Caesars Entertainment, Inc. Q4 FY2024 earnings call

• Anthony Carano noted regional performance improved sequentially with new expansions in New Orleans and Virginia, and Las Vegas had roughly flat year-over-year results despite tough comparisons. - Eric Hession highlighted digital segment's record performance in 2024, with iGaming showing strong growth and sports betting having certain challenges but improving hold percentages. - Bret Yunker discussed using noncore asset sale proceeds to repay debt and repurchase stock, and debt refinancings positioning the company for lower cost of debt. - Tom Reeg provided details on fourth quarter performance, 2025 and first quarter outlook, including positive signs in Las Vegas and regional segments, and continued growth in digital.

Las Vegas Segment: In Q4, same store net revenues were $1.1 billion and adjusted EBITDA was $478 million, down 1% year-over-year. Margins were 44.4% and occupancy for the full quarter was 96%. For the full year 2024, the company delivered consolidated net revenues of $11.2 billion and EBITDA of $3.7 billion with an EBITDA margin of 33.2%. Regional Segment: In Q4, net revenues declined 1% and adjusted EBITDA declined 5%, but showed sequential improvement. The segment saw the completion of Caesars New Orleans remodel in October and the opening of Caesars Virginia in December. The 2024 year marked the end of an intensive capital investment cycle. Digital Segment: 2024 was a record year with total net revenue of $1.2 billion, up 20% year-over-year, and adjusted EBITDA of $117 million vs $38 million a year ago. Q4 net revenue was $303 million and adjusted EBITDA was $20 million. iGaming had 65% net revenue growth in Q4, while sports betting net revenue declined due to customer friendly outcomes but achieved all-time record hold percentages for parlay, SGP, and cash out.

• Expect a dramatic increase in free cash flow in 2025 and 2026 from investments in property portfolio. - Digital segment expects another strong year of revenue and EBITDA growth in 2025 to stay on track for $500 million EBITDA goal. - Las Vegas expects 2025 and 2026 to be strong with group business increases and improvements in room revenue and F&B. - Regional segment expects 2025 to be flat to slightly up in EBITDA as competitive pressures abate.

• Regulatory risks related to tax policy changes in gaming. - Sports betting business risks due to customer mix changes and volume fluctuations. - Regional market risks from continued competitive pressures in certain markets.

Q: Carlo Santarelli asked about expense side for Las Vegas and regionals in 2025.

A: Thomas Reeg said there's a smaller labor contract increase in Las Vegas and Atlantic City, and operators are efficient. Anthony Carano added about managing costs while increasing offerings.

Q: David Katz asked about stock buybacks and asset sale.

A: Thomas Reeg said majority of free cash flow in 2025 would go to debt pay down, and company considers non-core assets for sale.

Q: Brandt Montour asked about Las Vegas convention calendar and slot play.

A: Thomas Reeg and Anthony Carano discussed convention bookings, new food and beverage products, and strong response to new high limit slot areas.

Q: Daniel Politzer asked about iGaming growth and tax regulation.

A: Eric Hession and Thomas Reeg talked about iGaming growth drivers, regulatory outlook with potential for more iCasino jurisdictions, and hold improvement potential.

Q: Steven Wieczynski asked about regional unrated play and customer tiers.

A: Thomas Reeg said rate is stable and getting better, customer is solid and stable.

Q: Barry Jonas asked about sports betting handle and Vegas slot play.

A: Eric Hession explained sports betting handle decline reasons, and Anthony Carano discussed strong slot play and high-limit slot room success.

Q: John DeCree asked about sports betting handle color and slot play in Las Vegas.

A: Eric Hession talked about sports betting customer mix and hold, and Anthony Carano discussed slot play trends.

Q: Stephen Grambling asked about digital EBITDA goal and data tie-in.

A: Thomas Reeg said volumes expected to grow in sports side back half of year, and digital business has some dissynergies if separated.

Q: Unidentified Analyst asked about New York sports betting and reinvestment strategy.

A: Eric Hession and Thomas Reeg discussed hold improvement drivers and stable reinvestment strategy.

Q: Jordan Bender asked about tax changes and IDM business.

A: Thomas Reeg said tax rate affects reinvestment rates similarly for different business models.

Q: Daniel Guglielmo asked about regional metrics and CapEx.

A: Thomas Reeg and Anthony Carano discussed metrics for attacking properties and highlighted Tahoe CapEx project.