PENN Entertainment, Inc. Reports Fourth Quarter Results

Rhea-AI Summary

PENN Entertainment reported its Q4 2024 financial results, highlighting solid property-level performance with revenues of $1.4 billion and Adjusted EBITDAR of $461.2 million. Properties unaffected by new supply generated nearly 3% year-over-year revenue growth.

The Interactive segment showed significant improvements, with revenues of $275.0 million, despite customer-friendly sports betting outcomes. The company's iCasino business achieved record quarterly gaming revenue, showing over 60% growth year-over-year, boosted by the successful launches of the standalone Hollywood Casino app in Pennsylvania and Michigan.

PENN announced plans to repurchase at least $350 million of shares in 2025. The company maintained strong liquidity of $1.7 billion, including $706.6 million in cash and cash equivalents, with traditional net debt at $1.9 billion as of December 31, 2024.

Positive

• Share repurchase program of $350M announced for 2025
• iCasino revenue grew 60% year-over-year
• Properties unaffected by competition grew revenue 3% YoY
• Strong liquidity position of $1.7B
• 64% YoY growth in online customers cross-sold to retail

Negative

• Interactive segment posted $109.8M EBITDA loss
• Customer-friendly sports betting outcomes impacted results
• New competition affecting several properties' performance
• Traditional net debt stands at $1.9B

Insights

Financial Analyst

PENN Entertainment's Q4 2024 results reveal a company executing well operationally while navigating competitive pressures. Property-level performance remained solid with $1.4 billion in revenues and $461.2 million in Adjusted EBITDAR, maintaining 33.1% margins – above the regional casino industry average of approximately 30-32%. Properties unaffected by new competition achieved nearly 3% year-over-year revenue growth, partially offsetting headwinds in markets facing new entrants.

The most significant announcement is PENN's commitment to repurchase at least $350 million in shares during 2025, representing over 11% of the company's current market capitalization. This aggressive capital return signals management's confidence in future cash flows and suggests they view the current valuation as attractive.

The Interactive segment presents a mixed picture – still generating losses ($109.8 million Adjusted EBITDA loss) but showing meaningful operational improvements. The 60%+ year-over-year growth in iCasino revenue is particularly impressive in a maturing market, indicating PENN is gaining share. The improving parlay mix (exceeding 30% in December/January) should drive margin expansion as these bet types typically carry higher hold percentages.

PENN's omni-channel strategy appears to be gaining traction with 64% year-over-year growth in online customers engaging with retail properties. This cross-platform synergy represents a competitive advantage against pure-play digital operators who lack physical touchpoints.

The company's liquidity position remains comfortable with $1.7 billion available and $1.9 billion in traditional net debt. This financial flexibility supports both the share repurchase program and ongoing capital projects, including the new Hollywood Casino in Joliet slated for Q4 2025 opening.

For investors, PENN represents an interesting blend of established retail gaming cash flows funding digital growth initiatives. The substantial share repurchase program should provide near-term support for the stock while management works to improve Interactive segment profitability and complete retail expansion projects.

Gaming Industry Expert

PENN Entertainment's Q4 results reveal a company effectively navigating the evolving gaming landscape while balancing retail operations and digital expansion. The property-level performance shows resilience with $1.4 billion in revenue and 33.1% EBITDAR margins, though these figures mask significant variability across markets. Properties unaffected by new competition delivered nearly 3% growth, while those facing new entrants experienced pressure – a pattern consistent across the regional casino sector.

The Interactive segment's trajectory merits careful analysis. Despite a $109.8 million EBITDA loss, operational metrics show improvement in areas critical to profitability. The parlay mix exceeding 30% in December/January represents progress but remains below industry leaders who typically achieve 40-45%. The 60%+ year-over-year growth in iCasino revenue is particularly significant as this high-margin product typically delivers 3-4x the profitability of sports betting on comparable revenue.

PENN's standalone Hollywood Casino app strategy in the iGaming space represents a differentiated approach compared to competitors who primarily offer casino games within their sportsbook apps. This strategy appears to be gaining traction, potentially allowing PENN to develop distinct brand positioning in the crowded online casino market.

The 64% year-over-year increase in online customers engaging with retail properties validates PENN's omni-channel thesis. This represents a structural advantage against pure-play digital operators and could yield long-term customer acquisition cost advantages if effectively monetized.

The $350 million share repurchase program (over 11% of market cap) signals management's confidence but also raises questions about capital allocation priorities. While supporting share price, this commitment potentially limits flexibility for opportunistic M&A or accelerated digital investment at a time when scale advantages are increasingly important in the interactive space.

