FanDuel parent cuts 2026 revenue targets as new CEO pushes rewards strategy

Shareholders of Flutter Entertainment face a reduced payout outlook as the company cut its 2026 revenue targets. The online gambling firm lowered its full-year revenue midpoint by $300 million to $17.61 billion. It also reduced its adjusted EBITDA outlook by $160 million to nearly $2.5 billion. These changes follow a third-quarter report that missed analyst expectations on revenue and earnings.

Dan Taylor, who became CEO five weeks ago, presented the results on Wednesday. He stated the company will focus on organic growth and debt reduction. Taylor said Flutter will pause share buybacks until it brings leverage back into a target range of 2 to 2.5 times. This process is expected to take roughly 24 months. The immediate goal is to strengthen the balance sheet before returning capital to investors.

The company reported a net loss of $1.15 billion for the quarter. This figure includes an $873 million non-cash impairment primarily tied to Brazil. Brazil banned sports betting and online gaming in September. Taylor said the firm took the impairment to position itself for long-term success despite the regulatory change. Excluding this charge, the adjusted loss per share was 18 cents, a better result than the 28 cent loss analysts had projected.

Revenue rose 2% to $3.87 billion, falling short of the $4 billion consensus estimate. Adjusted EBITDA dropped 25% to $360 million. Taylor attributed the pressure to fierce competition and unfavorable sports results in the United States and internationally. He argued that the path forward involves improving product quality and offering more generous rewards.

FanDuel launched a nationwide rewards program in September. Taylor said the initiative has resonated well with users. Average monthly players on the U.S. sportsbook increased 9% in the third quarter. Bet counts climbed 15%. Total U.S. average monthly players rose 12%, with iGaming seeing 24% growth. Sportsbook handle increased 13%, but revenue grew only 4% due to higher promotional spending.

The company is increasing media spending to promote FanDuel Predicts, a platform competing with Kalshi and Polymarket. The app added 140,000 new customers in October. Taylor noted that trading volume surged 271% since July. He emphasized that about half of the U.S. still lacks regulated sports betting access, while 90% lacks regulated online gaming.

Flutter forecasts its cost of sales as a percentage of revenue to reach 58% for full-year 2026 and into 2027. Taylor believes shifting the mix of products customers use will allow the company to lift structural margins over time. The firm aims to convert current engagement gains into stronger profits through these operational adjustments.