Golden Entertainment Q2 2025 Earnings Report

Golden Entertainment EPS Results

• Actual EPS: $0.17
• Consensus EPS: $0.14
• Beat/Miss: Beat by +$0.03
• One Year Ago EPS: N/A

Golden Entertainment Revenue Results

• Actual Revenue: $163.62 million
• Expected Revenue: $169.70 million
• Beat/Miss: Missed by -$6.08 million
• YoY Revenue Growth: N/A

Golden Entertainment Announcement Details

• Quarter: Q2 2025
• Date: 8/7/2025
• Time: After Market Closes
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 5:00PM ET

Golden Entertainment (NASDAQ:GDEN) owns and operates a diversified entertainment platform in the United States. The company operates through four segments; Nevada Casino Resorts, Nevada Locals Casinos, Nevada Taverns, and Distributed Gaming. It also operates casino, casino resorts, and taverns; and slot machines in third party non-casino locations. The company was incorporated in 1998 and is headquartered in Las Vegas, Nevada.

Golden Entertainment Q2 2025 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: Q2 operations generated $163.6 million in revenue and $38.4 million in EBITDA, though results were dampened by a low table game hold in Laughlin and a summer slowdown on the Las Vegas Strip.
• Positive Sentiment: Nevada locals casinos posted their highest quarterly EBITDA in two years with revenue up 3% and EBITDA up 7%, driving margins 170 basis points higher and poised to benefit from new tax relief legislation in 2026.
• Negative Sentiment: Casino resort segment revenue fell 3% and EBITDA declined 5% due to unusually low table game hold in Laughlin and Strip weakness, though normalizing hold and cost controls at The Strat would have stabilized results.
• Neutral Sentiment: Tavern revenue dropped 7% amid heightened promotions and late-night volume declines, but EBITDA stabilized in July and two new tavern locations are scheduled to open within six months.
• Positive Sentiment: The company repurchased 500,000 shares for $14.6 million in Q2 and 3.7 million shares year-to-date while paying $41 million in dividends, maintaining low net leverage of 2.6× with $77 million remaining under its buyback authorization.

Presentation

[Operator]

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Golden Entertainment Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal remarks.

[Operator]

Please note that this call is being recorded today. Now I'd like to turn the conference over to James Adams, the company's Vice President of Corporate Finance and Treasurer. Please go ahead, sir.

[James Adams, VP - Corporate Finance & Treasurer at Golden Entertainment]

Thank you very much, operator, and good afternoon, everyone. On the call today is Blake Sartini, the company's Founder, Chairman and Chief Executive Officer and Charles Fertel, the company's President and Chief Financial Officer. On this call, we will make forward looking statements under the Safe Harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise.

[James Adams, VP - Corporate Finance & Treasurer at Golden Entertainment]

During the call, we will also discuss non GAAP financial measures in talking about our performance. You can find the reconciliation of GAAP financial measures in our press release, which is available on our website. We will start the call with Charles reviewing the details of the second quarter results and a business update. Following that, Blake and Charles will take your questions. With that, I'll turn the call over to Charles.

[Charles Protell, President & CFO at Golden Entertainment]

Thanks, James.

[Charles Protell, President & CFO at Golden Entertainment]

In the second quarter, our operations generated revenue of $163,600,000 and EBITDA of $38,400,000 Our results were impacted primarily by significantly lower table game hold in Laughlin and the widely reported summer slowdown on the Las Vegas Strip. Our Nevada locals casinos continue to demonstrate strong performance in Q2, posting their highest quarterly EBITDA for the past two years and growing EBITDA for the third consecutive quarter. Revenue increased 3% to prior year with EBITDA up 7% largely driven by the performance of our two Las Vegas locals casinos which grew EBITDA by over 9%. Margins improved as well, up 170 basis points from last year to over 46% for this segment. We are seeing a strong performance of our local properties continue as we move into Q3 and anticipate this segment will be the biggest beneficiary in 2026 from recent legislation providing tax relief on tips, overtime and additional tax deductions for seniors.

[Charles Protell, President & CFO at Golden Entertainment]

In our casino resort segment for Q2, revenue was down 3% and EBITDA was down 5%, mostly related to our low table game hold in Laughlin. We had a stronger event calendar in Laughlin this quarter that featured a concert and a rodeo, which drove higher revenue, but our tables games held less than 10%, which negatively impacted EBITDA by 1,500,000 Normalizing for unusually low hold would have resulted in increased EBITDA in Laughlin and stable year over year EBITDA for Nevada Resorts segment. At The Strat, EBITDA increased over the first two months of the quarter. However, we experienced meaningful slowdown in June consistent with other Strip properties. Strat occupancy for the quarter was 69%, down 4% from last year.

