Boyd Gaming Q1 2025 Earnings Report

Boyd Gaming EPS Results

• Actual EPS: $1.62
• Consensus EPS: $1.52
• Beat/Miss: Beat by +$0.10
• One Year Ago EPS: $1.51

Boyd Gaming Revenue Results

• Actual Revenue: $991.57 million
• Expected Revenue: $976.38 million
• Beat/Miss: Beat by +$15.19 million
• YoY Revenue Growth: +3.20%

Boyd Gaming Announcement Details

• Quarter: Q1 2025
• Date: 4/24/2025
• Time: After Market Closes
• Conference Call Date: Thursday, April 24, 2025
• Conference Call Time: 5:00PM ET

Boyd Gaming (NYSE:BYD), together with its subsidiaries, operates as a multi-jurisdictional gaming company in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania. The company operates through Las Vegas Locals, Downtown Las Vegas, Midwest & South, and Online segments. It also engages in owning and operating a travel agency. Boyd Gaming Corporation was founded in 1975 and is headquartered in Las Vegas, Nevada.

Boyd Gaming Q1 2025 Earnings Call Transcript

Presentation

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Good afternoon, and welcome to the Boyd Gaming First Quarter twenty twenty five Earnings Conference Call. My name is David Strau, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today's call, which we are hosting on Thursday, 04/24/2025. At this time, all lines are in listen only mode. Following our remarks, we will conduct a question and answer session.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Our speakers for today's call are Keith Smith, President and Chief Executive Officer and Josh Hirschberg, Executive Vice President and Chief Financial Officer. Our comments today will include statements that are forward looking statements within the Private Securities Litigation Reform Act. All forward looking statements in our comments are as of today's date, and we undertake no obligation to update or revise the forward looking statements. Actual results may differ materially from those projected in any forward looking statement. There are certain risks and uncertainties, including those disclosed in our filings with the SEC, that may impact our results.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

During our call today, we will make reference to non GAAP financial measures. For a complete reconciliation of historical non GAAP to GAAP financial measures, please refer to our earnings press release and our Form eight ks furnished to the SEC today, and both of which are available at investors.boydgaming.com. We do not provide a reconciliation of forward looking non GAAP financial measures due to our inability to project special charges and certain expenses. Today's call is being webcast live at boydgaming.com and will be available for replay in the Investor Relations section of our website shortly after completion of this call. So with that, I would now like to turn the call over to Keith Smith.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Keith?

[Keith Smith, President and CEO at Boyd Gaming]

Thanks, David. Good afternoon, everyone. During the first quarter, our company continued to deliver consistent results, growing revenues and EBITDAR on both the company wide and property level basis. Revenues for the quarter were nearly $1,000,000,000 while EBITDAR was $338,000,000 and we maintained property level margins of 40% consistent with the prior year. During the quarter, our team successfully managed a number of issues including significantly more weather impacted days in our Midwest and South segment, the comparison issues created by leap year and the benefits of last year's Super Bowl in Las Vegas.

[Keith Smith, President and CEO at Boyd Gaming]

Including the impact from these factors, play from our core customers continue to grow on a companywide basis during the first quarter, while retail play was even with the prior year. With respect to recent trends in the business, we have not seen any meaningful shift in consumer behavior or spending patterns thus far in the second quarter. Through the April, customer trends have remained consistent with March. And while we are encouraged by the consistency of the trends in our business, we recognize that the last several weeks have brought an increased level of economic uncertainty. However, our management teams have successfully managed through periods of uncertainty before and with the strongest balance sheet in our history and a larger and more diversified business, we remain confident in our ability to manage through the current environment.

[Keith Smith, President and CEO at Boyd Gaming]

Now, let's review our performance by segment starting with our Las Vegas Locals business. During the quarter, revenues in the Locals segment were nearly even with the prior year, while EBITDAR was down less than 4%, primarily attributable to the Orleans. At the Orleans, while we continue to be impacted by competitive pressures, year over year declines in both revenue and EBITDAR narrowed during the quarter. In the remainder of our local segment, even with the difficult comparisons created by leap year and last year's Super Bowl, revenues for the quarter grew modestly, EBITDAR was even with the prior year and operating margins once again exceeded 50%. Across the entire local segment, play from our core customers grew during the quarter, while retail play was consistent with fourth quarter trends.

[Keith Smith, President and CEO at Boyd Gaming]

And through the April, these trends have continued throughout our business. Next, Downtown Las Vegas achieved both revenue and EBITDAR growth during the first quarter. We continue to see encouraging customer trends downtown with growth in play from both our core customers and retail customers, solid visitation from Hawaii and healthy pedestrian traffic along Fremont Street. Additionally, recall that Hawaiian visitation to our downtown segment was temporarily impacted in last year's first quarter by higher airfares from Hawaii related to the Super Bowl. This created a favorable comparison during the first quarter of this year that will not continue in future quarters.

[Keith Smith, President and CEO at Boyd Gaming]

Looking ahead, we remain confident in the future of our Southern Nevada operations. The long term fundamentals of the Southern Nevada economy remain strong with consistent growth in local population, employment and tourism. Next, in the Midwest and South segment, both revenues and EBITDAR grew during the quarter, margins were even with the prior year. We achieved this performance despite a 28% increase in weather impacted days compared to last year, as well as the impact of leap year. During the quarter, play from our core customers continued to grow, while retail play was even with the prior year.

