Core Points - NBC Sports will present the Kentucky Oaks in primetime for the first time on May 1, 2026, at 8 p.m. ET on NBC and Peacock, enhancing the event's visibility and audience reach [2][3] - The Kentucky Derby, America's oldest major sporting event, will take place on May 2, 2026, and the previous year's event was the most-watched since 1989, peaking at 21.8 million viewers [3] - Churchill Downs Incorporated (CDI) has extended its partnership with NBC Sports, making NBC the longest-running broadcaster of the Kentucky Derby, covering 32 editions from 2001 to 2032 [4] Company Overview - Churchill Downs Incorporated (CDI) has been creating entertainment experiences for over 150 years, with a focus on the Kentucky Derby and expansion into live racing, online wagering, and casino gaming [5]

分组1 - Churchill Downs reported quarterly earnings of $3.1 per share, exceeding the Zacks Consensus Estimate of $3.03 per share, and up from $2.89 per share a year ago, representing an earnings surprise of +2.31% [1] - The company posted revenues of $934.4 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.39%, and an increase from $890.7 million year-over-year [2] - Churchill Downs has surpassed consensus EPS estimates two times over the last four quarters and topped consensus revenue estimates twice as well [2] 分组2 - The stock has underperformed, losing about 19.1% since the beginning of the year, while the S&P 500 has gained 7.3% [3] - The current consensus EPS estimate for the coming quarter is $1.14 on revenues of $667.29 million, and for the current fiscal year, it is $6.30 on revenues of $2.88 billion [7] - The Zacks Industry Rank indicates that the Gaming industry is currently in the top 26% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Churchill Downs Incorporated (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) 600 North Hurstbourne Parkway, Suite 400 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the trans ...

Executive Summary / Company Highlights [Consolidated Financial Performance](index=1&type=section&id=Consolidated%20Financial%20Performance) Churchill Downs Incorporated reported all-time record net revenue and Adjusted EBITDA for the second quarter of 2025, alongside an increase in net income attributable to CDI Consolidated Results (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change ($M) | Change (%) | | :-------------------------- | :-------------------- | :-------------------- | :---------- | :--------- | | Net revenue | $934.4 | $890.7 | $43.7 | 5% | | Net income attributable to CDI | $216.9 | $209.3 | $7.6 | 4% | | Diluted EPS attributable to CDI | $2.99 | $2.79 | $0.20 | 7.2% | | Adjusted EBITDA | $450.9 | $444.8 | $6.1 | 1% | [Key Operational Achievements & Strategic Initiatives](index=1&type=section&id=Key%20Operational%20Achievements%20%26%20Strategic%20Initiatives) The company achieved record-breaking performance for the 151st Kentucky Derby, announced a significant acquisition in New Hampshire, and authorized a new share repurchase program, while maintaining a net bank leverage of 4.2x - Churchill Downs Racetrack ran the **151st Kentucky Derby** with all-time record all-sources handle for the Kentucky Derby Race, Kentucky Derby Day Program, and Kentucky Derby Week[7](index=7&type=chunk) - The Kentucky Derby achieved its **highest average viewership of 17.7 million** (up **6% vs. prior year**) and **highest peak viewership of 21.8 million** (up **8% vs. prior year**)[7](index=7&type=chunk) - CDI announced definitive agreements to acquire **90% of Casino Salem** in New Hampshire for **$180 million**, with plans to develop a charitable gaming, entertainment, and dining destination[7](index=7&type=chunk) - The Board of Directors approved a new **$500 million share repurchase program** on July 22, 2025[7](index=7&type=chunk) - The company ended Q2 2025 with **net bank leverage of 4.2x** and returned **$250.4 million of capital** to shareholders through share repurchases[7](index=7&type=chunk) Segment Results [Live and Historical Racing](index=2&type=section&id=Live%20and%20Historical%20Racing) The Live and Historical Racing segment experienced significant revenue and Adjusted EBITDA growth in Q2 2025, primarily driven by strong performance from Virginia and Kentucky HRM venues and record Kentucky Derby wagering, despite a slight decrease in