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Churchill Downs Inc (CHDN)·Q2 2025 Earnings Summary

Executive Summary

  • Record Q2 results: net revenue $934.4M (+5% y/y), adjusted EBITDA $450.9M (+1% y/y), GAAP diluted EPS $2.99, adjusted diluted EPS $3.10 .
  • Revenue and adjusted EPS beat consensus: revenue +$10.3M above $924.1M*, adjusted EPS +$0.086 above $3.014*; prior quarter revenue slightly missed by ~$0.2M* while EPS beat modestly* [Q2 2025, Q1 2025 estimates shown below].
  • Segment divergence: Live & Historical Racing strength (revenue +$50.7M; adj. EBITDA +$17.3M), Wagering Services & Solutions modest growth, Gaming weaker on higher Indiana taxes, Louisiana HRM cessation, and Rivers Des Plaines softness .
  • Capital allocation: $250.4M repurchased in Q2; new $500M authorization; net bank leverage 4.2x; expected lower cash taxes ($50–$60M) from new federal bill boosts FCF trajectory .
  • 2026 Derby catalysts (NBC deal, Oaks in primetime) and continued HRM ramp in VA/KY provide visible growth drivers (NBC contract adds ~$10M adjusted EBITDA in 2026) .

What Went Well and What Went Wrong

What Went Well

  • Live & Historical Racing delivered all-time record Q2 revenue ($540.9M) and adjusted EBITDA ($296.5M) on VA/KY HRM expansion and strong Derby Week wagering/sponsorships .
  • Derby media/wagering momentum: 17.7M average and 21.8M peak viewers (record), Derby race handle +11%, Derby Day +9%, Derby Week +6%; NBC extension adds ~$10M adj. EBITDA in 2026; “we anticipate step function growth for Derby Week in 2026” .
  • Capital discipline and FCF: $455M H1 free cash flow; maintenance capex trimmed to $80–$90M for 2025; federal bill reduces 2025 cash taxes by $50–$60M, increasing FCF .

What Went Wrong

  • Gaming segment contracted: revenue $266.3M (-$8.1M y/y), adj. EBITDA $127.3M (-$13.4M y/y) on higher Indiana gaming tax at Terre Haute (-$7.0M), Louisiana HRMs elimination (-$1.4M net), and equity income decline at Rivers Des Plaines (-$2.6M) .
  • TwinSpires adjusted EBITDA down due to higher legal expenses and Derby Week marketing (+$2.4M expense impact), partially offset by Exacta (+$3.4M) and sports betting (+$0.8M) .
  • Churchill Downs Racetrack adj. EBITDA down $1.0M y/y on lower Derby Week ticketing and higher pari-mutuel taxes, despite strong wagering/sponsorships .

Financial Results

Consolidated comparison vs prior periods

MetricQ2 2024Q1 2025Q2 2025
Net Revenue ($USD Millions)890.7 642.6 934.4
Operating Income ($USD Millions)330.0 134.6 327.7
Net Income Attributable to CDI ($USD Millions)209.3 76.7 216.9
Diluted EPS (GAAP) ($)2.79 1.02 2.99
Adjusted Diluted EPS ($)2.89 1.07 3.10
Adjusted EBITDA ($USD Millions)444.8 245.1 450.9
Adjusted EBITDA Margin (%)49.9% 38.1% 48.2%

Consensus vs actuals

MetricQ2 2025 ConsensusQ2 2025 Actual
Revenue ($USD Millions)924.1*934.4
Primary EPS ($)3.014*3.10 (Adjusted)
EBITDA ($USD Millions)439.6*450.9 (Adjusted)

Values retrieved from S&P Global.*

Segment breakdown

SegmentMetricQ2 2024Q2 2025
Live & Historical RacingRevenue ($USD Millions)490.2 540.9
Live & Historical RacingAdjusted EBITDA ($USD Millions)279.2 296.5
Wagering Services & SolutionsRevenue ($USD Millions)159.9 168.4
Wagering Services & SolutionsAdjusted EBITDA ($USD Millions)46.2 48.0
GamingRevenue ($USD Millions)274.4 266.3
GamingAdjusted EBITDA ($USD Millions)140.7 127.3
All OtherRevenue ($USD Millions)1.9 2.3
All OtherAdjusted EBITDA ($USD Millions)(21.3) (20.9)

KPIs and operating stats

KPIQ2 2024Q2 2025
TwinSpires Horse Racing Total Handle ($USD Millions)653.4 665.9
Kentucky Derby Average TV Viewership (Millions)16.7 17.7
Kentucky Derby Peak TV Viewership (Millions)20.2 21.8
Derby Week Attendance (Thousands)—~370
Shares Repurchased (Q2)—2,565,964 shares; $250.4M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Project CapexFY 2025$350–$400M $250–$290M Lowered
Maintenance CapexFY 2025~$90–$100M (implied: reduced by $10M) $80–$90M Lowered
Cash TaxesFY 2025—Reduction of $50–$60M from H.R.1 bill Favorable
Net Bank LeverageFY 2025/2026—Low-4x in 2025; <4.0x in 2026 Improving trajectory
Kentucky Oaks Broadcast2026—Primetime on NBC; +~$10M adj. EBITDA 2026 New catalyst
Handle Tax Rate (VA)Effective 7/1/20251.39% 1.30% Lower rate
Share Repurchase AuthorizationJuly 2025Prior $500M (Mar-2025) New $500M program replacing prior Renewed/extended

