Earnings call transcript: Entain posts 10th straight quarter of online growth in Q3 2026

Entain PLC reported that online revenue growth has continued for the 10th consecutive quarter in Q3 2026, with group net gaming revenue (NGR) up 2% in constant currency and online NGR rising 3%. Excluding Brazil, online NGR increased by 5%, driven by 7% volume growth. The UK and Ireland delivered strong performance, with online NGR up 14%, while retail NGR rose 3% on a like-for-like basis.

Management reiterated a 2028 free cash flow target of GBP 500 million, emphasizing that cost control remains a daily discipline. Online growth remained broadly based, with gaming NGR up 8% and online volumes up 7% excluding Brazil. International markets faced mixed results, with overall international NGR falling 4% and online NGR declining 3%, largely due to Brazil and weak sports results in Europe.

However, several markets, including Spain, New Zealand, and Canada, posted strong double-digit growth. Net gaming revenue (NGR) for the year-to-date period excluding Brazil increased by 8%, surpassing the company's 5% to 7% guidance range. Online NGR excluding Brazil also rose 5% year-over-year. Group NGR increased 2% year-over-year in constant currency, while online NGR increased 3% year-over-year.

Online volume growth excluding Brazil was up 7%. Gaming NGR was up 8% in the quarter, while sports NGR declined 3% due to unfavorable results, particularly in football. Retail NGR remained flat on a like-for-like basis, although volumes rose 2%. The UK and Ireland showed standout performance, with online NGR up 14%. Management highlighted that improved products, better app features, and disciplined investment contributed to the company's positive results.

Brazil's market closure, rising UK tax pressure, and sports betting volatility are factors that could impact future performance. Entain's shares fell 1.69% to $5.81, near the lower end of its 52-week range, indicating cautious investor sentiment. Despite the solid operating update, Brazil's uncertainty, UK tax pressure, and sports betting result fluctuations overshadow the positive signs from online growth and UK market share gains.

The company expects full-year online NGR growth guidance of 4% to 6% including Brazil and expects growth at the top end of its earlier 5% to 7% range excluding Brazil. Entain's market capitalization stands at $3.63 billion, with a gross profit margin of 83.9%. The company aims to optimize its cost base, improve cash generation, and strengthen its balance sheet.