For investors, PENN presents an interesting proposition as one of the few gaming companies with meaningful exposure to both retail casino operations and digital gaming. The continued expansion of iCasino offerings represents the clearest path to Interactive segment profitability, particularly if additional states legalize online casino gaming beyond the current six jurisdictions.

Company to Repurchase at Least $350 Million of Shares in 2025

WYOMISSING, Pa.--(BUSINESS WIRE)-- PENN Entertainment, Inc. (“PENN” or the “Company”) (Nasdaq: PENN) today reported financial results for the quarter and year ended December 31, 2024.

Jay Snowden, Chief Executive Officer and President, said: “PENN’s fourth quarter property-level operating results reflect solid performance, as properties not impacted by new supply generated nearly 3% year-over-year revenue growth. Despite well-known, customer friendly sports betting outcomes during the quarter, our Interactive segment delivered significant year-over-year improvements in revenue and Adjusted EBITDA driven by our disciplined promotional strategies and accelerated growth in our online Casino business. The success in our iCasino business is bolstered by the continued strong momentum from the recent launches of our standalone Hollywood Casino app in Pennsylvania and Michigan. We are excited by the opportunities that lie in front of us in 2025 and into 2026 in all aspects of our business and are announcing this morning our intent to repurchase at least $350 million of shares this year.

Solid Customer Demand

Property level highlights¹:

• Revenues of $1.4 billion;
• Adjusted EBITDAR of $461.2 million; and
• Adjusted EBITDAR margins of 33.1%.

^{_______________________________________
1} Property level consists of retail operating segments which are composed of our Northeast, South, West, and Midwest reportable segments.

“Property-level operating results reflect the ongoing success of our initiatives designed to enhance the customer experience and improve operational efficiency,” said Mr. Snowden. “Led by our best-in-class property leadership teams, we are continuing to reimagine our casinos through new technology, hotel renovations, F&B offerings, ESPN BET-branded retail sportsbooks, and exciting pop-up experiences. Our performance has been further supported by our omni-channel strategy of cross-selling our growing digital database into retail engagement. The number of online customers cross-sold into retail this quarter has grown by more than 64% year-over-year. These efforts all contributed to impressive results in key markets, including Ohio, Massachusetts, Kansas, and Missouri, which helped balance the impacts from new supply affecting several of our properties. Our four retail growth projects remain on budget and on track, with the new Hollywood Casino in Joliet expected to open in the fourth quarter of 2025, subject to regulatory approvals.

Executing on Roadmap and Delivering Results

Interactive segment highlights:

• Revenues of $275.0 million (including tax gross up of $132.8 million); and
• Adjusted EBITDA loss of $109.8 million.

“In the Interactive segment, our parlay mix improved sequentially each month since October, and we experienced greater than 30% parlay mix as a percentage of handle in December and January. Greater same game parlay (“SGP”) adoption contributed to the parlay mix improvement, with SGP mix as a percentage of handle increasing each month since football season began. In addition, our online casino business delivered record quarterly gaming revenue, with over 60% growth year-over-year and continued momentum into 2025. We remain focused on delivering further enhancements to our digital offerings this year, including live streaming in the ESPN BET app, Men’s NCAA Tournament Challenge integrations with ESPN, and additional launches of our standalone iCasino app offerings,” concluded Mr. Snowden.

Liquidity and Financial Position

Total liquidity as of December 31, 2024 was $1.7 billion inclusive of $706.6 million in Cash and cash equivalents. Traditional net debt as of the end of the quarter was $1.9 billion.

Summary of Fourth Quarter Results
	For the quarter ended December 31,
(in millions, except per share data, unaudited)		2024				2023
Revenues	$	1,669.0			$	1,395.4
Net loss	$	(133.8	)		$	(358.8	)
Adjusted EBITDA (1)	$	165.2			$	(39.6	)
Rent expense associated with triple net operating leases (2)		155.5				152.1
Adjusted EBITDAR (1)	$	320.7			$	112.5
Cash payments to our REIT Landlords under Triple Net Leases (3)	$	239.4			$	235.4
Diluted loss per common share	$	(0.88	)		$	(2.37	)

(1)	For more information, definitions, and reconciliations see the “Non-GAAP Financial Measures” section below.
(2)	Consists of the operating lease components contained within our triple net master lease dated November 1, 2013 with Gaming and Leisure Properties, Inc. (Nasdaq: GLPI) (“GLPI”), that was amended and restated effective January 1, 2023 (referred to as the AR PENN Master Lease); our triple net master lease entered in conjunction with and coterminous to the AR PENN Master Lease (referred to as the 2023 Master Lease); as well as our individual triple net leases with VICI Properties Inc. (NYSE: VICI) (“VICI”) for the real estate assets used in the operations of Margaritaville Resort Casino (referred to as the Margaritaville Lease) and Hollywood Casino at Greektown (referred to as the Greektown Lease) and referred to collectively as our “triple net operating leases.” The expense related to operating lease components contained within our triple net operating leases are recorded as “General and administrative” within the Consolidated Statements of Operations.
(3)	Consists of total cash payments made to GLPI and VICI (referred to collectively as our “REIT Landlords”) under our triple net operating leases (as defined above), the Pinnacle Master Lease, and the Morgantown Lease and collectively referred to as our “Triple Net Leases.”

