Executive Summary

Q4 2024 showed mixed but improving trends: consolidated revenue rose to $1.669B (+19.6% y/y), Adjusted EBITDA improved to $165.2M from $(39.6)M y/y, while GAAP net loss was $(133.8)M (diluted EPS $(0.88)); property-level (retail) performance was strong with $1.4B of revenue and $461.2M Adjusted EBITDAR (33.1% margin) .
Interactive (ESPN BET/iCasino) improved y/y but remained a drag: revenue $275.0M (incl. $132.8M tax gross-up) and Adjusted EBITDA loss $(109.8)M; “customer-friendly” sports outcomes reduced Interactive revenue by ~$44M and EBITDA by ~$32M in the quarter .
Capital allocation catalyst: the company intends to repurchase at least $350M of shares in 2025 and guided to 2025 FCF positive; liquidity at year-end was $1.7B (cash $706.6M) .
2025 guidance introduced: Retail revenue $5.6–$5.75B; Retail EBITDAR $1.85–$1.95B; Interactive revenue $1.25–$1.75B; Interactive EBITDA loss $(200)–$(100)M with 4.7% OSB handle share (ex-NY) and 3.5% U.S. iCasino GGR share assumptions; capex $730M; Q4’25 targeted as first profitable quarter in digital .

What Went Well and What Went Wrong

What Went Well

Strong retail operations: “properties not impacted by new supply generated nearly 3% y/y revenue growth” and property-level Q4 revenue/Adjusted EBITDAR/margin of $1.4B/$461.2M/33.1% reflect healthy demand and execution .
Digital product momentum: iCasino delivered “record quarterly gaming revenue, with over 60% growth y/y” and the new standalone Hollywood Casino app launched in PA and MI with early share gains; parlay and SGP adoption improved sequentially since October (parlay mix >30% in Dec/Jan) .
Capital return and confidence: new plan to repurchase at least $350M in 2025, with management highlighting confidence in a multi-year growth phase and expecting positive EBITDA in Interactive by Q4 2025; “We anticipate each quarter of 2025 delivering a lower loss sequentially… ending the year with the fourth quarter representing the first profitable quarter since the launch of ESPN BET” .

What Went Wrong

Sports outcomes: Q4 Interactive results were negatively affected by “customer-friendly” sports outcomes, cutting Interactive adjusted revenue by ~$44M and EBITDA by ~$32M; consolidated net loss widened to $(133.8)M (EPS $(0.88)) .
Impairments and margin compression: Q4 included $89.1M of impairments and Adjusted EBITDAR margin fell to 19.2% vs 21.3% in Q3 and 22.1% in Q2; net loss margin deteriorated to (8.0)% .
New supply pockets: management continued to acknowledge pressure from new competitive supply in Nebraska, Chicagoland, and Louisiana (though lapping improves through 2025) .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$1,663.0	$1,639.2	$1,669.0
Net Income (Loss) ($USD Millions)	$(27.1)	$(37.5)	$(133.8)
Diluted EPS ($)	$(0.18)	$(0.24)	$(0.88)
Adjusted EBITDA ($USD Millions)	$212.1	$193.5	$165.2
Adjusted EBITDAR ($USD Millions)	$367.0	$348.4	$320.7
Adjusted EBITDAR Margin (%)	22.1%	21.3%	19.2%
Net Income (Loss) Margin (%)	(1.6)%	(2.3)%	(8.0)%
Adjusted EPS ($)	$(0.18)	$(0.25)	$(0.44)

Segment revenue and profitability (Q4 2024 vs Q4 2023):

Segment	Revenue Q4’24 ($MM)	Revenue Q4’23 ($MM)	Adj. EBITDAR Q4’24 ($MM)	Adj. EBITDAR Q4’23 ($MM)
Northeast	689.9	662.9	194.4	192.5
South	284.2	285.1	101.9	113.0
West	129.4	133.7	43.5	50.8
Midwest	290.7	290.6	121.4	120.1
Interactive	275.0	31.5	(109.8)	(333.8)
Other	3.7	3.7	(30.7)	(30.1)
Intersegment Elims	(3.9)	(12.1)	—	—
Total	1,669.0	1,395.4	320.7	112.5