Churchill Downs Racetrack's Adjusted EBITDA Live and Historical Racing Segment Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change ($M) | Change (%) | | :------- | :-------------------- | :-------------------- | :---------- | :--------- | | Revenue | $540.9 | $490.2 | $50.7 | 10.3% | | Adjusted EBITDA | $296.5 | $279.2 | $17.3 | 6.2% | - Revenue increase was primarily due to a **$23.8 million increase** from Virginia HRM venues (driven by The Rose opening and Richmond expansion) and a **$22.0 million increase** from Kentucky HRM venues[8](index=8&type=chunk) - Adjusted EBITDA increase was primarily due to a **$15.3 million increase** from Kentucky HRM venues and a **$3.0 million increase** from Virginia HRM venues, partially offset by a **$1.0 million decrease** at Churchill Downs Racetrack due to lower Derby Week ticketing revenue and higher pari-mutuel taxes[9](index=9&type=chunk) [Wagering Services and Solutions](index=2&type=section&id=Wagering%20Services%20and%20Solutions) The Wagering Services and Solutions segment saw an increase in revenue and Adjusted EBITDA in Q2 2025, driven by TwinSpires Horse Racing and Exacta, although TwinSpires' EBITDA was negatively impacted by increased legal and marketing expenses Wagering Services and Solutions Segment Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change ($M) | Change (%) | | :------- | :-------------------- | :-------------------- | :---------- | :--------- | | Revenue | $168.4 | $159.9 | $8.5 | 5.3% | | Adjusted EBITDA | $48.0 | $46.2 | $1.8 | 3.9% | - Revenue increase was primarily due to a **$5.1 million increase** from TwinSpires Horse Racing (higher Derby Week wagering) and a **$3.4 million increase** from Exacta (incremental HRMs in Virginia and New Hampshire)[10](index=10&type=chunk) - Adjusted EBITDA increase was due to a **$3.4 million increase** from Exacta and a **$0.8 million increase** from the sports betting business, partially offset by a **$2.4 million decrease** from TwinSpires Horse Racing due to increased legal and marketing expenses[11](index=11&type=chunk) [Gaming](index=3&type=section&id=Gaming) The Gaming segment experienced a decrease in both revenue and Adjusted EBITDA in Q2 2025, primarily attributable to the cessation of HRM operations in Louisiana and a higher effective state gaming tax rate at Terre Haute Casino Resort Gaming Segment Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change ($M) | Change (%) | | :------- | :-------------------- | :-------------------- | :---------- | :--------- | | Revenue | $266.3 | $274.4 | $(8.1) | (3.0%) | | Adjusted EBITDA | $127.3 | $140.7 | $(13.4) | (9.5%) | - Revenue decrease was due to a **$5.2 million decrease** from the cessation of HRM operations in Louisiana and a **$2.9 million net decrease** at other wholly owned gaming properties[12](index=12&type=chunk) - Adjusted EBITDA decrease was due to an **$11.6 million decrease** from wholly owned gaming properties (including a **$7.0 million decrease** at Terre Haute Casino Resort from a higher state gaming tax rate) and a **$1.8 million decrease** from equity investments[13](index=13&type=chunk) [All Other](index=3&type=section&id=All%20Other) The 'All Other' segment reported a slight increase in both revenue and Adjusted EBITDA for Q2 2025, mainly driven by intercompany revenue from the captive insurance company and a reduction in corporate legal fees All Other Segment Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change ($M) | Change (%) | | :------- | :-------------------- | :-------------------- | :---------- | :--------- | | Revenue | $2.3 | $1.9 | $0.4 | 21.1% | | Adjusted EBITDA | $(20.9) | $(21.3) | $0.4 | 1.9% | - Revenue increase was primarily due to intercompany revenue related to the captive insurance company[14](index=14&type=chunk) - Adjusted EBITDA increase was primarily due to the reduction of corporate legal-related fees, partially offset by increased other corporate-related expenses[15](index=15&type=chunk) Capital Management [Share Repurchase Program](index=3&type=section&id=Share%20Repurchase%20Program) Churchill Downs Incorporated actively managed its capital through share repurchases in Q2 2025, buying back a significant number of shares and retaining substantial repurchase authority - The Company repurchased **2,565,964 shares** of its common stock at a total cost of **$250.4 million** in the second quarter of 2025[17](index=17&type=chunk) - As of June 30, 2025, approximately **$184.2 million of repurchase authority** remained under the 2025 Stock Repurchase Program[17](index=17&type=chunk) Subsequent Events [Federal Tax Bill Impact](index=3&type=section&id=Federal%20Tax%20Bill%20Impact) The enactment of H.R. 1, a new federal tax and spending bill, is expected to significantly reduce the Company's current year cash tax expense and boost cash flow from operating activities, primarily due to the reinstatement of 100% bonus depreciation rules - H.R. 1, enacted on July 4, 2025, will have a **significant favorable impact** on the Company's current year cash tax expense[19](index=19&type=chunk) - The favorable impact is primarily due to the permanent reinstatements of **100% bonus depreciation rules** and a **30% of EBITDA-based interest expense deduction limitation**[19](index=19&type=chunk) - The Company will begin utilizing a **$91.2 million deferred tax asset** related to interest expense, leading to an expected increase in cash flow from operating activities[19](index=19&type=chunk) [Acquisition of Casino Salem](index=4&type=section&id=Acquisition%20of%20Casino%20Salem) CDI entered into definitive agreements to acquire a 90% equity interest in Casino Salem in New Hampshire for $180 million, with plans to develop it into a charitable gaming, entertainment, and dining destination - On July 14, 2025, CDI agreed to acquire **90% of Casino Salem** for **$180.0 million in cash**[20](index=20&type=chunk) - The acquisition includes responsibility for developing a charitable gaming, entertainment, and dining destination at The Mall at Rockingham Park[20](index=20&type=chunk) [New Share Repurchase Authorization](index=4&type=section&id=New%20Share%20Repurchase%20Authorization) The Board of Directors approved a new common stock repurchase program of up to $500.0 million, which incorporates any remaining authority from previous authorizations - On July 22, 2025, the Board of Directors approved a new common stock repurchase program of up to **$500.0 million**[21](index=21&type=chunk) - This new program includes, and is not in addition to, any repurchase authority remaining under prior authorizations[21](index=21&type=chunk) Net Income Attributable to CDI Analysis [Net Income Attributable to CDI Analysis](index=4&type=section&id=Net%20Income%20Attributable%20to%20CDI%20Analysis) Net income attributable to CDI increased in Q2 2025, primarily driven by lower state tax expense and improved operational results, partially offset by an asset impairment charge and higher interest expense Net Income Attributable to CDI (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change ($M) | | :-------------------------- | :-------------------- | :-------------------- | :---------- | | Net income attributable to CDI | $216.9 | $209.3 | $7.6 | - The increase was partially offset by a **$1.8 million after-tax impairment charge** related to obsolete HRMs in Virginia[23](index=23&type=chunk) - Excluding specific items, adjusted net income attributable to CDI increased by **$9.0 million**, primarily due to an **$11.4 million after-tax increase** from lower state tax expense and operational results, and a **$0.3 million after-tax increase** in equity income[23](index=23&type=chunk)[25](index=25&type=chunk) - This adjusted increase was partially offset by a **$2.0 million after-tax increase** in interest expense and a **$0.7 million after-tax increase** due to income attributable to a noncontrolling interest[25](index=25&type=chunk) Non-GAAP Measures Explanation [Non-GAAP Measures Explanation](index=5&type=section&id=Non-GAAP%20Measures%20Explanation) Churchill Downs Incorporated utilizes non-GAAP measures such as adjusted net income, adjusted diluted EPS, EBITDA, and Adjusted EBITDA to provide a clearer understanding of its core operating results, facilitate period-to-period comparisons, and aid internal performance evaluation, while clarifying that these are supplemental and not replacements for GAAP metrics - The Company uses non-GAAP measures (adjusted net income, adjusted diluted EPS, EBITDA, Adjusted EBITDA) as key performance indicators to evaluate operating performance internally and facilitate comparisons between periods[27](index=27&type=chunk) - Adjusted EBITDA is used to