Caesars Entertainment: ‘Lower-than-expected hold’ impacts Q1 results

Caesars Entertainment
Image: Kobby Dagan/Shutterstock

Caesars Entertainment has reported a drop in net revenue for the first quarter of 2024 with a “lower-than-expected hold” across several segments.

CEO Tom Reeg noted that despite setbacks due to headwinds across Las Vegas and Regional operations, the operator remains “optimistic toward improved operating results throughout the balance of the year”.

Publishing its Q1 results, Caesars declared a total net revenue of $2.7bn, down 1.2 per cent in comparison to the same period last year (Q1 2023: $2.8bn) following decreases in its Las Vegas and Regional segments.

The operator reported a net loss for the period of $158m, down 8.2 per cent year-over-year (2023: $136m) as declines occurred across Las Vegas, Regional and Caesars Digital segments.

Same-store adjusted EBITDA by the end of Q1 stood at $853m, a 9.9 per cent drop compared to Q1 the previous year (2023: $958m). Notably, Caesars Digital’s adjusted EBITDA improved to $5m (2023: $4m loss).

Caesars Q1 segment performance

Across Las Vegas operations, Caesars reported a 4.5 per cent drop YoY in revenue to $1.03bn (2023: $1.13bn), a 30 per cent decrease in net income to $198m (2023: $293m) and an adjusted EBITDA decline of 15.7 per cent to $440m (2023: $533m).

Reeg commented: “Operating results during the first quarter in Las Vegas are a combination of record occupancy, driven by the Super Bowl and international visitation for Chinese New Year, offset by lower-than-expected hold.” 

For its Regional operations, Caesars declared a 1.7 per cent decline YoY in revenue to $1.37bn (2023: $1.39bn), a 45.3 per cent drop in net income to $41m (2023: $75m) and an adjusted EBITDA decrease of 3.3 per cent to $433m (2023: $448m).

“In our Regional segment, results reflect weather related weakness in January and early February partially offset by our new property openings,” stated Reeg

Caesars Digital revenue improved by 18.5 per cent compared to the same period the previous year to $282m (2023: $238m), but the segment had a 6.3 per cent decline in net loss to $34m (2023: $32m loss) while adjusted EBITDA improved to $5m (2023: $4m loss).

Reeg noted: “Caesars Digital delivered strong revenue growth despite lower-than-expected hold in online sports due to unfavourable outcomes for the Super Bowl and March Madness.”

Managed and Branded revenue dropped by 1.4 per cent YoY to $68m (2023: $69m), net income fell as well by 5.3 per cent to $18m (2023: $19m) and adjusted EBITDA declined by 5.3 per cent too to $18m (2023: $19m).

Corporate and Other revenue decreased YoY to a $1m loss (2023: $3m) but had a 22.4 per cent improvement in net loss to $381m (2023: $491m loss). However, adjusted EBITDA for the segment declined by 13.2 per cent to a $43m loss (2023: $38m loss).

“Moving past the first quarter headwinds, we remain optimistic toward improved operating results throughout the balance of the year,” Reeg concluded.

As of March 31, 2024, Caesars’ cash and cash equivalents stood at $726m, while net debt stood at $11.7bn.

Bret Yunker, Chief Financial Officer, added: “On April 26, our Caesars Virginia joint venture successfully closed on a new five-year $425m pro rata bank financing. This financing will be used to fund the remaining capex associated with the permanent casino resort facility, which is expected to open in December 2024.

“Excluding joint venture capex, we estimate 2024 cash capex spend of $800m. We anticipate using free cash flows to continue to reduce debt in 2024.”