Core Thesis - Churchill Downs Incorporated (CHDN) is positioned as a diversified gaming and experiential entertainment platform, leveraging its iconic Kentucky Derby brand to attract strong demand and pricing power [2][5]. Company Overview - As of March 15th, CHDN's share price was $86.36, with a trailing P/E ratio of 16.33 [1]. - The Kentucky Derby serves as the cornerstone of CHDN's strategy to evolve into a modern, multi-channel gaming operator [3]. Business Strategy - CHDN is expanding its TwinSpires online wagering platform, allowing digital betting on horse racing, which broadens its market reach beyond physical racetracks [3]. - The company is investing in regional gaming markets by expanding its casino portfolio, creating additional revenue streams that complement its racing and wagering operations [4]. Market Positioning - This diversification strategy enables CHDN to capture a larger share of consumer spending within the growing gaming ecosystem [4]. - The ongoing expansion of regulated gambling in the U.S. presents new opportunities for operators with strong brands and established wagering infrastructure, aligning with CHDN's strategic goals [4]. Long-term Growth Potential - By combining the appeal of the Kentucky Derby with a growing digital platform and an expanding casino footprint, CHDN is well-positioned to benefit from the shift towards experiential spending and legalized gaming [5]. - The company represents a compelling investment opportunity tied to its historic brand strength and the structural growth of the modern gaming industry [5].

Core Viewpoint - Churchill Downs Incorporated (CDI) will release its first quarter 2026 financial results on April 22, 2026, after market close, followed by a conference call on April 23, 2026, at 9 a.m. ET to discuss the results [1]. Group 1 - The financial results announcement will be accessible through a real-time webcast and participants can register in advance for a teleconference [2]. - Participants are encouraged to join the call 15 minutes early, and a replay will be available online by noon ET on April 23, 2026 [2]. - A copy of the news release with financial and statistical information will be available on the company's website [3]. Group 2 - Churchill Downs Incorporated has a history of over 150 years in creating entertainment experiences, starting with the Kentucky Derby [4]. - The company is headquartered in Louisville, Kentucky, and has expanded through various avenues including live racing venues, online wagering, and regional casino gaming properties [4].

March 3, 2026 Forward-Looking Statements Certain statements made in this presentation contain various "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "might," "plan," "predict," "project," "seek," "should," "will," "scheduled," and similar words or similar expressions ( ...

Financial Data and Key Metrics Changes - The company achieved record net revenue and record Adjusted EBITDA in 2025, surpassing previous records set in 2024 [5][6] - The company generated a record $700 million of free cash flow in 2025, equating to $9.75 per share, following a record year in 2024 [22][24] - The bank covenant net leverage at the end of December 2025 was 4.1 times, with expectations to decrease below 4 times during 2026 [24] Business Line Data and Key Metrics Changes - The Live and Historical Racing segment and the Wagering Services and Solutions segment both delivered record Adjusted EBITDA [6] - The HRM properties in Kentucky generated record Adjusted EBITDA in 2025, supported by the successful opening of Owensboro [18] - The Wagering Services and Solutions segment saw a 7% increase in Adjusted EBITDA in 2025, primarily driven by growth in the Exacta business [20] Market Data and Key Metrics Changes - In Kentucky, statewide GGR grew at a double-digit rate year-over-year, demonstrating strong underlying demand [19] - Virginia's HRM venues also delivered record Adjusted EBITDA, with The Rose showing sequential growth in GGR per unit in every quarter of 2025 [20] - The company expects the Derby to generate $15 million-$20 million of incremental Adjusted EBITDA in 2026 [18] Company Strategy and Development Direction - The company plans to continue growing the Kentucky Derby, with renovations and expansions aimed at enhancing guest experience [10][11] - There are plans to invest $180 million-$200 million to develop Rockingham Casino in Salem, New Hampshire, with an expected mid-2027 opening [13] - The strategy includes expanding the HRM portfolio and enhancing the Exacta technology business, both domestically and internationally [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong momentum entering 2026, driven by the Kentucky Derby and HRM initiatives [16] - The company anticipates a favorable operating environment due to recent federal tax legislation, which may provide a tailwind for both Regional Gaming and HRM businesses [22] - Management highlighted the importance of disciplined capital allocation and operational excellence to drive long-term shareholder value [24] Other Important Information - The company repurchased over 4.2 million shares and returned over $456 million through share repurchases and dividends in 2025 [24] - The company is focused on responsible growth and careful rollout of new products, such as electronic table games [75] Q&A Session Summary Question: Insights on early pricing and demand trends for Derby 152 - Management noted strong ticket sales and positive trends heading into the Derby, with expectations for strong sponsorships and wagering [29] Question: Growth perspective on Kentucky HRMs and ETGs - Management indicated that ETGs are just being rolled out and that the growth in Kentucky is driven by product evolution and market building [33] Question: Wagering growth outlook for the Derby - Management emphasized a gravitation towards larger events like the Derby and noted that they operate under a different legal framework than other wagering platforms [38] Question: Legislative updates on iGaming in Virginia - Management expressed concerns about iGaming legislation in Virginia, stating it is not favorable for the market [43] Question: Thoughts on vertical integration and portfolio synergy - Management discussed the focus on growth margins and how different parts of the portfolio fit together to drive improvements [47] Question: Future opportunities for historical racing in other states - Management highlighted the positive impact of HRMs in states where implemented and the potential for expansion into new states [51] Question: Implementation of AI in business processes - Management outlined two categories of AI implementation: enhancing customer experience and improving business operations [55] Question: International sponsorship opportunities for the Derby - Management noted increasing interest from international markets, particularly the Middle East, and plans to leverage this for sponsorship growth [77]

