Caesars Entertainment, Inc. Reports Second Quarter 2024 Results

Rhea-AI Summary

Caesars Entertainment, Inc. (NASDAQ: CZR) reported its Q2 2024 results with GAAP net revenues of $2.8 billion, down slightly from $2.9 billion in the prior year. The company posted a GAAP net loss of $122 million, compared to a net income of $920 million in Q2 2023. Same-store Adjusted EBITDA remained stable at $1.0 billion. Caesars Digital segment showed improvement with Adjusted EBITDA of $40 million, up from $11 million last year.

Key highlights include:

• Record same-store revenues, hotel occupancy, and ADR in Las Vegas segment
• Caesars Digital segment achieved a new Q2 Adjusted EBITDA record
• Regional segment faced competition in new markets
• Continued debt reduction with Term Loan B repayments over $100 million
• Full-year 2024 capital expenditures forecast at $800 million, excluding Danville project

Positive

• Record same-store revenues, hotel occupancy, and ADR in Las Vegas segment
• Caesars Digital segment Adjusted EBITDA increased to $40 million from $11 million year-over-year
• Caesars Digital segment revenue grew 27.8% year-over-year
• Continued debt reduction with Term Loan B repayments over $100 million

Negative

• GAAP net loss of $122 million compared to net income of $920 million in prior year
• GAAP net revenues decreased to $2.8 billion from $2.9 billion year-over-year
• Regional segment Adjusted EBITDA declined 7.7% year-over-year due to competition in new markets
• Overall same-store Adjusted EBITDA remained flat at $1.0 billion

Financial Analyst

Caesars Entertainment's Q2 2024 results present a mixed picture. While the company maintained stable overall performance, there are notable shifts in segment dynamics:

• Same-store net revenues remained relatively flat at $2.83 billion, a slight 0.1% decrease year-over-year.
• Adjusted EBITDA held steady at $1 billion, down 0.3% from the adjusted prior-year period.
• The Las Vegas segment showed resilience with a 1.9% revenue increase and 1.2% Adjusted EBITDA growth.
• Caesars Digital segment demonstrated impressive growth, with revenue up 27.8% and Adjusted EBITDA reaching $40 million, a significant improvement from $11 million in Q2 2023.
• The Regional segment faced challenges, with revenue declining 5.2% and Adjusted EBITDA down 7.7%.

The company's $122 million GAAP net loss, compared to a $920 million net income in Q2 2023, is largely attributable to a one-time tax benefit in the prior year. This shouldn't overshadow the stable operational performance.

Caesars' debt reduction efforts continue, with over $100 million in Term Loan B repayments during Q2. The company maintains a solid liquidity position with $2.95 billion in cash and available credit capacity.

Looking ahead, Caesars' optimism for the remainder of 2024 is supported by strong Las Vegas and Digital segment performance, as well as upcoming property developments. However, investors should monitor the Regional segment's performance and the impact of new market competition.

Market Research Analyst

Caesars' Q2 results reveal intriguing market trends that investors should note:

• The Las Vegas segment's record same-store revenues, hotel occupancy and Average Daily Rate (ADR) indicate a robust recovery in tourism and entertainment spending in the city.
• The impressive growth in the Digital segment, with a 27.8% revenue increase and substantial Adjusted EBITDA improvement, reflects the growing importance of online gaming and sports betting in the industry.
• The Regional segment's challenges, particularly due to competition in new markets, highlight the evolving landscape of the U.S. gambling industry as more states legalize various forms of gaming.

The company's strategic focus on capital investments, such as the $430 million rebranding of Caesars New Orleans and the new Danville facility, demonstrates its commitment to maintaining market share and expanding its footprint.

Caesars' ability to maintain stable overall performance despite segment fluctuations suggests effective management of its diverse portfolio. However, the pressure on the Regional segment underscores the need for continuous innovation and market adaptation in the face of increasing competition.

The company's debt reduction efforts and maintained liquidity position indicate a balanced approach to financial management, which is important in the capital-intensive casino industry.

As the industry continues to evolve, Caesars' performance in its Digital segment and its ability to leverage its strong Las Vegas presence will be key factors to watch for investors assessing the company's long-term growth potential.

