Boyd Gaming (US:BYD)2025-07-24 22:00Financial Data and Key Metrics Changes - For Q2 2025, revenues excluding tax pass-through amounts grew by 4%, while EBITDAR also increased by 4% to $358 million, marking the strongest year-over-year growth in over three years [5][21] - Property level margins exceeded 40%, a level consistently achieved since 2021 [5][21] - Total leverage at the end of Q2 was approximately 2.8 times, expected to reduce to below 2 times post-FanDuel transaction [20][21] Business Line Data and Key Metrics Changes - The Las Vegas Local segment reported its first year-over-year revenue and EBITDAR growth in over two years, maintaining segment margins of nearly 50% [6][9] - The Downtown Las Vegas segment showed stable performance, with revenue and EBITDAR up more than 1% year-to-date [9] - The Midwest and South segment achieved revenue and EBITDAR gains of over 3%, marking its highest quarterly performance in nearly three years [10] - The online segment saw revenue and EBITDA increases driven by Boyd Interactive and modest growth from market access agreements [11] Market Data and Key Metrics Changes - Southern Nevada's employment and local income are on the rise, with average weekly wages up more than 5% year-over-year, contributing to a positive economic outlook [7] - The Las Vegas Valley has nearly $11 billion in construction activity underway, indicating strength in the local economy [7] Company Strategy and Development Direction - The company plans to use proceeds from the FanDuel transaction to pay down debt, invest in properties, pursue growth opportunities, and return capital to shareholders [5][18] - Capital investment programs include ongoing renovations and new developments, with a focus on enhancing long-term growth profiles [12][15] - The company remains committed to a balanced approach to capital allocation, including investments in business growth and shareholder returns [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Southern Nevada economy and the local business prospects, citing positive economic indicators [7][9] - The company noted that the promotional environment has remained stable, with no heightened promotional activities observed [42][43] - Management indicated that while there is flexibility for capital deployment, disciplined capital allocation will continue to guide decision-making [33][39] Other Important Information - The company repurchased $105 million in stock during Q2 and plans to increase its share repurchase program to $150 million per quarter [17][24] - The recent tax bill includes provisions that will benefit the company's operations, such as tax deductions for tips and overtime [8][60] Q&A Session Summary Question: What will Boyd do with the proceeds from the FanDuel transaction? - Management clarified that proceeds will be used to reduce leverage and invest in future growth opportunities, maintaining a balanced capital allocation strategy [28][33] Question: What is the optimal leverage level for Boyd? - Management indicated that while leverage was previously targeted around 2.5 times, the company may operate below that level for the time being as it evaluates capital allocation [36][39] Question: What is the current promotional environment in key markets? - Management stated that the promotional environment has been stable, with no significant changes in promotional activities across their properties [42][43] Question: Can you provide insights on the pickup in retail play? - Management noted a recent improvement in unrated play, attributing it to local customers staying closer to home, but indicated the need for further observation to determine sustainability [50][52] Question: How will the company approach online gaming strategy post-FanDuel? - Management confirmed that there will be no change in strategy, focusing on a regional online casino approach while enhancing their core product [55][66]