BOYD GAMING CORP Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Company continued to deliver consistent results with revenues near $1 billion and EBITDA $338 million in Q1, maintaining 40% property-level margins.
• Successfully managed weather impacts, Leap Year comparisons, and Super Bowl effects. Core customer play grew company-wide.
• Property renovations and expansions: IP, Valley Forge, and Orleans hotels being refreshed; Suncoast casino and public areas renovated; Treasure Chest facility to open in Q2; Belterra Park/Resort closed due to flooding; Sky River Casino expanding.
• Capital return program: repurchased $328M in stock and paid $15M in dividends in Q1; committed to $100M per quarter share repurchases, but more conservative above that; strong balance sheet with no near-term maturities.
• Positive long-term prospects with strong Southern Nevada economy fundamentals, and ongoing development projects in Missouri, Virginia, etc.

Segment Performance

• Las Vegas Locals: Revenues nearly even with prior year, EBITDA down less than 4% (attributable to Orleans). Core customer play grew, retail play consistent with Q4. Remainder of Locals segment had modest revenue growth, EBITDA even with prior year, operating margins >50%.
• Downtown Las Vegas: Revenue and EBITDA growth. Encouraging customer trends with core and retail customer play growth, healthy pedestrian traffic. Hawaiian visitation comparison from last year won't continue.
• Midwest & South: Revenues and EBITDA grew, margins even with prior year. Core customer play grew, retail play even with prior year. Belterra Park and Resort closed due to flooding. Trends in late March and April consistent with prior quarters.
• Online: EBITDA grew nearly 14% y-o-y, driven by market-access agreements and Boyd Interactive. 5% stake in FanDuel adds significant value.
• Managed & Other: Strong quarter, driven by Sky River Casino growth and expansion, with ongoing expansion at Sky River.

Guidance

• Committed to $100 million per quarter in share repurchases, but more conservative above that due to economic uncertainty.
• Projected total capital expenditures for full year $600 million to $650 million.
• Anniversary of Treasure Chest facility opening on June 6; Belterra Park and Resort closed earlier in the month due to flooding on the Ohio River.
• Norfolk resort project scheduled for completion in late 2027, with a transitional casino opening in November 2025.

Risks

• Weather impacts on Midwest & South segment with 28% more weather-impacted days than prior year.
• Economic uncertainty affecting capital allocation and share repurchases.
• Potential impact of Hawaiian sports betting bill on business.
• Tariff risks on capital projects, though steps taken to mitigate, including evaluating project deferrals and sourcing domestically where possible.

Question and Answer

Q: Carlo Santarelli of Deutsche Bank asked about Paradise project and other assets with land-based transition opportunities, and outlook for segments.

A: Keith Smith mentioned prioritizing projects for highest returns, core customer continuing to grow, retail customer performing consistently.

Q: Shaun Kelley of Bank of America asked about buyback strategy and capital projects with tariffs.

A: Keith Smith said balance between capital allocation, repurchases, and strong balance sheet; Josh Hirsberg discussed evaluating capital projects, sourcing domestically for Virginia project, and comfortable with risk relative to budgets.

Q: David Katz of Jeffries asked about M&A potential and customer metrics.

A: Keith Smith said interested in M&A but cautious; Josh Hirsberg said core customer growth from frequency and budget, retail unrated has growing volume.

Q: Steve Wieczynski of Stifel asked about non-gaming spend and competitors' promotional aggressiveness.

A: Josh Hirsberg said F&B and hotel up on cash basis; Keith Smith said no significant change in promotional environment.

Q: Jordan Bender of Citizens asked about Hawaiian travel and weather impact on EBITDA.

A: Keith Smith said first quarter this year was normal, weather impact on EBITDA estimated at $5 million.

Q: Brandt Montour of Barclays asked about Locals market competitive landscape and historical correlation to recessions.

A: Keith Smith said without Orleans, Locals business outperformed overall market, economy in Southern Nevada diversified so prior recession correlations not applicable.

Q: Ben Chaiken of Mizuho asked about Stardust iGaming platform and Hawaiian sports betting bill.

A: Keith Smith said Stardust platform performing well, modest investment; on Hawaiian sports betting, said Boyd Gaming would be part of any gaming in Hawaii.

Q: Joe Stauff of Susquehanna asked about land-based OpEx and flexibility.

A: Josh Hirsberg said constantly working on reducing OpEx, evaluating costs as variable in soft periods.

Q: Chad Beynon of Macquarie asked about Canadian travel exposure and Hawaiian sports betting bill risk.

A: Keith Smith said Canadian travel exposure is small; on Hawaiian sports betting, said no major impact on business.

Q: Max Marsh of CBRE asked about core customer risk in recession.

A: Josh Hirsberg said core customer has been most consistent since COVID, like during 2008-2009 recession.

Q: Barry Jonas of Truist Securities asked about Eastside Cannery and Trop I-15 interchange project.

A: Keith Smith said market doesn't support Eastside Cannery opening; Trop I-15 interchange project expected to be resolved later this year.