evaluate segment performance, develop strategy, and allocate resources, providing a more accurate measure of core operating results by excluding certain items not indicative of the core business[28](index=28&type=chunk) - Adjusted net income and adjusted diluted EPS exclude discontinued operations, noncontrolling interest, transaction expense, pre-opening expense, and certain other gains, charges, recoveries, and expenses[29](index=29&type=chunk) - Adjusted EBITDA includes equity investments' EBITDA and noncontrolling interest's EBITDA, while excluding transaction expense, stock-based compensation, asset impairments, legal reserves, pre-opening expense, and other charges[30](index=30&type=chunk) Company Overview & Forward-Looking Statements [About Churchill Downs Incorporated](index=6&type=section&id=About%20Churchill%20Downs%20Incorporated) Churchill Downs Incorporated, headquartered in Louisville, Kentucky, has a rich 150-year history centered around the Kentucky Derby, and has diversified its operations through acquisitions and development in live and historical racing, online wagering, and regional casino gaming - Churchill Downs Incorporated (CDI) has created entertainment experiences for over **150 years**, with its most iconic asset being the Kentucky Derby[32](index=32&type=chunk) - CDI has expanded through the acquisition, development, and operation of live and historical racing entertainment venues, online wagering businesses, and regional casino gaming properties[32](index=32&type=chunk) [Forward-Looking Statements and Risk Factors](index=6&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The report contains forward-looking statements that are subject to various risks and uncertainties, including economic conditions, regulatory changes, competition, and operational challenges, which could cause actual results to differ significantly from projected outcomes - The news release contains 'forward-looking statements' subject to the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995[32](index=32&type=chunk) - Important factors that could cause actual results to differ materially include extraordinary events, economic conditions, changes in tax laws, public health threats, lack of confidence in core businesses, negative shifts in public opinion regarding gambling, loss of key personnel, and significant competition[33](index=33&type=chunk) - Other risks include inability to respond to technological changes, online security risks, compliance costs with data privacy laws, and difficulties in integrating acquisitions or completing new developments on time and budget[33](index=33&type=chunk) Consolidated Financial Statements [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The Consolidated Statements of Comprehensive Income detail the company's financial performance for the three and six months ended June 30, 2025, showing increases in total net revenue and net income attributable to Churchill Downs Incorporated Consolidated Statements of Comprehensive Income Highlights | Metric | Q2 2025 ($M) | Q2 2024 ($M) | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Total net revenue | 934.4 | 890.7 | 1,577.0 | 1,481.6 | | Operating income | 327.7 | 330.0 | 462.3 | 456.3 | | Net income | 217.6 | 210.2 | 294.8 | 290.6 | | Net income and comprehensive income attributable to CDI | 216.9 | 209.3 | 293.6 | 289.7 | | Diluted net income per common share | 2.99 | 2.79 | 3.98 | 3.87 | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets as of June 30, 2025, show an increase in total assets and total liabilities compared to December 31, 2024, with a slight decrease in total shareholders' equity Consolidated Balance Sheet Highlights | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | | :-------------------------- | :----------------- | :--------------------- | | Total assets | 7,375.7 | 7,275.9 | | Total liabilities | 6,311.6 | 6,172.6 | | Total Churchill Downs Incorporated shareholders' equity | 1,041.6 | 1,083.6 | - Current assets increased to **$464.0 million** from **$412.3 million**, driven by increases in cash, restricted cash, and accounts receivable[39](index=39&type=chunk) - Long-term debt, net of current maturities and loan origination fees, increased to **$1,863.5 million** from **$1,767.9 million**[39](index=39&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Consolidated