Las Vegas Sands - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 net revenue was $2.86B (-3.3% YoY) with consolidated adjusted property EBITDA of $1.14B; diluted EPS was $0.49 and adjusted EPS was $0.59.
• Marina Bay Sands delivered record adjusted property EBITDA of $605M at a 52.0% margin, while Macao operations generated $535M, modestly impacted by low rolling hold (-$10M).
• Board increased remaining share repurchase authorization to $2.0B; LVS repurchased $450M during the quarter and paid a $0.25 dividend.
• Management underscored Macao competition and base mass softness but expects Londoner ramp and portfolio scale to drive revenue/margin recovery; reiterated confidence in Singapore growth trajectory with upgraded suite product and sustained high-value tourism.

What Went Well and What Went Wrong

What Went Well

• Marina Bay Sands posted record adjusted property EBITDA of $605M and margin of 52.0%, supported by high-value tourism, premium mass strength, and renovated suites; ADR rose to $925 and RevPAR to $884.
• Portfolio capital and liquidity remain strong: $3.04B in unrestricted cash and $4.44B of revolver capacity; weighted average borrowing cost declined to 4.9% (vs 5.0% prior year).
• Capital returns accelerated: $450M repurchased at $44.59 WAP and authorization increased to $2.0B; dividend of $0.25 declared.
  “Marina Bay Sands continued to deliver outstanding financial and operating performance. Our new suite product and elevated service offerings position us for additional growth as travel and tourism spending in Asia expands.” — CEO Robert G. Goldstein.

What Went Wrong

• Macao net revenues fell to $1.709B (from $1.811B), with aggregated adjusted property EBITDA down to $535M (from $610M), reflecting lower non-rolling table revenues and competitive pressure; Venetian Macao EBITDA margin fell 540 bps YoY to 35.3%.
• Effective tax rate rose sharply to 13.4% (vs 2.8% prior year), driven by a 17% statutory rate on Singapore operations; net income fell to $408M (vs $583M prior year).
• Company emphasized Macao market growth “softened” and base mass demand lagged; sequential share losses and lower spend per head noted at Venetian; Londoner ramp timing extended (~6–12 months).

Transcript

Operator (participant)

Good day, ladies and gentlemen, and welcome to the Sands First Quarter 2025 earnings call. At this time, all participants have been placed on a listen-only mode. We will open the floor for your questions and comments following the presentation. It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at Sands. Sir, the floor is yours.

Daniel Briggs (SVP of Investor Relations)

Thank you, Paul. Joining the call today are Rob Goldstein, our Chairman and CEO; Patrick Dumont, our President and Chief Operating Officer; Dr. Wilfred Wong, Executive Vice Chairman of Sands China; and Grant Chum, CEO and President of Sands China and EVP of Asia Operations. Today's conference call will contain forward-looking statements. We will be making those statements under the safe harbor provision of Federal Securities Laws. The language on the forward-looking statements, included in our press release and 8-K filings, also applies to our comments made on the call today. The company's actual results will be differ materially from the results reflected in those forward-looking statements. In addition, we will discuss non-GAAP measures. Reconciliations to the most comparable GAAP financial measure are included in our press release. We have posted an earnings presentation on our website. We will refer to that presentation during the call.

Finally, for the Q&A session, we ask those with interest to please pose one question and one follow-up question so we might, Paul, pardon me, so we might allow everyone with interest the opportunity to participate. This presentation is being recorded. I'll now turn the call over to Rob.

Rob Goldstein (Chairman and CEO)

Okay, thank you, Dan. Let's begin with Macao. This is a competitive market that has not improved as we anticipated. However, we have the strongest assets in the market, and we can perform better despite the challenging macro environment. The Londoner is now fully open this time, 2,405 study rooms and suites as we prepare for Golden Week in May. Now that we've completed the development projects, we expect this asset to elevate our performance. Our focus is on improving our revenue and cash flow across the portfolio. There is opportunity in every segment to show stronger results. Our business strategy remains unchanged. We have designed our capital investment programs to ensure we will lead in both Macao and Singapore. We delivered $535 million of EBITDA for the quarter in Macao. SCL still continues to lead the market in gaming and non-gaming revenue and EBITDA.

We have meaningful opportunities to grow in every segment. Our objective is to grow our share of EBITDA in Macao markets. We have a unique product advantage in terms of scale, quality, and diversity of product offerings. Turning to Marina Bay Sands in Singapore, we delivered a record quarter with $605 million of adjusted property EBITDA, an extraordinary achievement by any standard. I assume this is a record EBITDA quarter for any gaming property in the world. Pretty extraordinary performance. Mass gaming is thought we had reached $778 million, reflecting 73% growth from the first quarter of 2019 and 13% growth from one quarter a year ago. The results at MBS reflect the positive impact of our gaming investment program and the growth of high-value tourism. The growing appeal of Singapore as a destination is enhanced by the robust entertainment and lifestyle calendar.

We believe there is considerable runway for growth there as well. Again, thanks for joining the call. Let me turn the call over to Patrick before we go to Q&A. Patrick.

Patrick Dumont (President and COO)

Thanks, Rob. Macao EBITDA was $535 million. If we had held as expected in our rolling program, our EBITDA would have been higher by $10 million. When adjusted for lower-than-expected hold in the rolling segment, our EBITDA margin for the Macao portfolio of properties would have been 31.6%, down 280 basis points compared to the first quarter of 2024. All 2,405 rooms and suites at the Londoner Grand are now available for the upcoming May Golden Week. Now that the refurbishment process is completed, we are focused on delivering revenue and cash flow growth at the Londoner. Margin at the Venetian was 35.3%, while margin at the Plaza and Four Seasons was 35.6%. We expect margin improvement as revenue grows, and we use our scale and product advantages to better address every market segment.

