Earnings call transcript: Boyd Gaming’s Q2 2025 Sees Revenue Growth and Strategic Moves

Boyd Gaming Corporation (BYD) reported a 4% increase in revenue for the second quarter of 2025, reaching $358 million, continuing its impressive 6.4% revenue growth over the last twelve months. The company’s strategic sale of a 5% stake in FanDuel for $1.755 billion was a significant highlight, contributing to its financial strength. With a market capitalization of $6.7 billion and maintaining industry-leading gross profit margins of 61.3%, Boyd Gaming has demonstrated robust operational efficiency. Despite these positive developments, Boyd Gaming’s stock experienced a slight premarket dip of 0.6% to $81.62, following its last close at $82.11. According to InvestingPro analysis, the stock currently trades at an attractive P/E ratio of 12.9x.

Key Takeaways

• Revenue increased by 4% to $358 million in Q2.
• Boyd Gaming sold a 5% stake in FanDuel for $1.755 billion.
• Property-level margins remained above 40%.
• Premarket stock price decreased by 0.6%.
• Continued investments in property improvements and new developments.

Company Performance

Boyd Gaming’s performance in the second quarter of 2025 was marked by solid revenue growth and strategic financial maneuvers. The company reported a 4% increase in revenue compared to the same quarter last year, reflecting strong operational execution. The sale of its FanDuel stake for a substantial sum further bolstered its financial position, allowing the company to reduce leverage significantly. InvestingPro data reveals that three analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s trajectory. Subscribers to InvestingPro can access 12 additional exclusive insights about Boyd Gaming’s financial health and growth prospects.

Financial Highlights

• Revenue: $358 million, up 4% year-over-year.
• Property-level margins: consistently over 40%.
• EBITDAR increased by 4%.
• Sale of FanDuel stake: $1.755 billion, with after-tax proceeds of approximately $1.4 billion.

Outlook & Guidance

Boyd Gaming has outlined an optimistic outlook, with plans to increase quarterly share repurchases to $150 million, continuing management’s aggressive share buyback strategy. The company projects $50-55 million in EBITDAR from its online segment for 2025 and anticipates total capital expenditures of $600-650 million for the year. These investments will focus on property improvements and new developments, including ongoing renovations and new casino projects. The company’s strong financial position is reflected in its impressive EBITDA of $1.24 billion over the last twelve months. For detailed analysis and comprehensive valuation metrics, investors can access Boyd Gaming’s full Pro Research Report, available exclusively on InvestingPro.

Executive Commentary

Keith Smith, CEO of Boyd Gaming, highlighted the company’s strategic achievements, stating, "We’ve created nearly $2 billion in value for our shareholders, all from a $10 million investment." CFO Josh Hirsberg emphasized the company’s robust financial position, noting, "We’re in a much better position than the company has ever been in to deal with any kind of uncertainty."

Risks and Challenges

• Potential tax bill impacts could affect profitability.
• Lower summer room rates compared to the previous year may influence revenue.
• The broader economic environment and employment trends in Southern Nevada could impact future performance.

Q&A

During the earnings call, analysts inquired about the rationale behind the FanDuel transaction, Boyd Gaming’s leverage strategy, and the company’s promotional environment. Executives confirmed a stable promotional landscape and highlighted improvements in unrated customer play, addressing potential concerns about future tax obligations.

Full transcript - Boyd Gaming Corp (BYD) Q2 2025:

David Strow, Vice President of Corporate Communications, Boyd Gaming: Good afternoon and welcome to the Boyd Gaming second quarter 2025 earnings conference call. My name is David Strow, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today’s call, which we are hosting on Thursday, July 24, 2025. At this time, all lines are in listen-only mode. Following our remarks, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star then zero for the operator. Our speakers for today’s call are Keith Smith, President and Chief Executive Officer, and Josh Hirsberg, Executive Vice President and Chief Financial Officer. Our comments today will include statements that are forward-looking statements within the Private Securities Litigation Reform Act. All forward-looking statements in our comments are as of today’s date, and we undertake no obligation to update or revise the forward-looking statements.

Actual results may differ materially from those projected in any forward-looking statements. There are certain risks and uncertainties, including those disclosed in our filings with the SEC, that may impact our results. During our call today, we will make reference to non-GAAP financial measures. For a complete reconciliation of historical non-GAAP to GAAP financial measures, please refer to our earnings press release and our Form 8-K furnished to the SEC today, both of which are available at investors.com.

