Flutter Entertainment entered 2026 facing investor pressure after reporting fourth-quarter results that fell short of expectations, even as it highlighted long-term growth plans tied to prediction markets and iGaming expansion.

The NYSE-listed group reported Q4 2025 revenue of $4.74 billion, below consensus forecasts of $4.90 billion. Adjusted earnings per share came in at $1.74, missing the $1.80 estimate. For the full year, revenue reached $16.38 billion, under the revised midpoint guidance of $16.69 billion. Shares declined sharply in pre-market trading following the release.

Despite the miss, Flutter pointed to continued scale in the U.S. business. U.S. revenue rose 20 percent year over year to $7.8 billion, while adjusted EBITDA increased 82 percent to $922 million. Group Q4 revenue grew 25 percent to $4.73 billion, and adjusted EBITDA climbed 27 percent to $832 million, though both metrics lagged analyst expectations.

Prediction Markets Become Strategic Focus

A central theme of Flutter’s outlook is the December 2025 launch of FanDuel Predicts in partnership with CME Group. The product allows users in 18 states, including California, Florida and Texas, to access sports-based prediction contracts. These jurisdictions account for a significant portion of the roughly 40 percent of the U.S. population that does not live in regulated sports betting states.

Chief Executive Officer Peter Jackson described prediction markets as a long-term expansion opportunity during the earnings call. “We believe the emergence of prediction markets will accelerate the path to state regulation… This is the most valuable long-term opportunity in the U.S.,” he said.

He added: “In the meantime, the near to medium-term growth potential from prediction markets for FanDuel is significant. There is new TAM to go after. Prediction markets will enable us to acquire new sports and entertainment first customers into the FanDuel ecosystem ahead of potential regulation. We can deliver attractive returns by providing sports markets to the 40% of the U.S. population who cannot currently access online regulated sportsbooks.”

Flutter expects adjusted EBITDA losses of between $200 million and $300 million from prediction markets in 2026. Investment will concentrate in the second half of the year to coincide with the FIFA World Cup 2026 and the start of the 2026/27 NFL season.

Management said it conducted a review of potential cannibalisation from prediction markets and found only a low single-digit impact on handle growth.

FanDuel Sportsbook posted quarterly revenue growth of 35 percent, yet underlying trends raised concerns. U.S. sportsbook handle increased just 3 percent in Q4, and overall hold for the quarter came in at 8.9 percent. For the full year, hold declined from 11.5 percent in 2024 to 10.8 percent in 2025, reflecting what the company described as “customer-friendly outcomes,” particularly during the NFL season.

Chief Financial Officer Rob Coldrake addressed margin volatility, stating: “Investors shouldn’t lose sight of the 15.5% structural revenue margin we achieved this quarter.

“Even when the ‘Actual Hold’ is dragged down by a streak of favorite-heavy Sundays, our product mix – specifically the deepening penetration of our Same Game Parlay products – is structurally more profitable today than it was 12 months ago.”

Jackson acknowledged execution missteps in promotional strategy. “Our standard generosity playbook proved less effective in Q4. Our investment phasing did not sufficiently align with the pattern of sports results during this period, with lower spend levels coinciding with periods of bookmaker friendly results.

“This resulted in less effective spend against a backdrop of improved competitor product offerings and continued elevated levels of market generosity. As a result we saw higher churn within our customer base and a resultant loss of market share.”

He also characterized rival marketing activity during the NFL season as “uneconomic generosity.”

Casino Growth Offsets Volatility

While sportsbook margins fluctuated, iGaming continued to provide stability. As stated in Publication of Annual Report and Accounts 2025 (pdf) official, U.S. iGaming revenue rose 39 percent year over year in Q4, supported by a 31 percent increase in Average Monthly Players and the launch of more than 500 proprietary titles during 2025.

FanDuel Casino revenue increased 33 percent, representing 28 percent of the U.S. iGaming gross gaming revenue market. The company attributed growth to exclusive content, including a fourth Huff N Puff title that “[beat] all previous records for engagement in the first 30 days post-launch,” as well as expanded jackpots and a revamped rewards ecosystem. Average Monthly Players in the casino segment rose 18 percent, alongside higher player frequency.

Group Average Monthly Players reached 15.07 million in Q4, compared with 14.61 million a year earlier. U.S. FanDuel AMPs grew 17.6 percent to 4.0 million.

Net income fell 94 percent in Q4, reflecting a $556 million impairment tied to Indian regulation and other expenses. The company’s leverage ratio stood at 3.7, down from 4.0 in Q3 but above the 2.0 to 2.5 range previously expected.

Guidance for 2026 includes a revenue range of $18.5 billion to $19.2 billion. However, midpoint EBITDA forecasts for both U.S. and International segments fell below consensus estimates, contributing to investor disappointment.

Flutter also faces rising tax burdens in key markets such as Illinois, where wagering taxes reach up to 40 percent. Management signaled that elevated taxation and competitive pressure will require careful balancing of marketing spend and profitability targets.

“The launch of FanDuel Predicts in December was a strategic milestone. By capturing millions of players in non-legal states through a free-to-play model, we are building a proprietary database that will allow us to ‘switch on’ market leadership the moment states like California or Texas eventually regulate,” Jackson said.

Flutter’s strategy now hinges on whether prediction markets, sustained iGaming growth and improved sportsbook execution can restore momentum in 2026.