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01/09 23:39
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial maneuvers, such as the FanDuel transaction improving leverage and financial flexibility. The expansion plans in Nevada and Virginia, alongside increased shareholder returns, show growth and confidence. The Q&A section highlights steady performance and strategic partnerships, with some minor uncertainties, but overall, the optimistic guidance and proactive strategies suggest a positive outlook for the stock.
Revenue Revenues exceeded $1 billion in the third quarter, showing growth driven by strong play from core and retail customers, despite weakness in the destination business.
EBITDAR EBITDAR was $322 million for the quarter, reflecting growth after adjusting for the FanDuel transaction. Margins were consistent with the prior year at 37%, supported by operational efficiencies.
Las Vegas Locals Segment Revenue Revenues were $211 million, with year-over-year growth of 2% (excluding the Orleans). Growth was driven by strong demand from locals customers and improving trends in retail customer play.
Las Vegas Locals Segment EBITDAR EBITDAR was $92 million, with year-over-year growth of 2% (excluding the Orleans). Margins were consistent with the prior year at 47%, supported by disciplined marketing and operating efficiencies.
Midwest and South Segment Revenue Revenues rose 3% to $539 million, marking the strongest third quarter performance in 3 years. Growth was broad-based, driven by core and retail customer play.
Midwest and South Segment EBITDAR EBITDAR grew to $202 million, more than 2% over the prior year. Operating margins exceeded 37%, supported by disciplined cost structure and marketing spend.
Shareholder Capital Return $160 million in stock repurchases and $15 million in dividends were returned to shareholders during the quarter. Total shareholder returns for the year reached $637 million.
Capital Expenditures $146 million was invested in capital during the quarter, bringing year-to-date expenditures to $440 million. Total capital expenditures for the year are expected to be approximately $600 million.
Leverage Ratio Total leverage ratio declined from 2.8x to 1.5x, and lease-adjusted leverage declined from 3.2x to 2.0x, following the sale of a 5% stake in FanDuel and debt repayment.
FanDuel transaction: The company adjusted for the recent FanDuel transaction, which contributed to revenue and EBITDAR growth.
Sky River Casino expansion: The first phase of expansion will add 400 slot machines and a 1,600-space parking garage by Q1 2026. A second phase will include a 300-room hotel, new food and beverage outlets, a spa, and an event center by mid-2027.
Cadence Crossing development: A new Las Vegas Locals property replacing Joker's Wild casino, scheduled to open in Q2 2026, with future plans for additional amenities.
Norfolk, Virginia resort: A $750 million resort development with a transitional casino opening soon and a permanent resort scheduled for November 2027.
Las Vegas Locals market: Gaming revenue grew over 3% in the last 12 months, supported by wage growth and population increases in Southern Nevada.
Midwest and South segment: Achieved its strongest Q3 revenue and EBITDAR performance in 3 years, with revenues up 3% to $539 million.
Downtown Las Vegas segment: Revenues and EBITDA were stable, supported by Hawaiian customers, despite lower hotel revenues and reduced pedestrian traffic.
Operational efficiencies: Maintained consistent margins (37%) and disciplined marketing and cost structures across segments.
Capital investments: Invested $146 million in Q3, with a total of $600 million expected for the year, including maintenance and growth capital.
Shareholder returns: Repurchased $160 million in stock and paid $15 million in dividends in Q3, with plans to maintain $150 million in quarterly repurchases.
Balance sheet strength: Reduced leverage ratio to 1.5x after selling a 5% stake in FanDuel, maintaining the strongest balance sheet in company history.
Destination Business Weakness: The company experienced declines in its destination business, particularly at the Orleans property, and softness in hotel revenues and pedestrian traffic in Downtown Las Vegas. This could impact overall revenue growth and profitability.
Regulatory Approvals: Several growth projects, including the Norfolk, Virginia resort and Illinois gaming facility, are pending regulatory approval. Delays or denials could hinder expansion plans and revenue generation.
Construction Disruptions: Ongoing construction projects, such as the Suncoast renovations and Cadence Crossing development, may temporarily disrupt operations and customer experience, potentially affecting short-term revenue.
Economic Sensitivity: The company's performance is tied to economic conditions, including wage growth and consumer spending. Any economic downturn or reduced consumer confidence could negatively impact gaming and hospitality revenues.