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: We.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project special charges and certain expenses. Today’s call is being webcast live at boydgaming.com and will be available for replay in the Investor Relations section of our website shortly after the completion of this call. I would now like to turn the call over to Keith Smith.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: Keith, thanks David, and good afternoon everyone. Before discussing our second quarter results, let me first touch on our recent FanDuel announcement. We announced two weeks ago we reached an agreement to sell our 5% equity interest in FanDuel to Flutter Entertainment for $1.755 billion in cash, unlocking the significant value that we have created through our partnership with FanDuel. As part of this transaction, we extended our market access agreements with FanDuel through 2038 and adjust our market access rates. We expect this transaction to close and to receive the proceeds in the next several weeks. The net proceeds will be used to pay down debt, reducing our leverage below 2x.

As a result of this transaction, our company is in an even stronger financial position to continue executing our strategy of investing in our properties, pursuing attractive growth opportunities, returning capital to shareholders, and maintaining a strong balance sheet. Consistent with our focus over the last several years, now moving on to second quarter results, we delivered a strong performance in the second quarter. For the quarter, revenues excluding tax pass-through amounts grew 4% while EBITDAR also increased 4% to $358 million. These results were driven by broad-based growth across our operating segments, including both our online and managed segments, demonstrating the value of our diversified business model. On a property-level basis year over year, revenue and EBITDAR growth was the strongest in more than three years while property-level margins once again exceeded 40%, a level we have consistently delivered since 2021.

Across the portfolio, our results were supported by continued strength in play from our core customers as well as improving trends among retail customers. Turning to segment results, the Las Vegas Locals segment had a strong quarter, delivering its first year-over-year revenue and EBITDA growth in more than two years while maintaining segment margins of nearly 50%. This performance was led by growth in play from our core customers as well as continued improvements in retail play. Growth in play among our local guests more than offset softness in play from.

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: Our out-of-town customers.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: While the Las Vegas Strip has recently seen softer demand trends, there are signs of continued strength in the local economy. In Southern Nevada, employment continues to grow while local income is increasing with average weekly wages up more than 5% over the prior year, well above the national average. Southern Nevada’s cost of living remains below the national average, ranking among the most affordable of the nation’s 30 largest metropolitan areas. Las Vegas Valley has nearly $11 billion in construction activity currently underway, reflecting continued strength in this critical economic sector. The recent tax bill passed by Congress includes several provisions that will benefit both our Southern Nevada operations and our Midwest and South operations. These provisions include tax deduction for tips and overtime, a new deduction for seniors, and a larger standard deduction for taxpayers.

Given these positive factors, we remain confident in the prospects for the Southern Nevada economy and in the future of our locals business. Next, our Downtown Las Vegas segment delivered a solid quarterly performance against a challenging prior year comparison. As you may recall, last year’s second quarter benefited from significant pent up demand from our Hawaiian customers who did not visit in the first quarter of last year due to higher airfares related to Super Bowl. Importantly, the underlying performance of our downtown business remains stable through the first six months of the year. Both revenue and EBITDAR in the downtown segment were up more than 1% over the prior year. Next, our Midwest and South segment, which was impacted by both flood related closures and the shift of Easter into April, delivered revenue and EBITDAR gains of more than 3%.

This marked the segment’s highest quarterly revenue and EBITDAR in nearly three years. Growth in this segment was led by continued strong performance at Treasure Chest Casino, which marked its one year anniversary on June 6. Similar to the Las Vegas Locals segment, we continued to see strength in play from our core customers during the second quarter while play from retail customers also improved. Next, in our online segment, both revenues and EBITDA are increased, driven by Boyd Interactive and modest growth from our market access agreements. Finally, our managed business continues its strong performance with ongoing growth in management fees from Sky River Casino.

Given Sky River’s ongoing success, we remain optimistic about the future potential of the expansion currently underway at this property. The first phase of this expansion, set for completion early next year, will address the need for more gaming capacity by adding 400 slot machines as well as a 1,600-space parking garage. The second phase will further diversify Sky River’s offerings with a 300-room hotel, three new food and beverage outlets, a full-service resort spa, and an entertainment and event center. Once complete in mid-2027, this expansion will further strengthen Sky River’s position as one of Northern California’s leading gaming entertainment destinations. In all, we delivered strong results in the second quarter reflecting the strength of our customer base, the quality of our property amenities, and the benefits of our diversified business.

