Boyd Gaming Q2 Earnings Call Highlights

Key Points

• Boyd Gaming posted modest Q2 growth as revenue rose 3% and EBITDA increased 2%, helped by strong results in the Midwest and South, online operations and managed business. That offset weaker Las Vegas destination traffic and construction disruption at Suncoast.
• The Midwest and South segment was the standout, with revenue up 3% and EBITDA up 4% as customers continued to “stay and spend closer to home.” Property margins in the segment expanded to nearly 38%, the highest in almost two years.
• Boyd raised guidance and kept investing aggressively, lifting full-year online EBITDA guidance by $5 million and managed business guidance by $3 million. The company also plans continued share buybacks, ongoing Las Vegas renovations, and major long-term projects including the Norfolk resort and Sky River expansion.

Boyd Gaming NYSE: BYD reported comparable second-quarter growth as strength in its Midwest and South properties, online operations and managed business helped offset continued softness tied to Las Vegas destination travel and construction disruption at Suncoast.

President and Chief Executive Officer Keith Smith said companywide revenue rose 3% and EBITDA increased 2% in the quarter when adjusted for the impact of last year’s FanDuel transaction and tax pass-through amounts related to market access agreements. Smith said the quarter reflected “the continued benefits of our diversified business model,” ongoing capital investment and growth across customer segments.

Boyd maintained property operating margins of 40%, which Smith said was consistent with recent years. He added that trends from the second quarter had continued into the first three weeks of July.

Midwest and South Segment Leads Growth

Boyd’s Midwest and South segment delivered one of the strongest performances in the quarter. Smith said revenue in the segment grew 3%, led by gaming revenue, while EBITDA increased 4%. Property margins expanded to nearly 38%, the segment’s highest level in almost two years.

Smith attributed the performance to growth from both core and retail customers, saying guests “continue to stay and spend closer to home.” He also pointed to recent hotel renovations, new food and beverage offerings and larger investments at properties such as Treasure Chest and Ameristar St. Charles.

During the question-and-answer session, Smith said Boyd has seen customers spending closer to home for several quarters, particularly in the Midwest and South portfolio. He cited a mix of possible consumer factors, including airfares, inflation, gas prices, tax refunds and stock market gains, but said Boyd could only report that it was seeing growth from core and retail customers in that segment.

Las Vegas Locals Mixed as Suncoast Renovations Continue

Boyd’s Las Vegas Locals segment remained pressured by two factors: softer destination business, primarily affecting the Orleans, and ongoing construction at Suncoast. Overall gaming revenue in the segment was even with the prior year, with stable play from core and retail customers.

Excluding the Orleans and Suncoast, Smith said the rest of the Las Vegas Locals portfolio generated 4% revenue growth, 3% EBITDA growth and margins above 50%. He said that performance reflected “the continued strength of our local customer.”

Chief Financial Officer Josh Hirsberg said the destination-business impact was about $5 million of EBITDAR in the quarter, consistent with levels Boyd has seen since the third quarter of last year. He said the company does not expect those trends to quickly turn positive as comparisons ease, but expects the impact to become “less bad,” estimating roughly $3 million in each of the third and fourth quarters.

Hirsberg also said Suncoast construction disruption had an estimated $3 million impact in the second quarter and should be similar in the third quarter before the property begins contributing more in the fourth quarter. Smith said renovations of the Suncoast casino floor and public areas are expected to be completed by the end of the third quarter.

Boyd is also planning a refresh of the Orleans casino floor and public spaces, expected to begin in the first half of next year. Smith said the initial work would be behind walls and should not create construction disruption in 2027. He also said the company expects no construction disruption at Suncoast in 2027.

Capital Projects Remain Central to Boyd’s Strategy

Smith highlighted a broad investment program across Boyd’s Las Vegas portfolio, including new restaurants at Gold Coast, Sam’s Town and Suncoast, additional food and beverage concepts planned in the coming months, hotel renovations at the Orleans and Suncoast expected to be completed by year-end, and sportsbook updates at Sam’s Town and Aliante ahead of football season.

By early next year, Smith said Boyd expects to have renovated more than 70% of its Las Vegas hotel room inventory, introduced 17 new food and beverage concepts, and expanded its Southern Nevada presence with Cadence Crossing and Suncoast improvements. He said Cadence Crossing, which opened in late March, has seen strong visitation and revenue since its debut.

Beyond Las Vegas, Boyd’s Norfolk, Virginia, resort remains on time and on budget for a late 2027 opening, according to Smith. The project is expected to include a 65,000-square-foot casino, 200-room hotel, eight food and beverage outlets, live entertainment and an outdoor amenity deck. In response to an analyst question, Hirsberg said Boyd generally targets a 15% cash-on-cash return for a project like Virginia as it ramps from the first to second year.

The company is also in the design phase for modernization of the Par-A-Dice Casino in Illinois and is planning, subject to regulatory approval, to convert Amelia Belle in Louisiana to a land-based facility with a modern casino floor and enhanced food and beverage offerings. Smith said construction on Amelia Belle is expected to begin in late 2027 after design work is complete.

Online and Managed Businesses Lift Guidance

Boyd’s online segment delivered comparable revenue and EBITDA growth, supported by Boyd Interactive and consistent contributions from market access agreements. Hirsberg said the company raised its full-year 2026 online segment guidance by $5 million to a range of $35 million to $40 million.

The managed business grew EBITDA 18% year over year, driven by the first phase of the Sky River expansion, which added casino floor space and a multi-level parking structure. Boyd raised full-year managed business guidance by $3 million to a range of $113 million to $117 million. Smith said the second phase of the Sky River project has begun and will add a 300-room hotel, three food and beverage outlets, a full-service spa and an entertainment and event center, with completion expected in early 2028.

Shareholder Returns and Balance Sheet

Boyd invested $142 million in capital expenditures during the quarter, bringing year-to-date spending to $297 million. Hirsberg said the company remains on track for full-year capital expenditures of $650 million to $700 million, including maintenance capital, hotel remodel spending, growth capital and $300 million for the Virginia casino resort development.

During the second quarter, Boyd paid $15 million in dividends and repurchased $156 million of stock, buying 1.9 million shares at an average price of $83.60. Hirsberg said Boyd plans to continue repurchasing approximately $150 million in shares per quarter, putting the company on pace to return more than $650 million to shareholders this year, including dividends.

Since beginning its capital return program in late 2021, Boyd has returned more than $3 billion to shareholders and reduced its share count by 35%, Hirsberg said. The company ended the quarter with traditional leverage of 2.2 times and lease-adjusted leverage of 2.7 times. Boyd’s next debt maturity is in December 2027, which Hirsberg said the company intends to refinance later this year or in the first half of 2027.

Hirsberg also noted that Boyd expects to complete the previously announced sale of its Shreveport property by the end of July. On mergers and acquisitions, Smith said Boyd remains interested in opportunities but does not need to pursue deals, adding that any acquisition would need to be strategic and involve the right asset, market and price.

About Boyd Gaming (NYSE:BYD)

Boyd Gaming Corporation NYSE: BYD is a diversified hospitality and gaming company headquartered in Las Vegas, Nevada. The company develops, owns and operates a portfolio of branded gaming and entertainment properties, including casinos, hotels, restaurants and meeting facilities. Boyd Gaming's offerings range from slot machines and table games to live entertainment, dining concepts and convention space, designed to appeal to both regional and destination visitors.

Founded in 1975 by its namesake, William S.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.