Adjusted EPS

The following table reconciles diluted loss per share (“EPS”) to Adjusted EPS (approximate EPS impact shown, per share; positive adjustments represent charges to income):

	For the quarter ended December 31,
		2024				2023
Diluted loss per share	$	(0.88	)		$	(2.37	)
Impairment losses		0.59				0.86
Insurance recoveries, net of deductible charges		(0.02	)			(0.05	)
Loss on disposal of assets		0.01				—
Transaction related expenses		0.01				0.03
Legal matters inclusive of litigation settlements		0.03				—
Non-operating items:
Gain related to debt and equity investments		(0.02	)			(0.01	)
Income tax impact on net loss adjustments (1)		(0.16	)			(0.21	)
Adjusted EPS	$	(0.44	)		$	(1.75	)

(1)	The income tax impact includes current and deferred income tax expense based upon the nature of the adjustment and the jurisdiction in which it occurs.

PENN ENTERTAINMENT, INC. AND SUBSIDIARIES Segment Information
The Company aggregates its operations into five reportable segments: Northeast, South, West, Midwest, and Interactive.
	For the quarter ended December 31,								For the year ended December 31,
(in millions, unaudited)		2024				2023				2024				2023
Revenues:
Northeast segment (1)	$	689.9			$	662.9			$	2,755.7			$	2,738.4
South segment (2)		284.2				285.1				1,169.0				1,216.4
West segment (3)		129.4				133.7				525.3				528.5
Midwest segment (4)		290.7				290.6				1,172.2				1,172.6
Interactive (5)		275.0				31.5				959.9				718.8
Other (6)		3.7				3.7				19.6				20.2
Intersegment eliminations (7)		(3.9	)			(12.1	)			(23.6	)			(32.0	)
Total revenues	$	1,669.0			$	1,395.4			$	6,578.1			$	6,362.9
Adjusted EBITDAR:
Northeast segment (1)	$	194.4			$	192.5			$	801.0			$	831.0
South segment (2)		101.9				113.0				433.2				494.1
West segment (3)		43.5				50.8				187.5				204.2
Midwest segment (4)		121.4				120.1				486.8				496.6
Interactive (5)		(109.8	)			(333.8	)			(499.5	)			(402.5	)
Other (6)		(30.7	)			(30.1	)			(116.7	)			(110.8	)
Total Adjusted EBITDAR (8)	$	320.7			$	112.5			$	1,292.3			$	1,512.6

(1)	The Northeast segment consists of the following properties: Ameristar East Chicago, Hollywood Casino at Greektown, Hollywood Casino Bangor, Hollywood Casino at Charles Town Races, Hollywood Casino Columbus, Hollywood Casino Lawrenceburg, Hollywood Casino Morgantown, Hollywood Casino at PENN National Race Course, Hollywood Casino Perryville, Hollywood Casino Toledo, Hollywood Casino York, Hollywood Gaming at Dayton Raceway, Hollywood Gaming at Mahoning Valley Race Course, Marquee by PENN, Hollywood Casino at The Meadows, and Plainridge Park Casino.
(2)	The South segment consists of the following properties: 1st Jackpot Casino, Ameristar Vicksburg, Boomtown Biloxi, Boomtown Bossier City, Boomtown New Orleans, Hollywood Casino Gulf Coast, Hollywood Casino Tunica, L’Auberge Baton Rouge, L’Auberge Lake Charles, and Margaritaville Resort Casino.
(3)	The West segment consists of the following properties: Ameristar Black Hawk, Cactus Petes and Horseshu, M Resort Spa Casino, and Zia Park Casino.
(4)	The Midwest segment consists of the following properties: Ameristar Council Bluffs, Argosy Casino Alton, Argosy Casino Riverside, Hollywood Casino Aurora, Hollywood Casino Joliet, our 50% investment in Kansas Entertainment, LLC, which owns Hollywood Casino at Kansas Speedway, Hollywood Casino St. Louis, Prairie State Gaming, and River City Casino.
(5)	The Interactive segment includes all of our online sports betting, online casino/iCasino and social gaming operations, management of retail sports betting, media, and the operating results of Barstool Sports, Inc. (“Barstool” or “Barstool Sports”). We owned 36% of Barstool common stock prior to acquiring the remaining 64% of Barstool common stock on February 17, 2023. In connection with PENN’s decision to rebrand our online sports betting business from Barstool Sportsbook to ESPN BET, PENN entered into a stock purchase agreement, and on August 8, 2023 we sold 100% of the outstanding shares of Barstool. Interactive revenues are inclusive of a tax gross-up of $132.8 million and $107.0 million for the quarters ended December 31, 2024 and 2023, respectively, and $435.6 million and $390.4 million for the years ended December 31, 2024 and 2023, respectively.
(6)	The Other category, included in the tables to reconcile the segment information to the consolidated information, consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Park, the Company’s JV interests in Freehold Raceway (which ceased operations on December 28, 2024) and our management contract for Retama Park Racetrack. The Other category also includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, travel expenses, and other general and administrative expenses that do not directly relate to or have not otherwise been allocated. Corporate overhead costs were $26.3 million and $28.6 million for the quarters ended December 31, 2024 and 2023, respectively, and $104.8 million and $106.7 million for the years ended December 31, 2024 and 2023, respectively.
(7)	Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive.
(8)	As noted within the “Non-GAAP Financial Measures” section below, Adjusted EBITDAR is presented on a consolidated basis outside the financial statements solely as a valuation metric or for reconciliation purposes.

