Core Insights - Red Rock Resorts reported strong Q2 2025 earnings, with both earnings and revenues exceeding estimates, indicating positive financial performance [2][3] Financial Performance - Adjusted EPS for Q2 2025 was 95 cents, surpassing the Zacks Consensus Estimate of 40 cents, and up from 59 cents in the prior-year quarter [3] - Quarterly revenues reached $526.3 million, beating the Zacks Consensus Estimate of $485 million, and grew 8.2% year over year from $486.4 million [3] - Net income increased to $108.3 million from $69.8 million in the prior-year quarter [5] - Adjusted EBITDA was $229.4 million, a 13.7% increase from $201.7 million year over year, with an adjusted EBITDA margin expanding to 43.6% from 41.5% [5] Segment Performance - Las Vegas Operations generated revenues of $513.3 million, up 6.2% from $483.2 million in the prior-year quarter, with adjusted EBITDA of $239.4 million, up 7.3% from $223.1 million [4] - Native American Management reported revenues and adjusted EBITDA of $10 million, reflecting cumulative development fee recognition [4] Financial Position - As of June 30, 2025, cash and cash equivalents were $145.2 million, up from $122.8 million as of March 31, 2025, while outstanding debt remained at $3.4 billion [6] - The board declared a cash dividend of $0.25 per share, payable on September 30, 2025, demonstrating commitment to shareholder returns [6] Market Outlook - There has been an upward trend in estimates for Red Rock Resorts, with the consensus estimate shifting by 11.72% recently [7] - The stock has a Growth Score of B and a Momentum Score of B, with an aggregate VGM Score of B, indicating a balanced investment profile [9] Industry Context - Red Rock Resorts operates within the Zacks Gaming industry, where Las Vegas Sands reported revenues of $3.18 billion for the last quarter, reflecting a year-over-year increase of 15% [11] - Las Vegas Sands is expected to post earnings of $0.61 per share for the current quarter, indicating a change of 38.6% from the year-ago quarter [12]

Core Viewpoint - Boyd Gaming (BYD) is currently viewed as a superior value option compared to Red Rock Resorts (RRR) based on various valuation metrics and earnings outlook [3][7]. Valuation Metrics - BYD has a forward P/E ratio of 12.00, significantly lower than RRR's forward P/E of 33.45 [5]. - The PEG ratio for BYD is 2.34, while RRR's PEG ratio is slightly higher at 2.38, indicating BYD's better valuation relative to its expected earnings growth [5]. - BYD's P/B ratio stands at 4.75, compared to RRR's much higher P/B of 20.96, further supporting BYD's valuation advantage [6]. Earnings Outlook - BYD is currently experiencing an improving earnings outlook, which is a positive indicator in the Zacks Rank model, contributing to its higher ranking [3][7]. - The Zacks Rank for BYD is 2 (Buy), while RRR holds a 3 (Hold) ranking, reflecting the stronger earnings estimate revisions for BYD [3].

