Caesars Entertainment, Inc. Q4 FY2025 earnings call

• Caesars delivered solid 2025 results driven by portfolio diversity, omnichannel focus. • Fourth quarter results in line with expectations; Digital, Las Vegas, Regional segments had respective performances. • In Las Vegas, continued to elevate customer experience with new villas, investments in assets, upcoming CapEx projects. • In Regional, strategic customer reinvestments promising; expected benefits in 2026 from group mix, property transitions, renovations, events. • Digital segment had strong Q4 and full year results, continued to convert jurisdictions to digital wallet, launched sports betting in Missouri. • Bret Yunker mentioned reducing debt and opportunistic share repurchases in 2025, expecting more in 2026.

Full year same-store enterprise net revenues increased $266 million or 2% year-over-year. Fourth quarter consolidated net revenues $2.9 billion, up 4% y-o-y; adjusted EBITDAR $901 million, up 2% y-o-y. Digital segment: Q4 EBITDA record $85M despite Oct. poor hold; full year net revenues $1.4B, up 21% y-o-y; EBITDA $236M, up 100% y-o-y. Las Vegas segment: Q4 occupancy and rate trends improved; same-store adjusted EBITDAR $447M vs $477M last year; benefited from strong event calendar. Regional segment: Revenues up 4% y-o-y; EBITDAR declined slightly due to Dec. winter weather, but absent weather impact would have grown; adjusted EBITDAR $407M, down slightly to last year.

• Expect to benefit from decreasing CapEx, decreasing interest expense and well below $100M of cash taxes in 2026. • Digital expected to continue 20% top line growth with 50% flow-through to EBITDA. • Anticipate being a significant free cash flow generator in 2026, to utilize cash for debt paydown and share repurchases. • Expect tax refund season to be a tailwind in 2026 for consumer discretionary businesses. • For digital, fixed marketing expense to change in 2026 and 2027 as big contracts roll off, with majority likely flowing to EBITDA.

• Leisure traveler softness in Las Vegas during shoulder periods with no big events/conferences, challenging demand and labor staffing. • December winter weather in Regional segment negatively impacted EBITDA by over $10M. • Uncertainty around prediction markets and potential impact on brick-and-mortar licenses if pursued.

Q: Dan Politzer asks about leisure customer traction in Vegas and promotion/value proposition.

A: Tom Reeg says it's normal economic cycle, big events are strong, pricing not driving issues, expect recovery.

Q: Lizzie Dove asks about Vegas capital investments and OpEx management.

A: Thomas Reeg says first quarter sequential improvement, second quarter better, margin numbers challenging but expected to improve as demand firms.

Q: Brandt Montour asks about regionals flow-through and when metric flips.

A: Thomas Reeg says saw improvement in third/fourth quarter, expect continued improvement in 2026.

Q: Steven Pizzella asks about Las Vegas other revenue line item drivers.

A: Thomas Reeg says will call back with detail.

Q: John DeCree asks about tax refund season tailwind.

A: Thomas Reeg says tax cuts a tailwind, money benefits consumer discretionary businesses.

Q: David Katz asks about Regional Gaming value proposition.

A: Thomas Reeg says Caesars Rewards unique, legacy properties helped.

Q: Steven Wieczynski asks about leisure traveler bottom.

A: Thomas Reeg says rated player activity improving, sequential improvement with stronger group calendar.

Q: Barry Jonas asks about Virginia expansion bills and skill games.

A: Thomas Reeg says open to Northern Virginia opportunity, not involved in skill games.

Q: Stephen Grambling asks about Vegas real estate monetization.

A: Thomas Reeg says open to business, but not running process soon.

Q: Chad Beynon asks about digital business valuation and AI benefits.

A: Thomas Reeg says unlikely near-term spin-out, AI has benefits in various areas.

Q: Jordan Bender asks about digital long-term structural targets.

A: Eric Hession says improvement through product enhancements, confident in trend continuing.

Q: Trey Bowers asks about monthly unique payers.

A: Eric Hession says retention, active wagers, states played in contribute to metric.

Q: Daniel Guglielmo asks about Caesars Windsor expansion.

A: Thomas Reeg says unique situation, most Canada opportunities not interesting due to small tough locations