The group booked flat revenue at £408m in the three months to March 31 while underlying earnings dipped 8 per cent to £102m.
This, Paddy said, was down to customer activity in the UK being “adversely affected by the sustained period of bookmaker-friendly sports results from November to February”.
Bookmakers cashed in over Christmas when a large number of bets were placed on Arsenal and Liverpool, who then went on to underperform over the festive period.
Paddy also flagged a “high level of racing fixture cancellations” - linked to the extreme weather in March - as dragging on its performance.
It expects full-year underlying earnings to come in between £470m and £495m.
Boss Peter Jackson said: “We have made good progress against our strategic priorities.
“In Europe, the successful completion of our platform integration has resulted in a meaningful improvement to the Paddy Power product.
“This has seen the brand’s gaming revenue returning to growth from February and a significant uplift in Cash Out usage and in-running betting during the Cheltenham Festival.”
The group is also returning £500m of cash to shareholders, which it said represents a step towards a “more efficient capital structure”.
It comes as bookmakers brace for the impact of state intervention in the sector this month.
The Government is to cut the maximum stake for fixed-odds betting terminals (FOBTs) to £2, with betting firms braced for a profits hit as a result of the change.