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MGM Resorts International (MGM)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $4.25B, a slight beat versus S&P Global consensus ($4.238B), but Adjusted EPS of $0.24 missed Street ($~0.30); GAAP diluted EPS was a loss of $1.05 driven by a $256M goodwill impairment and ~$93M other non-cash write-offs tied to the Empire City license withdrawal . S&P Global values included below; Values retrieved from S&P Global.*
  • Las Vegas softness (ADR and occupancy), MGM Grand room remodel, and lower hold pressured Las Vegas EBITDAR (-18% YoY); MGM China posted record Q3 Segment Adjusted EBITDAR and reached 15.5% market share .
  • Strategic actions: sale of MGM Northfield Park operations for $546M (6.6x LTM EBITDAR) with master lease rent reduced by ~$54M at closing in H1 2026; BetMGM raised FY25 guidance and expects to distribute at least $200M to parents in 2025 (MGM expects ≥$100M in Q4) .
  • Capital/catalysts: $300M USD-equivalent yen-denominated term loan A at ~2.5% to fund Osaka (upsize potential to $450M), signs of Las Vegas stabilization with group/convention strength and F1 demand; management reiterated high return thresholds and buyback priority given valuation .

What Went Well and What Went Wrong

  • What Went Well

    • MGM China delivered record Q3 Segment Adjusted EBITDAR ($284M, +20% YoY) and a 15.5% market share; management cited strong premium mass and new Alpha Gaming Club/Alpha Villas openings .
    • BetMGM momentum: Q3 net revenue $667M (+23% YoY), EBITDA $41M; FY25 guidance raised to ≥$2.75B net revenue and ~$200M EBITDA with quarterly cash distributions to parents .
    • Portfolio optimization: announced sale of MGM Northfield Park operations for $546M cash (6.6x LTM EBITDAR) and rent reduction ($54M) upon closing, highlighting transaction multiples above MGM’s implied trading levels .
    • Quote: “We see signs of stabilization as the luxury market segment continues exhibiting strength. Groups and conventions are returning... F1 ticketing presales are pacing higher versus the prior year” .

  • What Went Wrong

    • Las Vegas Strip Resorts net revenues fell 7% YoY to $2.0B and Segment Adjusted EBITDAR declined 18% to $601M, impacted by remodel disruption, lower ADR/occupancy, and lower table hold; insurance proceeds also decreased YoY .
    • GAAP loss ($1.05 diluted EPS) due to a $256M goodwill impairment and ~$93M write-offs related to Empire City after withdrawing the NY commercial casino application (license term reduced to 15 years and competitive clustering) .
    • MGM Digital posted a Segment Adjusted EBITDAR loss of $23M in Q3 (driven by Brazil investment); FY25 MGM Digital EBITDA losses could approach ~$100M, though MGM’s economic stake in Brazil is ~50% .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$4.277 $4.405 $4.250
Diluted EPS ($)$0.51 $0.18 ($1.05)
Adjusted EPS ($)$0.69 $0.79 $0.24
Consolidated Adjusted EBITDA ($USD Millions)$637 $648 $506
Adjusted EBITDA Margin (%)14.9% 14.7% 11.9%

Actual vs S&P Global consensus (quarterly)

MetricQ1 2025 ActualQ1 2025 ConsensusQ2 2025 ActualQ2 2025 ConsensusQ3 2025 ActualQ3 2025 Consensus
Revenue ($USD Billions)$4.278 $4.284*$4.405 $4.317*$4.250 $4.238*
Primary EPS ($)$0.69 $0.447*$0.79 $0.548*$0.24 $0.299*
EBITDA ($USD Billions)$0.650 $1.141*$0.648 $1.168*$0.506 $1.096*

Values retrieved from S&P Global.*

Segment breakdown – Net Revenues ($USD Billions)

SegmentQ1 2025Q2 2025Q3 2025
Las Vegas Strip Resorts$2.176 $2.115 $1.985
Regional Operations$0.900 $0.965 $0.957
MGM China$1.027 $1.110 $1.088
MGM Digital$0.128 $0.164 $0.174
Management & Other$0.045 $0.052 $0.047
Total$4.277 $4.405 $4.250

Segment breakdown – Segment Adjusted EBITDAR ($USD Millions)

SegmentQ1 2025Q2 2025Q3 2025
Las Vegas Strip Resorts$811 $710 $601
Regional Operations$279 $309 $296
MGM China$286 $301 $284
MGM Digital($34) ($26) ($23)
Unconsolidated affiliates (BetMGM & other)($12.9) $25.9 $25.6
Management & Other$21.8 $20.2 $16.3
Stock comp (corporate)($28.6) ($16.5) ($14.3)
Triple net lease rent expense($564.5) ($564.4) ($564.7)
Corporate($120.1) ($112.5) ($114.3)
Consolidated Adjusted EBITDA$637 $647.5 $505.8

KPIs – Las Vegas Strip

KPIQ1 2025Q2 2025Q3 2025
Casino revenue ($MM)$538 $457 $450
Table games drop ($MM)$1,511 $1,554 $1,363
Table games win ($MM)$404 $355 $309
Table games win %26.7% 22.9% 22.6%
Slot handle ($MM)$5,682 $5,886 $6,155
Slot win ($MM)$545 $549 $570
Slot win %9.6% 9.3% 9.3%
Occupancy94% 93% 89%
ADR ($)$257 $252 $236
RevPAR ($)$242 $235 $210