As The Londoner ramps up and is integrated into our Cotai offerings, our competitive position will be stronger than ever. We look forward to utilizing our entire portfolio to grow revenue and EBITDA. Now turning to Singapore, MBS's EBITDA was $605 million at a margin of 52%. Given the mix of games and demonstrated player preferences over the last two years, we have updated our expectation for hold on rolling play at Marina Bay Sands to 3.7%. There will naturally be fluctuations in any specific quarter given by game mix and player preference. We will continue to provide the illustrative impact of hold on our rolling play in Singapore. The record financial results at Marina Bay Sands reflect the impact of high-quality investment in market-leading product and growth in high-value tourism.

We believe we are still in the early stages of realizing the benefits of our investments in Marina Bay Sands. Turning to our program to return capital to shareholders, we repurchased $450 million of LVS stock during the quarter. We also paid our recurring quarterly dividend of $0.25 per share. Before going on to Q&A, I would like to provide an update on the New York development opportunity. We strongly believe in the development opportunity for land-based downstate casino license in New York. We also continue to believe that the Nassau Coliseum site is the best location for that development opportunity and should be highly competitive in the New York casino licensing process. However, as we have previously stated, the company remains concerned about the impact of potential legalization of iGaming on the overall market opportunity and project returns.

We are in the process of attempting to secure an agreement with a third party to whom we can transact the opportunity to bid for a casino license on the Nassau Coliseum site. This would include those that may be able to address both land-based and digital markets in New York. For Las Vegas Sands, we believe the highest and best use of our capital in the near term is to purchase LVS and SEL shares. Accordingly, LVS has decided not to bid for a casino license in New York. We believe repurchases of LVS equity through our share repurchase program will be meaningfully accretive to the company and its shareholders over the long term. Our board has increased our share repurchase authorization to $2 billion. We look forward to continuing to utilize the company's share repurchase program to increase returns to shareholders in the future.

Thanks again for joining the call today. Now let's take questions.

Operator (participant)

Thank you, ladies and gentlemen. The floor is now open for questions. If you would like to enter the queue to ask a question, please press star one on your telephone keypad now. If listening on speakerphone today, please pick up your handset to provide optimum sound quality. Also, we ask each participant to limit yourself to one question and one follow-up. Please hold a moment while we pull for questions. The first question today is coming from Carlo Santarelli from Deutsche Bank. Carlo, your line is live.

Carlo Santarelli (Managing Director of Gaming and Lodging Equity Research)

Yeah, hey, thanks, everybody. Rob, Patrick, thanks for your comments. As anyone could kind of see when you look at the valuation of the Hong Kong listing and what it implies basically for the corporate and Singapore, one understands kind of the willingness and desire to kind of repurchase shares. As you do think about the two entities, though, and the various repurchases across both and your stake in the Hong Kong listing specifically, how are you guys kind of balancing the way you more or less go about those allocations right now?

Patrick Dumont (President and COO)

I appreciate the question. You've heard us say it on prior calls. We see meaningful value in both LVS and SEL equity, and we're going to continue to act with this belief. We were active during the quarter at LVS. I think our goal is to really be active in both SEL and LVS equity and continue to march towards that 74.9, and you'll see us do that. I think on the LVS side, we think the valuation where our stock is currently is very attractive for us. We're going to be aggressive in the way that we buy back shares than we have done previously. We view it as an opportunity, and we're going to continue to be active in the share repurchase market for both SEL and LVS.

Carlo Santarelli (Managing Director of Gaming and Lodging Equity Research)

Great, thanks. If I could, just a quick follow-up. Obviously, the decision to raise the theoretical on the VIP side in Marina Bay Sands makes sense relative to the history here over the last two years. As you look at, however, on the mass side, hold was up nicely. I know it's always tough to kind of guesstimate what handle would have been in a normalized hold environment and how to think about all of that. When you look at kind of the impact the higher hold year over year on the mass side, mass table side specifically had on MBS, is there any way you guys could maybe outline how you think about the potential EBITDA benefit that stemmed from that?

I think the problem is it doesn't matter high-end or mass. The problem is it depends on what the customers bet. That's always been the reason why there's such talk about smart tables, it enables you to actually know and not guess whether it's 3, 4, 3, 6, 4, 1. It tells you specifically. I think that's the advantage we're going to have in both Macao and Singapore in the future. Again, it depends on the composition of bets. It really doesn't matter if it's premium or mass or base mass. If the customer bets the, I call them prop bets, but the lesser, the more favourable bets the house is going to drive the hold percentage. For years, people discussed this and guessed the handle or the hold percentage and false drop, etc. This takes the guesswork out.

It makes it actually mathematically perfect. That is our goal is to have that information across both jurisdictions in the future.

Patrick Dumont (President and COO)

I think the most important thing here is that while MBS obviously is impacted by hold, our rolling program, really the outperformer at Marina Bay Sands has been the mass segment. I think that really has been the story of Marina Bay Sands. Yeah, I think our rolling business has improved in a meaningful way. When you look at Marina Bay Sands and the investments that have been made there, it is really to attract high-value tourists on the mass side. Our premium mass and mass segment there has outperformed to an extraordinary level. We think there is room to grow now that our renovation is completed. I think it is an important story to talk about how we see the uptake of these side bets and how it has moved our hold over time.

I think our team there has done great work developing game types and innovating so that we can benefit from player preferences and these more aggressive bets. At the same time, it's really a mass-driven story based on the investment and the non-gaming amenities that are driving visitation and high-value tourism. That's why you see the EBITDA that we have today.

