Bally's (US:BALY)2023-05-14 12:54Financial Data and Key Metrics Changes - Bally's Corporation reported revenues of $598.7 million, an increase of 9.2% year-over-year, and adjusted EBITDA of $126.4 million, up 10.2% year-over-year [21][27] - Adjusted EBITDA margin improved to 21.1% from 20.9% in Q1 2022, while adjusted EBITDAR margin was 26.3% [21][27] - The company anticipates EBITDAR guidance for 2023 to be between $665 million and $700 million, reflecting confidence in business strength [27][28] Business Line Data and Key Metrics Changes - The Casinos & Resorts segment generated record revenues of $329 million, up 9.4% year-over-year, with EBITDA of $105 million [15][21] - International Interactive segment achieved $80.2 million in EBITDA with a margin of 32.6%, and the UK business grew 9.6% year-over-year [23][17] - North America Interactive reported a negative EBITDAR of $10.5 million, but New Jersey is contributing over $1 million in profit monthly [24][19] Market Data and Key Metrics Changes - The UK market showed strong growth, with Bally's International Interactive segment up 9.6% year-over-year on a constant currency basis [23][17] - In Asia, positive trends were noted despite difficult comparisons, with expectations for easier comparisons moving forward [18] - Bally's aims to launch its online sports betting (OSB) in seven states and expand globally, including potential markets in the UK and Europe [13][20] Company Strategy and Development Direction - Bally's is focusing on becoming a premier, full-service vertically integrated casino and resort company, enhancing its online sports betting and iGaming capabilities [14][20] - The company has partnered with Kambi and White Hat Gaming to improve its North American sports betting platform, transitioning to a variable cost model [11][25] - Bally's plans to leverage its omni-channel data capabilities to enhance customer engagement and drive growth across its brands [12][70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the integration of Bally's internal systems and the performance of its operating businesses [9][10] - The recent UK government white paper on gambling regulation is expected to have a short-term impact but is seen as beneficial for larger operators in the long run [10][37] - Management remains vigilant regarding consumer spending trends but has not observed significant negative impacts on business performance [27] Other Important Information - Bally's has undergone significant management changes, with Marcus Glover appointed as the new CFO [6][7] - The company repurchased 1 million common shares for $19.8 million and $15 million of bonds for $10.6 million during the quarter [29][29] - Bally's has a strong liquidity position with over $344 million in cash and $3 billion in net debt [29] Q&A Session Summary Question: Management transition and appeal of the CFO role - Marcus Glover expressed enthusiasm for joining Bally's, highlighting the company's entrepreneurial spirit and the opportunity to build on existing foundations [34] - Robeson Reeves emphasized Glover's operational experience and financial acumen as key to driving growth [35] Question: Financial implications of the UK white paper - Robeson Reeves indicated that the short-term impact would be minimal, with larger operators likely to gain market share as smaller competitors exit [37] Question: Guidance and business trends - Robert Lavan noted that the company is taking a conservative approach to guidance upgrades early in the year, reflecting positive trends [39] Question: North America Interactive restructuring and future losses - Lavan mentioned that the company expects to close the gap in losses as iCasino grows and the new partnerships with Kambi and White Hat are implemented [41][52] Question: Tropicana's strategy and asset value - Lavan discussed the potential for development options at Tropicana, emphasizing a disciplined long-term view [43] Question: Capital allocation and share repurchases - Lavan stated that the company will continue to evaluate capital allocation, balancing share buybacks, debt repurchases, and investments in Chicago [45] Question: North America Interactive labor efficiencies - Robeson Reeves explained that the transition to a variable cost model with Kambi and White Hat would enhance profitability and operational efficiency [48][70]