Earnings Call Themes & Trends

TopicQ4 2024 (prior two quarters context)Q1 2025 (prior quarter)Q2 2025 (current)Trend
Derby monetizationRecord 150th Derby Week; strong sponsorships Announced premium projects; paused Skye/Conservatory Step-function growth expected in 2026; NBC primetime Oaks; pricing power in premium experiences Strengthening
HRM expansion (VA/KY)The Rose opened (Nov 2024); VA ramp; Terre Haute opened Owensboro opened (Feb 2025); VA softness in unrated play VA Northern/Richmond growth; Henrico opening in Oct; Calvert City in 1Q26 Ramp continuing
Taxes/regulatory——Federal bill lowers cash taxes $50–$60M; VA handle tax moves to 1.30% Favorable
Technology (Xacta/Interblock)——Xacta expansion; HRM-based electronic table games; HRM roulette with Interblock pending approvals Expanding
Capital allocationReturned $218.3M to shareholders in 2024 New $500M buyback approved in March Repurchased $250.4M in Q2; new $500M authorization Active buybacks
Regional gamingStrength from Terre Haute initially Normalization of Indiana tax rate expected Lower margin at Terre Haute from higher tax; Rivers softness Mixed/pressure

Management Commentary

  • CEO: “We anticipate that we will generate step function growth for Derby Week in 2026 based on growth in ticket revenue… new NBC contract, increased wagering, and growth in sponsorships and licensing” .
  • CEO: “We were thrilled to announce NBC will, for the first time, broadcast the Kentucky Oaks… a $10 million increase in adjusted EBITDA for 2026” .
  • CFO: “We generated $455 million or $6.29 per share of free cash flow in the first half… reduced our 2025 maintenance capital projection by $10 million to $80–90 million… cash tax payments in 2025 will be $50–60 million lower” .
  • CEO on The Rose (VA): “Generating awareness and trial is a multi-year process… you’ll see consistent improvement for an extended period” .

Q&A Highlights

  • Derby pricing: Strong demand expected for new premium areas (Starting Gate Pavilion) as word-of-mouth drives pricing/demand .
  • New Hampshire (Salem) vision: Strategic location off I-93 near Boston; HRMs and full table games; will disclose plans post-close; competitive with regional leaders .
  • International Derby strategy: Building Road to the Derby (Europe/Japan/Middle East); focus on high-end consumers and international sponsorships; social media expanding abroad .
  • Federal tax bill implications: Expect ~$50–$60M 2025 cash tax savings; similar dynamic anticipated in 2026 with 100% bonus depreciation and interest deductibility .
  • Property development: Next Churchill Downs project between First Turn Building and Skye Terrace (“gap and smile”); not disruptive to 2026 Derby; more specifics next call .
  • Sponsorships: Intentional, curated partnerships with international expansion opportunities; focus on luxury, unique experiences alignment .

Estimates Context

  • Q2 2025 results beat consensus on revenue and adjusted EPS, supported by Live & Historical Racing momentum and Derby Week strength; adjusted EBITDA also exceeded the EBITDA* consensus (note: consensus and reported use different definitions, consensus typically EBITDA vs company’s Adjusted EBITDA) .
  • Prior quarter (Q1 2025) showed a slight revenue miss but EPS beat, consistent with cost control and Exacta contribution offsetting legal/marketing headwinds* .

Values retrieved from S&P Global.*

Estimates vs actual detail

MetricQ1 2025 EstimateQ1 2025 ActualQ2 2025 EstimateQ2 2025 Actual
Revenue ($USD Millions)642.8*642.6 924.1*934.4
Primary EPS ($)1.044*1.07 (Adj.) 3.014*3.10 (Adj.)
EBITDA ($USD Millions)244.1*245.1 (Adj.) 439.6*450.9 (Adj.)
# EPS Estimates5*—6*—
# Revenue Estimates9*—10*—

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Q2 prints validate Derby/HRM-led growth while Gaming headwinds are specific (Indiana taxes, Louisiana exit, Rivers softness) and largely known; mix should tilt favorable with VA/KY HRM ramp and Oaks primetime in 2026 .
  • Visible FCF uplift from federal tax changes ($50–$60M 2025) and project capex reset ($250–$290M vs $350–$400M prior) improves capital return capacity; active buybacks are likely to continue .
  • Consensus beats on revenue/adjusted EPS and the NBC contract signal durable monetization of the Derby franchise; management’s “step-function growth” framing is an incremental positive .
  • Watch VA metrics (handle tax down to 1.30%, Henrico opening in Oct) and The Rose ramp pace; management prioritizes trial/database build over near-term margin, implying sustained top-line growth ahead .
  • Gaming equity contributions (Rivers) and tax normalization (Terre Haute) bear monitoring; category pressures can persist but are offset by HRM and wagering solutions growth .
  • Near-term trading: Buyback plus estimate beats and tax/FCF tailwinds are supportive; medium-term thesis centers on Derby Week premiumization, media rights, and HRM market expansion .

Additional source documents referenced:

  • Q2 2025 8-K and Exhibit 99.1 press release –
  • Q2 2025 earnings call transcripts – –
  • Q2 2025 press releases: results and share repurchase – –
  • NBC Sports Kentucky Oaks primetime press release –
  • Prior quarters: Q1 2025 8-K –; Q4 2024 8-K –