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MC

MONARCH CASINO & RESORT INC (MCRI)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered record results: net revenue $136.91M (+6.8% YoY), diluted EPS $1.44 (+21.0% YoY), and Adjusted EBITDA $51.29M (+16.8% YoY); EBITDA margin expanded ~320 bps YoY to 37.5% on technology and operational efficiency gains .
  • Results beat Wall Street consensus: EPS $1.44 vs $1.20*, revenue $136.9M vs $129.9M*, and EBITDA $51.3M (company Adjusted) vs $44.6M*; on S&P’s EBITDA basis, actual ~$49.4M* also exceeded estimates. Bold beat driven by casino strength (+12.1% YoY) and lower cost ratios .
  • Liquidity strong: $71.6M cash, zero borrowings; $12.4M capex funded by operating cash, $19.8M buybacks (240,395 shares), and quarterly dividend maintained at $0.30/share (new declaration for Sept. 15, 2025) .
  • Key narrative catalysts: market share gains at Monarch Black Hawk, completion of $100M Atlantis room upgrade, and ongoing PCL construction litigation appeal with $76.5M liability accrued; balance sheet and cash flow support continued capital returns despite litigation overhang .

What Went Well and What Went Wrong

What Went Well

  • Casino revenue grew 12.1% YoY; casino operating expense ratio fell to 35.7% (vs 37.7% prior-year), reflecting labor management and efficiencies .
  • Adjusted EBITDA margin expanded to 37.5% (+~320 bps YoY); CEO: “Our focus on technology and operational efficiencies drove an operating margin increase... Adjusted EBITDA increased 16.8% year-over-year to $51.3 million” .
  • Strategic progress: completed ~$100M Atlantis room redesign; recognized awards elevating brand—Atlantis ranked #1 hotel in Reno by U.S. News; Wine Spectator honored multiple restaurants at both properties .

What Went Wrong

  • Hotel revenue declined 3.1% YoY as occupancy fell to 79.6% (from 85.5%) on weaker convention group business; hotel expense ratio rose to 34.3% .
  • Professional service fees tied to construction litigation increased (Other operating items, net at $0.9M in Q2), and company accrued $76.5M for the PCL judgment pending appeal .
  • F&B covers decreased 2.8% YoY (offset by +4.0% revenue per cover), and competitive pressures in Reno plus wage inflation continued to pressure Atlantis margins .

Financial Results

Consolidated Results vs Prior Periods and Consensus

MetricQ4 2024Q1 2025Q2 2025Q2 2025 Consensus
Net Revenue ($USD Millions)$134.51 $125.39 $136.91 $129.91*
Diluted EPS ($)$1.36 $1.05 $1.44 $1.20*
Net Income ($USD Millions)$25.50 $19.86 $27.01 N/A
Operating Income ($USD Millions)$31.52 $25.32 $34.90 N/A
Adjusted EBITDA ($USD Millions)$47.28 $41.13 $51.29 $44.56*
EBITDA (S&P basis, Actual) ($USD Millions)N/AN/A$49.37*$44.56*
Adjusted EBITDA Margin %35.1% 32.8% 37.5% N/A

Values marked with * retrieved from S&P Global.

Revenue Mix

Revenue Category ($USD Millions)Q2 2024Q1 2025Q2 2025
Casino$70.98 $72.90 $79.59
Food & Beverage$31.84 $30.02 $32.19
Hotel$19.73 $16.71 $19.11
Other$5.59 $5.77 $6.02
Net Revenues$128.14 $125.39 $136.91

KPIs

KPIQ2 2024Q2 2025
Hotel Occupancy (%)85.5% 79.6%
ADR ($)$185.34 $189.42
RevPAR ($)$172.06 $162.57
F&B Covers YoY Change (%)—(2.8%)
F&B Revenue per Cover YoY Change (%)—+4.0%
Casino OpEx % of Casino Revenue37.7% 35.7%

Balance Sheet and Cash Flow Highlights

MetricQ4 2024Q2 2025
Cash & Equivalents ($USD Millions)$58.76 $71.59
Total Debt Outstanding ($USD Millions)$0.0 $0.0
Share Repurchases (Q2 shares/$)—240,395 @ avg $82.55; $19.8M
Capex (Q2) ($USD Millions)—$12.4
Operating Cash Flow (6M) ($USD Millions)—$70.59

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQ3 2025 payout$0.30 per share (program $1.20 annual) $0.30 per share payable Sept 15, 2025 Maintained
Share Repurchase AuthorizationOngoingProgram in place1,709,645 shares remaining authorization Maintained
Revenue/EPS/EBITDAFY/Q3Not providedNot providedN/A

Management reiterated ability to fund dividends and buybacks from operating cash flow; no formal quantitative revenue/EPS guidance issued .