LAS VEGAS & RENO, Nev.--(BUSINESS WIRE)-- Caesars Entertainment, Inc. (NASDAQ: CZR) (“Caesars,” “CZR,” “CEI” or “the Company”) today reported operating results for the second quarter ended June 30, 2024.

Second Quarter 2024 and Recent Highlights:

• GAAP net revenues of $2.8 billion versus $2.9 billion for the comparable prior-year period.
• GAAP net loss of $122 million compared to net income of $920 million for the comparable prior-year period, with the decrease primarily driven by a release of $940 million of valuation allowance against deferred tax assets associated with our REIT leases in the prior year.
• Same-store Adjusted EBITDA of $1.0 billion versus $1.0 billion for the comparable prior-year period.
• Caesars Digital Adjusted EBITDA of $40 million versus $11 million for the comparable prior-year period.

Tom Reeg, Chief Executive Officer of Caesars Entertainment, Inc., commented, “On a consolidated basis, the Company generated $1 billion of Adjusted EBITDA. Our operating results reflect year over year growth in Adjusted EBITDA in our Las Vegas segment driven by record same store revenues, hotel occupancy and Average Daily Rate (ADR). Our Caesars Digital segment posted a new second-quarter Adjusted EBITDA record, driven by strong revenue growth and solid flow through. Regional segment results reflect competition in new markets partially offset by our temporary facility in Danville, Virginia and our property in Columbus, Nebraska. We remain optimistic for the balance of 2024 driven by strong operating trends in our Las Vegas and Caesars Digital segments and the expected openings of the permanent facility in Danville coupled with our $430 million capital investment in our newly rebranded Caesars New Orleans property.”

Second Quarter 2024 Financial Results Summary and Segment Information

After adjusting for the effects of our completed divestiture, the following tables present adjustments to net revenues, net income (loss) and Adjusted EBITDA as reported, in order to reflect a same-store basis:

Net Revenues
	Three Months Ended June 30,
(In millions)	2024				2023				2023 Adj.(a)				Adj. 2023 Total				% Change
Las Vegas	$	1,101			$	1,128			$	(47	)		$	1,081			1.9	%
Regional		1,385				1,461				—				1,461			(5.2	)%
Caesars Digital		276				216				—				216			27.8	%
Managed and Branded		70				72				—				72			(2.8	)%
Corporate and Other		(2	)			2				—				2			*
Caesars	$	2,830			$	2,879			$	(47	)		$	2,832			(0.1	)%
Net Revenues
	Six Months Ended June 30,
(In millions)	2024				2023				2023 Adj.(a)				Adj. 2023 Total				% Change
Las Vegas	$	2,129			$	2,259			$	(101	)		$	2,158			(1.3	)%
Regional		2,750				2,850				—				2,850			(3.5	)%
Caesars Digital		558				454				—				454			22.9	%
Managed and Branded		138				141				—				141			(2.1	)%
Corporate and Other		(3	)			5				—				5			*
Caesars	$	5,572			$	5,709			$	(101	)		$	5,608			(0.6	)%
Net Income (Loss)
	Three Months Ended June 30,
(In millions)	2024				2023				2023 Adj.(a)				Adj. 2023 Total				% Change
Las Vegas	$	272			$	261			$	(5	)		$	256			6.3	%
Regional		(51	)			124				—				124			*
Caesars Digital		4				(22	)			—				(22	)		*
Managed and Branded		17				19				—				19			(10.5	)%
Corporate and Other		(364	)			538				—				538			*
Caesars	$	(122	)		$	920			$	(5	)		$	915			*
Net Income (Loss)
	Six Months Ended June 30,
(In millions)	2024				2023				2023 Adj.(a)				Adj. 2023 Total				% Change
Las Vegas	$	470			$	554			$	(15	)		$	539			(12.8	)%
Regional		(10	)			199				—				199			*
Caesars Digital		(30	)			(54	)			—				(54	)		44.4	%
Managed and Branded		35				38				—				38			(7.9	)%
Corporate and Other		(745	)			47				—				47			*
Caesars	$	(280	)		$	784			$	(15	)		$	769			*
Adjusted EBITDA (b)
	Three Months Ended June 30,
(In millions)	2024				2023				2023 Adj.(a)				Adj. 2023 Total				% Change
Las Vegas	$	514			$	512			$	(4	)		$	508			1.2	%
Regional		469				508				—				508			(7.7	)%
Caesars Digital		40				11				—				11			*
Managed and Branded		17				19				—				19			(10.5	)%
Corporate and Other		(40	)			(43	)			—				(43	)		7.0	%
Caesars	$	1,000			$	1,007			$	(4	)		$	1,003			(0.3	)%
Adjusted EBITDA (b)
	Six Months Ended June 30,
(In millions)	2024				2023				2023 Adj.(a)				Adj. 2023 Total				% Change
Las Vegas	$	954			$	1,045			$	(15	)		$	1,030			(7.4	)%
Regional		902				956				—				956			(5.6	)%
Caesars Digital		45				7				—				7			*
Managed and Branded		35				38				—				38			(7.9	)%
Corporate and Other		(83	)			(81	)			—				(81	)		(2.5	)%
Caesars	$	1,853			$	1,965			$	(15	)		$	1,950			(5.0	)%

