Wynn Resorts Q4 2023 Earnings Report

Wynn Resorts EPS Results

• Actual EPS: $1.91
• Consensus EPS: $1.15
• Beat/Miss: Beat by +$0.76
• One Year Ago EPS: -$1.23

Wynn Resorts Revenue Results

• Actual Revenue: $1.84 billion
• Expected Revenue: $1.74 billion
• Beat/Miss: Beat by +$101.47 million
• YoY Revenue Growth: +83.10%

Wynn Resorts Announcement Details

• Quarter: Q4 2023
• Date: 2/7/2024
• Time: After Market Closes
• Conference Call Date: Wednesday, February 7, 2024
• Conference Call Time: 5:00PM ET

Wynn Resorts (NASDAQ:WYNN), Ltd. is a global luxury hospitality and entertainment company that develops and operates integrated resorts. Its properties combine casino gaming with hotel accommodations, fine dining, retail shopping, nightlife, entertainment, spas and meeting facilities.

The company operates Wynn Las Vegas and Encore Las Vegas in Nevada, Encore Boston Harbor in Massachusetts, and Wynn Macau and Encore Macau in Macau. These properties serve leisure and business travelers, gaming customers and convention guests across the United States and Asia.

Founded in 2002 by casino executive Steve Wynn, Wynn Resorts has expanded its portfolio through destination resorts focused on premium service and design. The company is also developing Wynn Al Marjan Island in Ras Al Khaimah, United Arab Emirates, in partnership with local entities. Craig Billings serves as chief executive officer.

Wynn Resorts Q4 2023 Earnings Call Transcript

Key Takeaways

• Record property EBITDA of $632 million in Q4 2023 and nearly $2.2 billion for the full year, reflecting momentum across all markets.
• Wynn Las Vegas delivered an all-time quarterly record with 24% year-over-year adjusted EBITDA growth in Q4, driven by F1 and other citywide events.
• Macau operations produced $297 million of EBITDA in Q4 with a 140 basis-point margin gain versus Q4 2019, aided by a shift to higher-margin mass gaming.
• Liquidity remained robust at nearly $4.5 billion globally, and the company returned capital with a $0.25 per share dividend and $139 million in share buybacks.
• The company plans $350 million–$500 million of capex for Macau concession commitments through 2025 and advances the UAE El Marjan project, requiring prudent capital allocation.

Presentation

[Operator]

Welcome to the Wynn Resorts fourth quarter 2023 earnings call. All participants are in a listen-only mode until the question-and-answer session of today's conference. To ask a question, press star one on your touch-tone phone, record your name, and I will introduce you. Please limit yourself to one question and one follow-up question. This call is being recorded. If you have any objections, you may disconnect at this time. I will now turn the line over to Julie Cameron-Doe, Chief Financial Officer. Please go ahead.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Thank you, operator, and good afternoon, everyone. On the call with me today are Craig Billings, Brian Gullbrants, and Steve Weitman in Las Vegas. Also on the line are Linda Chen, Frederic Luvisutto, and Jenny Holaday. I want to remind you that we may make forward-looking statements under safe harbor federal securities laws, and those statements may or may not come true. I will now turn the call over to Craig Billings.

[Craig Billings, CEO at Wynn Resorts]

Afternoon, everyone, and thanks for joining us again today. Well, what a quarter, and really, what a year! Every single member of the Wynn team should be incredibly proud of what they achieved together in 2023. Momentum in the business built throughout the year, and we ended on a high note with $632 million of property EBITDA, an all-time quarterly record, capping off a record year in which we generated nearly $2.2 billion of property EBITDA.

[Craig Billings, CEO at Wynn Resorts]

We see tremendous value in our business, as evidenced by our buybacks in the quarter, and I'm genuinely looking forward to 2024. The company is more diversified than it's ever been. In Las Vegas, we continue to distance ourselves from peers as the leader in luxury, and it's more evident than ever that we are the go-to spot for the best customers attending citywide events like F1.

[Craig Billings, CEO at Wynn Resorts]

We have a growing business in Macau that is running structurally higher margins than in the past, is much less reliant on the volatile VIP segment, and is increasingly well-positioned to compete. Importantly, we have a substantial growth opportunity in the UAE that will further diversify our portfolio and expand our brand into new markets.

[Craig Billings, CEO at Wynn Resorts]

Turning to the quarter and starting here in Vegas, Wynn Las Vegas delivered $271 million of adjusted property EBITDA, an all-time quarterly record, up 24% year-on-year on a very difficult comp. While F1 was clearly a contributor, activity at the property was intense throughout the quarter, with RevPAR, table drops, slot handle, and food and beverage revenue all well above what was a very strong quarter in 2022.

