Flutter Slashes FY2026 Guidance Again As Brazil Problems Wreak Havoc On Q3

Key Points

• Flutter has had to trim its 2026 forecast three times this year, and the latest one is no exception. We’re now talking a massive $790m hole in its revenue expectations compared to where they were back in February
• Bad sports luck costs an estimated $113m, which is just shy of that $118m drop in group adjusted EBITDA. But what’s more puzzling is that if you factor that in, earnings weren’t actually down, just flatlining.
• So how did Flutter end up with that $873m non-cash impairment? It’s all down to Brazil, where an $873m impairment wiped out the value of its Betnacional stake which it bought a mere 16 months earlier. And the main reason it’s down now is that goodwill and acquired brands made up the bulk of the business’s value.

Flutter has been having a pretty rough time of it lately and its latest update is no exception. On Wednesday it revealed its Q3 revenue was up a whopping 2% to $3.87bn, but its adjusted EBITDA took a 25% hit to $360m, and its net loss went from $789m to a whopping $1.15bn.

Luck Or Not? Bad Luck Put It At $113m vs A $118m EBITDA drop

Flutter reckons that sports results were the culprit behind a $27m hit in the US and an $86m hit in International. That adds up to a staggering $113m, which is close to that $118m drop in EBITDA from $478m a year ago. But there’s a catch, these figures are just management’s own estimates. And as you might expect, they do have a bit of leeway on how they calculate those numbers.

Looking at the segment results it’s clear that the business isn’t performing evenly. US adjusted EBITDA had a pretty brutal fall of 94% to just $3m, a fall of $48m. But if you add back that estimated $27m sports impact, it’s not as bad as it looks. International adjusted EBITDA dropped a more modest $70m to $435m. And once you factor in that $86m hit from sports results, it’s even making a bit of ground, with an increase of about $16m, even with the hit from UK taxes.

UK remote gaming duty in April jumped from 21% to 40% (and it’s not just us that are feeling the pinch, up to 1,400 jobs are now at risk). US revenue, on the other hand, was up a respectable 6% to $1.46bn thanks to a 13% rise in handle. iGaming revenue grew by 8% to $572m while sportsbook revenue was up 4% to $817m. Average monthly players actually inched up 12% to 3.9m, but adjusted EBITDA came in at a pretty low $3m. Management points to the Alberta launch, prediction markets and promotions as factors, but they haven’t broken down what exactly caused that remaining $21m hit.

FanDuel Predicts averaged 66,000 monthly players, which is up 39% from the previous quarter. But Flutter says that number of active players actually hit about 140,000 in October. Meanwhile competition for ad space is getting pretty fierce with media spending across the category up more than 60% in September, a rise that CEO Dan Taylor says is driven mostly by prediction market operators. That, he says “puts a lot of pressure on our share of voice”.

Write-Down Will Cost Flutter $873m, 16 Months After Completion Of The Acquisition

On 14 May 2025, Flutter completed the purchase of its 56% interest in NSX, the parent company of Betnacional. The transaction cost Flutter approximately $350m in cash, but the accounting consideration was slightly higher at $678m, inclusive of contributed assets.

President Lula’s provisional measure, passed on 25 September, has banned online sports betting and casino gaming in the country. This measure has modified the regulatory framework of Law 14,790, introduced in December 2023, rather than revoke it. Licences expire 30 days after the date of publication and there are no refunds of the licensing fee to operators. The deadline for customers to withdraw their money was 5 October.

Flutter ceased operations in Brazil on 26 September. Taylor commented, “We’re ready to resume operating if the market comes back.”

Brazilian earnings fell 31%, from $87m to $60m. Thus, the $873m impairment charge is 14 times greater than the quarterly earnings of the unit. According to Flutter’s statement released in September, the value of goodwill was $539m and the value of trademarks was $124m.

The estimates of Flutter for 2026 are much lower. Assuming the ban stays in place, Flutter estimates the Brazilian operation will generate earnings of $70m and EBITDA of $20m in 2026. Out of the total impairment charge, $537m after tax applies to the 56% stake of Flutter.

Higher Legal Fees And Currency Volatility Drove Up The Loss

Losses from legal contingencies increased by $105m due to Flutter’s provision of the Fast Code class action against Sportsbet in Australia. Fast Code, the betting system of Sportsbet is accused of violating Australian laws and regulations, but the company denies this accusation.

Other income fell by $45m primarily because of the $40m foreign exchange gain. The $95m tax benefit helped offset the impact on the bottom line. Flutter now expects the transaction, restructuring and integration costs for 2025 to be around $620m, $120m more than earlier expected.

