Executive Summary [Consolidated Financial Highlights](index=1&type=section&id=Consolidated%20Financial%20Highlights) Golden Entertainment's Q2 2025 revenues decreased to **$163.6 million**, but net income rose significantly to **$4.6 million** ($0.17 diluted EPS) from $0.6 million, while Adjusted EBITDA slightly declined to **$38.4 million** Consolidated Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------- | :-------- | :-------- | :----------- | | Revenues | $163.6M | $167.3M | -$3.7M | | Net Income | $4.6M | $0.6M | +$4.0M | | Diluted EPS | $0.17 | $0.02 | +$0.15 | | Adjusted EBITDA | $38.4M | $41.2M | -$2.8M | [Capital Allocation](index=1&type=section&id=Capital%20Allocation) The Company maintained its quarterly cash dividend of **$0.25 per share** and repurchased **514,150 shares** for **$14.6 million** in Q2 2025, with **$77.2 million** remaining under its share repurchase authorization - The Company paid a quarterly cash dividend of **$0.25 per share** on July 9, 2025, and authorized the next recurring quarterly cash dividend of **$0.25 per share** payable on October 3, 2025[3](index=3&type=chunk) Share Repurchase Program | Metric | Q2 2025 | | :-------------------------------- | :------------ | | Shares Repurchased | 514,150 | | Total Repurchase Value | $14.6 million | | Remaining Authorization (as of June 30, 2025) | $77.2 million | [Debt and Liquidity Position](index=1&type=section&id=Debt%20and%20Liquidity%20Position) As of June 30, 2025, Golden Entertainment's total principal debt outstanding was **$436.9 million**, with a cash balance of **$52.3 million** and **$200 million** remaining availability under its revolving credit facility Debt and Liquidity Summary | Metric | As of June 30, 2025 | | :-------------------------------- | :------------------ | | Total Principal Debt Outstanding | $436.9 million | | - Term Loan Borrowings | $392 million | | - Revolving Credit Facility Borrowings | $40 million | | Cash and Cash Equivalents | $52.3 million | | Remaining Revolving Credit Facility Availability | $200 million | Corporate Information [About Golden Entertainment](index=3&type=section&id=About%20Golden%20Entertainment) Golden Entertainment operates a diverse entertainment platform, including **eight casinos** and **72 gaming taverns** across Nevada, with approximately **5,500 slots**, **100 table games**, and **6,000 hotel rooms** - Golden Entertainment operates a **diversified entertainment platform** of gaming and hospitality assets[11](index=11&type=chunk) Operational Assets | Asset Category | Quantity | | :----------------- | :------- | | Casinos | 8 | | Gaming Taverns | 72 | | Slots | ~5,500 | | Table Games | 100 | | Hotel Rooms | 6,000 | [Investor Relations](index=1&type=section&id=Investor%20Relations) Golden Entertainment will host a conference call and webcast on **August 7, 2025**, to discuss its Q2 2025 financial results, with replay options available, and key investor contacts are Charles H. Protell and James Adams - The Company will host a webcast and conference call on **August 7, 2025, at 5:00 p.m. Eastern Time** to discuss the 2025 second quarter results[6](index=6&type=chunk) - A replay of the audio webcast will be available on the Company's website, **https://www.goldenent.com/conference-calls.php**[6](index=6&type=chunk) - Investor contacts include **Charles H. Protell**, President and Chief Financial Officer, and **James Adams**, VP Corporate Finance and Treasurer[12](index=12&type=chunk) Financial Performance Details [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations detail Q2 2025 revenues and expenses, showing a slight decrease in total revenues but a substantial increase in net income due to lower non-operating expenses, particularly the absence of a significant prior-year loss on debt extinguishment Consolidated Statements of Operations (Three Months Ended June 30) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :----------- | | **Revenues** | | | | | Gaming | $78,730 | $78,247 | +$483 | | Food and beverage | $41,068 | $43,113 | -$2,045 | | Rooms | $29,424 | $31,422 | -$1,998 | | Other | $14,398 | $14,552 | -$154 | | **Total revenues** | **$163,620** | **$167,334** | **-$3,714** | | **Expenses** | | | | | Gaming | $20,465 | $20,764 | -$299 | | Food and beverage | $33,776 | $34,300 | -$524 | | Rooms | $15,946 | $16,452 | -$506 | | Other | $4,334 | $2,784 | +$1,550 | | Selling, general and administrative | $54,566 | $56,087 | -$1,521 | | Depreciation and amortization | $22,475 | $22,616 | -$141 | | Loss on disposal of assets | $79 | — | +$79 | | Loss (gain) on sale of business | — | $792 | -$792 | | Preopening expenses | $63 | $4 | +$59 | | **Total expenses** | **$151,704** | **$153,799** | **-$2,095** | | **Operating income** | **$11,916** | **$13,535** | **-$1,619** | | **Non-operating expense** | | | | | Interest expense, net | $(7,727) | $(8,610) | +$883 | | Loss on debt extinguishment and modification | — | $(4,446) | +$4,446 | | **Total non-operating expense, net** | **$(7,727)** | **$(13,056)** | **+$5,329** | | **Income before income tax benefit (provision)** | **$4,189** | **$479** | **+$3,710** | | Income tax benefit (provision) | $443 | $144 | +$299 | | **Net