Mohegan achieved its “highest quarterly net revenues” in its history during its third fiscal quarter of 2024, following a year-over-year increase during the financial period of over 20%.
Across its operations, the operator noted that digital revenue rose by more than 150% in comparison to the same period last year, while Mohegan INSPIRE in South Korea has now generated $101.1m in revenue since it opened.
CEO Raymond Pineault reflected on the three months ending 30 June, where he stated that he was “confident” in how the operator’s strategy was starting to take shape and “excited” about near and long-term prospects.
Mohegan also recently announced that Joseph J Hasson has been named as the operator’s permanent Chief Operating Officer, after previously serving in the role on an interim basis since April.
Historic quarter
Publishing its financials, Mohegan reported a 21.4% YoY increase in net revenues to $504.2m (Q3 2023: $415.4m), its “highest quarterly net revenues” in its history. CFO Ari Glazer attributed the improvement primarily “to continued growth in Mohegan Digital and revenue from Mohegan INSPIRE”.
Income from operations dropped by 12.1% in comparison to the same period the previous year to $72.4m (2023: $82.4m). The operator also reported a net loss of $29.9m (2023: $50.6m net income) and an adjusted EBITDA of $104.7m, down 3.6% YoY (2023: $108.7m).
As of 30 June, Mohegan held cash and cash equivalents of $180.9m (30 September 2023: $217.3m).
Glazer commented: “Consolidated adjusted EBITDA of $104.7m decreased $3.9m compared with the prior-year period, primarily due to operating costs related to the opening of Mohegan INSPIRE and non-controlling interest adjustments at Niagara Resorts, offset by strong growth in our digital operations.
“Excluding the adjustment of non-controlling interest at Niagara Resorts, Adjusted EBITDA would have been $108.3m or flat to prior year.”
Segment performance
Per segment, domestic revenue rose by 2.6% in comparison to the same period last year to $310.7m (2023: $302.7m). This was due to higher non-gaming revenues which were “driven by strong entertainment, food and beverage revenues”.
For revenue per location, Mohegan Sun generated $235.7m (2023: $230.7m), Mohegan Pennsylvania produced $68.7m (2023: $65.2m) and Mohegan Las Vegas reported $6.3m (2023: $6.8m).
Domestic’s income from operations grew by 2.7% YoY to $63.6m (2023: $61.9m), net income increased by 5.8% to $63.5m (2023: $60.1m) and adjusted EBITDA fell slightly to $82.2m (2023: $83m) with a margin of 26.5%.
Internationally, net revenue rose by 67% to $135.4m (2023: $81.1m), driven by Mohegan INSPIRE which had $60.1m in revenue during the measuring period. Niagara Resorts revenue stood at $75.3m (2023: $81.1m).
However, Mohegan suffered a loss from operations and a net loss in this segment of $14.5m and $35.9m, respectively. Adjusted EBITDA also fell to a loss of $2.1m (2023: $13.7m), primarily due to operating costs related to INSPIRE’s opening and a $3.6m non-controlling interest adjustment related to Niagara Resorts.
Mohegan noted: “Excluding the adjustment for non-controlling interest, adjusted EBITDA would have been $1.5m, which we believe presents a more accurate comparison with prior periods.”
Digital growth
As for digital operations, net revenue for the period came in at $41.9m, up 151.3% YoY due to the growth of its Connecticut operations (2023: $16.7m). Yet, the operator noted that the results were impacted by $6m in igaming tax reimbursements from “igaming partners being included as an increase to both net revenues and expenses in the current year”.
Income from digital operations increased by 100.1% to $23m (2023: $11.5m), net income grew by 99.1% to $23.1m (2023: $11.6m) and adjusted EBITDA came in at $23.1m (2023: $11.6m) “as Mohegan Digital continues to experience strong growth”.
Across management, development and other operations, net revenue stood at $22.5m (2023: $21.5m) “driven by higher management fee and inter-company entertainment revenues, partially offset by Mohegan INSPIRE development fees earned in the prior-year period”.
The segment’s income from operations was $11.2m (2023: $16.5m) with a net loss of $9.7m (2023: $6.2m net income) and an adjusted EBITDA of $11.2m (2023: $16.4m), due to “Mohegan INSPIRE development fees earned in the prior-year period”.
Corporate and other revenue stood at $27,000 (2023: $10,000) with a loss from operations of $10.8m (2023: $11.6m) and a net loss of $70.9m (2023: $25.9m) “due to a loss on fair value adjustment driven by changes in the estimated value of the warrants and put option” related to its Korea Term Loan.
Adjusted EBITDA for the segment was a loss of $9.7m (2023: $10.4m loss) primarily due to “corporate labour savings”.
Pineault stated: “As I look across our enterprise, I feel confident about how our strategy is taking shape and I’m excited about our near and long-term prospects.
“The combination of profitable growth in Digital, the ramp at INSPIRE since the grand opening in March, combined with the stability and resilience of our flagship, Mohegan Sun in Connecticut, highlights some of the important drivers for our growth in the present and future.”
Hasson named as permanent COO
As mentioned earlier, Mohegan has also named interim COO Hasson as the operator’s permanent Chief Operating Officer. He previously served in this position for Station Casinos and Red Rock Resorts.
Reporting to Pineault, Hasson will be responsible for the development and execution of short and long-term strategic business plans across all Mohegan properties in the US, Canada and Northern Asia, enhancing operational efficiency and guest satisfaction alongside high service standards.
He will also work with the operator’s leadership team to “align all strategic processes with company-wide goals, emphasising the sustainable growth of Mohegan’s portfolio of entertainment resorts”.
In addition, Hasson will continue as General Manager of Mohegan Casino at Virgin Hotels Las Vegas while the casino transitions ownership.
“Joe Hasson’s expertise, garnered over more than 40 years in the gaming and hospitality industries, coupled with his exemplary leadership at our Las Vegas property, positions him uniquely to ensure strategic alignment and continuity across Mohegan’s diverse portfolio,” said Pineault.
“We are confident that his leadership as our Chief Operating Officer will be instrumental in our sustained success.”