Robin Farley

Robin Farley inquired about the new Discovery Class ship order, its potential size and impact on pricing, and whether the recent low net cruise costs are sustainable or due to dry dock timing.

Answer

President and CEO of Royal Caribbean International Michael Bayley stated that the Discovery Class will be a 'game changer' with details to be shared later, noting current assumptions on size are inaccurate. CFO Naftali Holtz affirmed that low net cruise costs are sustainable, driven by scale leverage and disruptive technologies like AI. Chairman and CEO Jason Liberty added that AI enhances guest experience, employee efficiency, and drives higher margins.

Robin Farley inquired about the new Discovery Class ship order, specifically its potential size, deployment in higher-yielding destinations, and trade-offs. She also asked about the sustainability of the incredibly low Net Cruise Costs growth seen over the past two years.

Answer

Michael Bayley, President and CEO of Royal Caribbean International, stated that the Discovery Class will be a 'game changer' but declined to provide specific details on size or capacity, noting current assumptions are inaccurate. Naftali Holtz, CFO, explained that low Net Cruise Costs growth is sustainable due to leveraging the business's scale (6.7% capacity growth, becoming an $8 billion company) and utilizing disruptive technologies like AI and GenAI for efficiency without compromising product quality. Jason Liberty, Chairman and CEO, added that AI enhances guest experience, empowers employees, and drives higher margins through operational improvements like supply chain and yield management.

Robin Farley of UBS Group AG questioned the change in the full-year yield guidance, specifically why the top end of the range was brought down despite positive commentary. She also asked if the growth in onboard spend is still outpacing the growth in ticket prices.

Answer

President & CEO Jason Liberty explained that the previous wider guidance range was established during a period of significant geopolitical noise, and the current, tighter range reflects a return to historical forecasting practices for this point in the year. He noted that continued strength in close-in demand could lead to results at the top end or better. Regarding spending, Liberty stated that trends for ticket and onboard revenue are very similar, with both competing against strong comps. He added that the increasing volume of pre-cruise purchases continues to be a tailwind, as guests who buy in advance spend about 2.5 times more overall.

Robin Farley asked about the implications of strong April bookings on the 2026 booking curve and whether the current load factor for 2026 is still historically high. She also asked for clarification on a slight reduction in the 2026 capacity growth rate.

Answer

CEO Jason Liberty confirmed April's strength applies to all future bookings and explained that the 2026 booked position is intentionally 'in line' with the prior year to avoid being 'too booked' and to allow for future revenue optimization. CFO Naftali Holtz clarified the 2026 capacity change is a minor 30 basis point adjustment due to rounding and refinements in dry dock and delivery schedules.

Robin Farley from UBS inquired about the Celebrity River Cruise launch, asking about the timeline for ordering additional ships, the build cost per berth compared to ocean vessels, and the expected yield premium for the more inclusive river product.

Answer

CEO Jason Liberty indicated they would not wait until the 2027 launch to order more ships, calling the current 10-ship plan an 'initial order.' He noted that while the cost per berth is elevated, the total capital is significantly less than one ocean liner. He confirmed the river product is expected to be a yield tailwind with a strong margin and ROIC profile, though it will have seasonal operations.

Robin Farley asked if the 2025 outlook is positioned to be better than the typical pre-pandemic initial yield guidance of 3-4%. She also inquired about the company's ship order book, asking when they might be considered 'done ordering' for the medium term.

Answer

CEO Jason Liberty acknowledged that while it's too early for specific 2025 guidance, her characterization of the historical 3-4% initial guidance was 'more or less' accurate. Regarding the order book, he stated that orders are largely set through 2027 and possibly into 2028, but the company has options available and remains committed to a strategy of moderate capacity growth distributed across its global brands and markets.

Robin Farley followed up on Singapore's continued outperformance, asking if there are any gating issues or natural limits to how much further the building's performance can grow.

Answer

Rob Goldstein, Chairman and CEO, admitted the company has been poor at forecasting MBS's potential, consistently underestimating it. He attributed the success to Singapore's appeal, government support, the upgraded building, service levels, and a diverse, growing customer base, expressing strong belief in its sustainable future without providing specific growth forecasts.

Robin Farley questioned the sustainability of Macau's recent GGR acceleration, suggesting it might be heavily dependent on a temporary events calendar. As a follow-up, she asked if the company was considering revising its normalized hold percentage assumption for Singapore after the quarter's strong results.

Answer

Grant Chum, President & CEO of Sands China, responded that the events calendar in Macau is consistently being filled by all operators, establishing the city as a regional entertainment hub. Chairman & CEO Robert Goldstein added that events often rearrange visitation rather than create new demand, and the market's underlying strength is the more important factor. Regarding Singapore's hold, Goldstein stated they would not adjust the normalized hold percentage based on one quarter, as it's a moving target dependent on game mix and player behavior.

Speaking on behalf of Robin Farley, an analyst from UBS asked for an outlook on the Chinese consumer, holiday booking trends, and the potential for the base mass segment to return to pre-COVID levels. A follow-up question concerned the impact of potential iGaming legalization on the returns of a New York casino.

Answer

President and COO Patrick Dumont and Chairman and CEO Robert Goldstein expressed strong confidence in the Macau market's growth to $30 billion, supported by their ongoing investments. They believe the base mass segment will return, though the timing is uncertain. Regarding New York, Robert Goldstein acknowledged it as a strong market but shared significant concern that the 'inevitable' introduction of iGaming could dilute the value of a land-based casino.

Robin Farley asked about the observed pressure on luxury spending among Chinese consumers and its potential overlap with LVS's premium mass segment, and followed up by asking if recent government stimulus could accelerate the recovery of the base mass market.

Answer

Chairman and CEO Robert Goldstein highlighted Macao gaming's resilience and double-digit growth, which has not followed the negative trend seen in luxury retail. He, along with Sands China CEO Grant Chum, noted it was too early to predict the impact of stimulus measures, emphasizing that Macao's outperformance has been driven by the premium segment, with a base mass recovery representing significant future upside.

Robin Farley questioned the 12-month ramp-up timeline for the Londoner, its impact on Q1 market share, and what the Macao government seeks in terms of non-gaming investments from concessionaires.

Answer

President and COO Patrick Dumont clarified that Q1 results were impacted by not having the full room inventory available. CEO and President of Sands China Grant Chum added that the 12-month timeline reflects a gradual optimization process and acknowledged a Q1 market share loss they intend to reverse. Regarding non-gaming investment, Chum mentioned projects like the Venetian arena upgrade, while Executive Vice Chairman Dr. Wilfred Wong noted the government is encouraging specialization among operators and coordinating the use of additional investment funds.

Robin Farley asked about the EPS drag from Slingshot after the Indian separation and a broader question regarding the company's portfolio strategy. She followed up by asking if mix, particularly with the Ranger 500, would be a benefit or drag on 2026 margin guidance.

Answer

Michael Speetzen (CEO, Polaris Inc.) affirmed 'zero intention of divesting the marine business,' citing its strong performance and strategic value. He stated Slingshot, Polaris's most interest-rate-sensitive business, has been unprofitable (though not material to the company) but has an aggressive plan for improvement, including a product refresh cycle. Speetzen confirmed no major remaining portfolio moves. Bob Mack (CFO, Polaris Inc.) indicated mix is expected to be a headwind in 2026, citing strong NorthStar mix in 2025, the lower margin of the Ranger 500, and shifts in Marine and Snow. He noted that a slowing promotional environment and normal price increases would help offset this.

