MONARCH CASINO & RESORT INC (MCRI)·Q4 2024 Earnings Summary

Executive Summary

• Operationally strong quarter: net revenue $134.513M and Adjusted EBITDA $47.280M, with a record Q4 EBITDA margin of 35.1% .
• Subsequent event materially reduced GAAP earnings due to the PCL litigation judgment: Q4 net income adjusted to $4.211M and diluted EPS to $0.22; Adjusted EBITDA was not impacted .
• Liquidity remains solid with $58.8M cash and no borrowings on the credit facility; the Board declared a $0.30 quarterly dividend payable March 15, 2025 as part of the annual $1.20 dividend program .
• Management reaffirmed strategic priorities: Black Hawk market share gains, Atlantis room renovations targeted for completion by Q2 2025, and ongoing evaluation of M&A opportunities .
• Catalyst: the court judgment and subsequent appeal plan, plus the EPS reset, are likely to drive stock narrative despite strong operating metrics .

What Went Well and What Went Wrong

What Went Well

• Record Q4 operating margin performance: “Fourth quarter net revenue and adjusted EBITDA were $134.5 million and $47.3 million, respectively, resulting in a record fourth quarter EBITDA margin of 35.1%.” — John Farahi, CEO .
• Black Hawk execution: “Monarch Black Hawk continues to grow market share and increase revenue across all its business segments… attract and retain mid-to-upper tier guests from the Denver and Boulder metro areas.” .
• Atlantis upgrades nearing completion and brand refresh: ~$100M room redesign; final 246 rooms to be completed in phases by Q2 2025 and new “Once is All it Takes” campaign; focus on technologies/processes to enhance long-term returns .

What Went Wrong

• GAAP earnings reset post-judgment: Q4 net income reduced to $4.211M and diluted EPS to $0.22 following the $74.6M court judgment against Monarch; the company recorded a $27.619M loss on litigation and adjusted accounts payable; Adjusted EBITDA unchanged .
• Cost pressures: Casino operating expense ratio rose to 36.8% (labor and technology), and F&B operating expense ratio increased to 73.4% (cost of goods sold) .
• Higher depreciation: $13.365M in Q4 vs $12.142M a year ago, diluting GAAP earnings power despite strong EBITDA .

Financial Results

Quarterly progression (oldest → newest)

Year-over-year (Q4 2023 → Q4 2024 adjusted)

Segment revenue (Q4 2023 → Q4 2024) and YoY change

KPIs and Operating/Liquidity (Q2 → Q4)

Notes and drivers:

• Q4 effective tax rate was 19.7% vs 28.6% in Q4 2023, contributing positively to the initially reported GAAP EPS; lower legal/consulting costs ($0.1M vs $2.8M) were a tailwind, partially offset by higher depreciation ($13.4M vs $12.1M). Subsequent litigation adjustment superseded the GAAP EPS/NI figures .
• Q4 cash increased and debt was fully repaid, supporting dividend continuity and optionality for investments .

Guidance Changes

No quantitative revenue/EPS/OpEx guidance was provided in the Q4 materials .

Earnings Call Themes & Trends

Note: An earnings call transcript for Q4 2024 was not available in our document catalog; themes above are synthesized from press releases and 8-Ks .

Management Commentary

• “Monarch ended 2024 with record financial results in both the fourth quarter and full year… record fourth quarter EBITDA margin of 35.1%.” — John Farahi, CEO .
• “Monarch Black Hawk continues to grow market share and increase revenue across all its business segments… luxury resort offerings and exceptional service continue to attract and retain mid-to-upper tier guests.” .
• “Atlantis is near the completion of approximately $100 million in capital investment… last stage… completed in phases by the second quarter of 2025… launching a ‘Once is All it Takes’ brand campaign… implementing new technologies and processes… financially rewarding over the long-term.” .
• Capital allocation and balance sheet: $58.8M cash, no borrowings; $0.30 quarterly dividend; continued M&A evaluation .

Q&A Highlights

• Q4 2024 earnings call transcript was not available in our catalog; Q&A details could not be assessed .

Estimates Context

• S&P Global (Capital IQ) consensus estimates for Q4 2024 EPS and revenue were unavailable at the time of retrieval due to API request limits; comparison to Street estimates cannot be provided.
• Given the Type I subsequent event recognition of the litigation judgment in the 2024 Form 10-K, reported Q4 GAAP EPS and net income changed materially post-release; Adjusted EBITDA was unchanged, which is the more relevant operating metric for gaming sector comparisons .

Key Takeaways for Investors

• Strong operations: net revenue and Adjusted EBITDA indicate healthy demand and operational execution; Q4 EBITDA margin reached a record 35.1% .
• Litigation dominates GAAP optics: the judgment-induced loss resets Q4 GAAP EPS to $0.22; monitor appeal timeline, potential fees/costs, and cash implications; note Adjusted EBITDA unaffected .
• Balance sheet optionality: $58.8M cash, no facility borrowings, sustained $0.30 quarterly dividend underpin capital returns while funding property investments .
• Property-level drivers: Black Hawk continues to gain share; Atlantis upgrades and brand campaign are near-term catalysts for Reno competitiveness by Q2 2025 .
• Cost structure watch: labor and F&B costs remain elevated; hotel expense ratio improved vs prior year on ADR and cost management—sustainability will be key in 2025 .
• No formal financial guidance: lack of revenue/EPS guidance shifts focus to execution metrics (EBITDA, margins, capex progress) and litigation resolution .
• Near-term trading lens: expect stock narrative to center on litigation overhang vs resilient operations and dividend continuity; updates on the appeal and any cash requirements could be pivotal .