Statements of Cash Flows for the six months ended June 30, 2025, indicate increased cash provided by operating activities, while cash used in investing and financing activities also increased, primarily due to higher capital project expenditures and share repurchases Consolidated Statements of Cash Flows Highlights (H1 2025 vs. H1 2024) | Metric | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------------- | :----------- | :----------- | | Net cash provided by operating activities | 486.1 | 471.7 | | Net cash used in investing activities | (166.1) | (290.1) | | Net cash used in financing activities | (287.1) | (173.5) | | Net increase in cash, cash equivalents and restricted cash | 32.9 | 9.1 | - Capital project expenditures decreased to **$133.3 million** in H1 2025 from **$257.2 million** in H1 2024[41](index=41&type=chunk) - Repurchase of common stock significantly increased to **$340.9 million** in H1 2025 from **$154.7 million** in H1 2024[41](index=41&type=chunk) Supplemental Financial Information [Adjusted Net Income and EPS Reconciliation](index=10&type=section&id=Adjusted%20Net%20Income%20and%20EPS%20Reconciliation) The company provides a reconciliation of GAAP net income to adjusted net income and adjusted diluted EPS, detailing specific adjustments for non-recurring or non-core items to offer a clearer view of underlying operational performance Adjusted Net Income and EPS (Q2 & H1 2025 vs. 2024) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | | GAAP net income attributable to CDI | 216.9 | 209.3 | 293.6 | 289.7 | | Total adjustments | 7.5 | 6.1 | 10.4 | 10.3 | | Adjusted net income attributable to CDI | 224.4 | 215.4 | 304.0 | 300.0 | | Adjusted diluted EPS | 3.10 | 2.89 | 4.15 | 4.02 | - Key adjustments include transaction, pre-opening, and other expenses, other charges and recoveries, asset impairments, and the income tax impact on these adjustments[42](index=42&type=chunk)[44](index=44&type=chunk) [Total Handle](index=10&type=section&id=Total%20Handle) Total handle generated by TwinSpires Horse Racing showed a slight increase for the three months ended June 30, 2025, but a minor decrease for the six-month period compared to the prior year TwinSpires Horse Racing Total Handle (Q2 & H1 2025 vs. 2024) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | | TwinSpires Horse Racing Total Handle | 665.9 | 653.4 | 1,066.4 | 1,073.0 | [Net Revenue by Segment and Source](index=11&type=section&id=Net%20Revenue%20by%20Segment%20and%20Source) [Net Revenue from External Customers by Segment](index=11&type=section&id=Net%20Revenue%20from%20External%20Customers%20by%20Segment) Net revenue from external customers increased across most segments for both the three and six months ended June 30, 2025, with Live and Historical Racing showing the strongest growth, while Gaming experienced a slight decline Net Revenue from External Customers by Segment (Q2 & H1 2025 vs. 2024) | Segment | Q2 2025 ($M) | Q2 2024 ($M) | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | | Live and Historical Racing | 509.9 | 464.7 | 782.4 | 709.8 | | Wagering Services and Solutions | 158.4 | 151.7 | 265.3 | 258.3 | | Gaming | 266.0 | 274.2 | 529.2 | 513.4 | | All Other | 0.1 | 0.1 | 0.1 | 0.1 | | Total net revenue from external customers | 934.4 | 890.7 | 1,577.0 | 1,481.6 | - Within Live and Historical Racing, Virginia revenue increased significantly to **$136.0 million** (Q2 2025) from **$111.9 million** (Q2 2024), and Western Kentucky revenue grew to **$16.0 million** (Q2 2025) from **$6.1 million** (Q2 2024)[47](index=47&type=chunk) [Net Revenue by Type (Q2)](index=12&type=section&id=Net%20Revenue%20by%20Type%20%28Q2%29) For Q2 2025, historical racing and live and simulcast racing revenues showed growth, while gaming revenue experienced a slight decline compared to the prior year, with racing event-related services also decreasing Net Revenue by Type (Q2 2025 vs. Q2 2024) | Revenue Type | Q2 2025 ($M) | Q2 2024 ($M) | | :-------------------------- | :----------- | :----------- | | Live and simulcast racing | 183.2 | 170.3 | | Historical racing | 256.5 | 221.4 | | Racing event-related services | 172.5 | 177.4 | | Gaming | 232.8 | 235.7 | | Other | 89.4 | 85.9 | | Total | 934.4 | 890.7 | - Food and beverage, hotel, and other services furnished to customers as an inducement to wager or through