PENN Entertainment NASDAQ: PENN reported first-quarter 2026 results that management said were highlighted by year-over-year growth in retail segment adjusted EBITDA and a sharp improvement in the Interactive segment’s profitability, as the company executed on a “realigned” digital strategy and continued to ramp recent property investments.
Retail portfolio posts year-over-year EBITDA growth
CEO Jay Snowden said PENN’s “diversified retail portfolio delivered another solid quarter,” with retail segment adjusted EBITDA increasing year-over-year. He cited broad-based improvement in property performance, “with particular strength in the West segment,” driven by the continued ramp of M Resort’s new hotel tower and results at Ameristar Black Hawk.
In the Midwest, Snowden pointed to “strong revenue and EBITDA growth led by our properties in the St. Louis market,” along with continued momentum at the new Hollywood Joliet in Illinois.
CFO Felicia Hendrix reported Retail segment revenue of $1.4 billion and adjusted EBITDA of $471.4 million, representing an adjusted EBITDA margin of 33.2%. Hendrix noted results benefited from “a one-time favorable adjustment related to a legal accrual,” which “nets out to a $5 million benefit primarily in the South region.”
Snowden said company-wide increases in visitation and spend per visit supported year-over-year theoretical revenue growth across rated customer segments, which he called the Retail segment’s “largest quarterly increase in three years.” He added that April trends were “very much…a continuation of Q1,” despite higher gas prices and geopolitical uncertainty.
Development pipeline: near-term openings and longer-term project timing
Management reiterated its focus on development projects as a driver of growth, while stressing regulatory approvals remain a prerequisite for openings. Snowden highlighted upcoming projects, including:
- Hollywood Columbus hotel tower opening on June 12
- New Hollywood Casino Aurora opening on June 24
- New Council Bluffs property scheduled to open in 2028
Snowden repeated prior expectations that the company’s “four development projects will generate 15%+ cash-on-cash returns on our aggregate project cost of $800 million,” net of a $50 million contribution from the city of Aurora.
On Aurora, Hendrix said the legacy Aurora riverboat will be closed for about two weeks in the second quarter “due to regulatory requirements prior to opening” the new facility. Snowden later clarified the shutdown would occur “roughly” for two weeks in June, “literally right before we open,” with some timing possibly in late May but “entirely in the second quarter.”
Hendrix also lowered total 2026 capital spending guidance to $420 million from $445 million, including $200 million of project CapEx and $220 million of maintenance CapEx. She said the reduction in project spending reflects a timing shift into 2027 for the Council Bluffs relocation, with “no changes to scope or budget,” and completion still expected in 2028.
Interactive results improve; Alberta launch changes full-year outlook
Snowden said the Interactive segment delivered “significant adjusted EBITDA improvement of approximately $78 million year-over-year in Q1,” driven by nearly 15% iCasino revenue growth, approximately 5% online sports betting revenue growth, reduced marketing spend, and ongoing cost management.
Hendrix reported Interactive segment revenue of $358.3 million, including a $185.8 million tax gross-up, and an adjusted EBITDA loss of $10.8 million.
Management described the quarter as the first full period under its revised digital strategy, which Snowden said prioritizes U.S. iCasino states and Canada while operating under a more efficient cost structure. In Canada, management said Ontario continued to show positive year-over-year trends in average monthly active users and both sports betting and iCasino revenue, supported by the theScore Bet brand.
The company is preparing for regulated iCasino and online sports betting in Alberta, with a planned launch date of July 13. Snowden said theScore Bet has been approved as a registered iGaming operator by the Alberta Gaming, Liquor and Cannabis Commission (AGLC), and pre-registration has begun.
PENN expects the Alberta launch to result in a $20 million loss in 2026. Snowden said the shift from prior break-even expectations for 2026 Interactive adjusted EBITDA is “entirely attributable to this $20 million investment in Alberta,” adding that “outside of Alberta, our break-even interactive guide for the year is unchanged.” Hendrix updated 2026 Interactive guidance to approximately $1.6 billion in revenue (including an estimated $820 million tax gross-up) and an adjusted EBITDA loss of $20 million.
