Gaming and Leisure Properties Q1 Earnings Call Highlights

Key Points

• Management reiterated mid- to high-single-digit AFFO growth and issued full-year 2026 AFFO guidance of $1.212 billion to $1.223 billion (or $4.08 to $4.12 per diluted share), while signaling a $1.8 billion capital commitment runway expected to be mostly deployed by year-end 2027 that includes $750M–$800M of 2026 development spend and the planned $225 million Aurora acquisition.
• Q1 total income from real estate rose by more than $24 million year-over-year, driven by about $33 million of cash rent increases from acquisitions and escalators (including Bally’s Lincoln, Chicago, Baton Rouge and others), partially offset by $8 million of non‑cash items and with operating expenses down roughly $49.8 million.
• Balance-sheet and market backdrop: GLPI ended the quarter at a 5x leverage ratio with $275 million cash, roughly $230 million of annual free cash flow and forward equity settling June 1 to fund the pipeline, and management said cap rates are normalizing to levels it views as accretive (around an “8” in front of the cap rate).

Gaming and Leisure Properties NASDAQ: GLPI reported what management described as a “terrific quarter” in its first-quarter 2026 earnings call, citing mid- to high-single-digit growth in adjusted funds from operations (AFFO) and AFFO per share and pointing to a multi-year development and acquisition pipeline.

Management highlights AFFO growth and a $1.8 billion capital commitment runway

Chairman and CEO Peter Carlino said the company continues to have “a clear and well-documented line of sight toward a very healthy multi-year AFFO growth” across its acquisition and development pipelines. Carlino said that with the February acquisition of Bally’s Lincoln and progress across development projects, GLPI’s future capital commitments stand at roughly $1.8 billion, “nearly all of which we expect to deploy by year-end 2027.”

Carlino also emphasized what he characterized as steady tenant health despite recent regional gaming volatility, noting that “our rent coverage remains strong, with the vast majority of our leases covered at 1.8x or higher.” He added that GLPI remains active in the market, but reiterated a long-standing discipline around deal selection: “there is no transaction that we have to do.”

Revenue growth driven by rent escalations and acquisitions; guidance provided for full-year 2026

Chief Financial Officer and Treasurer Desiree Burke said first-quarter 2026 total income from real estate exceeded the first quarter of 2025 by over $24 million. Burke attributed the increase primarily to about $33 million in cash rent increases from acquisitions and escalators, including:

• Bally’s Lincoln acquisition adding $7.5 million in cash rent
• Chicago lease increasing cash income by $5.5 million
• Bally’s Baton Rouge development increasing cash rent by $2.6 million
• PENN Joliet M funding increasing cash income by $5.4 million
• Sunland Park increasing cash income by $3.8 million
• Dry Creek, Ione, and Cordish Virginia loans adding $3.5 million
• Escalators and percentage rent adjustments contributing approximately $4.6 million

Burke said certain non-cash revenue items partially offset these increases, producing a collective year-over-year decrease of $8 million for those non-cash components. She also noted operating expenses declined by $49.8 million, “mainly due to the non-cash adjustments in the provision for credit losses.”

GLPI issued full-year 2026 AFFO guidance of $1.212 billion to $1.223 billion, or $4.08 to $4.12 per diluted share in OP units. Burke said the guidance excludes the impact of future transactions, but includes additional development funding of roughly $590 million to $640 million across the remainder of 2026, bringing total 2026 development spend to $750 million to $800 million.

The company’s guidance also includes the planned $225 million acquisition of PENN’s Aurora facility, which Burke said is expected “late in the second quarter,” and the anticipated settlement of $363 million of forward equity on June 1.

Development cadence accelerates in Chicago; other projects discussed

Burke said the upward revision to 2026 development spend is “mainly due to our Chicago project,” where GLPI has “greater visibility and a clearer spend cadence” as construction progresses. She said the increased funding guidance reflects timing of spend rather than a change in expected opening dates.