Robin Farley inquired about the potential EPS drag from the Slingshot business after the Indian Motorcycle separation and sought a broader update on Polaris's portfolio strategy. She also asked for clarification on Polaris's 2026 margin guidance, specifically whether product mix, considering the Ranger 500 and other factors, is expected to be a benefit or a drag.

Answer

CEO Mike Speetzen firmly stated Polaris has no intention of divesting its marine business, highlighting its strong performance and cash flow. Regarding Slingshot, he acknowledged it's their most interest-rate-sensitive business and has been unprofitable (though not material to the company), but an aggressive plan is in place for resolution, with expected improvements from product refreshes. He concluded that no major divestitures are planned. CFO Bob Mack stated that mix is expected to be a headwind in 2026, contrasting with the strong NorthStar mix in 2025. He cited the Ranger 500 as a margin headwind, along with marine's shift to retail (a GP headwind) and snow's recovery (structurally lower GPs). These headwinds are partially offset by an anticipated slowdown in promotional activity and normal model year price increases.

Robin Farley asked about the recurring benefits of favorable mix and positive warranty expense to margin in Q4 2025 and 2026, and inquired about early reads into the 2026 retail environment, factors shaping demand outlook, and initial comments on new product introduction cadence and Polaris's opportunity to grow above industry growth.

Answer

CEO Mike Speetzen confirmed that warranty improvements are a recurring positive trend for 2026 due to improved product quality. He also noted continued operational efficiencies from lean manufacturing, with more benefits expected as volume improves, and generally a positive mix story due to strong performance in high-end product lines. He stated that innovation cadence will not slow down, with plenty of opportunities in 2026, highlighting macro factors like inflation and interest rates as challenges but expecting rate cuts to benefit consumers. He anticipates customers from the pandemic-era bubble to return for repurchases and believes Polaris can grow even in a flat industry due to right-sized dealer inventory and innovation.

Robin Farley of UBS Group AG inquired about potential plans to optimize the U.S. dealer footprint and sought final clarification on whether the 2025 ORV retail outlook was closer to flat or slightly down.

Answer

CEO Mike Speetzen and CFO Bob Mack explained that Polaris uses a sophisticated, data-driven approach to continuously optimize its dealer footprint, focusing on coverage and quality over raw numbers. They reiterated that the expectation for the ORV industry in 2025 is to be slightly down, with Polaris aiming to hold share in a potentially volatile market due to competitor promotions.

Robin Farley sought clarification on the operational cost savings, asking how much was volume-dependent and what conditions were needed to realize the full benefit. She also asked if a flat retail environment in 2025 would translate to a roughly $2 EPS recovery due to increased shipments.

Answer

CFO Robert Mack clarified that of the $280M in savings, the non-volume-dependent portion ($210M) is already in the 2024 run rate. The remainder is tied to production, but a return in volume would also reverse a $140M negative absorption headwind. CEO Mike Speetzen declined to quantify a potential 2025 EPS recovery, reiterating that their 'flat' outlook for next year refers to shipments, implying retail could remain challenged, and that it's too early to provide specific 2025 guidance.

Robin Farley asked about Carnival's 2026 guidance, specifically whether the acceleration in onboard spend and strong close-in demand observed in Q4 2025 were fully factored in, or if they represent potential upside. She also inquired about the Q1 2026 booking position, particularly for Caribbean capacity, relative to typical levels.

Answer

President and CEO Josh Weinstein stated that the guidance reflects their best expectations at the time, acknowledging that the business environment changes daily. He noted that while they always aim to continue momentum in onboard spending and close-in bookings, the current guidance is their best estimate. For Q1 2026, he indicated that bookings are slightly better positioned than the previous year on the fringes, with not much left to book.

Robin Farley asked for clarification on Carnival's 'historic price levels' commentary, specifically if it implies prices are above previous records and if both European and North American sourcing brands are now at these record levels, suggesting an improvement for North America since the last quarter. She also inquired about quantifying Celebration Key's impact on forward bookings, such as any ticket price premium for itineraries calling at the island.

Answer

CEO Josh Weinstein clarified that both North America and Europe are indeed at historical record high pricing levels, with no dramatic shifts from the prior quarter, simply more comprehensive information being provided. Regarding Celebration Key, Mr. Weinstein expressed excitement about its impact, confirming it is meeting anticipated returns, including a nice chunk from ticket premiums, despite being only two months into operations.

Robin Farley from UBS inquired about the meaning of "historic price levels" for forward bookings, specifically if prices are above previous records, and sought clarification on whether North American sourcing brands had only recently reached these record levels compared to a quarter ago. She also asked for quantification of Celebration Key's impact on forward bookings, such as a premium in ticket price for itineraries calling there.

Answer

CEO Josh Weinstein clarified that both North America and Europe are currently at historical record high pricing levels, with no dramatic shifts from a quarter ago, simply more detailed disclosure. He stated that Celebration Key is meeting anticipated returns, including a nice chunk from ticket price premiums for itineraries visiting the destination, but it's still early days (two months into operations) to quantify further.

Robin Farley from UBS Group asked for clarification on Carnival's 'historic price levels' commentary for forward bookings, specifically if North American brands are now at record levels, and sought quantification of Celebration Key's impact on future yields and ticket prices.

Answer

CEO Josh Weinstein confirmed that both North American and European brands are achieving historical record high pricing. He stated that Celebration Key is meeting anticipated returns, including a premium on ticket prices for itineraries calling at the island, but specific quantification is still in early stages of operation.

Robin Farley inquired about the demand characteristics for European itineraries in Q3 and whether the resilience of onboard revenue, which performed well despite recent volatility, suggests potential for upside in the second half of the year.

Answer

CEO Josh Weinstein responded that demand for Europe in Q3 is "looking great." He confirmed that onboard spending was strong throughout the second quarter and has continued into the start of the third quarter. However, he noted that the current full-year guidance already incorporates their expectations for both ticket and onboard revenue performance for the remainder of the year.

Robin Farley asked for characterization of Q3 demand for European itineraries and questioned if there is potential for onboard revenue upside in the second half, given that onboard spending appeared resilient through recent volatility.

Answer

CEO Josh Weinstein responded that Q3 demand for Europe is "looking great." He confirmed that onboard spending was strong throughout the quarter and has continued into June. However, he noted that the current full-year guidance already incorporates expectations for both ticket and onboard revenue, while reiterating the goal is always to outperform.

Robin Farley from UBS asked if the decision to not raise yield guidance for the next three quarters, despite a strong Q1, was a sign of caution, implying potential upside if strong close-in and onboard trends persist. She also requested quantification of permanent structural cost savings.

Answer

CEO Josh Weinstein acknowledged the strength in Q1, noting that onboard spending accelerated to 10% year-over-year growth, and confirmed there could be upside if those trends continue. CFO David Bernstein specified that about one-third of the $65 million Q1 cost beat represented permanent savings, emphasizing the company's continuous search for efficiencies.

Robin Farley asked to what extent the potential upside from Celebration Key is included in the 2025 yield guidance. She also inquired about the potential EPS benefit from refinancing high-cost callable debt in the coming year.