[Craig Billings, CEO at Wynn Resorts]

In fact, we had our best October, our best November, and our best December ever in terms of EBITDA during Q4. We continued to fire on all cylinders here in Las Vegas, and I'm incredibly proud of the Vegas team. More recently, January 2024 looked a lot like January 2023 from an overall revenue perspective, with hotel revenue particularly strong.

[Craig Billings, CEO at Wynn Resorts]

That being said, January isn't where the action is this quarter. It's all about February. Super Bowl, Chinese New Year, and for us, the best February in our history for group and convention. Between Super Bowl and Chinese New Year, we have double the front money and credit that we had in 2023, and we expect record hotel revenue over Super Bowl. So a very active February will really set the tone for the first quarter.

[Craig Billings, CEO at Wynn Resorts]

Turning to Boston, Encore generated $64 million of EBITDA during the quarter. Similar to many other regional markets, demand at the property was largely stable year-on-year. Revenue decreased by about 0.5%, but the team has done a great job remaining disciplined on OpEx, driving a 2% year-over-year increase in EBITDA. More recently, underlying demand has remained healthy through January, although a couple of unfortunately timed winter storms have negatively impacted visitation during a few recent weekends.

[Craig Billings, CEO at Wynn Resorts]

On the development across from Encore Boston Harbor, we recently received a key environmental approval, and we are advancing through a few remaining items before construction can begin. Turning to Macau, we generated $297 million of EBITDA in the quarter on market share that was consistent with the prior quarter and with 2019.

[Craig Billings, CEO at Wynn Resorts]

While we held in the normal range in mass, we held a bit high in VIP, so on a fully normalized basis, EBITDA would have been approximately $290 million or 94% of Q4 2019 levels. The strength in our business there has continued into Q1. In the casino, our mass drop per day in January increased 32% versus January 2019 and was up sequentially versus Q4.

[Craig Billings, CEO at Wynn Resorts]

On the non-gaming side, our hotel occupancy was 99%, along with continued strength in tenant retail sales. Overall, strong top-line performance combined with disciplined OpEx control drove healthy margins during the month of January. On the development front, we opened our first major concession-related capital project during Q4, a collaboration with the team behind Las Vegas-based Illuminarium, and initial customer feedback has been positive.

[Craig Billings, CEO at Wynn Resorts]

We are deep into design and planning for our other concession-related CapEx commitments, including our destination food hall, the new event and entertainment center, and a unique production show. Lastly, turning to Wynn Al Marjan, construction continues on the project, with much of the hotel tower and podium foundation now complete, and we are nearly ready to start going vertical on the hotel tower. Property is really going to be a stunner, and it's great to see the building start to take shape. With that, I'll now turn it over to Julie to run through some additional details on the quarter.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Thank you, Craig. At Wynn Las Vegas, we generated $270.8 million in adjusted property EBITDA on $696.8 million of operating revenue during the quarter, delivering an EBITDA margin of 38.9%, up 140 basis points year-on-year. Higher-than-normal table games hold benefited EBITDA by around $10 million in Q4. OpEx, excluding gaming tax per day, was $4.4 million in Q4 2023, up 16% year-over-year, well below the 19% increase in revenue. The sequential increase in OpEx was primarily driven by higher programming and staffing costs related to F1. Turning to Boston, we generated adjusted property EBITDA of $64.4 million on revenue of $217.1 million, with an EBITDA margin of 29.7%.

[Julie Cameron-Doe, CFO at Wynn Resorts]

We've stayed very disciplined on the cost side, with OPEX excluding gaming tax of $1.14 million per day in Q4 2023, down 2% year-over-year, driving a 70 basis point increase in EBITDA margin. The team has done a great job mitigating union-related payroll increases with cost efficiencies in areas of the business that do not impact the guest experience.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Our Macau operations delivered adjusted property EBITDA of $297 million in the quarter on $910.6 million of operating revenue. As Craig alluded to, we estimate higher than expected hold positively impacted EBITDA by around $7 million during the quarter. Importantly, mass hold at both properties was in the expected range during the quarter, with the hold impact primarily related to the VIP side of the business.

[Julie Cameron-Doe, CFO at Wynn Resorts]

EBITDA margin was 32.6% in the quarter, an increase of 140 basis points relative to Q4 2019, driven by a combination of the favorable mix shift to higher margin mass gaming and operating leverage on cost efficiencies. Our OpEx, excluding gaming tax, was approximately $2.56 million per day in Q4, a decrease of 14% compared to $3 million in Q4 2019.

