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Gaming & Leisure Properties, Inc. (GLPI)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered record revenue ($394.9M, +3.8% YoY), AFFO ($276.1M, +4.4% YoY), and Adjusted EBITDA ($361.5M, +6.2% YoY), underpinned by recent acquisitions, contractual escalators, percentage rent adjustments, and development fundings .
  • Full-year 2025 AFFO guidance was nudged up at the low end to $1.112–$1.118B ($3.85–$3.87/share), from $1.109–$1.118B ($3.84–$3.87/share), reflecting expected $130M Joliet funding at a 7.75% cap rate and ~$338M remaining H2 development funding; dividend declared at $0.78 in Q2 .
  • Versus S&P Global consensus: revenue was a modest miss, GAAP EPS missed driven by a non-cash provision for credit losses ($53.7M), while company-reported Adjusted EBITDA was strong; FFO/share consensus exceeded GAAP FFO/share, but AFFO/share printed $0.96 , S&P values marked with *.
  • Strategic catalysts include Bally’s lease reallocation ($28.9M annual rent moved to Bally’s Master Lease II with revised guarantees), tribal financing (Ione) advancing, PENN’s Joliet relocation funding, forward interest rate swaps hedging anticipated notes, and an active sale-leaseback/development pipeline .

What Went Well and What Went Wrong

  • What Went Well

    • “Another quarter of record revenue, AFFO and Adjusted EBITDA,” with total revenue +3.8% YoY to $394.9M, AFFO +4.4% to $276.1M, Adjusted EBITDA +6.2% to $361.5M .
    • Bally’s assets “performing very well” and lease changes improved structural alignment; $28.9M annual rent reallocated to Bally’s Master Lease II with new Bally’s entity guarantees .
    • Pipeline execution: Boyd master lease extensions, Ione tribal project funding ($25.8M to date; $110M commitment at 11% rate), PENN’s $130M Joliet relocation at 7.75% cap rate .

  • What Went Wrong

    • GAAP EPS impacted by non-cash macro modeling: provision for credit losses rose to $53.7M in Q2 due to downside GDP/tariff scenario inputs (TREPP/Oxford), despite all tenants current on rent .
    • Consensus comparison optics: slight revenue miss vs S&P; GAAP FFO/share and SPGI EBITDA “actual” appear below consensus, while company Adjusted EBITDA was strong—non-GAAP versus GAAP definitional mismatch drove confusion , S&P values marked with *.
    • Lease guarantee changes created investor questions; management clarified corporate guarantee remains on Bally’s Master Lease II; residual Casino Queen lease lacks parent guarantee but has guarantees from Bally’s entities due to restricted/unrestricted group considerations .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Total Revenue ($M)$389.6 $395.2 $394.9
Net Income ($M)$223.6 $170.4 $156.2
Diluted EPS ($)$0.79 $0.60 $0.54
FFO ($M)$287.9 $234.8 $224.9
FFO/share ($)$1.01 $0.83 $0.79
AFFO ($M)$269.7 $272.0 $276.1
AFFO/share ($)$0.95 $0.96 $0.96
Adjusted EBITDA ($M)$354.0 $360.1 $361.5

EBITDA and Net Income margins (S&P Global):

MarginQ1 2025Q2 2025
EBITDA Margin (%)83.0%*79.9%*
Net Income Margin (%)41.8%*38.4%*

Values retrieved from S&P Global.*

Estimates vs Actuals (Q2 2025, S&P Global):

MetricConsensusActual ReportedSurprise
Revenue ($M)398.0*394.9 Miss
Primary EPS ($)0.751*0.54 Miss
EBITDA ($M, SPGI basis)365.6*315.6*Miss
FFO/share ($)0.968*0.79 Miss

Values retrieved from S&P Global.* Note: Company Adjusted EBITDA was $361.5M, reflecting non-GAAP addbacks .

Segment/Lease Revenue Contribution (Q2 2025):

Lease/AssetTotal Income from Real Estate ($000)
Amended PENN Master Lease76,994
PENN 2023 Master Lease64,451
Amended Pinnacle Master Lease91,421
Caesars Master Lease24,480
Boyd Master Lease24,804
Bally’s Master Lease29,223
Maryland Live! Lease24,927
Pennsylvania Live! Master Lease15,390
Casino Queen Master Lease8,805
Bally’s Master Lease II8,982

Key KPIs:

KPIQ2 2025
Cash NOI ($000)371,234
Annualized Dividend per Share ($)3.12
Q2 Dividend per Share ($)0.78
Properties/Facilities68
Debt Wtd Avg Interest Rate5.064%
Master Lease Coverage Range1.69x–2.72x (trailing)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
AFFO ($B)FY 2025$1.109–$1.118 $1.112–$1.118 Raised low end
AFFO/share ($)FY 2025$3.84–$3.87 $3.85–$3.87 Raised low end
Development fundings assumptionFY 2025~$400M (Feb) ~$375M (Jul) Lowered
Remaining H2’25 development fundingFY 2025N/A~$338M New detail
Joliet relocation fundingH2 2025N/A$130M at 7.75% cap; fund Aug 1 Added
DividendQ2 2025$0.76 (Q1) $0.78 (Q2) Raised

