Thank you for standing by. My name is Jael and I will be your conference operator today. At this time, I would like to welcome everyone to the Flutter Entertainment fourth quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. I would now like to turn the conference over to Paul Timms, Group Director of Investor relations. You may begin.

Hi, everyone, and welcome to Flutter's Q4 update call. Joining me today are CEO Peter Jackson and CFO Rob Coldrake. After this short intro, Peter will open with a summary of our operational performance in the quarter, and then Rob will update on our Q4 financials and new 2026 guidance. We will then open the lines for Q&A. Some of the information we are providing today constitutes forward-looking statements that involve risks, uncertainties, and other factors that could cause actual outcomes or results to differ materially from those indicated statements. These factors are detailed in our results materials and our SEC filings. All forward-looking statements are based on current expectations and we undertake no obligation to update any forward-looking statement except as required by law. Also in our remarks or responses to questions we will discuss non-GAAP financial measures. Reconciliations are included in the results materials we have released today. And I will now hand you over to Peter.

Thank you, Paul. I'm pleased to share our strong fourth quarter results and reflect on our strategic progress in 2025. Flutter is the world's leading online sports betting and iGaming company, with unique advantages delivered through the Flutter edge and a proven track record of delivery. 2025 was another transformative year for the company, marked by our strategic execution, continued market leadership, and disciplined investment, delivering group revenue up 17% and adjusted EBITDA 21% higher. In the U.S., we maintained our clear leadership position in both online sports betting and iGaming. We also launched Fangio Predicts in Q4 to capitalize on the emerging prediction markets opportunity. In our international business, we strengthened our portfolio with strategic acquisitions in Brazil and Italy, extending our positions in high-growth and exciting markets. We made significant progress on our transformation and efficiency programs, and we were well on track to deliver the anticipated revenue growth and cost efficiencies. Our swift, disciplined responses to regulatory changes in India, where sudden legislative changed for cessation of real money gaming and to higher UK gaming taxes underscored our scale benefits and business agility. We entered 2026 in a strong position and I've never had more conviction in our ability to capitalise on the long growth runway ahead.

Turning to the fourth quarter.

Our Q4 group performance was strong, with revenue up 25% and adjusted EBITDA up 27%. In the U.S., revenue growth was 33%, with adjusted EBITDA 90% higher, lapping the significantly unfavorable sports results in the prior year. We delivered another superb iGaming quarter. Revenue grew 33%, driven up by 18% Amps growth and an increase in player frequency, as our successful content strategy and reward scheme resonated well with our customers. Foundry Sportsbook Q4 revenue growth was 35%. However, Q4 Sportsbook trends across the market diverged from expectations. High gross revenue margins were offset by moderating handle performance. As a business, we always consider net revenue as our core revenue KPI, and we therefore always consider revenue and handle trends together in conjunction with customer activity levels. This was particularly important this quarter, as adverse recycling was a key driver of the lower handle growth, with persistently high gross revenue margins leading to lower levels of customer engagement. In addition, the second half of the NFL season saw less compelling content, with fewer popular teams and favourite players making the playoffs this season, adversely impacting customer engagement. These market trends were far more pronounced for Fangio for two reasons. First, our significant structural revenue advantage resulted in a greater impact from adverse recycling as Fangio recorded persistently high NFL gross revenue margins throughout November and December. Overall, we finished the NFL season a hundred bips ahead of our expected margin at 19%. Second, our standard generosity playbook proved less effective in Q4, as our investment phasing did not sufficiently align with the pattern of sports results during this period. As a result, we saw a higher churn within our customer base and a resultant loss of market share. We also don't believe prediction markets are having a meaningful impact on our business, As you'd expect, we've undertaken a comprehensive review and found no evidence of material cannibalization on our existing business. And this finding is reinforced by our Missouri launch, where customer acquisition trends exceeded expectations, reaching 5% of the population within the first 30 days, making Missouri one of our best state launches to date. Moderated market handle trends have continued into the start of 2026. We believe these trends reflect the halo impact of the factors evidenced in Q4, and we continue to monitor trends closely. And as set out in our shareholder letter, we have a clear U.S. strategy for 2026. Our market-leading, highly profitable U.S. position is driven by product superiority, enabled by our exceptional pricing capabilities, combined with highly disciplined customer acquisition. This has allowed Fangel to deliver an estimated 70% share of market EBITDA. However, recent trends have led us to take additional actions to strengthen these capabilities to reinforce our leadership position. We will leverage our scale, proprietary technology, and data advantages to deliver experiences competitors cannot easily replicate, including more intuitive bet building, smarter personalization, and richer live engagement. In addition, we're enhancing how customers feel recognised and rewarded, with more engaging reward experiences, including the launch of a new loyalty programme, extending a core part of our casino success into sport. I'm confident that the ongoing improvements to our Sportsbook product and generosity strategy will harness our scale and structural advantages, driving a sequential improvement in our performance throughout 2026 and deliver market share gains. Let me now update you on prediction markets and how we're going after this opportunity. We believe that prediction markets will accelerate state regulation of online sports betting and iGaming. This, in our view, is the most valuable long-term opportunity in the US. In the meantime, the near-to-medium-term growth potential on prediction markets for Fangio is significant. There is new TAM to go after. Prediction markets will enable us to acquire new sports and entertainment-first customers into the Fangel 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. We are exceptionally well positioned to harness this opportunity, and we launched our own offering, Fangel Predicts, in Q4. Early signals have been encouraging. with most activity focused on sports and with average volume per customer in line with expectations we are also actively pursuing options to leverage our world-class proprietary pricing capabilities for market making services and we'll share further details in due course rob will update on our predictions market financial guidance as outlined in our q3s we'll invest meaningfully with ambition to deliver a leading position in this space The opportunity of cost prediction markets is certainly far bigger than any potential cannibalization of existing sports. Moving on to our international business. International revenue grew 19% in Q4 and adjusted EBITDA increased to 6%. We are making excellent progress on our strategic transformations and integrations, building a strong platform for future revenue growth and delivering cost savings. In the UKI, the SkyBet Sportsport migration has delivered the expected cost savings, and we are now accelerating customer-facing investments to restore momentum. In SEA, Flutter regained the online market leadership position in Q4. And the results of the PokerStars migration in Italy have been very encouraging, with revenue growth of 13% and new customer volumes more than doubling in Q4. PokerStars' migrations will continue at pace into 2026, following the successful precedent we have now created in Italy, driving further growth and delivering planned cost savings. The SNI business integration is progressing well. Customer acquisition initiatives, including C-SAL's retail sign-up model and restructured generosity to boost cross-sell and reactivations, drove all-time record iGaming amps and ensured SNI finished the year in revenue growth. The planned platform migration in Q2 will further accelerate this growth by providing SNI access to a vast expanded product suite, including CSAIL's leading products such as Mycombo. In Brazil, improved casino and digital marketing capabilities drove a surge in customer acquisition, up 51% since the start of the year. We believe the Brazilian market presents a significant and compelling growth opportunity for Flutter, and that the 2026 FIFA World Cup represents a unique moment in a soccer-obsessed market that's to take market share. As a result, we expect to invest more. And while extending our investment timeline shifts the phasing of profitability, we have strong conviction that disciplined near-term investments will build a larger, more profitable, and sustainable business over the long term. Looking ahead to 2026, I'm confident in our strategic positioning. There are compelling plans in place to strengthen our leadership, unlock future value, and deliver sustainable growth. I'll now hand you over to Rob to take you through the financials.