Part I. Financial Information [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Red Rock Resorts, Inc.'s unaudited condensed consolidated financial statements for periods ended June 30, 2025, are presented, detailing balance sheets, income, equity, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects a slight decrease in total assets as of June 30, 2025, with stable liabilities and a decline in cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $145,201 | $164,383 | | Total current assets | $286,892 | $295,364 | | Property and equipment, net | $2,841,613 | $2,781,915 | | Total assets | $4,032,442 | $4,045,531 | | **Liabilities & Equity** | | | | Total current liabilities | $322,401 | $325,202 | | Long-term debt, less current portion | $3,349,294 | $3,354,567 | | Total liabilities | $3,735,388 | $3,738,698 | | Total stockholders' equity | $297,054 | $306,833 | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net revenues and net income attributable to Red Rock Resorts, Inc. significantly increased for both the second quarter and six-month period ended June 30, 2025 Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Revenues | $526,273 | $486,403 | | Operating Income | $168,028 | $140,234 | | Net Income | $108,253 | $69,810 | | Net Income Attributable to Red Rock | $56,404 | $35,676 | | Diluted EPS (Class A) | $0.95 | $0.59 | Six Months 2025 vs 2024 Performance (in thousands, except per share data) | Metric | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net Revenues | $1,024,134 | $975,300 | | Operating Income | $322,381 | $295,758 | | Net Income | $194,203 | $148,181 | | Net Income Attributable to Red Rock | $101,153 | $78,511 | | Diluted EPS (Class A) | $1.69 | $1.29 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity decreased as of June 30, 2025, influenced by net income, dividends, distributions, and stock repurchases - For the six months ended June 30, 2025, the company paid dividends of **$89.6 million** and repurchased **$30.9 million** of Class A common stock[14](index=14&type=chunk) - In May 2025, the company declared a special cash dividend of **$1.00** per share of Class A common stock[57](index=57&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities for the six months ended June 30, 2025, was offset by significant cash used in investing and financing activities Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $284,667 | $269,003 | | Net cash used in investing activities | ($72,461) | ($185,072) | | Net cash used in financing activities | ($231,388) | ($85,068) | | **Decrease in cash and cash equivalents** | **($19,182)** | **($1,137)** | - Investing activities included **$146.4 million** in capital expenditures and proceeds of **$110.5 million** from the repayment of Native American development costs[16](index=16&type=chunk) [Notes to Condensed Consolidated Financial Statements (unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The notes provide critical context to the financial statements, detailing accounting policies, the North Fork development project, long-term debt, share-based compensation, and segment reporting - The company has development and management agreements for the North Fork Project in California. In Q2 2025, the company recognized a **$10.0 million** cumulative development fee and an **$8.5 million** gain after receiving a **$110.5 million** repayment on advances[34](index=34&type=chunk)[36](index=36&type=chunk) - Total long-term debt stood at **$3.4 billion** as of June 30, 2025, primarily consisting of a Term Loan B Facility and several series of Senior Notes[40](index=40&type=chunk) - The company's operations are aggregated into two reportable segments: Las Vegas operations and Native American development. Las Vegas operations generated **$513.3 million** in net revenues and **$239.4 million** in Adjusted EBITDA in Q2 2025[78](index=78&type=chunk)[80](index=80&type=chunk) - The company extended its **$600 million** equity repurchase program through December 31, 2025. As of June 30, 2025, **$278.1 million** remained authorized for repurchase[60](index=60&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for Q2 and H1 2025, highlighting revenue growth driven by casino performance and the North Fork Project, alongside solid liquidity and capital resource management [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Net revenues and operating income significantly increased in Q2 2025, primarily driven by strong casino performance and a development fee from the North Fork Project Q2 2025 vs Q2 2024 Revenue Breakdown (in thousands) | Revenue Source | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Casino | $344,796 | $319,629 | 7.9% | | Food and beverage | $94,374 | $91,718 | 2.9% | | Room | $51,187 | $50,142 | 2.1% | | Development fees | $10,008 | $— | n/m | | **Net revenues** | **$526,273** | **$486,403** | **8.2%** | - Casino revenue growth in Q2 2025 was driven by a **5.8%** increase in slot handle and a **3.9%** increase in table games hold