MGM Resorts International Q2 Earnings Call Highlights

Key Points

• MGM reported record consolidated net revenue in Q2, supported by Las Vegas Strip growth, record same-store regional casino revenue and 20% year-over-year growth at MGM Digital. Group and convention business reached 20% of Las Vegas room mix, while luxury properties remained strong.
• Macau operations recovered after a temporary June slowdown, with MGM China retaining a 16.4% market share and July volumes returning to or exceeding first-quarter levels. Regional casinos also posted record same-store results, led by properties including Borgata and Empire City.
• MGM Digital continued expanding despite a $31 million quarterly EBITDA loss, while the Osaka integrated resort remains on schedule and on budget for a fall 2030 opening. MGM also repurchased approximately 4.3 million shares for $164 million during the quarter, and its board is evaluating a proposal from People Incorporated.

MGM Resorts International NYSE: MGM said its second-quarter momentum was supported by record consolidated net revenue, continued growth at its Las Vegas Strip properties, record same-store regional revenue and 20% year-over-year revenue growth at MGM Digital.

Chief Executive Officer and President Bill Hornbuckle said the company’s board continues to evaluate an offer from People Incorporated through a special committee of independent directors. Hornbuckle said he and Chief Financial Officer Jonathan Halkyard would not address the proposal during the question-and-answer session.

Hornbuckle said the company entered the second half with positive momentum across Las Vegas, regional casinos, Macau and digital operations, while construction of its Osaka integrated resort remains on schedule for a fall 2030 opening.

Las Vegas revenue and group business supported results

In Las Vegas, MGM reported year-over-year growth in both net revenue and segment adjusted EBITDA during the second quarter. Halkyard said Strip-resort EBITDA was up $25 million year to date, primarily reflecting a recovery at MGM Grand following room renovations and a favorable hold benefit.

Group and convention business accounted for 20% of MGM’s room mix during the quarter, keeping the company on pace for that segment to represent 20% of full-year room mix, Hornbuckle said. Technology and hospitality corporate groups, business-to-business trade shows and professional association meetings helped drive the company’s highest second-quarter convention average daily rate, as well as record catering and banquet revenue.

Hornbuckle said April and May were strong, with May benefiting from events and other activity. June was more challenging as summer conditions intensified, though July had been favorable. MGM expects a solid third quarter supported by group business and a larger citywide event calendar, while Hornbuckle said the company has “some work to do” in the fourth quarter.

Chief Operating Officer Ayesha Molino said luxury properties and the group segment remained strong, while the lower end of MGM’s Las Vegas portfolio, particularly Luxor and Excalibur, remained challenged but had stabilized.

MGM’s all-inclusive offering at Luxor and Excalibur has booked more than 30,000 room nights since its launch four months ago, according to Hornbuckle. Nearly half of guests booking the offer were first-time MGM visitors. Molino said the package has supported occupancy, generated higher weekend rates, and delivered a favorable margin profile.

The company is also seeking to draw more local customers to Park MGM through food-and-beverage, parking and free-play offers. Molino cited the resort’s proximity to T-Mobile Arena and Dolby Live, its nonsmoking positioning and its existing local high-end gaming business as factors supporting that effort.

Luxury investment plans remain within current capital framework

MGM plans further upgrades to its Las Vegas luxury offerings, including work at Bellagio’s convention and public spaces, potential additional villas, and future room renovations at Aria and The Cosmopolitan. Hornbuckle said the company also sees opportunities to build on the activation of Bellagio’s Lakeside area.

Halkyard said MGM can complete significant renovations within the level of capital expenditures it has maintained over the past several years. Projects that expand the company’s physical footprint or add capacity would likely require capital spending above that base level.

“Las Vegas is our home,” Hornbuckle said, describing the market as the epicenter of gaming and saying MGM intends to continue investing in luxury experiences where returns justify it.

MGM is also preparing to host the Players Era Basketball Tournament in November across Mandalay Bay’s Michelob Ultra Arena and T-Mobile Arena. The tournament will include 24 collegiate basketball programs and will be televised on ESPN networks.

Regional casinos set same-store records

MGM’s regional operations produced their best quarterly revenue on a same-store basis, with same-store slot handle rising 4% and slot win increasing 3%, Halkyard said. Several properties posted record revenue during the period, including Empire City, which increased gross gaming revenue in June despite new competition in New York state.

Borgata was a major contributor to record same-store casino revenue and slot win, supported by improvements to high-limit gaming areas. MGM plans to enhance premium lounges at Beau Rivage and Borgata and begin room renovations at Borgata before year-end.

Hornbuckle also pointed to the planned Sphere venue near MGM National Harbor as a potential demand driver. He said projections call for approximately 2.5 million visitors at the roughly 6,500-seat venue and that MGM expects to capture demand given its location next to the property.

Macau volumes recovered following World Cup disruption

MGM China maintained a 16.4% market share in the second quarter, up one percentage point sequentially. While Macau volumes declined during June amid World Cup activity, company executives said the weakness was temporary.

Kenneth Feng, CEO of MGM China Holdings, said business volumes and visitation improved beginning in the second week of July. He said Macau gaming revenue had recovered to nearly first-quarter levels in the prior week, while MGM’s property visitation and normalized gross gaming revenue had exceeded first-quarter levels.

Feng said MGM’s strategy in Macau centers on optimizing the yield of its gaming floors through a combination of products, service, innovation and promotions rather than promotions alone. The company recently completed suite conversions and expanded premium gaming space at MGM Cotai, and it has begun design work for about 100 suites at MGM Macau.

Digital operations grow as Osaka construction advances

MGM Digital generated 20% revenue growth in the quarter and recorded segment adjusted EBITDA losses of $31 million. Halkyard said the company expects MGM Digital’s full-year EBITDA loss to be lower than last year’s as it calibrates its Brazil operations.

Gary Fritz, chief commercial officer and president of MGM Digital, said MGM’s European LeoVegas and BetMGM-branded businesses are positioned for operating leverage and potentially substantial profitability in 2027. MGM expects those operations to help fund some future growth investments, particularly in Brazil.

At the BetMGM North America venture, MGM said iGaming revenue grew 8% in the second quarter. During the first half, handle per active customer rose 7% and net gaming revenue per active customer increased 9% in iGaming. In online sports betting, handle per active customer increased 18% and net gaming revenue per active customer rose 17%.

In Japan, MGM expects its Osaka funding commitment for the second half of 2026 to be approximately $125 million to $175 million. The company has spent about $600 million to date and expects to deploy roughly $1 billion in each of 2027 and 2028, completing its capital commitments. More than 60% of foundation piles have been completed, and MGM said the project remains on time and on budget.

During the quarter, MGM repurchased about 4.3 million shares for $164 million. Halkyard said the company has reduced its share count by nearly 50% over the past five years.

About MGM Resorts International (NYSE:MGM)

MGM Resorts International is a leading global hospitality and entertainment company that develops, owns and operates destination resorts, hotels and casinos. Its properties feature integrated gaming floors alongside luxury accommodations, fine dining and retail outlets, live entertainment venues and convention facilities. The company also offers loyalty programs, sports betting and digital gaming experiences to enhance guest engagement and drive repeat visitation.

The company traces its heritage to the opening of the original MGM Grand Hotel & Casino on the Las Vegas Strip in 1973.

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