Carlo Santarelli (Managing Director of Gaming and Lodging Equity Research)

Rob, Patrick, then, is it fair if you look at last year, kind of the mass table hold was right around 20.1%? It had been kind of 2018 and 2019 in the prior years. Based on the theoretical that you guys are seeing with the information that you have to be able to do so, is 2020 more like that normalized level on a go-forward basis on the mass side?

Rob Goldstein (Chairman and CEO)

I don't know. You can't know. Again, the difference is it's like sports wagers. You read about the sports betting companies. When they have flat bets on if one team wins or the other, the hold percentage is relatively weak. When they make side bets, it soars. I think the same is happening here. The mass tends to bet more on the prop bets and gives you more advantage. That's my point is that for 2020, 30 years I've been doing this, people have been guessing, what's the right hold? Is it 3.6%? Is it 2.4%? The beauty of this whole thing is we'll know mathematically perfect based on the bets they make. We take the table drop out of it and the false drop and the handle. It comes down to it. It basically becomes a slot machine. You'll know exactly what the number should be.

I think what you are seeing now across the industry is the development of side bets has been very valuable. Since we are the biggest baccarat provider in the world, for this company, it is very valuable and will impact EBITDA in the future. The more bets they make in these side bets, the more you grow the hold percentage. Baccarat provider used to be a very dense game house at 2.6%, 2.7% because the flat bets were predominant. Today, the fact it is growing to 3.7%, it could go to 4%, is hugely valuable to put your EBITDA. It will be very clear within the next year the exact mathematical number. You will not be guessing more and say, "It is going to be this stuff." It is going to range at, I guess, 3.5%-4%.

Again, as these bets proliferate and people choose to make these side bets, I think baccarat becomes more and more valuable for this company because it's our principal source of revenue.

Patrick Dumont (President and COO)

We should just caution everyone that with player preference and game mix, these percentages will move around.

Carlo Santarelli (Managing Director of Gaming and Lodging Equity Research)

Yes.

Patrick Dumont (President and COO)

With bet size. We just have to be aware that this is the best that we can do in terms of providing information. We are going to continue to be optimistic about the types of games we put on the floor in terms of growth they can provide. We will see what they do.

Rob Goldstein (Chairman and CEO)

One thing's not deniable is bet differences are happening every day. Developing these games is very valuable for the industry, very valuable for us. It's happening and getting better by the day. The more these bets continue to become more important, the more EBITDA will grow. I think it's going to happen both in Singapore. I think it'll happen in Macao as well.

Carlo Santarelli (Managing Director of Gaming and Lodging Equity Research)

Thank you both very much.

Operator (participant)

Thank you. The next question is coming from Stephen Grambling from Morgan Stanley. Stephen, your line is live.

Stephen Grambling (Managing Director)

Hey, thank you. I think you mentioned that there's an effort to activate the properties and see revenue and EBITDA ramp from here as the Londoner project has generally come to completion. It looks like there's some moving parts across the different properties. I'm curious if there's any thought process on some of the ones that maybe have lagged in terms of how you will reinvigorate growth there, whether it's Venetian or others, or is it just really a question of as the Londoner is kind of fully up and running, you'll see everything click?

Grant Chum (CEO and President)

Yeah, thank you, Stephen. I'll take that question. I think overall, yes, the focus will be ramping up the new product at Londoner and Grand. As Rob mentioned, we now have the 2,400 rooms and suites in full service. You'll see us leveraging the asset, the new product to drive customer growth and obviously eventually revenues and EBITDA. The ramp-up will take its course over the next 12 months. We're still at the early stages of it. We just got the full complement of the rooms in mid-April. As for the other properties, our intention is to maintain and grow each of the existing properties whilst Londoner is ramped up. You'll see us focus across Venetian, Parisian, Four Seasons, and Sands across all of the product segments and price points.

Yes, the driver of our customer growth will be The Londoner over the next six to 12 months.

Stephen Grambling (Managing Director)

Does the initial read in what you're seeing there change the way you think about CapEx and allocating capital across the different properties? Is there any kind of renovations that you see in the future at some of the other properties?

Patrick Dumont (President and COO)

You know, I have to tell you, I think Macao is the greatest gaming market in the world. If you look at its size and you look at the potential and where its source markets are, the long-term potential there is absolutely incredible. We love our ability to invest there. We love the scale nature of our portfolio, the number of amenities that we have, and the quality of those amenities, and now the high quality of our entire property portfolio. We think we're in a great position. We're going to continue to invest to maintain that position, but also for growth because we think the opportunity is there long-term.

Grant Chum (CEO and President)

I think we'll continue, Stephen, with regular upgrade and renovation of our existing assets. That's a given, given we have 33 million sq ft of asset portfolio across Macao. The major redevelopment and upgrading at The Londoner is largely complete. We'll have a few more amenities to add and restaurants. From here on, you should expect, yes, we will continue to reinvest back into the asset base because we need to upgrade and keep up with the competition. It will be regular renovation where we'll be taking a modest amount of keys out at any one time. You'll see that over every year, every quarter, over the next several years as we upgrade the existing portfolio.

Stephen Grambling (Managing Director)

Helpful. Thank you. We'll jump back in the queue.

Operator (participant)

Thank you. The next question is coming from Robin Farley from UBS. Robin, your line is live.

Robin Farley (Managing Director and Leisure Analyst)

Thanks. I just wanted to circle back to the ramp-up you mentioned for the Londoner. You did mention that it may take 12 months. I wonder if you could talk a little bit about, do you think that your market share results in Q1, did the new Londoner rooms contribute to that, or would you say not really, that that's not really indicative of where you think your market share can go? I guess, I don't know if you can give a little more color around what would happen over the next 12 months or why it would take 12 months. I know you'll have, of course, very easy comparisons to the disruption in Q2 and Q3 last year, but that maybe is a little bit longer of a ramp-up period than maybe people would have expected. Thanks.