Thanks, Peter. I'm pleased to present another quarter of strong financial delivery. Group revenue increased by 25% and adjusted EBITDA grew 27%, driven by a good year on year performance across both segments and the successful integration of our recent acquisitions. As Peter noted, we are making excellent progress on our strategic transformations and integrations and we are firmly on track to achieve our targeted $300 million cost savings by 2027. We're embedding rigorous cost discipline across the business, identifying new efficiencies and optimising opportunities to protect margins and fund strategic growth investments. In the quarter, group net income was $10 million compared to $156 million in the prior year, as the strong adjusted EBITDA performance was offset by higher interest costs relating to the financing of our strategic M&A and increased tax expense, reflecting the significant step up in U.S. profitability year over year. Earnings per share and adjusted earnings per share declined by 50 cents and $1.20 respectively, reflecting these factors. The group's net cash provided barc rating activities declined by $224 million to $428 million, primarily reflecting the cash impact of these increased expenses and a $128 million adverse impact from a lower level of customer deposits year over year. Free cash flow declined by $335 million to $138 million, including the impact of M&A and increased investment in capital expenditure. The higher capex was driven by phasing of Italian concession payments and investment in future revenue enhancing and cost efficiency projects, such as our PokerStyles transformations. We completed $245 million in share repurchases during Q4, bringing full-year 2025 repurchases to $1 billion, in line with our guidance. Our disciplined capital allocation policy provides the flexibility to respond effectively to evolving market conditions and emerging opportunities. We remain committed to our long-term policy of returning capital to shareholders. We now expect to commence returning $250 million in H1 2026 and will provide guidance on our future buyback cadence as the year progresses, preserving our flexibility to invest in the business and strengthen our balance sheet. We ended the year with a leverage ratio of 3.7 times. Strong profit growth and cash generation will continue to drive leverage reduction throughout about 2026, moving us towards our target ratio of two to two and a half times over the medium term. Moving now to our outlook for 2026. In the US, we expect revenue of $7.8 billion, an adjusted EBITDA of $1.05 billion, translating to year-over-year growth of 12% and 14% respectively. This includes new state investment of $70 million in adjusted EBITDA as we expect to launch Alberta in Q2. The guidance also reflects current trading, where the impact on our customer base from the very high gross revenue margins achieved in the second half of Q4, alongside a less compelling end to the NFL season, has driven lower customer engagement levels into 2026. Outside of NFL, year-over-year trends improved in February. Although we believe that these market trends are largely transitory, we have taken a measured view of how these trends will progress, including when market-handled growth rates will recover from the Q4 recycling impact. We also expect a sequential improvement in Fandru's relative performance to the market due to improvements to our sports product, generosity strategy, and the launch of our new loyalty program during the year. We now expect that our prediction markets investment will be towards the upper end of the previously guided range, closer to $300 million, to reflect the significant opportunity we believe exists to drive customer acquisition. While it's still very early days, our view remains that the shape of the profit ramp for prediction markets should be similar to new sportsbook state launches. In international, we expect a revenue of $10.6 billion at adjusted EBITDA of $2.23 billion revenue at the midpoint, representing year-over-year growth of 13% and 1% respectively. We are really pleased with the underlying momentum in the first two months of the year, particularly in SEA, where we have extended our online market leadership in Italy. The guidance incorporates an investment in Brazil of approximately $70 million to grow our market position and the previously guided impacts from the UK tax increases and the Indian market switch-off. We expect our unallocated corporate costs to be $310 million, a $30 million increase compared with the prior year. this reflects an increased 2025 base driven by investment in shared technology talent and costs associated with our u.s listing which will continue in 2026 to conclude and reiterate peter's conviction we are excited for the year ahead and look forward to another year of strong execution with that peter and i are happy to take your questions I'll hand you back to JL to manage the call.

Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. And to try to get as many questions as possible, we do request that you try to limit yourself to one question and one follow-up. Your first question comes from the line of Jordan Bender of Citizens. Your line is open.

Hi, everyone. Good afternoon or good evening. Peter, I want to start with one of the quotes from the press release where it says it's difficult to be definite as to when market handle growth rates will recover from the impact in 4Q recycling. I guess what I'm trying to figure out here is, do you think any of this, what's going on, could be structural in nature? And do you ever see this type of phenomenon happen across any of your other sports markets globally? And I guess the second or the follow-up question to that is, your sports book mops were up 4% for the year. The story around increasing penetration into existing states is something that you've spoken to in the past. So I'm curious where you think you stand in terms of net new customers to support this environment where we are seeing handles well. Thank you.

Thanks, Jordan. Look, let's start with your question around sort of handle and how that compares with other markets that we operate in. And I think it's worth acknowledging that, you know, the period of time we're talking about in the U.S. in Q4 is, you know, in the football season. And I've talked before about the very high levels of volatility that we see around football in the U.S. So I think when I think about other markets, the soccer-driven markets we see in the UK or Italy, rating in Australia, we would see less volatility and less sustained periods of very positive sports results. I can remember this time last year when we were talking about the football season and people were concerned as to whether we could ever see positive sports results in football. Clearly, this season we've seen very strong results. And as I stated earlier, we've seen a margin of 19% across the full football season. And so when you compare that with last year and the very substantial step up in margins year over year, you would expect to see a commensurate drop in handle. It's the maths in terms of how it works from the customer play. So that phenomenon of recycling and the impact that margin has on sort of growth of stakes is something that we've seen before. In terms of your second question around sort of amps, look, you know, I think the important thing is that, you know, So our sports bot amps in our pre-2025 states were also growing in Q4. And look, in the combined sports and our gaming business, we saw mid-single-digit growth. So we're still seeing AMP growth in older cohorts.

Thank you. Again, in the interest of time, when asking your question, please ask your follow-up as well as your main question at the same time.

Your next question comes from the line of Paul Ruddy of Davey. your line is open hi good evening peter and rob um just on it's a little bit of a follow-up that but to that but on the structural whole piece it looks exceptionally strong uh has there been any change of strategy around pursuing pursuing a more say a whole positive handle passive strategy uh in the way you've set yourselves up um and maybe if you could just give if there is any quantification of what you think the actual um amount of handle impact might have been year and from that recycling impact.

Hi, Paul. I think one of the things I'd state is, you know, when I think about the NFL season this year, you know, when you look at the sort of the quality of the teams that got into the latter stages of the competition, there were a lot less of the sort of, you know, key marquee players, you know, involved. And that has a significant impact for us because of our, dependence on the parlay market. I actually suspect that we saw lower levels of parlay penetration than we would otherwise have done if we'd had matchups like we'd had last year. So there's nothing, we've not changed our VIG or anything like that. We simply saw a very considerable set of consecutively positive, you know, sports results, you know, I think, you know, 10 out of 11 weeks, we saw, you know, very favorable, you know, weeks of above average margin there, found a number of weeks above 30%, which we think has a real sort of impact on sort of customer sentiment when you get to those sort of levels. And then in terms of, you know, the black art of trying to work out, you know, if it were not for that, what would have happened to hands up? I mean, it's very difficult, and I think, you know, there's a lot of, you know, it's a complex relationship between those things, and, of course, you've also got the overlay of what's going on from a generosity perspective as well. So, yeah, I think it's hard for us to make a full assessment.