Chief Development Officer Steve Ladany added that Chicago is expected to top out both “the podium and the tower next week” and said the project remains “on track for a first half 2027 opening.”

Asked about Live! Virginia, Burke confirmed the remaining funding expectations are included in guidance but said the company has not provided month-by-month detail. President and COO Brandon Moore noted that the Cordish structure differs from other projects because “the Cordish equity dollars are all being spent first,” which management said should improve visibility as the project advances.

Operators’ early-year results and recent openings; coverage considerations

On property performance, Moore highlighted several recent openings and expansions. He said PENN’s Hollywood Joliet has delivered strong early results, referencing PENN’s own recent commentary. Moore also said Live! Petersburg, which opened January 22, has been “incredibly strong,” generating “a little bit over $15 million a month in each of the two months that that’s been open.” He said Bally’s Baton Rouge, which opened in December 2025, has shown a similar pattern with market expansion versus the prior riverboat facility.

Carlo Santarelli, SVP of corporate strategy and investor relations, added that GLPI’s first tribal investment with Ione opened in February and had a “very strong opening,” which he said appears to have grown the market.

On lease-level dynamics, Burke said the only lease GLPI does not currently expect to receive an escalation on is the Pinnacle lease. She said expected percentage rent adjustments on the Pinnacle lease and a few other leases should represent “a small decrease for 2026,” below $4 million on a full-year basis, with roughly half of that expected to impact 2026.

Addressing coverage questions around Caesars, Santarelli said Caesars master lease coverage was 1.59x for the quarter, which he described as “still a very fine, solid coverage.” He attributed some performance pressure to factors including “some hold in Atlantic City” and renovations at a property there, and said GLPI feels it has “our hands around that situation.”

Pipeline commentary, cap rates, and balance sheet funding approach

On the transaction environment, Ladany said GLPI is in “very active dialogue” on opportunities ranging from large-scale portfolio divestitures to ongoing tribal discussions, though he said the company was not in a position to announce anything.

He also said cap rates appear to be “normalizing” at levels “accretive” to GLPI, and suggested that recent 7.5% cap rates are “not indicative” of what he expects going forward. “I think…a regular way down the middle of the fairway transaction is going to go for right now…with an eight in front of it,” he said, while cautioning that each transaction is negotiated and the market can change.

Burke said GLPI ended the quarter with a leverage ratio of 5x, “at the low end of our target level.” In response to questions about funding the $1.8 billion pipeline, Burke noted the company has $275 million of cash not yet deployed and free cash flow “in the tune of $230 million or so per year,” as well as forward equity expected to settle June 1. Burke said management expects that after funding the remaining commitments and receiving the associated AFFO contribution, leverage should still be “at the low end of our 5x-5.5x” target range.

On longer-term growth visibility, Burke said she can “clearly see through 2027” but said results in 2028 and beyond will depend on future accretive transactions, beyond contractual escalators.

Management also addressed several investor topics during Q&A, including potential impacts from Chicago video gaming terminals (VLTs), prediction markets, the status of the Rockford loan (discussions ongoing), and questions about lease durability in the context of media speculation about Caesars. Moore said GLPI’s leases include “qualified or discretionary transferee” provisions, and he indicated that replacement guarantee requirements are among the conditions tied to any tenant transition, while also stating the company does not yet have visibility into transaction structures under discussion publicly.

Carlino closed the call by thanking participants and said the company would provide another update next quarter.

About Gaming and Leisure Properties NASDAQ: GLPI

Gaming and Leisure Properties, Inc NASDAQ: GLPI is a real estate investment trust (REIT) specializing in the ownership and management of gaming and entertainment properties. Established in 2013 as a spin-off from Penn National Gaming, the company was designed to acquire and hold real estate assets associated with casinos, racetracks and other gaming facilities, while leasing those assets back to operating partners under long-term, triple-net lease agreements.

The company's core activities involve identifying attractive gaming real estate, structuring lease agreements that align tenant incentives with property performance, and actively managing its portfolio to enhance asset value.

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