Moving next to our capital investment program, we continued our work in the second quarter highlighted by hotel renovations at several of our properties as well as the ongoing improvements at the Suncoast Casino. During the quarter, we completed a hotel room renovation at Valley Forge Hotel and continue to work on our room renovation project at the IP Hotel, and we plan to start hotel renovations at the Orleans Hotel in the coming months. In addition, our property-wide renovation of the Suncoast Casino is continuing and is now in its most disruptive stage with large portions of the casino floor under renovation. We are on track to complete the Suncoast Casino renovations in the first quarter of next year, and given the strong response we’ve already seen to the new amenities we recently added, we are confident in the long-term potential of this project.

Beyond property enhancements, we have several projects underway to strengthen the long-term growth profile of our business. These investments are part of our $100 million in annual recurring growth capital in Missouri. We are on track for a late August completion of our meeting and convention center at Ameristar St. Charles. We expect this project to drive strong returns given the encouraging pre-bookings that the property has already secured for the new space. Importantly, more than 90% of these pre-bookings are from entirely new customers, a strong indication that this project will further expand Ameristar St. Charles’ customer base and drive incremental growth at the property. Also, work is progressing on our Cadence Crossing Casino in Southern Nevada. The adjacent community of Cadence is one of the fastest growing master plan communities in the nation, creating a compelling long term growth opportunity for our company.

On track to open in mid-2026, Cadence Crossing will replace our existing Joker’s Wild casino with a modern gaming entertainment facility designed to appeal to the thousands of new residents throughout the area. We are well positioned to keep pace with continued residential growth in the area with future plans for a hotel, additional casino space, and more non gaming amenities. Beyond these investments, we’re developing plans for the next phase of projects to further strengthen our long term growth profile. In Illinois, we’re working through the final design and regulatory approval process for a modern new entertainment facility that will replace our existing riverboat casino at Paradise. Assuming regulatory approvals are received later this year, we expect this project to begin in 2026.

In Norfolk, we are on track to open our transitional casino in November of this year while construction is progressing on our $750 million permanent resort, which is scheduled to open in late 2027. Once complete, this resort will include a 65,000 square foot casino, a 200 room hotel, eight food and beverage outlets, live entertainment, and an outdoor amenity deck. In addition to being the leading gaming resort in the market, our property will be the most convenient gaming destination for much of the Hampton Roads metropolitan area, one of the largest underserved markets in the Mid Atlantic region with nearly 1.8 million people. We also expect to draw tourists from nearby Virginia Beach, a destination that attracts nearly 15 million visitors each year.

By offering a best in market experience with compelling amenities and easy access, we believe our Norfolk resort will deliver strong returns for our company in the coming years. In all, our capital investment program is an important part of driving growth and creating long term shareholder value. At the same time, we are investing in our properties and developing projects to support our long term growth. We remain committed to returning capital to our shareholders. During the second quarter, we repurchased $105 million in stock and paid $15 million in dividends. Since we began our capital return program in 2021, we’ve returned nearly $2.4 billion to our shareholders, and with the recent FanDuel transaction, we have increased flexibility to continue our capital return program.

As a result, we plan to increase our target for share repurchases from $100 million per quarter to $150 million per quarter starting with the third quarter. While the proceeds from this transaction will initially be used to reduce debt, our proven track record of making smart capital allocation decisions gives us confidence in our ability to deploy these proceeds toward attractive, higher returning investments in the future. In closing, the combination of an attractive growth pipeline, ongoing property investment, a strong financial position, and our ability to deliver consistent results all position us well to continue creating long-term shareholder value. Before I turn the call over to Josh, I want to thank our team members who are key to our ongoing success every day. They provide our guests with memorable and distinctive service, providing a unique experience that builds loyalty to our brand. Thank you for your time today.

I would now like to turn the call over to Josh.

Thanks, Keith.

