MGM Resorts International Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Bill Hornbuckle: Highlighted record results in 2024, strong Net Promoter Scores, strategic investments in properties (e.g., Bellagio suite renovations, Cosmopolitan rebranding to MGM rewards), success in groups and meetings with over 2.2 million room nights booked for 2025, rebranding Delano Tower at Mandalay Bay to W Las Vegas, and progress in development projects (Osaka ground preparation, New York RFA submission).
• Jonathan Halkyard: Introduced new disclosures like consolidated adjusted EBITDA, discussed CapEx ($1.15B in 2024), and mentioned aiming to capture ~$150M of $200M operational EBITDA opportunities in 2025.
• Gary Fritz: Detailed MGM Digital's investments, integration of assets (e.g., Tipico's US sports betting technology), growth plans in Europe (BetMGM brand launch), Brazil venture, and MGM live operations.

Segment Performance

• Las Vegas: In the fourth quarter, revenues were down 6% and adjusted EBITDAR was down 11% despite an all-time quarterly record domestic slot win. January 2025 was strong with positive indicators.
• Regional Properties: Revenues grew 7% and adjusted EBITDAR grew 21% in the fourth quarter. MGM Grand Detroit contributed to the year-over-year increase due to strong execution and recovery from labor strike impacts.
• Macau: MGM China grew quarterly net revenues 4% year-over-year, and total dividends from MGM China to MGM Resorts were approximately $200 million in the year.
• MGM Digital: Net revenues grew 15% in the fourth quarter. Losses are narrowing in the UK, but increased spending in Brazil will keep 2025 EBITDAR losses similar to 2024.

Guidance

• BetMGM: Expect net revenues from operations to roll in $2.4 billion to $2.5 billion in 2025 with EBITDA inflecting positive.
• MGM Digital: Aims for $1 billion plus in revenue with healthy double-digit margins.
• Operational EBITDA: Expect to capture ~$150 million of $200 million operational EBITDA opportunities in 2025, with 35% revenue actions and 65% expense.
• Share Buybacks: Aggressive share buyback program due to attractive share valuation, with $120 million repurchased in Q4 and ~$300 million in January 2025.

Risks

• Tax Increases: Potential impact of increasing taxes in various markets (digital and land-based).
• Competitive Landscape: Intense competition in digital and land-based operations, including iGaming and sports betting markets.

Question and Answer

Q: Provide more color on the scale of MGM's digital investment and near-term returns for MGM Digital?

A: Gary Fritz discussed MGM Digital's investments in content development, integration of assets, growth in Europe, Brazil venture, and MGM live operations, stating confidence in the business being $1 billion plus in revenue with healthy margins.

Q: Any meaningful BI proceeds in the fourth quarter?

A: Jonathan Halkyard stated there were no meaningful BI proceeds in the fourth quarter, but expected additional proceeds in 2025.

Q: Thoughts on Las Vegas revenue and ADRs in a flat demand environment?

A: Jonathan Halkyard mentioned January 2025 was strong with high occupancy and ADR records, and mid-single-digit ADR growth expected in other months except February.

Q: Degree of MGM Digital alignment with BetMGM in the US?

A: Bill Hornbuckle and Gary Fritz discussed content development collaboration and future potential for live dealer operations between MGM Digital and BetMGM.

Q: Concerns about increasing taxes in markets?

A: Corey Sanders and Gary Fritz discussed manageable tax increases, emphasizing communication of stakes and competitive landscape.