Growth in China and Las Vegas drives MGM’s revenue to $4.38 billion in the first quarter

In the three months to March 31, group revenue rose 13.2% year-on-year. This was because MGM’s operations in China and Las Vegas more than offset the decline in regional business.

Casino revenue was down slightly in the first quarter, but Las Vegas remains MGM’s main source of revenue. However, his 10.0% increase in hotel revenue more than made up for this, with revenue setting a new record high for the quarter.

Records were also broken in China, with first-quarter revenue reaching an all-time high. MGM has continued to grow and recover in China since all pandemic-related restrictions were lifted in early 2023.

The news wasn’t so good for its regional business, which includes BetMGM’s joint venture with Entain. Severe weather across the United States during the first quarter negatively impacted revenue. However, when it comes to the outlook, the operator is much more optimistic, speaking about its current growth and future prospects.

“Obviously, when we use the term record first quarter, and if you look at the recent press coverage, we’re very excited about that,” MGM CEO and President Bill Hornbuckle said. I’m excited and pretty satisfied.”

“This speaks to the diversity of our business and our four key pillars: Las Vegas, our regional assets and Macau, which we believe is ultimately a digital business.”

Business MGM aims to become independent in its digital business

Hornbuckle further elaborated on the digital space, stating that BetMGM’s ultimate goal is to become self-sustaining with all products and functionality in-house.

BetMGM grew further as a brand in Q1lived in north carolinaand Charlotte Motor Speedway. Hornbuckle also talked about his success with BetMGM in the UK, while things are improving with his LeoVegas in Sweden and, as Hornbuckle says, on the rebound.

Additionally, this week BetMGM announced:Released in the NetherlandsAs part of our ongoing expansion strategy.

“The whole relicensing process happened there and it cost everyone, including us. That was their main market,” Hornbuckle said. “So LeoVegas is on the road to recovery. BetMGM UK, which we talked about last quarter, is doing very well. We’ve established a solid presence there. And also what we’re excited about. And yesterday, BetMGM’s first soft launch took place in the Netherlands.

“Overall, our digital strategy remains the same. At some point, we hope to make all functions of the site autonomous, including the creation of our own games and products.”

Business First quarter casino revenue exceeds $2.24 billion

A complete analysis of the first quarter’s results shows that the majority of MGM’s revenue came from casino operations in all regions. Here, revenue increased 19.1% year over year to $2.24 billion.

Room revenue also increased 12.7% to $956.4 million, and food and beverage revenue increased 6.6% to $769.4 million. Entertainment, retail and other revenue fell 1.3% to $404.4 million, while MGM also recorded redemption costs of $12.2 million.

Looking at segment performance, Las Vegas Strip revenue increased 3.6% to $2.26 billion. Casino revenue fell slightly to his $498 million as slot handles and wins declined, but this was helped by an increase in table game handles and subsequent wins.

As for Las Vegas hotel revenue, it increased 10.0% to $827 million in the first quarter. The occupancy rate increased from 92.0% to 93.0%, and the average daily rate also increased to $277.

Turning to our regional business, sales were down 4.5% to $685 million. Table games and slots wins are both down year-over-year, with slots reporting the largest decline. MGM said the decline was partially due to adverse weather conditions in some U.S. markets during the first quarter.

For MGM China, sales increased 71.0% to $1.06 billion. This was mainly due to a 65.8% increase in casino revenue as the region returned to normal operations after the COVID-19 measures were lifted in January 2023.

Goldstrike Tunica sale impacts competitors’ profits

Looking at first quarter spending, operating costs increased 27.2% to $3.9 billion. MGM’s main expense was casino costs of $1.27 billion, closely followed by general and administrative expenses of $1.19 billion.

MGM reported an additional $115 million in non-operating expenses, including $110 million worth of interest expense. As a result, the group’s pre-tax profit decreased by 46.8% year-on-year to $343.4 million.

This decline is partly due toSold operation of Gold Strike Tunica Resort in MississippiThis sale generated additional cash for MGM in the prior year period.

Back in the first quarter of this year, MGM paid $43.7 million in income taxes and recorded an $82.3 million loss on noncontrolling interests. As a result, net income amounted to $217.5 million, a decrease of 53.4% ​​from the first quarter of 2023. This is also partly due to the Gold Strike Tunica deal.

Consolidated adjusted EBITDA reached $1.23 billion. No comparable figures are shown.

“The bottom line is you’ve probably heard me use this word before, and perhaps more than any other quarter, the words product diversification and business diversification have been loud and clear. I think it showed,” Hornbuckle said.

“Obviously, Macau had strong growth this quarter. Las Vegas held its own. Locals are also recovering. And the digital business is well funded and ultimately I look forward to seeing what you can do.”

Business Analysts remain ‘bullish’ on MGM

MGM’s first quarter EBITDA was 2% above Macquarie Group analysts’ expectations, with MGM shares currently trading at around 5.7 times the group’s 2025 forecast for MGM’s EBITDA. Additionally, his MGM’s EBITDA for the first quarter exceeded Trust Securities’ expectations by 3% and exceeded Wall Street’s expectations by 5%. Net revenue also exceeded Trust’s and Wall Street’s expectations.

McCauley cited MGM’s 58% exposure in Las Vegas as a key factor in maintaining his “bullish” outlook on MGM’s performance. MGM owns more land on the Las Vegas Strip than any other operator.

“In Las Vegas, MGM is located in the world’s sports/entertainment capital and stands out for its luxury offerings,” McCauley said in an analyst note.

Additionally, Trust said MGM China “outperformed” MGM’s expectations, exceeding Trust’s first-quarter EBITDA estimates by 6%. The Trust also expects MGM’s land operations to continue to see “steady” growth, and expects Las Vegas to be on the upswing because of that. Partnered with hotel giant Marriott International.

Meanwhile, McCauley cited MGM’s strong balance sheet and lofty goal of becoming a global digital leader as reasons for his confidence in the future of MGM, which is well-positioned to grow its digital business in New York and Japan as well as in New York. emphasized.

The Trust maintained MGM’s rating at “buy” and made only minor adjustments to its model, with no major changes to its forecast. Both Trust and Macquarie maintained their price targets at $58.

But Mr. McCauley pointed to unexpectedly high marketing spending and the fact that it is becoming more expensive to maintain market share in the U.S. as potential risks the company faces going forward.