PENN ENTERTAINMENT, INC. AND SUBSIDIARIES Reconciliation of Comparable GAAP Financial Measure to Adjusted EBITDA, Adjusted EBITDAR, and Adjusted EBITDAR Margin
	For the quarter ended December 31,								For the year ended December 31,
(in millions, unaudited)		2024				2023				2024				2023
Net loss	$	(133.8	)		$	(358.8	)		$	(313.3	)		$	(491.4	)
Income tax benefit		(15.0	)			(49.1	)			(28.0	)			(8.2	)
Interest expense, net		113.6				118.6				470.5				464.7
Interest income		(4.4	)			(9.8	)			(23.6	)			(40.3	)
Income from unconsolidated affiliates		(6.0	)			(8.3	)			(28.1	)			(25.3	)
Gain on Barstool Acquisition, net (1)		—				—				—				(83.4	)
Gain on REIT transactions, net (2)		—				—				—				(500.8	)
Loss on early extinguishment of debt		0.3				—				0.3				—
Other income		(2.8	)			(1.0	)			(5.3	)			(5.5	)
Operating income (loss)		(48.1	)			(308.4	)			72.5				(690.2	)
Loss on disposal of Barstool (3)		—				—				—				923.2
Stock-based compensation		13.9				14.5				52.9				85.9
Cash-settled stock-based awards variance (4)		(3.8	)			(1.8	)			(18.7	)			(13.8	)
Loss on disposal of assets		1.2				0.1				10.0				0.1
Contingent purchase price		(0.1	)			0.1				(1.2	)			1.9
Depreciation and amortization		107.1				111.2				433.6				435.1
Impairment losses (5)		89.1				130.6				89.1				130.6
Insurance recoveries, net of deductible charges		(2.8	)			—				(5.5	)			(13.9	)
Income from unconsolidated affiliates		6.0				8.3				28.1				25.3
Non-operating items of equity method investments (6)		1.2				1.0				4.4				7.4
Other expenses (7)		1.5				4.8				7.0				29.9
Adjusted EBITDA		165.2				(39.6	)			672.2				921.5
Rent expense associated with triple net operating leases		155.5				152.1				620.1				591.1
Adjusted EBITDAR	$	320.7			$	112.5			$	1,292.3			$	1,512.6
Net loss margin		(8.0	)%			(25.7	)%			(4.8	)%			(7.7	)%
Adjusted EBITDAR margin		19.2	%			8.1	%			19.6	%			23.8	%

(1)	Includes a gain of $66.5 million associated with Barstool related to remeasurement of the equity investment immediately prior to the acquisition date of February 17, 2023 and a gain of $16.9 million related to the acquisition of the remaining 64% of Barstool common stock.
(2)	Upon the execution of the February 21, 2023 AR PENN Master Lease and the 2023 Master Lease, both effective January 1, 2023, we recognized a gain of $500.8 million as a result of the reclassification and remeasurement of lease components.
(3)	Relates to the loss incurred on the sale of 100% of the outstanding shares of Barstool which was completed on August 8, 2023.
(4)	Our cash-settled stock-based awards are adjusted to fair value each reporting period based primarily on the price of the Company’s common stock. As such, significant fluctuations in the price of the Company’s common stock during any reporting period could cause significant variances to budget on cash-settled stock-based awards.
(5)	For the periods ended December 31, 2024, impairment charges relate to the Northeast, South, and Midwest segments. For the periods ended December 31, 2023, impairment charges relate to the Northeast segment.
(6)	For the quarters ended December 31, 2024 and 2023, and for the year ended December 31, 2024, the respective amounts consist principally of depreciation expense associated with our Kansas Entertainment, LLC joint venture. For the year ended December 31, 2023, amounts consist principally of interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense associated with Barstool prior to us acquiring the remaining 64% of Barstool common stock and our Kansas Entertainment, LLC joint venture.
(7)	Consists of non-recurring acquisition and transaction costs and prior to August 1, 2024 finance transformation costs associated with the implementation of our new Enterprise Resource Management system.