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
BetMGM Net RevenueFY2025Not disclosed in MGM PR (raised in Q2) ≥$2.75B Raised
BetMGM EBITDAFY2025Not disclosed in MGM PR (raised in Q2) ~$200M Raised
BetMGM Cash Distribution to ParentsFY2025Not disclosed≥$200M (MGM expects ≥$100M in Q4) New/Initiated
Osaka Funding FacilityCurrentN/A$300M USD-equivalent yen TLA at ~2.5% (capacity to upsize to $450M) New
CapEx OutlookFY2026N/AFY2026 CapEx expected below FY2025; Aria room renovation starts Nov 2026, principal work summer 2027 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Las Vegas pricing/value, convention recoveryQ1: record occupancy/slot win; Super Bowl base inflated ADR YoY comp . Q2: remodel + lower hold; outlook brighter with MGM Grand completion and bookings .Stabilization; groups/conventions pacing strong; F1 presales higher; remodel completion supports ADR/occupancy recovery Improving into Q4/FY2026
BetMGM profitability/cash returnsQ1: positive EBITDA inflection; significant YoY improvement . Q2: guidance upgraded; strong EBITDA growth .FY25 raised guidance; quarterly cash distributions with ≥$100M to MGM in Q4 Accelerating cash generation
Macau premium mass expansion & shareQ1: softer main floor drop vs PY . Q2: all-time record EBITDAR; 16.6% share .Record Q3 EBITDAR; 15.5% share; Alpha Gaming Club/Alpha Villas bolster high-end Sustained strength
Portfolio optimizationQ1/Q2: repurchases ($494M Q1; $217M Q2), high ROI threshold .Northfield sale at 6.6x; rent reduction; exit Yonkers license; focus on high-return capital allocation Sharpening focus
Japan IR funding/returnsQ2: Japan pipeline commentary .$300M yen term loan at ~2.5%; project expected high-teens returns at opening; only IR in Japan Execution progressing
Digital (LeoVegas/Brazil)Q1: flat revenue; losses increased . Q2: brand expansion; losses .Revenue +23% YoY; EBITDA loss ($23M); Brazil investment intensifying 2025 losses ($100M) Investing for scale

Management Commentary

  • “We see signs of stabilization as the luxury market segment continues exhibiting strength. Groups and conventions are returning... all MGM guest rooms [MGM Grand] will be upgraded and back online… F1 ticketing presales… pacing higher” .
  • “We expect to receive at least $100 million in the fourth quarter from our $630 million total investment [BetMGM]… now… generating ample cash capable of funding growth and cash distributions” .
  • “Given present circumstances with our share price, our return thresholds are pretty darn high… simply buying our own shares [free cash yield] probably 25% or 30%” .
  • “Progress in Japan continues… raised a yen-denominated term loan A… $300 million USD at a borrowing cost of approximately 2.5%… ability to upsize to $450 million” .
  • On Yonkers exit: “Competitive landscape… four proposals clustered… license reduced to 15 years… proposition no longer aligns with our commitment to capital stewardship…” .

Q&A Highlights

  • New York/Yonkers: Decision to withdraw application due to competitive clustering, minimum tax obligations (~$400M), and shorter license term (15 years), lowering expected returns .
  • Capital allocation/ROIC: Management emphasized high hurdle rates given perceived undervaluation, prioritizing buybacks; Japan remains a favored high-return project .
  • Las Vegas segmentation: Luxury assets holding rate/volume; value-oriented properties (Luxor/Excalibur) challenged midweek amid reduced seats (Spirit bankruptcy), weaker drive/international traffic; pricing/value actions underway .
  • Regional markets: Promotions measured; Borgata VIP upgrades yielding market outperformance; regional margins ~30% reflecting disciplined reinvestment .
  • CapEx schedule: Aria renovation starts Nov 2026; principal work summer 2027; FY2026 CapEx below FY2025 .

Estimates Context

  • Q3 revenue beat: $4.250B actual vs $4.238B consensus (small beat); Adjusted EPS miss: $0.24 vs ~$0.30 consensus; EBITDA far below consensus ($0.506B actual vs ~$1.096B) as MGM uses “Consolidated Adjusted EBITDA” and Street models differed; Values retrieved from S&P Global.*
  • Drivers of miss: Las Vegas EBITDA down $130M YoY (remodel, lower hold, softer ADR/occupancy), lower insurance proceeds; GAAP loss from non-cash impairments tied to Empire City .
  • Potential revisions: Street likely to trim near-term Las Vegas margin/ADR assumptions and adjust EBITDA modeling to MGM’s “Consolidated Adjusted EBITDA” definition; upward revisions to BetMGM FY25 net revenue/EBITDA and cash returns already reflected by guidance raise .

Key Takeaways for Investors

  • Near-term headwinds centered in Las Vegas; management indicates stabilization with group/convention strength and F1 demand, plus MGM Grand remodel completion providing rate/occupancy tailwinds into FY2026 .
  • Macau remains a core growth engine with record Q3 EBITDAR and mid-teens share, supported by premium mass investments (Alpha Gaming Club/Villas) and suite conversions at Cotai in H1 2026 .
  • BetMGM is now a cash-returning asset: FY25 guidance raised (≥$2.75B, ~$200M EBITDA) with quarterly distributions and ≥$100M to MGM in Q4, de-risking funding for digital initiatives .
  • Portfolio optimization and lease economics: Northfield sale at 6.6x LTM EBITDAR and ~$54M rent reduction at closing enhance cash flow and focus capital on higher-return opportunities .
  • Osaka financing secured at attractive rates (~2.5%); management targets high-teens returns at opening, with optionality to upsize financing to $450M .
  • High return thresholds and buybacks remain the baseline allocation given management’s view of valuation; expect continued discipline in regional M&A and CapEx pacing .
  • Risk watch: U.S. leisure pricing/value sensitivity, airline capacity (“seats”) impact, drive/international visitation, and Brazil investment drag at MGM Digital in FY2025; offset by convention calendar, Macau momentum, and BetMGM cash distributions .