[Julie Cameron-Doe, CFO at Wynn Resorts]

The team has done a great job remaining disciplined on costs, and we're well positioned to continue to drive strong operating leverage as the market continues to recover. In terms of CapEx in Macau, we're currently advancing through the design and planning stages on our concession commitments. as we noted the past few quarters, these projects require a number of government approvals, creating a wide range of potential CapEx outcomes in the near term.

[Julie Cameron-Doe, CFO at Wynn Resorts]

As such, we expect CapEx related to our concession commitments to range between $350 million and $500 million in total between 2024 and the end of 2025. Moving on to the balance sheet, our liquidity position remains very strong, with global cash and revolver availability of nearly $4.5 billion as of December 31.

[Julie Cameron-Doe, CFO at Wynn Resorts]

This was comprised of $2 billion of total cash and available liquidity in Macau, and approximately $2.45 billion in the US. Bringing it all together, the combination of strong performance in each of our markets globally, with our properties generating nearly $2.2 billion of property EBITDA in 2023, together with our robust cash and liquidity positions, creates a very healthy leverage and free cash flow profile for the company globally.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Further, the board approved a cash dividend of $0.25 per share, payable on February 29, 2024, to stockholders of record as of February 20, 2024. We also repurchased approximately 1.6 million shares for $139 million during the quarter, highlighting our commitment to prudently returning capital to shareholders.

[Julie Cameron-Doe, CFO at Wynn Resorts]

We will consider additional dividend increases at Wynn Resorts and the initiation of a dividend from Wynn Macau as the recovery progresses and the exact timing of our global capital deployment plans become more clear. Finally, our CapEx in the quarter was $113 million, primarily related to the Spa Villa renovations and food and beverage enhancements at Wynn Las Vegas, concession-related CapEx in Macau, and normal course maintenance across the business. With that, we'll now open up the call to Q&A.

[Operator]

Thank you. To ask a question, press star one on your touchtone phone. Unmute your phone, record your name clearly after the prompt, and I will introduce you for your question. Please limit yourself to one question and one follow-up question. To withdraw your question, press star two. Our first question comes from Carlo Santarelli with Deutsche Bank.

[Carlo Santarelli, Managing Director of Gaming & Lodging Equity Research at Deutsche Bank]

Hey, Craig. Hey, Julie, everyone. Guys, as you think about kind of Macau and obviously, you know, with the amenities that come on, whether it's concession-related or other, does this kind of HKD 2 to HKD 2.5 to HKD 2.6 daily OpEx rate feel like you're in the right place going forward as we think about 2024, at least?

[Craig Billings, CEO at Wynn Resorts]

Hey, Carlo, I'll start, and then I'll hand it to Julie. I mean, I think we should put it in perspective, right? Our OpEx in the quarter was, I think, about 14% below Q4 2019, and our margins were some, I think, 140 basis points higher. So we're clearly being disciplined on OpEx. But Julie, do you want to discuss some specifics?

[Julie Cameron-Doe, CFO at Wynn Resorts]

Yeah, there were some specifics, Carlo, over you know, sequentially. So if you think about it, it increased 160K per day, or $15 million sequentially, and that was split across three different buckets. The first one was higher variable costs on the extremely robust business volumes, with hotel occupancy up 100 basis points, GGR up 12%, F&B up 13%.

[Julie Cameron-Doe, CFO at Wynn Resorts]

The second bucket really is payroll. We had more overtime pay related to holidays because there were 9 public holidays in the quarter versus just 2 in the previous quarter. And then the third bucket was really the higher spending on concession-related non-gaming events, because this was a particularly heavy event quarter.

[Julie Cameron-Doe, CFO at Wynn Resorts]

You remember, we kind of foreshadowed that in the previous call when we talked about all the different programming we had going on. And that really kicked off with the Hypercar exhibition that we had, and then we had several, you know, well-received art, sports, and culinary events. So that's really what was driving it, the sequential pop. You know, going forward, you know, we feel, you know, we've got, as Craig said, with EBITDA margin at both properties above Q4 2019 levels.

[Julie Cameron-Doe, CFO at Wynn Resorts]

With the OpEx well controlled, you know, we, we do expect that, you know, the pace of growth in market-wide GGR, along with our revenue mix, to be a key driver of margins. So there's going to be some quarter-to-quarter variation as we see different programming coming through, and we continue to roll out the programming associated with concession commitments.

[Craig Billings, CEO at Wynn Resorts]

Barring a major facility opening, like the event center, which is a number of years away, I don't foresee a step change in our OpEx, and we're managing it very, very tightly.

[Carlo Santarelli, Managing Director of Gaming & Lodging Equity Research at Deutsche Bank]

Very helpful. Thank you for the detail as well. Then just as a follow-up, obviously, the Las Vegas results kind of speak for themselves, and it would be hard to notice anything changed in Las Vegas in the fourth quarter. But obviously, you guys do have a new competitor there to the north, and I was just wondering, now with at least a couple months of kind of experience with that, could you talk a little bit perhaps about how Fontainebleau has kind of impacted positively or negatively the asset and kind of daily traffic?

