Chavdar Vasilev is a journalist covering the casino and sports betting market sectors for CasinoBeats. He joined CasinoBeats in May 2025 and reports on industry-shaping stories across the US and beyond, including legislative debates, market...
Read Full BioChurchill Downs Incorporated (CDI) reported a record third quarter with net revenue of $683.0 million, a 9% increase year-over-year. Strong performances from its historical racing venues in Kentucky and Virginia were the driving forces behind the results.
However, quarterly net income fell 42% to $38.1 million. That was primarily due to a one-time, non-cash impairment charge tied to the Chasers’ gaming rights.
Adjusted results were also strong. Adjusted net income rose 7% to $77.1 million. Meanwhile, adjusted EBITDA climbed 11% to $262.3 million, marking another record for the Louisville-based operator.
Q3 marked another strong quarter for CDI, following a 9% revenue increase in Q1 and a 4.9% rise in Q2, according to prior filings.
Record Gains in Historical Racing
CDI’s Live and Historical Racing segment powered much of the growth. The segment’s revenue surged 21% to $305.7 million, up from $252.4 million in the prior year. The results were fueled by continued expansion in its historical horse racing (HHR) machine venues.
These include strong performances from newly developed properties in Virginia and Kentucky, as well as early contributions from the temporary Casino Salem facility in New Hampshire.
According to the Q3 filing, revenue increased by $30.1 million from Virginia HHR venues and $20.9 million from Kentucky HHR venues. The Salem property saw a $2.3 million increase. Adjusted EBITDA in the segment rose by $23.4 million to $116.4 million, driven by double-digit growth in both states.
The company opened Roseshire Gaming Parlor in Henrico County, Virginia, in September with 175 machines and completed the Rosie’s Richmond expansion in August, adding 450 HHRs. CDI also finalized its $180 million acquisition of Casino Salem, gaining a foothold in the New England market.
Wagering & Gaming Hold Steady
The Wagering Services and Solutions segment, composed of TwinSpires and Exacta, recorded revenue of $127.2 million, up 7% year-over-year. Adjusted EBITDA grew to $46.0 million, supported by increased horse racing handle and Exacta’s expanded HHR operations in Virginia and New Hampshire.
Meanwhile, Gaming revenue slipped slightly to $265.5 million from $270.3 million. That was due to the halting of HHR operations in Louisiana, which offset modest gains in other regions. Adjusted EBITDA in the segment remained flat at $123.3 million, with stronger results from CDI’s properties in Iowa, Indiana, and New York balancing the Louisiana decline.
Those results underscored stability across CDI’s digital and regional gaming operations.
Analysts Stay Constructively Positive
Following the earnings release, analysts maintained a generally bullish stance on CHDN despite near-term profit compression.
According to MarketBeat’s October 22–24 data, 11 firms rate the stock a “Moderate Buy” with their average 12-month target of $137.50.
Citizens Capital Markets reiterated a Market Outperform rating with a $142 target. It cited “continued HRM expansion and disciplined capital allocation.”
Barclays upped its target to $132, praising “momentum in premium event rights and rural gaming growth.”
Susquehanna, however, trimmed its target to $124, warning of “execution risk tied to simultaneous project buildouts.”
Bottom Line
Despite the impairment hit, Churchill Downs’ Q3 results underscore a resilient operating model anchored in HHR-led growth, expanding digital wagering, and premium live racing assets.
Record revenue and double-digit EBITDA position the company well heading into 2026, as it deepens its historical racing network and capitalizes on the enduring strength of the Kentucky Derby brand.
Image Credit: Joanna Poe via Wikimedia Commons (license)