Your next question comes from the line of Barry Jonas of Truist Securities. Your line is open.

Hey, guys. Can you maybe talk a little bit about the prediction product today and how you see that improving moving forward? And then maybe as a follow-up, curious to get your thoughts on the probability of more U.S. state tax increases here. And is there any scenario where you might exit OSB in any uneconomically viable state to focus more on Fandle Predicts? Thank you.

Obviously, we're pleased we've got our prediction market product from a sports perspective into those 18 states where we can't currently offer our regulated OSB. Clearly, that's a lot of incremental opportunity for us to go after that otherwise we couldn't have had. We have got good plans to improve the breadth and quality of the product we have over the course of this year. There's obviously the World Cup coming up shortly, which is going to be a very important opportunity for us to showcase the quality of our soccer product, both for the half of America who are in states where there's regulated OSB, where we'll be very excited about that, but also into the half of America who will be reliant on our PEDIX product. Soccer is actually the fourth most popular sport for us by GGR. So I think we're excited about that and we believe that we have a lot of expertise in that globally and, of course, can couple that together with the quality of the Fangio brand and our experience from the Betfair exchange to really push hard. There's lots of other product enhancements we intend to make over the course of the year before we get to the start of the NFL.

From a tax perspective, Barry, we're clearly at the outset of the year and moving into legislative season. As ever, there will be some noise and soundings about tax increases in certain states. On the positive front, actually, just before coming on this call, we've had positive news, RE getting a licence in Arkansas, which is a positive move for us. Ultimately, if we do see any tax increases, there aren't any that we see with higher degree of certainty at the moment, but as a scale operator, we're very well placed to mitigate those, as we've proven in the past, and we have levers at our disposal and costs that we will use to mitigate that and work through it.

Your next question comes from the line of Jeff Stanchel of Stiefel. Your line is open.

Hey, good afternoon, Peter. Thanks for taking our questions. Maybe starting off on the handle trends in Q4 and year-to-date, Peter, you talked to some market share loss, which is expected to moderate as the year goes on. But if you look at performance in the Missouri launch, there really doesn't seem to be much dilution of market share at all. So maybe could you just help us reconcile those two data points? And then for my follow-up, Rob, it looks like Unallocated Corporate is pacing well above the 27 targets that you introduced a few years back. And you just framed for us what's changed, if anything, and where do you go from here. Thanks.

Jeff, you're right. We've been very pleased with the launch in Missouri. As I stated earlier, it's one of our most successful state launches to date in terms of the population penetration. I think we're very pleased with that. I think it's down to our excellent new state playbook. I think the point I'd make around some of the handle trends that we saw in Q4 last year, it really ties back to some of the stuff I was talking about in terms of the very strong and sustained periods of very high margins, coupled with the fact that we saw less popular teams getting into the playoffs for football. I suspect that there were some of our customers who, to use another sporting analogy, put their queues back in the rack and stopped betting. So I think what we'll have to do is reactivate those customers. We're excited about the product changes that we'll be delivering over the course of this year and mentioned the loyalty program, the changes they're making to generosity. We've got the World Cup coming up. So I think there's a lot of great opportunities, March Madness, for us to push hard and get these customers back on our platform.

From a corporate cost perspective, Jeff, there's a couple of points to make. So we're slightly above our original guide. There's a couple of contextual points to this. The first is we obviously resegmented the business at the start of 2025, and we saw some additional costs move into corporate as a result of that resegmentation. The second point with regards to 2025 is we actually had some reduced revenue-driven cost allocations as part of the year-end closeout, which is just kind of left pocket, right pocket. We have been investing in cost in the centre overall with the Flutter Edge, and we're seeing excellent payback in terms of the transformation, strategic transformation work that's going on across the group. And what I'd say lastly is actually we've just kicked off a comprehensive cost optimisation programme across the group, and we are looking to optimize further efficiencies as we go through 2026.

Your next question comes from the line of Brent Montour of Barclays. Your line is open.

Hi, everybody. Thanks for taking my question. So, digging into U.S. revenue guidance for 26 low teams, growth expectations, I think we kind of got a sense now for, you know, sort of some conservatism around Handel. Have you guys changed your philosophy around how you guide for sport outcomes or for structural hold within that guide?

