WYNN RESORTS LTD Q3 FY2024 earnings call

Management Statement and Operational Highlights

• Las Vegas: Demand remained healthy in Q3, with revenue up ~1% normalized and EBITDA flat Y/Y on tough comps. Hotel revenue up 5%, slot handle up 4%, table drop healthy. Fourth quarter demand remains strong. High-end consumer demand stable.
• Boston: Strong demand across business, EBITDA up 4% Y/Y, disciplined cost management, mitigated union-related payroll increases.
• Macau: EBITDA up 3% Y/Y, operating revenue up 6%, initiatives in food & beverage programming (renovated venues, new concepts), revitalizing/expanding Chairman's Club, enhancing loyalty program and Only at Wynn events. Golden Week saw mass table drop up almost 30% compared to last year.
• Wynn Al Marjan Island: Received first land-based gaming license, construction progressing, bullish on UAE as $3B-$5B gaming market, strategic land banks and potential greenfield opportunities outside UAE.
• Balance Sheet: Liquidity strong with $3.5 billion global cash and revolver availability, reduced gross debt $1.2 billion, approved $0.25/share dividend, repurchased ~1.5 million shares for $118 million, share repurchase authorization increased to $1 billion.

Segment Performance

• Las Vegas: Generated $202.7 million in adjusted property EBITDA on $607.2 million of operating revenue during the quarter, with an EBITDA margin of 33.4%. On a normalized basis, revenue was up about 1% and EBITDA was essentially flat year-over-year. Hotel revenue grew by 5%, slot handle by 4%, and table drop in the casino remained healthy. OpEx, excluding gaming tax per day, was $4.2 million in Q3 2024, up 2% compared to the prior year period.
• Boston: Generated adjusted property EBITDA of $63 million, up 4% year-on-year on revenue of $214.1 million with an EBITDA margin of 29.4%. Slot handle was up 3%, table drop up 1%, and non-gaming revenue up 2%. OpEx per day was $1.14 million, up less than 1% year-on-year and down slightly sequentially.
• Macau: Delivered adjusted property EBITDA of $262.9 million in the quarter on $871.7 million of operating revenue. Operating revenue grew 6%, led by 10% year-on-year growth in combined mass table and slot win. EBITDA margin was 30.2% in the quarter, an increase of 210 basis points relative to Q3 2019. OpEx, excluding gaming tax, was approximately $2.55 million per day in Q3, up 7% year-on-year, primarily due to higher payroll and variable costs on increased business volumes.
• Wynn Al Marjan Island: Construction rapidly progressing, received first land-based gaming license, equity contribution of $18.2 million during the quarter, total equity contribution to-date $532.6 million, remaining 40% pro rata share of required equity ~$800 million to $875 million.

Guidance

• Board increased share repurchase authorization to $1 billion.
• Macau CapEx related to concession commitments expected to range between $350 million to $425 million in total between 2024 and the end of 2025.
• Vegas project CapEx for remainder expected ~$300 million, normal course maintenance CapEx $75 million to $85 million.
• Macau maintenance CapEx ~$75 million.

Risks

• Competitive environment in Macau remains intense.
• Regulatory approvals required for Macau CapEx projects create uncertainty.
• Potential impact of online gaming on land-based operations as seen in other markets, with implications for employment and regulatory blowback.

Question and Answer

Q: Carlo Santarelli from Deutsche Bank asked about outlining 2025 revenue and cost increases.

A: Craig Billings stated they don't manage to a margin, focus on revenues and costs, Vegas high-end consumer holds up but tough comps, Macau Q3 margin unique due to factors like VIP commissions and retail revenue decline but looks good going into 2025.

Q: Carlo Santarelli followed up on Las Vegas comp challenges from Super Bowl.

A: Craig Billings said no specific EBITDA numbers on Super Bowl headwind, Q4 and F1 shaping up well, posted room rates at significant premium.

Q: Joe Greff from JPMorgan asked about Macau competitive environment and October performance.

A: Craig Billings said competitive environment stable to slightly better, October had healthy mass table drop, strong direct VIP turnover, 99% hotel occupancy.

Q: John DeCree from CBRE asked about Wynn Macau mass market table drop and Las Vegas table drop.

A: Craig Billings attributed Wynn Macau success to execution, Las Vegas table drop not a broad trend, diversification in casino business.

Q: Robin Farley from UBS asked about Vegas gaming revenue decline and group bookings.

A: Julie Cameron-Doe said it's a function of hold and higher ADRs, Brian Gullbrants said group business outlook healthy, pacing for record room nights in 2024, 2025 expected like 2024.

Q: Dan Politzer from Wells Fargo asked about share repurchase and CapEx.

A: Craig Billings said opportunistic share repurchasing, Julie Cameron-Doe outlined Vegas and Macau CapEx plans.

Q: Stephen Grambling from Morgan Stanley asked about Macau RevPAR and smart tables.

A: Craig Billings said RevPAR not much to read due to high occupancy, smart tables to be fully rolled out by Chinese New Year 2025.

Q: David Katz from Jefferies asked about Macau stimulus impact and share count.

A: Craig Billings said too early to say stimulus impact, did not comment on post-quarter share count.

Q: Brandt Montour from Barclays asked about Macau CapEx guidance change.

A: Julie Cameron-Doe said it's about timing and approval dependencies, range tightened due to closer to end of period.