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PENN Entertainment, Inc. (PENN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $1.67B, up 4.1% year over year ($1.61B → $1.67B), but modestly below S&P Global consensus of $1.70B; adjusted EPS was -$0.25 vs consensus of -$0.21, a slight miss, while GAAP diluted EPS was $0.68 due to a $215M financing gain .*
  • Property-level (retail) performance rebounded after severe weather; March/April volumes were stable, delivering property-level revenues of $1.4B, Adjusted EBITDAR of $457.0M and 33.1% margins, though weather reduced retail Adjusted EBITDA by at least $10M .
  • Interactive delivered record gaming revenue; segment revenues were $290.1M (incl. $128.2M tax gross-up) and Adjusted EBITDA loss improved to -$89.0M despite unfavorable sports betting outcomes (-$10M EBITDA impact) .
  • Guidance: Q2 interactive revenue $280–$320M (incl. $116M tax gross-up) and EBITDA loss of $50–$70M; company reiterated full-year positive FCF, 2025 net cash interest ~$150M and net cash taxes ~$70M, and maintained plans to repurchase at least $350M of shares in 2025 (YTD $35M) .
  • Catalysts: ESPN direct-to-consumer integration and deeper account linking (favorites, rewards) aimed at driving OSB funnel and cross-sell into iCasino; continued retail project openings (Joliet in Q3/Q4 2025) and land-based Council Bluffs plan with GLPI funding optionality .

What Went Well and What Went Wrong

What Went Well

  • Record online gaming revenue and improved flow-through in Interactive; momentum from standalone Hollywood iCasino app in PA/MI with 70% incremental customers and 134 bps higher hold vs integrated iCasino offerings .
  • Retail resilience: property-level revenues $1.4B and Adjusted EBITDAR $457.0M with 33.1% margin; volumes rebounded in March and remained consistent into April/May. “This past weekend was the second best weekend of the year for revenue” (Jay Snowden) .
  • Strong omni-channel cross-sell: PA cohort saw +21% YoY retail theoretical and +165% online theoretical; MI cohort +27% retail theoretical and +242% online theoretical (Jay Snowden) .
  • Shareholder returns: $35M of buybacks through May 7; intent to repurchase at least $350M in 2025 (Felicia Hendrix: “magnitude of repurchases [to] increase in back half”) .

What Went Wrong

  • Industry-wide customer-friendly sports betting outcomes (March Madness) reduced Interactive revenue by ~$15M and EBITDA by ~$10M; retail margins also pressured by revenue mix (more Northeast/Midwest with higher tax rates) .
  • Severe weather impacted retail Adjusted EBITDA by at least $10M in January/February; year-over-year comparisons in the South were also affected by a $5M one-time accounting benefit in Q1 2024 .
  • Corporate overhead elevated: ~$8M higher in Q1 from legal/advisory costs tied to a proxy campaign; corporate overhead for the quarter was $36.0M vs $24.9M in prior-year quarter .

Financial Results

Consolidated Results (oldest → newest)

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Billions)$1.61 $1.67 $1.67
Gaming Revenue ($USD Billions)$1.26 $1.29 $1.30
F&B, Hotel, Other ($USD Billions)$0.35 $0.38 $0.37
Adjusted EBITDA ($USD Millions)$101.4 $165.2 $173.3
Rent Expense ($USD Millions)$154.8 $155.5 $155.9
Adjusted EBITDAR ($USD Millions)$256.2 $320.7 $329.2
Adjusted EBITDAR Margin (%)15.9% 19.2% 19.7%
GAAP Diluted EPS ($)($0.76) ($0.88) $0.68
Adjusted EPS ($)($0.79) ($0.44) ($0.25)

Results vs S&P Global Consensus (Q1 2025)

MetricActualConsensus*Surprise
Revenue ($USD Billions)$1.67 $1.70*Miss ~$0.03B
Adjusted EPS ($)($0.25) ($0.21)*Miss ~$0.04
EBITDA ($USD Millions)$173.3 $350.5*Miss ~$177.2M

Values retrieved from S&P Global.*

Property-Level (Retail) KPIs (Q1 2025)

