Vici Properties: Revenue Rises, EPS Dips

Core Viewpoint - Vici Properties reported strong revenue growth in Q4 2024 but fell short of earnings expectations, primarily due to credit-related adjustments impacting net income [2][6]. Financial Performance - Revenue for Q4 2024 reached $976.1 million, exceeding analysts' expectations of $970 million, and reflecting a year-over-year increase of 4.7% from $931.9 million in Q4 2023 [3][6]. - Adjusted earnings per share (EPS) fell to $0.58, missing the anticipated $0.68, marking a decline of 19.2% from $0.72 in Q4 2023 [3][6]. - Adjusted funds from operations (AFFO) increased to $0.57 per share, up by 3.6% from $0.55 in Q4 2023 [3][6]. Business Overview - Vici Properties operates as a real estate investment trust focusing on gaming, hospitality, and entertainment properties, utilizing long-term triple net leases to ensure predictable revenue streams [4]. - Major tenants, including Caesars and MGM, significantly contribute to the company's rental income [4]. Strategic Initiatives - The company has been expanding through strategic partnerships and investments, committing $1.1 billion to various ventures with a weighted yield of 8.1% [5][7]. - All properties remained fully leased with a weighted average lease term of 40.7 years, providing a stable revenue floor [7]. Challenges and Risks - The decline in net income per share was primarily due to a $157.7 million adjustment in the Current Expected Credit Loss (CECL) allowance, reflecting market volatility [6][8]. - Macroeconomic conditions, including interest rate fluctuations, could impact future revenue streams and necessitate strategic adjustments in capital allocation [8]. Future Outlook - Vici Properties has set an AFFO target for 2025 between $2.455 billion and $2.485 billion, translating to AFFO per diluted share of $2.32 to $2.35, indicating a stable outlook [9].