Patrick Dumont (President and COO)

I have to tell you, this is what we spend a lot of time talking about. We're very focused on growing our business in Macao. Unfortunately, we had 2,000 keys that we really, 2,405 keys that we really wanted to be available. It took a little while to get them. During the quarter, we didn't have full access to all the inventory we normally would have to bring to bear. I think when you think about it, 1,700 keys that we were out or 1,600 keys we were out in average over the quarter is equivalent to not having a property available in your portfolio.

I think now that it's back and we have the full strength of our portfolio, we're going to press very hard to continue to grow this business, recapture share, recapture EBITDA share, and grow revenue, which will expand our margin. We have some work to do. I think that's very clear to us. We know it. We acknowledge it. There's some things we want to focus on in Macao to improve our outlook and grow our business.

Grant Chum (CEO and President)

Yeah, Robin, I think the reference to the 12 months is simply that any new property of this scale, we are going to get better and better over time. That is really the point of that comment. In terms of the market share, yes, I think our results were impacted by the fact that we lost market share both against the prior year and sequentially. We are looking, with the new assets coming online, to be competing harder for the revenues in a flat market. We fully intend to compete with the Londoner. You can also see some of our results in the other properties. We are looking to improve performance at Venetian as well as the other existing properties.

I think it's going to be a comprehensive effort to reactivate, engage new customer growth, as well as to fully leverage the new property in Londoner Grand.

Robin Farley (Managing Director and Leisure Analyst)

Thank you. Maybe just as a follow-up, Macao has talked about kind of wanting to review the non-gaming investments and efforts of the concessionaires. Do you have a sense of what they would like to see more of or what may have changed recently or they would be looking for more of going forward? Thanks.

Grant Chum (CEO and President)

I'll give my view, and maybe Wilfred can also chime in here in terms of the policy direction. For us, we are continuing to focus on what we've committed to the government in terms of non-gaming investments. Clearly, we've already made a significant investment in upgrading the Venetian Arena at a cost of around $200 million that was completed last year. That's our single biggest project that we've completed for the concession commitment. Of course, in terms of programming, in terms of developing sports and mega events with strong international IP, we're bringing the NBA Preseason Games this October, which will be a multi-year partnership. Wilfred, do you want to add to how things are evolving in terms of the direction on non-gaming investments?

Wilfred Wong (Executive Vice Chairman)

Sure. I think the new administration now has had time to look at the overall picture of the non-gaming development. As long as we maintain our total commitment, they are looking to us to specialize in areas where we each do best. They feel that maybe it's better that rather than six of us all working on similar areas, maybe there are emphases that each of us can focus on. There will be opportunities for us to discuss with the government how we do best in some of the areas. The second area is that because of the GGR reaching a certain level, we are also committed to spending an additional 20% of our into the non-gaming investment. The government is really looking into how best to coordinate the use of these proceeds.

Robin Farley (Managing Director and Leisure Analyst)

Great. Thank you.

Operator (participant)

Thank you. The next question will be from Shaun Kelley from Bank of America. Shaun, your line is live.

Shaun Kelley (Managing Director and Senior Research Analyst)

Hi, good afternoon, everyone. Thank you for taking my question. One big picture one and then sort of one micro one if I could. On the big picture side, just Rob or Grant, your high-level view here on just has the market dynamic in Macao changed at all as it relates to the balance between premium mass and the competition there versus base mass? I mean, as I think about it, LVS has always succeeded, I think, really well when the market's been extremely full. We've seen the visitation recover now, and sort of both segments are struggling a little bit. I'm just kind of curious on the balance. Are you pivoting strategy at all to kind of lean into particularly the premium segment if that's the healthier one right now?

Rob Goldstein (Chairman and CEO)

Shaun, I think your observations are correct. Our scale and size played to our advantage for years, and it was a huge advantage for us. That is more difficult to bring to light. It is more competitive in these segments. There is no longer a free segment or easy business in Macao. I think it is very competitive. In the end, I think our assets give us a—I think that we have really handicapped this Londoner thing that has taken so long and so difficult. Now we have all these rooms back open again. We can service the base mass, the premium mass. We have done well at the premium mass. We have not done as well at the base mass, nor has the market provided opportunity at the base mass. Your observations are spot on.

We were the leaders and the margin leaders as well in that base mass segment, which is much more difficult today. That has been the conundrum of Macao for us. I think now, though, it is a new day. Londoner is open. It is extraordinary, both in terms of scale and quality. I think it introduces all kinds of new opportunities for us to maximize that asset and grow again and get back in the game. We are disappointed by our results in every segment. We can do better. We plan to do better. I think your observations, unfortunately, make that market is highly competitive, but it is base mass, premium mass. There is no easy segment anymore in Macao. Grant?

Grant Chum (CEO and President)

Yeah, Shaun, I think to add to the visitation question, although you do see strong visitation growth and recovery, you can see also from slide 20 of Dan's deck, the visitation, especially this quarter, has been driven by the day trippers from Guangdong Province because they've introduced a couple of new multiple entry visas to Zhuhai and Hengqin. The non-Guangdong visitation is still only a recovery rate of about 75%. Clearly, the overnight visitation, the customers who are going to spend more coming from further away, that's still lagging. To Rob's point, the base mass is the opportunity there has been more challenging for us. Therefore, we are also competing for the revenues in premium mass given a very competitive context in that segment. That is the strongest segment. You're absolutely right in that observation.