loyalty points redemption were **$15.6 million** for Q2 2025, up from **$14.2 million** for Q2 2024[49](index=49&type=chunk) [Net Revenue by Type (H1)](index=13&type=section&id=Net%20Revenue%20by%20Type%20%28H1%29) For the first six months of 2025, historical racing revenue saw substantial growth, contributing significantly to the overall increase in net revenue, while gaming revenue also increased, and racing event-related services remained stable Net Revenue by Type (H1 2025 vs. H1 2024) | Revenue Type | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------- | :----------- | :----------- | | Live and simulcast racing | 285.2 | 271.7 | | Historical racing | 502.6 | 442.3 | | Racing event-related services | 174.6 | 180.7 | | Gaming | 453.7 | 437.6 | | Other | 160.9 | 149.3 | | Total | 1,577.0 | 1,481.6 | - Food and beverage, hotel, and other services furnished to customers as an inducement to wager or through loyalty points redemption were **$30.0 million** for H1 2025, up from **$27.6 million** for H1 2024[50](index=50&type=chunk)[52](index=52&type=chunk) [Adjusted EBITDA by Segment](index=14&type=section&id=Adjusted%20EBITDA%20by%20Segment) [Adjusted EBITDA by Segment (Q2)](index=14&type=section&id=Adjusted%20EBITDA%20by%20Segment%20%28Q2%29) For Q2 2025, Live and Historical Racing and Wagering Services and Solutions segments showed increased Adjusted EBITDA, while the Gaming segment experienced a decline, primarily due to higher gaming taxes and content expenses Adjusted EBITDA by Segment (Q2 2025 vs. Q2 2024) | Segment | Q2 2025 ($M) | Q2 2024 ($M) | | :-------------------------- | :----------- | :----------- | | Live and Historical Racing | 296.5 | 279.2 | | Wagering Services and Solutions | 48.0 | 46.2 | | Gaming | 127.3 | 140.7 | | All Other | (20.9) | (21.3) | | Total Adjusted EBITDA | 450.9 | 444.8 | - Pari-mutuel taxes & purses increased to **$115.8 million** in Q2 2025 from **$98.4 million** in Q2 2024[54](index=54&type=chunk) - Gaming taxes increased to **$81.9 million** in Q2 2025 from **$76.1 million** in Q2 2024[54](index=54&type=chunk) [Adjusted EBITDA by Segment (H1)](index=15&type=section&id=Adjusted%20EBITDA%20by%20Segment%20%28H1%29) For the first six months of 2025, Live and Historical Racing and Wagering Services and Solutions segments demonstrated growth in Adjusted EBITDA, while the Gaming segment saw a decrease, influenced by increased gaming taxes and content expenses Adjusted EBITDA by Segment (H1 2025 vs. H1 2024) | Segment | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------- | :----------- | :----------- | | Live and Historical Racing | 398.5 | 380.0 | | Wagering Services and Solutions | 89.3 | 85.8 | | Gaming | 250.8 | 263.5 | | All Other | (42.6) | (42.0) | | Total Adjusted EBITDA | 696.0 | 687.3 | - Pari-mutuel taxes & purses increased to **$187.7 million** in H1 2025 from **$162.0 million** in H1 2024[55](index=55&type=chunk)[58](index=58&type=chunk) - Gaming taxes increased to **$156.2 million** in H1 2025 from **$144.6 million** in H1 2024[55](index=55&type=chunk)[58](index=58&type=chunk) [Reconciliation of Comprehensive Income to Adjusted EBITDA](index=16&type=section&id=Reconciliation%20of%20Comprehensive%20Income%20to%20Adjusted%20EBITDA) The reconciliation details the adjustments made to convert net income and comprehensive income attributable to CDI into Adjusted EBITDA, highlighting significant non-cash and non-operating expenses such as depreciation, interest, and income tax provisions Reconciliation of Comprehensive Income to Adjusted EBITDA (Q2 & H1 2025 vs. 2024) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Net income and comprehensive income attributable to CDI | 216.9 | 209.3 | 293.6 | 289.7 | | Net income | 217.6 | 210.2 | 294.8 | 290.6 | | Total adjustments | 233.3 | 234.6 | 401.2 | 396.7 | | Adjusted EBITDA | 450.9 | 444.8 | 696.0 | 687.3 | - Major adjustments include depreciation and amortization (**$57.8M** in Q2 2025), interest expense (**$74.2M** in Q2 2025), and income tax provision (**$74.4M** in Q2 2025)[60](index=60&type=chunk) - Other adjustments include stock-based compensation expense, pre-opening expense, asset impairments, and transaction expense[60](index=60&type=chunk) [Summarized Joint Venture Financial Statements](index=17&type=section&id=Summarized%20Joint%20Venture%20Financial%20Statements) Summarized