Churchill Downs ((CHDN)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Churchill Downs Incorporated’s second quarter earnings call for 2025 exuded a positive sentiment, underscored by record-breaking revenue and EBITDA figures. The company’s strategic initiatives, particularly in the Kentucky Derby and HRM property expansions, have set a promising tone for future growth. Despite minor declines in specific segments, the overall outlook remains optimistic, with a strong focus on continued expansion and shareholder value enhancement.
Record-Breaking Revenue and EBITDA
Churchill Downs Incorporated reported an all-time high net revenue of $934 million and adjusted EBITDA of $451 million for the second quarter of 2025. This achievement marks the fifth consecutive year of record-setting performance for the company, showcasing its robust financial health and operational excellence.
Kentucky Derby Growth
The Kentucky Derby continues to be a significant growth driver for Churchill Downs. The event saw a 6% increase in viewership, reaching nearly 18 million, with peak viewership climbing by 8% to almost 22 million. Additionally, wagering on the Derby race increased by 11% over last year’s record, highlighting the event’s growing popularity and financial impact.
Expansion of HRM Properties
Churchill Downs made significant strides in expanding its HRM operations, particularly in Virginia and Kentucky. New facilities in Richmond and Henrico County are progressing on schedule and within budget, while a new venue in Calvert City is set to open in the first quarter of 2026, further strengthening the company’s market presence.
New Hampshire Expansion
The company announced the acquisition of a 90% interest in the Casino Salem project in New Hampshire. This strategic move aims to develop a state-of-the-art gaming and entertainment destination, expanding Churchill Downs’ footprint in the region and enhancing its market offerings.
Share Repurchase Program
Reflecting confidence in its future growth prospects, Churchill Downs’ Board approved a new common stock repurchase program of up to $500 million. This initiative underscores the company’s commitment to enhancing shareholder value and optimizing its capital structure.
Minor Decline in Churchill Downs Racetrack EBITDA
The Churchill Downs Racetrack experienced a slight decrease in adjusted EBITDA by $1 million, or less than 1%, attributed to a high comparison base from the 150th Kentucky Derby in 2024. Despite this minor decline, the overall performance remains strong.
Louisiana HRM Machine Relocation Impact
The relocation of approximately 500 HRM machines from Louisiana to Virginia and Kentucky affected the comparability of Louisiana’s results to the previous year. This strategic move aligns with the company’s broader expansion plans in more promising markets.
Regional Gaming Margin Decline
Adjusted EBITDA for wholly owned gaming properties saw a decrease of $3.1 million, with a 1.3 point decline in casino margin compared to the same period in 2024. This decline reflects challenges in maintaining margins amidst competitive market conditions.
Forward-Looking Guidance
Looking ahead, Churchill Downs anticipates continued growth in 2026, driven by premium experiences, increased wagering, and a new NBC contract expected to add $10 million to adjusted EBITDA. The company remains focused on strategic capital investments for long-term growth, particularly in HRM operations in Virginia and Kentucky, ensuring sustained expansion and profitability.
In summary, Churchill Downs Incorporated’s second quarter earnings call highlighted a period of record-breaking financial performance and strategic growth initiatives. The positive sentiment expressed during the call reflects the company’s strong market position and future growth potential, with key drivers including the Kentucky Derby and HRM property expansions. Despite minor challenges, the overall outlook remains optimistic, promising continued success and shareholder value enhancement.