PENN Entertainment (PENN) 7 Nov 242024 Q3 Earnings call transcript

Greetings, and welcome to the Penn Entertainment Third Quarter 2024 Earnings Call. I would now like to turn the conference over to Mr. Joe Jaffoni, Investor Relations. Please go ahead.

Thank you, Cindy. everyone, Penn thanks, conference XXXX and call. morning, for Entertainment's joining quarter Good management's momentarily and your get presentation We'll to comments answers. questions as and as well

During please that question we X the to and themselves X everyone follow-up. Q&A session, limit ask

and the call. into that discussion disclosure, note statements. we'll contains get I'll now forward-looking harbor then read today's safe the Please

statements differ materially. to involve actual cause results risks, Forward-looking assumptions could and uncertainties that

for For more details release information factors. risk press please on see specific our

over my With company's to pleasure to that, call please the Jay the ahead. now Jay, Snowden. it's CEO, turn go

team. here Joe. Wyomissing Head everyone. Thanks, and as our morning, I'm Good Todd management other Operations, our happy our Hendrix; to Felicia as be Aaron LaBerge; of well in CFO, CTO, George; with members of senior

see you event great the of of X was our October Resort at in Vegas. It M on to Las investor many

have related highlighted enhancements as Some it. KPIs early we of upgrades. implemented of product well for recently missed you ESPN BET to the some significant may We feature as some

We property highlight also to you our will updates or our we of industry-leading all see with along some a attendees new of technology that and here XCs in several key today. got action, review with business hands-on of again automations provided demonstration

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completing customer. January been through We room the end driving per of spend which this halfway there, by plan have the roughly are project We look forward to XXXX. gaming renovations

to improvement in land are share in are the gaining the no customer We our throughout third performing thanks by and month properties to loyalty. continuing several are consumer we markets the and the to efforts new not drive ongoing month-over-month experience demand seeing reimagine market to in Chicago competition, best-in-class our mitigate impacted continuing Meanwhile, those our and stable operators sequential Overall, of and quarter well country. profitably new October. through we across them, improve of from saw into supply pressure Nebraska,

several November with well first a volumes days first improved showed The of as weekend. strong

X growth around schedule Finally, Ohio noted highlighted X, of the second X.X% on country we the our new provide expected to on year-over-year year-over-year spot volume compared are are our seen flat first projects on Slide through and slot of in half projects, The as Louis. the during the remain on third Hollywood have we about St. Slide which X. trends schedule, by in us ahead optimism seeing These open and with quarter, continued with to Joliet Michigan, XXXX. in properties volumes led budget growth QX

X. We ESPN continue to rebranding retail quarter new our the Turning unveiled X strategy as we BET to portfolio. Slide branded our during sports books implement

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growth Slide digital user strong X introduce generated active base, meaningful has as growth improvement. providing for and BET product highlights database foundation the a additional future ESPN we

year-over-year QX in digital 'XX. 'XX users growth our we are QX in members database, now versus million and in monthly X approaching XX% We active saw

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disciplined we database. on football given reactivation season retention at we spend the from deep saw an remained digital have efforts and our we the focus While promotional as of competition, increase primarily in beginning

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XX. to Turning Slide

ESPN new now have between Bringing live account sports available industry-leading experience this This monetization to espn.com. towards seamlessly to is an linking the market As reactivation. on ability further step track creating to betting an engagement, now for is retention feature ESPN linking important and enhanced help within drive the will across personalized and customers. through of ecosystem. bets By October and settled the BET and ESPN ESPN fans XX, app accounts, upcoming

was for to Penn talented and speaks partnership ESPN. technology depth our teams really This and achievement a ESPN with tremendous of the the

exciting soon some same improved These betting. as in-play accelerate We IP we additional an our enhancements game experience, parlay and coming include upgraded have map. enhanced branding product product road and

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financial to over I'll quarter. additional for the now it turn details Felicia for

Thanks, Jay.