I'll put this up, Brent. So we've not changed our philosophy. What I'd say in summary for 2026 is we've taken a sensible, measured approach to our guidance. The guidance includes 12% revenue growth for 2026 and 14% EBITDA growth in the US. We're not including any revenue from prediction markets in that as we want to trade through the period initially before we take a view on that. As Peter mentioned, there's quite a complex relationship between handle and gross revenue margin, and that's why we look at revenue as our core KPI and we guide to revenue only. We also haven't talked about iGaming yet, but we're assuming that the iGaming growth continues in the high teens and will have double-digit sportsbook growth on revenue. So, yeah, overall, as I said, it's a sensible, measured approach that we feel comfortable with. We should also see some sequential improvement through the year as we land some of the products and generosity initiatives that we talk to in the shareholder letter.

Your next question comes from the line of Ed Young of Morgan Stanley.

Your line is open. um thank you um uh my question is around the less effective generosity playbook um you mentioned phasing improved investor offerings uh and elevated generosity in the market so my question is how should we square your commentary around your new generosity strategy which you said you want to be sort of disciplined but also competitive is that is that you saying effectively that you need to make your scale count by keeping your generosity at higher levels and then my follow-up is the commentary is also that the improved competitor offerings so what's not worked on the product side to maintain sufficient leadership versus competition and what sort of additional investment are you making or do you think you need to make to make that right Hi, Ed.

Thank you for the question. On generosity, I think it is a very important topic for us. I've talked about some of these heightened levels of margin that we saw. I think, look, it's fair to say that we didn't execute our generosity strategy as well as we should have done. We pushed hard in the beginning of Q4, and actually when you look at what the pattern of gross win margins were throughout the back end of Q4, we just saw this very sustained period, including a number of weeks, as I said earlier, above 30%. then. We should have pushed harder at generosity at those points, and we didn't. And that's something that we will address and make sure that we incorporate into our playbook for the future. So this isn't about putting more money on the table. This is about using what we have in a smarter way. And I think tying to that point about being smarter with it, When I look at what we do with our casino business, we get a lot more credit for the generosity we give our customers there as a result of the loyalty program that we have. The rewards program has been a really important driver of the success of Seeding Casino. And we must be one of the few consumer businesses in the States that doesn't have a loyalty program for full stop for sports. It's been very successful for us in Casino Air, and as I said, we'll bring that experience into our sports book, which I think will be very important. That's something that we'll do in Q2 this year. So we're going to remain disciplined. We saw a very unusual situation after the last couple of years where we've seen low margins in football, were sort of very high and very sustained periods of margin and we didn't have the right playbook or tools really to be able to deal with it.

Picking up on the second part of your question Ed around products, we don't necessarily think this is something that's not worked for us per se but more a bit of a narrowing of the gap in terms of the product advantage that we've typically held over over the last few years and as we think about this we're looking to you know double down on on the product advances that we've had previously and we're working on a number of things both in the US and in our international business as we outlined in the release there's a few specific areas so we're looking at differentiation and innovation and really enhancing our SGP offering you'd see actually outside of the US in Italy are my combo products working extremely well for us and that's allowed us to take the leadership position back in Italy the rewards piece that Peter talked about and also just elevating the the core journeys and the personalization and experience of being on the Fangel site which we've got a team working on the other piece which we obviously talked about a lot previously is our outcome-based pricing and how this really provides the structure and the foundations behind our product innovation and improvements moving forward and we still remain incredibly excited about this you know it's taking a little while to to work through but fundamentally we expect this to be a significant product

advantage for us when we when we fully land that roll that capability out your next question comes from the line of sean kelly of bank of america your line is open hi good afternoon everybody thanks for taking my question um i want to follow up on rob's comment about the double digit growth you're seeing in in sportsbook uh or you're expecting i guess uh embedded in the guidance just rob can you help us compare that to you know the run rates you're seeing in the business right now i know um current quarter is a little harder to comment on but is the market has been so dynamic it's been it's been a little hard to track and while we can see handle numbers it's harder to get that that full ngr picture so any color you could give us there to kind of square what you're seeing in the business with that outlook would be helpful? And then also, if you could just comment maybe high level on what you're seeing share-wise for the NBA, because it feels like we've seen that as a product that Flutter has historically done extremely well in, but we've seen some competition ramp up there. Thanks.

Thanks, Sean. So yeah, in terms of current trading, we started off the year with a continuation of the trends that we observed late in Q4. So the closing stages of the NFL season, as Peter alluded to, including the playoffs and the Super Bowl, saw some slightly less compelling player narratives, and that drove continued lower levels of customer engagement into the start of the year. But outside of the NFL, we started to see trends improving month on month into February, which is encouraging. We think some of the customer fatigue from the positive sports results persisted into January as well. As Peter said, we had 10 out of 11 positive weeks. We ended up the NFL season with a 19.3% margin on the NFL, which is incredibly strong for a season overall. And in terms of February data, based on the small sample that we have, the week-to-week volume trends are definitely improving, suggesting that part of this was potentially an NFL season-specific dynamic. But at this stage, it's still quite early visibility remains slightly limited on whether the current market dynamics will be short-lived or what we'll see over the next quarter or a few months. But we're quite confident about our Q1 guide and we'll continue to monitor the trends very closely. We're confident that we have the right plans in place to continue improving our US performance over the course of the year.

