Las Vegas Sands Corp. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Macau: Underperformed due to not being aggressive enough in customer reinvestment. Changed approach in the middle of the quarter to increase market share and EBITDA. Londoner is open and moving towards $1 billion annualized EBITDA. Macau's GGR accelerated this quarter.
• Singapore: Marina Bay Sands' record financial results reflect high-quality investment in market-leading products and growth in high-value tourism. Still in the initial stages of realizing benefits from investments.
• Share Repurchases: Repurchased $800 million of LVS stock during the quarter and $179 million of SCL stock, increasing ownership of SCL to 73.4%.

Segment Performance

• Macau: EBITDA for the quarter was $566 million. Margin at Venetian was 35.6%, Plaza and Four Seasons was 34%, and Londoner was 31.9%. If they had held to the expected rolling program, EBITDA would have been lower by $7 million. Adjusted for higher-than-expected hold in the rolling segment, the EBITDA margin for the Macau portfolio of properties would have been 31.3%, down 80 basis points compared to Q2 2024.
• Singapore: Marina Bay Sands had a historic quarter with EBITDA of $768 million at a margin of 55.3%. Mass gaming and slot win did $843 million, reflecting 97% growth in Q2 2019 and 40% higher than last year's same quarter. If they had held to the expected rolling program, EBITDA would have been lower by $107 million.

Guidance

• Londoner aims to move towards the goal of $1 billion in annualized EBITDA.
• Macau's short-term goal is to reach a $2.7 billion run rate and eventually get back to the $2.6 billion to $2.7 billion range.
• Singapore's strong performance suggests potential for continued high EBITDA, though hard to predict long-term due to changing market dynamics.

Risks

• Competitive market in Macau requires ongoing adjustments in customer reinvestment and product strategies.
• Uncertainty in hold percentages in Singapore due to changing customer behavior and types of bets.
• Potential headwinds from events calendar changes in Macau affecting visitation and GGR.

Question and Answer

Q: Starting with Macau, I appreciate the acknowledgment of the shortfall somewhat there. But perhaps remind us of how you're thinking about turning the tide from a competitive standpoint and what KPIs or timing investors should maybe be thinking about in terms of seeing some of the market share go in the opposite direction?

A: I'll take that, Stephen. Thank you for the question. I think around late April, we started to implement a more aggressive customer reinvestment program. And I think we're seeing some encouraging initial results from those increased levels of reinvestment. As we get into May and June, the performance of SCL did improve. And I think we will be continuing to adjust to the market conditions as and when necessary. We're also looking at opportunity for us to perform better from our smaller properties at Parisian and Sands. So overall, the reception to Londoner has been phenomenal. I think we're getting exceptional feedback from customers, and that's obviously growing nicely. But obviously, this quarter is still just the start. All of the rooms, as Patrick referenced, were available from late April, and we intend to continue to yield better at Londoner and Macau. So that property has much further to go. And then the rest of the portfolio, we have to adjust our reinvestment levels according to the product and according to the individual product mix within the property. And I think this process has only just started, and we'll continue to see, I think, improvements in our results as we have done since May and June already. And as you can see, we have a sequential improvement in our mass GGR market share, up 8% for the quarter, and we intend to drive better improvements and also hopefully recapture that market share in the coming quarters.

Q: For Grant or whoever wants to take it, maybe we could just start in Macau. We did see across the market a bit of an improvement sequentially as the quarter went on in sort of overall market GGR. We've heard some mixed views about how either promotionally driven or VIP or event-driven that was. So hoping to get a little bit of color on just what's driving that improvement? How sustainable you think it is and just broader health of the macro in the market right now?

A: Sure. Thanks for the question, Shaun. I think the market clearly accelerated from May and June, obviously, was a standout performance I think, helped by the calendar of events that prevailed in June. If you look at the segment breakdown, clearly, as you can see from the DICJ data as well, the rolling -- the VIP segment performed very well during the quarter and was up 26% year-on-year by our estimates. But the non-rolling slot win also improved, and we're still in the high single-digit growth region for the quarter. So I think there's some very encouraging signs. I think a mix between improved customer intensity, but also the calendar of events and the offerings by the operators helping to drive the increased patronage as well.