[Craig Billings, CEO at Wynn Resorts]

Yeah, it really hasn't. So I feel great about our business, feel great about where we are. Like I said, February is shaping up to be jam-packed between the Super Bowl, Chinese New Year, and everything else we have going on. I don't really see any impact.

[Carlo Santarelli, Managing Director of Gaming & Lodging Equity Research at Deutsche Bank]

Great. Thank you both.

[Operator]

Thank you. Our next caller is Joe Greff with JPMorgan.

[Joe Greff, Managing Director and Senior Equity Research Analyst at J.P. Morgan]

Hi, everyone. Thanks. Craig, in the fourth quarter, mass table GGR was 117% of fourth quarter levels, up from 106% in the 3Q relative to 2019 or the 3Q of 2019. I know you don't sort of think about it maybe, or present it, at least externally, to the same degree that Las Vegas Sands does between how it defined its premium mass and its base mass business. But when you think about, you know, within the different tiering that you guys have, would you say all of your, your mass table tiers are fully recovered plus relative to 2019? Or are there some tiers that still have, you know, relative recovery to get to and exceed 2019 levels?

[Craig Billings, CEO at Wynn Resorts]

Thanks, Joe. I think you have to differentiate between each of the properties. So, the early portion of the recovery was clearly premium mass led. You saw that in the difference, you know, revenue per head or revenue per visitor in the early portion of the recovery. And clearly, we saw that hit Palace first. And so we've been talking for the past several quarters about how Wynn Macau would need a little bit longer to recover. And so at Wynn Palace now, it's really about yielding the rooms and driving, you know, the best heads in beds, if you will, in order to continue to grow our position there, and the property is well positioned to do that.

[Craig Billings, CEO at Wynn Resorts]

At Wynn Macau, where we have historically been more reliant on more transient traffic, on what, you know, other operators may refer to as core mass, you saw that start to come through in this quarter. There's still more work to do there, but honestly, if you really look at the numbers that Wynn Macau produced this quarter, I'm incredibly proud of that team.

[Craig Billings, CEO at Wynn Resorts]

You can see the uptick in drop, you can see the uptick in GGR, and it was incredibly strong. That's really down to the targeted CapEx that we did, that we completed just at the end of the third quarter, bridging into the beginning of the fourth quarter, and then also the return of those additional segments that you referred to in your question.

[Joe Greff, Managing Director and Senior Equity Research Analyst at J.P. Morgan]

Great. That, that's helpful. And, Craig, we heard your positive commentary about February and the 1Q in Las Vegas and, you know, in addition to the Super Bowl, the group traction. Would you expect 2Q 2024 through 4Q 2024 group room nights to be up year-over-year?

[Craig Billings, CEO at Wynn Resorts]

Yeah. Brian, you want to give a little bit more color?

[Brian Gullbrants, COO, North America at Wynn Resorts]

Sure. Joe, as we're seeing this year play out, we're really encouraged by the forward group booking trends that we're seeing. The outlook for group business is super strong. 2024 is pacing towards a record group room night, so that base is there for us to yield from, and the sales and revenue teams continue to just do a great job in yield managing our properties. So-

[Joe Greff, Managing Director and Senior Equity Research Analyst at J.P. Morgan]

On those group room nights, Brian, what, what would you say rate is relative to 2023 pricing?

[Craig Billings, CEO at Wynn Resorts]

We don't disclose that, but you can assume that rates are contracted on a multi-year basis and bear some relationship to CPI.

[Joe Greff, Managing Director and Senior Equity Research Analyst at J.P. Morgan]

Great. Thank you very much.

[Craig Billings, CEO at Wynn Resorts]

Sure.

[Operator]

Thank you. Our next caller is Shaun Kelley with Bank of America. You may go ahead.

[Shaun Kelley, Managing Director and Senior Equity Research Analyst at Bank of America]

Hi, good afternoon, everyone. Craig, maybe just starting and building off the answer to the last question on, you know, sort of the way the recovery's played out across the properties. Just specifically at Wynn Macau, is that the bigger beneficiary, you know, in the portfolio today as it relates to, let's call it, the ... As we start to see visitation maybe, you know, outpace or, or, you know, balance out now relative to the spend per visit we saw again earlier in the recovery, is that sort of the implication of the answer to the last question? Or, can you just elaborate a little bit on where you expect to see some of the still very strong visitation numbers and that kind of catch up in the base mass business?

[Shaun Kelley, Managing Director and Senior Equity Research Analyst at Bank of America]

You know, where should we see that most in your portfolio?