On quarterly cadence, Snowden said management expects Q2 Interactive performance “very similar to Q1,” with Q3 the “largest loss of the year” due to Alberta launch spending and Q4 profitability in the Interactive segment.
Balance sheet actions, leverage targets, and cash flow priorities
Hendrix outlined financing steps taken during and after the quarter as part of PENN’s deleveraging plan. In March, the company issued $600 million of unsecured notes due 2031 at 6.75% and used proceeds to repay revolver borrowings, ending the quarter with $1.7 billion of liquidity, including $708 million in cash and cash equivalents.
After quarter-end, PENN refinanced its $1 billion revolving credit facility and refinanced approximately $447 million of Term Loan A. Hendrix also said PENN expects to receive approximately $225 million in funding from Gaming and Leisure Properties, Inc. (GLPI) for the new Hollywood Casino Aurora in June, plus the remaining $21 million from the city of Aurora by year-end. She added PENN elected not to take GLPI capital in connection with construction of the Hollywood Casino Columbus hotel tower.
Hendrix said PENN expects to delever by “at least 1 full turn” on lease-adjusted net leverage and “at least 2 full turns” on traditional net leverage by year-end 2026, driven by free cash flow generation and optimized spending. She reiterated expectations for $1 billion in 2026 cash payments under triple net leases and projected $150 million of 2026 cash interest expense net of interest income. On taxes, she said PENN does not expect to be a cash taxpayer in 2026, citing favorable deductions under the “One Big Beautiful Bill,” acquired net operating losses, and tax credits.
Other themes: consumer backdrop, market structure, and regulatory issues
On consumer health, Snowden told analysts that regional gaming demand has historically correlated most closely with employment levels, which he said “continues to be a really good story in the U.S.” He also noted potential benefits from higher tax refunds and said most customers live within a 30-minute drive, making gas prices less likely to change visitation behavior materially.
In Illinois, Snowden said PENN does not expect meaningful impact from a bill allowing video gaming terminals (VGTs) in Chicago restaurants, given property locations in the suburbs. He added the company expects to participate in expanded VGT opportunities through its Prairie State Gaming route operation business, which he said has continued to grow.
Snowden also addressed unregulated “skill games,” saying PENN feels “better about where things sit in states like Pennsylvania and Missouri than we probably ever have.” He noted a Pennsylvania skill games case is expected before the Pennsylvania Supreme Court in the coming months, and he praised Missouri’s attorney general for enforcement efforts, adding that reduced skill game prevalence could become a retail tailwind if it develops as PENN hopes.
During Q&A, management confirmed PENN exited the Washington, D.C. online sports betting market due to limited volume there, while indicating no broader near-term plans to change its state footprint. On legislative discussions around potential tax increases in certain states, Snowden said it remains early, but that lawmakers have recognized “now would not be a good time” to raise taxes on incumbent operators amid competitive pressures such as prediction markets. He also said litigation is pending related to Maine iGaming legislation and that if implemented as proposed, PENN would invest “next to zero” in Maine going forward.
Snowden closed the call by reiterating that management is “laser-focused” on improving free cash flow, optimizing corporate overhead, and maintaining capital discipline, with the company expecting to provide further updates when it reports again in August.
About PENN Entertainment NASDAQ: PENN
PENN Entertainment, Inc NASDAQ: PENN is a leading operator of gaming and racing facilities in the United States. The company's business activities encompass land-based casinos, pari-mutuel racetracks, off-track wagering, and ancillary amenities such as hotels, restaurants and entertainment venues. In August 2022, the company rebranded from Penn National Gaming to PENN Entertainment to reflect its expanding footprint across digital and traditional segments of the gaming industry.
The company's portfolio includes well-known properties under the Hollywood Casino and Ameristar Casino brands, located across multiple states including Pennsylvania, Ohio, Missouri and West Virginia.
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