$XXX November. revenue volumes or continued on are quarter midpoint reported results where billion the million over results weekend above through In of the remains X. of supply, we the September not and demand EBITDA stable. to markets quarter improve third new first $X.X preliminary adjusted October Our slightly improved October facing and retail and sequentially we third in

in our a the and upside drove in guidance the quarter was $XX the lower promotional reported a by loss from and mix skin are of driven tax, X. Interactive original million excluding quarter X reflects tax revenues, the gross adjusted end These XX% on adjusted quarter results sequential Interactive August $XXX adjusted of than to where on segment, the expected expenses million, third October our high Interactive product our a parlay quarter the from we EBITDA second improving sub For also EBITDA at higher we the preliminary better results results. relative our improvement and provided

find including interest Of and to our REIT total cash the CapEx. of taxes, liquidity quarter, development our table in $X.X a of project $XXX projects. earnings the that was ended As cash quarter and Page XXXX to in million cash the related total our CapEx cash million million usual, $XXX CapEx you cash will with in $XX cash total in quarter, payments our our of on X expenditure release summarizes We landlords and equivalents. billion of core third

maturities know, are have no our which you As until convertible notes. debt XXXX, $XXX million

leverage projects balance third Our our lease excited driven the we're sheet delevering peaked net and to access trajectory ability growth our of growth XXXX, as adjusted reach by to completion. GLPI's begin quarter and EBITDA in our organic

our cash continue of Interactive to by in our XXXX flow be complete in X by generate to growth We bolstered XXXX EBITDA beyond free which the adjusted positive first generate XXXX. and should retail segment, half projects, meaningful expect which should all and

Retail our for guidance provide now and interactive will segments. I

revenues quarter to the to $X.XX adjusted $XXX from segment, $X.XX For and $XXX million. million the expect range Retail fourth billion range we EBITDA XX to from to billion

the the by remodeling end of assumes due Charles project, which XXXX. continued construction completed to forecast Our room disruption in Lake January

Nebraska also Chicago in and open continue absorb Louisiana, to and land drive a competition as trial. properties as We to markets, such make efforts new few

As in market, impacted consumer and new competition. demand, by I are mentioned stable performing are earlier, well not we the we

of that guidance, industry-wide customer hold unchanged our is our prudent to quarter-to-date. impacted negatively reiterate call. fourth now We given the Interactive, think quarter XXXX For EBITDA interactive from been for has which outcomes last it's funds by midpoint

We awards. expect of inclusive roughly expense million, corporate cash XXXX stock-based of settled our $XXX

CapEx for XXXX year approximately roughly the of million cash be of $XXX million or interest full CapEx $XXX expense, XXXX inclusive approximately income. will million of forecast Total million $XXX interest for we project $XX for

For of inclusive of basic count refund shares, the of cash was conversion. million have XXX.X a are share in 'XX, dilution $XX million taxes, end typically of quarter as tax the shares, diluted third projecting small we we the from the and and our share

turn that, I'll Jay. And back over it with to

straight All one of I'm Champions boardroom year diversity of right. our fourth In ensure the by proud recognized us of who efforts their Thanks, closing, Felicia. to Board that named to diversity. Forum within Women report as Executive of the have for been perspective our corporate background

diverse Com the employers recently to one named Magazine. of In proud XXXX addition, we're best been Diversity by top the best of have

XXXX at Excellence the Leadership largest our XXX one internship the by top program been programs internship for stands which recognized Finally, has recruitment DEI of as platform. of LEAP nation's Penn,

can the up we line And question. our with open that, for Cindy, first

[Operator question Mr. Instructions] Truist from Jonas Barry Securities. of First

starting BET. with Maybe ESPN

users closer You're say, in share achieving weekly more to GGR. mid-single digits, in but mid-teens let's active

do drive Given spend bridge that time you over think focus, degree higher what you can market your user? mass and delta per

last of on Yes. it's for we've several one Barry, those think, quarters. a topics quarterly basis I the hit,

per seeing that and call encouraging to what's per if we X, seeing user. nice are we're from, through at really where user. us week our week We're think is you we for I look growth it, average growth handle every sequential

is seeing we that but said where to mass BET part wager bet propensity on for parlays and So player draws long this casual average ESPN wager, Higher even just that weeks more term. base. in maybe exactly you we the certainly grow think average a what terrific, market continue I of We to a from were few that's great are ago. think props is

as us a to to think good It's improve key into to for going So focus retention, a we're now. monetization out us. is that big really as place, see right but well. expect we be in we to throughout continuing grow for season continue head March And Madness would we

