Bally's (BALY) - 2024 Q3 - Quarterly Results

Financial & Operational Highlights Bally's reported a slight revenue decline to $630.0 million and a significant net loss of $247.9 million in Q3 2024, alongside strategic project funding and strong North America Interactive growth Q3 2024 Key Financial Results (vs. Q3 2023) | Metric | Q3 2024 (USD) | Q3 2023 (USD) | Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | $630.0 million | $632.5 million | -0.4% | | Casinos & Resorts Revenue | $353.4 million | $359.0 million | -1.6% | | International Interactive Revenue | $230.9 million | $243.9 million | -5.3% | | North America Interactive Revenue | $45.7 million | $29.6 million | +54.5% | | Net Loss | ($247.9 million) | ($61.8 million) | -301.2% | | Adjusted EBITDAR | $166.3 million | N/A | N/A | - Key strategic and operational milestones achieved during the quarter include securing $940 million in construction funding from GLPI for the Chicago project, beginning demolition at the Tribune site in Chicago, launching a second online sportsbook in the UK under the Bally's brand, and completing the demolition of the Tropicana hotel towers in Las Vegas subsequent to the quarter's end[2] Management Commentary Management discussed mixed financial results, emphasizing progress on major development projects in Chicago and Las Vegas, alongside ongoing initiatives to optimize portfolio performance and cost structure - CEO Robeson Reeves highlighted the critical $940 million financing for the Chicago casino and the demolition of the Tropicana in Las Vegas as key steps toward completing two attractive portfolio additions expected to drive shareholder returns[3] - President George Papanier emphasized that initiatives to optimize and centralize property-level functions in the Casinos & Resorts segment are showing positive outcomes, and the company remains optimistic about future benefits[6] - CFO Marcus Glover stated that the team is working to optimize the cost structure and enhance operational efficiency, particularly in the C&R and International Interactive segments, with tangible results expected in the near-term[6] Segment Performance Analysis Segment performance varied in Q3 2024, with North America Interactive showing substantial revenue growth, while Casinos & Resorts and International Interactive experienced declines, leading to divergent profitability trends Q3 2024 Revenue & Adjusted EBITDAR by Segment | Segment | Revenue (Q3 2024 USD) | YoY Change | Adjusted EBITDAR (Q3 2024 USD) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Casinos & Resorts | $353.4 million | -1.6% | $100.4 million | -15.0% | | International Interactive | $230.9 million | -5.3% | $90.0 million | +5.3% | | North America Interactive | $45.7 million | +54.5% | ($11.0 million) | +37.5% (Improved) | Casinos & Resorts The Casinos & Resorts segment experienced a 1.6% revenue decrease to $353.4 million and a 15.0% Adjusted EBITDAR decline, primarily due to specific operational disruptions and lower hold - Segment results were adversely affected by ongoing bridge construction in Rhode Island disrupting traffic and visitation at the Lincoln property, turnover in the Atlantic City relationship marketing team impacting results during the key summer season, and lower-than-expected hold in Kansas City contributing to the decline[4] International Interactive International Interactive revenue declined 5.3% to $230.9 million due to Asian market weakness, despite strong UK growth, but Adjusted EBITDAR increased 5.3% to $90.0 million due to margin improvements - UK revenue grew a healthy 11.8% (8.9% in constant currency), driven by all-time high active customer levels and robust Average Revenue per User[5] - Adjusted EBITDAR margin improvement was attributed to diligent UK marketing spend, management of compensation expenses, and synergies from technology platform consolidation[5] North America Interactive North America Interactive revenue grew significantly by 54.5% to $45.7 million, narrowing its Adjusted EBITDAR loss to $11.0 million, driven by strong iGaming performance in Rhode Island and Pennsylvania - The segment's growth was primarily fueled by iGaming operations in Rhode Island and strong results in Pennsylvania[6] - The company remains pleased with the performance and positive player feedback for its iGaming product and Bally Bet OSB, indicating excitement for the segment's long-term potential[6] Financial Statements The financial statements reveal a significant increase in net loss for Q3 and YTD 2024, stable long-term debt, a modest increase in cash, and lower capital expenditures compared to the prior year Consolidated Statements of Operations The Consolidated Statements of Operations show a net loss of $247.9 million in Q3 2024, significantly higher than the prior year, primarily due to a $150 million sale-leaseback loss and increased expenses Q3 2024 Statement of Operations Highlights (in thousands) | Line Item | Q3 2024 (USD thousands) | Q3 2023 (USD thousands) | | :--- | :--- | :--- | | Total Revenue | $629,974 | $632,477 | | Loss from Operations | ($157,655) | $37,236 | | Net Loss | ($247,855) | ($61,802) | | Diluted Loss Per Share | ($5.10) | ($1.15) | Balance Sheet & Cash Flow Data As of September 30, 2024, the balance sheet shows $191.0 million in cash, stable long-term debt at $3.67 billion, and capital expenditures of $155.8 million for the nine months, a decrease from prior year Selected Balance Sheet Data (in thousands) | Item | Sept 30, 2024 (USD thousands) | Dec 31, 2023 (USD thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $190,975 | $163,194 | | Long-term debt, including current portion | $3,670,938 | $3,662,635 | Selected Cash Flow Data (in thousands) | Item | Nine Months Ended Sept 30, 2024 (USD thousands) | Nine Months Ended Sept 30, 2023 (USD thousands) | | :--- | :--- | :--- | | Capital expenditures | $155,757 | $266,231 | Reconciliation of GAAP to Non-GAAP Measures This section reconciles GAAP Net Loss to non-GAAP Adjusted EBITDA and Adjusted EBITDAR, showing how the Q3 2024 net loss of $247.9 million was adjusted to an Adjusted EBITDA of $137.7 million - Management uses Adjusted EBITDA and Adjusted EBITDAR to provide a fuller understanding of core operating results and to evaluate period-to-period performance, as they believe these are widely used metrics in the gaming industry[10] Q3 2024 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Description | Amount (USD thousands) | | :--- | :--- | | Net Loss | ($247,855) | | Interest expense, net | $73,975 | | (Benefit) for income taxes | ($33,629) | | Depreciation and amortization | $77,800 | | Loss on sale-leaseback, net | $150,000 | | Other Adjustments | $17,440 | | Adjusted EBITDA | $137,731 |