MetricQ1 2025
Property-Level Revenues ($USD Billions)$1.4
Property-Level Adjusted EBITDAR ($USD Millions)$457.0
Property-Level Adjusted EBITDAR Margin (%)33.1%
Weather Impact to Retail Adjusted EBITDA ($USD Millions)≥$10

Segment Breakdown (Q1 2025 vs Q1 2024)

SegmentRevenue Q1 2024 ($MM)Revenue Q1 2025 ($MM)Adjusted EBITDAR Q1 2024 ($MM)Adjusted EBITDAR Q1 2025 ($MM)
Northeast$684.7 $680.9 $202.6 $194.2
South$298.5 $288.3 $113.5 $103.3
West$128.8 $129.7 $45.9 $45.7
Midwest$291.2 $282.9 $117.0 $113.8
Interactive$207.7 $290.1 ($196.0) ($89.0)
Other$6.0 $5.3 ($26.8) ($38.8)
Intersegment Eliminations($10.0) ($4.7) ——
Total$1,606.9 $1,672.5 $256.2 $329.2

Liquidity & Capital Allocation

MetricQ4 2024Q1 2025
Cash & Equivalents ($USD Millions)$706.6 $591.6
Traditional Net Debt ($USD Millions)$1,889.5 $2,054.4
Lease-Adjusted Net Leverage (x)7.3x 7.1x
Traditional Net Leverage (x)5.5x 5.0x
Shares Repurchased YTD ($USD Millions)—$35.0
Q1 CapEx ($USD Millions)$221.0 $125.2
Cash Interest Paid ($USD Millions)$25.6 $36.7
Net Cash Taxes ($USD Millions)($2.7) ($19.7)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Interactive Revenue ($USD Millions)Q2 2025Not previously quantified in Q1 materials$280–$320 (incl. $116 skin tax gross-up) Maintained trajectory; quantified
Interactive EBITDA ($USD Millions)Q2 2025Not previously quantified in Q1 materialsLoss $50–$70 Sequential improvement expected
Interactive EBITDAFY 2025Range unchanged; incorporate flow-throughRange unchanged; incorporate -$10M EBITDA impact from Q1 outcomes Maintained; negative flow-through
Interactive RevenueFY 2025Range unchangedRange unchanged; incorporate -$15M revenue impact from Q1 outcomes Maintained; negative flow-through
CapEx ($USD Millions)FY 2025$730 $730 (unchanged) Maintained
Project CapEx ($USD Millions)FY 2025$490 $490 (unchanged) Maintained
Net Cash Interest ($USD Millions)FY 2025~$150 ~$150 (unchanged) Maintained
Net Cash Taxes ($USD Millions)FY 2025~$70 ~$70 (unchanged) Maintained
Free Cash FlowFY 2025Positive Positive (unchanged) Maintained
Share Repurchases ($USD Millions)FY 2025≥$350 ≥$350 (unchanged); $35 YTD Maintained

Earnings Call Themes & Trends

TopicQ3 2024 (Nov 2024)Q4 2024 (Feb 2025)Q1 2025 (May 2025)Trend
OSB/iCasino product enhancementsImproved parlay mix, better sportsbook hold; account linking launched Continued enhancements; live streaming; fantasy integrations; standalone iCasino growth ESPN favorites on homepage; rewards; hiring CPO; deeper personalization & live betting roadmap Strengthening toward personalization/live
Supply chain/tariffsRemodeling impacts in select markets Projects on budget/on schedule No material OpEx impact to date; steel tariff mitigation via locking costs for Council Bluffs Monitored, mitigated
Retail volumes and weatherWeather disruptions; Q4 off to stronger start Solid property-level demand Weather hit ≥$10M; March/April rebound; April retail revenue +2% YoY Normalizing post-weather
Regulatory/legal——PA skill-based gaming concerns; pursuing equitable regulation/taxation Ongoing
Financing optionality for projects——GLPI term loan vs rent optionality; timing to match openings Optionality preserved
iCasino cross-sell & incrementality—Standalone app momentum in PA/MI 70% incremental customers; higher hold vs integrated Improving