And we've definitely seen a sequential improvement even over the last few weeks. on on the you know the question around of you know a high level on on nba look you know this has always been an area um you know that's important to us you know again it's you know it's down to things like the the quality of the players we have engaged in the games you know with the strength of our uh our parlay offering you know there are you know there are you know there's inevitably a bit of us have bleeded cross between you know customers who are betting on both football and NBA, if they've seen those very high margins on football, inevitably will have some impact on their ability to stake on NBA.

Thank you. Again, due to time constraints and a large volume of questions, we please ask that you now restrain yourself and please ask one question. Your next question comes from the line of Jed Kelly of Oppenheimer. Your line is open.

Hey, great. Thanks for taking my question. Just going back to your prediction markets, do you feel like you potentially would want to acquire your own DCM license just to control your own destiny, or can you just talk about how your JV with the CME is progressing?

We spent a lot of time working on how we wanted to tackle prediction markets. I think we got our products into the market. We're into those 18 states that we can't offer our regulated sports betting products in. And look, we're going to make a series of product changes over the course of this year. We're very happy with the CME. We've got a strong pipeline of product improvements coming through. I also referenced some of the stuff we're looking at around market making as well. So there's a lot going on in this space. We're investing, you know, we plan to invest a lot of money. And look, I hope we're sat here in a year's time and we've been able to invest very successfully and acquire a lot of customers onto our platform.

Your next question comes from the line of Dan Pulitzer of JPMorgan. Your line is open.

Hey, good afternoon, everyone. Thanks for the question. I want to go back on prediction markets, unsurprisingly, I guess. I guess what have you seen that justifies the incremental spend there? because it sounded like things so far were tracking in line with your expectations. And along those lines, how do you think about the competitive landscape evolving if and when we do get perfect regulatory clarity here?

Dan, we've got experience of investing organically in our business. I think about what we're doing in Brazil at the moment. I think about all the quarters we had post-passing repeal. But we've always taken a very disciplined approach when opportunities arise. And we will make sure that we acquire as much business as we can. Clearly, the phasing of our marketing will align with our product roadmap and scale over the course of this year. This quarter is more about test and learn to understand how we optimize our spend and drive conversion. We expect to invest heavily in the second half of the year. And look, given the opportunity we see, we expect to be towards the top end of the figures. But I reserve the right to spend more if we find opportunities are bigger.

Your next question comes from the line of Bernie McTernan of Needham & Company. Your line is open.

Hi, this is Stephanos Christ calling in for Bernie. I just wanted to follow up on Arkansas. We understand there's a 51% revenue share. I just wanted to ask why launch now and maybe why not do Predicts instead of the traditional sportsbook.

Look, I'm happy to pick that up. And I think what we've seen in Missouri with our new state playbook, I think, is a really good example of when you're given customers or consumers the choice, the breadth of offering that you have in a traditional OSB together with the generosity playbook you can provide means it's a much more compelling offering. We're super excited. That's what our sort of true north is for us in the business. We'd like to see more states passing regulation for OSB and indeed iGaming. Look, it's a for those two areas. We'd love to see more states pass. There are only two national players in the state. So, you know, look, we're excited to get our playbook going and see what we can do in the state.

Your next question comes from the line of Ben Shelley of UBS. Your line is open.

Hi, thanks for taking my question. Do you expect U.S. online sports betting market share to stabilize in 2026? And more broadly, what's giving you confidence in sequential improvement in your competitive position through the year? Thank you. Ben, yeah, we are confident in the quality of the product that we have in the market. We're excited about the introduction of our loyalty program. There is more work we're doing around generosity. And as Rob mentioned on the question earlier, there are enhancements that we're making to our product as well. So I'm very confident in our ability to execute. We have consistently done that. And I think that we will be able to hold our market share. Look, I'd like us to take more market share to the extent that we can get good returns on it, and we will spend that money.

Your next question comes from the line of Clark Lampin of BTIG. Your line is open.

Thanks very much. My questions are related to the Sportsbook loyalty program. I think Peter, number one, just for clarification, I think he said that that was going to roll out in Q2, wanted to make sure that they had that correct. And then second, I wanted to see if you could give us a little bit of color around when you introduced this same offering for your iGaming business, what the immediate impact was. Was it the revenue driver? Did it help you with Promo? I think that that's, you know, there's clearly been a bunch of questions on the call thus far around the direction of Promo. So maybe with that as a reference point, was it helpful to Promo? Was that, you know, a source of leverage, I guess, for iGaming when you introduce that, any color that you can provide a reference point would be helpful.