____________________
*		Not meaningful
(a)		Adjustment for pre-disposition results of operations reflecting the subtraction of results of operations for Rio All-Suite & Casino prior to divestiture at the end of the third quarter of 2023. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors for the periods presented. The additional financial information is included to enable the comparison of current results with results of prior periods.
(b)		Adjusted EBITDA is not a GAAP measurement and is presented solely as a supplemental disclosure because the Company believes it is a widely used measure of operating performance in the gaming industry. See “Reconciliation of GAAP Measures to Non-GAAP Measures” below for a definition of Adjusted EBITDA and a quantitative reconciliation of Adjusted EBITDA to net income (loss), which the Company believes is the most comparable financial measure calculated in accordance with GAAP.

Balance Sheet and Liquidity

As of June 30, 2024, Caesars had $12.4 billion in aggregate principal amount of debt outstanding. Total cash and cash equivalents were $830 million, excluding restricted cash of $129 million.

(In millions)	June 30, 2024				December 31, 2023
Cash and cash equivalents	$	830			$	1,005
Bank debt and loans	$	6,075			$	3,193
Notes		6,311				9,199
Other long-term debt		44				47
Total outstanding indebtedness	$	12,430			$	12,439
Net debt	$	11,600			$	11,434

As of June 30, 2024, our cash on hand and borrowing capacity was as follows:

(In millions)		June 30, 2024
Cash and cash equivalents		$	830
Revolver capacity (a)			2,235
Revolver capacity committed to letters of credit			(68	)
Available revolver capacity committed as regulatory requirement			(46	)
Total (b)		$	2,951

___________________
(a)		Revolver capacity includes $2.25 billion under the CEI Revolving Credit Facility, maturing in January 2028 (subject to a springing maturity in the event certain other long-term debt of Caesars is not extended or repaid), and $25 million under the Caesars Virginia Revolving Credit Facility, maturing on April 26, 2029, less $40 million reserved for specific purposes.
(b)		Excludes approximately $280 million of additional borrowing available under the Caesars Virginia Delayed Draw Term Loan.

“Our debt reduction plan continued in the second quarter, with Term Loan B repayments of over $100 million. We continue to forecast 2024 full year capital expenditures of $800 million, excluding our Danville project which is funded within the joint venture,” said Bret Yunker, Chief Financial Officer.

Reconciliation of GAAP Measures to Non-GAAP Measures

Adjusted EBITDA (described below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding our ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents net income (loss) before interest income and interest expense, net of interest capitalized, (benefit) provision for income taxes, depreciation and amortization, stock-based compensation expense, (gain) loss on extinguishment of debt, impairment charges, other (income) loss, net income (loss) attributable to noncontrolling interests, transaction costs associated with our acquisitions, developments and divestitures, and non-cash changes in equity method investments. Adjusted EBITDA also excludes the expense associated with certain of our leases as these transactions were accounted for as financing obligations and the associated expense is included in interest expense. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with accounting principles generally accepted in the United States (“GAAP”). Adjusted EBITDA is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, and payments under our leases with affiliates of GLPI and VICI Properties, Inc., which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate Adjusted EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.

