Boyd Gaming ‘solid’ Q2 results buoyed by online as properties decline

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Boyd Gaming has reported “solid” results for the second quarter of 2023 with revenue and net income improving compared to the same period last year.

President and CEO Keith Smith has noted the company is “confident” in its overall business direction despite several land-based property segments undergoing decreases in revenue year-over-year.

Publishing its Q2 results, Boyd Gaming declared revenue of $917m, a 2.5 per cent increase YoY (Q2 2022: $894.5m) with most verticals seeing growth against the previous year.

Gaming revenue, however, was one of the verticals to see a drop YoY, falling by 3.5 per cent to $660.7m (2022: $684.9m). Room revenue fell as well, but only slightly, coming in at $49.8m (2022: $49.9m).

Elsewhere, food & beverage rose to $70.4m (2022: $70.3m) while online improved to $85m, up 49.7 per cent (2022: $56.8m), benefiting from FanDuel’s operations in Ohio and Pennsylvania, as well as Boyd Interactive.

Management fees accounted for $17.4m with other revenues at $33.6m (2022: $32.5m) thanks to Sky River Casino performing ahead of expectations.

Net income in Q2 improved by 31.1 per cent YoY to $192.5m (2022: $146.8m), while total adjusted EBITDAR came in at $351.4m, up slightly in comparison to the previous year (2022: $353.9m). Adjusted earnings declined slightly to $161.3m (2022: $163.5m).

As of June 30, 2023, the operator had $260.8m cash on hand and a total debt of $3bn.

Commenting on the results, Smith highlighted Boyd Gaming’s operating model, management teams, and growth initiatives as the reason why the operator delivered solid results in the second quarter of 2023.

The CEO said: “During the second quarter we once again proved our ability to deliver solid results in a challenging environment, thanks to our effective operating model, strong management teams and successful growth initiatives.

“We maintained our focus on building loyalty among our core customers while our operating teams continued to effectively manage expenses throughout the business, achieving strong company-wide margins consistent with recent quarters.” 

Every one of Boyd Gaming’s property segments saw YoY decreases in revenue and adjusted EBITDAR. 

Las Vegas Locals revenue dropped by 2.3 per cent to $230.9m (2022: $236.5m) while adjusted EBITDAR fell to $118.4m (2022: $125.3m), although the operator noted that core customer trends remained solid and operating margins exceeded 50 per cent.

Downtown revenue and adjusted EBITDAR fell slightly to $53m (2022: $53.9m) and $19.7m (2022: $22.1m) respectively as construction at Fremont and Main Street Station caused disruption. However, the company did note that the area is benefiting from visitation growth.

Midwest & South dropped by 3 per cent to $518.8m (2022: $534.9m) while adjusted EBITDAR decreased by 7.8 per cent to $201.8m (2022: $218.9m), but both figures grew in comparison to Q1.

Smith noted that Boyd Gaming is confident in the direction it is travelling in despite the impact seen during the quarter on property revenues.

“Property operating results were impacted by difficult year-over-year comparisons early in the quarter, while overall results were strengthened by our key growth initiatives, including online gaming and Sky River Casino,” the CEO said.

“We remain confident in the overall direction of our business and our ability to create long-term value for our shareholders.”

Boyd Gaming also reported that as part of its ongoing share repurchase program, it repurchased $100m in stock during Q2. The company had approximately $533m remaining under current repurchase authorisations as of June 30.