Boyd Gaming (US:BYD)2025-10-23 22:02Financial Data and Key Metrics Changes - The company reported revenues exceeding $1 billion for the third quarter, with EBITDA at $322 million, maintaining margins at 37% [4][17] - Year-to-date capital expenditures reached $440 million, with expectations to total approximately $600 million for the year [20][21] - The total leverage ratio improved from 2.8x to 1.5x following the sale of a stake in FanDuel [23][90] 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% excluding the Orleans property [5][6] - 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 [9][10] - The online segment showed growth from Boyd Interactive, with an increased EBITDA guidance to $60 million for the year [10] 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 of more than 6% [7][9] - The Southern Nevada economy remains resilient and diversified, with significant job growth in sectors beyond hospitality [8] Company Strategy and Development Direction - The company is focused on capital investments to enhance property offerings, with a budget of $100 million per year for growth capital projects [14][21] - Ongoing expansions include the Sky River Casino and the Cadence Crossing project, aimed at enhancing competitive positioning in the market [15][16] - The company maintains a disciplined approach to M&A, looking for the right opportunities in the market [31] Management's Comments on Operating Environment and Future Outlook - Management noted strong play from core customers and improving trends from retail customers, indicating a positive outlook for the fourth quarter [12][18] - The company is optimistic about the impact of recent tax legislation on customer spending, although specific quantification of benefits remains uncertain [8][66] - Management expressed confidence in the long-term growth potential of the Las Vegas Locals business, supported by a diversified economy [9][18] Other Important Information - The company repurchased $160 million in stock during the quarter and paid $15 million in dividends, returning a total of $637 million to shareholders year-to-date [17][22] - The company is managing ongoing construction at properties like Suncoast and Orleans, with expectations of minimal disruption to operations [14][52] Q&A Session Summary Question: What are the main drivers of weakness in the destination business? - Management indicated that the weakness is primarily in the destination business, particularly at the Orleans, while core and locals customers continue to perform well [26][28] Question: Can you share thoughts on the M&A pipeline? - Management noted a disciplined approach to M&A, monitoring opportunities but not seeing a significant increase in pitch books [31] Question: How did the Midwest and South properties perform? - Performance was broad-based across the portfolio, with notable growth at Treasure Chest [36] Question: What is the expected impact of the Orleans renovation? - Management anticipates limited disruption from the renovation, with more clarity on timing and scope to be provided later [51][54] Question: How is the promotional environment across markets? - Management reported a consistent promotional environment, maintaining disciplined marketing spend despite increased competition [55] Question: What are the expectations for the tax bill benefits? - Management expects incremental benefits from the tax bill but has not quantified the overall impact on revenue and EBITDA [66] Question: How is the balance sheet positioned for future leverage? - Management indicated that leverage is expected to gradually increase to around 2.5x due to capital plans, but they are not actively seeking to increase leverage at this time [90][92]