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MC

MONARCH CASINO & RESORT INC (MCRI)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered first-quarter records: net revenue $125.394M (+3.1% YoY), Adjusted EBITDA $41.131M (+6.7% YoY), and diluted EPS $1.05; EBITDA margin was 32.8% .
  • Versus Wall Street consensus (S&P Global): EPS beat (+$0.09), revenue beat (+$2.7M), while standardized EBITDA was modestly below consensus; company-reported Adjusted EBITDA was a record (see Estimates Context) *.
  • Dividend maintained at $0.30/share (payable June 15, 2025; record date June 1) and funded from operating cash flow; cash of $75.1M and no borrowings outstanding at quarter-end support capital returns and flexibility .
  • Operational focus on technology/process improvements and labor efficiency drove lower casino and SG&A ratios; Atlantis renovation nearing completion with remaining 76 rooms expected before Memorial Day, a refined timeline from prior “Q2 2025” guidance .
  • Ongoing PCL construction litigation remains an overhang; company intends to appeal the $74.6M judgment, but Adjusted EBITDA and liquidity were unaffected in Q1 .

What Went Well and What Went Wrong

What Went Well

  • Record first-quarter revenue ($125.4M) and Adjusted EBITDA ($41.1M); EBITDA margin up 110 bps YoY to 32.8% .
  • Operational efficiency gains: casino operating expense fell to 37.7% of casino revenue; SG&A decreased to 21.7% of net revenue; F&B expense ratio improved to 74.3% .
  • Property momentum: “Monarch Black Hawk continues to benefit from the property’s position as the premier luxury casino resort in Colorado… increasing market share” (CEO) .

What Went Wrong

  • F&B and hotel revenue down slightly YoY (-0.5% and -0.4%) due to one fewer day in Q1 2025 and lower available rooms amid renovation at Atlantis .
  • Hotel operating expense ratio rose to 37.7% (from 35.6%) reflecting reduced room availability during renovation .
  • Litigation overhang: Colorado court judgment of $74.6M in favor of PCL; company plans to appeal, with potential requirements for bonds/surety adding uncertainty .

Financial Results

Multi-Period Performance (oldest → newest)

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Net Revenue ($USD Millions)$121.657 $137.873 $134.513 $125.394
Net Income ($USD Millions)$18.275 $27.601 $25.495 $19.864
Diluted EPS ($)$0.93 $1.47 $1.36 $1.05
Adjusted EBITDA ($USD Millions)$38.548 $50.643 $47.280 $41.131
EBITDA Margin (%)—36.7% 35.1% 32.8%

Segment Revenue Breakdown (oldest → newest)

Segment Revenue ($USD Millions)Q3 2024Q4 2024Q1 2025
Casino$76.307 $77.093 $72.895
Food & Beverage$32.888 $32.581 $30.022
Hotel$21.642 $18.210 $16.708
Other$7.036 $6.629 $5.769
Net Revenues$137.873 $134.513 $125.394

Operating KPIs (expense ratios) (oldest → newest)

KPIQ3 2024Q4 2024Q1 2025
SG&A as % of Net Revenue19.7% 20.7% 21.7%
Casino OpEx as % of Casino Revenue36.3% 36.8% 37.7%
F&B OpEx as % of F&B Revenue72.8% 73.4% 74.3%
Hotel OpEx as % of Hotel Revenue33.8% 34.8% 37.7%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per ShareQ2 2025 (payable Jun 15; record Jun 1)$0.30 quarterly as part of $1.20 annual $0.30 quarterly maintained Maintained
Atlantis Renovation TimelineQ2 2025Remaining 246 rooms completed in phases by Q2 2025 Remaining 76 rooms anticipated before Memorial Day weekend Refined/accelerated timeline
Formal Financial Guidance (Revenue/Margins/OpEx)2025None providedNone providedN/A

Earnings Call Themes & Trends

Note: The Q1 2025 earnings call transcript was not available in our document catalog. Themes below reflect management’s press releases across quarters.