Answer

CEO Josh Weinstein stated that the impact of Celebration Key is included in the guidance, but noted its effect in 2025 is limited as it will only feature on 5% of sailings, a figure set to grow to over 15% in 2026. CFO David Bernstein confirmed there is an opportunity to lower interest expense by refinancing debt, and that a small amount of savings is already factored into the forecast, but successful transactions could provide further upside.

Robin Farley asked if it was fair to say that Carnival is off to a better start for 2025 compared to a typical year, given the positive commentary on bookings. She also sought clarification on a potential one-time cost saving in 2024 that might not recur in 2025.

Answer

CEO Josh Weinstein directly confirmed, "we are starting off even better for '25 than we did for 2024," citing higher occupancy and higher prices. CFO David Bernstein clarified the expense question, stating that of the $100 million in cost benefits for the year, about $20 million was related to one-time items like pension credits.

Robin Farley asked about the impact of elevated non-current inventory and promotions from other OEMs on the overall ORV market, questioning if this represents a small percentage of the market and how much longer this pressure is expected to continue. She also sought BRP's view on the potential shakeout for ORV retail in the next 12 months.

Answer

CFO Sébastien Martel expects Q4 to remain a non-current market, with promotional activity from other OEMs, even on Model Year 2026 products, potentially continuing for a few more quarters, impacting overall profitability. He noted that demand for high-end products remains strong, but traffic for lower-end, entry-level models is lighter. Mr. Martel's base assumption for the calendar 2026 ORV industry is flat retail, consistent with year-to-date trends.

Robin Farley of UBS sought clarification on the second-half retail outlook, specifically for North American ORV. She also questioned why the current ORV network inventory, down 5% from pre-COVID levels despite much higher retail sales, is considered the optimal level.

Answer

CFO Sébastien Martel noted that ORV retail improved sequentially through Q2 and into August, expressing hope for better performance than Q2. Regarding inventory levels, Martel explained that the higher dollar value of units makes dealers more cautious. He added that strong demand for certain models and the overall economic uncertainty make the current leaner inventory levels prudent, providing flexibility and protecting the brand.

Robin Farley questioned the retail assumptions underlying the forecast for wholesale and retail to align by next quarter. She also asked about the feasibility of raising prices to offset tariffs in a challenging demand environment.

Answer

CFO Sebastien Martel clarified that the industry, excluding snowmobiles, was down 5% in Q1 and that softness continued. He explained that even with declining retail, H2 can be strong due to corrected inventory and new product launches. CEO Jose Boisjoli responded that the company is sensitive to the pricing environment, confirming no price hikes on current MY25 models but indicating some increases for P&A and a careful approach to MY26 pricing to minimize tariff-related increases.

Robin Farley asked for the retail assumptions behind the now-withdrawn fiscal 2026 guidance and inquired about mitigating actions taken, such as pre-shipping inventory to the U.S. ahead of potential tariffs.

Answer

CFO Sebastien Martel stated the original guidance assumed a flat industry, with BRP gaining volume as wholesale matched retail. He declined to give a new forecast due to uncertainty. CEO Jose Boisjoli confirmed they have taken mitigating actions, including renting U.S. warehouses and pre-shipping about a month's worth of inventory across the border.

Robin Farley sought clarification on BRP's ORV market share outlook, questioning the ability to gain share in the coming season while also expecting short-term losses. She also asked about BRP's optimism for the electric motorcycle market when others have tempered expectations.

Answer

CEO Jose Boisjoli clarified that while BRP may lose some share in H2 due to inventory correction, he expects to gain share over the full upcoming season (August '24 to July '25) thanks to new products. Regarding electric motorcycles, he expressed confidence based on a strong product with fast charging, a well-known brand, a solid dealer rollout plan, and favorable regulatory trends in Europe.

Robin Farley of UBS questioned the long-term outlook for the Marine business, suggesting that exiting the segment could be additive to earnings, especially since BRP does not hold the same market-leading position there as it does in powersports.

Answer

CEO Jose Boisjoli responded that while BRP will continue to grow its core powersports business, the company must plan for long-term growth, and the Marine market offers the same scale as powersports. He acknowledged that the timing of their recent push was not ideal and execution wasn't perfect, but reiterated that Marine is a long-term play and the company needs to navigate the current industry inventory bubble.

Robin Farley inquired about the recent uptick in booked revenue per passenger cruise day over the last three months, asking if it was due to comparable base effects, an improved geopolitical situation, or accelerating demand. She also asked about the expense side, specifically if other costs would scale given significant capacity increases, beyond marketing and HR investments.

Answer

Leah Talactac, President and CFO, attributed the uptick to the strength of Viking's consumers, their loyalty, and willingness to plan ahead, exceeding marketing expectations. Regarding expenses, she noted that current SG&A investments support next year's growth. While committed to disciplined cost management and not compromising product quality, Leah acknowledged that expenses would increase with growth, but also highlighted efficiencies from technology and operators' ability to navigate cost pressures, aiming for margin expansion.

Robin Farley inquired about the recent uptick in booked revenue per passenger cruise day, asking if it's due to comparable base factors or accelerating demand. She also asked if other expenses are expected to scale given significant capacity increases, beyond marketing and HR investments.

Answer

Leah Talactac, President and CFO, attributed the booking trends to the strength and loyalty of Viking's consumers, who responded to marketing beyond expectations and are willing to plan ahead. Regarding expenses, Leah and Linh Banh, Executive Vice President of Finance, clarified that current SG&A reflects investments for future growth. They noted continuous year-over-year growth in the order book and emphasized disciplined cost management, leveraging technology for efficiencies, and not compromising product quality.

Robin Farley from UBS Group AG questioned the 4% booked revenue per cruise day growth for 2026, asking if the company still expects it to increase as perhaps implied in the previous quarter. She also sought clarity on the Q2 expense uptick, asking if it represents a new baseline or if it contained non-recurring factors.

Answer

Leah Talactac, President & CFO, and Linh Banh, EVP of Finance, clarified that they have consistently aimed for mid-single-digit growth and did not guide for a specific tick-up. They reiterated that the current position is strong. Regarding expenses, Banh explained that quarterly variances are normal due to timing of maintenance, ship deliveries, and itinerary mix. She emphasized that for the first half of 2025, operating expense growth was well below revenue growth, leading to a 45% increase in adjusted EBITDA, and confirmed that quarterly fluctuations should be expected.

Robin Farley questioned the company's confidence in achieving mid-single-digit yield growth for 2026, noting that booked rates often decline as the booking window closes, and asked what makes the 2026 season different.

Answer

President and CFO Leah Talactac and EVP of Finance Linh Banh responded that booking curve development is nuanced and not subject to a fixed rule. Talactac cited a past example where the 2024 Ocean booking rate actually increased as the year progressed due to dynamic pricing. They explained that given the strong current demand and a stable macro environment, they remain confident in their ability to dynamically price the remaining inventory to achieve mid-single-digit yield growth.

Robin Farley challenged the company's outlook for mid-single-digit yield growth in 2026, noting that booked pricing growth often moderates as the booking window closes. She asked why 2026 would behave differently and if itinerary mix was a contributing factor.