Good afternoon everyone. In light of our recently announced transaction to sell our 5% interest in FanDuel to Flutter, I wanted to take a few moments to review the financial impacts for our company. This transaction further enhances our financial flexibility, strengthens our already strong balance sheet, and is accretive to free cash flow. As Keith noted, we expect to receive $1.755 billion in total proceeds in the next several weeks. We estimate after-tax proceeds of approximately $1.4 billion, or more than $17 per share. Initially, we intend to use the proceeds to completely repay the debt outstanding under our credit facility. Total leverage at the end of the second quarter was approximately 2.8 times, or 3.2 times on a lease-adjusted basis. Pro forma for this transaction, we estimate leverage will be reduced by approximately one turn as a result of reduced debt balances.

We estimate interest expense savings of approximately $85 million on an annualized basis. As noted in our press release announcing the FanDuel transaction, our future results will reflect the economics of the new market access agreements, which are effective July 1st pending regulatory approvals. We estimate our online segment will generate $50 to $55 million in EBITDAR for the full year 2025, followed by $30 million in EBITDAR in 2026. To summarize the impacts of this transaction, leverage is lower. Our market access agreements are extended through 2038 with a reduced fee structure. Free cash flow has increased and we are in an even stronger position to execute our strategy now. Let’s take a few moments to review the second quarter. The results for the quarter were strong across the company, growing revenue and EBITDAR, while property-level margins were once again 40%.

Property-level margins have consistently remained at or above this level, a reflection of our continued focus on maintaining operating efficiencies. During the quarter, we continued to see strength in play from our core customers and improving trends in play from our retail customers. Tax pass-through amount for our online segment was $134 million during the second quarter compared to $104 million in the year-ago period. Excluding the tax pass-through amount for this quarter, companywide margins for the second quarter this year would have been 515 basis points above the margin we reported. With respect to capital expenditures, we invested $124 million in capital during the second quarter, bringing year to date capital expenditures to $251 million. We continue to project total capital expenditures for the full year of $600 million to $650 million.

These capital plans include approximately $250 million in maintenance capital, $100 million related to our hotel room projects at IP Hotel, Valley Forge Hotel, and the Orleans Hotel, $100 million in growth capital for the meeting and convention space at Ameristar St. Charles and the new Cadence Crossing Casino development here in Las Vegas, and finally $150 million to $200 million for our casino development in Virginia. In terms of our shareholder capital return program, we paid a regular quarterly dividend of $0.18 per share during the second quarter, totaling $15 million. Also during the quarter, we repurchased $105 million in stock, acquiring 1.5 million shares at an average price of $70.94 per share. Actual shares outstanding at the end of the quarter were 80.5 million shares. Year to date, we have repurchased 5.9 million shares at an average price of $72.98 per share.

As Keith noted earlier, we intend to increase our share repurchase program to $150 million per quarter, supplemented by our regular quarterly dividend. Considering this higher rate of repurchase activity, in conjunction with our quarterly dividend going forward, our annual run rate of capital returns to shareholders are expected to total approximately $700 million, or about $9 per share. Since we began our capital return program in October 2021, we have returned nearly $2.4 billion in the form of share repurchases and dividends, while reducing our share count by 28%. Following the end of the second quarter, our Board of Directors approved an additional $500 million share repurchase authorization, providing the company a total repurchase authorization of $707 million.

In conclusion, with strong play from our core customer and improving trends among our retail customers, efficient operations, robust free cash flow, and the strongest balance sheet in our company’s history, we have outstanding flexibility to continue executing our strategy for creating long term shareholder value. With that, I will now turn it to David to open the call for questions.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thank you, Josh. We will now begin our question and answer session. If you’d like to ask a question, please press star then one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to withdraw your request, please press star then two. If you are using a speakerphone, please use your handset when asking your question. We will pause for a moment while we compile our list of questioners. Our first question comes from Steven Wieczynski of Stifel. Steven, please go ahead.

Yeah.

Hey, guys.

Good afternoon. Keith or Josh, I guess one of the questions we’ve gotten a lot since this transaction was announced is, what is Boyd going to do with the proceeds? You guys, I think, made it pretty clear that you’re going to be reducing leverage, taking up your quarterly buyback, all that kind of stuff. What does this mean now for what I would call other opportunities? I guess what I’m trying to understand is, does this take away material M&A transactions? Maybe a better way to ask that is, what do growth opportunities mean for you guys?

