WYNN RESORTS LTD Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Over the past three years, made numerous investments and changes in Las Vegas, Boston, and Macau to distance from competitors, resulting in another record year of adjusted property EBITDA, including an annual record in Las Vegas.
• In Las Vegas, demand remained healthy in Q4, gaming market share grew, non-gaming impacted by F1 week but daily EBITDA remained elevated. January demand looked good excluding Super Bowl headwind. Budgeted group and convention room nights for 2025 are healthy, and transient booking demand is robust.
• In Boston, slot handle was up 6%, setting a new all-time property record for slot revenue, and demand remained healthy through January.
• In Macau, completed digital tables rollout, made CapEx improvements, and January volumes were healthy. Construction progressing on Wynn Almarjean Island in the UAE, with $2.4 billion financing secured.
• Repurchased $200 million of stock in Q4 and $150 million in Q1 2025, with strong liquidity and improving leverage profile.

Segment Performance

• Las Vegas: Generated $267.4 million in adjusted property EBITDA on $699.5 million of operating revenue during the quarter, with an EBITDA margin of 38.2%. EBITDA was down 1% year on year, but revenues were up slightly. Table games hold positively impacted EBITDA by over $30 million, slot handle up 13%. OpEx excluding gaming tax per day was $4.4 million, up about 1% compared to prior year.
• Boston: Generated adjusted property EBITDA of $58.8 million on revenue of $212.7 million, with an EBITDA margin of 27.7%. Slot handle was up 6%, helping set a new all-time property record for slot revenue, offsetting some union-related payroll increases. OpEx per day was $1.17 million, up 2% year on year.
• Macau: Generated $293 million of EBITDA during the fourth quarter, down about 1% year over year but up 11% sequentially. Completed rollout of digital tables, with improvements and optimizations in the quarter, including an expansion of the Chairman's Club at Wynn Macau. January volumes were healthy with mass table drop, strong direct VIP turnover, and full hotel occupancy.
• Wynn Almarjean Island: Construction progressing, with work reaching the 35th floor of the hotel. Entered into an agreement to purchase Aspenols in Mayfair, London, to establish a presence in Central London where future customers spend time.

Guidance

• Total CapEx spend in 2025, inclusive of concession-related commitments and other projects, is expected to range between $250 million and $300 million.
• Leverage profile continues to improve as free cash flow grows, allowing increased return of capital to shareholders through recurring dividend and share repurchases.
• Board approved a cash dividend of $0.25 per share payable on March 5, 2025, to stockholders of record as of February 24, 2025.

Risks

• Competitive market in Macau, though management remains disciplined on maximizing EBITDA.
• Regulatory approvals required for CapEx projects in the UAE, creating potential variability in CapEx outcomes.
• Impact of foreign exchange rates on international business, though management does not see significant impact on visitation or spend.

Question and Answer

Q: Carlo Santarelli from Deutsche Bank asked about table hold win rate in Las Vegas and January/February EBITDA outlook.

A: Craig Billings noted they are conservative, January was good excluding Super Bowl headwind, and they feel good about Q1 other than the Super Bowl hit.

Q: Shaun Kelley from Bank of America asked about Macau footfall and spend per visit, and expansion opportunities.

A: Craig Billings said premium customers outperformed base during Chinese New Year, and there may be bolt-on opportunities but currently focused on Wynn Almarjean Island.

Q: John DeCree from CBRE asked about Macau milestones and Las Vegas land timing.

A: Craig Billings said topping off of Wynn Almarjean Island is towards end of 2024, and timing of Las Vegas land development depends on market positioning and execution.

Q: David Katz from Jefferies asked about long-term opportunities and Las Vegas land puts and takes.

A: Craig Billings mentioned focus on Wynn Almarjean Island, active in Thailand and New York, and Las Vegas land development will be timed appropriately.

Q: Robin Farley from UBS asked about Vegas renovation disruption and room rates.

A: Craig Billings and Brian Gullbrants said renovations are done in summer to minimize disruption, and room rates were strong in Q4 and continue to feel good in 2025.

Q: Dan Politzer from Wells Fargo asked about Vegas table drop and slot handle change.

A: Craig Billings said demand is strong across the board, and they've made material improvements in slots and service.

Q: Steven Grambling from Morgan Stanley asked about buyback balance and OpEx mitigation.

A: Craig Billings said they can do both buybacks and new projects due to strong liquidity, and OpEx mitigation is done through multiple cost-saving measures without impacting guest experience.

Q: Steve Wiesinski from Stifel asked about Macau OpEx and buyback vs new projects.

A: Julie Cameron-Doe and Craig Billings discussed Macau CapEx projects and buyback strategy, stating they can do both and are comfortable with current leverage levels.

Q: Brandt Montour from Barclays asked about Vegas renovation timing and room rate trends.

A: Craig Billings and Brian Gullbrants explained renovation timing and mitigation of disruption, and room rates were strong in Q4 and into 2025.

Q: Chad Beynon from Macquarie asked about Macau CapEx returns and customer cohorts.

A: Julie Cameron-Doe discussed Macau concession CapEx projects and customer cohorts for Wynn Almarjean Island, expecting to drive incremental visitation and revenue.

Q: Benjamin Chaiken from Mizuho asked about UAE gaming license pace and customer cohorts.

A: Craig Billings said they don't expect a second license soon, and customer cohorts include inbound visitors, Dubai residents, and destination luxury travelers.