WYNN Q1 2025: Bookings for 2026 Beat Forecast, ADR Rising
- Resilient Demand & Strong Group Bookings: Executives noted that despite external uncertainties, Wynn's group business is robust—with bookings for 2026 trending better than expected and healthy ADR performance—indicating strong underlying demand across key markets.
- Effective Operational Cost Management: The management emphasized minimal tariff impact on operating expenses through proactive sourcing strategies and disciplined cost controls, suggesting resilience in margin performance even amid rising costs.
- Ongoing Investments in Innovation & Enhancements: Wynn is leveraging technology (e.g., machine learning applications) and strategic capital allocations to upgrade amenities and service quality—factors that can drive incremental revenue and reinforce their competitive positioning.
- CapEx Execution Uncertainty: Delays of approximately $375 million in U.S. CapEx projects, including the Encore Tower remodel, highlight uncertainties in timing and cost management due to unpredictable tariff impacts, potentially affecting future operational efficiency.
- Fierce Competitive Environment in Macau: The discussion emphasized a highly competitive, “hand-to-hand” battle for market share in Macau, where even incremental product launches by competitors could intensify pricing and margin pressures.
- Exposure to Short Booking Windows and Mixed International Demand: With a noted short booking window in non-group channels and a decline in visitation from key international markets like Canada and Mexico, there is potential vulnerability to sudden shifts in demand and overall hospitality revenue volatility.
| Metric | YoY Change | Reason |
|---|---|---|
Total Operating Revenues | –7.5% (Q1 2025: $1,700.397M vs Q4 2024: $1,838.797M) | The decline was driven primarily by weaker performance in key segments—especially Macau Operations, where lower VIP and mass market table games wins reduced overall revenues compared to the robust Q4 2024 results. |
Operating Income | –27% (Q1 2025: $268.589M vs Q4 2024: $366.895M) | A significant drop in operating income reflects the revenue shortfall from Macau and other segments in Q1 2025 relative to Q4 2024, indicating that softer top-line performance was not fully offset by cost management improvements. |
Net Income | –75% (Q1 2025: $81.405M vs Q4 2024: $322.360M) | The dramatic 75% decrease in net income signals a substantial contraction in profitability, primarily due to the fall in operating revenues—especially from Macau—and possibly margin pressures that were less favorable than in Q4 2024. |
Basic & Diluted EPS | Significant decrease (Q1 2025: $0.69 vs Q4 2024: Basic $2.53 and Diluted $2.33) | The sharp drop in EPS mirrors the steep decline in net income and reflects dilution adjustments along with reduced earnings per share compared to the strong performance in Q4 2024. |
Segment/Geography Breakdown | – | Q1 2025 saw Macau Operations contributing $865.89M (with Wynn Palace at $535.93M and Wynn Macau at $329.96M), alongside $625.29M from Las Vegas and $209.22M from Encore Boston Harbor. The weaker performance in Macau, compared to previous periods, was a key factor in the overall revenue decline. |
Derivatives’ Fair Value | Shift from +$50,398K to –$29,539K | The dramatic swing in derivatives’ fair value was due to a remeasurement of the WML Convertible Bond’s embedded derivative and the impact of newly executed foreign currency swaps, with shifts in market factors such as volatility, interest rates, and exchange rates relative to Q4 2024. |
Interest Expense | –3.7% (Q1 2025: –$157,608K vs Q4 2024: –$163,488K) | A slight reduction in interest expense resulted from a lower weighted average debt balance and a decrease in the weighted average interest rate in Q1 2025 compared to Q4 2024, helping mitigate the cost of debt despite weaker revenue performance. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Las Vegas EBITDA headwind | Q1 2025 | $25 million | no current guidance | removed |
Stock Buyback | Q1 2025 | $150 million | $200 million | raised |
Tariffs Impact | Q1 2025 | no prior guidance | Delayed ~$375 million in CapEx projects | no prior guidance |
Macau CapEx | 2025 | $250–$300 million | $250–$300 million | no change |