Management Commentary

  • “Our Interactive segment generated significant top and bottom-line year-over-year growth… despite customer-friendly sports betting outcomes that negatively impacted Adjusted EBITDA by approximately $10 million” (Jay Snowden) .
  • “In Pennsylvania… year-over-year increases of 21% in retail theoretical play and 165% in online theoretical play… Similarly, in Michigan… 27% retail and 242% online” (Jay Snowden) .
  • “Our resale [retail] business in April was stable with revenue growth of 2% year-over-year… picking up market share in 14 of our 17 markets not impacted by meaningful new supply” (Todd George) .
  • “For the second quarter, our interactive revenue guidance range is $280 million to $320 million… and our EBITDA guidance range is a loss of $70 million to a loss of $50 million… expect each quarter… lower interactive EBITDA losses sequentially… positive EBITDA in the fourth quarter” (Felicia Hendrix) .

Q&A Highlights

  • Digital mix: OSB share trending below plan offset by stronger iCasino; management comfortable with full-year guide as momentum builds in both .
  • iCasino incrementality and promo spend: 70% incremental customers to iCasino; initial focus on organic cross-sell with performance marketing ramping now .
  • Pipeline financing & disruption: GLPI financing matched to openings; minimal disruption for Columbus hotel/Council Bluffs; IL land-based conversions target ~2-week downtime .
  • ESPN integration: upcoming DTC product and deeper personalization expected to drive users and parlay mix; flagship and fantasy integrations highlighted .
  • Regulatory watch: PA skill-based gaming seen as competitive; advocating for regulation/tax parity; monitoring prediction markets and Ohio iGaming legislation .

Estimates Context

  • Q1 2025: Revenue $1.67B vs consensus $1.70B (miss); Adjusted EPS -$0.25 vs consensus -$0.21 (miss). EBITDA $173.3M vs consensus $350.5M (miss). Values retrieved from S&P Global.*
  • Q4 2024: Revenue $1.67B vs consensus $1.67B (inline); Adjusted EPS -$0.44 vs consensus -$0.39 (miss). Values retrieved from S&P Global.*
  • Q1 2024: Revenue $1.61B vs consensus $1.63B (miss); Adjusted EPS -$0.79 vs consensus -$0.59 (miss). Values retrieved from S&P Global.*
MetricQ1 2024Q4 2024Q1 2025
Revenue Consensus ($USD Billions)*$1.63*$1.67*$1.70*
Revenue Actual ($USD Billions)$1.61 $1.67 $1.67
Primary EPS Consensus Mean ($)*($0.59)*($0.39)*($0.21)*
Adjusted EPS Actual ($)($0.79) ($0.44) ($0.25)
Primary EPS – # of Estimates*11*12*9*

Values retrieved from S&P Global.*

Target Price Consensus Mean: $20.82*; Recommendation text unavailable in this pull.*

Key Takeaways for Investors

  • Retail core is stabilizing post-weather with property-level margins robust (33.1%), but regional new supply remains a headwind in select markets; mix effects (higher-tax regions) can pressure consolidated margins near term .
  • Interactive is approaching an inflection: standalone iCasino driving incrementality (70%) and higher hold; sequential EBITDA losses expected to narrow each quarter with positive EBITDA targeted in Q4 .
  • Q1 was a low-quality GAAP beat (EPS $0.68) driven by a $215M financing gain; adjusted EPS (-$0.25) missed consensus, and revenue missed modestly, suggesting estimates may need fine-tuning for sports betting hold volatility and legal/advisory spend .*
  • Capital deployment and deleveraging: management reiterated positive 2025 FCF, net cash interest ~$150M, net cash taxes ~$70M, and ≥$350M buybacks with YTD $35M; leverage metrics improving sequentially .
  • Product catalysts: ESPN DTC integration, deeper account linking, personalization and live-betting improvements, plus fantasy football tie-ins could boost OSB engagement and parlay mix into H2 .
  • Project pipeline: Joliet grand opening set for Aug 11, 2025; Council Bluffs land-based plan with GLPI financing optionality; management targeting minimal operational disruption and cost mitigation amid potential steel tariffs .
  • Trading lens: Near-term stock moves likely tied to OSB/iCasino contribution trajectory, legal/advisory cost normalization, and evidence of sequential Interactive EBITDA improvement; watch Q2 Interactive guide execution and ESPN flagship launch timing .