[Craig Billings, CEO at Wynn Resorts]

Well, I think you're going to see it across the portfolio, but you're going to see it disproportionately at Wynn Macau, just based on the geographic location of the property. You tend to have that more transient customer in downtown, and we're gonna be a beneficiary of that there. But it affects Palace as well.

[Craig Billings, CEO at Wynn Resorts]

I mean, there's a lot of reasons to visit Palace and to make Palace a destination for a base mass customer. You should see the queue just to get on the gondola out in front of the lake every day. And now as we add incremental amenities like we did with Illuminarium, there's a lot of reasons to visit our property, more so than there probably ever have been.

[Craig Billings, CEO at Wynn Resorts]

So I would say it affects both properties to some extent, but I would expect it to disproportionately affect the property downtown.

[Shaun Kelley, Managing Director and Senior Equity Research Analyst at Bank of America]

Thank you for that. And then maybe as a Las Vegas question, obviously, you know, some, you know, significant benefit on the event side from F1, which we know, you know, disproportionately seems like it accrued to Wynn. You're gonna have another big one, it seems like, with Super Bowl.

[Shaun Kelley, Managing Director and Senior Equity Research Analyst at Bank of America]

Wondering if you would comment a little bit on maybe, you know, as you look year-over-year, the broader events business in calendar. You talked about groups, so how does the just broader event calendar post-Super Bowl feel on a year-over-year basis? And then specifically, because we, you know, we've got some tracking data that looks pretty good for you.

[Shaun Kelley, Managing Director and Senior Equity Research Analyst at Bank of America]

Just any thoughts or comments on the impact of the Sphere and how that has played out, especially on some of the bigger concert nights, you know, and what you might see in terms of impact there? Thanks.

[Craig Billings, CEO at Wynn Resorts]

Sure. On the first portion of your question, the events calendar looks pretty good because we spent a whole bunch of time creating our own events. So it's not just the citywides. We've been programming the heck out of this joint for several years now, and we've built a lot of momentum on doing that, and that not only helps us from a brand and marketing perspective, but clearly from a room nights and a pricing on rooms perspective. So I feel great about the remainder of 2024 from an events perspective. With respect to the Sphere, it's been—I tell you, it's been pretty amazing.

[Craig Billings, CEO at Wynn Resorts]

I mean, this probably doesn't affect our rate, but we sure do get a whole bunch of requests to reside on that side of the building in order to see, you know, to see the Sphere itself. And certainly on the U2 weekends, we see an uptick in terms of very high-quality occupancy. So you're talking about kind of the best of the best customers that wanna stay with us because we're actually the closest property to the Sphere as the, you know, as the crow flies. So it's definitely been additive to us on the margin, and I got to tell you, I admire and respect what they've done by doing that.

[Craig Billings, CEO at Wynn Resorts]

I think it's incredibly novel, it's incredibly unique, and it's yet another kind of only in Vegas experience that, that you can have, and we're delighted that they're next door.

[Shaun Kelley, Managing Director and Senior Equity Research Analyst at Bank of America]

Thank you very much.

[Operator]

Thank you. And once again, to ask a question, you may press star one. Our next caller is Dan Politzer with Wells Fargo. You may go ahead, sir.

[Daniel Politzer, Executive Director and Senior Equity Research Analyst at Wells Fargo]

Hey, good afternoon. Thanks for taking my questions. Look, Vegas is obviously performing at an extremely high level, no real impact from new supply. How do you think about that, the parcel, the property parcel Wynn West that you have? And, you know, obviously, this is a longer term focused question, but how did your thought process there maybe, you know, expand as it relates to you know, your, your CapEx projects in, in the UAE, as well as New York? Thanks.

[Craig Billings, CEO at Wynn Resorts]

Sure. I mean, look, there's a lot. We have a lot of different avenues for growth. We've got a huge land bank here in Vegas, right? We've got the land across the street, we've got the golf course. There's a lot that we can do here. We're in pursuit, as I think everyone knows, in New York. We have a project that's actually coming out of the ground in the UAE, and that's gonna be a very substantial opportunity for us.

[Craig Billings, CEO at Wynn Resorts]

There's some additional states that are, you know, moving, albeit at a relatively slow pace, that might prove to be opportunities for us. We obviously don't do every possible, every potential jurisdiction. We're very selective. And then there are certain international jurisdictions, like Thailand, for example, that are also in the process of considering gaming.

[Craig Billings, CEO at Wynn Resorts]

We're always balancing really two things, our ability to do what we do so well. Remember, you know, we're one of the last in the industry that maintains its own design and development group, and so it's not as though you can, you can bang four of these out in any, in any particular year. So that's always a consideration. And then the other is capital, as you rightly pointed out. So we're always looking at what is the highest and best use of capital that we can deploy, and then we're making decisions accordingly. We will certainly make use of that land across the street in Las Vegas.

