Company Highlights - Churchill Downs Incorporated (CDI) reported record net revenue of $665.9 million for Q4 2025, an increase of $41.7 million or 7% compared to Q4 2024 [3][6] - Net income attributable to CDI for Q4 2025 was $51.3 million, down $20.4 million or 28% from the prior year [3][30] - Adjusted EBITDA for Q4 2025 reached a record $247.0 million, up $10.4 million or 4% year-over-year [3][6] Consolidated Results - For the full year 2025, net revenue was $2,925.9 million, an increase of $175.4 million compared to $2,734.3 million in 2024 [3][9] - Full year net income attributable to CDI was $383.0 million, down from $426.8 million in 2024 [3][31] - Adjusted diluted EPS for the full year was $6.13, compared to $5.91 in 2024 [3][51] Segment Results Live and Historical Racing - Q4 2025 revenue from Live and Historical Racing was $319.4 million, up from $275.5 million in Q4 2024 [5] - Full year revenue for this segment was $1,442.4 million, an increase from $1,267.0 million in 2024 [5][9] Wagering Services and Solutions - Q4 2025 revenue increased to $114.9 million from $108.0 million in Q4 2024 [11] - Full year revenue for this segment was $526.3 million, up from $500.7 million in 2024 [11][15] Gaming - Q4 2025 revenue decreased to $250.3 million from $257.5 million in Q4 2024, primarily due to the cessation of HRM operations in Louisiana [17][18] - Full year revenue for the Gaming segment was $1,049.3 million, slightly up from $1,045.4 million in 2024 [17][20] Capital Management - The company repurchased 310,639 shares at a total cost of $32.0 million in Q4 2025, and 4,190,380 shares for $425.3 million throughout 2025 [26] - An annual cash dividend of $0.438 per share was approved, marking a 7% increase over the prior year [27] Income Taxes - The enactment of H.R. 1 in July 2025 is expected to significantly reduce the company's cash tax expense, enhancing cash flow from operating activities [29]

Financial Data and Key Metrics Changes - The company recorded normalized EBITDA of $11,200,000, representing a $13,000,000 improvement compared to the previous corresponding period (PCP) [10] - Group revenue increased by 6% to $261,400,000, with gross profit rising to $137,000,000, up from $126,000,000, resulting in a gross profit margin of 52.4% [19][20] - The group achieved a record number of rolling twelve-month cash actives at 295,800, marking a significant milestone [10] Business Line Data and Key Metrics Changes - In Australia, revenue reached $218,500,000, a 3% increase from the PCP, with gross profit also at a record of $114,500,000, up 2% [11] - The Australian business achieved a statutory segment EBITDA of $30,100,000, reflecting a 12% increase from the PCP [13] - In Canada, net win grew by 26% to $43,000,000, with sports betting net win at $17,000,000, up 11%, and iGaming net win at $26,000,000, increasing by 39% [16][17] Market Data and Key Metrics Changes - The Australian wagering market experienced a material decline, estimated at around 7% for FY 2025, despite PointsBet gaining market share [26][27] - The Canadian market showed strong growth momentum, with a significant increase in cash active clients by 30% to 58,004 [17][18] Company Strategy and Development Direction - PointsBet is focused on enhancing its mass market recreational segments in both Australia and Canada to create a more diversified and sustainable revenue base [10] - The company is actively encouraging reforms in the wagering industry regarding advertising, aiming for a sustainable framework that leverages digital and social media platforms [14][15] Management's Comments on Operating Environment and Future Outlook - Management noted that the Australian market has not grown at a net win level, indicating challenges ahead but expressed hope for a return to growth based on recent positive trends [26][27] - The company anticipates continued market growth tailwinds in the regulated Canadian market, particularly with Alberta expected to go live [18] Other Important Information - PointsBet's board has recommended shareholders accept the MiXi Australia takeover offer, which provides a 50.6% cash premium over the share price prior to the announcement [4][6] - The company paid $115,300,000 in taxes and fees to Australian governments and sports bodies, representing 47.9% of its net win for the year [14] Q&A Session Summary Question: What is the estimated decline in the Australian wagering market for FY 2025? - Management agreed with estimates of around 7% decline, noting that the last quarter showed some positive margins for operators, indicating potential for future growth [26][27] Question: What are the next steps if MiXi exceeds 50.1% ownership? - If MiXi achieves over 50.1% before the offer closes, it will trigger a two-week extension for the offer [28][29]