Boyd Gaming Corp ((BYD)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Boyd Gaming Corp’s recent earnings call painted a picture of optimism and strategic growth, despite some challenges. The company highlighted a successful transaction with FanDuel, robust revenue and EBITDAR growth, and a strategic capital return program. However, it also acknowledged some hurdles, such as softness in certain segments and external impacts like flood-related closures.
FanDuel Transaction
Boyd Gaming announced a significant agreement to sell its 5% equity interest in FanDuel to Flutter Entertainment for $1.755 billion in cash. This transaction is set to enhance the company’s financial flexibility by reducing leverage below 2x, with the proceeds aimed at paying down debt.
Revenue and EBITDAR Growth
The company reported a 4% increase in revenues and a similar 4% rise in EBITDAR, reaching $358 million year-over-year. This growth was driven by broad-based improvements across various operating segments.
Las Vegas Locals Segment Performance
For the first time in over two years, the Las Vegas Locals segment experienced year-over-year revenue and EBITDAR growth, with segment margins nearing 50%.
Midwest and South Segment Performance
The Midwest and South segment achieved revenue and EBITDAR gains exceeding 3%, marking the highest quarterly figures in nearly three years, despite challenges such as flood-related closures.
Strong Balance Sheet
With the FanDuel transaction, Boyd Gaming expects to reduce leverage by approximately 1 turn and save an estimated $85 million in interest expenses annually, reinforcing its strong balance sheet.
Increased Share Repurchase Program
The company plans to increase its share repurchase target from $100 million to $150 million per quarter, starting in the third quarter, as part of its capital return strategy.
Softness in Destination Business
Boyd Gaming noted some softness in its Las Vegas destinations, particularly at the Orleans, due to lower room rates and decreased demand from destination business.
Flood-Related Closures
The Midwest and South segment faced challenges from flood-related closures and the timing shift of Easter into April, impacting performance.
Forward-Looking Guidance
Boyd Gaming provided an optimistic outlook for the future, backed by strong performance metrics. The company highlighted its 4% revenue growth and 4% EBITDAR increase as the strongest in over three years. The Las Vegas Locals segment’s growth and the Midwest and South segment’s record performance were also emphasized. Additionally, the sale of its FanDuel stake and increased share repurchases demonstrate Boyd’s commitment to maintaining financial strength and enhancing shareholder value.
In conclusion, Boyd Gaming’s earnings call reflected a positive sentiment with strategic moves aimed at strengthening its financial position and driving growth. Despite some challenges, the company’s robust performance and forward-looking strategies suggest a promising future for Boyd Gaming and its stakeholders.