Red Rock Resorts(RRR)2025-02-12 07:18Financial Data and Key Metrics Changes - In Q4 2024, the company's Las Vegas operations achieved net revenue of 223.9 million, up 1.6% from the previous year [11] - Consolidated Q4 net revenue was 202.4 million, up 0.5% year-over-year [12] - For the full year 2024, Las Vegas operations reported net revenue of 879.4 million, up 7.4% from the prior year [12][13] - The company's adjusted EBITDA margin for Q4 was 40.8%, down 267 basis points from the previous year, while the full year margin was 41%, also down 222 basis points [12][13] Business Line Data and Key Metrics Changes - The gaming segment achieved record revenue and profitability in Q4, driven by strong customer engagement and spend per visit [15] - Non-gaming segments, including hotel and food and beverage, also saw record revenue and near-record profitability in Q4, with the hotel division experiencing its highest revenue [16] - The Durango Casino Resort continues to grow, signing up over 85,000 new customers and is expected to generate a return of almost 16% net of cannibalization in 2024 [6][7] Market Data and Key Metrics Changes - The company noted stability in core slot and table business in the locals market, with positive trends observed post-election [41][43] - The Las Vegas locals market is expected to benefit from long-term growth, particularly in areas like Summerlin, which is projected to add around 34,000 new households [7] Company Strategy and Development Direction - The company is focused on reinvesting in existing properties to enhance amenities and improve customer service [10] - Significant capital expenditures are planned for 2025, with expectations to spend between 425 million, including 325 million in investment capital [21] - The company is committed to strategically investing in new amenities to drive incremental visitation and spending [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in business prospects moving forward, citing strong performance in the Las Vegas locals market and ongoing growth in customer engagement [15][29] - The company anticipates some disruption due to ongoing renovations but expects to see incremental growth from capital investments [60][62] - Management highlighted the importance of the demographic trends in Las Vegas, indicating a favorable long-term outlook for the company's growth strategy [29][102] Other Important Information - The company declared a cash dividend of 750 million, with a mid-2026 opening anticipated [27] Q&A Session Summary Question: Can you quantify the total sports betting hold impact in Q4? - Management indicated that the sports business was healthy overall, but faced an 6 million in December year-over-year [34] Question: What trends are observed in consumer behavior post-election? - Management noted consistent positive trends across the database, particularly among high-end customers, with an acceleration in activity following the election [41][43] Question: How is the backfill process for Red Rock progressing? - Management stated that historically, backfill takes about two to three years, and they are on pace to meet those targets [46] Question: What is the outlook for corporate expense growth in 2025? - Management expects corporate expenses to remain around 21 million [85] Question: How do you view the potential for M&A in the gaming space? - Management remains open to opportunities but emphasizes a preference for development given their land bank in a strong regional gaming market [57] Question: What is the expected impact of renovations on EBITDA in 2025? - Management anticipates up to 25 million in disruption due to ongoing renovations but expects growth from capital investments [60][62]