[Craig Billings, CEO at Wynn Resorts]

It's not a question of if, it's a question of when, and we'll see how things play out in New York and things play out in a couple of other jurisdictions in determining the timing of the use of that land.

[Daniel Politzer, Executive Director and Senior Equity Research Analyst at Wells Fargo]

Got it. And then just for my follow-up, right, Macau is certainly continuing along a nice trajectory here. You outlined some CapEx as you think about it for the concession related to the concession renewals, but how do you balance that with maybe, you know, the subsidiary paying up dividends to the parent? Is that something that we could see within the next, you know, 12-18 months, or is that something longer term that you'd like to envision coming back?

[Craig Billings, CEO at Wynn Resorts]

Yeah, it really depends. You're right. It's... There's a lot of moving parts there, right? We have a debt maturity later this year there. We need to think about our leverage profile in Macau and what that longer-term leverage profile should be. We have some capital that we need to put in the ground there. We had nearly three years of closure and cash burn. So the question is: What do we want the balance sheet to be? How will the CapEx plans come together in terms of the timing of capital deployment, which we're studying and learning more about as we go through the design and development process every day.

[Craig Billings, CEO at Wynn Resorts]

Then, of course, the dividend... And as you know, the dividend, just as a global statement, dividends are the cornerstone of our capital return strategy. So stay tuned. We are looking very closely at it, and we'll figure it out in due course.

[Stephen Grambling, Managing Director, Head of US Gaming, Lodging & Leisure Research at Morgan Stanley]

Got it. Thanks, and congrats on the quarter.

[Craig Billings, CEO at Wynn Resorts]

Thank you.

[Operator]

Thank you. Our next caller is Robin Farley with UBS.

[Robin Farley, Managing Director and Senior Equity Research Analyst at UBS]

Great, thanks. I wanted to ask about Vegas. Sounds like clearly, you know, very strong events calendar and outlook for February. Your January comment sounded like it was maybe a little bit flattish year-over-year. I'm just wondering how March is looking on kind of a year-over-year basis when you get past some of these, the big events in Feb. Thanks.

[Craig Billings, CEO at Wynn Resorts]

Sure, Robin. Yeah, January—well, keep, keep in mind, last year, Chinese New Year started in January, and so this year it starts in February. So as I mentioned in my prepared remarks, February really sets the tone, for the quarter, and it's where all the action is, this year in Q1. March has a couple headwinds. Easter timing is one of them, and then the absence of CON/AGG is another. But our forward booking indicators continue to look strong, and, and we feel, we feel good about it. I've said probably five times on the last, the last three or four calls, the trees don't grow to the sky, and I would continue to tell you how things are looking in Vegas, and they continue, they continue to look good. They continue to look good for us.

[Craig Billings, CEO at Wynn Resorts]

So how the quarter plays out will be very dependent on February, and again, all forward indicators look strong for February, but subsequent to that, we'll take it from there.

[Robin Farley, Managing Director and Senior Equity Research Analyst at UBS]

Okay, great. Thank you very much.

[Craig Billings, CEO at Wynn Resorts]

Sure.

[Operator]

Thank you. Our next caller is Brant Montour with Barclays. You may go ahead, sir.

[Brant Montour, Director and Senior Equity Research Analyst at Barclays]

Thanks. Good evening, everybody, and, and congrats on the results. In Macau, and Palace, I guess, specifically, but it's a broader question. Can, can you comment on just the broader competitive environment for the premium mass players, how it's evolved sort of into the end of the year and into the early part of this year, which, you know, with volumes being strong, infrastructure, travel infrastructure coming back, you know, how, how has that changed? And is that a tailwind for you as we, as we go forward here and as, volumes continue to grow?

[Craig Billings, CEO at Wynn Resorts]

Sure. Specifically as it relates to Wynn Palace, Wynn Palace is, is incredibly well-positioned, and it has been since the day it opened on Cotai, but it only grows more so as we continue to evolve the amenities in Wynn Palace. Competition for premium mass customers has been fierce for ever and today, so it's, it's really nothing new.

[Craig Billings, CEO at Wynn Resorts]

What we try to do is really focus on what we do well, stay true to who we are, and be really, really disciplined, including on reinvestment, because at the end of the day, I don't think the bank takes market share. I think they take cash. And so we're really focused on generating cash and EBITDA. So I, I think Palace turned in a great quarter. Its future is bright, and we will continue to aggressively chase market share responsibly.

[Brant Montour, Director and Senior Equity Research Analyst at Barclays]

Great. Thanks.