PENN ENTERTAINMENT, INC. AND SUBSIDIARIES Consolidated Statements of Operations
	For the quarter ended December 31,								For the year ended December 31,
(in millions, except per share data, unaudited)		2024				2023				2024				2023
Revenues
Gaming	$	1,290.9			$	1,036.3			$	5,169.5			$	4,905.8
Food, beverage, hotel, and other		378.1				359.1				1,408.6				1,457.1
Total revenues		1,669.0				1,395.4				6,578.1				6,362.9
Operating expenses
Gaming		852.3				840.3				3,429.0				2,989.4
Food, beverage, hotel, and other		270.3				237.9				985.5				1,011.4
General and administrative		398.3				383.8				1,568.4				1,563.4
Depreciation and amortization		107.1				111.2				433.6				435.1
Impairment losses		89.1				130.6				89.1				130.6
Loss on disposal of Barstool		—				—				—				923.2
Total operating expenses		1,717.1				1,703.8				6,505.6				7,053.1
Operating income (loss)		(48.1	)			(308.4	)			72.5				(690.2	)
Other income (expenses)
Interest expense, net		(113.6	)			(118.6	)			(470.5	)			(464.7	)
Interest income		4.4				9.8				23.6				40.3
Income from unconsolidated affiliates		6.0				8.3				28.1				25.3
Gain on Barstool Acquisition, net		—				—				—				83.4
Gain on REIT transactions, net		—				—				—				500.8
Loss on early extinguishment of debt		(0.3	)			—				(0.3	)			—
Other		2.8				1.0				5.3				5.5
Total other income (expenses)		(100.7	)			(99.5	)			(413.8	)			190.6
Loss before income taxes		(148.8	)			(407.9	)			(341.3	)			(499.6	)
Income tax benefit		15.0				49.1				28.0				8.2
Net loss		(133.8	)			(358.8	)			(313.3	)			(491.4	)
Less: Net loss attributable to non-controlling interest		0.5				0.7				1.8				1.4
Net loss attributable to PENN Entertainment, Inc.	$	(133.3	)		$	(358.1	)		$	(311.5	)		$	(490.0	)
Loss per share:
Basic loss per share	$	(0.88	)		$	(2.37	)		$	(2.05	)		$	(3.22	)
Diluted loss per share	$	(0.88	)		$	(2.37	)		$	(2.05	)		$	(3.22	)
Weighted-average common shares outstanding—basic		152.2				151.3				152.1				152.1
Weighted-average common shares outstanding—diluted		152.2				151.3				152.1				152.1

Selected Financial Information and GAAP to Non-GAAP Reconciliations
(in millions, unaudited)	December 31, 2024				December 31, 2023
Cash and cash equivalents	$	706.6			$	1,071.8
Total traditional debt	$	2,596.1			$	2,643.7
Less: Cash and cash equivalents		(706.6	)			(1,071.8	)
Traditional net debt (1)	$	1,889.5			$	1,571.9
Amended Revolving Credit Facility due 2027	$	—			$	—
Amended Term Loan A Facility due 2027		481.3				508.8
Amended Term Loan B Facility due 2029		975.0				985.0
5.625% Notes due 2027		400.0				400.0
4.125% Notes due 2029		400.0				400.0
2.75% Convertible Notes due 2026		330.5				330.5
Other long-term obligations		9.3				19.4
Total traditional debt		2,596.1				2,643.7
Financing obligation (2)		201.2				154.1
Less: Debt discounts and debt issuance costs		(26.6	)			(32.2	)
	$	2,770.7			$	2,765.6
Total traditional debt	$	2,596.1			$	2,643.7
Less: Cash and cash equivalents		(706.6	)			(1,071.8	)
Plus: Cash rent payments to REIT landlords for the trailing twelve months (3)		7,603.2				7,502.4
	$	9,492.7			$	9,074.3
Adjusted EBITDAR for the trailing twelve months	$	1,292.3			$	1,512.6
Lease-adjusted net leverage ratio (1)	7.3x				6.0x
Traditional net leverage (1)	5.5x				2.7x

(1)	See “Non-GAAP Financial Measures” section below for more information as well as the definitions of Traditional net debt, Lease-adjusted net leverage ratio, and Traditional net leverage.
(2)	Represents cash proceeds received and non-cash interest on certain claims of which the principal repayment is contingent and classified as a financing obligation under Accounting Standards Codification Topic 470, “Debt.”
(3)	Amount equals 8 times the total cash rent payments to REIT landlords for the trailing twelve months.

