Flutter and WSP Deliver Strong Q1 Results Amid Mixed Global Markets

Julian CruzWednesday, May 7, 2025 8:10 pm ET
15min read

The first quarter of 2025 brought contrasting yet compelling financial performances for

Flutter
Entertainment and WSP Global Inc., two global leaders in their respective industries. While Flutter leveraged U.S. market dominance and strategic acquisitions to fuel growth, WSP capitalized on record backlogs and operational efficiency to strengthen its financial position. Here’s a deep dive into the numbers and implications for investors.

Flutter Entertainment: U.S. Dominance Fuels Profit Surge

Flutter’s Q1 results underscored its transformation into a high-margin operator, driven by its U.S. sports betting and iGaming powerhouse, FanDuel.

Key Highlights:
- Revenue Growth: Total revenue rose 8% to $3.665 billion, with the U.S. segment surging 18% to $1.666 billion.
- Profitability: Net income skyrocketed 289% to $335 million, while Adjusted EBITDA jumped 20% to $616 million. The U.S. Adjusted EBITDA margin expanded 790 basis points to 9.7%, reflecting cost discipline.
- Acquisitions Pay Off: The Snai acquisition added $378 million to Q1 Italian revenue, while the pending NSX deal will further bolster scale.

Growth Drivers:
- Sportsbook Efficiency: Despite unfavorable March Madness results, sportsbook revenue grew 15% due to handle increases and improved risk management.
- iGaming Momentum: Revenue surged 32% as direct customer acquisition and premium content expanded the player base.

Challenges Ahead:
- Cash Flow Timing: Net cash from operations fell 44% to $188 million due to weekday-end timing impacts.
- Regional Headwinds: Brazil’s revenue dropped 44%, and APAC’s sportsbook declined 18%, highlighting regulatory and market risks in emerging regions.

WSP Global: Record Backlog and Cash Flow Boost Resilience

WSP’s Q1 results demonstrated robust execution in its engineering and professional services portfolio, with record backlog and improved cash flow metrics.

Key Highlights:
- Revenue Expansion: Total revenue hit $4.39 billion (+22.4% YoY), driven by organic growth and acquisitions. Net revenues rose 19.8% to $3.35 billion.
- Backlog Strength: The backlog reached a record $16.6 billion (+16.6% YoY), reflecting strong demand across sectors like infrastructure and energy.
- Profitability: Adjusted EBITDA increased 19.7% to $533.9 million, with margins holding steady at 16%. Free cash flow turned positive at $115.9 million.

Operational Excellence:
- Cost Management: Days Sales Outstanding (DSO) improved to 70 days from 76 days, signaling better receivables management.
- Dividend Discipline: The company maintained a $0.375 per share dividend, underscoring confidence in its financial stability.

Risks and Opportunities:
- Geopolitical Risks: Uncertainties in global markets, particularly in Europe and Asia, could impact project timelines.
- Acquisition Integration: Costs from the 2024 POWER Engineers acquisition remain a drag on margins.

Conclusion: Strategic Bets vs. Steady Earnings

Both companies present compelling investment opportunities, but with distinct risk/reward profiles:

  1. Flutter Entertainment (FTD):
  2. Strengths: U.S. leadership, acquisition synergies (Snai/NSX), and a shareholder-friendly repurchase program ($230 million in Q1).
  3. Risks: Cash flow volatility, regulatory hurdles in Brazil/APAC, and reliance on sports results.

  4. Investment Case: Suitable for growth-oriented investors willing to accept cyclical risks.

  5. WSP Global (WSP):

  6. Strengths: Record backlog, strong free cash flow, and a dividend yield of ~1.5%.
  7. Risks: Integration costs, geopolitical instability, and macroeconomic slowdowns.
  8. Investment Case: Attractive for income-focused investors seeking steady earnings in a resilient sector.

Final Take:
Flutter’s Q1 results highlight its shift from a high-growth, high-cost model to one prioritizing profitability, while WSP’s cash flow turnaround signals operational maturity. For long-term investors, both companies offer exposure to secular trends—Flutter to regulated gambling expansion, WSP to infrastructure spending—though Flutter’s 289% net income surge suggests it may deliver higher upside in the near term.

In a volatile market, these results suggest that both companies are well-positioned, but investors must weigh growth potential against execution risks. For now, the data points to WSP as a safer bet for stability and dividends, while Flutter rewards those willing to bet on transformative growth in regulated markets.