[Keith Smith, President and CEO at Boyd Gaming]

Importantly, as we move past the impacts of weather, trends in late March and April were consistent with the last several quarters similar to what we saw in our two Nevada segments. Looking ahead to the second quarter, keep in mind that we will anniversary the opening of our new treasure chest facility on June 6. Additionally, our Belterra Park and Belterra Resort properties were forced to close for several days earlier this month due to flooding on the Ohio River. Next, our online segment grew EBITDAR by nearly 14% year over year, driven by stable performance from our market access agreements and strong growth from Boyd Interactive, our online gaming business. On top of the continued growth we are delivering in our online segment, our 5% equity stake in FanDuel represents significant and growing value for our shareholders as FanDuel further strengthens its position as the nation's leading online gaming company.

[Keith Smith, President and CEO at Boyd Gaming]

Finally, our managed and other business had yet another strong quarter, driven by continued growth in management fees from Sky River Casino. And the foundation for future growth at Sky River is being laid with the ongoing expansion activity at this property. The first phase of this expansion, set for completion early next year, will add 400 slots and a 1,600 space parking garage, providing much needed additional gaming capacity. Second phase will further diversify Sky River's offerings with a 300 room hotel, two new food and beverage outlets, a day spa and an entertainment and event center. Once fully complete in mid-twenty twenty seven, this expansion will position Sky River to continue growing well into the future, strengthening its position as one of Northern California's leading gaming entertainment destinations.

[Keith Smith, President and CEO at Boyd Gaming]

So in all, our revenue and EBITDAR growth in the first quarter reflected the strength of our diversified business, the resiliency of our customer base and the appeal of our properties. And we are further enhancing the competitiveness of our amenities as we refresh and update our hotels at the IP, Valley Forge and Orleans. We are also continuing our property wide renovation of the Suncoast. We began these improvements last year with the addition of several new amenities and have now begun a complete renovation of the casino and public areas. While disruption from this project has been minimal so far, we will be moving into the most impactful phase of the casino floor renovations this summer, which fortunately is the property's slowest time of the year.

[Keith Smith, President and CEO at Boyd Gaming]

We expect to complete these renovations during the first quarter of next year. Beyond these property enhancements, we have several projects underway to strengthen the long term growth profile of our business. These projects are located in markets with long term growth potential, each providing the opportunity for a strong return on investment for our company and are part of our 100,000,000 in annual recurring growth capital. In Missouri, work is progressing on our meeting and convention center expansion at Ameristar St. Charles.

[Keith Smith, President and CEO at Boyd Gaming]

The vast majority of pre bookings for this new space are from entirely new customers, significantly expanding the properties reach and appeal when we open our expansion this fall. And earlier this month, we broke ground on Cadence Crossing Casino adjacent to the master plan community of Cadence in the Southeast part of the Las Vegas Valley. When it opens in mid-twenty twenty six, this new property will replace our existing Joker's Wild Casino with a modern gaming entertainment facility designed to appeal to the thousands of new residents throughout the Cadence community. And this property has been designed for continued growth with future plans for hotel, additional casino space and more non gaming amenities. We near the completion of these investments, we are developing plans for the next phase of projects to strengthen our growth profile.

[Keith Smith, President and CEO at Boyd Gaming]

One example is our plan to replace our 30 year old Paradise Riverboat Casino in Illinois with a modern and new entertainment facility. We are in the design phase of this project and expect to seek regulatory approval and begin construction in the next twelve months. And in Virginia, construction is now underway on our $750,000,000 resort project in Norfolk. This project will further diversify our portfolio by expanding our presence into one of the largest underserved gaming markets in the Mid Atlantic region. Scheduled for completion in late twenty twenty seven, this best in market resort will include a casino with 1,500 slots, 50 table games, a 200 room hotel, eight food and beverage outlets, live entertainment, and a 45,000 square foot outdoor amenity deck.

[Keith Smith, President and CEO at Boyd Gaming]

And as part of this project, we plan to open a modest transitional casino in November of this year. Our development site is located near Downtown Norfolk with convenient interstate access. Importantly, it will be the most convenient gaming destination for a significant number of the 1,800,000 residents of the Hampton Roads metropolitan area. It will also be the closest gaming resort to Virginia Beach, a tourism destination that attracts nearly 15,000,000 visitors each year and is the state's largest city. Given all of these dynamics, we are excited about the long term potential of our Norfolk project.

[Keith Smith, President and CEO at Boyd Gaming]

While our capital investment program is an important part of our strategy to create long term shareholder value, we also remain committed to returning capital to our shareholders. During the first quarter, we repurchased $328,000,000 in stock and paid $15,000,000 in dividends. While we remain committed to 100,000,000 per quarter in share repurchases, with the current economic uncertainty, we will be much more conservative and buybacks above that level. As we balance our capital expenditure program and maintaining a strong balance sheet with returning capital to our shareholders. So in all, this was a good start to the year for our company as we continue to deliver year over year growth despite challenges from weather and the calendar during the quarter.

[Keith Smith, President and CEO at Boyd Gaming]

And we are encouraged that customer trends have held steady so far in April. We remain confident in the long term prospects of our company and our strategy to create value for our shareholders. Before turning the call over to Josh, I wanted to take a moment to personally thank our team members for their continued contributions to our company's success. Their hard work and dedication to providing memorable service keeps our guests coming back and we are grateful for all that they do for our company. Thank you for your time today.

[Keith Smith, President and CEO at Boyd Gaming]

I would now like to turn the call over to Josh.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Thanks, Keith, and good afternoon, everyone. Our first quarter reflected a continuation of the positive operating and customer trends over the last several quarters, despite the weather impacts on our Midwest and South segment in the leap year comparison. And while acknowledging that the recent past is not a guarantee of future performance, particularly in light of the current environment, customer trends from the first quarter are continuing into the first several weeks of April. Now some additional points on the quarter. Tax pass through amount for our online segment was $130,000,000 during the quarter compared to $116,000,000 in the year ago period.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Excluding the tax pass through amount, company wide margins for the first quarter this year would have been five twenty basis points above the margin we reported. Beginning with this quarter, we are recording non controlling interest activity related to our Virginia development. This amount reflects expenses incurred by the tribe related to the Virginia development. In terms of capital expenditures, we invested $127,000,000 in capital during the first quarter. Continue to project total capital expenditures for the full year of $600,000,000 to $650,000,000 As a reminder, these capital plans include approximately $250,000,000 in maintenance capital, dollars 100,000,000 related to our hotel room projects at IP, Valley Forge and the Orleans, Dollars One Hundred Million in growth capital for the meeting and convention space at Ameristar St.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Charles and the new Cadence Crossing development here in Las Vegas. And then finally, 150,000,000 to $200,000,000 for our casino development in Kenya. Given our current capital plans in today's environment, we have taken steps to mitigate the potential tariff impacts on these projects and we have also identified capital projects that can be deferred if needed. On the operating side of the business, we have also taken steps to mitigate the potential impact of tariffs on our operating expenses. Moving next to our capital return program, we paid a regular quarterly dividend of $0.17 per share during the first quarter.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

And as previously announced, we increased our quarterly dividend to $0.18 per share beginning with our April distribution. Also during the quarter, we repurchased $328,000,000 in stock, acquiring 4,500,000.0 shares. As of the end of the quarter, we had $312,000,000 remaining under our current repurchase authorizations and the actual number of shares outstanding at quarter end was 81,900,000.0 shares. Since we began our program to return capital to shareholders in October of twenty twenty one, earned over $2,200,000,000 in the form of share repurchases and dividends and reduced our share count by more than 27%. As Keith noted, we remain committed to repurchasing $100,000,000 in shares per quarter.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

We will balance this commitment with our capital expenditure plans and ensuring we retain a strong balance sheet. Given the current environment, you should expect us to be more conservative in repurchasing amounts in excess of our $100,000,000 per quarter commitment. We ended the quarter with total leverage of approximately 2.8 times and lease adjusted leverage of about 3.2 times. We have no near term maturities, robust free cash flow and ample borrowing capacity. In conclusion, our company remains in excellent financial condition to continue executing our strategy.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

With that, I'd now like to turn the call over to David to open it for questions.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Thank you, Josh. We will now begin our question and answer session.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

If you would

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

like to ask a question, please press star then 1 on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to withdraw your request, please press then 2. If you are using a speakerphone, please use your handset when asking your question. We will pause for a moment while we compile our list of questioners.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

First question comes from Carlo Santarelli of Deutsche Bank. Carlo, please go ahead.

[Carlo Santarelli, Analyst at Deutsche Bank]

Hey guys, thank you. Keith, you talked a little bit about it in your remarks as it related to some plans at Paradise. You guys have had obviously great success at Treasure Chest. You're talking about kind of Paradise. You have several other kind of multi level boats where the returns on these types of projects have been very good.

[Carlo Santarelli, Analyst at Deutsche Bank]

How do you kind of think about some of the other assets that are similar in nature where that opportunity to kind of make a land based transition exists over the next few years? Just given kind of the success that's been seen not only by you, by others in similar moves.

[Keith Smith, President and CEO at Boyd Gaming]

Thanks for the question Carlo. So it falls in the category of we have a list of these types of development projects. We prioritize that list based on where we believe the highest returns are. And are you kind of focused on the ones that provide the highest returns. Those are the only ones we're talking about.

[Keith Smith, President and CEO at Boyd Gaming]

But trust me, there's a long list of additional projects that can continue to benefit the company and provide a good return on investment. And we do have a number of three story riverboats remaining that are older in nature that over the course of time we'll the opportunity to upgrade.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

The only thing I would add to that Carlo is Treasure Chest has exceeded all of our expectations in terms of that investment. Everyone's but Keith. I would say that from the perspective of Paradise, which is the next one up, it is a different dynamic in terms of the population density in the competitive landscape. We wouldn't expect the same kind of return that we got from Treasure Chest to apply to Paradise. We expect a return that warrants the investment, but certainly potentially not at the level of Treasure Chest.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Just want to clarify that.

[Carlo Santarelli, Analyst at Deutsche Bank]

Yep, understood and then just as a follow-up. As you guys kind of look at what you've seen in April to date and kind of when you take the entirety of the first quarter and acknowledging there was several moving parts and several kind of difficult to comp and understand dynamics across not only the Midwest and South, but also in Las Vegas. When you talk about kind of the core customer remaining flat to up across most markets and retail kind of oscillating a little bit amongst the markets, how would you more or less categorize the outlook for each of those segments? And do you see anything, especially as it relates to the core changing in any of the markets?

[Keith Smith, President and CEO at Boyd Gaming]

Yes. So as we try and best as we can look through the noise that occurred during the first quarter, whether it be the Super Bowl here in Las Vegas or significantly more weather or leap year, we see our core customer frankly continuing to grow and continuing to show up and participate with us. So that is a strength of ours and has been since we came out of COVID. As we look at the retail customer and we look at the unrated side of the business, they also continue to perform on a very consistent basis. And once again, when you sort through the noise, you see very positive trends there.

[Keith Smith, President and CEO at Boyd Gaming]

They are consistent, they're growing a little bit. And so we feel very good about the direction. Now having said that, we have three weeks of April under our belt and we feel good about those three weeks, but it is three weeks. But that's best as I guess I can describe it.

[Carlo Santarelli, Analyst at Deutsche Bank]

Thank you, Keith. That's helpful. Thanks guys.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Thank

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

you. Our next question comes from Shaun Kelley of Bank of America. Shaun, please go ahead.

[Shaun Kelley, Senior Research Analyst & MD - Gaming, Lodging & Leisure Equities at Bank of America Merrill Lynch]

Hi, good afternoon everybody. Sorry, can you hear me okay?

[Keith Smith, President and CEO at Boyd Gaming]

Yes, we can hear you.

[Shaun Kelley, Senior Research Analyst & MD - Gaming, Lodging & Leisure Equities at Bank of America Merrill Lynch]

Okay, great. Yes, just wondering, Keith, can you maybe just I want to talk about the buyback strategy at a high level. If we could just dig in on just the timing of large buy in Q1. Josh, you made some detailed remarks about not expecting that to continue. But what was the opportunity you saw there?

[Shaun Kelley, Senior Research Analyst & MD - Gaming, Lodging & Leisure Equities at Bank of America Merrill Lynch]

Or the sort of catalyst just given how much that actually is at this point? And then what would be the criteria? I mean, again, I get the uncertainty, but this is also the opportunity to possibly lean in a little bit and utilize the balance sheet capacity that you have. So just help us think about those different dimensions. Thanks.

[Keith Smith, President and CEO at Boyd Gaming]

I think as you think about where we're at today and going forward, one of our priorities is maintaining a strong balance sheet. And so we will kind of balance the rest of our capital allocation program, investing in our properties and returning capital to our shareholders with ensuring that we don't go so far as to impact our balance sheet in a negative fashion. Once again, we allow leverage to float up and float down based on our ability to see it coming back down. And so the current environment is a little less certain than it was maybe a month ago. And so we are just going to be cautious as both Josh and I said in our prepared remarks as we balance all of that.

[Keith Smith, President and CEO at Boyd Gaming]

As we think about what happened in the first quarter, I would just say, look you saw us buy in Q3 and Q4 over $200,000,000 and we feel very good about the direction of the business overall. So very good about it coming into Q1 and we took advantage of kind of where we thought it was a good stock price buying under market and certainly have plenty of capacity to be able to do that. And so that was the result. But once again going forward, we just want to make sure that we can see around the corner up there before we buy too much more than $100,000,000 a quarter.

[Shaun Kelley, Senior Research Analyst & MD - Gaming, Lodging & Leisure Equities at Bank of America Merrill Lynch]

Perfect. Thanks. And just as a brief follow-up, but Josh, you also mentioned a little bit about the capital projects and some of the steps you've taken to mitigate potential risks around tariffs. Just wondering, could you elaborate a little bit more there? And specifically on Norfolk, if you could give us a sense of either how much of the project is bought out at this point?

[Shaun Kelley, Senior Research Analyst & MD - Gaming, Lodging & Leisure Equities at Bank of America Merrill Lynch]

I know it's still relatively early. And kind of how those conversations have maybe trended because we are seeing capital projects being delayed or in some cases fully canceled just given the uncertainty in the environment. And appreciate that's probably too extreme, but just how you're kind of working around what is definitely a dynamic environment. Thanks.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Yes. So I would say, first step was to go through the project list and figure out what we might be willing to defer given what kind of the I would call it the anxiety in the marketplace. But we have to remember that in our business today, we're not really seeing anything differently. And I would say, just before I get into kind of some details on how we thought about the capital projects, that you have to also remember that we're coming from this from a position of strength, probably the most the strongest position our company has ever been this type of environment before. So we feel very comfortable about kind of where we're sitting.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

So we have a very low levered balance sheet. We're a much larger company, very diversified. And so again, just to reiterate, I think we approach these kind of decisions from a totally different perspective than maybe we had to in the past. In terms of kind of after evaluating what projects we thought might be considered for deferral, we looked at each one of the capital projects and really evaluated where they were in their development cycle as well as where they were in the procurement cycle. And then from there we identified the sources of what was coming from outside the country, what was coming in domestically and we evaluated whether we had the opportunity to shift some of the external or the stuff being brought in that was subject potentially to tariffs to other vendors, to other products, to other sourcing methods.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

At the end of the day, when we got through that analysis, quite honestly, we felt very comfortable with the risk relative to our existing budgets. We don't feel like what we know today that any of our budgets would have to change. And I think with respect to Virginia in particular, the temporary is a very small development effort. Remember, we don't expect much to come up from an economic perspective from the temporary casino. In terms of the permanent casino, that's being developed over a much longer period of time so we have a lot more flexibility in terms of timing, purchasing and all of that other stuff.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

We have pre purchased some items to avoid the risk of tariffs and we have kind of ensured that some of the longer lead items were taken care of. Some people talk a lot about steel and those factors and actually the steel for Virginia would be produced or sourced from domestic product, domestic sources here. So that takes a lot of the risk out of that project. Hopefully that gives you a sense of kind of without going into too much detail, it gives you enough of detail to understand kind of the diligence we've been through.

[Keith Smith, President and CEO at Boyd Gaming]

And Sean, just to clarify, what Josh is saying, he is not saying that we won't see cost increases. We have identified those areas that we will see cost increases or we expect to see cost increases because of either existing or possibly new tariffs. But as we've calculated them and looked at our budgets, we're comfortable that they're not going to hinder our ability to go forward and that we can handle those increased costs, whatever they may be. Within the budgets that we have. So it's not going to cause us to really change course.

[Shaun Kelley, Senior Research Analyst & MD - Gaming, Lodging & Leisure Equities at Bank of America Merrill Lynch]

Really encouraging. Thank you, thank you all.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Thank you. Our next question comes from David Katz of Jefferies. David, please go ahead.

[David Katz, Managing Director at Jefferies]

Afternoon. I'd love to just go out on the edge a little bit here. Given what you're seeing in your business, given your capital position, and given what looks like pretty solid execution, what would be the boundaries of any M and A or underwriting potential? And is that a possibility in this environment?

[Keith Smith, President and CEO at Boyd Gaming]

Well, we talk about this environment. The best as I can tell, we've been in this environment for three, maybe going on four weeks, and so it doesn't really change our view of M and A. We've always had an appetite for M and A. Cautious about what we do, the type of asset we buy, the price we're willing to pay. Again, it's got to be strategic.

[Keith Smith, President and CEO at Boyd Gaming]

It has to be in a market that is generally a market we're not in and something that we feel can move the company and move the needle for the company. And so, we're interested in M and A today. We were interested in M and A last month. We're interested in M and A last year, but going to have said this over and over and over again, we're very cautious, we're very disciplined. We have, I think a very good track record of doing these things.

[Keith Smith, President and CEO at Boyd Gaming]

And the last three weeks of volatility, maybe three weeks in a day to the date all this started, hasn't changed our view.

[David Katz, Managing Director at Jefferies]

Understood, thanks for repeating yourself. Just separately speaking, if we're looking hard at your numbers and when we talk about seeing things, can we just spend a second on is it number of visits, is it spend per visit, is it all of the above, is it some element of new customer inflow? A little specificity in the environment would help.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Yeah, so I think with respect to the core customer, that growth is coming largely from a little bit of both of the items you mentioned, a little bit more in frequency and a little bit more in terms of budget. Maybe leaning a little bit more to budget, but not too heavily. As you get into the retail piece, I would have to break retail into two components: unrated, which we have limited visibility in because they don't have a card, but we look overall at the volume of unrated as growing and we can't tell whether that's driven by either frequency or a combination. In the lower segments of the database, I would say it largely follows the core customer. It's a little bit of frequency and a little bit more of spend on the budget side of things.

[David Katz, Managing Director at Jefferies]

Okay. Thank you. Nice quarter.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Thank

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

you.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Thank you. Our next question comes from Steve Wieczynski of Stifel. Steve, please go ahead.

[Steve Wieczynski, Managing Director at Stifel Financial Corp]

Yes. Hey, guys. Good afternoon. So this might sound like a repeat of a couple other questions, but I'm going to ask it a little bit differently or hopefully I am. So as we think about general trends being stable through the first three weeks of April, it seems like even that unrated play segment has been pretty steady as well.

[Steve Wieczynski, Managing Director at Stifel Financial Corp]

But we're now starting to hear some of your competitors out there have started to talk about seeing a little bit of softness in unrated even in their retail segments. So I guess the question is, that segment seems pretty stable for you, but have you seen any change in spend across the non gaming amenities in your assets, whether that's lower spend in food and beverage or hotel or etcetera, or is that stable as well? I'm just trying to figure out if your core customer is still coming to the properties and gambling, but maybe deferring spending across the non gaming assets and hope that makes sense.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

So, we look at both F and B and hotel, it's up on a cash basis. And the only reason it would be down is largely Las Vegas related to the Super Bowl, which drove a lot of room in F and B business. But when we look at the segments and we look at the individual components, I would say it largely mirrors what we're seeing on the kind of what we talked about on the customer side of things.

[Steve Wieczynski, Managing Director at Stifel Financial Corp]

Okay, got you. That makes sense. And then as we kind of look around the country, have you seen any of your competitors start to get more aggressive with on the promotional side of things in order to try and combat any weakness that may be out there at this point?

[Keith Smith, President and CEO at Boyd Gaming]

Look, think as we look across the country, we haven't seen any significant changes in the overall promotional environment like any other month or with it, like any other quarter. You have some players get a little more aggressive for a month or so, but there's no structural change. Nobody's gotten extremely aggressive. So, nothing to talk about.

[Steve Wieczynski, Managing Director at Stifel Financial Corp]

Okay, great. Thanks, guys. Appreciate it.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Thank you. Our next question comes from Jordan Bender of Citizen. Jordan, please go ahead.

[Jordan Bender, Senior Equity Research Analyst at Citizens Capital Markets and Advisory]

Hey, everyone. Good afternoon. You went through a period of weakness with inbound Hawaiian travel, which you spoke to in the prepared remarks. Curious if you could help us curious if you could frame where you stand in terms of Hawaiian travel, whether that's in relation to 2019 or some of the levels around 2021 and 2022? Thank you.

[Keith Smith, President and CEO at Boyd Gaming]

Jordan, I don't have those comparison points handy. The decline we actually saw in the first quarter of last year was specifically related to a spike in airfares around Super Bowl. And as that spike normalized in the second quarter of last year, we saw the business come back. And so when we the first quarter this year was what I would call a normal quarter. The business grew, but it's up significantly over the first quarter of last year, but it's just a comparison issue because of that.

[Keith Smith, President and CEO at Boyd Gaming]

I don't know how we compare to overall visitation from our Hawaiian guests vis a vis 2019 or 2021, just don't have that data.

[Jordan Bender, Senior Equity Research Analyst at Citizens Capital Markets and Advisory]

Understood. Thank you. And then just

[Jordan Bender, Senior Equity Research Analyst at Citizens Capital Markets and Advisory]

on the follow-up, Josh, do

[Jordan Bender, Senior Equity Research Analyst at Citizens Capital Markets and Advisory]

you have any impact from the weather in the quarter?

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

In terms of the dollar amount? Is that what you're asking?

[Jordan Bender, Senior Equity Research Analyst at Citizens Capital Markets and Advisory]

Yes, any dollar amount related to EBITDA or EBITDAR in the quarter from weather?

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Yes, so I think we estimated that to be about $5,000,000 for the weather impact.

[Jordan Bender, Senior Equity Research Analyst at Citizens Capital Markets and Advisory]

Great. Thank you very much.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Sure.

[David Katz, Managing Director at Jefferies]

Thank

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

you. Our next question comes from Brent Montour of Barclays. Brent, please go ahead.

[Brandt Montour, Director, Equity Research Analyst at Barclays Corporate & Investment Bank]

Thanks for that. Thanks for the question. So on the local segment, Keith, you talked about the sort of market share losses narrowing in the first quarter. Can you maybe talk about how that competitive landscape in that locals market for you has evolved? I know this has been an ongoing thing and it's been getting better.

[Brandt Montour, Director, Equity Research Analyst at Barclays Corporate & Investment Bank]

But we kind of can assume that those competitors aren't necessarily sitting still and they're evolving as well. And so what's kind of the outlook for the balance of the year in terms of how you're lapping those comparisons and how you kind of expect you can continue to narrow it from here?

[Keith Smith, President and CEO at Boyd Gaming]

A couple of comments. I think with respect to the overall locals market, if you look at the numbers that are out there, the locals market basically shrunk a little bit for the recent couple of months, maybe a half a percent. When you look at our performance and you strip out the Orleans, we actually outperformed, we did better than the overall locals market. So without the Orleans, the business is performing better than the overall market and that's been consistent for the last several quarters. The Orleans really is the one who is facing competitive competition.

[Keith Smith, President and CEO at Boyd Gaming]

We talked about the Orleans and Gold Coast. Gold Coast has been performing better in recent quarters and there is nothing new going on. It is still a couple of properties in the neighborhood of the Orleans. They are not doing anything really new or different. We are beginning to cycle through the worst of that.

[Keith Smith, President and CEO at Boyd Gaming]

As I said in my prepared remarks, gap at the Orleans has narrowed in the first quarter And kind of given today's environment, we're really not in a position to comment about how we see the rest of the year rolling out.

[Brandt Montour, Director, Equity Research Analyst at Barclays Corporate & Investment Bank]

Fair enough. I do have another Locals question. And again, not looking for any sort of guidance, but more of like a historical look back. The common sense would suggest that Locals has clear linkage to the Las Vegas Strip, given the worker where folks that frequent those your casinos make wages, etcetera. The historical correlation, can you talk about that maybe in prior recessions?

[Brandt Montour, Director, Equity Research Analyst at Barclays Corporate & Investment Bank]

And if you think that that would be less so in today's market given how the locals market has evolved over the last ten or fifteen years?

[Keith Smith, President and CEO at Boyd Gaming]

Yes, look the benefit of the greater Las Vegas community is that it's done a wonderful job of diversifying its economy. And so there are tremendous more businesses here today. They are diversified. It's not just all about gaming. And so our customers, while historically, a large portion of them maybe were dependent on tourism business.

[Keith Smith, President and CEO at Boyd Gaming]

They're certainly today the world is different as we have much more diversified employee base here in the city. So, I don't think you can look back at prior recessions and draw anything from that in terms of what may happen today because the economy here in Southern Nevada is just different than it was ten or fifteen years ago.

[Brandt Montour, Director, Equity Research Analyst at Barclays Corporate & Investment Bank]

Okay, great. Thanks everyone.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Thank you. Our next question comes from Ben Chaikin of Mizuho. Ben, please go ahead.

[Benjamin Chaiken, Equity Analyst at Mizuho Financial Group, Inc.]

Hey, thanks for taking my questions. Understanding future tax policies are fluid, have you done any work, Josh or Keith, on the percentage of your customer base in locals in downtown that are potentially impacted by the proposed no tax on tips policy?

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

We really haven't. I mean, we recognize that there would be a benefit. But Keith, unless you know something, haven't seen anything. Yeah, we haven't seen done anything, Ben.

[Benjamin Chaiken, Equity Analyst at Mizuho Financial Group, Inc.]

Okay, still helpful. And then bigger picture question, Josh or Keith, whoever wants to take this. You have the Stardust iGaming platform, which we really don't spend a lot of time talking about. Maybe you could expand on your ambitions with this product or investment opportunities to the extent that you want to get more into the B2C iGaming business. Thanks.

[Keith Smith, President and CEO at Boyd Gaming]

Sure. So we launched into this a couple of years ago with the sole intent to make sure that we had a product that spoke to the customers in the markets where we operate. We got into this never intending to be a national leader or looking to attain a podium position across The U. S. It really always was about making sure that when our customers went home at night in The States where it's legal, that we had a product that they could participate in.

[Keith Smith, President and CEO at Boyd Gaming]

And so it was very modest investment to start off with. I think it's performing right on or ahead of our expectations in terms of gaining traction where it has launched in places like New Jersey and Pennsylvania. It's doing quite well, very pleased with it and we're prepared to grow into other states. Once again, where we do business or maybe an adjacent state to where we gain customers from when state legislatures happen to approve it. So continues to be a modest investment.

[Keith Smith, President and CEO at Boyd Gaming]

You shouldn't expect to see us go out and make any significant acquisitions to bolster that. I think it's a great platform. We're having great success. You may see us do some smaller acquisition to beef it up, but nothing significant.

[Benjamin Chaiken, Equity Analyst at Mizuho Financial Group, Inc.]

Understood. Thanks.

[Keith Smith, President and CEO at Boyd Gaming]

Yep.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Thank you. Our next question comes from Joe Stauff of Susquehanna. Joe, please go ahead.

[Joseph Stauff, Institutional Investment Analyst at Susquehanna]

Thank you. Good afternoon, Keith and Josh. I wanted to ask about land based cap, land based OpEx, in particular, you know, and just seeing where it is for you certainly in the current quarter or in the last couple quarters.

[Joseph Stauff, Institutional Investment Analyst at Susquehanna]

You've had

[Joseph Stauff, Institutional Investment Analyst at Susquehanna]

to manage through a lot of inflationary factors, especially wages over the past, say, year and a half or so. Just wondering, are you in a position now where you think you can do you have some flexibility to manage that lower? What seems to be the right balance in terms of just your overall land based OpEx and the levers that you have today?

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Joe, I think that our guys are constantly working on being very focused on reducing overall operating expenses, as you can imagine. So while this is commonsensical to the extent they saw opportunities, would be taking advantage of those. I think we're always looking for those opportunities, looking for ways to be more efficient, looking for ways to utilize technology to help us be more efficient. I think the one thing I would say just in the environment that we are in and this may be part of your slide question, which is in periods of softness, I think one of the things that we have that we learned from COVID is there's really no concept of fixed costs beyond property taxes, insurance, rent and interest expense. So, everything becomes a variable cost and you evaluate those and make gains where you can.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

That's what we try to do every day, but in times of softer revenue or whatever, it creates other opportunities to adjust hours, adjust amenities and things of that nature. But that's how I'd kind of give you a sense of answering your question.

[Joseph Stauff, Institutional Investment Analyst at Susquehanna]

Thank you.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Yeah.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Thank you. Our next question comes from Chad Beynon of Macquarie. Chad, please go ahead.

[Chad Beynon, Managing Director, Analyst at Macquarie Group]

Hi, good afternoon. Thanks for taking my question. Josh, Keith, I wanted to ask about some of the data that we've seen with Canadian travel. Obviously here in The U. S, we're seeing it in all major cities, but some of the data came out in Las Vegas showed that visitation was down.

[Chad Beynon, Managing Director, Analyst at Macquarie Group]

Wanted to get a sense of what your exposure to those customers are in the downtown market and in Orleans? And then the second part of that is if we do see that piece of business, which I think makes up about 5% of visitation in all of Las Vegas, if you think that there could be some room rate discounting during this period? Thank you.

[Keith Smith, President and CEO at Boyd Gaming]

Yeah, a couple of comments. I think for Las Vegas as a whole, and it probably depends on what numbers you look at, it's closer to 3%. But regardless, look, for us as a company, it's less than one tenth of 1%. Here in Las Vegas, it might be worth a few hundred thousand dollars to us. It's not a big piece of business.

[Keith Smith, President and CEO at Boyd Gaming]

And so, we're concerned about any loss of customer whether it be from Canada or any other destination. But specific to Canada, it's not a big piece of business for our company.

[Chad Beynon, Managing Director, Analyst at Macquarie Group]

Okay, thank you. And then a second one, I guess just focusing on another potential risk, the Hawaiian sports betting bill, given that there's no casinos, lottery, sports betting, iGaming in Hawaii. If this is passed, if you believe that, I don't think we've seen cannibalization as much with sports betting to land based, but if you would view that as a risk or is there something that you could do to, I don't know, partner or mitigate some of those customers who might not be coming to The United States to gamble if they have it on their phones? Thanks.