percentage compared to the prior year period[113](index=113&type=chunk) - A **$10.0 million** cumulative development fee was recognized in Q2 2025 related to the North Fork Project after financing for the project was secured[116](index=116&type=chunk) - A gain of **$8.5 million** on Native American development was recognized in Q2 2025, representing the excess of proceeds received over the carrying amount of reimbursable advances for the North Fork Project[124](index=124&type=chunk) [Adjusted EBITDA](index=30&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA, a key non-GAAP performance measure, increased in Q2 2025, primarily driven by contributions from Las Vegas operations and Native American development Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | $108,253 | $69,810 | | Adjustments (Depreciation, Interest, etc.) | $121,106 | $131,847 | | **Adjusted EBITDA** | **$229,359** | **$201,657** | Adjusted EBITDA by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Las Vegas operations | $239,444 | $223,147 | | Native American development | $10,008 | $— | | Corporate and other | ($20,093) | ($21,490) | | **Total Adjusted EBITDA** | **$229,359** | **$201,657** | [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position as of June 30, 2025, with sufficient cash and credit availability to fund operations, debt service, and shareholder returns - As of June 30, 2025, the company had **$145.2 million** in cash and cash equivalents and **$897.4 million** available under its Revolving Credit Facility[136](index=136&type=chunk) - Anticipated capital expenditures for the remainder of 2025 are approximately **$180 million** to **$230 million**[137](index=137&type=chunk) - The company has a completion guaranty for the North Fork Project, capped at a commitment of **$425 million**, but management believes it is not probable that funding will be necessary[139](index=139&type=chunk) - The equity repurchase program was extended to December 31, 2025, with **$278.1 million** remaining authorized for repurchases as of June 30, 2025[140](index=140&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on its long-term debt, managed through interest rate collar agreements, with no material changes since year-end 2024 - The company's main market risk is interest rate risk from its long-term debt. It uses interest rate collars to manage this exposure[160](index=160&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[161](index=161&type=chunk) - No material changes were made to the company's internal control over financial reporting during the most recent fiscal quarter[162](index=162&type=chunk) Part II. Other Information [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various routine lawsuits, none of which are expected to have a material impact on its financial condition or operations - The company is a defendant in various routine lawsuits but does not expect them to have a material impact[163](index=163&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have been reported since the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors were reported since the last Annual Report on Form 10-K[164](index=164&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased Class A common stock, with a significant amount remaining authorized under its equity repurchase program Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | | April 2025 | — | $— | $308,970,496 | | May 2025 | 671,677 | $45.92 | $278,115,032 | | June 2025 | — | $— | $278,115,032 | | **Total** | **671,677** | **$45.92** | **$278,115,032** | [Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[169](index=169&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - None[169](index=169&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - None of the Company's directors or executive officers adopted, terminated or modified a Rule 10b5-1 trading arrangement during Q2 2025[169](index=169&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including Sarbanes-Oxley Act certifications and XBRL data files

Core Viewpoint - Boyd Gaming (BYD) is currently positioned as a more attractive investment option compared to Red Rock Resorts (RRR) based on valuation metrics and earnings outlook [1][3][7]. Valuation Metrics - Boyd Gaming has a forward P/E ratio of 12.34, significantly lower than Red Rock Resorts' forward P/E of 35.50 [5]. - The PEG ratio for Boyd Gaming is 2.88, while Red Rock Resorts has a PEG ratio of 3.64, indicating that BYD is more favorably valued in relation to its expected earnings growth [5]. - Boyd Gaming's P/B ratio stands at 4.95, compared to Red Rock Resorts' P/B ratio of 17.6, further highlighting BYD's relative undervaluation [6]. Earnings Outlook - Boyd Gaming holds a Zacks Rank of 1 (Strong Buy), reflecting positive revisions to its earnings estimates, while Red Rock Resorts has a Zacks Rank of 3 (Hold) [3][7]. - The stronger estimate revision activity for Boyd Gaming suggests a more favorable earnings outlook compared to Red Rock Resorts [7].