income** | **$4,632** | **$623** | **+$4,009** | | **Diluted Net income per share** | **$0.17** | **$0.02** | **+$0.15** | [Segment Performance and Adjusted EBITDA Reconciliation](index=7&type=section&id=Segment%20Performance%20and%20Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA reconciliation reveals varying segment performance, with **Nevada Locals Casinos** showing growth in both revenue and Adjusted EBITDA for Q2 2025, while **Nevada Casino Resorts** and **Nevada Taverns** experienced declines Segment Performance and Adjusted EBITDA Reconciliation (Three Months Ended June 30) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :----------- | | **Revenues by Segment** | | | | | Nevada Casino Resorts | $98,196 | $101,093 | -$2,897 | | Nevada Locals Casinos | $38,911 | $37,866 | +$1,045 | | Nevada Taverns | $26,255 | $28,152 | -$1,897 | | Corporate and Other | $258 | $223 | +$35 | | **Total revenues - Continuing Operations** | **$163,620** | **$167,334** | **-$3,714** | | **Adjusted EBITDA by Segment** | | | | | Nevada Casino Resorts | $25,970 | $27,392 | -$1,422 | | Nevada Locals Casinos | $18,063 | $16,928 | +$1,135 | | Nevada Taverns | $5,877 | $7,791 | -$1,914 | | Corporate and Other | $(11,470) | $(10,919) | -$551 | | **Total Adjusted EBITDA - Continuing Operations** | **$38,440** | **$41,192** | **-$2,752** | - System implementation costs represent expenses related to the implementation of new enterprise resource planning, finance, payroll and human capital management software[17](index=17&type=chunk) Disclosures [Forward-Looking Statements](index=1&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding future events, company strategies, and financial projections, which are subject to various risks and uncertainties that could cause actual results to differ materially, and the Company disclaims any obligation to update them - This press release contains forward-looking statements regarding future events and the Company's future results, including strategies, objectives, business opportunities, anticipated growth, and financial projections[7](index=7&type=chunk)[8](index=8&type=chunk) - Forward-looking statements are subject to assumptions, risks, and uncertainties that may change at any time, and actual results could differ materially from those expressed[8](index=8&type=chunk) - The Company undertakes no obligation to update any forward-looking statements as a result of new information, future developments or otherwise[8](index=8&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Golden Entertainment uses **Adjusted EBITDA** as a non-GAAP financial measure, a key metric for its chief operating decision maker and investors to assess performance by excluding specific non-core expenses, and it should not be considered in isolation from GAAP - **Adjusted EBITDA** is used as the primary metric by the chief operating decision maker and investors for measuring past and future performance[9](index=9&type=chunk) - It provides useful information by excluding specific expenses and gains not indicative of core operating results and is tied to executive compensation[9](index=9&type=chunk) - The presentation of this additional information is not meant to be considered in isolation or as a substitute for measures of financial performance prepared in accordance with GAAP[9](index=9&type=chunk) [Definition of Adjusted EBITDA](index=3&type=section&id=Definition%20of%20Adjusted%20EBITDA) Adjusted EBITDA is defined as earnings before depreciation, amortization, non-cash lease benefit or expense, share-based compensation, asset disposal gains or losses, debt extinguishment losses, preopening expenses, impairment, interest, income taxes, and other non-cash or non-recurring items - Adjusted EBITDA is defined as earnings before depreciation and amortization, non-cash lease benefit or expense, share-based compensation expense, gain or loss on disposal of assets and businesses, loss on debt extinguishment and modification, preopening and related expenses, impairment of assets, interest, income taxes, and other non-cash charges and non-recurring expenses[10](index=10&type=chunk)

Group 1 - The article discusses Golden Entertainment (NASDAQ: GDEN), a small operator of casinos and taverns located in Las Vegas, Laughlin, and Pahrump [1] - Golden Entertainment is known for its Stratosphere Las Vegas property, which is referred to as The STRAT, and is noted for its impressive views [1]

Group 1 - Boyd Gaming (BYD) has been a top pick in the casino sector since last year, with the stock increasing over 40% compared to the S&P's 18% return in the same period [1]