Competitive Pressures: The company faces competition in the gaming and entertainment industry, which could affect market share and profitability, especially as new facilities and expansions are introduced by competitors.
Supply Chain and Cost Management: The company is investing heavily in capital projects, with $600 million in expected expenditures for the year. Any supply chain disruptions or cost overruns could impact project timelines and financial performance.
Online Segment EBITDAR Guidance: The company has increased its guidance for the Online segment to $60 million in EBITDAR for 2025. For 2026, the company expects approximately $30 million in EBITDAR from this segment.
Sky River Casino Expansion: The first phase of the Sky River Casino expansion will add 400 slot machines and a 1,600-space parking garage, expected to be completed in the first quarter of 2026. A second phase, to be completed by mid-2027, will include a 300-room hotel, 3 new food and beverage outlets, a full-service resort spa, and an entertainment and event center.
Suncoast Renovation: The modernization project at Suncoast, including a complete transformation of the casino floor and enhanced meeting and public spaces, is expected to be completed by mid-2026. A similar project at the Orleans will follow.
Cadence Crossing Development: Construction is progressing on Cadence Crossing, a new Las Vegas Locals property, scheduled to open in the second quarter of 2026. Future plans include a hotel, additional casino space, and more non-gaming amenities.
Paradise Gaming Facility in Illinois: Design and planning work for a new gaming facility at Paradise is ongoing, with construction expected to start in late 2026, pending regulatory approval.
Norfolk, Virginia Resort Development: Development of a $750 million resort in Norfolk, Virginia, is underway. A transitional casino is expected to open in a few weeks, with the permanent resort scheduled to open in November 2027. The resort will feature a 65,000 square foot casino, 200-room hotel, 8 food and beverage outlets, live entertainment, and an outdoor amenity deck.
Capital Expenditures for 2025: Total capital expenditures for 2025 are expected to be approximately $600 million, including $250 million for recurring maintenance, $100 million for hotel room renovations, $100 million for growth capital, and $150 million for the Virginia casino development.
Shareholder Capital Return Program: The company plans to maintain share repurchases of approximately $150 million per quarter, supplemented by a regular quarterly dividend, equating to more than $650 million per year or over $8 per share.
Quarterly Dividend: Paid a quarterly dividend of $0.18 per share during the quarter, totaling $15 million.
Annual Dividend Plan: Intend to maintain a regular quarterly dividend as part of the shareholder return program.
Share Repurchase in Q3 2025: Repurchased $160 million in stock, acquiring 1.9 million shares at an average price of $84.05 per share.
Cumulative Share Repurchase: Since October 2021, returned more than $2.5 billion through share repurchases and dividends, reducing share count by 30%.
Future Share Repurchase Plan: Plan to maintain repurchases of approximately $150 million per quarter, equating to more than $650 million per year.
The earnings call reveals strong financial maneuvers, such as the FanDuel transaction improving leverage and financial flexibility. The expansion plans in Nevada and Virginia, alongside increased shareholder returns, show growth and confidence. The Q&A section highlights steady performance and strategic partnerships, with some minor uncertainties, but overall, the optimistic guidance and proactive strategies suggest a positive outlook for the stock.
The earnings call reflects strong financial performance with $1 billion in revenue and $338 million EBITDA, maintaining a 40% margin. The company is in excellent financial health, with robust free cash flow and no near-term maturities. Shareholder returns are substantial, with $105 million in stock repurchased and a $15 million dividend paid in Q2 2025. The Q&A section reveals a stable promotional environment and disciplined cost management. Although management avoided specifics on tax changes, overall sentiment remains positive, with strategic focus on growth and capital allocation.
The earnings call highlights strong financial performance with record revenue and growing EBITDAR, a stable leverage ratio, and a commitment to shareholder returns through dividends and buybacks. Despite competitive pressures and some weather impacts, the company shows resilience and strategic planning. The Q&A section indicates management's confidence in growth and risk mitigation strategies. The increase in dividends and share repurchases signals a positive outlook, leading to a likely positive stock price movement in the short term.
The earnings call reflects a generally positive sentiment with record revenue, strong EBITDA growth, and stable margins. Shareholder returns through increased dividends and share repurchases also contribute positively. The Q&A section highlights cautious optimism, with management addressing competitive pressures and capital allocation prudently. Despite some uncertainties, such as competitive pressures and economic environment, the overall financial health and strategic initiatives suggest a positive outlook for the stock price.
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