KPIs and balance sheet/cash flow:

KPI	Q4 2024	Notes
Property-level Revenue ($B)	$1.4	Retail-only (Northeast/South/West/Midwest)
Property-level Adjusted EBITDAR ($MM)	$461.2	Retail-only
Property-level Adjusted EBITDAR Margin	33.1%	Retail-only
Interactive Revenue ($MM)	$275.0 (incl. $132.8 tax gross-up)	Consolidated
Interactive Adjusted EBITDA ($MM)	$(109.8)	Consolidated
Parlay Mix (% of Handle)	>30% in Dec/Jan	Sequential improvement since Oct
SGP Adoption	Increased monthly since football season began	Qualitative
Online→Retail Cross-sell	+64% y/y	Omni-channel progress
Liquidity ($B)	$1.7 (Cash $706.6M)	As of Dec 31, 2024
Traditional Net Debt ($B)	$1.8895	As of Dec 31, 2024
Lease-adjusted Net Leverage	7.3x	TTM basis
Traditional Net Leverage	5.5x	TTM basis
Capex ($MM)	$221.0	Q4 2024
Cash Interest Paid ($MM)	$25.6	Q4 2024

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Retail Revenue	FY2025	—	$5.6B–$5.75B	New
Retail EBITDAR	FY2025	—	$1.85B–$1.95B	New
Interactive Revenue	FY2025	—	$1.25B–$1.75B	New
Interactive EBITDA	FY2025	—	$(200)M–$(100)M	New (midpoint +$350M y/y)
ESPN BET Handle Share (ex-NY)	FY2025 Assumption	—	4.7%	New
OSB Hold	FY2025 Assumption	—	9%	New
U.S. iCasino GGR Share	FY2025 Assumption	—	3.5%	New
Skin Tax Gross-up	FY2025	—	~$520M	New
Interactive Revenue	Q1 2025	—	$270M–$350M	New
Interactive EBITDA	Q1 2025	—	$(85)M–$(70)M	New
Free Cash Flow	FY2025	—	Positive	New
Capex (Total; Project)	FY2025	—	$730M; $490M project	New
Net Cash Interest	FY2025	—	~$150M	New
Net Cash Taxes	FY2025	—	~$70M	New
Share Repurchases	CY2025	—	≥$350M	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024 and Q3 2024)	Current Period (Q4 2024)	Trend
ESPN BET integrations, tech stack	Q2: Product enhancements; NY launch planned; improved trading/promo discipline . Q3: Account linking launched; 7 retail ESPN BET books; product roadmap progress .	Account linking reached ~230k; in-app live streaming launched; deeper personalization via ESPN Fantasy; optimization with ESPN in 2025 .	Improving
iCasino standalone strategy	Q2: Record gaming revenue; roadmap toward standalone iCasino . Q3: PA standalone app planned early Q1’25; others to follow .	Standalone Hollywood app launched PA/MI; early share gains; slot-focused mix; retention strong; NJ launch pending approvals .	Improving
Retail competitive landscape & projects	Q3: New supply pressure (NE, LA, Chicago); 4 projects on budget/schedule (Joliet H2’25) .	Lapping new supply improves during 2025; 4 retail growth projects progressing; Joliet opening Q4’25; others in H1’26 .	Stabilizing/Improving
Regulatory/tax environment	—	Cautioned against tax hikes; advocated engaging industry; highlighted illegal/offshore competitors; discussed alternatives incl. iCasino legalization where appropriate .	Mixed risk
Omni-channel cross-sell	Q3: Growing digital database; retail cross-sell momentum .	Cross-sold online customers into retail +64% y/y; ESPN-branded retail books driving sign-ups/visitation .	Strengthening
Canada/Alberta	Q3: Ontario strong; account linking and MAU growth .	Ontario #1 market; expect Alberta to mirror Ontario performance upon approval .	Positive outlook
Capital allocation	—	≥$350M buyback in 2025; opportunistic approach; deleveraging trajectory highlighted .	Shareholder-friendly