[Charles Protell, President & CFO at Golden Entertainment]

But in June alone occupancy fell to 60%, down from 76% compared to prior year. EBITDA for The Strat was down only 5% year over year despite the challenging environment as we aggressively managed costs to mitigate the impact of lower revenue. Weaker script demand continued into July, but we are seeing stabilization of bookings in August and remain optimistic about the outlook in Q4 and Q1 twenty twenty six where we should benefit from increased attendees at the Las Vegas Convention Center and overall group business in the city. For our Tavern business, we had mentioned on the Q1 call that the promotional environment could negatively impact our performance in Q2 and it did. Revenue was down 7% year over year even with some of our own increased reinvestment in the quarter.

[Charles Protell, President & CFO at Golden Entertainment]

Our reinvestment rate remains at levels well below our peers and lower than our casinos and we do not anticipate increasing our tavern reinvestment beyond where we are currently. We saw the largest declines in revenue in April, where in addition to declining volume, we experienced lower hold than normal. We're also experiencing lower volume during our late night shifts, which caters to strip workers in tip positions, but we expect this to improve with improved strip business in Q4 and in 2026. In July, we've seen Tavern EBITDA stabilize compared to last year as promotional activity in the market has been reduced. We are confident that we will see improved Tavern performance in the back half of the year and we have two new builds scheduled to open over the next six months.

[Charles Protell, President & CFO at Golden Entertainment]

Moving on to our capital structure, we ended the quarter with $432,000,000 of funded debt outstanding, dollars 52,000,000 of cash and $200,000,000 of remaining availability under our revolving credit facility. In Q2, we opportunistically repurchased over 500,000 shares of our common stock for $14,600,000 Since the start of 2024, we have purchased 3,700,000.0 shares representing 17% of our free float totaling nearly $115,000,000 and paid out $41,000,000 in dividends. We currently have $77,000,000 remaining on our current buyback authorization, which we will continue to utilize opportunistically throughout the year. With low net leverage of 2.6 times, we have plenty of capacity to continue to return capital to shareholders and we see no better use of our capital at this time. Strategically, M and A has been a lower priority for us recently given the uncertain business environment and elevated interest rates, which we expect may continue for the near term.

[Charles Protell, President & CFO at Golden Entertainment]

We see the business volatility of the summer abating in the fall, and we believe there will be meaningful tailwinds from increased strip visitation as well as the recent tax legislation that will support near term organic growth at all our properties. We have a diverse portfolio of assets with exposure to various markets in Southern Nevada, including our hyper local taverns to our Strip property in addition to our Las Vegas locals and Nevada regional casinos that will benefit from these dynamics. In the interim, we're focused on managing the cost structure of our business, investing our own assets and returning capital to shareholders. That concludes our prepared remarks. Blake and I are now available for questions.

[Operator]

Thank you. We will now begin the question and answer session. You. Your first question comes from the line of Barry Jonas with Truist Securities. Please go ahead.

[Jeremy Jacoby, Equity Research Associate at Truist Securities]

Hi. This is Jeremy on for Barry. Thanks for taking our questions. Do you guys expect any other impacts from the passing of the big beautiful bill? And any chance you could quantify or give more color on the no tax on tips benefit? Thank you.

[Charles Protell, President & CFO at Golden Entertainment]

Sorry, Jeremy. What was it? I didn't catch quite the first part of your question. Can you repeat that?

[Jeremy Jacoby, Equity Research Associate at Truist Securities]

Just any other impact on the big beautiful bill besides the ones that you mentioned?

[Charles Protell, President & CFO at Golden Entertainment]

Look. I think we're gonna benefit a little bit from getting some of the accelerated depreciation. So for us, if you were to quantify, it's probably an extra 10 to 15,000,000 of tax shield, so call it 2,000,000 to $3,000,000 of cash flow off of that. So that's one. And then starting in 2026, there's an increase in the reportable limit of of slot winnings, will be somewhat meaningful for the taverns just in terms of the volume of those transactions that we get in terms of jackpots.

[Jeremy Jacoby, Equity Research Associate at Truist Securities]

Got it. Thank you.

[Operator]

Your next question comes from the line of Chad Beynon with Macquarie. Please go ahead.

[Sam Ghafir, Equity Analyst at Macquarie Group]

Hi, guys. This is Sam on for Chad. Thank you for taking our questions. I was hoping you guys could provide a little color on the growth outlook for the second half of the year. I know last year there were some moving parts with some disruption given the presidential election distraction and then we have a new F1 season this year.

[Sam Ghafir, Equity Analyst at Macquarie Group]

And then obviously, major volatility in the consumer, strength in locals, but some weakness in the strip. So any color you could help you could provide just for how we should think about growth in 2H?

