Flutter Entertainment PLC (LSE:FLTR) shareholders should be watching closely when the group reports its second-quarter results tomorrow, after a blowout set of numbers from DraftKings suggested that market expectations for Flutter’s US business may be too low.
Analysts at Citi said the strength of DraftKings’ latest earnings, particularly in online sports betting, pointed to upside potential in Flutter’s own US revenue and profit margins.
“We see very positive read-across to Flutter from DraftKings’ 2Q25 results,” the analysts wrote.
DraftKings posted an online sportsbook net win margin (NWM) of 8.7% for the quarter, well ahead of the 7.6% consensus figure gathered by Visible Alpha and a 230 basis point improvement year on year.
Flutter’s implied NWM from consensus estimates stands at 10%, flat on last year, which Citi said “may be too conservative.”
Digging into the numbers, DraftKings reported a structural hold of 10.9%, helped by favourable sports outcomes. That figure, combined with a gross win margin of 11.5%, suggests that free bets made up only 2.8% of hold.
Citi’s own estimate for Flutter’s free bets ratio is 3.5%, leaving room for outperformance if promotional spending were kept similarly low.
Margins told a similar story. DraftKings reported an adjusted EBITDA margin of 19.9%, up sharply from 11.6% a year ago. That 8.3 percentage point gain compares with just a 15 basis point improvement implied by Visible Alpha consensus for Flutter, which is currently pegged at 17.2% for the second quarter.
Headline profits also stood out. DraftKings delivered adjusted EBITDA of $301 million for the period, 22% above consensus and roughly 2% higher than the $296m consensus forecast for Flutter’s US division.
With Flutter due to report on Friday, Citi’s read-through suggests the bar may be set too low. If Flutter’s US business follows the same trend, there could be room for a positive surprise.
The shares were up 2.4% at 23,490p in afternoon trading.