• Retail Revenue: $1.4 billion for Q4 2024.
• Adjusted EBITDAR: $461 million for Q4 2024.
• Interactive Adjusted Revenues: $142 million for Q4 2024.
• Interactive Adjusted EBITDA: Loss of $109.8 million for Q4 2024.
• CapEx: $221 million total for Q4 2024, with $122 million for project CapEx.
• Total Liquidity: $1.7 billion, including $707 million in cash and cash equivalents.
• 2025 Retail Revenue Guidance: $5.6 billion to $5.75 billion.
• 2025 EBITDAR Guidance: $1.85 billion to $1.95 billion.
• 2025 Interactive Revenue Guidance: $1.25 billion to $1.75 billion.
• 2025 Interactive EBITDA Guidance: Loss of $200 million to $100 million.
• 2025 Total CapEx Expectation: $730 million, including $490 million for project CapEx.
• Net Cash Interest Expense for 2025: Approximately $150 million.
• Net Cash Taxes for 2025: Roughly $70 million.

• Warning! GuruFocus has detected 6 Warning Signs with PENN.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• PENN Entertainment Inc (NASDAQ:PENN) announced a $350 million share repurchase plan for 2025, highlighting confidence in their growth prospects.
• The company reported strong performance in its core Retail business, with consistent market share growth in regional markets.
• PENN's digital segment is gaining momentum, particularly in Canada, where Ontario is the top market in North America for revenues and gross profit.
• The launch of standalone Hollywood iCasino products in Pennsylvania and Michigan has shown promising early results, with significant market share gains.
• PENN's partnership with ESPN BET is showing early signs of success, with plans for deeper integration and enhanced user experiences in 2025.

Negative Points

• The Interactive segment reported a loss of $109.8 million in adjusted EBITDA for the fourth quarter, impacted by customer-friendly sports betting results.
• PENN faces competitive pressures from new supply in markets like Council Bluffs, Chicagoland, and Louisiana, which could impact future performance.
• Weather events have negatively affected performance in early 2025, particularly in the Midwest and Northeast regions.
• The company has yet to achieve profitability in its digital segment, with expectations to approach breakeven only by the end of 2025.
• PENN's market share in sports betting is not yet at the desired level, requiring further improvements and optimizations in partnership with ESPN.

Q & A Highlights

Q: Can you discuss the financing strategy for the Illinois projects and the timing of the second financing with GLPI? A: Felicia Hendrix, CFO, explained that the financing will likely occur close to the opening of the projects to avoid incurring rent before generating EBITDAR. This approach is intended to align financing with operational revenue generation.

Q: How is the OSB business expected to perform in 2025, and what are the strategic plans if targets are not met? A: Jay Snowden, CEO, stated that the company expects improvements in market share for both sports betting and iCasino throughout 2025. If targets are not met, operational levers, including marketing spend adjustments and cost structure changes, will be considered. The partnership with ESPN is crucial, and both parties aim to be in a strong position by the third anniversary of their agreement.

Q: What is the expected ramp-up for the land-based renovation projects, and are there more opportunities like these? A: Jay Snowden, CEO, and Todd George, EVP of Operations, noted that the ramp-up for these projects is expected to be quick due to existing infrastructure and active databases. Additional projects, such as moving from water-based to land-based facilities, are being considered, with Council Bluffs as a potential candidate.

Q: How does PENN plan to address potential gaming tax increases, and what are the alternatives? A: Jay Snowden, CEO, emphasized the importance of engaging with states to find solutions other than tax increases. Alternatives include addressing illegal gaming competition and considering the introduction of sports betting or online casino options in certain states to generate additional tax revenue.

Q: Can you provide insights into the market share expectations for ESPN BET and Hollywood iGaming, and how are these progressing? A: Jay Snowden, CEO, reported that iGaming has shown promising early results, with market share gains in Pennsylvania and Michigan. Sports betting market share is expected to grow more gradually. The company aims to end the year with increased market share in both segments, supported by product enhancements and strategic partnerships.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.