Earnings Call Themes & Trends

Note: Q2 2025 earnings call transcript was not available in our document set. Themes below reflect press releases and the 10-Q MD&A.

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
Technology & Operational EfficiencyMargin gains; record EBITDA margin (35.1% Q4) ; continued focus on new technologies/processes Further margin expansion to 37.5%; efficiency reduced cost ratios Improving
Market Share (Black Hawk)Growing share; premier luxury positioning Continued market share gains among mid-to-upper-tier guests Improving
Atlantis RenovationNear completion; final phases by Q2 2025 $100M room redesign completed; brand accolades (U.S. News, Wine Spectator) Completed; positive brand momentum
Reno Competition & Wage InflationCompetitive promotions, wage pressure Continued competitive pressure; occupancy down on less convention business Persistent headwind
Litigation (PCL)Ongoing; trial and judgment developments [12:—]$74.47M revised judgment; $76.5M accrued; appeal filed; bond posted Legal overhang; managed
Capital ReturnsDividend program ($0.30/qtr); buybacks Dividend maintained; $19.8M buybacks in Q2 Ongoing
Liquidity/Credit FacilityNo debt; amended facility maturity to 2028 No borrowings; $99.4M available; covenant waiver re: litigation Stable

Management Commentary

  • “Net revenue increased 6.8% year-over-year to $136.9 million, driven by strong casino revenues… operating margin increase of approximately 320 basis points… Adjusted EBITDA… $51.3 million” — John Farahi, CEO .
  • “At Atlantis… completed the multi-year $100 million redesign… providing guests with an elevated… experience, resulting in market share gains. The U.S. News & World Report 2025 Best Hotels ranked Atlantis the No. 1 hotel in Reno.” .
  • “At Monarch Black Hawk, we continue to increase market share, especially among mid-to-upper-tier guests…” with new awards for Bistro Mariposa and Monarch Chophouse .

Q&A Highlights

The Q2 2025 earnings call transcript was not available in the document set; therefore, Q&A highlights and any guidance clarifications from live remarks could not be assessed.

Estimates Context

  • EPS: Actual diluted EPS $1.44 vs S&P consensus $1.20* — significant beat .
  • Revenue: Actual $136.91M vs S&P consensus $129.91M* — beat .
  • EBITDA: Company Adjusted EBITDA $51.29M beat S&P EBITDA consensus $44.56M*; S&P-reported actual EBITDA ~$49.37M* also above consensus .
  • Coverage breadth: 5 EPS and 5 revenue estimates; target price consensus ~$$107.17 with 6 estimates*.

Values marked with * retrieved from S&P Global.

Actual vs Consensus Detail

MetricQ2 2025 ActualQ2 2025 Consensus# of Estimates
Primary EPS ($)$1.44 $1.199*5*
Revenue ($USD)$136,914,000 $129,914,510*5*
EBITDA ($USD)$51,289,000 (Adjusted) $44,563,420*—
EBITDA (S&P basis) ($USD)$49,370,000*$44,563,420*—
Target Price ($)—$107.17*6*

Key Takeaways for Investors

  • Strong beat and margin expansion driven by casino strength and cost efficiencies; expect estimate revisions higher, especially on EBITDA margin trajectory .
  • Sequential trajectory remains positive: revenue up vs Q1 ($136.9M vs $125.4M), Adjusted EBITDA up ($51.3M vs $41.1M), supporting near-term momentum .
  • Litigation is a notable overhang but appears ring-fenced: appeal filed, bond posted, covenant waiver in place; $76.5M accrued provides transparency .
  • Capital returns are intact: $0.30 quarterly dividend and ongoing buybacks; strong cash generation and no debt underpin shareholder yield .
  • Atlantis renovation completion and brand accolades should support ADR and long-term positioning; monitor recovery in convention/group to stabilize occupancy and RevPAR .
  • Reno competitive environment and wage inflation remain cost/revenue headwinds; continued technology-driven efficiencies and pricing/mix strategies are key to margin resilience .
  • Near-term trading: positive reaction likely tied to sustained beats and buybacks; medium-term thesis hinges on continued share gains in Colorado, normalization of Reno occupancy, and resolution path on PCL litigation .

Appendix: Additional Q2 2025 Press Releases

  • Q2 reporting date announcement (July 7, 2025) .
  • Property awards and brand recognition (Wine Spectator; U.S. News) included in earnings release .
  • Post-quarter but relevant: USA Today ranking for Spa Monarch (#2 hotel spa nationally) announced Aug 20 (brand momentum) [1:—].