Dividends | FY 2024 | no prior guidance | $125 million | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Las Vegas Operations Performance & Revenue Drivers | Consistently highlighted strong EBITDAR, robust revenue growth, healthy casino gaming and non‐gaming figures, and disciplined cost management in Q2–Q4 2024 | Q1 2025 reported adjusted EBITDAR of $223.4 million on $625.3 million revenue, with healthy casino growth, effective cost discipline even with wage inflation, and strategic promotions despite the Super Bowl absence | Continued strong performance with consistent focus on cost discipline and revenue growth. |
Macau Market Dynamics and Competitive Pressures | Emphasized a highly competitive yet stable environment, market share driven by premium segments, digital and concession improvements, and disciplined expense management in Q2–Q4 2024 | Q1 2025 detailed a competitive market with stabilized promotional activity, ongoing service quality and operational efficiency, and noted lower VIP hold impacting EBITDAR moderately | Steady competitive intensity with maintained cost discipline though minor headwinds persist. |
Group Bookings and Demand Trends | Repeated mentions of record room nights, strong group and convention bookings, robust transient demand, and high ADRs in Q2–Q4 2024 | Q1 2025 confirmed strong group bookings for 2026, exceptionally robust transient demand, and active rate increases despite a short booking window | Sustained bullish demand with forward‐looking optimism in group bookings and strong market pace. |
Operational Efficiency and Cost Management | Discussions across Q2–Q4 2024 on maintaining controlled OpEx in Las Vegas, Boston, and Macau, with slight increases offset by rigorous cost management efforts | Q1 2025 reiterated disciplined cost management across key markets, with operating expenses rising modestly due to normal wage inflation but effectively offset by efficiency measures | Stable efficiency with continued focus on disciplined cost control despite minor inflation pressures. |
Share Repurchase and Capital Return Strategies | Regular emphasis on opportunistic buybacks, strong dividend policies, increased repurchase authorizations, and balanced capital allocation in Q2–Q4 2024 | Q1 2025 continued the trend with significant share repurchases (over $200 million executed) and increased dividends, underscoring a robust commitment to returning capital to shareholders | Consistent, robust capital return strategy maintained over time. |
Innovation and Technology Investment Initiatives | Q3 and Q4 2024 highlighted smart tables rollout, technology enhancements in food & beverage, loyalty program improvements, and broader service delivery innovations | No specific mention in Q1 2025 discussions | Topic not mentioned in current period, suggesting potential deprioritization or integration into ongoing operations. |
CapEx Execution Challenges and Project Delays | Q3 and Q4 2024 focused on delays in Macau due to land use approvals and regulatory timing uncertainties; Q2 2024 reported steady CapEx progress in the UAE and Macau | Q1 2025 introduced new challenges with approximately $375 million in U.S. CapEx delayed by tariffs and re-specification issues (e.g., Encore Tower remodel), while projects in Macau and the UAE remain on track | Emergence of new tariff-induced delays in U.S. projects alongside ongoing regulatory delays; overall CapEx challenges remain dynamic. |
International Demand Volatility and Short Booking Windows | Q2 2024 discussed the short booking window for Las Vegas (except group events) and noted event-driven demand; Q3 and Q4 had little explicit focus on this topic | Q1 2025 explicitly addressed international visitation levels (9% of Las Vegas room nights) and emphasized a short booking window for non-group channels, while reporting strong recent booking activity | Increased focus on international demand dynamics and booking window constraints, with cautious yet optimistic sentiment. |
Regulatory and Expansion Challenges in New Markets | Q2–Q4 2024 mentioned exploration of new markets like New York, Thailand, UAE, and cautious advancement amid regulatory uncertainties, as well as opportunities in gateway cities | Q1 2025 provided detailed commentary on regulatory challenges in New York, potential opportunities in Japan and Thailand, and highlighted complexities such as local politics, online gaming implications, and delays in legislative bills | Ongoing cautious expansion with detailed attention to regulatory complexities; strategic approach remains conservative. |