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: Sure, Steve, I’ll take a shot at this. We assume that there’d be some discussion around the FanDuel transaction on this call, so let me provide some context for you first. I’ll go ahead and say it up front. This FanDuel transaction is not a precursor to another transaction. Flutter and FanDuel have done a remarkable job over the last seven years or so in becoming the industry leader in online sports betting and casino. They’ve created tremendous value both for themselves and for us. Over the last seven years, our partnership with FanDuel has continued to grow in value and represents a significant asset for our company. Between our market access fees over the last seven years and our 5% equity interest in FanDuel, we’ve created nearly $2 billion in value for our shareholders, all from a $10 million investment. A pretty fair return, I think.

As we analyze our equity value, Boyd’s equity value, it’s our belief that our stock price doesn’t properly reflect the true value created by this investment. As a result, we determined that as we’re approaching the end of this partnership, now is an appropriate time to monetize this investment and to focus the proceeds on future growth. Now it’s our turn to take advantage of the investment and invest in the future of our company. While we’re initially reducing debt, our goal is to deploy this new capital in attractive higher returning investments to support the long term growth of our company. We commented on that in our prepared remarks and we’re confident in our ability to do so. This transaction doesn’t change our strategy of having a balanced approach to capital allocation.

That balanced approach includes investing in our business and pursuing attractive growth opportunities, as well as returning capital to shareholders and maintaining a strong balance sheet. This transaction doesn’t change the cadence of our current investment strategy or our views on capital deployment or potential M&A. We have a successful track record of disciplined capital allocation that has served us and our shareholders well and we remain committed to this approach. This transaction merely allows us to continue our strong track record of making sound capital allocation decisions from a stronger position. Hope these comments answer some of the questions, but I’m sure they don’t answer all your questions. If you have additional questions, feel free to reach out to either Josh or Amir after the call is over and we’d appreciate kind of staying focused on Q2 earnings for the rest of the questions.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Our next question comes from Barry Jonas of Truist Securities. Barry, please go ahead.

Great. Thank you. I appreciate all the comments there. Maybe just at a high level, philosophically now that leverage is going to be around 2 times, what do you think philosophically is the optimal level that leverage should be for Boyd?

I think, Barry, before this transaction we would have said leverage was going to be we were going to run our company at around 2.5 times leverage. I would say he had always said if by chance there was a transaction that caused us to leverage up, we would have the intention of coming back down to 2.5 times. I’d say today, you know, our expectation is obviously leverage will be lower than 2.5 times. We will probably run the company not necessarily with the objective of staying below 2.5 times, but that’s probably where we’re going to kind of run the company for the time being as we figure out where best to allocate the capital to get the returns. I don’t think we’re going to kind of go out of our way to do something just to get leverage back up to a level where it should be.

I think we’re going to continue to be disciplined in terms of how we think about opportunities, continue to be disciplined in how we think about pursuing capital investment within our own company. One thing we’ve said before, and I’ll reiterate it here, is just because we have a ton of flexibility doesn’t mean we’re going to go out and try to do something that doesn’t make sense. We’ve been really disciplined. Keith made that comment in his remarks. We think it’s paid off for our shareholders and we’ll continue to approach allocating capital in that way.

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: Yeah, look, I think the way we think about this is as a result of the transaction, we end up with leverage, sub 2 and the high ones. It’s simply a point in time in the history of the company. We don’t expect that it’s going to stay there. It’s our job to take that and invest it in higher returning assets, simply higher, higher returning than paying down, you know, 6% debt. We understand that’s our mission and our goal and we’ll endeavor to do that. The sub 2 times leverage is just once again, it’s a level we’re at today as a result of the transaction. In longer term, I suspect, as Josh indicated, we’ll be more in the 2.5 range long term.

That’S great.

Just as a follow up, any comments you can give in terms of the promotional environment in kind of your key markets? We’ve certainly heard some chatter from some about ramping promos in some select markets. Curious what you’re seeing and how you’re responding if that’s true. Thank you.

Sure. It sounds like this is simply on replay, but over the last several years, including in Q1 and Q2, the promotional environment has been relatively stable, both here in Las Vegas as well as in our Midwest and South markets. I’ve said in the past, and I’ll say it again, those properties that have been promotional for the last couple of years remain promotional. Those properties that have been more disciplined have stayed more disciplined. While some properties are always stepping out a little bit, they do it for a month or so, and then it comes back to normal. There’s not a heightened promotional environment anywhere where we operate.

