Caesar's emphasizes the influence of its New Orleans and Virginia locations, along with its collective Vegas business.
Loosened Leash on Caesars: Q4 2024 Earnings Roar
(Buck Wargo, our no-holds-barred guide)
📢🎈 Spread the Word 🎈📢
Caesars Entertainment let loose with its Q4 2024 financial fists this week, kicking off the New Year with a bang. With the grand opening of Caesars New Orleans in October and the stellar debut of Caesars Virginia in December, the gambling giant showcased unbridled expansion.
Las Vegas, the gambling capital of the world, held steady despite flat year-over-year earnings. But don't fret, Vegas central, those numbers are set to balloon as 2025 unfurls, thanks to a swell of group business, Caesars promised.
With a flutter of confidence, COO and President Anthony Carano shared the deets: 4Q net revenues hit $1.1 billion, adjusted EBITDAR came in at a respectable $478 million. While a 1% dip compared to '23 isn't groundbreaking, Carano declared himself pleased, especially considering the city-shaking F1 race in '23.
Margins lingered at 44.4%, and occupancy dipped ever so slightly to 96%, but group business proved a powerful force, representing 16% of occupied room nights. And recent investments in Vegas rooms and gaming offerings? Reaped some of the strongest returns in the portfolio's history, baby!
In the regional segment, 4Q net revenues plummeted 1%, and adjusted EBITDAR took a 5% nosedive. But fear not, champion, as Carano pointed out sequential improvements in the EBITDAR decline versus Q2 and Q3. Two new properties, fresh as a daisy in New Orleans and Danville, propelled this run.
Carano declared 2024 the end of an ambitious capital-investment cycle, with projects completed providing "meaningful contributions" in 2025 and beyond. The company, skating through competitive pressures in its regional segment, expects a major boost in free cash flow in 2025 and 2026.
CEO Tom Reeg boasted pride over Vegas' fourth-quarter performance compared to the previous year. Despite the absence of the F1 business, cash room revenue was down less than 1%, food and beverage revenue smashed records, and slot coin-in achieved an all-time high.
The regional segment faced fresh competitive threats, but Reeg, unfazed, stands on the front lines, granting battleground markets a hefty dose of investment. And, he encourages you to keep an eye on state revenue reports from Iowa and Indiana, revealing a captivating battle for market share.
Virginia, lauded as exceeding expectations, doubled revenue after doubling capacity, while New Orleans enjoyed a "spectacular Super Bowl," albeit marred by a terror attack on New Year's Eve and unseasonable snowfall. Reeg insists they remain optimistic about regional properties in 2025 and expects 2026 to be even better.
Reeg is also stoked about Caesars Digital, expectantly piling yesteryears' success onto newer milestones. While 2025 might see a slight blip without the Super Bowl, a return to normal holds should smooth out the dip and group business is anticipated to rise, both in '25 and '26.
Eric Hession, President of Caesars Sports & Online Gaming, relayed stunning year-over-year net revenue growth, totaling $1.2 billion in '24, up a whopping 20%. Adjusted EBITDAR increased from $38 million to $117 million. The holiday season, however, resulted in lackluster hold, but Hession maintains confidence in another strong year of revenue and EBITDAR growth, guiding Caesars towards its coveted $500 million EBITDAR goal.
Finally, CFO Bret Yunker shared the spoils of non-core asset sales, used to offload $500 million in debt and purchase 5.1 million shares for $190 million, averaging a modest $37 per share. All in all, what a wild ride for Caesars Entertainment as they stormed through Q4 2024 with unapologetic grit and continue boldly into '25! 🤩🎲💰
- Buck Wargo's upcoming guide promising in-depth analysis of the booming casino culture in Las Vegas, focusing on casino personalities and the latest trends in casino-games offered at Strip casinos.
- In the heated casino-and-gambling landscape, Caesars Digital is expected to launch innovative programs in 2025, bolstering its presence in the digital casino arena and competing with other major casino-culture players in the industry.