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Technology/process efficiencyFocus on reducing labor via new tech/processes Continued implementation across properties “Implementing new technologies and processes… elevate efficiencies” Consistent emphasis; ongoing execution
Black Hawk market shareGrowing share across segments Premier position; mid-to-upper-tier focus “Continue to increase market share… mid-to-upper-tier guests” Positive momentum
Atlantis renovationRemaining 246 rooms targeted by Q2 2025 Last stage to be completed in phases by Q2 2025 Remaining 76 rooms before Memorial Day Nearing completion; refined timeline
Capital returns (dividends/buybacks)Dividend; Q3 2024 buybacks ($9.6M) Dividend maintained Dividend maintained; funded by operating cash flow Stable returns; buybacks not reiterated in Q1
M&A evaluationEvaluating opportunities Ongoing evaluation “Diligently evaluating potential M&A” Ongoing; no specifics
Litigation (PCL)Awaiting court decision Subsequent judgment; 10-K updates Judgment disclosed; appeal anticipated Legal overhang persists

Management Commentary

  • “Net revenue increased 3.1% year-over-year to a first quarter record of $125.4 million, and Adjusted EBITDA increased 6.7% year-over-year to a record $41.1 million… operating margin improved 110 basis points… to 32.8%” — John Farahi, CEO .
  • “Monarch Black Hawk continues to benefit… We continue to increase market share, especially among the mid-to-upper-tier guests from the Denver and Boulder metro areas.” — John Farahi .
  • “Atlantis is near the completion of approximately $100 million in capital investments… The remaining 76 hotel rooms are anticipated to be completed before the upcoming Memorial Day weekend.” — John Farahi .
  • Liquidity and returns: cash and cash equivalents of $75.1M; no borrowings; dividend of $0.30/share declared for June 15, 2025 .

Q&A Highlights

The Q1 2025 earnings call transcript was not available in our document catalog; therefore, Q&A highlights and any clarifications provided during live Q&A are unavailable.

Estimates Context

Metric (S&P Global)Q1 2025 ConsensusQ1 2025 ActualSurprise
Primary EPS ($)0.9897*1.0744*+0.0847* (Beat)
Revenue ($)122.698M*125.394M*+$2.696M* (Beat)
EBITDA ($)39.4767M*38.9290M*-$0.548M* (Miss)

Values retrieved from S&P Global. Company-reported Adjusted EBITDA was $41.131M (record) . Differences between S&P standardized EBITDA and company Adjusted EBITDA reflect non-GAAP adjustments (e.g., stock comp, certain one-time items, construction litigation and lobbying expenses) .

Key Takeaways for Investors

  • Q1 print was clean: revenue and EPS beat consensus, driven by casino strength and improved labor efficiency; seasonal step-down vs Q4 was expected, but Q1 still set records .
  • Margin narrative remains solid: company-reported EBITDA margin 32.8% with targeted efficiency improvements; expect margin uplift as Atlantis rooms return to full availability post-renovation .
  • Balance sheet is a differentiator: $75.1M cash, zero borrowings at Q1-end supports continued dividends ($0.30/quarter) and optionality for M&A/capex .
  • Watch the litigation risk: appeal process and potential bonding/surety requirements are near-term overhangs; note 10-K treatment as subsequent event adjusting 12/31/24 accounts payable .
  • Property-level momentum: Black Hawk market share gains among mid-to-upper-tier cohorts remain a key growth lever; Reno’s Atlantis renovation completion should aid hotel mix/pricing .
  • Estimate revisions: Modest upward adjustments to EPS and revenue likely post-beat; be mindful of differing EBITDA definitions when assessing consensus vs company Adjusted EBITDA *.
  • Trading setup: Positive beat-and-raise narrative absent formal guidance; catalysts include Atlantis completion, continued share gains in Colorado, and any clarity on litigation/appeal timing.