Financial Performance - Total revenues for the three months ended March 31, 2025, were $160.8 million, a decrease of $13.2 million, or 8%, compared to $174.0 million in the prior year period[109] - Gaming revenues decreased by $6.7 million, primarily due to the exclusion of results from distributed gaming operations sold on January 10, 2024[110] - Operating income for the three months ended March 31, 2025, was $11.1 million, down from $80.1 million in the prior year period[109] - Net income for the three months ended March 31, 2025, was $2.5 million, compared to $42.0 million in the prior year period[109] - Adjusted EBITDA for the same period was $37.581 million, down $3.411 million, or 8.3%, from $40.992 million in the prior year[123] - Nevada Casino Resorts segment revenues decreased by $6.8 million, or 7%, with Adjusted EBITDA down by $2.1 million, or 8%[124] - Nevada Locals Casinos segment revenues decreased by $0.2 million, or 0.4%, while Adjusted EBITDA increased by $0.3 million, or 2%[126] - Nevada Taverns segment revenues decreased by $0.3 million, or 1%, and Adjusted EBITDA decreased by $0.2 million, or 3%[127] Transactions and Acquisitions - The company completed the sale of its distributed gaming operations in Nevada for cash consideration of $213.5 million on January 10, 2024[96] - The company acquired the operations of Great American Pub for $7.3 million on April 22, 2024, adding two tavern locations to its portfolio[97] Expenses and Costs - Selling, general and administrative expenses decreased by $5.8 million, or 10%, for the three months ended March 31, 2025, primarily due to reduced transaction costs and advertising expenses[112] - The increase in depreciation and amortization expenses of $0.3 million, or 2%, was primarily related to the addition of GAP tavern locations and new assets placed in service[114] - The gain on sale of business of $69.7 million in the prior year period was related to the sale of distributed gaming operations[116] Cash Flow and Financing - Cash and cash equivalents as of March 31, 2025, totaled $50.5 million, with $225 million available under the Revolving Credit Facility[130] - Net cash provided by operating activities increased by $2.8 million, or 11%, to $28.6 million for the three months ended March 31, 2025[134] - Net cash used in financing activities increased by $16.2 million, or 210%, to $23.9 million for the three months ended March 31, 2025, primarily due to stock repurchases and cash dividends[136] - The company intends to fund capital expenditures through operating cash flows and the Revolving Credit Facility, with ongoing refurbishment and maintenance at its facilities[140] - As of March 31, 2025, the company had $393 million in outstanding Term Loan B-1 borrowings and $15 million under the Revolving Credit Facility[153] - The weighted-average effective interest rate on the company's outstanding borrowings was 6.60% for the three months ended March 31, 2025[154] - A 50 basis point increase in the applicable interest rate would increase interest incurred by $2.0 million over a twelve-month period[154] Regulatory and Market Risks - The gaming industry is subject to extensive regulation, and changes in laws or regulations could materially affect the company's financial position[149] - The company’s casino properties and branded taverns in Nevada experience seasonal revenue fluctuations, with lower revenues in summer and higher revenues in fall[147] - The primary exposure to market risk is interest rate risk associated with variable rate long-term debt[152] Accounting and Valuation - The estimated fair value of an indefinite-lived trade name did not significantly exceed its carrying value as of October 1, 2024, indicating potential impairment risks[145] - The company has no off-balance sheet arrangements that could materially affect its financial condition or results[151] - There were no material changes to critical accounting policies and estimates during the three months ended March 31, 2025[146]

Core Viewpoint - Golden Entertainment reported quarterly earnings of $0.09 per share, missing the Zacks Consensus Estimate of $0.10 per share, but showing improvement from a loss of $0.37 per share a year ago [1][2] Financial Performance - The company posted revenues of $160.84 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.91% and down from $174.05 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates only once [2] Stock Performance - Golden Entertainment shares have declined approximately 18.2% since the beginning of the year, compared to a decline of 4.3% for the S&P 500 [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.21 on revenues of $170.28 million, and for the current fiscal year, it is $0.58 on revenues of $666.38 million [7] - The trend for estimate revisions ahead of the earnings release has been unfavorable [6] Industry Context - The Gaming industry, to which Golden Entertainment belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another company in the same industry, Snail, Inc. (SNAL), is expected to report a quarterly loss of $0.11 per share, indicating a year-over-year change of -120% [9]