Answer

President and CFO Leah Talactac and EVP of Finance Linh Banh responded that pricing is dynamic and not bound by a fixed pattern. Talactac cited a past instance where Ocean pricing growth for 2024 actually accelerated over time. They asserted that given the current strong demand and a stable macro environment, they are confident in their ability to achieve mid-single-digit yield growth, as it is not a 'rule of thumb' that rates must decline.

Robin Farley sought clarification on whether the 2026 booking strength is driven by price, volume, or both, and if the current booking position is consistent with achieving mid-single-digit yield growth. She also asked about barriers to entry, such as docking rights.

Answer

President and CFO Leah Talactac confirmed that 2026 is ahead on both rate and volume but deferred a more detailed discussion to the next earnings call. Chairman and CEO Torstein Hagen detailed significant barriers to entry, emphasizing Viking's control of 72 premier docking locations, including long-term exclusive contracts in Paris and near the Karnak temple in Egypt, which are difficult for competitors to replicate.

Robin Farley questioned the trajectory of the 2025 booked revenue per cruise day growth, which moderated from 10% to 7% quarter-over-quarter, asking if it would continue to decline or potentially rise. She also asked for quantification of the impact from the Middle East conflict on 2025 Egypt itineraries.

Answer

EVP of Finance Linh Banh reiterated the company's goal of mid-to-high single-digit yield growth and expressed confidence in the current 2025 position. Regarding Egypt, Banh noted it represents only a couple of percentage points of total capacity, so small movements won't significantly impact overall results. CEO Torstein Hagen added that Viking's ships in Egypt are the best on the river, supporting the product's long-term strength.

Robin Farley asked for a breakdown of the $300 million luck impact between Q3 and Q4 to better understand the structural hold increase. She also inquired about DraftKings' competitive offering in prediction markets, specifically its ability to offer parlays and leverage official sports data differently from competitors.

Answer

Jason Robins, Co-founder and CEO of DraftKings, explained that parlays are challenging in prediction markets due to liquidity requirements and the need for individual liquidity pools, making it difficult to replicate the combinability of a traditional Sportsbook. He believes DraftKings' pricing models and IP will enable a better, though still limited, version of parlay offerings compared to others. Michael DeLalio, Senior Director of Investor Relations, offered to follow up offline regarding the luck impact breakdown.

Robin Farley asked about the split of the $300 million luck impact between Q3 and Q4 to quantify the structural hold increase. She also inquired about prediction markets, DraftKings' competitive offering, and its ability to offer parlays, including access to official sports data.

Answer

Michael DeLalio, Senior Director of Investor Relations, offered to follow up offline regarding the $300 million luck impact split. Jason Robins, Co-founder and CEO of DraftKings, explained that parlays are challenging with predictions due to their liquidity-based nature, making it difficult to replicate traditional sportsbook offerings. While DraftKings' pricing models and IP might offer a better version than competitors, it will still be very limited compared to their traditional sports betting product.

Robin Farley of UBS Group asked for the reason behind sequentially flat trailing twelve-month unique users and inquired about DraftKings' customer revenue concentration, referencing the standard 80/20 split.

Answer

Co-Founder & CEO Jason Robins explained that the flat monthly unique payers (MUPs) were primarily due to the loss of Jackpocket in Texas, a very large lottery state. Regarding customer mix, he confirmed the company is roughly in the 80/20 range, which he considers normal, but noted that for DraftKings, 20% of customers still represents millions of people, indicating a well-diversified base.

Robin Farley of UBS asked for the reason behind sequentially flat trailing twelve-month unique users. She also inquired about DraftKings' customer concentration, referencing the 80/20 rule, and its implications for tax changes affecting high-value players.

Answer

Co-Founder & CEO Jason Robins explained that the flat Monthly Unique Payers (MUPs) metric was primarily due to the loss of Jackpocket's large user base in Texas. He confirmed the customer base is roughly in the 80/20 range but emphasized that the top 20% still represents millions of diversified customers, not just high rollers.

Robin Farley asked about DraftKings' market share in basketball, noting that handle growth seemed strong compared to competitors. She also requested insight into how handle growth rates mature over time in states based on their launch vintage.

Answer

CEO Jason Robins confirmed a belief that DraftKings gained market share in basketball, attributing the success to significant improvements in live betting, which has been boosted by recent technology acquisitions. Regarding handle growth in mature states, Robins explained that handle is just one of several metrics, alongside hold rate and promotional efficiency, that combine to drive contribution profit growth.

Robin Farley from UBS questioned why EBITDA guidance remained unchanged despite another revenue guidance increase, asking about the potential 2026 contribution from live betting investments. She also inquired about the intended use of capital from potential debt market activities.

Answer

CEO Jason Robins confirmed that investments in live betting are the primary reason for the flat EBITDA guidance, stating these investments will be neutral in 2025 but EBITDA-positive in 2026 and beyond. CFO Alan Ellingson added that any initial debt issuance would be for general corporate purposes to establish a market presence, with no specific immediate use in mind.

Robin Farley of UBS inquired about the hold percentage in Q3 and asked for an update on the company's progress in mitigating the Illinois tax increase by adjusting promotional activity.

Answer

CEO Jason Robins stated that Q3 hold was neutral and as expected. Regarding Illinois, he confirmed that DraftKings has begun implementing measures to mitigate the tax impact, which is factored into their promotional efficiency improvements. However, he noted that this is still a work in progress and not fully realized, representing potential upside for future guidance.

Robin Farley asked for clarification on the assumptions factored into the UAE base case, specifically regarding the potential for two other competitors by 2029 and their impact on market size. She also requested a sense of the Las Vegas group pace after Q1 2026.

Answer

CEO Craig Billings confirmed that their base case for the UAE factored in two incremental competitors and a $3 billion-$5 billion GGR market, with Wynn assuming a fair share premium, noting that the absence of announced competition suggests conservatism. He declined to break down group forecasts by quarter for Las Vegas but stated they 'feel good about it.'

Robin Farley of UBS Group AG asked for Wynn's expectation on how long it might be the sole gaming operator in the UAE after its 2027 opening, considering a competitor is already building a non-gaming resort.

Answer

CEO Craig Billings confirmed the expectation to be the sole operator for 'some period of time' but declined to speculate on the duration, as it depends on future regulatory decisions in other Emirates. He stressed that Wynn's financial projections were compelling even with the assumption of multiple competitors, so being the sole operator provides significant potential upside.

Robin Farley sought details on the $375 million in U.S. CapEx being delayed due to tariffs and asked about the strength of the 2026 group booking pace, especially in light of other hotel companies reporting softness.

Answer

CEO Craig Billings specified that the bulk of the delayed CapEx is the Encore Las Vegas tower remodel. He cautioned against using this as a read-through for New York costs, as the issue was specific to certain high-tariff items. Billings and executive Brian Gullbrants both confirmed they are not seeing any softening in group business, attributing the strong 2026 pace to the favorable timing of large, cyclical conventions.

Robin Farley from UBS questioned if Wynn could grow Las Vegas EBITDA in Q1 despite the tough Super Bowl comparison, similar to peers, and asked for clarification on which corporate entity would pursue a potential development in Thailand.

Answer

CEO Craig Billings avoided direct guidance but expressed strong confidence, noting that excluding the Super Bowl, all key volume metrics were up year-over-year, with a great room base and robust transient demand. He confirmed that any potential Thailand project would be pursued through a subsidiary of the U.S.-listed entity, Wynn Resorts, Limited.