Clark, I mean, the perspective from our casino business where our rewards program has been a really important part of the success of that business. We got to a record market share in Q4 with 28%. And we're still building the rewards program, right? There's still changes we're making. We're still integrating more of the generosity into the program. So, you know, we've been at it a long time in the casino business, and there's still a way to go. So, you know, it's a little bit like our parlay products. You know, we're never done. There's always improvements and changes we can make. So, look, you know, we will launch a loyalty program for our sports book. And I think, you know, one of the immediate benefits that we've seen in casino know is that you get much better sort of saliency from your customers around the rewards that you're giving them. And I expect to see that happen in our sports book. I mean, we sometimes describe it as sort of link and labeling. And so I think that's the immediate step change we'd expect to see.

And so I hope it will help drive increases in wallet share. your next question comes from the line of ian moore of bernstein your line is open thanks for taking my question um one on capital allocation uh how would you rank i guess the different inputs you're weighing and deciding at one point you become more active on share purchases through the year and uh i guess any update you're willing to give on progress toward uh resolution of the fox option thank you but maybe i'll start with the cancer allocation question, Ian.

So as I mentioned in my prepared comments, the capital allocation framework remains consistent with what we outlined at our investor today in 2024, and we remain committed to the long-term policy of returning caps to our shareholders. As we often say, we are an end company, so we'll ensure our capital allocation decisions are balanced by the opportunities to invest for growth, but also to optimize for leverage over time. And our current approach really provides us with the flexibility to respond effectively to evolving market conditions and emerging opportunities. And in 2026, we'll prioritize significant capital deployment across both the organic investment in our core business, which has historically yielded the highest returns, by the way, and strategic investment in the newly emerging prediction markets opportunities so there's a lot to go after we continue to you know generate a lot of cash in this business and we we can and will de-leaver quickly but there's lots of interesting and exciting allocation opportunities ahead of us through 2026 which we want to get behind and then there's not there's nothing to say on the on the fox option

thank you your next question comes from the line of robert fishman of muffet nathanson your line is open.

Hi, good afternoon. Any more color you can provide? I think you said high teens growth that you're expecting for the US iGaming in 2026. Just how sustainable do you think that is as we think about the years ahead? Thank you.

Well, if you think about, Robert, the iGaming market in 2025, it grew around 26% and our revenue growth was 33%. I think as the states mature would expect some moderation of that growth, but we feel confident it's going to continue to be mid to high teens. Therefore, we do expect continued strong growth. We're excited about the product roadmap that we've got in iGaming. There's definitely still a long way to go on the penetration rates in iGaming.

If you look at what we set out, I think it's nine and a half percent of the invested area, about six and a half percent, I think, as we stand today so lots to still go after there and you know we're incredibly pleased as i said earlier with our eye gaming performance your next question comes from the line of joe staff of susquehanna your line is open thank you um hello peter rob just sorry about it but i i wanted to ask a little bit more just on generosity investments and those returns in in for fandle so it certainly makes sense right and i casino you get a higher return you know you get more betting events that makes sense but do you get a return does that customer that seems to me to be a unique customer meaning that customer doesn't necessarily cross promote into osb and so your generosity investments in osb at least for that does cross is that maybe part um i guess of of you know what we're trying to figure out and what happened essentially in the third and fourth quarter um with respect to like your approach because obviously you're gunning on the i casino and it and it's worked i was just wondering if that's part if that's a realistic understanding of kind of how you're allocating

that capital and and why the returns are lower yeah so i think there's there's two things going on and I'll just make sure I understand your question. I think effectively we did not deploy our generosity efficiently in Q4. Particularly when you think about the very long sequence of very high margins, particularly during those real peak weeks, we were not efficient and effective. We should have been deploying more generosity at those points there. I think separately, we have had lots of success with deploying our loyalty or rewards program into a casino. In all of our businesses, we deploy a lot of generosity to customers. And one of the advantages of bundling up that generosity within a loyalty program is consumers understand better what's been going on. And I actually think one of the issues for us in Q4 was there's a bit of a whipsaw way. Generosity was on, it was off, it was on, it was off. And particularly at a time when margins were running very hot, I think we were probably causing a bit of confusion amongst our customers and we're just not deploying it effectively. So that's what we're going to address, get to a more efficient and effective distribution of generosity. I think that's very important.

Your next question comes from one of Chad Bainan of Macquarie Group. Your line is open.

Afternoon. Thanks for taking my question. With respect to the upcoming UK iGaming impact, has anything changed just in the current landscape in terms of how your competitors are maybe running their business, promos, marketing, etc.? And could this potentially adjust how you're thinking about mitigation? Thank you.

Hi, Chad. Well, we obviously laid out our top level plans for mitigation when the changes were introduced in Q4 last year. And to this point, we're not seeing anything different to what we'd anticipated in terms of activity. But it's actually early days because the tax changes don't actually hit until April. And what we expect will happen is that people will start to moderate behavior from that point onwards. If you think about the market share of iGaming in the UK, there's a very long tail. So there's circa 30% of the market shares in the long tail with much inferior economics to us, given our scale. And actually, we fully anticipate that there'll be some changes in marketing and generosity and return to player dynamics as we move through the year. We were reasonably conservative in terms of our view, in terms of what we recapture versus the tax increase, and we still remain confident.

