Q3 2024 Earnings Summary
- Strong performance in Las Vegas high-end market: Despite tough comparisons, the high-end consumer continues to hold up in Las Vegas, with retail lease revenue up 3.5% year-over-year in Q3 . The company feels positive about demand in 2025 .
- Increased share repurchase authorization and confidence in stock value: Wynn Resorts increased their share repurchase authorization, buying back $118 million during the quarter, and believes the stock is attractive at current levels .
- Growth in Macau mass market and execution improvements: In Macau, mass market table drop was up 10% , and the company has improved guest experiences over the past year, leading to increased market share .
- Intense competition in Macau is putting pressure on margins and revenues, as the company acknowledges the challenging competitive environment in the region.
- Challenging year-over-year comparisons in Las Vegas are impacting growth, with management noting increasingly tough comps and potential pressure on revenues due to planned renovations that will take rooms out of service in 2025.
- Higher VIP commissions in Macau are affecting margins, with increased VIP turnover not translating into higher Gross Gaming Revenue (GGR), leading to margin pressure.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +1% | Continued recovery in Macau and steady performance in Las Vegas slightly lifted total revenue, but growth was modest compared to the large rebound in the prior year. This reflects improved mass market gaming volumes in Macau and stable ADR in Las Vegas, partly offset by softer results at Encore Boston Harbor. |
Macau Operations | +6% | Higher mass market gaming volumes and increased visitation following the relaxation of travel restrictions in Macau continued to boost operations. However, growth was more measured than the initial reopening surge seen in the prior year, signaling normalizing demand in the region. |
Wynn Macau | +19% | Stronger VIP and mass segment turnover at Wynn Macau drove revenue gains as tourism levels rose further post-COVID measures. Company-specific marketing efforts also helped capture a greater share of premium guests, though cost pressures from staffing and promotional activities tempered profit margin expansion. |
Entertainment, Retail & Other | -11% | The drop primarily reflects lower retail and entertainment revenue tied to closure or reduced presence of certain online/digital offerings, partially offset by improved in-person venue demand in Las Vegas. While visitation has rebounded, the shift in focus away from select digital segments weighed on year-over-year results. |
Operating Income (EBIT) | +113% | Significant margin improvement—especially in Macau—on higher gaming volumes, combined with strict cost discipline, accelerated EBIT growth. The prior-year low base during the peak of pandemic-related disruptions also contributed to the sharp percentage lift in operating income. |
Net Income | - $32.05M vs. - $120.54M | Reduced net losses stem from robust Macau performance and revenue gains in Las Vegas, partially offset by increased operating expenses. Looking ahead, further normalization in travel and ongoing cost management may continue improving profitability, though elevated interest expense could remain a headwind. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Macau Capital Expenditures | 2024–2025 | $350 million to $500 million | $350 million to $425 million | lowered |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Strong and sustained Las Vegas group bookings | Previously: Frequently discussed in Q2 2024 , Q1 2024 , and Q4 2023 , each time emphasizing robust group bookings. | Q3 2024: Outlook remains strong; pacing toward a record year in room nights with solid ADRs. | Consistently mentioned; sentiment remains positive. |
Fluctuating table game metrics in Las Vegas | Previously: Q2 2024 mentions healthy table drop but no deep detail ; Q1 2024 highlights large growth from 2019 to 2023, with tougher comps ; Q4 2023 only mentions higher-than-normal hold. | Q3 2024: No significant shifts; diversification reduces exposure to high-end volatility. | Mentioned less frequently; viewed as stable overall. |
Macau performance and strategy | Previously: Recurring focus in Q2 2024 , Q1 2024 , and Q4 2023 , emphasizing recovery, margin growth, and ongoing investments. | Q3 2024: Mass market gains, slight GGR fluctuations, stable competitive environment, smart tables rollout. | Recurring focus; generally optimistic outlook. |
Development pipeline in UAE, New York, Thailand | Previously: Q2 2024 , Q1 2024 , Q4 2023 , detailing active construction in UAE, early licensing steps for NY, cautiously watching Thailand. | Q3 2024: UAE gaming license progress and $3–5B market estimate; brief NY mention; no Thailand mention. | Continues; Thailand not referenced in Q3. |
Encore Tower renovations | Previously: No specific mention in Q2 2024, Q1 2024, or Q4 2023. | Q3 2024: About 50,000 room nights will be out of service in 2025 due to renovations. | Newly introduced in the latest call. |
Cost management and margin optimization | Previously: Q2 2024 , Q1 2024 , Q4 2023 , each highlighting cost efficiencies and focusing on margin expansion. | Q3 2024: Emphasized disciplined cost control in Las Vegas, Boston, Macau to maintain margins. | Recurring theme with consistently positive results. |
Potential macroeconomic headwinds in China affecting Macau demand | Previously: Q2 2024 notes crosscurrents in the economy ; Q1 2024 no mentions; Q4 2023 suggests Macau was somewhat decoupled from broader China macro. | Q3 2024: Not explicitly discussed; mention of encouraging Golden Week but no direct macro commentary. | Less explicit in Q3; previously acknowledged. |
Major events driving Las Vegas demand (F1, Super Bowl, conventions) | Previously: Q2 2024 , Q1 2024 , Q4 2023 all stressed key events as demand drivers. | Q3 2024: Confident in F1 bookings; references tough Super Bowl comp but strong group base. | Consistently discussed as a significant driver. |
Regulatory and execution risks tied to international expansion | Previously: Q2 2024 , Q1 2024 , no specific Q4 2023 mention. | Q3 2024: Caution about regulatory pushback (citing Australia) and iGaming vs. land-based cannibalization. | Ongoing caution around new jurisdictions. |
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Macau CapEx Reduction
Q: Why has Macau CapEx guidance decreased?
