Boyd Gaming Corporation Reports Strong Q3 2024 Earnings

Boyd Gaming Corporation (NYSE: BYD) showcased strong financial performance during its third-quarter earnings call on October 24, 2024. The company highlighted successful property-level margins, positive market trends in Southern Nevada, and notable advancements on its expansion projects. Boyd Gaming's commitment to disciplined growth and shareholder returns is evident through its aggressive share repurchase program and focus on operational efficiency.

Key Takeaways

• Property-level margins reached over 39%.
• Steady performance in Las Vegas, with downtown benefiting from increased Hawaiian visitor numbers.
• Record results from the Midwest and South segment, particularly at Treasure Chest Casino.
• Online segment growth projected to increase EBITDAR guidance through the FanDuel partnership.
• Ongoing expansions include Sky River Expansion, Cadence Crossing Casino, and a new casino in Norfolk, Virginia.
• The company repurchased $202 million of stock while planning to continue its $100 million quarterly buyback program, maintaining a leverage ratio of 2.5 times.
• Estimated capital expenditures for 2024 are $400 million to $425 million.

Company Outlook

• Boyd Gaming stays focused on disciplined growth and operational efficiency.
• Anticipation of maintaining a leverage ratio of 2.5 times to enable growth execution while providing returns to shareholders.
• Online segment EBITDA projected at $105 million for 2024.
• Nearly $1.7 billion returned to shareholders through repurchases and dividends since October 2021.

Bearish Highlights

• EBITDAR margins decreased from 50% to 49% compared to last year.
• Limited growth expected from Treasure Chest Casino.
• Hurricanes impacted some areas but had a minimal overall business effect.

Bullish Highlights

• Strong economy in Southern Nevada underpins performance.
• Record performance from the Midwest and South segments and strong online partnerships point to a positive future.
• Diversification strategies are yielding beneficial results.

Misses

• One-time revenue increase from early terminations of market access agreements is not expected to recur.
• Acknowledgment of Hurricane Francine's impacts on Amelia Belle and Treasure Chest, though operations remained stable.

Q&A Highlights

• Keith Smith reaffirmed the commitment to a $100 million baseline for share repurchases, recently exceeding this due to favorable pricing conditions.
• Anticipated minimal impact from the F1 event in Las Vegas, with stronger business expected during that weekend due to a Raiders game.
• Financing for the Virginia project planned leveraging business cash flow and available credit, with no significant issues expected in non-gaming revenue despite renovations.

In summary, Boyd Gaming's Q3 performance reflects a strategic focus on growth and shareholder value amidst challenges in the competitive gaming landscape. Projected expansions and partnerships are expected to drive future success.

InvestingPro Insights

Boyd Gaming's robust Q3 2024 performance is reinforced by InvestingPro data, revealing a market capitalization of $6.35 billion with a P/E ratio of 13.38, indicating reasonable stock valuation. Gross profit margins stood at 62.34%. Revenue grew by 2.84% over the last twelve months. The company actively engages in share buybacks, aligning with management's confidence in financial health, trading near a 52-week high, reflective of positive market trends.

Full Transcript – Boyd Gaming Corp (BYD) Q3 2024

David Strow: Good afternoon, and welcome to the Boyd Gaming Third Quarter 2024 Earnings Conference Call. My name is David Strow, and I will be the moderator for today’s call.

Keith Smith: Thanks, David, and good afternoon everyone. Our recent property investments produced strong results, driving growth in our downtown Las Vegas and Midwest and South segments. Our online and managed businesses delivered excellent performances, showcasing our diversification strategy.

Josh Hirsberg: We delivered a solid performance, but year-over-year EBITDAR comparisons for Q4 may be challenging due to last year's favorable expense adjustments.

David, that concludes our remarks and we are now ready to take questions.

This overview captures Boyd Gaming’s performance, expectations, and market strategies going forward.