Flutter Entertainment Inc. (FLUT) shares dipped in after-hours trading Wednesday despite delivering a significant earnings beat, as investors focused on revenue shortfalls and a reduced outlook for the year ahead.

The Numbers

Flutter reported quarterly earnings of $1.64 per share, crushing the Street estimate of 86 cents. That's the good news. The not-so-good news? Quarterly revenue came in at $3.79 billion, missing the analyst estimate of $3.9 billion.

What Happened This Quarter

The company's sportsbook business showed signs of both strength and struggle. On the positive side, average monthly players grew 5% after declining 4% in Q2. But sportsbook revenue dropped 5% year-over-year, squeezed by unfavorable sports results and what Flutter called "very high levels of uneconomic generosity from sportsbook competitors" during the NFL season kickoff. That competitive pressure helped push Q3 adjusted EBITDA to $51 million, down 12% year-over-year.

Flutter didn't sit idle. The company ramped up FanDuel investment during Q4, and early results look promising. Year-over-year handle growth hit 10% so far this quarter, with the NBA season launching strong.

"Flutter delivered a solid third quarter, with continued momentum in both our US and International businesses. We are the clear number one operator in the U.S., and we will continue to build on that position to drive future profitability," said CEO Peter Jackson.

The Outlook

Flutter lowered its fiscal 2025 revenue outlook to $16.69 billion versus the $17.05 billion estimate, signaling that near-term headwinds remain a concern.

Flutter Entertainment stock was down 2.1% at $229.50 in Wednesday's extended trading session.