Management Commentary

“We are announcing this morning our intent to repurchase at least $350 million of shares this year” .
“We anticipate each quarter of 2025 delivering a lower loss sequentially throughout the year, ultimately ending the year with the fourth quarter representing the first profitable quarter since the launch of ESPN BET” .
“Our retail segment had a strong finish to the year… retail revenue of $1.4 billion and adjusted EBITDAR of $461 million, both slightly above the high end of our previously guided fourth quarter revenue and EBITDAR ranges” .
“Ontario is our #1 market in North America… We believe the strength in Canada will only grow once we launch in Alberta” .
“We do not anticipate any new significant competitive supply impacting us in 2025 or 2026” .

Q&A Highlights

ESPN BET path and levers: If share/scale targets are not met in 2025, management will pull operating/marketing cost levers; cited a 3-year clause in the ESPN agreement milestone as they approach 2026 .
Financing of Illinois relocations (Joliet/Aurora): Intend to close GLPI financing near opening to avoid rent before EBITDAR generation .
Land-based project ramp: Moving from riverboats to land-based with existing staff/databases should shorten ramp vs typical 90–180 days .
Tax headwinds: Encouraged dialogue with states; highlighted competing untaxed/illegal operators and alternative revenue solutions (e.g., iCasino in appropriate structures) .
iCasino contribution and mix: iCasino is a positive EBITDA contributor; standalone app skewing slot mix and improving hold; early growth largely database-driven with limited promo .
Buyback approach: ≥$350M sized to be “substantive” (~>10% market cap) and executed opportunistically rather than programmatically .

Estimates Context

S&P Global (Capital IQ) Wall Street consensus for Q4 2024 was unavailable at time of analysis due to a data access limit. As a result, we cannot present a definitive vs-consensus comparison for revenue/EPS. However, management stated Retail Q4 revenue and Adjusted EBITDAR were slightly above the high end of the company’s previously guided ranges, indicating an internal beat versus guidance for Retail .
The Interactive segment underperformed due to unfavorable sports outcomes (hold), suggesting potential near-term estimate volatility; management’s 2025 guidance implies sequential quarterly improvement in Interactive EBITDA with profitability targeted in Q4’25 .

Key Takeaways for Investors

Retail strength persists despite isolated new-supply pressure; lapping of Nebraska/Chicagoland/Louisiana headwinds should improve trajectory through 2025, with new projects (Joliet Q4’25; others H1’26) as catalysts .
Digital is inflecting: iCasino growth (>60% y/y) and standalone Hollywood app launches are improving mix/hold and should be a positive EBITDA contributor in 2025; ESPN BET integrations (account linking, live streaming, Fantasy) support share gains .
2025 outlook de-risks the digital P&L: guidance embeds limited OSB share (4.7% ex-NY) and 9% hold, with quarterly loss reduction culminating in Q4 profitability; any upside to share/hold could accelerate breakeven .
Balance sheet/liquidity provide flexibility: $1.7B liquidity and plan to be FCF positive in 2025 support ≥$350M buyback and development capex, though lease-adjusted leverage at 7.3x warrants monitoring .
Near-term trading setup: Buyback and iCasino momentum are potential positive catalysts; watch Interactive quarterly cadence (Q1 guide: $(85)M–$(70)M EBITDA loss) and OSB hold dynamics post “customer-friendly” Q4 outcomes .
Medium-term thesis: Multi-year growth from four retail projects, digital profitability by 2026, and omni-channel flywheel (younger database, cross-sell) underpin improving returns. Regulatory/tax developments and competitive intensity remain key risks .

Additional Relevant Press Releases (Q4/Q1 Context)

ESPN BET launch in Washington, D.C. (Jan 21, 2025), expanding to 20 U.S. jurisdictions and deepening Monumental Sports partnership; reinforces integration and top-of-funnel reach heading into 2025 .

Citations: All figures and statements are sourced directly from PENN’s Q4 2024 8-K press release and exhibits, earnings call transcript, prior quarter 8-Ks, and company press releases as cited after each item.

PENN Entertainment, Inc. (PENN)·Q4 2024 Earnings Summary