Core Insights - Red Rock Resorts reported strong second-quarter fiscal 2025 earnings, with GAAP revenue of $526.3 million, surpassing analyst expectations of $488.1 million, and GAAP EPS of $0.95, significantly higher than the anticipated $0.41 [1][2] - The company experienced a 55.1% year-over-year increase in net income, reaching $108.3 million, driven by robust business trends and development progress [1][2] Financial Performance - Q2 2025 GAAP revenue was $526.3 million, an 8.2% increase from $486.4 million in Q2 2024 [2] - GAAP EPS for Q2 2025 was $0.95, up 61.0% from $0.59 in Q2 2024 [2] - Adjusted EBITDA reached $229.4 million, reflecting a 13.7% increase from $201.7 million in the previous year [2] - Las Vegas operations contributed significantly, with adjusted EBITDA of $239.4 million, a 7.3% increase from $223.1 million [2] Business Operations - The company operates a network of casino resorts and entertainment venues in Las Vegas, including major properties like Red Rock and Green Valley Ranch [3] - Key business drivers include strategic property locations, high-margin gaming revenue, and loyalty initiatives aimed at local residents [4] - Recent operational highlights included a 6.2% year-over-year revenue increase in Las Vegas, reaching $513.3 million, supported by resilient visitation and new property additions [5] Development and Investments - The company is actively reinvesting in its properties, with ongoing projects including a $120 million expansion at Durango, $53 million in upgrades at Sunset Station, and a $200 million refurbishment at Green Valley Ranch [8] - A one-time revenue boost of $10 million from Native American management was noted, linked to a unique development fee [6] Future Outlook - Management expressed confidence in the business model's resilience, citing stability in local casino spending and strong database growth [10] - The company did not provide specific financial guidance but acknowledged potential short-term disruptions from ongoing renovations [10][11] - A regular quarterly dividend of $0.25 per share was declared, alongside a special dividend of $1.00 related to the North Fork project's capital return [9][11]

Core Insights - Red Rock Resorts reported revenue of $526.27 million for the quarter ended June 2025, marking an 8.2% year-over-year increase and exceeding the Zacks Consensus Estimate of $485.25 million by 8.45% [1] - The company achieved an EPS of $0.95, a significant increase from $0.59 a year ago, resulting in an EPS surprise of 137.5% compared to the consensus estimate of $0.40 [1] Financial Performance Metrics - Casino operating revenues reached $344.8 million, surpassing the average estimate of $319.64 million by analysts, reflecting a year-over-year increase of 7.9% [4] - Room operating revenues were reported at $51.19 million, exceeding the estimated $48.83 million, with a year-over-year change of 2.1% [4] - Food and beverage operating revenues totaled $94.37 million, above the average estimate of $88.47 million, indicating a 2.9% year-over-year increase [4] - Other operating revenues were $25.91 million, slightly above the estimated $25.75 million, showing a year-over-year change of 4% [4] - Net revenue from Las Vegas operations was $513.26 million, exceeding the average estimate of $466.92 million, with a year-over-year increase of 6.2% [4] - Corporate and other net revenue was $3 million, slightly below the estimated $3.06 million, reflecting a 6% decrease year-over-year [4] - Adjusted EBITDA for Las Vegas operations was $239.44 million, surpassing the estimated $209.55 million [4] - Adjusted EBITDA for corporate and other operations was reported at -$20.09 million, better than the estimated -$21.28 million [4] Stock Performance - Red Rock Resorts shares have returned 5.2% over the past month, outperforming the Zacks S&P 500 composite's 3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Red Rock Resorts reported strong quarterly earnings of $0.95 per share, significantly exceeding the Zacks Consensus Estimate of $0.40 per share, marking an earnings surprise of +137.50% [1][2] Financial Performance - The company achieved revenues of $526.27 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 8.45% and showing an increase from $486.4 million year-over-year [2] - Over the last four quarters, Red Rock Resorts has consistently exceeded consensus EPS estimates [2] Stock Performance - Red Rock Resorts shares have increased approximately 18.3% since the beginning of the year, outperforming the S&P 500's gain of 8.6% [3] Future Outlook - The company's earnings outlook will be crucial for assessing future stock performance, with current consensus EPS estimates at $0.33 for the upcoming quarter and $1.57 for the current fiscal year [7] - The Zacks Rank for Red Rock Resorts is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Gaming industry, to which Red Rock Resorts belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]

