MGM Resorts International(MGM) - 2025 Q3 - Quarterly Report

Financial Performance - Consolidated net revenues for Q3 2025 were $4,250,464, a 2% increase from $4,183,138 in Q3 2024, driven by a 17% increase in MGM China and a 23% increase in MGM Digital, while Las Vegas Strip Resorts decreased by 7%[105][106] - Consolidated operating loss for Q3 2025 was $112,852, compared to an operating income of $314,857 in Q3 2024, primarily due to a $256 million goodwill impairment related to Empire City[106][108] - MGM China net revenues increased 17% for Q3 2025 compared to Q3 2024, and 7% for the nine months ended September 30, 2025, driven by increased casino revenue[117] - Las Vegas Strip Resorts net revenues decreased 7% for Q3 2025, primarily due to declines in casino, rooms, and food and beverage revenues[111] - Regional Operations net revenues were flat for Q3 2025 compared to the prior year quarter, with a 1% increase for the nine months ended September 30, 2025, attributed to increased casino revenue[115] Impairments and Write-downs - The company recorded a $256 million impairment for Empire City and $93 million in write-downs and impairments in Q3 2025[102][106] - An impairment of $256 million was recorded for the Empire City reporting unit's goodwill due to decreased forecasted cash flows and the withdrawal of the commercial gaming license application[168] Revenue Metrics - Las Vegas Strip Resorts' average daily rate (ADR) decreased to $236 in Q3 2025 from $243 in Q3 2024, while revenue per available room (RevPAR) decreased to $210 from $229[114] - Table games drop for Las Vegas Strip Resorts was $1,363 million in Q3 2025, down from $1,386 million in Q3 2024, with a win percentage of 22.6%[113] - Slot handle for Las Vegas Strip Resorts increased to $6,155 million in Q3 2025 from $5,920 million in Q3 2024, with a win percentage of 9.3%[113] - MGM China's casino revenues increased by 18% for the three months ended September 30, 2025, and by 8% for the nine months ended September 30, 2025, primarily due to an increase in main floor table games drop[118] - MGM Digital's revenue rose by 23% for the three months ended September 30, 2025, and by 13% for the nine months ended September 30, 2025, driven by organic growth and brand expansion[119] Adjusted EBITDA and EBITDAR - Consolidated Adjusted EBITDA was $505.8 million for the three months ended September 30, 2025, down from $574.2 million in the prior year quarter[122] - Las Vegas Strip Resorts Segment Adjusted EBITDAR decreased by 18% for the three months ended September 30, 2025, with a margin of 30.3%, down from 34.3% in the prior year quarter[123] - Regional Operations Segment Adjusted EBITDAR decreased by 1% for the three months ended September 30, 2025, with a margin of 30.9%, compared to 31.5% in the prior year quarter[125] - MGM Digital Segment Adjusted EBITDAR loss was $23 million for the three months ended September 30, 2025, unchanged from the prior year quarter[129] Cash Flow and Investments - Operating cash flows increased to $1.9 billion for the nine months ended September 30, 2025, up from $1.7 billion in the prior year, primarily due to changes in cash paid for income taxes and net working capital[144] - Cash used in investing activities was $940 million for the nine months ended September 30, 2025, compared to $879 million in the prior year, with capital expenditures of $772 million[147] - Cash used in financing activities was $1.2 billion for the nine months ended September 30, 2025, compared to $774 million in the prior year, including $717 million for stock repurchases[150] - As of September 30, 2025, MGM Resorts International had cash and cash equivalents of $2.1 billion, with $6.2 billion in principal amount of indebtedness[159] Future Commitments and Plans - The company expects to make annual cash rent payments of $1.8 billion over the next twelve months under triple net lease agreements[162] - Planned capital expenditures for the remainder of 2025 are estimated to be between $285 million and $335 million, including $50 million to $70 million related to MGM China[163] - MGM Resorts International has cash commitments of approximately JPY428 billion (approximately $2.4 billion) for the development of an integrated resort in Osaka, Japan, expected to be funded over the next three years[165] - BetMGM North America Venture anticipates distributing at least $200 million of cash in the fourth quarter of 2025, of which MGM Resorts expects to receive its 50% share[160] - The company entered into a JPY45.2 billion term loan A facility, with an option to increase to JPY67.8 billion, to support cash commitments to MGM Osaka[166] Debt and Financial Risks - The company has substantial indebtedness, which could adversely affect operations and financial results[173] - The company is subject to interest rate risk, particularly with variable rate long-term debt, which could impact future earnings and cash flow[170] - Current economic conditions may impact the company's ability to service its substantial indebtedness and make planned expenditures[173] - A significant portion of the company's cash flows is allocated to rent, potentially limiting operational funding and growth[173] Competition and Market Conditions - The company faces significant competition in destination travel locations and must navigate economic conditions affecting customer travel[174] - The company is investing in online sports betting and iGaming, positioning BetMGM North America Venture as a leader in these markets[172] - The company is susceptible to global geopolitical events that may affect leisure and business travel[174] - The company’s operational efforts to expand its digital business in new geographic markets may not be successful[174] - Future construction and expansion projects are subject to significant risks that could impact timelines and costs[174] - The company has extended credit to a large portion of its customers, raising concerns about the collectability of gaming receivables[174] - The company is subject to extensive regulation, and compliance costs could adversely affect its business[174] Dividend Policy - The company has suspended ongoing regular dividends to stockholders and may not resume in the foreseeable future[173] - Future share repurchases and cash dividends on common stock are under consideration, with no current regular dividends being paid[172]