Barry, the only thing I would add to that, you ask, you know, how are we responding? If you look at our reinvestment rate as a % marketing reinvestment rate as a % of revenues, it’s been very stable since we came out of COVID. You can see that reflected in our margins for the company over the last five years as well.

Yeah. I would say that includes you’re not getting into a room rate war here. In Las Vegas, where room rates are extremely low, we’re not chasing room rates down. We’re being disciplined, and we’ll just continue to work our way through that.

That’s great. Thank you so much for all the color.

You’re welcome.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thank you. Our next question comes from John DeCree of CBRE. John, please go ahead.

Can you hear me?

John, please go ahead. Yes, we can hear you.

Fantastic. Hi, Josh. Hi, Keith. Wanted to ask a question about the pickup in retail that you’ve seen. It sounded like kind of unrated play picked up in locals and regionally, and curious if you could give us any more color on that. I know that’s a segment that’s a bit harder to track, and I guess kind of interested in sustainability and the trend over the last couple of quarters leading to, you know, what seems like some growth in that segment finally.

Yeah, John, it’s a good question. I think that first of all, when you think about, and I’ll primarily touch on the Midwest and South and Las Vegas Locals when I talk about the trends we’re seeing in unrated. First, starting with the Midwest and South, we combine unrated into what we call our retail segment in the Midwest and South. I think retail as a whole, including the low end of our database as well as retail, has been pretty stable for well over a year. I will say, kind of not really growing, but not declining. Starting in the second quarter, we began to see a pickup in unrated play. We attribute that largely to customers staying closer to home. That is drive-in business and truly local customers, even in the regional business, not traveling or not taking that extra trip.

Whether it’s, and this is a broader comment, whether it’s sustainable or not, I think we’re going to need to see another quarter or two. There’s no doubt that’s what showed up and pivoted retail to being a much more improved segment of our customer base. In Las Vegas, and Keith alluded to this earlier with his comment on room rates, we’ve seen a real softness. You’re seeing it in the Strip as well. I think in destination business, we’re seeing it in our own business. In particular, a place like Orleans where we have a significant room inventory, we’re just not seeing the same level of demand that we’ve seen historically from destination business. That’s been more than made up by retail and drive-in business, once again showing up in that unrated segment.

For our business to work, we’ve had a very consistent core customer, and we’ve been waiting for the retail customer to really come back into the fray. I would say the second quarter, largely driven by unrated business, is where they showed up. Now, whether it’ll continue or not, I do think we need another quarter or two before we can say we’re back to normal, so to speak. Keith, I don’t know. Is there anything you want to add to that?

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: No, I think that fairly summarizes kind of what we saw the second quarter.

That’s helpful. I appreciate the color. Maybe a quick follow-up on the online gaming strategy from here. Now that you’ve kind of sold your 5% stake in FanDuel, is there any change in how you approach online gaming kind of under the new commercial agreement that you have with FanDuel? Is it an area that you might want to invest in more aggressively than you had in the past or any change in strategy on the digital front?

Yeah, no real change in strategy. We bought PAL Interactive several years ago, now known as Boyd Interactive, and it’s grown nicely over the last several years. We did a small bolt-on acquisition last year to bolster the New Jersey part of that business. It’s performing well. When we bought PAL, we described what we called a regional strategy. We wanted to be able to make sure we had a compelling and competitive product in the markets where we operate and in some of the important surrounding states where we draw customers, that we were not looking to have a national product or be a national leader in the online casino business. That remains the same today. None of that changes with respect to the transaction with FanDuel. We’ll continue to be focused on a regional online casino strategy.

While we’re waiting for other states to legalize this product, we’ll just continue to make sure that we improve our core product and that it’s ready when various legislatures around the country approve this.

Very good. Thanks, Keith.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thank you. Our next question comes from Shaun Kelley of Bank of America. Shaun, please go ahead.

Great. Thank you, everyone. Josh, maybe to switch gears again on you. A lot of the questions I had have been asked and answered. You know, the tax bill. You highlighted some of the implications here. I was kind of curious more on the company level. There were some changes in everything from bonus depreciation to interest deduction. Obviously you’re delevering, so maybe the interest deduction thing is not as big, but sort of to your cash tax rate and your free cash flow conversion. Is there any impacts? Have you kind of done your first take on what some of the legislative changes might mean for you at the corporate level?