Financial Data and Key Metrics Changes - The second quarter net revenue was $513.3 million, up 6.2% from the prior year [8] - Adjusted EBITDA was $239.4 million, up 7.3% from the prior year, with an adjusted EBITDA margin of 46.7%, an increase of 47 basis points [8] - Consolidated net revenue, including $10 million from the North Fork project, was $526.3 million, up 8.2% from the prior year [8] - Adjusted EBITDA on a consolidated basis was $229.4 million, up 13.7% from the prior year, with an adjusted EBITDA margin of 43.6%, an increase of 212 basis points [9] - The company generated $124.3 million in operating free cash flow, bringing year-to-date cumulative free cash flow to $217.3 million [9] Business Line Data and Key Metrics Changes - The gaming segment achieved the highest revenue and profitability in the company's history, driven by strong visitation and spend per visit [10] - The hotel division recorded its highest second quarter revenue and profit, supported by increased average daily rate (ADR) and occupancy [10] - The food and beverage division also achieved near-record results, benefiting from higher cover counts across outlets [10] - Group Sales and Catering delivered near-record second quarter revenue and profit, with positive momentum expected to continue [11] Market Data and Key Metrics Changes - The Las Vegas locals market showed continued strength, with the company focusing on core local guests while also attracting regional and national customers [9] - The opening of the Durango Casino Resort added over 108,000 new customers to the database, expanding the Las Vegas locals market [5] Company Strategy and Development Direction - The company is focused on reinvesting in existing properties to enhance amenities and deliver best-in-class customer service while returning capital to shareholders [7] - Significant investments are being made in the Durango Casino Resort, Sunset Station, and Green Valley Ranch properties [13][16] - The company is strategically positioned with over 450 acres of developable land in desirable locations throughout the Las Vegas Valley, supporting long-term growth [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the business and long-term growth prospects, despite expected seasonal visitation patterns and construction disruptions [11] - The company anticipates full revenue recovery over the next couple of years, supported by strong demographic growth in the Las Vegas Valley [6] - Management highlighted the positive impact of tax legislation on discretionary income for customers, which is expected to benefit the company [38][41] Other Important Information - The company declared a regular cash dividend of $0.25 per Class A common share and a special dividend of $1 per Class A common share [19] - Total distributions to LLC unitholders were approximately $200.3 million, including share repurchases totaling $31 million [12] Q&A Session Summary Question: Can you unpack where you're finding incremental operating leverage and any impact from renovations on EBITDA? - Management noted strength across all business lines, with the best table and slot hold in company history and record hotel revenue and profitability [24] Question: What is the timeline for construction disruption? - Management indicated that the bulk of disruption is expected in Q3 and Q4, with some impacts already seen at Green Valley [32][34] Question: How are new customer sign-ups performing, especially in light of the Strip's slowdown? - Management reported strong positive performance across all segments, with significant growth in new sign-ups, particularly from the Durango property [47] Question: What is the expected impact of tax relief on the locals market? - Management expects the tax legislation to enhance discretionary income for customers, benefiting the company [38] Question: What are the expectations for group bookings in Q4 and 2026? - Management reported positive forward bookings with mid-twenty percent increases in group sales [53] Question: How is the company insulated from hotel rate compression seen on the Strip? - Management explained that while they remain competitive, hotel revenue only represents about 10% of overall revenue, with the majority coming from gaming [61] Question: What is the ideal leverage range for the company moving forward? - Management expressed comfort with the current leverage position, supported by a flexible credit agreement and no near-term debt maturities [101]