We will continue to drive both premium mass and base mass, especially with the full inventory online now.

Shaun Kelley (Managing Director and Senior Research Analyst)

Great. Thanks. Just as I follow up, this sort of alludes to, I think, a comment that Patrick made in the prepared remarks about sort of expecting margin improvement as revenue grows. Just I think as we did our math, and this is high level, so it could be off a little bit. Macao OPEX, we had up roughly 7% across the properties this quarter. Kind of curious, is that the right run rate, or are there things you can do to match cost to revenue? Again, maybe this was somewhat inflated by reopening of The Londoner, maybe the reopening of the arena at The Venetian. I'm not sure exactly, but felt like it was a little that being up relative to kind of where revenues came in was a bit of a kind of a double issue for you.

Grant Chum (CEO and President)

Again, your observation is right. The main contributor is just the additional payroll costs that we incurred, both because of salary increases, but also additional headcount as we opened up these new assets. At the same time, obviously, we had a revenue decline in the non-rolling segment. We actually did well in the slot and also rolling. The most important segment of revenue is the non-rolling tables. We came down in that segment. That is where you get that negative operating leverage. Hopefully, we should be seeing the reverse of that over time as we compete with the new assets and the existing properties for the customers and the revenues. As revenues improve, we should see the positive operating leverage even with the payroll cost increase.

Shaun Kelley (Managing Director and Senior Research Analyst)

Thank you so much.

Operator (participant)

Thank you. The next question will be from Brandt Montour from Barclays. Brandt, your line is live.

Brandt Montour (Director and Equity Research Analyst)

Great. Thanks, everybody. Thanks for taking my question. I am curious, and I know you guys do not give guidance or a comprehensive forward look at the business, but there has been some commentary from the government, from other sources that there is a pretty decent momentum into Golden Week in May. I am just curious if April and/or the Golden Week bookings that you see feel better than normal or worse than normal, or how would you kind of characterize what you are seeing out there?

Rob Goldstein (Chairman and CEO)

I appreciate the question, but we don't talk about current quarter. Why don't we move on to your next question?

Brandt Montour (Director and Equity Research Analyst)

Okay. Fair enough. Sure. Next question would be on the Venetian. I'm curious, I understand we kind of talked about the Londoner a lot here, and we kind of can see what's going on a little bit with the sequential share losses there because you didn't have the rooms, and so it's a tough environment for base mass. What about the Venetian? Can you kind of walk us through maybe the monthly results in that property or how things evolved throughout the quarter and if that was sort of affected at all by other things in the portfolio and optimization changes that you had made?

Grant Chum (CEO and President)

I think it's straightforward, Brandt. I mean, Venetian, we just had too sharp a decline in the non-rolling revenues, especially in the premium mass segment, and we're addressing that. Obviously, the hold percentage against both prior year and quarter on quarter was actually much lower as well. Nonetheless, we're focused on driving the customer and revenues across all segments of Venetian, premium mass and base mass. It's fair to say it's as well patronized, as well populated in terms of headcount as ever. In fact, we had quite significant growth in non-rolling table headcount during the quarter, both over the prior year and sequentially. Clearly, the spend for headcount was lower. We do need to drive to secure higher value customers in the premium mass segment to grow the revenues back at Venetian.

Brandt Montour (Director and Equity Research Analyst)

Great. Thanks, everyone.

Operator (participant)

Thank you. The next question is coming from Joseph Stauff from Susquehanna. Joseph, your line is live.

Joseph Stauff (Senior Equity Research Analyst)

Thank you, Patrick, Rob, Grant. Two questions on MBS, please. I guess the first one, is there any way to assess, I guess, the level of consumer adoption, especially for the mass customer for prop bets? Naturally, kind of given the higher guidance that you have on VIP, that the adoption rate is higher, but I was just wondering how you guys think about it.

Rob Goldstein (Chairman and CEO)

I think it's very difficult. Are you saying how can you handicap people's willingness to bet a certain way? I'm not sure I understand what you're asking.

Joseph Stauff (Senior Equity Research Analyst)

No, more like, I guess, the frequency of a mass customer to bet on props versus that of a VIP. Obviously, different bet sizes, but just the frequency between the two groups.

Rob Goldstein (Chairman and CEO)

I don't think you can actually ever say 100% how people are going to bet a certain way. I do think the lower-end customer tends to be, it's like lottery tickets. They tend to bet more. It's a lesser customer, I think, on the prop bets. Your large betters, your more, your rolling in super high-end, tend to be more flat betters. That's not always true. That can reverse as well. I think the truth is, no one can predict this, but what you are seeing over in the market is they are adopting or moving towards these prop bets in a way which I never thought we'd see these. Think about a hold percentage moving an entire point. It wasn't that long ago, 285 was the standard. We're now, Patrick mentioned, 37. It could be 41.

The truth is, they are adopting these bets every day, both in the base mass, premium mass, and rolling segments. How much we keep moving after, I don't know. I can't predict that. I can tell you we've got the ability now. We're competent with the new machinery and our smart tables to tell you what it should be exactly. And you'll be able to tell for yourself. I think people are propensity of bet is very hard to figure out. Some people are dodging the whole bank betters or player betters, and some love prop bets. I don't think you can pigeonhole any one segment how they're going to bet. We have people at the super high end who bet props like crazy. It's hard to imagine they have that kind of money. Others who are dodging the whole flat betters.

That's always been the case in gambling. You can't really assess how someone's going to bet until they step up the table. Although people sometimes do see these bets, how we merchandise them will be very important in the future of our business to merchandise these bets in a way to get people to bet more in different directions. Flat betting doesn't really help our company's hold percentage or the industry. I think we're in a new world here in Baccarat, and it's an astounding new world. We're lucky to have it because imagine a point, point and a half more of hold. What that does to this company's revenues and EBITDA. It's astounding. We're seeing in Singapore, and I think you'll see in Macao as well over time. You can't really handicap or assess.