Cash Flow Data

The table below summarizes certain cash expenditures incurred by the Company.

	For the quarter ended December 31,							For the year ended December 31,
(in millions, unaudited)		2024				2023			2024				2023
Cash payments to our REIT Landlords under Triple Net Leases	$	239.4			$	235.4		$	950.4			$	937.8
Cash payments (refunds) related to income taxes, net	$	(2.7	)		$	—		$	(3.8	)		$	73.9
Cash paid for interest on traditional debt	$	25.6			$	34.7		$	154.3			$	162.6
Capital expenditures	$	221.0			$	152.2		$	482.7			$	360.0

Non-GAAP Financial Measures

The Non-GAAP Financial Measures used in this press release include Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDAR margin, Adjusted EPS, Traditional net debt, Traditional net leverage ratio, and Lease-adjusted net leverage ratio. These non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

We define Adjusted EBITDA as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of deductible charges, changes in the estimated fair value of our contingent purchase price obligations, gain or loss on disposal of assets, the difference between budget and actual expense for cash-settled stock-based awards, pre-opening expenses, loss on disposal of a business, non-cash gains/losses associated with REIT transactions, non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 “Business Combinations,” and other. Adjusted EBITDA is inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as interest expense, net, income taxes, depreciation and amortization, and stock-based compensation expense) added back for Barstool (prior to our acquisition of Barstool on February 17, 2023) and our Kansas Entertainment, LLC joint venture. Adjusted EBITDA is inclusive of rent expense associated with our triple net operating leases with our REIT landlords. Although Adjusted EBITDA includes rent expense associated with our triple net operating leases, we believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our consolidated results of operations.

Adjusted EBITDA has economic substance because it is used by management as a performance measure to analyze the performance of our business, and is especially relevant in evaluating large, long-lived casino-hotel projects because it provides a perspective on the current effects of operating decisions separated from the substantial non-operational depreciation charges and financing costs of such projects. We present Adjusted EBITDA because it is used by some investors and creditors as an indicator of the strength and performance of ongoing business operations, including our ability to service debt, and to fund capital expenditures, acquisitions, and operations. These calculations are commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare operating performance and value companies within our industry. In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including us, have historically excluded from their Adjusted EBITDA calculations certain corporate expenses that do not relate to the management of specific casino properties. However, Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP. Adjusted EBITDA information is presented as a supplemental disclosure, as management believes that it is a commonly used measure of performance in the gaming industry and that it is considered by many to be a key indicator of the Company’s operating results.

We define Adjusted EBITDAR as Adjusted EBITDA (as defined above) plus rent expense associated with triple net operating leases (which is a normal, recurring cash operating expense necessary to operate our business). Adjusted EBITDAR is presented on a consolidated basis outside the financial statements solely as a valuation metric. Management believes that Adjusted EBITDAR is an additional metric traditionally used by analysts in valuing gaming companies subject to triple net leases since it eliminates the effects of variability in leasing methods and capital structures. This metric is included as a supplemental disclosure because (i) we believe Adjusted EBITDAR is traditionally used by gaming operator analysts and investors to determine the equity value of gaming operators and (ii) Adjusted EBITDAR is one of the metrics used by other financial analysts in valuing our business. We believe Adjusted EBITDAR is useful for equity valuation purposes because (i) its calculation isolates the effects of financing real estate; and (ii) using a multiple of Adjusted EBITDAR to calculate enterprise value allows for an adjustment to the balance sheet to recognize estimated liabilities arising from operating leases related to real estate. However, Adjusted EBITDAR when presented on a consolidated basis is not a financial measure in accordance with GAAP, and should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net income because it excludes the rent expense associated with our triple net operating leases and is provided for the limited purposes referenced herein. Adjusted EBITDAR margin is defined as Adjusted EBITDAR on a consolidated basis (as defined above) divided by revenues on a consolidated basis. Adjusted EBITDAR margin is presented on a consolidated basis outside the financial statements solely as a valuation metric.

Adjusted EPS is diluted earnings or loss per share adjusted to exclude gains/losses on the disposal of a business; non-cash gains/losses associated with REIT transactions; non-cash gains/losses associated with partial and step acquisitions as measured in accordance with ASC 805 Topic “Business Combinations;” impairment losses; pre-opening expenses; debt extinguishment charges; gains/losses on the disposal of assets; foreign currency gains/losses; transaction related expenses; business interruption insurance proceeds; net gains/losses related to equity investments; and other.