Robin Farley questioned whether the gaming revenue decline in Las Vegas was driven more by international VIP play or difficult domestic comps, and also requested an outlook for the group bookings business for Q4 and 2025.

Answer

CFO Julie Cameron-Doe clarified that after normalizing for table games hold and accounting for higher ADRs impacting comp costs, there was no underlying negative trend in gaming revenue. CEO Craig Billings added that metrics like slot handle (up 3.5%) show business health. Executive Brian Gullbrants stated that the group business outlook is healthy, pacing toward a record year in 2024. He expects 2025 group room nights to be similar to 2024 by design, allowing the company to push rates and manage inventory around the Encore Tower renovation.

Robin Farley sought more insight into the 2026 group booking pace, specifically the breakdown between room night increase versus rate increase, to understand if it indicates real room night demand recovery or is still mostly rate-driven. She also asked about Host's interest in potential asset acquisitions.

Answer

President and CEO Jim Risoleo clarified that the 5% group pace for 2026 is primarily room night-driven (just over 3% from room nights), with only a slight improvement from rate year-over-year. Regarding acquisitions, he stated they are a very low priority due to the inability to generate comparable returns to other capital allocation decisions, such as investing in existing assets and paying sustainable dividends. He noted that while Host evaluates all market opportunities, they are not currently seeing accretive acquisition opportunities.

Robin Farley sought more insight into Host Hotels & Resorts' 2026 group booking pace, specifically asking for the split between room nights increase versus rate increase within the reported 5% growth, to understand if it signifies real room night demand recovery or is primarily rate-driven. She also asked about Host's interest in potential asset acquisitions and what types of markets or assets might enhance the portfolio.

Answer

Jim Risoleo, President and CEO, clarified that the 5% group pace for 2026 is predominantly driven by room nights, with rate showing only a very slight year-over-year improvement. He specified that just over 3% of the 5% pace is attributable to group room nights. Regarding acquisitions, Risoleo stated that asset acquisitions are a very low priority for Host Hotels & Resorts. He explained that the company does not believe it can generate the same level of returns through acquisitions as it can through other capital allocation decisions, such as investing in existing assets, paying sustainable dividends, and thoughtful dispositions. He noted that while Host evaluates all market opportunities, nothing currently meets their underwriting criteria for accretive acquisitions.

Robin Farley from UBS Group AG inquired about the current transaction environment for hotel acquisitions and dispositions, and followed up on whether recent group booking trends in July were improving.

Answer

President & CEO James Risoleo described the debt markets as 'wide open' but noted a persistent bid-ask spread. He stated that buying hotels is not a priority, viewing share repurchases as a 'screaming bargain.' EVP & CFO Sourav Ghosh added that while July trends were positive, the company remains cautious on Q3 due to the short-term booking window.

Robin Farley from UBS Group AG inquired about the current transaction environment for both acquisitions and dispositions, and also asked for an update on near-term group booking trends observed in July.

Answer

President & CEO James Risoleo noted that while debt markets are open, a bid-ask spread persists, though it is narrowing. He stated that buying is not a top priority, as Host sees better value in reinvesting in its portfolio and repurchasing its stock, which he called a 'screaming bargain.' EVP & CFO Sourav Ghosh added that while July trends are good, the company remains cautious on Q3 due to the short-term nature of group bookings.

Robin Farley of UBS sought clarification on two points: whether the $25 million condo sales guidance includes more than the 14 units with deposits, and what the expected corporate negotiated rate increase is for 2025.

Answer

EVP and CFO Sourav Ghosh confirmed the guidance assumes sales beyond the 14 units with current deposits, but noted the EBITDA would not be recognized until Q4 2025. Regarding corporate rates, he stated the increase is expected to be 'close to the mid-single-digit number,' aligning with reports from major hotel brands.

Robin Farley requested clarity on year-over-year leisure rates in Q3 and the outlook for 2025. She also sought to confirm if the $1.75 billion run-rate EBITDA figure included the full, long-term recovery from Maui.

Answer

EVP and CFO Sourav Ghosh reported that Q3 leisure rates were relatively flat year-over-year, having normalized at approximately 50% above 2019 levels, and he expects this to be a stable baseline for 2025. He also confirmed that the $1.75 billion run-rate EBITDA figure is a long-term potential that assumes the full $75-$80 million recovery from Maui, not a forecast for 2025.

Robin Farley questioned the growth in Hilton's fee revenue per room despite an increasing mix of economy rooms and expansion in China, asking about the underlying economics and any unusual year-over-year comps.

Answer

Kevin Jacobs, EVP and CFO, and Chris Nassetta, President and CEO, clarified that fee revenue per room continues to grow due to several factors: the mix of new deliveries (excluding China) having similar or higher fee rates than existing properties, RevPAR growth, increasing take rates from license fees, and the bulk of deliveries being in strong mid-market brands with high fees. In China, while MLAs continue, Hilton is increasingly growing its own higher-rate brands, leading to overall fee-per-room growth in the region. They confirmed no unusual comps affecting fee per room year-over-year.

Robin Farley of UBS Group requested clarification on the timing of non-RevPAR fees and asked if certain termination fees were recognized in Q2, contributing to the EBITDA beat.

Answer

EVP & CFO Kevin Jacobs confirmed that certain termination fees, which were previously expected in Q3, were recognized in Q2. He clarified this was a timing shift that was already incorporated into the full-year guidance. He stated the quarterly outperformance was predominantly driven by the timing of such non-RevPAR items and some corporate expenses, which is why full-year guidance remained consistent.

Robin Farley sought clarification on two points: the nature of the 'timing-related' outperformance in non-RevPAR fees and the drivers behind the expected continued growth in fee revenue per room, particularly given the development mix in China.

Answer

CFO Kevin Jacobs explained that a significant portion of the Q1 earnings beat was due to timing and should not be fully extrapolated, though he confirmed non-RevPAR fees are expected to outperform the algorithm for the full year. CEO Christopher Nassetta added that fee-per-room growth is structural, driven by rising RevPAR, share gains, growth in high-royalty brands, and systematic fee increases. In China, growth is accelerating as the mix shifts toward full-fee franchise deals for brands beyond the initial joint ventures.

Robin Farley questioned why the 2025 EBITDA growth guidance appears slightly below the company's typical growth algorithm (RevPAR + unit growth), and asked if a decline in 'other management fees' in Q4 was a contributing factor.

Answer

Kevin Jacobs, CFO and President, Global Development, clarified that after adjusting for one-time items and foreign exchange headwinds, the underlying fee growth is strong and the 2025 EBITDA growth is actually above the algorithm. Christopher Nassetta, President and CEO, added that the bottom-line EBITDA forecast for 2025 is higher than what was presented at their Investor Day, demonstrating continued discipline and outperformance despite FX.

Robin Farley asked two questions: first, how current visibility into business and leisure transient bookings compares to 2019 levels, and second, for details on the drivers of the Q3 EBITDA beat, specifically non-RevPAR fees and timing benefits.