You can merchandise it better so people see it and have the ability to at least gravitate towards it.

Joseph Stauff (Senior Equity Research Analyst)

Understood. You also have.

Rob Goldstein (Chairman and CEO)

Maybe a lot more games. I should also say, we also have people who spend their time thinking about developing these new games and how you do that, how we find new prop bets to make and make games more interesting and then merchandise it to the customer. We are actively trying to do that. It is a very big part of our push towards better hold percentage.

Joseph Stauff (Senior Equity Research Analyst)

Understood. Maybe a follow-up on just the renovations in Tower 3. I guess, very briefly, are you still on time to finish roughly in June? Just take an inventory of what are the big items still that need to be completed?

Rob Goldstein (Chairman and CEO)

Tower 3 is done. The key thing is there's some things we're going to be doing in the lobby and the Sky Park over the next six to nine months. As a lodging capacity, we're there.

Joseph Stauff (Senior Equity Research Analyst)

The rooms are not the public space, right?

Rob Goldstein (Chairman and CEO)

Yeah. The rooms are good. It is the public space that we are going to continue to work on throughout the year. The rooms are there. You are going to start seeing the benefit of those rooms in the upcoming quarters.

Joseph Stauff (Senior Equity Research Analyst)

Okay. Thanks, guys.

Rob Goldstein (Chairman and CEO)

Thank you.

Operator (participant)

Thank you. The next question will be from George Choi from Citigroup. George, your line is live.

George Choi (Research Analyst)

Thank you very much for taking my question. Now, obviously, the introduction of the new side bets was done in Macao only in the middle of last year. I just wonder how popular are these new side bets in Macao thus far, and how does it compare to Singapore? Is there any chance that you could also raise the theoretical hold rate in Macao in less than two years' time?

Grant Chum (CEO and President)

Hi, George. Actually, in terms of introducing new side wagers, we had one set of introduction in Q2 of last year and the other latest one in October last year. Progressively, you're seeing strong take-up of all of these new wagers. Obviously, Macao is somewhat behind Singapore as a market. Some of these wagers were introduced a lot earlier before Macao. We're only beginning to see the adoption. The adoption, I would say, is strong.

At this stage, yes, in Singapore, we do see a higher propensity to wager these side wagers. Macao is growing. Over time, who knows? As Rob says, you can't predict the precise distribution. All we know is that the propensity is increasing.

Rob Goldstein (Chairman and CEO)

As with time, George, the two markets have become very similar. I believe that long term, it'll be very similar in terms of hold percentage.

George Choi (Research Analyst)

Thanks for the color.

Rob Goldstein (Chairman and CEO)

You know the whole thing.

Grant Chum (CEO and President)

You know the whole thing.

Rob Goldstein (Chairman and CEO)

You're ahead of us, George. You know this already, right?

George Choi (Research Analyst)

Thanks for those kind words. Another question for me is on dividends. We all appreciate the recent dividend resumption at Sands China. Should we expect the payout ratio to be maintained at around the 50% level? I guess, more importantly, should we expect an increase in the dividends of LVS as a result from Sands China dividend resumption?

Rob Goldstein (Chairman and CEO)

First off, in the honor of Sheldon Adelson, I'd like to say yay dividends. I think that's very important here, very applicable. I think the key thing here is we're very happy that the SEL board determined to be able to start paying a dividend again at the Sands China level. We hope to be able to grow that dividend over time as our CapEx rolls off there and as we generate more cash flow through revenue and EBITDA growth. We're very excited about the opportunity to continue return to capital at the SEL level and to grow that dividend to the future. I think at the LVS level, what you've seen us do in years past has really been very dividend heavy.

I think what you're seeing now is we sort of look at our return of capital, which is actually laid out on page 33 of our book. You can kind of see that our ratio from share repurchase to dividends has been very weighted towards share repurchases. If you sort of review our prior commentary in this call, you'll see that we're very focused on returning capital to share repurchases, both at the LVS level and through the acquisition of further SEL shares. We do not necessarily target a specific dividend pay ratio. We do think where we are is healthy and sustainable for the long term for long-term dividend growth. As SEL continues to grow its dividend over time, as we hope, we'll have the ability to return more capital at the LVS level.

George Choi (Research Analyst)

Thank you very much, Adam. Sheldon, thank you.

Operator (participant)

Thank you. The next question will be from Colin Mansfield from CBRE. Colin, your line is live.

Colin Mansfield (Portfolio Manager)

Hey, everybody. Thanks for taking my question. Maybe the first one, can you give a little bit of color around what drove the decision to repay the parent loan from Sands China back to the parent? Just given we talked about that in the past, it was a pretty attractive cost of capital relative to where your current spreads are. Just kind of curious what influenced that decision and how should we think about your ability to dividend cash out of Macao? Was that part of the decision too?

Rob Goldstein (Chairman and CEO)

I think the idea was that decision was made at the SEL board level. The general concept was SEL is performing in a strong way. As growth opportunities, its leverage level is quite low. I think for SEL, it was just negative carry. It was accumulating cash. Why not pay down some prepayable debt since they no longer needed it as SEL has access to the investment-grade credit market, if there's any reason to create an opportunity for further borrowings? I think with access to the revolving credit facility that it had, its current capital structure, its leverage levels, and the amount of cash that it was generating, it just made sense for SEL to pay back and get rid of some negative carry.

