Red Rock Resorts NASDAQ: RRR executives highlighted what they described as another “strong quarter” in the company’s first-quarter 2026 earnings call, pointing to record first-quarter gaming revenue and continued momentum at its Durango property even as construction and broader macro noise created headwinds late in the period.
Stephen Cootey, executive vice president, chief financial officer, and treasurer, said Las Vegas operations posted the highest first-quarter net revenue and the second-highest first-quarter adjusted EBITDA in company history while maintaining a near-record adjusted EBITDA margin. He said results came “despite several headwinds later in the quarter, including higher gas prices, air travel-related disruption, and temporary construction impacts at and around several of our properties.”
First-quarter results and operating trends
For Las Vegas operations, Cootey reported first-quarter net revenue of $499.5 million, up 0.9% year over year, and adjusted EBITDA of $232.4 million, down 1.5%. Adjusted EBITDA margin was 46.5%, down 113 basis points from the prior year.
On a consolidated basis, including the North Fork project, net revenue was $507.3 million, up 1.9%, and adjusted EBITDA was $212.6 million, down 1.2%. Consolidated adjusted EBITDA margin was 41.9%, down 129 basis points.
Cootey said the company converted 50.3% of adjusted EBITDA into operating free cash flow, generating $107 million, or $1.03 per share. He said the cash flow supported capital projects at Durango, Sunset Station, and Green Valley Ranch, as well as dividends and share repurchases.
Management said gaming was driven by “robust spend per visit and Net Theoretical Win” across local, regional, and national customer segments, contributing to what Cootey called the “highest first-quarter gaming revenue and profitability in the company’s history.” He also noted continued strength in cardless slot play “across the majority of our database.”
Non-gaming performance also contributed. Cootey said hotel and food and beverage delivered “near-record” revenue and profitability, even with room nights offline at Green Valley Ranch due to renovations. Food and beverage posted the “second-best first-quarter revenue” and “third-best first-quarter profit” in company history, supported by higher cover counts and higher average guest checks. Group sales and catering produced the “third-highest first-quarter revenue” in company history, and the company said trends excluding Green Valley Ranch room-night losses were positive into the first half of 2026.
Durango expansion and 2027 growth plans
Cootey said the company remained “very pleased” with Durango’s performance and the “successful revenue backfill at our core properties,” describing Durango as expanding the Las Vegas locals market and driving incremental play from existing customers.
He said that following a December expansion—adding more than 25,000 square feet of casino space, a high-limit slot area, and nearly 2,000 covered parking spaces—the company continued to see strong results and guest feedback. Scott Kreeger added that early results from the expansion were “confirming the thesis that continued capital investment in Durango is a good thing,” citing an increase in Net Theo in what management calls the “Durango Zone.”
Red Rock is also advancing the Durango North expansion, which Cootey said will add more than 275,000 square feet along the north side of the property, including nearly 400 additional slot machines and new amenities such as:
- A 36-lane bowling facility
- Luxury movie theaters
- New dining and entertainment venues, including a partnership with Moonshine Flats
The project is scheduled to open in summer 2027, with an estimated total cost of approximately $385 million, Cootey said.
On expected construction impacts, Cootey told analysts that Durango experienced “significant traffic disruption” in the first quarter but said the team managed through it. Looking ahead, he said the company expects $2 million to $3 million of disruption starting next quarter, and that estimate “sticks pretty much through the summer to the completion of the project.”
Renovations at Sunset Station and Green Valley Ranch
Red Rock executives provided updates on major renovations across the portfolio. At Sunset Station, Cootey said a $53 million podium refresh is underway and includes a new country-western bar and nightclub, a new Mexican restaurant, a new center bar, and a fully renovated casino floor. He said feedback and performance from completed portions have been encouraging, and that the project remains on budget. Cootey said the Gaudi Bar is expected to reopen “in the coming weeks,” with remaining amenities expected to come online throughout 2026.
Red Rock is also advancing an additional phase at Sunset Station, with an estimated cost of approximately $87 million. Cootey said this phase includes a comprehensive casino refresh, movie theater expansion and enhancement, a bingo relocation to a permanent space, and conversion of the former buffet into a new Highland Steakhouse and a high-limit table games room. Work is expected to begin this quarter, with additional work in the back half of 2026 extending into 2027.