Adjusted EPS is a non-GAAP measure and is presented solely as a supplemental disclosure to reported GAAP measures because management believes this measure is useful in providing period-to-period comparisons of the results of the Company’s operations to assist investors in reviewing the Company’s operating performance over time. Management believes it is useful to exclude certain items when comparing current performance to prior periods because these items can vary significantly depending on specific underlying transactions or events. Further, management believes certain excluded items may not relate specifically to current operating trends or be indicative of future results. Adjusted EPS should not be construed as an alternative to GAAP earnings per share as an indicator of the Company’s performance.

We calculate Traditional net debt as Total traditional debt, which is the principal amount of debt outstanding (excludes the financing obligation associated with cash proceeds received and non-cash interest on certain claims of which the principal repayment is contingent) less Cash and cash equivalents. Management believes that Traditional net debt is an important measure to monitor leverage and evaluate the balance sheet. With respect to Traditional net debt, Cash and cash equivalents are subtracted from the GAAP measure because they could be used to reduce the Company’s debt obligations. A limitation associated with using Traditional net debt is that it subtracts Cash and cash equivalents and therefore may imply that there is less Company debt than the most comparable GAAP measure indicates. Management believes that investors may find it useful to monitor leverage and evaluate the balance sheet.

The Company’s Traditional net leverage ratio is defined as Traditional net debt (as defined above) divided by Adjusted EBITDAR (as defined above) for the trailing twelve months less cash rent payments to REIT landlords for the trailing twelve months. Management believes this measure is useful as a supplemental measure and provides an indication of the results generated by the Company in relation to its level of indebtedness with the cash generated from Company operations.

The Company’s Lease-adjusted net leverage ratio’s numerator is calculated as cash rent payments to REIT landlords for the trailing twelve months capitalized at 8 times plus Traditional net debt (as defined above). The Company’s Lease-adjusted net leverage ratio’s denominator is Adjusted EBITDAR (as defined above) for the trailing twelve months. Management believes this measure is useful as a supplemental measure and provides an indication of the results generated by the Company in relation to its level of indebtedness (including leases) with the cash generated from Company operations.

Each of these non-GAAP financial measures is not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure of comparing performance among different companies. See the tables above, which present reconciliations of these measures to the GAAP equivalent financial measures.

Management Presentation, Conference Call, Webcast and Replay Details

PENN is hosting a conference call and simultaneous webcast at 9:00 a.m. E.T. today, both of which are open to the general public. During the call, management will review a presentation regarding the quarter and recent developments that can be accessed at http://investors.pennentertainment.com/events-and-presentations/presentations.

The conference call number is 203-518-9783; please call five minutes in advance to ensure that you are connected prior to the presentation. Interested parties may also access the live call at www.pennentertainment.com; allow 15 minutes to register and download and install any necessary software. Questions and answers will be reserved for call-in analysts and investors. A replay of the call can be accessed for thirty days at http://www.pennentertainment.com/corp/investors.

This press release, which includes financial information to be discussed by management during the conference call and disclosure and reconciliation of non-GAAP financial measures, is available on the Company’s web site, http://www.pennentertainment.com/corp/investors (select link for “Press Releases”).

About PENN Entertainment, Inc.

PENN Entertainment, Inc., together with its subsidiaries (“PENN,” or the “Company”), is North America’s leading provider of integrated entertainment, sports content, and casino gaming experiences. PENN operates in 28 jurisdictions throughout North America, with a broadly diversified portfolio of casinos, racetracks, and online sports betting and iCasino offerings under well-recognized brands including Hollywood Casino®, L’Auberge®, ESPN BET™, and theScore BET Sportsbook and Casino®. PENN’s ability to leverage its partnership with ESPN, the “worldwide leader in sports,” and its ownership of theScore™, the top digital sports media brand in Canada, is central to the Company’s highly differentiated strategy to expand its footprint and efficiently grow its customer ecosystem. PENN’s focus on organic cross-sell opportunities is reinforced by its market-leading retail casinos, sports media assets, and technology, including a proprietary state-of-the-art, fully integrated digital sports and iCasino betting platform, and an in-house iCasino content studio (PENN Game Studios). The Company’s portfolio is further bolstered by its industry-leading PENN Play™ customer loyalty program, offering its approximately 32 million members a unique set of rewards and experiences.

