Caesars Entertainment, Inc. Q1 FY2025 earnings call

Key Points

• Brian Agnew introduces the call and notes forward-looking statements and non-GAAP measures.
• Anthony Carano discusses consolidated performance, highlighting Las Vegas' flat same-store adjusted EBITDAR despite tough Super Bowl comps and regional segment improvement despite weather disruptions.
• Eric Hession details digital segment growth, including sports betting and iCasino revenue increases, and mentions app enhancements and new game launches.
• Bret Yunker talks about balance sheet, including CapEx guidance and stock repurchases.
• Tom Reeg provides insights on Vegas, regional, and digital trends, mentions capital inflection point, free cash flow usage for debt paydown, and strong forward bookings.

Consolidated net revenues for the first quarter of 2025 were $2.8 billion, up 2% year-over-year, and total adjusted EBITDA was $884 million, up 4% year-over-year.

• Las Vegas: Same-store adjusted EBITDAR was $433 million, essentially flat year-over-year. Slots and ETG volumes grew, convention room nights made up 20% of the mix, and the form convention center achieved a Q1 EBITDA record. Las Vegas EBITDA margins were 43.2%, up 50 basis points year-over-year.
• Regional: Delivered $440 million of adjusted EBITDA for the quarter, up 2% versus the prior year. Benefited from stable same-store trends and contributions from New Orleans and Danville, despite weather disruptions.
• Digital: Net revenue was $335 million, up $53 million or 19% year-over-year, and adjusted EBITDA was $43 million, up $38 million year-over-year. Sports betting net revenue grew 9%, and iCasino net revenue grew 53%. The Horseshoe app contributed approximately 7% of the segment net gaming revenue.

Forward-Looking Statements

• 2025 full year CapEx is expected to be roughly $600 million (excluding Virginia joint venture).
• Free cash flow is anticipated to be used primarily for debt paydown.
• Vegas is expected to grow slightly, regionals are forecasted to be flat to slightly up, and digital is projected to post strong growth. Forward bookings remain strong with no immediate consumer softness observed.

Risks Identified

• Uncertainty surrounding potential US policy changes impacting Las Vegas' economic outlook.
• Weather disruptions affecting regional segment performance.
• Volatility in sports betting hold due to small sample sizes and correlated outcomes in sports events.
• Skin revenues and World Series of Poker-related revenues creating headwinds in specific quarters (e.g., Q2 and Q3).

Q: Carlo Santarelli asks about Las Vegas outlook and World Series of Poker revenue impact.

A: Tom Reeg discusses group bookings and expected growth in group business, while Eric Hession explains that skin revenues and World Series of Poker-related revenues create headwinds in Q2 and Q3.

Q: Brandt Montour asks about weather impact and cost savings in Las Vegas.

A: Anthony Carano and Tom Reeg discuss weather effects on regional performance and the cost efficiencies achieved by the Las Vegas team.

Q: Steve Muszynski asks about digital business and balance sheet.

A: Tom Reeg talks about digital growth and the company's strong balance sheet position, while Eric Hession provides insights on digital segment dynamics.

Q: David Katz asks about digital split between sports and iGaming.

A: Tom Reeg discusses sports betting EBITDA potential and iGaming growth opportunities, noting iGaming's appeal for investors.

Q: Barry Jonas asks about digital operating trends.

A: Tom Reeg emphasizes digital business goals and the company's focus on creating value for shareholders.

Q: John DeCree asks about digital iCasino growth.

A: Tom Reeg and Eric Hession discuss iCasino growth drivers, including app enhancements and new in-house game launches.

Q: Jordan Bender asks about sports betting hold and omnichannel.

A: Eric Hession talks about hold improvement timelines and Anthony Carano discusses omnichannel synergies between brick-and-mortar and digital.

Q: Daniel Guglielmo asks about Las Vegas spend and CapEx.

A: Tom Reeg and Bret Yunker address Las Vegas spending patterns and confirm CapEx guidance remains unchanged.

Q: Stephen Grambling asks about sports betting hold and omnichannel.

A: Tom Reeg and Eric Hession discuss sports betting hold volatility and omnichannel initiatives to enhance customer experience.