Vici Properties ((VICI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Despite facing challenges in the Las Vegas market and dealing with significant transaction costs, VICI Properties showcased a robust financial performance during their latest earnings call. The company demonstrated positive momentum by raising its Adjusted Funds From Operations (AFFO) guidance and making strategic investments, signaling a strong outlook for the future.
Raised AFFO Guidance for 2025
VICI Properties has increased its AFFO guidance for 2025, forecasting a year-over-year growth of 4.4% in AFFO per share. This adjustment represents a $0.02 increase on the lower end and a $0.01 increase on the upper end of the range, indicating confidence in their financial trajectory.
Strong Balance Sheet and Liquidity
The company reported approximately $2.9 billion in total liquidity, with a total debt of $17.1 billion. VICI’s net debt to annualized second quarter adjusted EBITDA stands at approximately 5.1x, reflecting a solid financial foundation.
Successful Bond Offering
In April, VICI Properties successfully closed a bond offering, issuing $400 million of 3-year notes at a 4.75% coupon and $900 million of 10-year notes at a 5.625% coupon. This move underscores the company’s ability to access capital markets efficiently.
Continued Growth in AFFO Per Share
The midpoint of VICI’s revised 2025 guidance anticipates a 4.4% growth in AFFO per share compared to 2024. This positions VICI among the leaders in AFFO per share growth for 2025, showcasing their commitment to shareholder value.
Strategic Investments and Partnerships
VICI has made strategic investments, including a $150 million increase in its mezzanine loan related to the One Beverly Hills development. Additionally, the company has partnered with Red Rock Resorts for the North Fork Mono Casino Resort development, highlighting its focus on growth and expansion.
Las Vegas Market Challenges
Despite recent challenges in the Las Vegas market, such as slowing visitation and dips in gross gaming revenue, VICI remains confident in the city’s long-term potential. The company is optimistic about overcoming these hurdles and capitalizing on future opportunities.
Significant Transaction Costs
During the quarter, VICI Properties incurred approximately $7 million in transaction costs. These costs were related to pursuit expenses from previous quarters that were ultimately not pursued, reflecting the company’s strategic decision-making process.
Technical Difficulties During Earnings Call
The earnings call experienced technical difficulties, with audio issues impacting communication clarity. Despite these challenges, VICI successfully conveyed its key messages to investors.
Forward-Looking Guidance
VICI Properties provided an optimistic outlook for the fiscal year during the earnings call. The revised 2025 guidance forecasts a 4.4% growth in AFFO per share, ranging between $2.35 and $2.37. This growth is driven by a combination of same-store earnings growth and new store external growth. VICI’s strong dividend return, efficient revenue conversion, and disciplined cost management contribute to a compelling total return strategy.
In conclusion, VICI Properties’ earnings call highlighted a positive sentiment, with the company demonstrating resilience and strategic foresight. Despite market challenges and technical difficulties, VICI’s raised AFFO guidance, strong financial position, and strategic investments underscore its commitment to growth and shareholder value.