A Third Cut This Year And The Buybacks Screech To A Halt

Flutter kicked off 2026 with a promise of $18.4bn in revenue and $2.97bn in adjusted EBITDA, but since then they’ve seen fit to cut that forecast yet again. Last May they reduced the numbers and then again in May when they released their second-quarter results. Yesterday they announced that the new forecast for revenue and EBITDA is $17.61bn and $2.495bn respectively.

In comparison to what they were expecting back in February, these latest forecasts have seen around $790m shaved off what they thought they’d make in revenue, and a whopping $475m off what they expected to rake in from EBITDA. The August cut also upped the company’s promotional giveaways to roughly 6% of handle, which is just one of the measures they use to gauge this sort of thing. Flutter said that early fourth-quarter trading is roughly on track for what they were expecting on an underlying basis, but let’s be honest, sports results have had other plans for the company, yet again.

Debt has been building up once again, this time to a whopping 4.6 times, which is a fair bit higher than their target of 2 to 2.5 times. And guess what? CFO Rob Coldrake said they were putting the brakes on buybacks until further notice. Oh and by the way, they’ve managed to push off some of those key debt dates until 2032 due to refinancing.

Flutter is still holding on to its old plan to save $500m by 2029. The idea is that by using some AI and simpler tech they can hopefully just magic the savings into being. Meanwhile, their shares were trading at around $82 on the day of the results, a pretty sad state of affairs considering they’ve been down about 62% this year and a whopping 73% from their peak back in August 2025.

International revenue was flat at $2.42bn, but UK and Ireland managed to eke out a 4% increase to $889m. Southern Europe and Africa grew 13% to $836m and Central and Eastern Europe had a nice little 10% gain to $166m too.

Asia Pacific revenue, on the other hand, fell by 4% to $349m, all because of a ban on real money gaming in India. And let’s just say revenue from the other regions took a right old tumble of 48%, although it’s worth noting that 21 points of that drop were because people moved from PokerStars to other Flutter segments rather than leaving altogether. Italy, incidentally, has seen Snai bounce back quicker than any of the other Flutter migrations.

Congress Gets A Chance, Then We Get Guidance For 2027

Brazil’s Congress has got until the end of November to sort out their deliberations in line with what they’ve already laid out. The text of the bill has had 99 amendments chucked in, and the best-case scenario is that it gets passed by early 2027 if they don’t get round to voting on it by then.

There’s also a separate bit of legislation that’s been doing the rounds in the Brazilian press which would make it a crime to be involved in any illegal betting, and Flutter are holding out for their full 2027 guidance to drop in February, alongside their Q4 results. Taylor, the new guy at the helm who took over from Peter Jackson at the start of October, is keen on getting things done a bit faster, making some tough decisions and not being too reckless with the cheque book.

Expert Analysis: Flutter’s Bad Luck Defence Is Partially Correct

We believe that Flutter’s bad luck defence is only partially valid. On a consolidated level, the $113m estimated costs of negative sports results are nearly equal to the $118m decline in adjusted EBITDA. There is not much of a difference between those numbers. In the US, the story is quite different. After adjusting for the estimated $27m effect, the underlying EBITDA declined by $21m despite 13% growth in handle.

The international adjusted EBITDA rose by $16m after adjusting for the estimated $86m sports results impact. This occurred despite the higher tax bill in the UK. The international operations of Flutter support the group, which continues promoting itself as a leader in the US market. Taylor has identified the US leadership as his top priority, so the negative change in underlying US EBITDA should be considered an important number.

Both calculations rely on Flutter’s estimate of the impact of the sports results. The readers who question the reliability of those estimates might draw a different conclusion regarding the performance of the group.

According to Taylor, the increased expenses on promotions put FanDuel “in line with the market, not ahead of the market”. Additionally, he expects the increased spending on advertising in prediction markets to be a temporary measure. Two of Flutter’s three cuts in guidance in 2023 were due to negative sports results. Thus, the forecasts leave little room for normal sporting events. The international performance in Q2 was the opposite – it added $23m to Flutter’s performance. The impact of sports results might positively or negatively affect the earnings, and we would like to see more flexible guidance that does not require the cut of forecasts after a bad month.

Brazil poses a different challenge for Flutter. The company invested in the market which had just begun being regulated at the end of 2023. The company might have overpaid or made the wrong decision, but now the shareholders have to bear the same $537m after-tax charge. Taylor said that the Brazilian market could still be “an attractive market for us”, if the right conditions were met. February’s 2027 guidance will demonstrate whether Flutter considers Brazilian revenue in its forecasts.