Boyd Gaming (US:BYD)2025-10-23 22:00Financial Data and Key Metrics Changes - The company reported revenues exceeding $1 billion for the third quarter, with EBITDA at $322 million, maintaining a margin of 37% consistent with the prior year [3][16] - The total leverage ratio improved from 2.8 times to 1.5 times following the sale of a 5% stake in FanDuel, while lease-adjusted leverage decreased from 3.2 times to 2.0 times [22][21] Business Line Data and Key Metrics Changes - The Las Vegas Locals segment generated revenues of $211 million and EBITDA of $92 million, with year-over-year growth of 2% in both metrics when excluding the Orleans property [4][8] - The Midwest and South segment achieved its strongest third-quarter performance in three years, with revenues rising 3% to $539 million and EBITDA growing to $202 million, reflecting broad-based growth across the segment [8][9] Market Data and Key Metrics Changes - The broader Las Vegas Locals market saw gaming revenue growth of over 3% in the last 12 months, supported by solid wage growth exceeding 6% in Southern Nevada [5][6] - The Downtown Las Vegas segment's revenues and EBITDA remained stable compared to the prior year, driven by strong play from Hawaiian customers despite softness in destination business [8][9] Company Strategy and Development Direction - The company is focused on capital investments to enhance guest experiences, with a budget of $100 million annually for growth capital projects, including expansions at Sky River Casino and Cadence Crossing [10][19] - The company plans to maintain a balanced approach to capital allocation, with intentions to repurchase approximately $150 million in stock quarterly while paying dividends [16][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the Las Vegas Locals business, citing ongoing improvements in customer demand and operational efficiencies [3][11] - The company noted that customer trends observed in the third quarter have continued into October, indicating a positive outlook for the fourth quarter [11][23] Other Important Information - The company completed $146 million in capital expenditures during the third quarter, bringing year-to-date expenditures to $440 million, with expectations to reach approximately $600 million for the year [18][19] - The company is undergoing renovations at several properties, including the IP Hotel and Orleans Hotel, to enhance competitiveness [12][19] Q&A Session Summary Question: What are the main drivers of weakness in the destination business? - Management indicated that the weakness is primarily related to the Orleans property, while core and retail customer segments continue to perform well [25][26] Question: Can you provide insights on the M&A pipeline? - Management stated they are monitoring opportunities but have not seen a significant increase in M&A activity recently [28] Question: How did the Midwest and South properties perform? - The performance was broadly strong across the portfolio, with notable growth at Treasure Chest Casino [31][32] Question: What is the expected impact of the Orleans Hotel project? - Management anticipates limited disruption from the renovation project, with more clarity expected as the project scope is defined [45][49] Question: How is the promotional environment across markets? - The company has maintained a disciplined marketing approach despite increased competition, resulting in consistent margins [50] Question: What are the expectations for the tax bill benefits? - Management noted that while there are several elements to the tax bill, they have not quantified the overall benefit to revenue and EBITDA [57] Question: How is the balance sheet positioned regarding leverage? - The company is currently at a leverage ratio of 1.5 times, with plans to gradually increase it to around 2.5 times as capital projects progress [80][81]