Financial Data and Key Metrics Changes - The first quarter results were in line with expectations, primarily impacted by the absence of last year's Super Bowl in Las Vegas, particularly affecting The Strat [5] - EBITDA from other casinos increased year over year, while EBITDA from taverns stabilized [5] - The company ended the quarter with over $400 million in debt, $50 million in cash, and $225 million in remaining availability under the revolving credit facility, with a low net leverage of 2.4 times EBITDA [9][10] Business Line Data and Key Metrics Changes - The Strat experienced a 5% decline in occupancy for the quarter, with a 13% drop in February, leading to a $3 million EBITDA headwind [6] - In Laughlin, EBITDA increased by reducing expenses and focusing on more profitable concerts, maintaining leading market share [7] - Revenue for Nevada locals casinos was flat year over year, but EBITDA increased by 2%, with consistent performance and EBITDA margins at 46% for the second consecutive quarter [8] Market Data and Key Metrics Changes - The company observed increasing strength in the locals business in April, indicating a strong start for Q2 [8] - The tavern segment saw slight declines in revenue and EBITDA year over year, but sequentially improved over Q4 [9] Company Strategy and Development Direction - The company is focused on a disciplined reinvestment strategy and has prioritized share repurchases over M&A opportunities due to current market conditions [10][19] - The management believes that the current macroeconomic environment allows for continued reinvestment in assets, paying dividends, and opportunistically acquiring stock [10][11] Management's Comments on Operating Environment and Future Outlook - Management noted that the business remains resilient and is improving despite an uncertain macroeconomic environment [11] - The company is optimistic about the upcoming months, with April showing stable operating trends and May starting strong [5][11] Other Important Information - The company has repurchased 3.2 million shares totaling nearly $100 million since the start of 2024 and paid out $35 million in dividends [10] - A nationally recognized food and beverage concept is set to open at The Strat, which is expected to enhance the property’s offerings [45] Q&A Session Summary Question: Can you provide insights on The Strat's booking window and OTA mix? - Management indicated that the booking window is relatively short, with 25% to 30% of occupancy materializing within a seven-day period, and the OTA mix is currently around 65%, trending downward as they improve direct bookings [13][17] Question: How is the M&A environment affecting discussions? - Management stated that the current market dislocation has dampened strategic M&A discussions, with high price expectations for marketed assets [18][19] Question: Can you elaborate on the tavern business and competition from smaller operators? - Management noted increased promotional activity from smaller operators but emphasized that such trends are typically unsustainable and that their disciplined approach has led to improved performance [24][28] Question: How is the company addressing capital allocation and potential leverage for stock repurchases? - Management confirmed a commitment to aggressive stock buybacks, utilizing available liquidity, but expressed skepticism about the effectiveness of tender offers in the gaming space [66] Question: What are the key drivers for increasing hotel room rates at The Strat? - Management highlighted the importance of citywide events and improved direct booking strategies, with a focus on midweek occupancy to drive higher rates [70][72]

Financial Data and Key Metrics Changes - The first quarter results were in line with expectations, primarily impacted by the absence of last year's Super Bowl in Las Vegas, particularly affecting The Strat [5] - EBITDA from other casinos increased year over year, while EBITDA from taverns stabilized [5] - The company ended the quarter with over $400 million in debt, $50 million in cash, and $225 million in remaining availability under the revolving credit facility, with a low net leverage of 2.4 times EBITDA [8][9] Business Line Data and Key Metrics Changes - The Strat experienced a 5% decline in occupancy for the quarter, with a 13% drop in February, leading to a $3 million EBITDA headwind [6] - In Laughlin, EBITDA increased by reducing expenses and focusing on more profitable concerts, maintaining leading market share [7] - Revenue and EBITDA from taverns were down slightly year over year, but sequentially improved over Q4 due to better performance from newer taverns and reduced operating expenses [8] Market Data and Key Metrics Changes - Revenue for Nevada locals casinos was flat compared to the prior year, with EBITDA up 2% driven by operational efficiencies [7] - The locals business showed increasing strength in April, indicating a strong start for Q2 [8] Company Strategy and Development Direction - The company is focused on a disciplined reinvestment strategy and has prioritized share repurchases over M&A opportunities due to current market conditions [10][19] - The management believes that the current valuation dislocation presents a better opportunity for repurchasing equity rather than pursuing acquisitions [10][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite an uncertain macroeconomic environment, highlighting stable operating trends in April and a strong start in May [5][11] - The company is optimistic about the performance of The Strat, with occupancy pacing up 6% year over year in May and showing strength in June [6][11] Other Important Information - The company has repurchased 3.2 million shares totaling nearly $100 million since the start of 2024 and paid out $35 million in dividends [10] - A