External Event Impacts on Revenue Comparables | Q2–Q4 2024 discussed the effects of major events (F1, Super Bowl, Sphere events) on revenue and EBITDA comparables, noting both positive impacts and tough comparisons due to high-event benchmarks | Q1 2025 emphasized the headwind from comparing to the Super Bowl weekend in the prior year, noted tariff impacts on CapEx, and observed lower VIP hold in Macau affecting EBITDAR | Shift toward managing headwinds from external events, with nuanced impacts replacing event-driven boosts. |
Consumer Spending Uncertainty and Economic Risks | Q2 and Q4 2024 mentioned modest economic crosscurrents, varied performance among customer segments, and monitoring of consumer spending behavior amid mixed stimuli | Q1 2025 acknowledged economic uncertainties from factors like tariffs and reduced port traffic but noted overall robust bookings and sound performance in key areas | Persistent caution regarding economic risks, though strong performance buffers the uncertainty. |
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CapEx Delay
Q: Which projects delayed due to tariffs?
A: Management noted that approximately $375 million in CapEx—primarily the Encore Tower remodel—is on hold because uncertain tariff rates have forced a lengthy re-spec process, delaying execution though the project remains in the forecast. -
Equity Deployment
Q: When deploy remaining $650–$725M equity?
A: They explained that the remaining equity will be deployed following the standard construction curve over the rest of this year and into next year, in line with usual project funding. -
New York Development
Q: What’s the New York timeline?
A: Management outlined that RFAs are expected by the end of June with licenses likely awarded by the end of 2025 or early 2026, given the complexities of the market. -
Japan Development
Q: Is Japan IR bidding attractive?
A: They stated that Japan is on the radar but will only be pursued if the regulatory setup is right, as structural challenges mean they require an optimal framework before proceeding. -
Rate Outlook
Q: Expect strong summer rate momentum?
A: The team affirmed that room rates are very strong and booking activity is robust heading into summer, with group demand and rate performance exceeding expectations. -
International Visitation
Q: What percentage are international room nights?
A: They disclosed that international visitors account for about 9% of Las Vegas room nights, with high-end international demand largely unaffected. -
Macau Competitiveness
Q: How intense is Macau competition?
A: Management acknowledged a fiercely competitive market in Macau, where stable promotional efforts and superior service and product quality are key to maintaining market share. -
Construction Inflation
Q: Are global construction costs rising?
A: They noted in the UAE cost certainty is strong, and outside the U.S., particularly for FF&E, the environment has even generated cost-saving opportunities rather than inflationary pressures. -
Operational Synergies
Q: Are scale synergies beneficial?
A: Management emphasized that operating as one integrated business creates significant efficiencies and enables robust cash flow redeployment, making disaggregation less attractive. -
Promos & Discounts
Q: Are discounts lower post-Super Bowl?
A: They confirmed that the lower promotional spend in Las Vegas is largely a function of extremely high ADRs during the Super Bowl weekend, reflecting a temporary seasonal adjustment. -
Non-Gaming Impact
Q: Do F&B and retail costs affect margins?
A: Management indicated that effective alternative sourcing keeps tariff impacts on food, beverage, and retail negligible, with retail performance remaining essentially flat despite high comps. -
Macau OpEx Stability
Q: Is Macau’s OpEx sustainable post-launch?
A: They explained that despite the recent food hall launch at Wynn Palace, disciplined cost management has enabled OpEx per day to stay flat, ensuring operational stability. -
Al Marjan Segments
Q: How are Al Marjan customer groups prioritized?
A: Management described three critical segments—locals, regional market, and destination visitors—as all vital to driving a balanced and strong EBITDAR, without any single group being ranked above the others.