Entain (ENT) Q3 2024 TU earnings summary

Executive summary

• Q3 performance exceeded expectations, with strong growth in core markets including the UK, Brazil, and the US, and momentum continuing from H1.

• UK online returned to positive year-on-year growth ahead of schedule, and Brazil maintained robust performance, both outperforming expectations.

• BetMGM in the US showed encouraging trends, with NGR up 18% year-on-year, market share stabilizing at 15%, and record iGaming revenues.

• Strategic review led to retaining Crystalbet, with asset sales only considered at proper valuations and strategic fit.

• New CEO and Chair appointed, emphasizing operational excellence, product improvement, and reinvigorating core business growth.

Financial highlights

• Group NGR up 6% pro forma, or 7% including BetMGM share; online NGR up 9% pro forma year-on-year.

• UK & Ireland online NGR up 6%, Brazil up 48%, CEE up 13% year-on-year; BetMGM NGR up 18% year-on-year.

• International online NGR up 10% year-on-year; Australia posted 8% revenue growth.

• Retail NGR in the UK down 2%, with improvement expected in Q4 from new cabinet rollout.

• Q3 YTD 2024: Group (ex US) NGR up 6% reported, 8% constant currency; online up 9% reported, 12% constant currency.

Outlook and guidance

• Upgraded 2024 guidance: online NGR ex-US expected to grow mid-single digits in pro forma constant currency.

• Group EBITDA now expected towards the top end of GBP 1,040m–1,090m range, with organic EBITDA returning to year-on-year growth.

• Online EBITDA margin for 2024 expected at the top end of guidance, with similar levels anticipated for 2025 despite Brazil tax introduction.

• Expectation of continued market growth in the UK and moderate growth in Brazil post-regulation in 2025.