Boyd Gaming Corporation Q4 FY2025 earnings call

• 2025 was successful with record company-wide revenues, EBITDAR ~$1.4 billion, property-level margins 40%.
• Unlocked value from FanDuel ownership, generating ~$1.8 billion cash proceeds, reducing leverage below 2x.
• Made capital investments to enhance property competitiveness and growth potential, including debut of transitional casino in Norfolk, Virginia.
• Returned over $800 million to shareholders in 2025, reducing share count by 11%.
• 2026 expectations: Las Vegas local segment benefits from Cadence Crossing and Suncoast project; Midwest and South segment benefits from meeting center expansion and hotel renovations; online segment expected growth; managed and other business to continue growth from Sky River expansion.
• 2025 capital expenditures: $148 million in Q4, total $588 million for full year. 2026 projected capital expenditures ~$650 million to $700 million.
• Share repurchases and dividends: Repurchased $185 million in Q4, total $836 million in 2025; plan to continue $150 million per quarter share repurchases and quarterly dividends

Las Vegas Local segment

• Overall revenue trends consistent with third quarter, with gaming revenue growth and cash hotel revenue decline due to destination business softness in Q4. Excluding Orleans, EBITDAR grew nearly 2.5% with margins exceeding 50%.
• 2026 expected to benefit from Cadence Crossing Casino opening and Suncoast project completion, and tax legislation benefits.

Downtown Las Vegas segment

• Play from Hawaiian guests and core customers stable in Q4, but offset by ~10% decline in Fremont Street Experience pedestrian traffic and lower cash hotel revenues due to weaker destination business.

Midwest and South segment

• Benefited from core and retail customer play growth in Q4, but impacted by severe winter weather in December and Sam's Town Tunica closure in November. Adjusted segment EBITDA grew ~2%.
• 2026 expected to benefit from non-gaming amenity investments, hotel renovations, and Ameristar St. Charles expanded meeting and convention center.

Online segment

• Full year EBITDAR $63 million, driven by Boyd Interactive and third-party market access agreements. 2026 projected EBITDAR $30 million to $35 million.

Managed and other business

• Management fees from Sky River Casino continued to grow. First phase of Sky River expansion near completion, 2026 projected EBITDAR $110 million to $114 million

• Online segment projected EBITDAR $30 million to $35 million in 2026.
• Managed and other business projected EBITDAR $110 million to $114 million in 2026.
• 2026 capital expenditures expected ~$650 million to $700 million.
• Leverage expected to approach ~2.5 times in 2026.
• Benefit from Cadence Crossing opening, Suncoast renovation completion, Ameristar St. Charles meeting center full year contribution, and tax legislation consumer spending benefits

• Severe weather events impacting Midwest and South segment, e.g., ~$5 million impact in Q1 2026 similar to Q1 2025.
• Weak destination business affecting hotel revenues in Las Vegas local segment, particularly at Orleans.
• Permanent closure of Sam's Town Tunica impacting Midwest and South segment.
• Uncertainty in consumer spending impact from tax legislation details

Q: Could you bifurcate between real locals play and destination locals play in Las Vegas Locals? How have each trended in Q4 and into the New Year?

A: Strong play from Las Vegas local residents, but true destination play (regional play) weak, resulting in $6 million decline in hotel revenue primarily at Orleans, with weakness more obvious in hotel revenues but also impacting gaming and food and beverage.

Q: Any updated thoughts on the M&A pipeline or overall environment on whole assets or opcos?

A: Remain interested in M&A, open to it, but with disciplined approach looking for right asset, market, price. Balance sheet strong but acquisition depends on right opportunity.

Q: Can you shed more light on the right market, right price, right characteristics for M&A?

A: Discipline remains on right market, asset, price, terms. Will accept OpCo structure for right asset. Structure not a deterrent if asset is right.

Q: Can you remind us about the customer base being 65 plus and thoughts on tax bill impact on Midwest and South customers?

A: ~40% of customer base is 65 plus company-wide. Expect tax bill to benefit Midwest customers, but TBD how much will show up in business. No concern about SNAP changes impacting customer cohorts.

Q: Can you quantify the Q4 impact of Suncoast disruption?

A: Suncoast project expected to be complete at end of Q3 2026, Q4 should start seeing benefits. Construction disruption impact on margins and EBITDA difficult to quantify, but property teams managing well.

Q: Updated expectations out of the temp in Virginia from an operational perspective?

A: Expected to breakeven at current level through opening of permanent facility in late 2027.

Q: How do you think about your approach to new state launches for iGaming?

A: Supportive of iGaming expansion in states with fair bills, paying attention to states talking about iGaming, and Boyd Interactive expected to continue growth with new state launches.

Q: Thoughts on locals market, headwinds, tailwinds, margin opportunity?

A: Uncertainty in destination business turnaround in Las Vegas. Core customers continue to be good, but destination business weakness impacts Orleans. Midwest and South benefit from people staying close to home, Ameristar meeting space, etc. Destination business turnaround needed for stronger performance.

Q: How material was January weather impact on Midwest and South?

A: Similar to last year, approximately $5 million impact like Q1 2025.

Q: Thoughts on weaker destination play affecting larger properties in regions?

A: Largest hotel outside Las Vegas (IP in Biloxi) impacted by destination business weakness, but other rooms in 200-400 category not impacted. Impact is specific to IP.

Q: Is 2.5x lease-adjusted leverage a year-end target?

A: 2.5x lease-adjusted leverage was traditional leverage estimate, year-end target considering CapEx, spend, and timing.

Q: Thoughts on Virginia iGaming support and locals business risk from strip softness?

A: Supportive of iGaming in Virginia depending on bill details. Locals business not seeing impact from strip softness as it's from true local residents, and tax legislation expected to benefit consumer spending in Southern Nevada