VICI Properties Q2 Earnings Call Highlights

Key Points

• VICI’s Q2 AFFO rose 4.6% year over year to $0.62 per share, and the company raised the low end of its 2026 AFFO-per-share guidance to $2.45–$2.47, implying 3.4% growth at the midpoint.
• The REIT ended the quarter with $17.2 billion of debt, leverage of approximately 4.9 times annualized adjusted EBITDA and $2.5 billion of liquidity, remaining below its target leverage range.
• VICI expanded into new investment areas through its first Club Med and Caribbean transaction, funding a $20 million resort acquisition and approximately $55 million redevelopment, while continuing to pursue gaming, hospitality and sports-related opportunities.

VICI Properties NYSE: VICI reported second-quarter adjusted funds from operations, or AFFO, of $0.62 per share, up 4.6% from $0.60 a year earlier, while raising the low end of its full-year 2026 AFFO-per-share guidance.

The experiential real estate investment trust said it now expects 2026 AFFO of $2.675 billion to $2.695 billion, or $2.45 to $2.47 per diluted common share. The updated range increased the low end of prior per-share guidance by $0.01. At the midpoint, the company expects year-over-year AFFO-per-share growth of 3.4%.

Chief Financial Officer David Kieske said the company had $17.2 billion of total debt as of June 30 and net debt to annualized second-quarter adjusted EBITDA of about 4.9 times, below its stated target leverage range of 5 times to 5.5 times. VICI reported approximately $2.5 billion of liquidity, consisting of $288 million of cash and $2.2 billion available under its revolving credit facility.

Club Med Deal Marks New Investment Areas

VICI highlighted its new partnership with Club Med, which involves the acquisition and redevelopment of the Carambola Beach Resort in St. Croix. The transaction represents VICI’s first build-to-suit investment and its first property acquisition in the Caribbean, President and Chief Operating Officer John Payne said.

At closing, VICI funded the $20 million acquisition of the resort property and will fund Club Med’s approximately $55 million redevelopment. Club Med is expected to operate the site under its premium Exclusive Collection brand, with a targeted opening in the fourth quarter of 2027.

Chief Executive Officer Ed Pitoniak said the company views its initial investments with new operators as foundations for potentially broader relationships. He noted that Club Med has stated a goal of expanding its portfolio from 60 to 100 destinations over the next several years.

“When we make a first investment with a new partner, we are highly focused on the foundation we are building for potential future investment,” Pitoniak said.

The company also completed several previously announced transactions during the quarter, including:

• A $1.16 billion sale-leaseback transaction with Golden Entertainment.
• The commencement of a new lease with Clairvest at Northfield Park.
• The acquisition of Gamehost real estate in Alberta for approximately CAD 200 million alongside existing partner PURE.

Payne said the transactions added Clairvest, Golden Entertainment and Club Med as VICI’s 14th, 15th and 16th tenants, respectively.

Las Vegas and Regional Gaming Trends

Management said Las Vegas Strip gaming revenue was running ahead of the prior year on a year-to-date basis, while room rates continued to demonstrate the market’s pricing power. Payne pointed to demand from entertainment, professional sports, conventions and potential future developments, including the prospect of an NBA franchise.

VICI owns nearly 6 million square feet of conference, convention and trade-show space on the Strip, according to Payne. He said Las Vegas’ convention business has continued to strengthen, citing a recent U.S. News & World Report ranking that named Las Vegas the top convention city in the U.S. and The Venetian the highest-ranked conference hotel on its list.

During the question-and-answer session, management also discussed a potential arena development on 50 acres of land behind Paris Las Vegas, Horseshoe Las Vegas and Planet Hollywood that VICI owns in conjunction with Caesars Entertainment. Payne said VICI is working with Caesars on a plan that could accommodate an arena for a potential NBA team.

Pitoniak added that MGM Resorts International reported 93% occupancy at its Strip properties during the second quarter, and said the company had achieved positive results from promotional all-inclusive packages at Luxor and Excalibur.

On regional gaming, Payne described the market as resilient and said there had been “an amazing rebound” over the past six months. He cited innovation in slot products and operators’ efforts to refresh customer offerings, rewards programs, service and entertainment.

Payne said VICI expects to review selected assets after Churchill Downs disclosed plans to sell its regional gaming portfolio. He also said some current VICI tenants may be interested in those assets.

Capital Allocation and Tenant Monitoring

Asked about potential share repurchases, Kieske said VICI sees more attractive opportunities in property and loan investments. He cited the company’s One Beverly Hills loan, priced at SOFR plus 825 basis points, and said VICI’s loan book carries a yield of nearly 9.5%.

“We can find much more attractive uses of that free cash flow,” Kieske said, adding that recently completed investments, including the Club Med transaction, offered attractive returns.

Management said the company continues to assess sports infrastructure opportunities involving universities, though no transaction has been announced. Payne said the process has been educational and relationship-driven, while Gabe Wasserman, managing director of business development and VECS, said universities have focused in part on ensuring financing structures do not affect their balance sheets or credit ratings.

VICI also addressed monitoring of private tenants. Kieske said gaming operators provide more transparency than many traditional net-lease tenants because of state-level monthly reporting, often at the property or regional level. Wasserman said VICI receives property-level financials from all borrowers and tenants and reviews every lease and loan investment quarterly.

Separately, Wasserman said VICI modified a $90 million senior secured loan collateralized by a leisure and hospitality asset during the quarter. The company extended the loan’s maturity and reduced its interest rate to 2% as the asset continues to ramp. In exchange, VICI received additional collateral and will receive borrower amortization payments. Wasserman said the loan is separate from a previously disclosed loan that was placed on non-accrual status in the fourth quarter of 2025.

About VICI Properties (NYSE:VICI)

VICI Properties NYSE: VICI is a publicly traded real estate investment trust (REIT) that specializes in experiential real estate, with a primary focus on gaming, hospitality and entertainment assets. The company acquires, owns and manages a portfolio of destination properties and leases those assets to operators under long-term agreements, generating rental income and partnering on property development and capital projects. VICI was formed in connection with the restructuring of Caesars Entertainment and has since grown through acquisitions and strategic transactions to expand its footprint in the gaming and leisure sector.

The company's portfolio is concentrated in major U.S.

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