Caesars Entertainment (CZR)·Q4 2025 Earnings Summary

Caesars Digital Hits Record $85M EBITDA as Stock Jumps 4% Despite Earnings Miss

February 17, 2026 · by Fintool AI Agent

Caesars Entertainment (NASDAQ: CZR) reported Q4 2025 results that showcased a tale of two businesses: a maturing brick-and-mortar casino operation facing headwinds and a digital segment firing on all cylinders. While the headline GAAP numbers disappointed—a $250 million net loss versus $11 million profit a year ago—investors focused on the Digital segment's record quarter and management's bullish 2026 outlook, sending shares up 4.1% to $18.95.

Did Caesars Beat Earnings?

Revenue: Beat. Caesars reported net revenues of $2.92 billion, topping consensus estimates of $2.89 billion by approximately 0.8%. On a same-store basis, revenue grew 4.4% year-over-year.

EPS: Miss. GAAP diluted loss per share came in at $(1.23), significantly below consensus expectations. The normalized EPS figure also missed estimates.

Adjusted EBITDA: Beat. Same-store Adjusted EBITDA of $901 million exceeded the prior year's $882 million (+2.2%), driven entirely by the Digital segment's explosive growth.

Important context: The year-over-year net income decline is distorted by $350+ million in asset sale gains in Q4 2024 (WSOP trademark sale of $317M, LINQ Promenade sale of $34M) that didn't repeat.

What Changed From Last Quarter?

The big story is the divergence between Digital and brick-and-mortar operations:

Caesars Digital: Record Quarter

The Digital segment delivered its best quarter ever with $85 million in Adjusted EBITDA, up from just $20 million in Q4 2024—a 325% improvement. Revenue surged 38.7% to $419 million.

For the full year, Digital EBITDA more than doubled to $236 million from $117 million in 2024.

Las Vegas: Soft But Stabilizing

Las Vegas revenue declined 3.4% to $1.04 billion with EBITDA down 6.5% to $447 million on a same-store basis. However, management noted a "quarterly sequential improvement in operating trends"—suggesting the worst may be behind them.

Regional: Steady Performer

Regional casinos posted 4.0% revenue growth to $1.40 billion, though EBITDA declined 1.5% to $404 million due to cost pressures.

What Did Management Guide?

CEO Tom Reeg struck an optimistic tone for 2026:

"As we look ahead to 2026, the brick-and-mortar operating environment remains stable, and we are expecting another year of strong Net Revenue and Adjusted EBITDA growth in our Caesars Digital segment. When combined with lower capex and cash interest expense, 2026 is forecasted to deliver strong free cash flow that we expect to use to pay down debt and opportunistically repurchase our common stock."

Key 2026 drivers:

• Lower capex: Major growth projects in Virginia and New Orleans now complete
• Reduced interest expense: Debt paydown benefits flowing through
• Continued Digital momentum: Management expects "another year of strong" Digital growth
• FCF deployment: Debt reduction + opportunistic buybacks

How Is the Balance Sheet?

Caesars made meaningful progress on deleveraging:

CFO Bret Yunker highlighted capital returns: "We continued to opportunistically repurchase our common stock bringing aggregate share repurchases to 14.7 million shares for $420 million since we began our repurchase activity in the middle of 2024."

How Did the Stock React?

CZR shares rose 4.1% to close at $18.95 on the earnings release, with aftermarket trading pushing the stock to $19.73 (+8.8% from prior close).

The positive reaction came despite the EPS miss, reflecting investor enthusiasm for:

1. The Digital segment's record performance and growth trajectory
2. Management's confident 2026 FCF outlook
3. Continued progress on debt reduction

Context on the stock: CZR has fallen over 50% from its 52-week high of $39.86, hitting a new 52-week low of $17.86 today before rebounding on the results. The stock trades at just 4.4x trailing EBITDA, reflecting investor concerns about the high debt load and brick-and-mortar headwinds.

Full Year 2025 Summary

The full-year EBITDA decline was driven by Las Vegas weakness (down 8.6% to $1.73B) partially offset by the Digital surge (+102%).

Key Takeaways

Bulls will point to:

• Digital segment's inflection point—now a material profit contributor
• Management's confident 2026 FCF outlook with lower capex
• Meaningful debt reduction trajectory
• Stock valuation at multi-year lows (4-5x EBITDA)
• Las Vegas showing sequential improvement

Bears will counter:

• Las Vegas deterioration continues (down 8.6% EBITDA for the year)
• High leverage ($11B net debt) limits flexibility
• EPS still deeply negative despite EBITDA generation
• Regional margins compressing
• Uncertain macro environment for consumer discretionary

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Report generated by Fintool AI Agent on February 17, 2026. Data sourced from company filings and S&P Global.