A: The Macau CapEx guidance was reduced due to timing issues with approvals, especially land use, which are beyond our control. While we've committed to full CapEx under our concession, it's now unlikely we'll complete everything by the end of 2025, so we've tightened our CapEx range. There is no change in our competitive stance. -
Share Repurchase Strategy
Q: How do you approach share repurchases and capital allocation?
A: We opportunistically buy back shares when we feel the stock is particularly cheap. This quarter, we purchased $118 million worth of shares, and we've increased our authorization because we believe the stock is attractive at current levels. We're balancing liquidity between growth projects, debt management, and returning capital to shareholders. -
Macau Competitive Environment
Q: How is competitive pressure in Macau evolving?
A: Competitive pressures in Macau are stable to slightly better compared to the beginning of the summer, but the market remains very competitive. -
Las Vegas Gaming Trends
Q: Are there shifts in high-end table play in Las Vegas?
A: We've seen no significant shifts. While table drop is down about 4.4% year-over-year, slot handle is up 3.5%. The decrease in table drop can result from a few high-end players' activity but isn't indicative of a broader trend. Our high-end consumer remains strong. -
Group Bookings Outlook
Q: What is the outlook for group bookings in Las Vegas?
A: Group business remains healthy for the rest of the year, pacing towards a record in room nights with strong ADRs. In 2025, we expect group room nights to be similar to 2024 by intention, as we balance group bookings with other valuable business segments. We'll push on rate as our team excels at doing. -
2025 Margin Outlook
Q: What revenue is needed to maintain margins in 2025?
A: We don't manage to a margin but focus on aggressively managing revenues and costs, while considering the brand. In Las Vegas, the high-end consumer continues to hold up, with retail lease revenue up 3.5% year-over-year in Q3. Wage pressure exists but is insignificant. In Macau, margins were unique this quarter due to factors like higher VIP commissions and a $3 million decline in retail revenue. Overall, we feel good about demand in 2025. -
Online Gaming Impact
Q: How do you view online gaming's effect on land-based casinos?
A: We recognize that online gaming can cannibalize land-based revenue, potentially causing a 15% revenue decline, which equates to half our margin. This affects employment levels and could lead to regulatory backlash, as seen in markets like Australia. We're cautious and monitoring the situation closely. -
Capital Expenditure Plans
Q: What are your CapEx needs domestically and in Macau?
A: In Las Vegas, we're investing in maintenance and high-return projects, including renovating spa villas and enhancing food and beverage offerings. Total project CapEx in Vegas will be around $300 million, with maintenance CapEx of $75–$85 million. In Macau, we've tightened our CapEx range due to timing but continue with our commitments under the concession. -
Wynn Macau Performance
Q: How is Wynn Macau performing amid visitation recovery?
A: Wynn Macau's gaming business has performed well, with mass market table drop up 10%. Improvements in physical experience and food and beverage have driven market share gains. Increased visitation benefits Wynn Macau due to its downtown location, but it's mainly due to our team's execution. -
Macau Visitation Trends
Q: How was demand during October Golden Week?
A: Demand during Golden Week was encouraging, with 99% occupancy. While it's early to say if stimulus measures had an impact, similar events in early 2016 led to substantial increases in visitation and GGR. We feel confident about our position in Macau. -
Smart Tables Rollout
Q: What's the status and impact of smart tables in Macau?
A: We've rolled out smart table technology to about a quarter of our tables and expect full coverage by Chinese New Year 2025. Benefits include game security and precise bet data, enabling innovative marketing. It's too early to see the full impact, but we're progressing as planned. -
Wynn Palace Environment
Q: Any changes at Wynn Palace affecting mass gaming volumes?
A: There's nothing significant changing at Wynn Palace. The environment is consistent with the rest of Macau, and previous remarks about Macau apply to Wynn Palace as well. -
Super Bowl Comp Headwind
Q: How will last year's Super Bowl affect Q1 comps?
A: We haven't disclosed the incremental EBITDA from last year's Super Bowl, and while it's a headwind from a comp perspective, we haven't provided specific numbers. However, Q4 and Formula 1 are shaping up nicely, with our room rates at a significant premium to the Strip.
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