Forward Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “projects,” “intends,” “plans,” “goal,” “seeks,” “may,” “will,” “should,” or “anticipates” or the negative or other variations of these or similar words, or by discussions of future events, strategies or risks and uncertainties. Specifically, forward-looking statements include, but are not limited to, statements regarding: the Company’s expectations of future results of operations and financial condition, including, but not limited to, projections of revenue, Adjusted EBITDA, Adjusted EBITDAR and other financial measures; the assumptions provided regarding the guidance, including the scale and timing of the Company’s product and technology investments; the Company’s expectations regarding results and customer growth and the impact of competition in retail/mobile/online sportsbooks, iCasino, social gaming, and retail operations; the Company’s development and launch of its Interactive segment’s products in new jurisdictions and enhancements to existing Interactive segment products, including the content for the ESPN BET and theScore BET and the further development of ESPN BET and theScore BET on our proprietary player account management system and risk and trading platforms; the benefits of the Sportsbook Agreement between the Company and ESPN; the Company’s expectations regarding its Sportsbook Agreement with ESPN and the future success of ESPN BET; the Company’s expectations with respect to the integration and synergies related to the Company’s integration of theScore and the continued growth and monetization of the Company’s media business; the Company’s expectations that its portfolio of assets provides a benefit of geographically-diversified cash flows from operations; management’s plans and strategies for future operations, including statements relating to the Company’s plan to expand gaming operations through the implementation and execution of a disciplined capital expenditure program at our existing properties, the pursuit of strategic acquisitions and investments, and the development of new gaming properties, including the development projects and the anticipated benefits; improvements, expansions, or relocations of our existing properties; entrance into new jurisdictions; expansion of gaming in existing jurisdictions; strategic investments and acquisitions; cross-sell opportunities between our retail gaming, online sports betting, and iCasino businesses; our ability to obtain financing for our development projects on attractive terms; the timing, cost and expected impact of planned capital expenditures on the Company’s results of operations; and the actions of regulatory, legislative, executive, or judicial decisions at the federal, state, provincial, or local level with regard to our business and the impact of any such actions.

Such statements are all subject to risks, uncertainties and changes in circumstances that could significantly affect the Company’s future financial results and business. Accordingly, the Company cautions that the forward-looking statements contained herein are qualified by important factors that could cause actual results to differ materially from those reflected by such statements. Such factors include: the effects of economic and market conditions in the markets in which the Company operates or otherwise, including the impact of global supply chain disruptions, price inflation, rising interest rates, slowing economic growth, and geopolitical and regulatory uncertainty; competition with other entertainment, sports content, and gaming experiences; the timing, cost and expected impact of product and technology investments; risks relating to operations, permits, licenses, financings, approvals and other contingencies in connection with growth in new or existing jurisdictions; our ability to successfully acquire and integrate new properties and operations and achieve expected synergies from acquisitions; the availability of future borrowings under our Amended Credit Facilities or other sources of capital to enable us to service our indebtedness, make anticipated capital expenditures or pay off or refinance our indebtedness prior to maturity; the impact of indemnification obligations under the Barstool SPA; our ability to achieve the anticipated financial returns from the Sportsbook Agreement with ESPN, including due to fees, costs, taxes, or circumstances beyond the Company’s or ESPN’s control; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the Company and ESPN to terminate the Sportsbook Agreement between the companies; the ability of the Company and ESPN to agree to extend the initial 10-year term of the Sportsbook Agreement on mutually satisfactory terms, if at all, and the costs and obligations of such terms if agreed; the outcome of any legal proceedings that may be instituted against the Company, ESPN or their respective directors, officers or employees; the ability of the Company or ESPN to retain and hire key personnel; the impact of new or changes in current laws, regulations, rules or other industry standards; the impact of activist shareholders; our ability to maintain our gaming licenses and concessions and comply with applicable gaming law, changes in current laws, regulations, rules or other industry standards, and additional factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the U.S. Securities and Exchange Commission. The Company does not intend to update publicly any forward-looking statements except as required by law. Considering these risks, uncertainties and assumptions, the forward-looking events discussed in this press release may not occur.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250227740023/en/

Mike Nieves

SVP, Finance & Treasurer

PENN Entertainment, Inc.

610-373-2400

Joseph N. Jaffoni, Richard Land

JCIR

212-835-8500 or penn@jcir.com

Source: PENN Entertainment, Inc.

FAQ

How much will PENN Entertainment's share buyback program be worth in 2025?

PENN Entertainment plans to repurchase at least $350 million worth of shares in 2025.

What was PENN's property-level revenue and EBITDAR in Q4 2024?

PENN reported property-level revenues of $1.4 billion and Adjusted EBITDAR of $461.2 million in Q4 2024.

How much did PENN's iCasino business grow in Q4 2024?

PENN's online casino business achieved over 60% year-over-year growth in Q4 2024.

What was PENN Entertainment's total liquidity at the end of 2024?

PENN's total liquidity was $1.7 billion, including $706.6 million in cash and cash equivalents.