Boyd Gaming (US:BYD)2025-07-24 22:02Financial Data and Key Metrics Changes - For the second quarter, 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 [7][21] - Property level margins exceeded 40%, a level consistently achieved since 2021 [7][23] - Total leverage at the end of the second quarter was approximately 2.8 times, expected to reduce to below 2 times post-FanDuel transaction [22][19] 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% [8] - The Midwest and South segment achieved revenue and EBITDAR gains of over 3%, marking its highest quarterly performance in nearly three years [11] - The online segment saw revenue and EBITDA increases driven by Boyd Interactive and modest growth from market access agreements [12] Market Data and Key Metrics Changes - Southern Nevada's employment and average weekly wages increased by over 5% year-over-year, contributing to a positive economic outlook [9] - The Las Vegas Strip experienced softer demand trends, but local economic strength remains [8][10] - The Downtown Las Vegas segment showed stable performance despite challenging comparisons from the previous year [10] 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][6][19] - Ongoing capital investments include hotel renovations and new developments, with a total capital expenditure projection of $600 million to $650 million for the year [24][18] - The company remains committed to a balanced approach to capital allocation, focusing on both growth investments and shareholder returns [33][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Southern Nevada economy and the prospects for the locals business, citing positive economic indicators [10] - The promotional environment has remained stable, with no heightened promotional activities noted in key markets [42][43] - Management indicated that while there is flexibility for future investments, they will remain disciplined in capital allocation decisions [36][39] Other Important Information - The company repurchased $105 million in stock during the second quarter and plans to increase its share repurchase program to $150 million per quarter [25][19] - The recent tax bill includes provisions that will benefit the company's operations, although quantifying the exact impact remains pending [9][75] 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 increase quarterly buybacks, while also exploring future growth opportunities [29][30] Question: What is the optimal leverage level for Boyd? - Management indicated that they previously aimed for around 2.5 times leverage but expect to operate below that level for the time being [36][39] Question: What is the current promotional environment in key markets? - Management noted that the promotional environment has been stable, with no significant increases in promotional activities [42][43] Question: Can you provide insights on the pickup in retail play? - Management observed a pickup in unrated play, attributing it to customers staying closer to home, but indicated the need for further observation to determine sustainability [50][51] Question: How will the company approach online gaming strategy post-FanDuel? - Management confirmed no change in strategy, maintaining a focus on regional online gaming rather than pursuing a national presence [55][56] Question: What are the implications of the recent tax changes? - Management acknowledged potential benefits from the new tax provisions but refrained from quantifying the impact until further analysis is completed [60][75]