[Operator]

Thank you. Stephen Grambling with Morgan Stanley. You may go ahead, sir.

[Stephen Grambling, Managing Director, Head of US Gaming, Lodging & Leisure Research at Morgan Stanley]

Hey, thank you. I may have missed this, but I guess, how are you thinking about looking currently at the Super Bowl, how that might compare to Formula 1? Or is there any way to kind of back out how you think about the contribution from Formula 1 in the quarter and how that might grow next year?

[Craig Billings, CEO at Wynn Resorts]

Yes, it's a really, it's a really good question. The Super Bowl is distinctly more corporate in terms of visitation. And so I think that's an important point to keep in mind. So we have, I alluded to it, actually, explicitly stated it in my prepared remarks, we have very strong front money and credit for Super Bowl, about double what we had last year, and that'll be a very important segment of our business over the course of, of the next week, and I expect it will generate very strong results. We also have a lot of folks in-house who will never go near a gaming table because there's a lot of corporate visitation around, around this particular event. So the real answer to your question is, we don't know. We're gonna see.

[Craig Billings, CEO at Wynn Resorts]

But if we had to, if we had to spitball it now, what I would say is that it's not gonna be as impactful in the casino, and it'll be equally, if not more impactful, when it comes to hotel revenue. Fair assessment, Brian?

[Brian Gullbrants, COO, North America at Wynn Resorts]

Yeah, both hotel revenues and rates are very similar to Formula 1. The weekend Super Bowl event's another great match, I think, for our brand. And as you said, we're gonna have double the credit and front money we had previously, so I think we're in for a great weekend here.

[Stephen Grambling, Managing Director, Head of US Gaming, Lodging & Leisure Research at Morgan Stanley]

Great. Thanks so much.

[Operator]

Thank you. Our next caller is John DeCree with CBRE.

[John DeCree, Managing Director and Head of Institutional Investor Research at CBRE]

Hi, everyone. Thanks for taking my question. Maybe two follow-ups. One is on F1, and we've had some conversations. This was the first year, obviously, you know, quite successful for you. I'm curious how you think about next year and going forward. You know, is there opportunities to calibrate the event and see growth and build upon this? Or, you know, do you have a view that the first one in Vegas might be the best? You know, we've had some different folks, different opinions about that, whether next year is a tough comp or an opportunity perhaps to just continue to grow that event for you and for the city.

[Craig Billings, CEO at Wynn Resorts]

Yeah, great question. I guess I'll answer that as a Las Vegan and someone who cares about the broader market and wanting to see everybody in the market participate and do really well. There's clearly, I mean, look, the first time you do anything of this scale, you're gonna have learnings, and it's just natural. And so I do think that there's a lot that can be done to make the event more relevant for the town more broadly.

[Craig Billings, CEO at Wynn Resorts]

I think that F1 understands that. And I think, frankly, the operators in town understand that, even those like us, who disproportionately benefited. So I think the event is only gonna get better and better. I think what this year proved is that the core contingent of people that travel to go to an F1 race is our customer.

[Craig Billings, CEO at Wynn Resorts]

So you better believe that we will program the heck out of this place yet again, just like we did this F1, this last F1, this coming year, and we will do our best to attract the best customers in the market. And hopefully, again, there will be more opportunities for some of the other tiers of properties in the market to participate in the event this year as they continue to evolve and change the event.

[John DeCree, Managing Director and Head of Institutional Investor Research at CBRE]

Thanks, Greg. That's helpful. Maybe one more top down on the other side of the world, in Macau. You know, we still hear from investors skittish about some of the uncertainty around the macroeconomic picture in China. Yet, you know, we continue to see monthly numbers out of Macau and your performance. You know, things just continue to recover and grow. You know, curious if you wanna take a stab or someone on the team to kind of weigh in on how Macau's kind of fundamental recovery has been decoupled from that, and what you're kind of seeing that it gives some confidence that the recovery trend continues. You know, and if you have any top-down, high-level comments, it could be helpful.

[Craig Billings, CEO at Wynn Resorts]

Yeah, I'll leave the detailed China macro analysis to people who do that for a living. But there's certainly a lot of crosscurrents to consider. You have tremendous pent-up demand still from several years of near closure. You have the ease of proximity to Macau, which actually benefits Macau, when, you know, the economic situation perhaps isn't as robust as it could be, and you have some modest stimulus efforts that we've seen. But you also, as you rightly pointed out, clearly have a litany of difficult economic indicators. Yet Macau continues to chug along. So to us, it's really the long-term viability of Macau. You know, we're thinking in kind of five, 10-year increments.

