FDJ

FDJ reported weaker-than-expected Q126 revenue. Total revenue declined 3% yoy, reflecting a €24m impact from gaming taxes, while GGR grew just 1%, indicating a slow start to the year.

By segment, French Lottery and Retail Sports (69% of total revenue) fell 2%, mainly due to fewer draw game cycles (-6.2% yoy), less compelling sports fixtures, and higher payout ratios in retail sports betting (-3.6%) and lottery (-2.6%).

Online betting and gaming (24%), a key area of focus, saw revenue decline of 8%, impacted by €9m in additional taxes, while GGR was broadly flat (-1%). Excluding NL and UK, performance was more resilient, with GGR up 6% and revenue nearly stable (-1%), supported by solid trends in France and Sweden. Notably, active players increased by 3% in France.

Following the softer performance, the company lowered its FY2026 outlook. It now expects a slight increase in GGR and a slight decline in revenue (vs. slight revenue growth previously). EBITDA margin guidance has been reduced to 23-24% (from 24.5%).

We plan to make low- to mid-single-digit downgrade to estimates to reflect the weaker outlook and expect a negative market reaction today.

Expert Opinion:
This is disappointing, even though it was partially expected. Following the recent rise in share price, we expect we could see some profit-taking.  Yet we believe these pressures are transitory. The fundamentals of the company remain sound and valuation is cheap, whatever the metric. We believe the dividend is secured and the company currently yields c8%, which, in my opinion, justifies buying the name and waiting for better days. 


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