Colin Mansfield (Portfolio Manager)

Okay. That's helpful, Carlo. Thanks, Patrick. Maybe second one for you, maybe just thinking about capital markets activity coming up with your upcoming refinancings, both at the hold co level and also Sands China. You guys are a seasoned investment-grade issuer. How are you guys thinking about the timing, potentially tapping the capital markets? Would you potentially lean on the revolver since you have capacity and liquidity there too? Just how are you thinking about that?

Rob Goldstein (Chairman and CEO)

I think you'll see us address the $500 million of LVS bonds in 2025 in the near term. I think we have an approach for that that we're very comfortable with. In regards to the SEL bonds, the $1.625 billion that comes due, we did actually, through the revolver refinancing there, we also initiated a term loan that we have the ability to draw on that amount. If we choose to access the high-grade credit markets, we have that opportunity, or we may put it into the term loan, which is also very favorable and offers a lot of flexibility. We have an approach to both of those maturities in 2025.

Colin Mansfield (Portfolio Manager)

Great. Thanks for the call, guys. Thanks for letting me get on. Thanks.

Rob Goldstein (Chairman and CEO)

Appreciate it.

Operator (participant)

Thank you. The next question is coming from Steven Wieczynski from Stifel. Steven, your line is live.

Steven Wieczynski (Managing Director and Senior Equity Analyst)

Yeah. Hey, guys. Good afternoon. Bigger picture question that I'm not even sure you're going to have an answer or not, but I'm going to ask it anyway. You know, Rob, clearly there's a lot of uncertainty around the political environments in both the U.S. and China. I think the fear that's out there is China might at some point retaliate against U.S. companies or something along the lines. That's where a lot of investors' heads are these days. I guess the question is, is that something, Rob, that kind of keeps you awake at night? Or do you view your relationship with China in very, very good standing at this point, and that risk seems more low, if that makes sense?

Rob Goldstein (Chairman and CEO)

First of all, I think we are not in mainland China. We're in Macao SAR. I think there is a difference. Number one, I do think Macao is a different orientation vis-à-vis Beijing. Secondly, to your point, I think we have an incredible relationship with Beijing, and we've worked on it for many, many years, and it's very important to us. We're a big believer in the relationship between China and the U.S. We're very disheartened by what's happening right now. Hopefully, we can get back on track. It doesn't keep me up at night at all. In fact, I think we're in a very good position at Macao. We've been the leader in CapEx. We've been the leader in developing non-gaming assets. Sheldon has a legacy which stands well. I don't believe right now this dislocation in countries is sustainable.

There has to be a deal between the two most powerful countries in the world. I remain steadfast, but I believe things come back to a much more normal, rational place quickly. They have to. I am hoping that happens sooner than I anticipate. No, it does not keep any of us up at night. We feel very committed to Macao and vice versa. It has been a very special relationship with this company. It began 20-plus years ago when Sheldon first went there and made that pitch for Cotai. I think the Chinese have been incredible partners. The government of Macao, people in Beijing, we are grateful for their support over the years. We continue to believe we will be there for many years to come beyond the concession. No, it does not keep me up at night at all.

I would like to see a stronger relationship between the U.S. and China tonight because we all need it. Consumers need it. They need it. We need it. It is good for the world. I am very disheartened by what I am seeing, hopefully, that gets resolved quickly. No, we are not concerned at all about our position in Macao, nor should we be.

Steven Wieczynski (Managing Director and Senior Equity Analyst)

Okay. That's great color. Appreciate that, Rob. Second question, real quickly, there have been some reports out there that the Singapore government wants to get probably a little bit more aggressive with driving visitation into their country moving forward. Obviously, that should benefit MBS over time. I guess the question is, have you guys thought about that more in terms of what obviously increased visitation could do to—you've always kind of given some longer-term projections of what MBS could look like from an EBITDA perspective over time. Has this kind of changed your view around that at all?

Rob Goldstein (Chairman and CEO)

First off, I think Singapore is an unbelievable market for high-value tourism. Singapore has been very focused on creating opportunities for high-value tourism for many years and investing behind that thesis. Airports, infrastructure, and other things that create attractions help create prominence and desirability to visit Singapore. I think for us, it benefits us, but we're also investing with this thesis. If you look at how we invest, the amenities that we're creating, the way we're positioning ourselves, the way other non-gaming operators are positioning their tourism offerings, it's really a special place. I think for us, it's very motivating, and we're very excited to continue to invest there and expand our offerings there. It's a very rare place. Singapore is rarefied air. It's very special who goes to Singapore, the consumption habits.

If you look at the retail consumption, the beverage consumption, the gaming play, the lodging consumption, it's really unique. I think it's driven because of the overall goal of the government of Singapore, which is to create the opportunity for high-value tourism. We have been benefiting from it for the last 15 years. The Singapore government has been great in terms of investing in the assets to drive tourism, and we have been investing behind that. I have to say, though, as much as Singapore is a wonderful place, our asset is a wonderful asset within that place. I think we have created our own very special place within the great state of Singapore. I think what we have done there is extraordinary. It attracts those people because there is nothing like it in the region. There is nothing that special. It is very seductive.

The rooms, the product, the food, it's amazing. It has enhanced Singapore and vice versa. Going back, the vision of the Singapore government is amazing. Our vision is pretty good too, to what we've built over there.

Steven Wieczynski (Managing Director and Senior Equity Analyst)

Okay. Thanks, guys. Really appreciate it. That's great color.

Rob Goldstein (Chairman and CEO)

Thank you.

Operator (participant)

Thank you. The next question will be from Ben Chaiken from Mizuho. Ben, your line is live.