Conference Call Information

The Company will host a conference call to discuss its results on July 30, 2024 at 2:30 p.m. Pacific Time, 5:30 p.m. Eastern Time. Participants may register for the call approximately 15 minutes before the call start time by visiting the following website at https://register.vevent.com/register/BI373390002b464f40a43cc986aa34eb52.

Once registered, participants will receive an email with the dial-in number and unique PIN number to access the live event. The call will also be accessible on the Investor Relations section of Caesars’ website at https://investor.caesars.com.

About Caesars Entertainment, Inc.

Caesars Entertainment, Inc. (NASDAQ: CZR) is the largest casino-entertainment company in the US and one of the world’s most diversified casino-entertainment providers. Since its beginning in Reno, NV, in 1937, Caesars Entertainment, Inc. has grown through development of new resorts, expansions and acquisitions. Caesars Entertainment, Inc.’s resorts operate primarily under the Caesars®, Harrah’s®, Horseshoe®, and Eldorado® brand names. Caesars Entertainment, Inc. offers diversified gaming, entertainment and hospitality amenities, one-of-a-kind destinations, and a full suite of mobile and online gaming and sports betting experiences. All tied to its industry-leading Caesars Rewards loyalty program, the company focuses on building value with its guests through a unique combination of impeccable service, operational excellence and technology leadership. Caesars is committed to its employees, suppliers, communities and the environment through its PEOPLE PLANET PLAY framework. To review our latest CSR report, please visit www.caesars.com/corporate-social-responsibility/csr-reports. Know When To Stop Before You Start.® Gambling Problem? Call 1-800-522-4700. For more information, please visit www.caesars.com/corporate.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding our strategies, objectives and plans for future development or acquisitions of properties or operations, as well as expectations, future operating results and other information that is not historical information. When used in this press release, the terms or phrases such as “anticipates,” “believes,” “projects,” “plans,” “intends,” “expects,” “might,” “may,” “estimates,” “could,” “should,” “would,” “will likely continue,” and variations of such words or similar expressions are intended to identify forward-looking statements. Although our expectations, beliefs and projections are expressed in good faith and with what we believe is a reasonable basis, there can be no assurance that these expectations, beliefs and projections will be realized. There are a number of risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements which are included elsewhere in this press release. These risks and uncertainties include, but are not limited to: (a) the impact on our business, financial results and liquidity of economic trends, inflation, public health emergencies, terrorist attacks and other acts of war or hostility, work stoppages and other labor problems, or other economic and market conditions, including reductions in discretionary consumer spending as a result of downturns in the economy and other factors outside our control; (b) the impact of future cybersecurity breaches on our business, financial conditions and results of operations; (c) our ability to successfully operate our digital betting and iGaming platform and expand its user base; (d) risks associated with our leverage and our ability to reduce our leverage; (e) the effects of competition, including new competition in certain of our markets, on our business and results of operations; and (f) additional factors discussed in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. Other unknown or unpredictable factors may also cause actual results to differ materially from those projected by the forward-looking statements.

In light of these and other risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur. These forward-looking statements speak only as of the date of this press release, even if subsequently made available on our website or otherwise, and we do not intend to update publicly any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as may be required by law.

CAESARS ENTERTAINMENT, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
	Three Months Ended June 30,								Six Months Ended June 30,
(In millions, except per share data)	2024				2023				2024				2023
NET REVENUES:
Casino	$	1,557			$	1,584			$	3,092			$	3,169
Food and beverage		435				435				857				862
Hotel		514				525				1,007				1,028
Other		324				335				616				650
Net revenues		2,830				2,879				5,572				5,709
OPERATING EXPENSES:
Casino		817				817				1,669				1,645
Food and beverage		266				258				529				509
Hotel		139				143				276				280
Other		100				111				194				218
General and administrative		465				499				965				1,008
Corporate		80				86				158				165
Impairment charges		118				—				118				—
Depreciation and amortization		326				323				653				623
Transaction and other costs, net		13				33				19				49
Total operating expenses		2,324				2,270				4,581				4,497
Operating income		506				609				991				1,212
OTHER EXPENSE:
Interest expense, net		(594	)			(586	)			(1,184	)			(1,180	)
Loss on extinguishment of debt		(3	)			—				(51	)			(197	)
Other income (loss)		(1	)			3				25				6
Total other expense		(598	)			(583	)			(1,210	)			(1,371	)
Income (loss) from continuing operations before income taxes		(92	)			26				(219	)			(159	)
Benefit (provision) for income taxes		(10	)			902				(25	)			951
Income (loss) from continuing operations, net of income taxes		(102	)			928				(244	)			792
Net income (loss)		(102	)			928				(244	)			792
Net income attributable to noncontrolling interests		(20	)			(8	)			(36	)			(8	)
Net income (loss) attributable to Caesars	$	(122	)		$	920			$	(280	)		$	784
Net income (loss) per share - basic and diluted:
Basic income (loss) per share	$	(0.56	)		$	4.27			$	(1.29	)		$	3.65
Diluted income (loss) per share	$	(0.56	)		$	4.26			$	(1.29	)		$	3.63
Weighted average basic shares outstanding		216				215				216				215
Weighted average diluted shares outstanding		216				216				216				216