nationally recognized food and beverage concept is set to open at The Strat, expected to enhance revenue [45] Q&A Session Summary Question: Booking trends and OTA mix at The Strat - Management noted a shorter booking window at The Strat, with occupancy materializing within a seven-day period, and the OTA mix is currently around 65%, trending downward as they improve direct bookings [13][16] Question: M&A environment and macro impact - The management indicated that the current macro environment has dampened M&A discussions due to value dislocation and uncertainty about future conditions [18][19] Question: Tavern business competition - Management acknowledged increased promotional activity from smaller operators but expressed confidence in their disciplined approach and market position [24][28] Question: Local segment margins and operational efficiencies - The company highlighted strong margins of 46% for the local segment, attributed to rightsizing labor and streamlining operations [50][51] Question: Capital allocation and stock repurchase strategy - Management confirmed a commitment to aggressive stock repurchases, leveraging available liquidity, but expressed skepticism about the effectiveness of tender offers in the gaming space [63][66] Question: Future hotel room rates at The Strat - The management indicated that driving higher room rates will depend on citywide promotions and improved midweek occupancy, with ongoing efforts to enhance direct bookings [70][72]

Business Overview - Golden Entertainment focuses on casino and branded tavern operations in Nevada[6,8] - The company operates 8 casinos in Nevada with approximately 4,400 slots and 6,000 rooms[7] - It also operates 72 branded taverns in Nevada with approximately 1,100 slots[7,24] Market Position and Growth - Nevada's total gaming revenue (GGR) in 2024 was $15.6 billion[15] - Las Vegas Strip GGR in 2024 was $8.8 billion[15] - Nevada Locals GGR in 2024 was $3.6 billion[15] - Clark County's population is growing at a CAGR of 1.7% from 2024-2028, which is 3.8x faster than the total US population CAGR of 0.4% over the same period[17,20] Financial Performance and Capital Structure - The company's net leverage as of March 31, 2025, was 2.4x[30,33] - Golden Entertainment has repaid over $750 million of debt since 2021[31] - The company has returned $194 million of capital to shareholders since the completion of the Rocky Gap sale in July 2023[31] - Total revenues for continuing operations in 2024 were $660.799 million, and Adjusted EBITDA was $154.891 million[58]

Financial Performance - Golden Entertainment reported Q1 2025 revenues of $160.8 million, a decrease of 7.4% from $174.0 million in Q1 2024[3] - Net income for Q1 2025 was $2.5 million, or $0.09 per diluted share, compared to $42.0 million, or $1.37 per diluted share in Q1 2024[3] - Adjusted EBITDA for Q1 2025 was $37.6 million, down from $41.0 million in Q1 2024, reflecting a decline of 8.3%[3] Share Repurchase and Dividends - The company repurchased 273,945 shares at an average price of $27.79 per share, totaling $7.6 million, with $91.8 million remaining under its repurchase authorization[2] - The company plans to continue opportunistically repurchasing common stock under its current buyback authorization[3] - The board authorized a quarterly cash dividend of $0.25 per share, payable on July 9, 2025[1] Debt and Liquidity - As of March 31, 2025, total debt outstanding was $411.3 million, including $393.0 million in term loans and $15.0 million in revolving credit[4] - Cash and cash equivalents stood at $50.5 million, with $225.0 million available under the revolving credit facility as of March 31, 2025[5] Business Operations - The company operates eight casinos and 72 gaming taverns in Nevada, featuring approximately 5,500 slots and 100 table games[10] Future Outlook - Forward-looking statements indicate potential growth and strategies for future business opportunities, subject to various risks and uncertainties[7]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Golden Entertainment despite lower revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - Golden Entertainment is expected to report quarterly earnings of $0.10 per share, reflecting a year-over-year increase of +127%, while revenues are projected to be $162.32 million, down 6.7% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 1.54% lower in the last 30 days, indicating a reassessment by analysts regarding the company's earnings prospects [4][10]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates a negative Earnings ESP of -41.85% for Golden Entertainment, suggesting analysts have become bearish on the company's earnings outlook [11][10]. Historical Performance - In the last reported quarter, Golden Entertainment was expected to post earnings of $0.22 per share but only achieved $0.10, resulting in a surprise of -54.55%. Over the last four quarters, the company has only beaten consensus EPS estimates once [12][13]. Investment Considerations - Despite the negative indicators, the potential for stock movement is influenced by various factors beyond earnings results, including unforeseen catalysts and overall market conditions [14][16].