[Craig Billings, CEO at Wynn Resorts]

It's really the long-term viability of Macau that's most relevant, and we're clearly already at levels that allow us the financial and operating flexibility to plan for that longer-term time horizon. So I think it's well observed, maybe not well understood, but well observed, that, Macau, Macau's trajectory does seem to be decoupled from the broader China macro. I think you saw that in, in 2009 as well. And I think that bodes well for the future. Does it bode well for next quarter? I don't know. Does it bode well for the quarter after that? I don't know. But it certainly bodes well for the future, and that's what we're thinking about.

[John DeCree, Managing Director and Head of Institutional Investor Research at CBRE]

Thanks for that. That long-term outlook is great perspective. I really appreciate it. Congratulations on the quarter.

[Craig Billings, CEO at Wynn Resorts]

Thank you.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Thank you, John. And operator, the next caller will be-- the next question will be our last.

[Operator]

Thank you. And our final question comes from Chad Beynon with Macquarie. You may go ahead, sir.

[Chad Beynon, Managing Director and Head of U.S. Research at Macquarie]

Afternoon. Nice results. Thanks for taking my question. Just to kind of pile on, on that Macau question, wondering if you could elaborate a little bit in terms of the health of the shopping, retail market. That's something that we've heard from the luxury operators, continues to be strong in specific markets. Wondering how you're seeing that right now, and then as some of the catchment areas recover in terms of visitation, if that could be an additional tailwind, in the future. Thanks.

[Craig Billings, CEO at Wynn Resorts]

Sure. I guess what I would say is, if you look at the trajectory over the course of 2023, retail sales have, have been and were incredibly strong in Macau, up over, over 2019. You saw- you can see, you can look at our numbers, Q3 to Q4, you can see that they were up very, very modestly, I think about 10 basis points. And so certainly, if anything from China macro is affecting, Macau, it's probably there. But again, given the relative strength compared to pre-COVID, I think it's, it's difficult for us to complain. I think what appears to us to be occurring is, to a certain extent, Macau has become a substitute for Hong Kong from a, a retail sales perspective.

[Craig Billings, CEO at Wynn Resorts]

Certainly based on the changing type of visitation that you see, particularly on Cotai, I think you can support that premise. And so I think it's, again, if you look at the long term, I think it's very bright for Macau from that perspective. And I think to the extent that someone goes to Macau with a retail-based motivation and a gaming-based motivation, or eventually, a retail-based motivation and entertainment based motivation, that's fine. That's great. I mean, that's a natural evolution of Macau. But you can see the quarter-over-quarter changes in our numbers.

[Chad Beynon, Managing Director and Head of U.S. Research at Macquarie]

Perfect. Thank you. Then in terms of the interactive business, is there any update to speak about, or could there be an opportunity to monetize or partner this in a shareholder-friendly way?

[Julie Cameron-Doe, CFO at Wynn Resorts]

I'll take that one. Thanks, Chad. Yeah, so we announced in August that we were exiting the jurisdictions we operate in. We were leaving New York and Michigan under review. So we're continuing that strategic review of those two states, and, you know, we'll stay tuned. We'll have more information on that in the future. Everywhere else is pretty much wrapped up now. We're working on closing down Massachusetts online as well.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Whenever we're able to and whenever we can interact with anybody else, you know, obviously, with player databases and so on, we'll make sure that we do the best for our shareholders and monetize the assets that we have in a way that, you know, works well with what's allowed and what's available out there in the market.

[Chad Beynon, Managing Director and Head of U.S. Research at Macquarie]

Great. Thank you very much. Appreciate it.

[Craig Billings, CEO at Wynn Resorts]

Thank you.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Thank you. With that, we'll close the call. Thank you for your interest, and we look forward to talking to you again next quarter.

[Operator]

Thank you for participating on today's conference call. You may now go ahead and disconnect.

Participants

Executives

• Julie Cameron-Doe, CFO
• Craig Billings, CEO
• Brian Gullbrants, COO, North America

Analysts

• Carlo Santarelli, Managing Director of Gaming & Lodging Equity Research at Deutsche Bank
• Joe Greff, Managing Director and Senior Equity Research Analyst at J.P. Morgan
• Shaun Kelley, Managing Director and Senior Equity Research Analyst at Bank of America
• Daniel Politzer, Executive Director and Senior Equity Research Analyst at Wells Fargo
• Stephen Grambling, Managing Director, Head of US Gaming, Lodging & Leisure Research at Morgan Stanley
• Robin Farley, Managing Director and Senior Equity Research Analyst at UBS
• Brant Montour, Director and Senior Equity Research Analyst at Barclays
• John DeCree, Managing Director and Head of Institutional Investor Research at CBRE
• Chad Beynon, Managing Director and Head of U.S. Research at Macquarie