Financial Data and Key Metrics Changes - The company achieved record net revenue and record Adjusted EBITDA in 2025, surpassing previous records set in 2024 [5][6] - The company generated a record $700 million of free cash flow in 2025, equating to $9.75 per share, following a record year in 2024 [22][24] - The bank covenant net leverage at the end of December 2025 was 4.1 times, with expectations to decrease below 4 times during 2026 [24] Business Line Data and Key Metrics Changes - The Live and Historical Racing segment and the Wagering Services and Solutions segment both delivered record Adjusted EBITDA [6] - The HRM properties in Kentucky generated record Adjusted EBITDA in 2025, supported by the successful opening of Owensboro [18] - The Wagering Services and Solutions segment saw a 7% increase in Adjusted EBITDA in 2025, primarily driven by growth in the Exacta business [20] Market Data and Key Metrics Changes - The Kentucky Derby generated record handle and the highest television ratings in nearly 40 years, with expectations for continued growth [7][16] - The HRM venues in Virginia also delivered record Adjusted EBITDA, with The Rose showing sequential growth in GGR per unit in every quarter of 2025 [19][20] - Despite weather disruptions, statewide GGR in Kentucky grew at a double-digit rate year-over-year, indicating strong underlying demand [19] Company Strategy and Development Direction - The company plans to invest $180 million-$200 million to develop Rockingham Casino in Salem, New Hampshire, with an expected opening in mid-2027 [9][13] - The strategic plan includes five key priorities, such as growing the Kentucky Derby, expanding the HRM portfolio, and enhancing the TwinSpires horse racing business [10][15] - The company aims to maintain disciplined capital allocation while focusing on sustainable long-term growth aligned with core competencies [15][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for the upcoming Kentucky Derby, with positive trends in ticket sales and sponsorships [28][59] - The company anticipates that the new federal tax laws may provide a meaningful tailwind to both Regional Gaming and HRM businesses [21][22] - Management remains focused on operational excellence and delivering sustainable long-term shareholder value [24] Other Important Information - The company repurchased over 4.2 million shares and returned over $456 million through share repurchases and dividends in 2025 [24] - The company introduced electronic table games in Kentucky, with plans to expand offerings in the future [9][72] Q&A Session Summary Question: Insights on early pricing and demand trends for Derby 152 - Management noted strong ticket sales and positive trends, with expectations for strong sponsorships and wagering [28] Question: Growth potential of Kentucky HRMs and impact of ETGs - Management indicated that ETGs are just being rolled out and that the continued evolution of the product will drive growth in Kentucky [32] Question: Wagering growth outlook for the Derby - Management highlighted a trend towards larger events and emphasized the importance of quality content for wagering growth [36] Question: Legislative updates on iGaming in Virginia - Management expressed concerns about iGaming legislation in Virginia, emphasizing that it is not currently law and that they believe it would not benefit the state [41] Question: Integration of AI into business processes - Management discussed the implementation of AI tools to enhance customer experience and improve operational efficiency [51][55] Question: Opportunities for media rights and sponsorships - Management noted increasing interest from international markets, particularly the Middle East, and emphasized the potential for growth in sponsorships [75]

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]

Core Insights - Churchill Downs Incorporated (CDI) announced the 152 Spring Meet and Derby Week will take place from April 25 to June 28, 2026, featuring 44 racing days, with Derby Week running from April 25 to May 2, 2026 [1][2] Event Highlights - The 152 Kentucky Derby will be held on May 2, 2026, marking the first Sunday racing during Derby Week since 2010, with various themed events planned throughout the week [2][5] - The Kentucky Oaks will take place for the first time in primetime on May 1, 2026, with a purse of $1.5 million, while the Kentucky Derby will feature a $5 million purse [5] Venue Information - Churchill Downs Racetrack, located in Louisville, spans 175 acres and includes a one-mile dirt track and a 7/8-mile turf track, accommodating approximately 60,000 guests and 1,400 horses [4]