Your next question comes from the line of John Decree of CBRE. Your line is open.

Hi, everyone. Thanks for taking my question. Peter, I wanted to circle back to a comment made in prepared remarks of your sentiment that we share as well, and that is prediction markets should accelerate OSB and iGaming regulation in the States. I'm curious if you could share any more color on that view and your perspective. You probably have as good of a view or better than anyone. What kind of inputs help you feel confident that that might come to fruition?

John, we have, I think we're singing to the choir if you're in agreement with me. I think we do believe that the noise around prediction markets, and it is an opportunity for us to acquire customers in advance of the state's regulating, but we do think it will help hasten the regulation of iGaming and online sports budding. We've got an extensive team who have focused on this, and we're having some very fruitful conversations at the moment. And, you know, look, we've just had some good news in Arkansas. You know, who knows where else the, you know, the next shooter drop will be. Now, I'm excited to see some of our gaming states come along at some point soon.

Your next question comes from line of Monique Pollard of City. Your line is open.

Hi. Hello, everyone. Afternoon and evening. Thank you for taking my question. Apologies if I missed it, but I couldn't see anywhere if you could help clarify how much you spent on fan jewel predicts in the fourth quarter just conscious that you didn't have you know it was only a handful of states during t4 before the wider launch in january and basically the follow-up question to that is me just trying to understand how much of you know the guidance change in the fan jewel predicts for 2026 to the upper end it's just a timing shift versus how much is it that you've seen something in the predict customers you've acquired so far that makes you think it's worth pushing more aggressively on that opportunity in 2026?

Yeah, hi, Monique, it's Rob here, but we didn't actually confirm a number in the release, so you didn't miss anything. It is actually lower than the 45 million that we guided at Q3, so ended up spending slightly less than that in the quarter. I think Peter outlined very well what our intentions are for for 2026. So, you know, we've now said that we're going to be towards the top end of the range. What I would say is that within that, you know, we retain our right to have flexibility on that spend. And it's a very fast-moving category, and our investment will ultimately be driven by the types of returns that we see. Ultimately, both of us would be delighted to be sitting here at the end of the year saying that we've actually invested at the top end or beyond that envelope, because that will mean that we're really achieving traction in the prediction market space.

Your next question comes from the line of Ryan Sigdal of Craig Hallam. Your line is open.

Hey, good day, Peter. I hear you on the NFL playoffs. I know we're all sad the Vikings didn't make it. The question is, given the more pronounced moderation in customer activity and the unfavorable recycling in the U.S., I guess especially relative to your peers, curious how the company, how you plan to maintain your structurally higher hold while also retaining share of players' wallets.

Hi, Ryan. Yeah, I mean, I think we've discussed some of these factors already. The key issue that we saw in Q4 wasn't that we had over the course of this football season the 19% margin. That was great. And you look at where the gross win margin was for Q4 and we're in line with what we anticipated doing for 2027. The issue really was how we deployed our generosity. And that's something that we are addressing. I've talked about that. We've got to make sure that the generosity strategy reflects what we're seeing in the market. And those 10 out of 11 weeks with very high and sustained margins and then the number of weeks at 30%, they really impacted our business. and, you know, the relationship around what we're doing with generosity with where margins are, the sort of hangover impact that you get for a couple of weeks after those very high margins is something we want to make sure that we address. Personalized generosity is the way to deal with that because, of course, even when we're talking about very high margins, there's still averages and there's customers who've done well and customers who've done badly within that. And, you know, that's what the team have got a lot of experience of doing in Australia. We're learning from that and deploying it into the U.S. business. So, yeah, this isn't so much a matter of the issue of the high margins. It's more how we make sure that we spend generosity effectively, customers understand what's happening, and we don't have the sort of situation where we're bidding consistent, and that is not helpful for customers, particularly for these consecutive high margins.

And your last question comes from the line of Richard Stuber of Deutsche Bank. Your line is open.

Hi, good evening. Just for me, a question on credit cards. I did read somewhere that you would now stop taking credit card deposits. I was wondering, have these credit card deposits been largely offset by the same customers using alternative payment methods, or have those credit card customers broadly left, and is that sort of a similar thing which your competitors are doing in terms of credit cards?

Thank you. yeah yeah hi Richard this is something that we've known about been anticipating for and also something that we've navigated in a number of our markets around the world but we're actually anticipating a de minimis impact from this it comes in at the start of March it's within our plans and we're not expecting it to have a material impact okay I think we are done with questions thank you very much everybody for dying in much appreciated this concludes today's conference call you may now disconnect