Answer

CEO Christopher Nassetta stated that transient booking visibility remains limited to 60-90 days, similar to pre-pandemic levels. CFO Kevin Jacobs added that the EBITDA outperformance was driven by stronger-than-expected non-RevPAR fees from areas like the credit card program and purchasing, with timing items accounting for about half of the beat versus guidance.

Robin Farley questioned why the global net system rooms growth guidance remained at 1% despite a new agreement in China and asked about the nature of any future operating profit guarantees.

Answer

CEO Patrick Pacious explained that the guidance accounts for strategic terminations of underperforming hotels, which are being replaced by higher-revenue properties. CFO Scott Oaksmith added the China deal was already in prior guidance. He also clarified the operating guarantee was a limited, $20M lifetime potential liability tied to a specific portfolio of 13 managed hotels from the Radisson acquisition.

Robin Farley noted that the development pipeline appeared to have ticked down sequentially and asked if the company's unit growth outlook relies on an acceleration of conversions that spend little time in the pipeline. She also asked if the pipeline mix had changed over the past year.

Answer

CEO Patrick Pacious confirmed that the high velocity of conversions, which can open in as little as three months, means many don't sit in the pipeline for long. He also mentioned that Q1 is a typical period for pipeline cleanup. CFO Scott Oaksmith explained that the pipeline's composition (2/3 new build) is the inverse of openings (2/3 conversion) because new builds have a much longer duration from signing to opening. Pacious added that this mix has been consistent for some time.

Robin Farley from UBS sought to clarify the economics of the Westgate partnership, asking for an equivalent franchise fee comparison, its impact on the effective royalty rate guidance, and whether it creates friction with full-fee-paying franchisees.

Answer

CFO Scott Oaksmith explained it's difficult to provide a direct correlation but stated the fees are significantly higher than the 5% average royalty rate, based on reservations delivered. He confirmed the Westgate deal does not mute the overall effective royalty rate growth guidance. CEO Patrick Pacious and CFO Scott Oaksmith both addressed franchisee sentiment, stating there is no pushback as these partnerships are additive, targeting different stay occasions or markets and bringing new guests into the Choice ecosystem.

Robin Farley sought to understand the company's confidence in positive Q4 RevPAR, especially for November, and asked about the prevalence of key money in new development deals, including whether its use is increasing.

Answer

CEO Patrick Pacious expressed confidence in Q4, citing positive macro trends and November bookings tracking ahead of the prior year. CFO Scott Oaksmith confirmed an increased use of key money to secure higher revenue-intense hotels in a competitive new-build environment, but expects this to normalize long-term.

Robin Farley from UBS Group inquired about the development pipeline, asking what percentage of openings would need to be conversions to achieve the company's mid-single-digit net unit growth target, given that rooms under construction are at 40% of the pipeline.

Answer

CFO Leeny Oberg explained that with conversions representing about 30% of signings for several years, the pipeline composition has shifted. She expects roughly one-third of future openings to be conversions, which is sufficient to support the mid-single-digit net rooms growth target. President & CEO Anthony Capuano added that the new midscale brands and portfolio deals present further conversion opportunities.

Robin Farley of UBS requested a comparable year-over-year metric for rooms under construction, noting a recent change in definition. She also asked for details on U.S. Incentive Management Fee (IMF) payers, including the percentage of hotels paying fees.

Answer

CFO Leeny Oberg defended the current 'under construction' definition as the most logical but did not provide an alternative calculation. For IMFs, she specified that in Q1, 21% of U.S. & Canada hotels were paying incentive fees, up from 20% a year ago. She noted this compares to 60% globally and that fees are coming strongly from both premium and luxury tiers.

Robin Farley of UBS inquired about the expected percentage of 2025 unit growth from conversions versus new construction. She also asked for details on the composition of capital spending for new unit contract investments, such as key money and loans.

Answer

CFO Leeny Oberg estimated that conversions could represent 30% to 40% of openings in 2025. CEO Tony Capuano noted that key money is the preferred tool for competitive deals, particularly in upper upscale and luxury tiers. Leeny Oberg added that investment in growth is overwhelmingly key money, with the company continuing to see strong returns on these contracts.

Robin Farley from UBS inquired about current trends in key money for new unit growth, the amount of non-recurring hurricane-related IMF, and if any other significant Starwood-era guarantees remain.

Answer

CFO and EVP, Development Leeny Oberg stated that key money trends are stable, with about one-third of deals using it and the amount per deal remaining similar. President and CEO Tony Capuano added it's being used selectively in broader quality tiers. Oberg noted the hurricane-related IMF was immaterial and confirmed the recent $70 million operating profit guarantee reserve was an unusual, long-dated one from the Starwood acquisition, with no other guarantees of that size or length remaining.

Robin Farley asked about potential cost-saving levers for 2026 to offset wage growth, whether asset sales were required for debt refinancing, and why Hawaii's group pace for 2026 wasn't stronger given its challenging 2025.

Answer

Chairman and CEO Thomas Baltimore expressed confidence in finding future efficiencies through operational deep dives and technology. CFO Sean Dell'Orto stated definitively that asset sales are not contingent on the planned refinancing. Regarding Hawaii's 2026 group pace, Dell'Orto explained that the Hawaii Convention Center will be shut down for renovation, impacting citywide demand for that year.

Robin Farley asked for a ranking of the relative strength or softness across the group, leisure transient, and business transient segments, and sought clarification on whether leisure demand was still pacing up for May and June after accounting for the Easter holiday shift.

Answer

CFO Sean Dell'Orto ranked group business as the strongest due to its solid base of definite bookings. He placed leisure second, noting strong performance in drive-to markets and a healthy outlook for the summer. Business transient was ranked third, showing solid short-term performance but with a very narrow booking window. He confirmed that June looks healthier than May for leisure, independent of the Easter shift.

Robin Farley inquired about the expected ramp-up timeline to achieve the doubled EBITDA target for the Royal Palm post-renovation and asked for specific drivers of the Q1 RevPAR decline, given positive factors like the Easter shift.

Answer

Chairman and CEO Thomas Baltimore stated the Royal Palm's EBITDA ramp-up would likely take a normal 2-3 years. CFO Sean Dell'Orto clarified the tough Q1 comp was due to broad-based strength in January and February of the prior year, which was a more significant factor than the Easter calendar shift.

Robin Farley of UBS Group AG questioned why the top end of the full-year guidance range was narrowed despite commentary about accelerating demand. She also asked for clarification on the CapEx budget, noting it did not change despite the major investment announced for the Great Stirrup Cay water park.

Answer

CFO Mark Kempa framed the guidance adjustment as raising the bottom end of the range, reflecting increased confidence based on current visibility. CEO Harry Sommer reiterated the company's principle of not sacrificing price for occupancy. Regarding CapEx, Kempa confirmed the Great Stirrup Cay investment was already included in their plans and that the company expects a strong, double-digit return on a reasonable construction cost.

Robin Farley questioned the year-over-year price on the books, noting that advance ticket sales were up around 3% while capacity is set to grow 5% for the year and 8% in the second half. She also asked about booking visibility for the fall Caribbean season, given the increased deployment and shorter booking window for those itineraries.

Answer

CFO Mark Kempa explained that the shift to more close-to-home Caribbean itineraries naturally shortens the booking window and impacts the advance ticket sales metric, but the overall booked position remains in the optimal range. He noted that while visibility is lower for these itineraries, close-to-home cruising continues to perform well. CEO Harry Sommer added that the enhancements to Great Stirrup Cay, launching in November, are expected to provide a tailwind for Q4 Caribbean demand.