financial information for equity investments shows relatively stable net revenue and net income for both the three and six months ended June 30, 2025, with a slight decrease in total assets and an improvement in members' deficit Summarized Income Statement for Equity Investments (Q2 & H1 2025 vs. 2024) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------- | :----------- | :----------- | :----------- | :----------- | | Net revenue | 216.0 | 215.9 | 421.3 | 432.8 | | Operating income | 75.3 | 76.7 | 144.1 | 152.4 | | Net income | 65.0 | 65.3 | 123.2 | 130.0 | Summarized Balance Sheet for Equity Investments (June 30, 2025 vs. Dec 31, 2024) | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | | :-------------------------- | :----------------- | :--------------------- | | Total assets | 687.2 | 693.6 | | Total liabilities | 687.2 | 693.6 | | Members' deficit | (226.9) | (237.8) | [Planned Capital Projects](index=18&type=section&id=Planned%20Capital%20Projects) Churchill Downs Incorporated has planned capital projects totaling $250-290 million for 2025, focusing on enhancements at Churchill Downs Racetrack, HRM expansions in Virginia and Southwestern Kentucky, and the development of Casino Salem Planned Capital Projects and 2025 Spend | Project Category | Project Name | Target Completion | 2025 Planned Spend ($M) | | :-------------------------- | :------------------------------------------ | :---------------- | :---------------------- | | Churchill Downs Racetrack | Starting Gate Pavilion and Courtyard | Completed | $75-85 | | Churchill Downs Racetrack | Finish Line Suites / The Mansion | April 2026 | $15-20 | | Virginia | Richmond (HRM Expansion) | Third Quarter 2025 | $30-35 | | Virginia | Henrico (Roseshire - HRM Venue) | Fourth Quarter 2025 | $30-35 | | Southwestern Kentucky | Calvert City (Marshall Yards Racing and Gaming - HRM Venue) | First Quarter 2026 | $30-35 | | New Hampshire | Casino Salem | TBD | TBD | | All Other | All Other | TBD | $70-80 | | **Total** | | | **$250-290** |

Company Announcement - Churchill Downs Incorporated ("CDI") announced a new $500 million share repurchase program, replacing the previous $500 million program authorized in March 2025 [1] - The new program allows for share repurchases at management's discretion, either in the open market or through privately negotiated transactions, and has no time limit [1] Company Background - CDI has been in operation for over 150 years, with its most iconic asset being the Kentucky Derby [2] - The company is headquartered in Louisville, Kentucky, and has expanded through acquisitions and the operation of live and historical racing venues, online wagering businesses, and regional casino gaming properties [2]

Company Highlights - Churchill Downs Incorporated (CDI) reported record net revenue of $934.4 million for Q2 2025, an increase of $43.7 million or 5% compared to Q2 2024 [6] - Net income attributable to CDI was $216.9 million, up $7.6 million or 4% year-over-year [6] - Diluted earnings per share (EPS) increased to $2.99 from $2.79 in the prior year [6] - Adjusted EBITDA reached an all-time high of $450.9 million, up $6.1 million or 1% from the previous year [6] Segment Results Live and Historical Racing - Revenue for this segment was $540.9 million in Q2 2025, up from $490.2 million in Q2 2024, reflecting a $50.7 million increase [5] - Adjusted EBITDA for Live and Historical Racing increased to $296.5 million from $279.2 million [5] Wagering Services and Solutions - Revenue increased to $168.4 million in Q2 2025 from $159.9 million in Q2 2024, a rise of $8.5 million [9] - Adjusted EBITDA for this segment rose to $48.0 million from $46.2 million [9] Gaming - Revenue decreased to $266.3 million in Q2 2025 from $274.4 million in Q2 2024, a decline of $8.1 million [11] - Adjusted EBITDA for Gaming fell to $127.3 million from $140.7 million [11] All Other - Revenue increased to $2.3 million in Q2 2025 from $1.9 million in Q2 2024 [13] - Adjusted EBITDA improved slightly to -$20.9 million from -$21.3 million [13] Capital Management - The company repurchased 2,565,964 shares at a total cost of $250.4 million during Q2 2025 [14] - As of June 30, 2025, approximately $184.2 million of repurchase authority remained under the 2025 Stock Repurchase Program [14] Subsequent Events - CDI announced the acquisition of 90% of Casino Salem in New Hampshire for $180 million, which will include the development of a charitable gaming and entertainment destination [16] - A new $500 million stock repurchase program was approved by the Board of Directors on July 22, 2025 [17] Financial Position - As of June 30, 2025, total assets were $7,375.7 million, up from $7,275.9 million at the end of 2024 [33] - Total liabilities increased to $6,311.6 million from $6,172.6 million [33]