[Blake Sartini, Chairman & CEO at Golden Entertainment]

Yeah, Sam. So if you take the parts of our business sequential, I guess, to answer that question, Charles mentioned in his prepared comments, we see very positive outlook continuing for the local economy, which I think benefits both obviously our local properties as well as our taverns going forward. Laughlin is continues to be a consistent market. You mentioned Charles mentioned the hickey. We sustained significant one in q two with the table game hold, The market is consistent, and our outlook is positive there.

[Blake Sartini, Chairman & CEO at Golden Entertainment]

The the the one that's hard to to, you know, give any detailed forward looking comments on is Strat. You know, we are seeing improvement post midsummer. We're seeing some positive green shoots in August. It's hard to look beyond that given the uncertainty in the macro environment in town. From my perspective, I think if I could get a little more color on that, I think you're going to see some recovery in demand.

[Blake Sartini, Chairman & CEO at Golden Entertainment]

I think the demand dynamic in terms of occupancy is going to show some improvement. I think the question is would rates settle in on that additional demand in occupancy? And that's that's tough that's the toughest one for us to try and gauge. But, again, I I think our diverse portfolio, if you take it pieces, we're we're very positive on on on the particular parts of it. And the strat, I think, is the one that's hard to give kind of a concrete look forward.

[Sam Ghafir, Equity Analyst at Macquarie Group]

Okay. Great. Thank you for that. And then as a follow-up, hoping you guys could just maybe elaborate a bit elaborate a bit on the strategy to mitigate, I guess, the recent depressed prices and rates on the strip and just kind of how you're thinking about it heading into the second half?

[Charles Protell, President & CFO at Golden Entertainment]

Yes. I mean, think like most other operators, we're really focused on this cost structure of the business given the lower volume. So you'll see that in terms of restaurant hours being curtailed during the mid weeks, certain services, whether it's valet or baggage or those types of things. During the times when we're not busy and we don't have the occupancy during the week, and we bring some of those services back during the weekends when we do have the occupancy. I think if you step back and as Blake has said, if look at the business and components, 75% of our EBITDA is flat to growing, year.

[Charles Protell, President & CFO at Golden Entertainment]

Of And results able to year. But then when we look past that, we see that stabilizing with others. If you look into q four into q one of next year when you have ConAg and a better convention schedule. So

[Blake Sartini, Chairman & CEO at Golden Entertainment]

Yeah. I mean, a bit more color, just a bit more. Weekends continue to be pretty solid. And I say that relatively speaking. I mean, we're in the 90% to 100% occupancy range pretty much every weekend.

[Blake Sartini, Chairman & CEO at Golden Entertainment]

Notwithstanding, again, rates sometimes are challenged in a on a sequential comparison year over year in this current environment. And then as Charles mentioned midweek, I will just add on the fixed cost side of the business, we're as efficient there as we have been since our ownership. We've made significant strides on that end of the business, and we are positioned well to force multiply on a revenue growth side of it when it does occur. I think Charles' comments speak to that in terms of broader citywide conventions, more sports and entertainment options coming in the fall and first quarter, we're well positioned from a cost standpoint to do well at the property.

[Sam Ghafir, Equity Analyst at Macquarie Group]

Great. Thanks guys. I'll jump back in the queue.

[Operator]

Your next question comes from the line of David Katz with Jefferies. Please go ahead.

[David Katz, Managing Director at Jefferies]

Hi everybody. Thanks for taking my question. It's been a while since we've or maybe it's only been ninety days, I don't know, talked about kind of the m and a landscape and the opportunity set for you to acquire. I wonder if there's any, you know, notable change or difference. You know, stocks are up a little bit. Updated thoughts and boundaries would be really helpful.

[Charles Protell, President & CFO at Golden Entertainment]

Yeah. And, look, as far as the landscape goes, I think there is a landscape of, you know, potential targets for us or combinations for us that could make some sense. I think from an environment standpoint, until you get to like, the debt capital markets are strong right now as many of you know. But I think, again, valuations have improved, you know, slightly, although that seems to be, you know, fluctuating on a weekly weekly basis. I think we're going to get better tailwinds when we get some rate cuts from the broader market. We anticipate like others that happens by the end of the year.

[Charles Protell, President & CFO at Golden Entertainment]

And I think for us right now, you know, our focus is, like, is I mentioned in my comments, as Blake mentioned, is stabilizing the operation of the business, which again, we are seeing in all of our assets right now except of our strip property. We expect that to happen in the q four. So from our perspective, you know, m and a really doesn't come into focus until you have the complex of those two things. You know, we see where we've stabilized in terms of our our our one strip asset, and we get some better tailwinds in the market that we think come with with a lower interest rate environment.

[David Katz, Managing Director at Jefferies]

Got it. Understood. Thank you.