[Keith Smith, President and CEO at Boyd Gaming]

So look, as I think most people know, we have a fifty year relationship with the people of Hawaii and the residents there and the communities there and have spent the last fifty years supporting them and welcome them here to our properties in Las Vegas. To the extent there is any form of gaming in Hawaii, you should expect that boy gaming will be part of it. With respect to sports betting, I don't think it will have any impact on our business here. It is something that they want to do. Will it change our overall budgets?

[Keith Smith, President and CEO at Boyd Gaming]

Maybe, but it's going to change them making trips to Las Vegas just because they can bet on sports online in the islands? I don't believe so. So I don't see it as a major impact. But you should assume if anything moves forward there that our company would have a role. We probably have the best brand and the most respected gaming company for the residents there in Hawaii.

[Chad Beynon, Managing Director, Analyst at Macquarie Group]

Great, thank you very much. Appreciate it.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Thank you. Our next question comes from John DeCree of CBRE. John, please go ahead.

[Max Marsh, Equity Research Associate at Macquarie Group]

Hi, this is Max Marsh on for John DeCree. Thanks for taking my question. Print throughout 2024 is core customer visitation being a little bit down, but spend per visit being up. Does that consumer have a higher risk of being impacted by a recession or perhaps promotional intensity stepping up in the event of an economic downturn?

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

You're talking about in relation to the core customer?

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

I couldn't hear the first part of your question.

[Max Marsh, Equity Research Associate at Macquarie Group]

Yeah.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

So look, I think perhaps to put it in context, the core customer has been the most consistent of any of our customer throughout. Since COVID, can discuss, I know this, we've not seen a quarter where that customer has been down. They've been flat and that's been the worst it's been with respect to that the trend within that customer.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

For those of you who were around during the financial crisis in 02/2008 and 02/2009, the issue wasn't that the core customer didn't show up, it was the unrated customer and the lower end retail customer was still showing up. They just weren't spending money. The core customer was the most stable even in that dramatic of a change in the economy. So, the core customer is named that for a reason. They're core to our business and they've been very consistent.

[Max Marsh, Equity Research Associate at Macquarie Group]

Great. That's all for me. Thank you very much.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Thank you. Our last question comes from Barry Jonas of Truist Securities. Barry, please go ahead.

[Barry Jonas, Managing Director at Truist Securities]

Hey, guys. Any updated thoughts on Eastside Cannery here?

[Keith Smith, President and CEO at Boyd Gaming]

No, really not. Our views haven't changed. Obviously, property has not reopened post the COVID crisis. We've said in the past that really the market out there really doesn't support the opening of an additional property and sitting here today, it still doesn't support the opening of additional capacity in that area. And so no, really no other views on that.

[Barry Jonas, Managing Director at Truist Securities]

Okay, great. And then just in the past you talked about the Trop I-fifteen interchange project having some impact. Any updates there in terms of continuing impact and maybe when that should pass?

[Keith Smith, President and CEO at Boyd Gaming]

No, I appreciate the question. Look, it's something we haven't talked a lot about over the last several quarters, but it certainly has had an impact on the business mainly at the Orleans. We're hopeful that later this year that that project will kind of finish to a point where that interchange at Trop and the I-fifteen is cleared up. I mean, it is the main ingress and egress point. It is the main corridor for people to get to the Orleans.

[Keith Smith, President and CEO at Boyd Gaming]

We've had to have them come up alternative streets. And unfortunately, many periods of time, those alternative access points like off of Russell, which is a street right before Tropicana have been closed at the same time, Trop has been closed. So it's created great confusion amongst our customers. So we are hopeful that later this year that project will be at a point where we no longer have to worry about it or complain about it, but it's not there yet.

[Barry Jonas, Managing Director at Truist Securities]

Helpful. All right. Thanks so much.

[David Strow, Vice President of Corporate Communications at Boyd Gaming]

Thank you. This concludes our question and answer session. I'd now like to turn the call over to Josh for concluding remarks.

[Josh Hirsberg, Executive VP, CFO & Treasurer at Boyd Gaming]

Thanks, David, and thanks to everyone for joining our call. If you have any follow-up questions, please feel free to reach out to the company. This concludes the call today and you can now disconnect.

Participants

Executives

• David Strow, Vice President of Corporate Communications
• Keith Smith, President and CEO
• Josh Hirsberg, Executive VP, CFO & Treasurer

Analysts

• Carlo Santarelli, Analyst at Deutsche Bank
• Shaun Kelley, Senior Research Analyst & MD - Gaming, Lodging & Leisure Equities at Bank of America Merrill Lynch
• David Katz, Managing Director at Jefferies
• Steve Wieczynski, Managing Director at Stifel Financial Corp
• Jordan Bender, Senior Equity Research Analyst at Citizens Capital Markets and Advisory
• Brandt Montour, Director, Equity Research Analyst at Barclays Corporate & Investment Bank
• Benjamin Chaiken, Equity Analyst at Mizuho Financial Group, Inc.
• Joseph Stauff, Institutional Investment Analyst at Susquehanna
• Chad Beynon, Managing Director, Analyst at Macquarie Group
• Max Marsh, Equity Research Associate at Macquarie Group
• Barry Jonas, Managing Director at Truist Securities