Flutter's 2.75 Stock Surge Defies Q4 Revenue Miss and 179th-Ranked Trading Volume

Market Snapshot

Flutter (FLUT) closed February 26, 2026, with a 2.75% gain, outperforming broader market trends. The stock traded at a volume of $0.75 billion, ranking 179th in trading activity for the day. Despite the positive price movement, Flutter’s revenue in the fourth quarter of 2025 fell short of Wall Street expectations, highlighting mixed performance between earnings and market sentiment.

Key Drivers

Flutter’s Q4 2025 earnings report revealed a complex mix of results. The company posted a non-GAAP earnings per share (EPS) of $1.74, exceeding analysts’ estimates by $0.13, yet its GAAP EPS was a loss of $0.05, significantly below the $0.76 forecast. Revenue totaled $4.74 billion, up 24.9% year-over-year but $230 million below the $4.97 billion expected. Adjusted EBITDA of $832 million also missed estimates by $60.8 million, reflecting margin compression amid rising operational costs. These discrepancies between adjusted and GAAP metrics underscore the company’s ongoing challenges in converting topline growth into profitability.

The decline in operating margins further complicated Flutter’s performance. For Q4, the operating margin stood at 5.4%, down from 7.4% in the same period in 2024. Free cash flow margins also contracted to 2.9% from 12.1% a year earlier. Analysts attributed this to moderating betting activity in the U.S., where the NFL season lacked compelling narratives to drive wagering. CEO Peter Jackson noted that early-season wins by favorites reduced customer funds for later bets, while playoff teams that were heavily wagered on failed to advance. These trends, combined with a less event-driven sports calendar, dampened handle growth.

Prediction markets emerged as a dual-edged sword for Flutter. While the company launched its own FanDuel Predicts platform in December, expanding into 18 states for sports-based markets and all 50 states for non-sports wagers, it acknowledged that external platforms like Kalshi and Polymarket had not yet meaningfully cannibalized its business. Jackson emphasized that customer volumes remained in line with expectations, but the broader sector’s shift toward prediction markets raised concerns about long-term competition. The CEO framed prediction markets as a “long-term opportunity,” noting their potential to expand Flutter’s reach in states without legal sports betting.

Strategic optimism was tempered by cautious guidance. Flutter projected full-year 2026 revenue of $18.4 billion, below the $19.13 billion consensus, with U.S. segment revenue forecast at $7.8 billion. The company attributed this to macroeconomic headwinds and regulatory uncertainties. Despite these challenges, Flutter highlighted its 30% five-year revenue CAGR and strong market share in the U.S. (41% for sportsbooks, 28% for iGaming). Jackson emphasized the need for patience, citing international expansion as a key driver, particularly in markets like Italy, where same-game parlays had boosted sports betting share.

The stock’s post-earnings reaction reflected investor skepticism. Shares fell as much as 9% in after-hours trading, extending a 43% decline in 2026 year-to-date. Analysts attributed this to the combination of revenue misses, margin pressures, and concerns over the U.S. market’s maturity. However, Flutter’s long-term position in a high-growth sector, bolstered by its portfolio of brands like FanDuel and PokerStars, remains a focal point for bullish investors. The company’s ability to innovate in prediction markets and navigate regulatory shifts will likely determine its trajectory in the coming quarters.