Ben Chaiken (Equity Analyst)

Hey, good afternoon. Thanks for taking my questions. First, in MBS, great margin results and strong mass performance. Would you just remind us, would you say that 1Q 2025 had a difficult comparison year over year from the Blackpink large concert in the prior year, as well as the easing of the China visitation policy, which I believe was also in the prior year? Or was this a pretty clean comparison year over year? One follow-up. Thanks.

Rob Goldstein (Chairman and CEO)

First off, I think both quarters were awesome.

Ben Chaiken (Equity Analyst)

That makes a lot of sense.

Rob Goldstein (Chairman and CEO)

It's a tough comp. As a practical matter, this was a totally normal quarter. I would say that there wasn't anything extraordinary that happened in the quarter. This is pretty indicative of the performance of the business without any sort of anything that's out of the ordinary.

Ben Chaiken (Equity Analyst)

Wasn't Taylor Swift there?

Grant Chum (CEO and President)

I think the key thing here is we really have been able to put the entire asset to work, which is something we haven't been able to do for a while because of all the construction activity. We're really getting close to being able to see this thing really get to the point where it's not experiencing any interruption due to development work. I think the key thing is this quarter was very normal. To your point, last year's quarter did have the Taylor Swift concert, did have a lot of other things going on that created very strong demand and very strong visitation. This quarter didn't. We were very fortunate that we had the results that we did. Credit to the team. They did phenomenal work. As Rob just referenced, the building's in phenomenal shape. We think it's the best building in the world.

We are very proud of what we have accomplished. You can see the results from the activities there.

Ben Chaiken (Equity Analyst)

That's very helpful. Yeah, great result there. Switching to Macao, maybe just touching on the sequential market share in Macao again, fully recognizing that you had rooms out of service in Q1, but also acknowledging you had rooms out of service in Q4 as well. I guess is the interpretation just from some of the previous commentary that it's harder for you to leverage the current type of gameplay or player in Macao as it stands?

Grant Chum (CEO and President)

I think sequentially, our room counts moved up marginally. So we're about 8,900 for Q4 and 9,100 or 9,200 in Q1. I think in terms of the Londoner Grand ramp-up, that was really a very soft ramp for Q1 because we didn't have all of the rooms. And therefore, it didn't make sense for us to operate as many gaming units in the Londoner Grand Casino for the first quarter. But from now on, from April, you'll see obviously us in full ramp-up mode. I'm not sure if that answers your question, but is there something else that you're asking that we haven't addressed?

Ben Chaiken (Equity Analyst)

No, that's fine. I appreciate it. Thanks.

Rob Goldstein (Chairman and CEO)

Thank you.

Grant Chum (CEO and President)

Thanks, Ben.

Operator (participant)

Thank you. The final question today will be coming from David Katz from Jefferies. David, your line is live.

David Katz (Managing Director)

Thank you very much. Appreciate you working in. I just want to go back to some of the earlier commentary and questions because I heard the word competition and competitive market in Macao quite a bit. Having been there not all that long ago and heard a lot of the on-the-ground commentary about more of a benign promotional environment, are you suggesting that we might start to see that change as part of the Londoner ramp-up? When you use the word competition, what do you mean by that?

Rob Goldstein (Chairman and CEO)

You mean competition. People are fighting for the very excitement sense across the board. I'm not sure what you mean benign when you write that, David, because I don't see it as benign. There was a time when Base Mass were benign, and they just fell on the door and no one gave them anything. Those days are gone. I think it is highly competitive. Again, our asset base is the best in class and scale and size. I think we'll do better, but I think it'd be foolish to think that in a non-growing market with a top line of transit society that is not expected would be competitive. That reflects everyone's business, not just ours. I'm not saying it's outsized or it's a silly competition, but it's competition, Grant.

Grant Chum (CEO and President)

Yeah. I do not have to add to that, Rob's comment. I think it has always been very, very competitive. I think we have just got to look at the competitive context, use the new assets that we have, and the advantages of scale and the product that we have to really compete harder to get more revenue and customer growth. That is all we are saying. I think the market has been very competitive. I do not think there has been any significant deterioration in that. We have also got to reflect and see where our position is within that context. With all of the new rooms online, we fully intend to compete hard to get more revenue.

Rob Goldstein (Chairman and CEO)

Those reduced liquidity, obviously, from 2019, reduced the top line results. In any market where you shrink by $6 billion-$8 billion-$10 billion, you're going to see more competition if the existing dollars are there. You're seeing that in Macao. I'm not saying we can't compete. I think we will compete well. I think it'd be foolish not to recognize that face masks, premium mass, rolling, every segment in Macao is under pressure in terms of getting your fair share.

David Katz (Managing Director)

Right. If I can just follow that up, one of the observations is, and I think some of the earlier questions were to this end, is that the premium mass arena seems to be getting quite a bit more crowded. Part of my question was, are you planning to get more promotional? I think that's what the word benign is really attached to, whether operators start becoming more promotional in how they compete.

Grant Chum (CEO and President)

I'm not sure. I think in terms of promotional, you have to look at it in different ways. I mean, firstly, we're going to aggressively deploy our new assets. I think that's first and foremost. We have the largest scale in terms of the big product and slot and ETG product. We need to drive that as hard as we can to maximize that scale advantage across all product types and across all price points. That's the second piece. In terms of marketing activities, there's always going to be tactical promotions that you implement, every operator does. I think we're just going to be very active in engaging existing and new customers and reactivating old customers with the full inventory that we're going to have at our disposal. We are going to drive that very hard because we intend to gain customers and gain revenue.

David Katz (Managing Director)

Thanks very much.

Rob Goldstein (Chairman and CEO)

Thank you.

Operator (participant)

Thank you. This does conclude today's Q&A session, and it does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation.