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Caesars Entertainment, Inc. (CZR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered stable topline and improved profitability: GAAP net revenues rose 2.1% YoY to $2.794B, net loss narrowed to $115M, and same‑store Adjusted EBITDA increased 4.1% to $884M, led by a record Q1 Digital result and resilient regional performance despite weather headwinds .
  • Versus Wall Street: Revenue slightly beat consensus ($2.794B actual vs ~$2.785B estimate), while EPS and EBITDA came in below S&P Global consensus; EPS loss was deeper than expected and EBITDA trailed estimates as sector-wide sports outcomes during March Madness pressured Digital hold* .
  • Las Vegas margins expanded: same‑store operating costs fell 3% and Las Vegas EBITDA margin reached 43.2% (+50 bps YoY), despite a tough Super Bowl comp; Regional trends improved on contributions from New Orleans and Danville .
  • 2025 FCF set to inflect: management reiterated lower capex ($600M) and cash interest ($775M), enabling accelerated deleveraging and opportunistic buybacks; $100M was repurchased in April at $23.84 per share, funded by expected monetization of the $250M WSOP note .
  • Near‑term catalysts: accelerating iGaming (April MGR +~70% YoY), continued Digital product rollouts (single wallet, proprietary games, branded studios), and record group bookings in Las Vegas underpin confidence into 2H 2025 .

What Went Well and What Went Wrong

What Went Well

  • Digital outperformed: Caesars Digital net revenue +19% YoY to $335M and Adjusted EBITDA reached $43M (TTM EBITDA >$150M), aided by cost discipline and product enhancements; iCasino net revenue grew 53% YoY, with April iGaming revenue up almost 70% YoY MGR .
  • Las Vegas margins expanded despite tougher comp: same‑store operating expenses down 3% YoY; EBITDA margin 43.2% (+50 bps YoY). “We had a good start to 2025… Las Vegas… was the third best Q1 Las Vegas performance on record” .
  • Balance sheet progress and capital inflection: 2025 capex guided to ~$600M and cash interest to ~$775M; management expects “significant improvement” in FCF and continued debt reduction plus opportunistic buybacks; repurchased $100M in April .

What Went Wrong

  • EPS and EBITDA below consensus: GAAP diluted EPS was a larger loss than Street expected and EBITDA trailed, reflecting “customer‑friendly” NCAA outcomes; management quantified hold‑adjusted Digital uplift, implying core momentum but near‑term volatility* .
  • Regional competitive pressure persists: while trends improved, certain markets (e.g., Chicago/Indianapolis/Council Bluffs) continue to face localized competition; New Orleans’ January was impacted by a terrorist event and weather .
  • Modest Las Vegas topline softness: occupancy and cash ADR were “down slightly,” and Vegas volumes were offset by ~200 bps hold below normal; leap year effect cited at ~$6M .

Financial Results

Consolidated Performance vs Prior Quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$2.874 $2.799 $2.794
GAAP Diluted EPS ($)$(0.04) $0.05 $(0.54)
Adjusted EBITDA ($USD Billions)$1.001 $0.885 $0.884

Q1 2025 vs Q1 2024 (Same‑Store) Segment Breakdown

SegmentNet Revenues ($USD Millions) Q1 2024 AdjNet Revenues Q1 2025% ChangeAdjusted EBITDA ($USD Millions) Q1 2024 AdjAdjusted EBITDA Q1 2025% Change
Las Vegas$1,022 $1,003 (1.9)% $436 $433 (0.7)%
Regional$1,365 $1,388 1.7% $433 $440 1.6%
Caesars Digital$282 $335 18.8% $5 $43 *
Managed & Branded$68 $67 (1.5)% $18 $16 (11.1)%
Corporate & Other$(1) $1 * $(43) $(48) (11.6)%
Total Caesars$2,736 $2,794 2.1% $849 $884 4.1%

Balance Sheet and Liquidity

MetricDec 31, 2024Mar 31, 2025
Cash & Equivalents ($USD Millions)$866 $884
Total Debt ($USD Millions)$12,294 $12,302
Net Debt ($USD Millions)$11,428 $11,418
Revolver Capacity ($USD Millions)$2,235 $2,235
Total Cash + Availability ($USD Millions)$2,971 $2,994

KPIs and Operating Details

KPIQ1 2025
Las Vegas EBITDA Margin43.2% (+50 bps YoY)
Convention room nights (Las Vegas mix)20%
Digital parlay mix change+260 bps YoY
iCasino net revenue growth+53% YoY
Digital TTM EBITDA>$150M
Hold‑adjusted Digital growth (approx.)Revenue +$88M; EBITDA +$60M
April iGaming revenue (through Apr 27)+~70% YoY MGR

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital ExpenditureFY 2025~$600M (Q4 2024 outlook) ~$600M Maintained
Cash Interest ExpenseFY 2025“Significant reductions in 2025” ~$775M Clarified/Quantified
Free Cash FlowFY 2025“Significant free cash flow” expected “Significant improvement” expected; majority to debt reduction Maintained (emphasis)
Share Repurchases2025Opportunistic, subject to FCF $100M repurchased in April at $23.84; remain opportunistic if dislocations persist Executed/Active
Segment OutlookFY 2025Brick‑and‑mortar stable; Digital growth Vegas “grow a little,” Regionals flat–slightly up, Digital strong growth Maintained/Refined
WSOP Note Monetization2025Proceeds received $250M (brand sale) $250M WSOP note expected to be monetized in 2025 Execution Update

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Digital growth trajectoryQ3: Record Digital EBITDA; net rev +40% YoY . Q4: Digital impacted by unfavorable sports outcomes; iGaming +60% YoY .Net rev +19% YoY; EBITDA $43M; iCasino +53% YoY; April MGR +~70% YoY; flow‑through >50% .Accelerating iGaming; solid OSB despite volatility
Regional competitionQ3: New competition, construction disruptions pressured regionals . Q4: Competitive pressures persisted, offset by openings in New Orleans/Danville .Trend improved vs late 2024; contributions from New Orleans & Danville; weather headwinds; leap year effect .Improving as new sites ramp; anniversaring competition
Las Vegas demand/marginsQ3: Record hotel/F&B/banquets; strong occupancy/ADRs . Q4: Stable conditions, high occupancy/strong ADRs .Margins up; costs down; tough Super Bowl comp; forward bookings strong; record group expected for 2025/2026 .Margin discipline; bookings strong
Technology/product roadmapQ3/Q4: Ongoing product enhancements; database leverage highlighted .Single wallet rollout (16 states, Nevada field trial); branded live dealer studios (PA/NJ); first in‑house proprietary game launched .Execution advancing
Macro/tariffsQ4: Expect stable brick‑and‑mortar; 2025 interest savings .No observed consumer softness; minimal direct tariff impact; cautious monitoring .Stable; watchful
Regulatory/legal (tax, iGaming)Q3/Q4: Standard risk disclosures .States looking at tax rates on OSB; view that iGaming legislation could gain appeal in 2026–2027 .Potential medium‑term tailwind
Omnichannel/CRMQ3/Q4: Caesars Rewards leverage .Hosts incentivized to cross‑sell; simultaneous brick‑and‑mortar/online launches (AGS) .Strengthening integration

Management Commentary

  • “Consolidated Adjusted EBITDA grew 4% over prior year driven by significant gains in our Digital segment… and a solid quarter in Las Vegas against a tough Super Bowl compare last year.” – CEO Tom Reeg .
  • “Las Vegas EBITDA margins were 43.2%, up 50 basis points year-over-year… same‑store operating expenses were down 3% YoY.” – President & COO Anthony Carano .
  • “Our flow-through rate was well in excess of our annual 50% target due to cost controls… sports betting net revenue increasing 9% and iCasino net revenue growing 53% YoY.” – President, Caesars Digital Eric Hession .
  • “We expect 2025 full year CapEx to be roughly $600 million… cash interest… ~$775 million… we repurchased $100 million of our stock at an average price of $23.84.” – CFO Bret Yunker .
  • “We still do not see any of the consumer softness that investors seem to be worried about… forward bookings look quite strong… digital continuing to post significant growth.” – CEO Tom Reeg .

Q&A Highlights

  • Las Vegas outlook: Record group year anticipated in 2025 and strong Q4 group strength; forward cash room revenue for Q2 looks in line with prior year; levers available if macro softens .
  • Regionals: Weather and one‑time events impacted Q1 (e.g., New Orleans January EBITDA ~$2M); underlying run‑rate improved as conditions normalized (March EBITDA >$16M); leap year impact ~$6M in Vegas .
  • Digital dynamics: OSB hold volatility is a feature, not a bug; parlay mix rising; roadmap to lift structural hold toward ~10% by late 2026 via tech/trading enhancements (e.g., cash‑outs on player props) .
  • Handle growth and profitability: Reduced reinvestment at unprofitable ends of the customer spectrum; mid‑tier recreational segments growing high single‑ to low double‑digits; industry should expect slower handle growth without new states, with rationalized promo .
  • Capital allocation: Expect to remain active in buybacks during dislocations; majority of operating FCF still directed to debt reduction; $250M WSOP note expected to be monetized in 2025 .

Estimates Context

  • Q1 2025 consensus vs actual: Revenue beat, EPS and EBITDA missed; sector‑wide NCAA outcomes pressured OSB hold while iCasino growth and lower promo partially offset .
MetricQ3 2024Q4 2024Q1 2025FY 2025
Revenue Consensus Mean ($USD)2,919,183,2002,813,784,7702,785,487,06011,476,287,750
Revenue Actual ($USD)2,874,000,0002,799,000,0002,794,000,000—
Primary EPS Consensus Mean ($)0.1417(0.1193)(0.1706)(1.2288)
Primary EPS Actual ($)(0.0362)(0.2430)(0.4811)—
EBITDA Consensus Mean ($USD)997,584,560901,969,580874,764,2103,663,747,170
EBITDA Actual ($USD)970,000,000867,000,000847,000,000—

Values retrieved from S&P Global.*
Document actuals for revenue: Q3 2024 , Q4 2024 , Q1 2025 .

Key Takeaways for Investors

  • Revenue slightly beat, but EPS/EBITDA missed consensus due to adverse OSB outcomes; core Digital momentum (iCasino +53% YoY) and margin discipline in Las Vegas support medium‑term profitability .
  • 2025 is a free cash flow inflection year with capex ($600M) and cash interest ($775M) lower; expect continued deleveraging and selective buybacks amid dislocations; $100M repurchased in April .
  • Las Vegas margin resilience and record group bookings underpin stability; regional trajectory improving as New Orleans/Danville ramp and competitive impacts anniversary .
  • Digital product and tech roadmap (single wallet, proprietary games, branded studios) expanding TAM and margins; parlay mix rising (+260 bps) supports structural hold lift over time .
  • Near‑term trading: watch OSB hold volatility and June–July WSOP/online events; iGaming acceleration and ongoing product launches can be positive catalysts .
  • Estimate revisions: expect modest upward adjustments to iGaming‑driven revenue while EPS/EBITDA forecasts may be tempered to reflect OSB volatility and Q2/Q3 WSOP revenue normalization in “other” Digital line .
  • Balance sheet: net debt edged down; liquidity ample ($2.994B cash + availability); next unsecured maturity due 2027; deleveraging plan intact .