MGM Resorts International (MGM)

Formula One Impact on EBITDA
Q: How will F1 softness affect Q4 EBITDA?
A: Management acknowledges that the fourth quarter depends greatly on the performance during Formula One. - Currently, F1 is off to a soft start compared to last year, with softer ticket and room sales, especially at luxury properties like Aria, Cosmo, and Bellagio. - While they hope for improvement, they're concerned enough to note the distinction from last year. - They believe other events, like an NFL game, will help fill properties, particularly in the south end of the Strip. -

Marriott Partnership Benefits
Q: What is the contribution from the Marriott partnership?
A: Year-to-date, they've booked 410,000 room nights through Marriott, with about 60% already stayed. - The incremental benefit comes from a $100 rate premium and $50 increased daily spend per room night. - Despite a later start due to a cyber incident, they expect the annual EBITDA benefit of $65–$75 million for 2024 remains a good estimate. -

Digital Strategy and BetMGM Investment
Q: Any changes in BetMGM investment outlook?
A: They believe the identified investment is sufficient and do not anticipate needing more funds. - Product improvements are expected to positively impact gross gaming margins. - While acknowledging challenges in the digital segment, they are not giving up on digital and see it as key to growth. - If investments don't pay off, they are prepared to pull back. -

Las Vegas Gaming Customer Trends
Q: How is the core gaming customer performing?
A: The core gaming customer remains solid, especially the high-end segment. - Revenue changes, particularly in slots, are tied to midweek and convention mix shifts. - Rated play is up 4–5% in regional markets. - However, the lower end of the database has seen some softening. -

Share Repurchases and Capital Allocation
Q: Will you add debt to fund share repurchases?
A: Management believes their shares are undervalued and will continue aggressive repurchases. - They have $800 million in excess cash and $1.3 billion remaining on the repurchase authorization. - They would consider adding financial leverage but don't need to do so currently. -

Market Share Gains in Las Vegas
Q: How do you plan to gain more market share?
A: Beyond absorbing customers from closed properties like Tropicana and Mirage, they believe there's more share to capture. - Plans include targeting the high-end retail and nightlife scene and enhancing properties like Cosmopolitan and Aria to keep guests within their portfolio. -

MGM China Margins
Q: How did MGM China achieve high margins despite a slowdown?
A: They focused on customer-centric investments and disciplined reinvestment. - An increased mass component in the revenue mix contributed to margin improvements. - EBITDA margins remain high, and their revenue share is maintained at mid-teens. -

Las Vegas Margins and Labor Costs
Q: What is the outlook for Las Vegas margins amid labor cost increases?
A: They are comfortable maintaining margins in the mid-30% range. - While unit labor costs have increased due to collective bargaining agreements, they've managed expenses well, with FTEs down in Las Vegas. - Future labor cost increases are expected to be lower. -

Development Pipeline in UAE
Q: Any updates on the UAE development opportunity?
A: They are encouraged by recent announcements like the lottery launch. - Timing is still uncertain, but they expect more details by the end of the quarter or early next. - They're excited about their under-construction property in Dubai, designed to accommodate large-scale casinos. -

Las Vegas Capital Expenditure Plans
Q: Will you defer any planned renovations?
A: They plan to proceed with major renovations at Aria and MGM Grand. - While they consider capital allocation carefully, they believe in continuing room remodels to maintain proper cycles. - Anticipated maintenance CapEx will remain around $600–$700 million annually. -

Regional Market Trends
Q: What are you seeing in regional markets?
A: Middle to high-end customers remain strong. - The lower end of the database has seen slight softening, and unrated play is down slightly, partly due to calendar shifts. -

Cross-Selling Initiatives
Q: How have cross-selling efforts progressed?
A: They've made significant progress in capturing in-market customer spend. - Investments in connecting properties and cultural shifts in marketing teams have encouraged guests to stay within their portfolio. - Their geographic positioning also enhances this strategy. -