Assumptions exclude future M&A/ATM beyond noted items .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
Bally’s exposure/guaranteesExpanding Bally’s footprint; Chicago binding term sheet; coverage ~2.0x in leases Clarified Master Lease II retains parent guarantee; residual Casino Queen lease has subsidiary guarantees; investors’ leverage concerns addressed Neutral to improving clarity
Chicago developmentQ1: 272/331 caissons; steel ordered; timing complexity acknowledged Project moving quickly; cap rates unchanged (8% land, 8.5% improvements); newsletter planned to enhance transparency Advancing execution
Tribal financingIone loan $18.4M funded (Q1) $25.8M funded; $110M facility at 11%; broader tribal pipeline progressing; NIGC approvals prerequisite to fund Building momentum
PENN projects (Joliet/Aurora/Council Bluffs)Backstop commitments; cadence uncertain Joliet $130M funding Aug 1 at 7.75% cap; Aurora $225M definitive; Council Bluffs optional 7.10% cap Near-term funding triggers
Provision for credit lossesQ4: favorable benefit; Q1: increase on macro assumptions Q2: $53.7M non-cash driven by downside GDP/tariff scenario; all rent current Macro model headwind
iGaming and tariffsMonitoring iGaming cannibalization risk; tariff impacts unclear (Q1) iGaming cautious stance; parent guarantees mitigate; tariff discussion tied to macro downside case Watchful
Balance sheet and hedgingRevolver extension (Q4); leverage ~4.7x (Q1) Forward SOFR swaps ($200M notionals) to hedge future notes; spreads tight; active monitoring Proactive risk management
New York downstateROFR; potential participation varies by project; “highly confident” letters common (Q1) GLPI open to multi-party solutions; sizing discipline (coverage >2x); Bally’s application cited GLPI Optionality maintained

Management Commentary

  • “The second quarter marked another quarter of record revenue, AFFO and Adjusted EBITDA… expected to drive continued financial growth in the second half of 2025.”
  • “DraftKings at Casino Queen and The Queen Baton Rouge properties were transferred to Bally's Master Lease II… annual rental income of $28.9 million will be reallocated… replaced by a guarantee from several Bally's entities.”
  • “We have funded $25.8 million… for the Ione Band of Miwok Indians… a first-of-its-kind financing agreement between a federally recognized tribe and a real estate investment trust.”
  • “PENN… intended to utilize $130 million for the relocation of Hollywood Casino Joliet… GLPI will receive a 7.75% cap rate on the funding.”
  • CFO: “Operating expenses increased… primarily resulting from a non-cash adjustment in the provision for credit losses due to a more pessimistic forward-looking economic forecast… all our rent payments are current.”

Q&A Highlights

  • Bally’s guarantees and lease structure: Clarified Master Lease II retains parent guarantee; residual Casino Queen lease moved assets to unrestricted group with subsidiary guarantees, aligning with Bally’s capital structure .
  • Provision for credit losses drivers: TREPP/Oxford macro scenarios (tariff/GDP downside case) drove non-cash provision despite current tenant payments; management views it as modeling-required, not fundamental .
  • Tribal pipeline and NIGC process: Advanced discussions across multiple tribes; GLPI will not fund without final NIGC approval; potential announcements in coming months .
  • Hedging/financing: Forward-starting SOFR swaps ($100M + $100M) to hedge anticipated bond issuance; spreads tight; team monitoring rates to add hedges opportunistically .
  • New York downstate: GLPI open to multi-party structures; emphasizes underwriting each property on standalone merits, coverage >2x, and accretive spread to cost of capital .

Estimates Context

  • Q2 revenue slightly below S&P consensus (Actual $394.9M vs $398.0M), reflecting minor timing/mix effects; company still printed record revenue , S&P*.
  • GAAP EPS missed (Actual $0.54 vs $0.751), due largely to the non-cash credit loss provision required under ASC 326 modeling; AFFO/share printed $0.96 (flat QoQ, +YoY), more relevant to REIT valuation , S&P*.
  • SPGI EBITDA “actual” vs consensus showed a miss (315.6 vs 365.6), but company’s Adjusted EBITDA was $361.5M (+6.2% YoY), underscoring the definitional gap and non-GAAP addbacks (straight-line rent, credit loss provision, etc.) , S&P*.
  • FFO/share consensus exceeded GAAP FFO/share (0.968 vs 0.79); analysts likely to recalibrate GAAP metrics for credit-loss modeling while holding AFFO trajectories given raised FY guidance , S&P*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • AFFO trajectory intact and slightly improved at the low end; dividend increased to $0.78 and annualized $3.12 supports income thesis .
  • The apparent GAAP EPS/EBITDA misses are driven by non-cash modeling (credit loss provision) and GAAP vs non-GAAP definitions; Adjusted EBITDA and AFFO performance demonstrate core cash flow strength .
  • Near-term catalysts: PENN Joliet funding (Aug 1) at 7.75% cap rate; ~$338M H2 development funding cadence; watch Bally’s Chicago progress and communications .
  • Bally’s lease reallocation and guarantees clarified; coverage ratios across master leases are comfortable (1.69x–2.72x), mitigating tenant credit volatility concerns .
  • Balance sheet prudence: Forward SOFR hedges ahead of potential notes; weighted average debt cost ~5.06% and leverage targeted within ~5.5x, preserving flexibility for sale-leasebacks and tribal deals .
  • Continued sale-leaseback and development opportunity set; management emphasizes underwriting discipline (coverage >2x, accretive spreads), with optionality in New York downstate and Southeast expansion .
  • Trading setup: Focus on AFFO delivery vs GAAP noise, guidance execution, and deal flow updates (PENN, Bally’s Chicago/Las Vegas, tribes) as stock reaction catalysts .