Caesars Entertainment, Inc.
CEO : Mr. Thomas Robert Reeg CFA
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 8.9% YoY | 144.7% | -65.5% | 2023-02-21 |
Tom Reeg says,
Debt Financing and Upsizing
- The company upsized by $1 billion and started dealing with ’25 maturities, which is earlier than expected.
- The company appreciates the belief of the debt markets, as they have strengthened numbers well beyond expectations.
- The company expects to deal with the remaining ’25 maturities at some point after the call steps down in the middle of this year.
EBITDA Contribution of Digital Business
- The Digital business is anticipated to be an EBITDA contributor for the company this year.
- The cumulative EBITDA losses for Digital are expected to finish at somewhere a little over $1.1 billion.
- The company expects to generate in excess of 50% of annual EBITDA from the Digital business at maturity, and the same remains in their sights.
Brick-and-Mortar Business remains Strong
- The regional business of the company continues to do well, and consumers continue to spend.
- Weather-related issues impacted the regional business in the fourth quarter and Northern Nevada in the first quarter. However, the business grew in the fourth quarter and continues to grow in the first quarter.
- The company has new projects coming online, like the Lake Charles opening and temporary casinos in Danville, Nebraska, and the Indiana project coming online in the back half of the year, which the company is excited about.
Strong Start to the First Quarter in Vegas
- The company experienced an exceedingly strong start to the first quarter in Vegas.
- Forward bookings in Vegas are strong and getting stronger, and March sets up to be one of the best months that the company has ever had in Las Vegas.
- Group business in excess of 2019 numbers for the first time seems to be going forward, and all of the forward indicators for bookings look very strong.
Overall Business Outlook
- The company’s business feels fantastic based on the strong start to the first quarter and forward bookings.
- The company expects to be run rating at least a quarter or two in ’24 for generating EBITDA at the levels described for the Digital business.
Eric Hession says,
Net Revenue Growth
- Net revenue for sports and online increased by over 100% YoY in Q4 2022.
- Volume was up by 7%, hold up by 100 basis points, and promotional expenses down by 43% YoY.
- The improved segmented marketing campaigns directly contributed to the net revenue growth by improving promotional efficiency.
iGaming and Product Experience
- iGaming remains a critical component of CZR’s digital growth strategy for 2023 and beyond.
- Enhanced product experience and marketing capabilities for Isle Casino, including life cycle triggered offers, will be rolled out in H2 2023.
- New content has been added to the Isle Casino, which has been well received by the customers.
Expansion Plan
- CZR opened retail locations in Puerto Rico and Kansas and launched online sports betting in Maryland in Q4 2022.
- The company launched sports betting online and retail in Ohio on January 1, 2023.
- The company plans to launch its mobile sports app in Massachusetts later this week to accept registrations and deposits and anticipates accepting wagers starting in mid-March pending final regulatory approvals.
Adjusted EBITDA Loss
- CZR reported the smallest adjusted EBITDA loss since rebranding to Caesars Sportsbook in August of 2001 in Q4 2022.
Product and Technology Improvements
- CZR continued to focus on improving the overall experience for customers by enhancing in-game parlay products, in-game wagering, streaming technology, and the introduction of live scores.
Q & A sessions,
Standalone Casino App
- Caesars will be launching a standalone casino app for users to easily access the casino without having to go through the sports betting app.
- This new app is expected to improve customer experience and increase engagement.
New Branded Live Table Games
- Caesars will be introducing new branded live table games in various states to attract more customers.
Segmented and Triggered Marketing
- Caesars will be introducing the ability to do segmented and triggered marketing on the casino side, which was previously not possible.
- This will allow Caesars to use learnings from years of experience on the brick-and-mortar side on the iCasino side.
Game Content
- Caesars is planning to make steady releases of new games, particularly on the iOS side, where they don’t have as many games as on the Android side.
- Custom table games branded as Caesars will also be added.
Improved Sports Betting Performance
- Caesars has seen improvements in multi-wager tickets, which have higher hold percentages.
- Boosts and pre-canned parlays are well received by customers and help improve overall hold for the product.
- Changes have been made to the trading team, including full separation from the William Hill team and in-house modeling.
Positive Business Performance
- Caesars has seen continued strength in the business, despite challenging economic conditions.
- The destination business is performing well, with no signs of a recession on the horizon.
No bad stock 