Monique Pollard

Monique Pollard asked for clarification on FanDuel Predicts spend in Q4 and whether the increased 2026 guidance for Predicts reflects a timing shift or stronger-than-expected customer acquisition.

Answer

CFO Rob Coldrake clarified that Q4 FanDuel Predicts spend was lower than the previously guided $45 million. He explained that the 2026 guidance towards the upper end reflects the significant opportunity, with investment flexibility driven by observed returns and traction in the fast-moving prediction market category.

Monique Pollard asked for clarification on FanDuel Predicts spend in Q4 and whether the 2026 guidance change to the upper end reflects a timing shift or increased opportunity based on acquired customers.

Answer

CFO Rob Coldrake confirmed that Q4 Predicts spend was lower than the $45 million guided at Q3. He explained that the move to the upper end of the 2026 guidance range reflects the significant opportunity, emphasizing that investment flexibility is maintained, and higher spend would indicate successful traction in the prediction market space.

Monique Pollard of Citi asked about the strong U.S. gross margin and whether there are other levers, beyond payment processing, to drive further scaling in the non-tax portion of cost of goods sold.

Answer

CFO Rob Coldrake confirmed ongoing success in reducing payment and fraud costs. He added that they continue to target other large cost buckets, such as geolocation, and are on track to meet the cost of sales parameters outlined at the September Investor Day.

Monique Pollard asked about the drivers behind the strong U.S. gross margin in the quarter and whether the full-year gross profit margin guidance has been increased, excluding the Illinois tax impact.

Answer

CEO Peter Jackson noted that favorable sports results had a profound impact on the margin. CFO Rob Coldrake stated that the full-year cost of sales guidance remains in line with previous expectations at approximately 56.8% of revenue. He acknowledged that while some costs like payment processing have risen, there are long-term levers to pull to manage them, drawing on experience from other markets.

Monique Pollard asked about the drivers behind the strong U.S. gross margin of 45.1% and whether the full-year guidance of 43.5% (excluding Illinois) has been increased.

Answer

CEO Peter Jackson first highlighted the positive impact of favorable sports results. CFO Rob Coldrake added that full-year cost of sales is expected to be ~56.8% of revenue, in line with prior guidance. He noted that while some costs like payments have increased, Flutter has significant experience and sees opportunities to reduce them over time, keeping them within their long-term guidance framework.

Monique Pollard questioned what made the North Carolina and Ohio launches so successful and the strategic advantage of early player acquisition. She also asked for a technical reconciliation of the full-year net interest guidance.

Answer

CEO Peter Jackson explained that launch success comes from a refined playbook, leveraging their DFS database, refer-a-friend programs, and national advertising, noting the importance of getting customers onto their superior product early to ensure retention. CFO Paul Edgecliffe-Johnson offered to follow up on the net interest query, suggesting the discrepancy might be in the modeling of interest received on fluctuating cash balances.

Monique Pollard from Citi asked about the specific strategies that made the North Carolina and Ohio launches so successful and questioned the components of the full-year net interest guidance, noting a discrepancy with Q1's run-rate.

Answer

CEO Peter Jackson explained that successful launches are a result of a refined playbook that leverages their DFS database, refer-a-friend programs, national advertising, and the advantage of acquiring customers early with a superior product. CFO Paul Edgecliffe-Johnson clarified that the net interest guidance includes interest received on fluctuating cash balances, which accounts for the difference, and offered to follow up with details.

Asked for details on the drivers of the French margin improvement (specifically retail media and e-commerce), the profitability of Brazilian e-commerce, and the future strategy for price investments in France.

Answer

The company detailed the French margin drivers, led by cost savings, with improving e-commerce profitability and a small but growing contribution from retail media. They confirmed Brazilian e-commerce is profitable. They plan to continue their price investment strategy in France throughout the year as planned.

Monique Pollard asked for more color on the drivers of the French margin improvement, specifically the scope of impact from retail media and e-commerce, and whether the e-commerce improvement was due to it becoming less unprofitable. She also questioned if the strong Brazilian e-commerce business is profitable. Finally, she asked if Carrefour might over-invest in price in H2 given the strong French margin and lack of competitive response.

Answer

Executive Matthieu Malige detailed the French margin drivers, highlighting dynamic cost savings, improving e-commerce profitability, benefits from franchising, and a positive but still small contribution from retail media. Executive Alexandre Bompard confirmed that price investments are spread across the entire year as planned. He also stated that the impressive e-commerce growth in Brazil is, importantly, profitable, and the company plans to accelerate it further.

Monique Pollard from Citigroup inquired about the company's capital expenditure, noting the H1 2023 figure of €81 million seemed low and asking if this represented the new run rate or if H2 would see higher spending.

Answer

CFO Brent Wissink confirmed that CapEx for the second half of the year is expected to be slightly higher than in the first half. He also noted that taxes would be slightly higher, but reiterated that overall cash flows are improving and the company is on track to be free cash flow positive by mid-2024.

Monique Pollard of Citigroup asked for details on the U.S. growth trajectory following the Amazon Prime partnership, including any data on new subscriber additions, and inquired about the future impact of fee caps.

Answer

CEO Jitse Groen stated that while he could not disclose specific numbers due to the partnership agreement, both companies are excited about the cooperation and expect it to improve Grubhub's growth trajectory. Regarding fee caps, he noted the recent change in San Francisco is encouraging, but the more significant impact would come from potential changes in New York City.

Monique Pollard of Citigroup Global Markets Ltd. sought clarification on the fee cap impact, noting that the January run-rate of €181 million seemed high compared to the full-year 2021 figure, given that some caps had been removed.

Answer

CEO Jitse Groen clarified that New York City accounts for a large portion of the U.S. fee cap impact. He also explained that in Canada, fee caps in most provinces remained in place through January and February due to the Omicron variant, which accounts for the high run-rate figure.