Robin Farley of UBS requested an update on the forward booking position for 2025, referencing prior commentary about price and load factors. She also asked for the company's official stance on entering the river cruise business.

Answer

EVP and CFO Mark Kempa reframed the discussion away from quarter-by-quarter metrics, stating the key goal is to be in the "best optimal booked position" on a 12- to 24-month basis, which he confirmed they are. President and CEO Harry Sommer definitively stated that the company is focused on its core ocean cruise business and its extensive newbuild order book, expressing no plans to enter the river cruise market.

Robin Farley sought to clarify if management's focus on the absolute 2026 targets implies that the annual spread between yield and cost growth might be narrower in 2025 after an exceptionally strong 2024. She also asked for their definition of 'inflation' for their sub-inflationary cost growth target.

Answer

CEO Harry Sommer confirmed it was 'broadly correct' that the focus is on the 2026 endpoint, not a specific spread in any single year. CFO Mark Kempa defined their view of inflation as global, not just U.S.-based, and generally in the 3% range, though he noted this figure is dynamic.

Robin Farley from UBS Group questioned if the HDFS transaction included any performance guarantees and asked for quantification of the future earnings being given up in exchange for the proceeds.

Answer

CFO Jonathan Root confirmed there are no guarantees on retail sales growth or loss levels, noting the partners have high confidence in HDFS's management. He explained that Harley-Davidson will now retain one-third of annual retail loan originations, versus all of them previously, but will receive a premium on the sold loans plus servicing fees. He directed investors to the earnings deck for a directional view of the future earnings curve.

Robin Farley of UBS asked if the HDFS transaction included any guarantees on retail sales growth or receivables, and requested a quantification of the go-forward earnings being given up in exchange for the proceeds.

Answer

CFO Jonathan Root confirmed there are no guarantees on growth or loss levels, highlighting the partners' confidence in H-D's management. He explained that H-D will now retain one-third of retail originations, receiving a premium and servicing fees for the other two-thirds. He directed investors to the earnings deck for a directional view of the post-transaction earnings curve.

Robin Farley of UBS questioned if the HDFS transaction includes performance guarantees and asked for quantification of the future earnings being given up in exchange for the immediate cash proceeds.

Answer

CFO & President - Commercial, Jonathan Root, confirmed there are no performance guarantees, as the partners have high confidence in HDFS's operations. He explained that in exchange for the proceeds, HDFS will now retain only one-third of new retail loan originations. He directed investors to the earnings deck, which illustrates the trade-off between lower future earnings and significantly reduced capital requirements, leading to a higher ROE.

Robin Farley questioned the rationale for considering a sale of HDFS now, given its historical role as a key marketing and earnings driver. She also asked if the improving but still soft retail environment would necessitate using pricing as a lever during the peak riding season.

Answer

CEO Jochen Zeitz clarified they are not planning to sell HDFS but are exploring options to unlock its value in a win-win scenario for stakeholders. On the retail environment, he noted that marketing spend is weighted toward Q2 and beyond this year, unlike last year. He mentioned competitors are promoting heavily, but Harley-Davidson is remaining disciplined with targeted promotions. CFO Jonathan Root added that consumer sensitivity could create some mix pressure, but the company is avoiding broad discounts on new models.

Robin Farley of UBS questioned the rationale for potentially selling HDFS, given its historical importance as a marketing tool and profit driver. She also asked about the April retail environment and whether pricing would be used as a lever to boost sales during the peak season.

Answer

CEO Jochen Zeitz clarified that the company is not planning to sell HDFS but is evaluating options to unlock value in a win-win scenario for stakeholders, correcting a market rumor. He noted that competitors are promoting more heavily but HOG has been targeted. He also shared proprietary research indicating that 60% of non-owners are delaying purchases due to economic uncertainty and interest rates. CFO Jonathan Root added that mix changes could pressure overall pricing.

Robin Farley of UBS sought to clarify the 2025 motorcycle revenue guidance of flat to down 5%. She asked if positive pricing implies that wholesale unit volumes are expected to be down more than 5% and requested a rough range for the full-year retail sales expectation.

Answer

CFO Jonathan Root confirmed that wholesale units are expected to be flat to down slightly, with some volume challenge being offset by favorable pricing. He reiterated that the company's guidance for global retail sales in 2025 is currently flat, acknowledging the difficulty in predicting the macroeconomic environment.

Robin Farley of UBS sought clarification on the 2025 guidance, asking if the flat-to-down 5% revenue forecast combined with positive pricing implies a larger decline in wholesale unit shipments, and requested a more specific range for the 'flat' retail sales expectation.

Answer

Chief Financial Officer Jonathan Root clarified that wholesale units are expected to be 'flat to down a little bit,' with the volume decline being offset by the positive pricing actions. On retail sales, he reiterated the company's guidance for a flat year-over-year performance in 2025, acknowledging the macroeconomic uncertainties but not providing a more specific numerical range.

Robin Farley of UBS sought clarification on whether the flat to down 5% motorcycle revenue guidance implies a greater decline in unit volume, given the expectation for positive pricing. She also asked for the expected range for retail sales performance.

Answer

CFO Jonathan Root confirmed that wholesale units are expected to be flat to down slightly, with some volume challenge being offset by favorable pricing. He reiterated the full-year guidance for retail sales to be flat in 2025, acknowledging the difficulty in predicting the macroeconomic environment but maintaining that as the company's current global expectation.

Robin Farley of UBS asked about expectations for a retail turnaround in 2025 and questioned the long-term commitment to the LiveWire business, asking at what point continued losses would trigger a reevaluation.

Answer

CEO Jochen Zeitz expressed cautious optimism for 2025, contingent on external factors like interest rates and consumer confidence. Regarding LiveWire, he stated that significant actions have already been taken to reduce cash burn by 40% next year and lower operating costs. He affirmed the importance of prudently investing in LiveWire to position Harley-Davidson as a leader in electrification for the future, while taking it one year at a time.

Robin Farley of UBS questioned the flat inventory level target and asked about Harley-Davidson's long-term commitment to the LiveWire business, particularly if losses continue to miss expectations.

Answer

CEO Jochen Zeitz responded that LiveWire has taken significant actions, expecting to reduce its cash burn by 40% next year and lower its breakeven point. He affirmed the strategic importance of investing prudently in LiveWire to secure a leadership position in electrification for Harley-Davidson's future, while also stating that the business is evaluated on a year-by-year basis.

Robin Farley from UBS asked about expectations for a retail sales turnaround in 2025 and questioned the company's long-term commitment to the LiveWire business if losses persist.

Answer

CEO Jochen Zeitz expressed cautious optimism for 2025, contingent on external factors like interest rate reductions. Regarding LiveWire, he emphasized that significant actions have been taken to cut cash burn by 40% for next year and that maintaining a leadership position in electrification remains strategically important for Harley-Davidson's future.

Robin Farley of UBS inquired about the large provision for credit losses recorded in the quarter, asking for color on whether it was driven by fundamental tenant issues or external economic modeling.