[Operator]

John, your line is open.

[John Decree, Director - Equity Research at CBRE Group]

Hi, guys. Thanks for taking my questions. Charles, Blake, maybe to ask another question about the consumer at The Strat. And so we've talked about kind of occupancy midweek and where rate might settle in. But for the customers that are coming and staying, how would you characterize their spends on property?

[John Decree, Director - Equity Research at CBRE Group]

Is it similar to prior year period? Are they still spending? So spend per trip's the same? We're just seeing less less people in the door. Any color you could give there would be helpful.

[Blake Sartini, Chairman & CEO at Golden Entertainment]

Yeah. I mean, that's a good question. One there's several bright spots within the within the challenging environment there. Our casino is showing good momentum and good progress, particularly on the table game slot side, obviously, which makes up the majority of it. We are seeing improved metrics there.

[Blake Sartini, Chairman & CEO at Golden Entertainment]

So that, I think, is a result of our focus on direct bookings through our casino efforts and marketing efforts at the property versus the, you know, broad net OTA direction. We worked very hard on that, and it's showing good signs and good positive trends in the casino. So we are seeing, even with less people, I guess, additional spend without quantifying it, I think that's that's fair to say. Additionally, our top of the world restaurant remains one of the best attractions in town. You know, we do 600 to 700 covers up there on a good weekend, and that remains consistent and strong and drives a lot of traffic through the building.

[Blake Sartini, Chairman & CEO at Golden Entertainment]

We are now receiving rent from Atomic Golf, which which is has performed fairly well. They're not public, but suffice it to say, they've generated a pretty significant amount of revenue through their first six months of or through the last, excuse me, six months of operation. And so there are pockets of opportunity and good signs there. Again, as you mentioned, midweek, as Charles mentioned, we have established a very good baseline, best that we've ever had in terms of fixed costs during midweek and have just basically gone the fixed cost route to mitigate, the lack of revenue midweek. And then weekends and some of the amenities I mentioned are driving traffic that we are seeing some positive signs.

[John Decree, Director - Equity Research at CBRE Group]

Thanks, Blake. That's helpful. Maybe one kind of broad question on Laughlin, which is a big asset for you.

[John Decree, Director - Equity Research at CBRE Group]

And it sounds like it's doing quite well. Can you give us a little bit of an oversight to kind of where the growth is coming? I think it's a little bit of a snowbird destination, and we've got some tax breaks in the one big beautiful bill that might help. So kind of what's your outlook on Laughlin and kind of where you're seeing some growth at that property?

[Blake Sartini, Chairman & CEO at Golden Entertainment]

Yes. I think we are the growth in the market there. With our locations and our amenities, we pretty much have the prime location and prime market share in that market. We have established a new marketing momentum going forward with smaller events but more frequent that seems to be paying off for us. And our elect center, I think, is 2,000 or 2,500 people versus the the or in the event center versus the elect, which was 11,000 or 12,000.

[Blake Sartini, Chairman & CEO at Golden Entertainment]

We've been able to pursue a more quantity than quality strategy, and that's working. More player events down there are working. And we're very bullish on that market. We're very solid on that market with our position and with our revamped approach to marketing down there. And by the way, I think the overall I think the overall attraction to that market is the value versus whether certainly Las Vegas currently in terms of what the consumer is paying for rooms and food and beverage and things down there, I think it's a very attractive market and continues to be so.

[Blake Sartini, Chairman & CEO at Golden Entertainment]

So through those more frequent events, that value driven consumer and our market leading position down there from amenity and location standpoint, we're in we're in a good spot.

[Charles Protell, President & CFO at Golden Entertainment]

And I I would just add to that, John, that those properties down there have our highest level of rated play. It's about 70% rated play for us within the portfolio down there. So we know all these players. We know how to market to them, and they actually should be those ones who are are benefiting certainly from the the tax break to seniors.

[Charles Protell, President & CFO at Golden Entertainment]

So, you know, you're gonna find, I think you're gonna find some increased discretionary spending, for our a majority of our customer set down there once we get to the April tax season.

[John Decree, Director - Equity Research at CBRE Group]

Interesting. Yes. That's great, Charles. Thank you. Thanks, Charles. Thanks, Blake.

[Operator]

And that concludes our question and answer session. And with that, that does conclude today's conference call. Thank you for your participation, and you may now disconnect.

Participants

Executives

• James Adams, VP - Corporate Finance & Treasurer
• Charles Protell, President & CFO
• Blake Sartini, Chairman & CEO

Analysts

• Jeremy Jacoby, Equity Research Associate at Truist Securities
• Sam Ghafir, Equity Analyst at Macquarie Group
• David Katz, Managing Director at Jefferies
• John Decree, Director - Equity Research at CBRE Group