Group 1: ClearBridge Investments and Mid Cap Strategy - ClearBridge Mid Cap Strategy underperformed against the Russell Midcap Index, which returned 0.16% during Q4 2025, due to narrow market leadership and sentiment-driven trading [1] - Weakness in information technology and real estate holdings negatively impacted returns, while gains in select consumer discretionary stocks provided partial support [1] - The portfolio management team expressed cautious optimism for the future, citing improving clarity around policy, interest rates, and business investment as potential positive factors for active stock selection [1] Group 2: Churchill Downs Inc. Overview - Churchill Downs Inc. operates gaming, racing, and online wagering assets, including the Kentucky Derby, with a one-month return of -11.91% and a market capitalization of approximately $7.029 billion [2] - The stock price of Churchill Downs Inc. has fluctuated between $85.58 and $126.60 over the past 52 weeks, closing at around $100.23 on January 27, 2026 [2] Group 3: Performance Insights on Churchill Downs Inc. - ClearBridge Investments highlighted Churchill Downs Inc. as a new holding that advanced as operating trends normalized following earlier weaknesses related to the Kentucky Derby and softer consumer sentiment [3] - Churchill Downs Inc. was held by 45 hedge fund portfolios at the end of Q3, an increase from 43 in the previous quarter, indicating growing interest among institutional investors [4]

Core Viewpoint - Churchill Downs Incorporated (CDI) will release its fourth quarter and full year 2025 financial results on February 25, 2026, after market close, followed by a conference call on February 26, 2026, at 9 a.m. ET to discuss the results [1]. Group 1 - The financial results announcement will be accessible through a real-time webcast and participants are encouraged to register in advance for the teleconference [2]. - A replay of the conference call will be available online by noon ET on February 26, 2026 [2]. - A copy of the news release detailing the quarterly results and relevant financial information will be available on the company's website [3]. Group 2 - Churchill Downs Incorporated has a history of over 150 years in creating entertainment experiences, starting with the Kentucky Derby [4]. - The company is headquartered in Louisville, Kentucky, and has expanded through various means including acquisitions and the operation of racing entertainment venues and casino gaming properties [4].

Financial Data and Key Metrics Changes - The company achieved record net revenue and record adjusted EBITDA for the third quarter of 2025, with the live and historical racing segment also reaching record levels [5][22] - The live and historical racing segment grew revenue by 21% and adjusted EBITDA by 25% compared to the prior year quarter, marking the 21st consecutive quarter of record growth for this segment [22] - Free cash flow generated was $166 million, or $2.34 per share, representing a 13% increase from the prior year quarter [25][26] Business Line Data and Key Metrics Changes - The regional gaming properties performed well, with adjusted EBITDA increasing over $3 million, and margins up 1.1 points compared to the prior year quarter [25] - The Rose gaming venue in Virginia showed significant growth, with gaming revenues increasing and a strong customer database being built [14][15] - The Exacta business benefited from the growth of HRM operations in Kentucky and Virginia, contributing to record adjusted EBITDA for the Wagering Services and Solutions segment [24] Market Data and Key Metrics Changes - The company is expanding its international reach with the addition of three new points races in Dubai and Saudi Arabia, enhancing the quality of the international pathway to the Kentucky Derby [10] - Virginia has proven to be a strong investment environment, with 4,875 HRMs deployed and continued growth in gaming revenue [15][16] Company Strategy and Development Direction - The company is focused on five key growth catalysts for the Kentucky Derby, including ticketing revenue, broadcast rights, wagering, sponsorships, and selective renovations [7][11] - A significant investment of $280 to $300 million is planned for the construction of a new venue called Victory Run, aimed at enhancing the guest experience during Derby Week [12][13] - The company is committed to maintaining a disciplined capital management strategy while balancing share repurchases and project investments [27][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the Kentucky Derby and HRM properties, citing strong customer engagement and market expansion [20][22] - The company anticipates continued improvement in margins and performance as it drives better awareness and customer engagement in its venues [61] - Management acknowledged the challenges posed by illegal gaming machines in Virginia but noted strong enforcement and progress in addressing these issues [70][72] Other Important Information - The Board of Directors approved a 7% increase in dividends, marking the 15th consecutive year of increased dividends per share [27] - The company expects to spend $200 to $240 million on project capital in 2025, with a focus on strategic investments in its flagship assets [26][28] Q&A Session Summary Question: ROI targets for Victory Run - The company targets a 20% unlevered IRR focused on year three for the Victory Run project [32] Question: Prospective opportunity for ETGs - Management sees electronic table games as an important opportunity but is cautious about predictions due to regulatory factors [36][37] Question: Capital allocation and leverage - The company is committed to reducing leverage below 4 times next year while balancing share repurchases and capital investments [40] Question: Benefits of owning properties outright - Owning real estate provides stability and predictability, which management believes is not fully recognized in the market [42][43] Question: M&A environment - There has been a recent pickup in M&A activity, and the company remains flexible in its approach to acquisitions [46][48] Question: Emerging landscape of prediction markets - The company plans to approach prediction market operators to explain the legal framework governing horse racing wagering [66][67] Question: Illegal machines in Virginia - Management reported strong enforcement against illegal machines and believes the situation is under control [70][72]