At Green Valley Ranch, Cootey said the company is progressing on a refresh of guest rooms, suites, and convention spaces. Renovations to the west tower and convention areas are complete and have reopened, and management said results and reviews have been encouraging despite ongoing disruption. Renovations to the east tower are expected to extend into late summer 2026; during Q&A, Cootey said the final rooms and suite product are expected to be delivered in mid-September.
The next phase at Green Valley Ranch—estimated at approximately $56 million—is underway and expected to extend into 2027, Cootey said, and includes a refreshed casino floor and upgraded food and beverage and entertainment offerings.
Disruption, margins, balance sheet, and shareholder returns
During Q&A, management addressed the year-over-year EBITDA margin decline. Cootey said the company “feels very comfortable” with margin structure and noted that Las Vegas operations were above 45% in 21 of the last 23 quarters since COVID. He attributed “the majority” of the margin degradation to Green Valley Ranch hotel disruption—“almost half” of it—along with elevated utilities costs and loss and damages. He added that payroll was up “a little under 3%,” while cost (another major line item) was “flat to down.”
Looking to the second quarter, Cootey said trends were stable and consistent with typical seasonality. He said Q1 is generally the peak quarter, and that results typically decline 8% to 9% from Q1 to Q2. He also quantified expected disruption, saying the company expects another $9 million of disruption at Green Valley Ranch in Q2 due to construction delays, and an incremental $2 million to $3 million of disruption beginning next quarter tied to Durango construction activity. Cootey said first-quarter disruption at Green Valley Ranch came in “pretty much spot on $9 million,” while Durango had only a marginal impact despite traffic issues.
On macro concerns raised by analysts, management said it had not seen a measurable hit from higher gas prices and described TSA-related travel disruption as “de minimis,” noting that while most hotel guests are out of town, the majority are driving from regional states. Cootey also said April was tracking to be “one of the best Aprils on record.”
Red Rock ended the first quarter with $134 million in cash and cash equivalents and $3.6 billion of total principal debt outstanding, resulting in net debt of $3.4 billion. Net debt to EBITDA was 4.07 times. In a discussion on leverage tolerance, management said it prefers to maintain leverage “around 4,” but for the “right opportunities” would allow leverage to spike higher during construction; executives said they begin to get “a little concerned” once leverage goes above 5 times.
During the quarter, the company made total distributions of approximately $139.9 million to Station Holdco LLC unit holders, including about $82.1 million to Red Rock Resorts. Cootey said the company used its portion to fund a $1.00 special dividend per Class A share, a $0.26 quarterly dividend per Class A share, and repurchased about 635,000 Class A shares at an average price of $60.32 under its $900 million authorization, reducing total shares outstanding to approximately 104.4 million. In total, he said the company returned about $170.5 million to shareholders through dividends and repurchases.
The board also declared a regular cash dividend of $0.26 per Class A share, payable June 30 to shareholders of record as of June 15, Cootey said.
Capital expenditures were $117.2 million in the quarter, including $87.2 million of investment capital and $30 million of maintenance capital. For full-year 2026, the company expects capital spending between $375 million and $425 million, including $275 million to $300 million of investment capital and $100 million to $125 million of maintenance capital.
On North Fork, Cootey said construction continues, permanent power is in place, and the company is working toward turnover of the first phase of the casino floor in late June, keeping the project “on pace for an early fourth quarter 2026 open.” Total all-in cost remains approximately $750 million and is “fully financed,” he said. As of quarter-end, Red Rock’s outstanding note balance due from the tribe was approximately $80.6 million. Executives said they expect the property to be profitable from day one, but that it could take roughly 1.5 to 2 years to ramp to a stabilized level; management reiterated that at stabilization it is “about a $40 million-$50 million revenue product.”
In other forward-looking commentary, Lorenzo Fertitta said the company is evaluating potential additions at Durango including rooms, a spa, and meeting space, and is “actively working on 2 additional new greenfield projects,” though he said there is “nothing to announce” currently. He said management expects “more visibility” into development plans as it moves into next year.
About Red Rock Resorts NASDAQ: RRR
Red Rock Resorts, Inc NASDAQ: RRR is a publicly traded gaming and hospitality company headquartered in Summerlin, Nevada. The company owns and operates a diversified portfolio of full-service casino resorts and neighborhood gaming properties in the Las Vegas valley. Its core business activities include resort hotel accommodations, casino gaming, food and beverage operations, entertainment and convention services designed to meet the needs of both leisure and business travelers.
The company's flagship resort, Red Rock Casino Resort & Spa, features a full range of table games, slot machines, a luxury spa, convention space, multiple signature restaurants and live entertainment venues.
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