MGM Resorts International
CEO : Mr. William Joseph Hornbuckle IV
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 17.5% YoY | -381.1% | -432.0% | 2023-02-08 |
Bill Hornbuckle says,
Record Fourth Quarter Performance
- MGM Resorts International achieved record fourth quarter adjusted property EBITDAR for Las Vegas and regional resorts.
- The full-year Las Vegas Strip adjusted property EBITDAR increased by more than 80% YoY, evidencing the company’s focus on optimizing growth and its strategic vision of becoming the world’s premier gaming entertainment company.
Diverse Portfolio and Business Strategy
- MGM Resorts International has the most diverse offerings in the gaming space, including nine Las Vegas Strip and eight regional domestic properties, two integrated resorts in Macau, and digital strategy through BetMGM and LeoVegas.
- The company’s balance sheet provides significant flexibility to invest in areas with high return on capital, including New York and Japan, expanding digital footprint and funding continued share repurchases.
Growth Opportunities in Las Vegas
- The Cosmopolitan of Las Vegas has achieved double-digit growth in revenue and EBITDAR compared to the reported 12-month period prior to the acquisition, and cross-property plays are producing millions in win at sister properties.
- Las Vegas has a strong event calendar, including CES, CONEXPO, CON/AGG, March Madness, Sweet Sixteen, Elite 8 games, and Formula 1, which is expected to bring $1 billion in economic value to the city.
- Visitation growth is ongoing, with domestic flight growth capacity expected to reach 120% of 2019 in Q1 2023, and Harry Reid Airport hosting a record 52.6 million passengers in 2022.
Rebound in Macau
- MGM China’s combined properties are the highest-earning businesses within the company, with a strong rebound quarter-to-date as guests return in force.
- 200 additional tables were secured as part of the new gaming concession and combined with premier mass positioning, should allow the company to drive market share into low to mid-teens.
Growth Prospects in New York and Japan
- The company expects to submit its RFA in New York in the first half of this year and fine-tune its program and planning, with extensive property improvements such as a significant entertainment offering, new food and beverage opportunities, covered parking, and an overall increase in the casino floor space.
- MGM Resorts has presented a compelling offer with its partner, ORIX, to develop an integrated resort in Japan and is waiting for the government’s response.
Bill Hornbuckle says,
Decision to Move Away from Entain
- MGM has ended its interest in acquiring Entain
- The focus will be on LeoVegas expansion capabilities and the content studio business
- Live dealer business and expansion into other global markets will also be prioritized
Allocation of Capital
- MGM will begin to allocate capital towards their own direction
- The company has faith in Gary Fritz’s ability to lead the way
Valuing Relationship with Entain and BetMGM
- While moving away from Entain, MGM still values their partnership in BetMGM
- The decision to move in a different direction only applies to the rest of the world
Q & A sessions,
Project in Osaka and Potential Market Expansion
- MLIT is currently reviewing MGM’s project in Osaka, and the company is waiting for further developments.
- If approved, the project will expand MGM’s potential market beyond the current 19 million people.
- MGM anticipates a $10 billion return on the project, which they believe will bring in 15%+ cash flow.
Combination of BetMGM and MGM Rewards System
- The combination of BetMGM and MGM Rewards System is bringing in younger players who spend about 40% more.
- MGM plans on automating the system to establish true connectivity between the two networks.
- MGM has set up a CRM system to capture VIP players and provide them with personalized one-to-one dialogue.
Growth Strategy and M&A
- MGM’s growth will come from development opportunities and digital expansion.
- There are no immediate plans for M&A, but the company is always open to opportunities.
Digital and Brick-and-Mortar Integration in Michigan
- MGM has market-leading digital and brick-and-mortar operations in Michigan.
- Connecting the two networks allows for more seamless player experiences and recognition.
- MGM sees Michigan as a laboratory to replicate success in other states.
Organic Growth and Financial Stability
- MGM continues to experience organic growth in its premium luxury brands like Aria and Bellagio.
- MGM has no net debt and over $5.3 billion in cash liquidity.
- The company has bought back over 25% of its shares since the current senior leadership team joined.
No bad stock 