Core Viewpoint - Churchill Downs Incorporated (CDI) has signed definitive agreements to acquire a majority of the equity interests in Casino Salem, a joint venture in New Hampshire, which will feature historical horse racing machines and a charitable gaming, entertainment, and dining destination [1][5]. Company Overview - CDI has been creating entertainment experiences for over 150 years, with its most iconic asset being the Kentucky Derby. The company is headquartered in Louisville, Kentucky, and has expanded through acquisitions and operations in live and historical racing, online wagering, and regional casino gaming properties [6]. Casino Salem Development - Casino Salem is located at The Mall at Rockingham Park, approximately 30 minutes from downtown Boston. Local developers Joe Faro and Sal Lupoli will retain ownership, ensuring their experience contributes to the venue's success [2]. - The initial phase of Casino Salem opened on July 9, featuring around 100 historical racing machines and 13 live table games. Future phases will include venue rebranding, gaming floor expansion, and new food and beverage concepts [3]. - CDI aims to create a regional destination in Salem to attract patrons from the growing New England market, with plans to support charitable organizations throughout New Hampshire [4]. Financial Aspects - The Salem Transaction will be financed through CDI's existing credit facility, with the closing subject to customary conditions, including approval from the New Hampshire Lottery Commission. The transaction is expected to close in the third quarter of 2025 [5].

Investor Presentation April 23, 2025 Forward-Looking Statements Certain statements made in this presentation contain various "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "might," "plan," "predict," "project," "seek," "should," "will," "scheduled," and similar words o ...

Core Points - Churchill Downs Incorporated (CDI) will release its second quarter 2025 financial results on July 23, 2025, after market close [1] - A conference call to discuss the quarterly results will take place on July 24, 2025, at 9 a.m. ET [1] - Investors can access the call via an online webcast or by registering for a teleconference [2] - An online replay of the call will be available by noon ET on July 24, 2025 [2] - A news release with financial and statistical information will be accessible on CDI's website [3] Company Overview - Churchill Downs Incorporated has been providing entertainment experiences for over 150 years, starting with the Kentucky Derby [4] - The company is headquartered in Louisville, Kentucky, and has expanded through acquisitions and operations in live racing, online wagering, and regional casino gaming [4]

Group 1 - Churchill Downs Incorporated (NASDAQ: CHDN) is initiated with a Strong Buy rating and a price target of $131, highlighting its position as a leading U.S. racing, online wagering, and gaming operator across three fast-growing segments: Live and Historical Racing, TwinSpires, and Gaming [1] - The Strong Buy rating is based on a structured, repeatable framework that identifies companies with durable business models, mispriced cash flow potential, and intelligent capital allocation [1] - Moretus Research emphasizes rigorous fundamental analysis combined with a high-signal, judgment-driven process, focusing on underappreciated companies undergoing structural change or temporary dislocation [1] Group 2 - Valuation methods used by Moretus Research are based on pragmatic, sector-relevant multiples tailored to each company's business model and capital structure, emphasizing comparability, simplicity, and relevance [1] - The research aims to provide professional-grade insights, actionable valuation, and a strong filter for what truly matters in modern equity analysis, reflecting a deep respect for capital, discipline, and long-term compounding [1]