Caesars Entertainment, Inc.
CEO : Mr. Thomas Robert Reeg CFA
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q2 | 2.1% YoY | 1.2% | 2411.8% | 2023-08-01 |
Tom Reeg says,
Las Vegas Performance
- Q2 was a strong quarter for Caesars in Las Vegas, despite missing a large group that usually comes every three years, impacting June hold and margins.
- Volumes came through the property, but hold impact in June affected margins.
- Group business is accretive to overall Vegas margin.
- Forward-looking, Vegas continues to look strong, with strong July performance and anticipation of Formula One and the Super Bowl in 2023.
Regional Portfolio
- There is competitive pressure in certain regional markets such as Tunica, Council Bluffs, and Chicago due to new casino openings.
- However, the fruits of the capital investment cycle, including new properties in Danville, Indianapolis, Lake Charles, and Atlantic City, have offset the competitive pressures.
- Regional EBITDA was flat year-over-year despite the strong comparison to last year.
Digital Business
- Caesars achieved its first full quarter of positive EBITDA in the digital vertical.
- The acquisition of William Hill has significantly improved Caesars’ digital capabilities and product offerings.
- Caesars expects to build market share in the iCasino space and leverage its Caesars Rewards program to drive growth.
- The launch of the Liberty app in Nevada is a significant milestone, providing a competitive edge and customer acquisition opportunity.
Financial Outlook
- Caesars continues to pay down debt and expects conventional leverage to decrease.
- The company is considering options for the free cash flow generated in 2024 and 2025, including potential return of capital or external opportunities.
- Caesars feels confident and well-positioned for future growth, with a strong cash flow machine, improving results, and reduced interest expenses.
Eric Hession says,
Improved Performance in Digital Segment
- Adjusted EBITDA of $11 million and net revenue of $216 million in Q2 2023.
- Significant improvement compared to a $69 million EBITDA loss in the same period last year.
Growth in Sports Betting and iCasino
- Sports betting hold improved by 180 basis points compared to last year.
- iCasino volume increased by 27% year-over-year.
New Technology Improvements
- Launch of the new iCasino product, Caesars Palace online, in multiple states.
- Transition to flagship Liberty product for the Caesars app in Nevada, with plans to convert William Hill product and retail sportsbooks later this year.
- Rolling out of a new native iOS Sportsbook app, with 100% adoption expected by August.
- Introducing an in-house player account management system, starting state by state later this year.
Expansion and Market Reach
- Offering sports betting in 30 North American jurisdictions, with 22 of them offering mobile wagering.
- Operating iCasino products in six jurisdictions.
Q & A sessions,
Reinvestment Levels
- Reinvestment levels as a percentage of volume were around 1%.
- Reinvestment as a percentage of gaming revenues was around 22%.
- Reinvestment for existing customers tends to be below the overall percentage.
- Reinvestment may range between 1% and 1.25% going forward.
iCasino Products
- Excitement about the iCasino products and the ability to grow market share.
- Competitive product in the market that can be used to attract existing database customers.
- Improved customer experience without needing to go through the sports betting app to access the casino.
- New system allows for segmented marketing and increased reinvestment on the casino side.
Standalone Caesars Palace App
- Higher percentage of slot business compared to table games.
- Standalone app will include live dealer and branded/customized games.
- Third-party partnerships for branded/customized games instead of in-house development.
Capital Allocation and Future Opportunities
- Expectation of generating significant free cash flow as capital projects wind down.
- Consideration of external opportunities for future growth.
- Confidence in the growth potential of the existing portfolio.
- Exploration of distributing cash flow or putting it to work elsewhere.
Growth Potential in Regional Portfolio
- Continued growth opportunities in regional properties, with examples of 2x and 3x improvements in EBITDA.
- Projects in progress and future investments to drive growth.
- Investment decisions based on the specific market and property circumstances.
No bad stock 