MGM Resorts International Q1 FY2026 earnings call

Adam Greenblatt mentioned BetMGM's steady start in 2026, focus on winning the BetMGM way, strategic improvements in player acquisition and management, etc. iGaming business saw solid top line growth with refinements in player management, launched exclusive titles like Gold Blitz and Survivor franchise. Sports business had top line drag from unfavorable sports results, but focus on quality over volume, and refining player management. Also mentioned Nevada as a core strength, focus on building on momentum in iGaming, and upcoming opportunities like World Cup, Alberta launch, etc.

For Q1, net revenue was $696 million, up 6% year-on-year, and adjusted EBITDA was $25 million. iGaming business delivered $481 million of net revenue in Q1, up 9% year on year, with iGaming contribution $143 million. OSB net revenue was $203 million, up 4% year over year, with OSB contribution $10 million. Retail sports delivered net revenue of $11 million, down 43% year-on-year. Q1 total contribution was $116 million, adjusted EBITDA was $25 million, and CAPEX was $3 million.

Now expects revenue for 2026 in the range of $2.9 to $3.1 billion, still expects to deliver adjusted EBITDA in line with guidance albeit at the lower end of the existing $300 to $350 million guidance range. Continues to see a path to $500 million of adjusted EBITDA in 2027.

Intensifying competitive dynamics in sports, including significant increase in CPAs due to new sports betting companies buying media, potentially affecting payback periods. Also, cannibalization concerns and uncertainty around prediction markets' impact on sports betting handle and legalization in some states.

Q: Asked about competitive environment change in iGaming, A: Saw pockets of new competition but not meaningful disruptors, strategy with content and exclusive still right.

Q: Split up of guidance downgrade for full year, A: In both first quarter and rest of year, evenly distributed.

Q: Thoughts on prediction markets cannibalization and legalization, A: Sports results encouraging, prediction markets could expedite legalization in some states.

Q: On shape of guidance, A: Focus on areas of strength, pruning least efficient spend, reallocating to best paybacks.

Q: On monthly active user growth, A: Strategy quality over quantity, trimming marginal players, acquiring aggressively.

Q: On prediction markets encroaching on premium mass customer, A: Premium parts of database resilient.

Q: On 2027 EBITDA guidance confidence, A: Healthy business, exciting pipeline, potential for rational marketing environment.

Q: On iGaming growth, A: Content strategy, live engagement, jackpots, potential of large market.

Q: On EBITDA cadence and delivery, A: Seasonality with middle of year good, fourth quarter typically strong.

Q: On unlicensed competition buying customers, A: Most players will return over time as BetMGM's value proposition better.

Q: On Nevada contribution, A: Previously a quarter, but slightly less this quarter.

Q: On prediction market spend sustainability, A: Higher up value pyramid more resilient, bottom end affected by prediction markets and player management.