Answer

CFO & Treasurer Desiree Burke explained the provision was a non-cash adjustment driven by a more pessimistic forward-looking economic forecast from their third-party model (Oxford Economics), specifically citing a decline in the downside case for GDP growth and CRE index projections. Chairman & CEO Peter Carlino added that it's an 'unfortunate requirement' and not a 'real number' reflecting actual rent collection issues, as all tenants are current.

Robin Farley of UBS inquired about the likelihood of an additional tribal gaming transaction in 2025 and whether the primary opportunity in that sector is limited to new developments.

Answer

President & COO Brandon Moore responded that while he couldn't give a probability, a tribal deal in 2025 is 'certainly a possibility.' He clarified that opportunities are not limited to greenfield projects and span a gamut of needs, including expansions and refinancing. He noted that the conversations are ongoing with both tribes and their professional advisors about incorporating GLPI's long-term capital into their financial structures.

Robin Farley from UBS asked if the growing opportunities in gaming, particularly with the tribal segment, mean GLPI is less likely than ever to look for deals outside of gaming. She also asked for the 2025 outlook on the provision for credit loss.

Answer

CEO Peter Carlino reiterated that while they always consider other opportunities, the gaming space provides dependable, "bulletproof" cash flow, and there is no reason to go elsewhere while strong opportunities exist. SVP & CIO Matthew Demchyk added that gaming offers superior risk-adjusted returns with less competition. CFO Desiree Burke stated that the 2025 guidance assumes a zero change for the provision for credit loss, as it is a non-cash, hard-to-predict item driven by macro factors and new lease additions.

Robin Farley asked for clarification on the EBITDA accretion from the ING Arena deal and requested quantification of the constant currency expectation for 2025 EBITDA guidance, which was impacted by foreign exchange rates.

Answer

CFO Craig Felenstein quantified the FX impact as a €10 million headwind to revenue and a €3-€4 million headwind to EBITDA for the full year 2025, explaining why guidance was maintained despite strong underlying business performance. CEO Carsten Koerl added that the ING Arena deal remains accretive to margin and cash targets but did not re-confirm a specific EBITDA number.

Robin Farley focused on the financial mechanics of the IMG deal, asking how much of the profitability improvement comes from the $225 million cash consideration versus Sportradar's operational scale. She also sought clarification on whether the implied revenue from the deal was a baseline or included future upsell potential.

Answer

CEO Carsten Koerl explained the deal's value is based on their own ROI analysis and ability to better monetize the rights. CFO Craig Felenstein detailed that the cash consideration includes prepayments to leagues, which improves free cash flow, and that the assets will be written down to fair market value, creating a lower cost base. He clarified the implied revenue figure is their estimate for the assets in 2025 and does not include future upsell and cross-sell opportunities.

Robin Farley sought to confirm that Sportradar's 2025 EBITDA margins are expected to be higher than 2024's, inclusive of any new MLB contract costs. She also asked about the adoption profile of the 4Sight product, specifically which types of clients are the early adopters.

Answer

CEO Carsten Koerl and CFO Craig Felenstein both unequivocally confirmed that 2025 EBITDA margins are expected to be higher than 2024 margins. Koerl added that adoption of the 4Sight product is a broad mix across geographies and client tiers (Tier 1, 2, and 3), with its primary goal of stimulating live betting proving to be successful.

Robin Farley sought to clarify if the $150 million in operational opportunities was incremental to Vegas performance and asked about the company's share repurchase intentions for 2025.

Answer

Executive Jonathan Halkyard explained the $150 million is a company-wide number and not specific guidance for Vegas. He affirmed the company will be 'aggressive' with share buybacks, citing the stock's 'tremendous value' and noting the accelerated pace of repurchases in Q4 and January. Executive William Hornbuckle added that despite headwinds, the company projects EBITDA growth in Las Vegas for 2025.

Asked about expectations for a retail turnaround in 2025 and questioned the long-term commitment to the LiveWire business given its ongoing losses.

Answer

Management is 'cautiously optimistic' for 2025, citing strong products but acknowledging the need for macro tailwinds. For LiveWire, they have taken significant actions to reduce cash burn by 40% for next year. They believe it's important to continue prudent investment to position the company for the future of electrification.

Robin Farley questioned why Flutter would not introduce a surcharge on winnings to recapture tax costs in high-tax states like Illinois, suggesting it would be a low-risk move if market leaders acted together.

Answer

CEO Peter Jackson declined to elaborate on the company's strategy, stating that he had addressed the topic in his earlier, more expansive answer and had nothing further to add.

Robin Farley questioned why Flutter would not introduce a surcharge on winnings in high-tax states like Illinois, suggesting it could be a low-risk way to recapture costs if market leaders acted in unison.

Answer

CEO Peter Jackson firmly declined to elaborate, stating, 'Robin, I doubted that earlier, and I don't have anything further to say.' His response referred back to his initial commentary where he explicitly ruled out a surcharge, calling other measures the 'best customer option.'

Robin Farley of UBS Group AG asked for clarification on 2024 booking trends, questioning if 'strong prices' meant they were up year-over-year. She also inquired about the implied yield and per diem growth needed to achieve the company's new three-year financial targets through 2026.

Answer

CEO Josh Weinstein confirmed that while more color on 2024 would be provided next quarter, the company is pleased with the pricing progress. Regarding the three-year targets, he stated that the occupancy gap recovery would contribute just under 7 points to yield growth, mostly in 2024. He also projected low to mid-single-digit price increases for 2024 through 2026, a trajectory the company has successfully managed in the past.

Robin Farley from UBS sought clarification on the yield outlook, questioning why Q4 yields were specifically mentioned as being above 2019 levels while Q3 was not. She also asked about the impact of Future Cruise Credit (FCC) discounts, wanting to confirm if the guided 3-4% per diem increase was inclusive of this drag.

Answer

CFO David Bernstein explained that Q4 was highlighted to demonstrate that underlying pricing is strong once mix issues from the recovery phase dissipate, but he did not provide specific Q3 guidance. CEO Josh Weinstein and CFO David Bernstein both confirmed that the 3-4% net per diem growth guidance for the year is inclusive of the FCC drag, which Bernstein estimated at about 1 percentage point for the full year.

Robin Farley from UBS sought clarification on whether 2023 booking prices are higher than 2019's even after accounting for Future Cruise Credits (FCCs). She also questioned the absence of specific Q1 yield guidance and asked for a potential floor for full-year 2023 EBITDA.

Answer

CFO David Bernstein confirmed that 2023 pricing is indeed higher than 2019 levels, even without adjusting for the minimal FCC impact. He then provided specific Q1 guidance, expecting net per diems to be up 5.5% to 6.5% in constant currency. CEO Josh Weinstein addressed the EBITDA trajectory, stating the goal is to reach 50% of 2019's unit performance in Q1 and sequentially improve from there.

Robin Farley sought clarification on the term 'considerably higher' for 2023 booking prices, asked if increased non-fuel expense guidance was solely due to advertising, and questioned the rationale for higher ad spend amid seemingly strong natural demand.

Answer

CEO Josh Weinstein clarified that 'considerably higher' pricing translates to mid-single digits. CFO David Bernstein confirmed the slight increase in non-fuel cost guidance was mainly from advertising. Weinstein justified the ad spend as a necessary investment to drive both volume and price, build long-term brand awareness for wave season, and attract new-to-cruise guests.