Financial Data and Key Metrics Changes - In Q2 2025, the company's Las Vegas operations achieved net revenue of $513.3 million, a 6.2% increase year-over-year, and adjusted EBITDA of $239.4 million, up 7.3% from the previous year [6][7] - Consolidated net revenue, including $10 million from the North Fork project, was $526.3 million, reflecting an 8.2% increase year-over-year, while adjusted EBITDA was $229.4 million, up 13.7% [6][7] - The adjusted EBITDA margin for the quarter was 43.6%, an increase of 212 basis points from the prior year [7] Business Line Data and Key Metrics Changes - The gaming segment reported the highest revenue and profitability in the company's history, driven by strong visitation and spending per visit [8] - The hotel division recorded its highest second-quarter revenue and profit, supported by increased average daily rates (ADR) and occupancy [8] - The food and beverage division achieved near-record results, benefiting from higher cover counts across outlets [8] Market Data and Key Metrics Changes - The Durango Casino Resort has added over 108,000 new customers since its opening in December 2023, contributing to the growth of the Las Vegas locals market [4] - The company expects full revenue recovery over the next couple of years, supported by strong demographic growth in the Las Vegas Valley, particularly in Summerlin [5] Company Strategy and Development Direction - The company is focused on reinvesting in existing properties to enhance amenities and improve customer service while returning capital to shareholders [5] - Significant investments are being made in the Durango Casino Resort, Sunset Station, and Green Valley Ranch properties, with ongoing renovations expected to drive future growth [11][13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the business and long-term growth prospects, despite expected seasonal visitation patterns and construction disruptions [9][10] - The company anticipates that recent tax legislation will enhance discretionary income for customers, positively impacting the locals market [34][36] Other Important Information - The company declared a regular cash dividend of $0.25 per Class A common share and a special dividend of $1 per Class A common share [16] - Year-to-date capital expenditures are projected to be between $325 million and $375 million, with a focus on investment capital for ongoing projects [11] Q&A Session Summary Question: Can you unpack where you're finding incremental operating leverage? - Management noted strength across all business lines, with the best table and slot hold in company history and record hotel revenue and profitability [22] Question: Any impact from renovations in the quarter? - Minimal impact was reported from renovations, with most disruption expected in Q3 and Q4 due to ongoing construction [24][30] Question: What is the timing of construction disruption? - Management indicated that the bulk of disruption would occur in Q3 and Q4, particularly at Green Valley Ranch [30] Question: How does the new tax legislation affect the locals market? - Management expects the tax legislation to increase discretionary income for customers, benefiting the company [34][36] Question: What are the trends in new customer sign-ups? - The company reported strong growth in new customer sign-ups, particularly from the Durango property, which added 108,000 new customers [44] Question: What is the outlook for group sales and catering? - Positive forward bookings were noted, with mid-twenty percent increases in group sales expected [49] Question: How is the company positioned regarding hotel rate competition? - Management acknowledged competitive pressures but emphasized that hotel revenue represents only about 10% of overall revenue [56] Question: What is the ideal leverage range for the company? - Management expressed comfort with the current leverage position, supported by a flexible credit agreement [94] Question: How do new customers from Durango behave compared to existing customers? - New customers from Durango exhibit similar behavior to existing customers but tend to have higher spending on food and beverage [100][102]

Growth & Market Opportunity - Nevada's population grew by 40% between 2004 and 2024[17] - Residents aged 65+ are projected to grow 4.1x faster than the total population in Clark County between 2025 and 2030[22] - The median household income for older consumers is expected to grow by 6.9% between 2025 and 2030[25] - The Las Vegas Locals gaming market is the second largest in the nation, generating $3.2 billion in gross gaming revenue in 2024[64] Red Rock Resorts Strengths - The company has 19 strategically distributed properties[85] - 75% of local carded slot revenue is generated by guests who visit 4+ times per month[88, 90] - Red Rock Resorts owns land holdings ready for development valued at over $950 million[102] - The company's Durango project is expected to generate over 3x return on investment[99] Financial Performance & Capital Allocation - 60% of EBITDA has been converted to operating free cash flow since reopening in 2Q 2020[159] - The company's net debt stands at $3.288723 billion with a net leverage of 3.96x as of Q2 2025[163] - Las Vegas operations achieved record-high EBITDA of $239.444 million in Q2 2025, with an adjusted EBITDA margin of 46.7%[171]