MGM Resorts International has reported a “positive” second quarter of 2024 following new records in consolidated net revenue and a new adjusted property EDITDAR high for MGM China.
Speaking on the company’s earnings call, Bill Hornbuckle, CEO and President of MGM Resorts, described Entain’s CEO appointment of Gavin Isaacs as “comforting” and that “he’ll do wonders for that business”, while also expressing confidence in their joint venture, BetMGM.
Net revenue growth
Publishing its Q2 financials, MGM Resorts declared record consolidated net revenues of $4.3bn, up 10% in comparison to the same period last year (Q2 2023: $3.9bn).
The global gaming and entertainment company credits the improvement to “an increase in revenue at MGM China resulting from the continued ramp-up of operations after the removal of COVID-19 related entry restrictions in Macau” in Q1 2023.
Net income attributable to MGM Resorts fell to $187m (2023: $201m), while consolidated adjusted EBITDAR stood at $1.2bn.
Per segment, casino revenue rose to $2.2bn (2023: $2bn), rooms revenue increased to $899m (2023: $815m), food and beverage revenue up to $802m (2023: $743m), while entertainment, retail and other revenue fell to $402m (2023: $421m). Reimbursed costs stood at $11.9m (2023: $11.6m).
Taking a look at operations per location, Las Vegas Strip Resorts revenue rose by 3% year-over-year to $2.2bn (2023: $2.1bn), Regional Operations revenue improved slightly to $927m (2023: $926m), while MGM China revenue grew by 37% YoY to $1bn (2023: $741m). Management and other operations revenue stood at $176.6m (2023: $128.5m).
“We’re excited by the progress we’re making as a company against our strategic priorities and anticipate carrying our current momentum forward into the back half of the year.”
Bill Hornbuckle, CEO and President of MGM Resorts
MGM noted that Las Vegas Strip Resorts’ revenue growth was driven primarily by “an increase in rooms revenue, driven by an increase in ADR, and an increase in catering and banquets revenue”. Adjusted property EBITDAR for the operations rose by 1% YoY to $782m (2023: $777m).
For Regional Operations, adjusted property EBITDAR fell by 2% when compared to the same period the previous year to $288m (2023: $294m).
Revenues from MGM China operations benefited positively from the “continued ramp up of operations after the removal of COVID-19 related travel and entry restrictions” in Q1 2023. Adjusted property EBITDAR for the operations grew by 40% YoY to $294m (2023: $209m).
MGM Resorts added that its international digital strategy has progressed with the “announced acquisition of Tipico’s US platform bringing sports betting product in-house and strategic relationship with Playtech to become only US operator to offer live casino content from the Las Vegas Strip”.
Hornbuckle commented: “MGM Resorts continued to drive positive financial results and solid growth in the second quarter, with record MGM China adjusted property EBITDAR and further growth in Las Vegas where our Marriott relationship continues to exceed expectations and our meetings and convention business continues to strengthen thanks to our recently completed remodel of Mandalay Bay.
“We made significant progress with our international digital strategy by adding both an in-house sports product and live dealer capabilities to our online gaming offerings. We’re excited by the progress we’re making as a company against our strategic priorities and anticipate carrying our current momentum forward into the back half of the year.”
Entain and BetMGM
Speaking on the company’s earnings call, Hornbuckle expressed confidence in MGM Resorts’ relationship with Entain and the leadership structure they have in place, with Stella David moving from interim CEO to Chair and Gavin Isaacs joining as CEO in September.
He said: “I’m excited by the relationship that we’ve created with Stella David as the interim CEO and now the Chair. I’m equally excited by the progress that’s been made by the team and BetMGM’s product enhancements with a key focus by the Entain Group.
“And now the recent addition of Gavin Isaacs as CEO is comforting, someone MGM and I have known for a long time, have a great relationship and I think he’ll do wonders for that business, and ultimately, the market.”
The MGM Resorts CEO and President also highlighted the recently announced results of BetMGM – MGM Resorts and Entain’s joint venture – saying they admire what the operations have accomplished for its brand and its long-term prospects.
“We have stated that 2024 would be an investment year, recognising that we’ve lost shares in sports and that it was impacting our leading market position in igaming, we righteously decided to invest heavily into our sports product and continue to invest in customer acquisitions for igaming, so long as we saw both market growth and overall market share growth.
“For the record, BetMGM was also profitable in the second quarter of 2024, driven by our igaming business, which annually contributes about $400m to the overall business.
“The second piece is improving our sports product. We’ve made substantial steps with Angstrom, and we’ll deploy a whole variety of new products into the football season, as well as single account single wallet in Nevada, establishing customers to carry a wallet with funds back to their home state.
“We think it’s a big deal for the business and for our omnichannel efforts. And so we’ll obviously invest into the fall with these new product offerings, trying to win back customers on sports. In the big picture, we love what BetMGM has done for our brand. We love the long-term prospects and we enjoy having a partner during this development stage that is equally focused on the business.
“We are patient and have a strong belief in the growth of this business now and long into the future.”
Outlook
MGM Resorts also provided an update on its planned resort in Japan, with Hornbuckle stating on the earnings call that the company is on the ground and hopes “to start pylons by May or June of next year with a target state still of middle of 2030 for opening”.
Ending 30 June, the company noted that net cash flow provided by (used in) operating, investing and financing activities came in at $1bn, ($385m), and ($1.1bn), respectively, while free cash flow was $613m.
Jonathan Halkyard, CFO and Treasurer of MGM Resorts, added: “We continued to deliver on our free cash flow growth algorithm in the second quarter, driving strong financial returns thanks to a solid baseline of cash flow from our domestic resorts, the continued growth of our digital business, and the resumption of dividends from MGM China.
“We remain committed to returning capital to our shareholders. In the second quarter, we returned more than $400m through share repurchases, reducing overall shares by nearly 40% since the beginning of 2021.”