I just a do then next a high about gaming follow-up and grow puts regional level, year? And there's but at land-based think we a takes, gaming. know few land-based can think XX, Great. on as you Maybe

nice if we've fourth from the in quarter QX, preelection, in We're really I'd fully are where I were we're Barry, to really a bump there's in go that the markets said up knew uptick But growth September. postelection, exactly that's new And October, whether what say now I the things question. country XXXX. driving I what's right third nice seen I seeing appreciate exclude nice seen the you if guessing quarter. stable. the we've we not into business that, sequential actually really a going really sure. with be where across core election, would not here that the

good feeling about we're that. So

don't mind there. in looking the as of would things not their but QX, Chest, somewhere Treasure Caesars And there's it the highlighted you and out have in Projects to ton a New new think that in -- project Orleans in competition supply these, time terms we've Cordis frame. course, Land open City, we've be be We Chicago just I Orleans, then there's an Caesars, with but there. highlighted you're New impact into Bossier keep is Nebraska, believe could then, there the opened that to then of projects sometime want is be Louisiana, already in some. expansion, X XXXX, Boy maybe and of going a QX,

of asset relocated opening keep the sort you a of And to sort That's because end XX about then, Land, months relocation going us. the ones which circle X, to XXXX our for 'XX. for in that land-based early XX, those year. Aurora be as nice Hollywood, are is projects dynamic Chicago big mind. sometime Hale project, first of X of going that's we'll the us Joliet is The to fantastic thing really of before our be course, in a be So

as I we'll with and in with mitigate, completion where well. Columbus, pretty in in think, the Hollywood for well hotel to be project, Chicago Ohio Las Tower as there play offense but time 'XX, land, 'XX So M-Resort Vegas really able the expansion it's start us to in as to well

Deutsche Bank. Next Carlo Santarelli question from from

and closer $XXX-plus respecting you a so getting to it as lot pertains give And I'm ballpark the XXXX. in to just year. guidance I obviously, the coming at you costs net picture, that kind understand be kind somewhere coming EBITDA the like of wanted way chunkier in that, over just kind coming And want of Jay, know the provide about sequencing on been of to fact any breakeven of an cetera, see to to interactive some you to far transition But path guys of and of range, talking next you where you'd there then of out, expenses the I side revenue look don't out color if the substantial swing. the growth message that has you're million think the larger, terms XXXX? launch et thinking business. promos on further out. costs Is able

Michigan, follow be in Yes, in iCasino in more as X Both pending mind to be for Pennsylvania, for guidance this offering color be didn't quickly in business QX. betting early that again, February get stand-alone when have put as approval the on to things will we pending on the launching we'll would like lot mentioned the in into you that vast before out things we're sports basis. we on say definitely And able approval. keep states you interactive. mention, year-over-year to I Hollywood improvements provide a a regulatory XXXX, side should well pretty retail cost sometime we regulatory again, that both online of our going

we and Casino New Jersey, West Virginia in perform well. Hollywood will very think Ontario,

able the you that So margin that's for more we third-party terms margin casino that as get us good with think you and we business. think cost really your mix course, have regard have, OSB to the gaming, better, in And about continue our online with to profile. you that's the parlayed lot really economics, the negotiate, a continuing scale get -- grow a is going getting Obviously, will nice to online of arm better shot efficiencies. think be scale. to stronger have which a said, for of providers grow you profile stronger. obviously, I but scale, and structure, as And to being in

marketing the have also outside of we ESPN. And spend

our I what's out in spend. out effective, working. digital performance digital think CPAs continuing We're we've really figure seeing figured attractive what's or to paid

this the about XXXX. need spend into rest smarter so through to and And we're year side continue getting the what things. of will smarter of on marketing That and

I level would level. be it thinking say but to of in that's specificity, with February, So way the high a provide we'll the about more at

think Great. a that on essentially I of EBITDA quarter, $XX midpoint -- the looks it for to kind reflection next increase baseline follow-up midpoint or whereas from lower could, cost from it benefits to if for you're cost the have of disruptions at of notably. the guidance, more perspective? how looks And some creep, cost year-over-year. business mitigation? light what And net one as of flattish the kind fourth some like relates then any that competition be looks is and it of a like of on good year-over-year kind the million brick-and-mortar kind less effectively you'll just the year outlook to year-over-year, the of revenue a to could Obviously, the the you of Is some the of just as more pertains anniversarying shed about of

Todd. is this Carlo,

margins QX margin the lowest with percentage. a there's as in typically, seasonality yes, always So traditionally

of guide mind, Also about unless QX. onetime last thinking some next look for year. next we keep QX of year that you're guys I kind in year had wouldn't So as in a at good

So that February. difference the EBITDA is in item get kind in of we'll flow-through. for detail year-over-year of more for 'XX, about that, into the like reconciling much Jay Outside talked the

of Your Montour Barclays. next is question Brandt from

guidance. interactive So the question the fourth quarter on is first

million -- in You year beat reiterated guys third by quarter EBITDA, full the you end. own the guidance your third quarter then $XX and

in fourth is you impact we about? is about the Or otherwise your made that flowing or So that should there we October to how from any the other quarter. should think through think question of quarter core KPIs adjustments the sort is, that direct third not Is hold?

related. as -- rough to think should about many hold documented you it's Yes, quarter of by fourth been it a entirely That's start the you.

the New You even weekly monthly can come it before in has out. the see York results October

all other the see hitting. can and having results, than also You hitting a West are when in is it great mix parlay Virginia higher favorites parlays are weekly

very the and X that's been what really of saw October first unfortunately. weekend we weeks in So consistent November the last with was

it's does a It just -- switches it's luck thing. that reverses it course. a It Now change.

pulling just hold the opposed in you're banking so sort the to help beat then made the what being an was We difference QX. QX now QX. And the thought for and through on exact hold sense. just we rest as number of in between And impact of it

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Yes.

Aaron me to one. to speak ask that Let

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next Greff question And is from of your Joe JPMorgan.

promos ask I so near and how and the New more about do inclusion York as trends term? about and think handle medium that you efforts in New in and York, term forward, your the to we of you how New in far relation how going longer think just of inclusion about wanted the to York you Jay, with think you're it about thinking how

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game, And it so a to has us for we're but later our to user base. been the grow

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results is we're shared what's October, I interesting regard sequentially. that think with that the feeling momentum we to good the about

-- I'm bit, So question, September late I because a we York launched, September, little -- and but lot a pivoting bit it noise New so your more think of if New a I all believe we York from there's and you actually October. this in a September, exclude important it's was is little in

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good speak a to been can little side, maybe broad-based. it's the it's to been Todd, specificity? surprisingly more that But news Yes, you

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seeing a for in, comes that been states Massachusetts as market has not the in strong only And growth we're us. but we that referenced, in Plainridge

pleased with I we're headed people So future. and getting and week feel through about the economy how continue think of and in the settle kind letting to in they Tuesday this through

Joe Your next question Mr. of Susquehanna. Stauff from

fed I opportunity lineups linking, something something -- that into to But a or to way about I guess, is that you Jay, the Is assume side then from question, it's are that, bit your to previous just now? that that of commentary, able how And certainly, say, for to I'm would early Aaron. With deliver, promos that a Is dynamic? is Todd is Jay, product. Felicia, had that realizing to to more CapEx that Or a it's it respect essentially in say to digital that right are real in wondering I able follow-up occur that? maybe and very deliver get difficult What's account revenue be guys answer, about later? launch the a there fantasy you XXXX you flat outlook. appreciate maybe personalized on the little think sports in could betting. 'XX. think down the an

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of Your next question is from Shaun Kelley Bank America. of

give online just support just talked too to to as the wanted some little relaunch I get a some refocused there, when don't into on you preview marketing much But for casino or a I efforts there? here. wanted can about incremental think of on us the sense XXXX. this that. seen on little touch we've have we they people have plans We

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And really had opportunity. so the haven't we

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Dan question Politzer of Fargo. Wells from Next

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others this I'm sure, later You'll week. hear reporting from this, week and next

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waiting that for sports a you that's iCasino better, an there's If you're that branded. not

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Next question from Chad Beynon of Macquarie.

thoughts some I country that regions? state. the also related on plans of vote that And that the any other that this potential Missouri part other the And have wanted then in to think of tax ask for rate if betting to in in or impact outcome either sports market? states, could you was about initial announced on

ago, XX for We know we what Yes, happy structure a whether feel talking good the to, it We're was did or but hours Chad. have going pass is. not. to

is outside but California sports last obviously, X I those the that of that an X country, It's the one probably interesting think the know real in states and last Missouri excluding we of Texas fandom. the of states state. there's

major MSA. St. of and X really X casinos we land-based in the X You've got Louis of And X City. state cities MSA, between City St. Louis the course, into have Kansas sports of Missouri,

Kansas We on property City. the have Kansas another of side

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regulators, the understanding clarifying we're sit today. as that we So but here that's our with

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maybe us improvement. strong you terms national about seasonality have think in and the go lot out viewership. a numbers Do a with rates there non-NFL for on and then just the And it. what saw hold World thinking and to really Appreciate the lot of Series hold of way of sports

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Next Needham. from question from McTernan Bernie

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Ryan from from Craig-Hallum. Sigdahl question Next

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Stanley. question Morgan Stephen Next Grambling with from

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David from Question Okay. of Katz Jefferies.

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all was this and and look in we a hopefully, few February. months redundant, in forward you of again up of you Some but information new catching to got with some takeaways,

participating Ladies ask for conference today. this that your lines. and please call for We disconnect you you gentlemen, your and concludes thank