CAESARS ENTERTAINMENT, INC. RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO CAESARS TO ADJUSTED EBITDA (UNAUDITED)
	Three Months Ended June 30,								Six Months Ended June 30,
(In millions)	2024				2023				2024				2023
Net income (loss) attributable to Caesars	$	(122	)		$	920			$	(280	)		$	784
Net income attributable to noncontrolling interests		20				8				36				8
(Benefit) provision for income taxes (a)		10				(902	)			25				(951	)
Other (income) loss (b)		1				(3	)			(25	)			(6	)
Loss on extinguishment of debt		3				—				51				197
Interest expense, net		594				586				1,184				1,180
Impairment charges (c)		118				—				118				—
Depreciation and amortization		326				323				653				623
Transaction costs and other, net (d)		26				46				42				74
Stock-based compensation expense		24				29				49				56
Adjusted EBITDA	$	1,000			$	1,007			$	1,853			$	1,965
Pre-disposition Adjusted EBITDA (e)		—				(4	)			—				(15	)
Same-Store Adjusted EBITDA	$	1,000			$	1,003			$	1,853			$	1,950

____________________
(a)		Benefit for income taxes during the three and six months ended June 30, 2023 includes the release of $940 million of valuation allowance against deferred tax assets.
(b)		Other (income) loss for the six months ended June 30, 2024 primarily represents a change in estimate of our disputed claims liability.
(c)		Impairment charges for the three and six months ended June 30, 2024 includes impairment within our Regional segment as a result of a decrease in projected future cash flows at certain properties primarily due to localized competition.
(d)		Transaction costs and other, net primarily includes costs related to non-cash losses on the write down and disposal of assets, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with our temporary facility openings, and non-cash changes in equity method investments.
(e)		Adjustment for pre-disposition results of operations reflecting the subtraction of results of operations for Rio All-Suite Hotel & Casino prior to divestiture at the end of the third quarter of 2023. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors for the periods presented. The additional financial information is included to enable the comparison of current results with results of prior periods.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240730809834/en/

Investor Relations: Brian Agnew, bagnew@caesars.com; Charise Crumbley, ccrumbley@caesars.com, 800-318-0047

Media Relations: Kate Whiteley, kwhiteley@caesars.com

Source: Caesars Entertainment, Inc.

FAQ

What was Caesars Entertainment's (CZR) Q2 2024 revenue?

Caesars Entertainment (CZR) reported GAAP net revenues of $2.8 billion for Q2 2024, slightly down from $2.9 billion in the same period last year.

Did Caesars Entertainment (CZR) report a profit or loss in Q2 2024?

Caesars Entertainment (CZR) reported a GAAP net loss of $122 million in Q2 2024, compared to a net income of $920 million in Q2 2023.

How did Caesars Digital segment perform in Q2 2024?

Caesars Digital segment showed significant improvement, with Adjusted EBITDA increasing to $40 million from $11 million in Q2 2023, and revenue growing 27.8% year-over-year.

What was Caesars Entertainment's (CZR) Adjusted EBITDA for Q2 2024?

Caesars Entertainment (CZR) reported same-store Adjusted EBITDA of $1.0 billion for Q2 2024, which remained stable compared to the same period last year.