Yeah. I will tell you, we’ve gotten a preliminary estimate. I’m actually not that comfortable kind of telling you what it is just yet. I think we need to do a little bit more work around it. The biggest impact or benefit to us will be from, and I think this is probably obvious, the bonus depreciation, 100% of depreciation that’s placed in service. I think that you’re right. We won’t get much in the way of benefit from further interest expense deductibility, because we already kind of quite qualify that fully. Many of the other things that we’ve evaluated really are either not material or if they are, you know, kind of going or negative, they’re pretty small. I’m hesitant to kind of give a number just yet until we go through fully the bonus depreciation calculation. That’ll be where we get the biggest benefit.

We kind of rushed it to be ready for this call. I just want to have time to kind of double check it, but that’s where the benefit will be.

Great. Keith, maybe just going back to the online strategy point, because I do think it’s important you lost sort of a material growth lever, which I think we all appreciate you were going to lose or renegotiate anyway as it relates to market access. Can you help us think through kind of Boyd’s approach? High level, as the sort of Internet and online gaming has come for lots of other brick and mortar sectors, it’s been highly disruptive. Now we have other areas like prediction markets and things that are at the gate as well. Strategically, do you think it’s important for you to have a presence here on this side? How do you think about, really talking kind of medium to long term, just having something here as a bit of a hedge as it relates to the broad brick and mortar piece of the business.

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: We bought Boyd Interactive a couple of years ago to kind of stake out on our own, if you will, on the online casino side for that very intent. We thought having both an online product as well as a brick and mortar product was important. I think we articulated that and we continue to articulate that. Look, our customers go home at night and they may want to still continue to gamble and enjoy this. If it’s legal in the state, we want to make sure we have a product that they can enjoy when they’re not on premise. We have that in New Jersey right now where it’s both legal online and legal on premise.

It’s a great product because it is fully integrated with our land-based rewards program, and the player gets all the benefits when they’re playing online as they would as if they were playing in the building. We do want to be ready. We think it is important, we think they’re clearly complementary to each other in that long term you need to have both products as part of your portfolio. Having said that, online sports betting is a different beast. We have a presence obviously here in Nevada where we run 10 sportsbooks ourselves and have for more than 40 years now and quite successful in doing that. As you may have noted in the press release, we’ll begin to transition into running our own sportsbooks outside of Nevada sometime next year.

Once again, we have tremendous experience in doing that, and once again, that will not be a very heavy lift for us. We don’t think that’s as important to us, the sports betting side, as in running our own books or having our own, quote unquote, national presence there as it is on the casino side for our customers to be able to participate with us. I think we’re well positioned, very happy with the product we have, happy with the growth of Boyd Interactive and what it’s doing. I think when other states start to approve this, we will be in a very strong position to capture a big share of the market in the states where we do business.

Thank you both.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thank you. Our next question comes from David Katz of Jefferies. David, please go ahead.

Hi. Afternoon. Thanks for taking my question. A couple things have changed since the last time I’ve asked this question, which is probably one of many times I’ve asked the question. At the moment there seems to be a little bit better outlook in regional gaming. Stocks are just a bit better, yours, to some degree included. Is there any update you can give us on the boundaries or the criteria that you’re thinking about in terms of acquisitions? You would consider anything changing with respect to hurdles or size. What you might be seeing, any update there would help. Thanks.

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: Sure. I would say nothing has really changed in how we view M&A, you know, regional acquisitions. The size and the scale is important. The quality of the asset will be important. Obviously, given the size of our company, in order to make it meaningful and move the needle and make it worth our time, it’s got to be significant enough. We’ve said in the past we continue to be somewhat agnostic on markets as long as it’s a strong market with, you know, stable regulatory environments and stable tax environments. There are a number of those out there. Those are all things we have talked about in the past as key to us as we look at acquisitions. That all remains the same today. I really don’t have anything to update on.

Okey doke.

Thanks, David.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thank you. Our next question comes from Benjamin Chaiken of Mizuho. Ben, please go ahead.

Hey, good afternoon. Thanks for taking my question. Now that no tax on tips and overtime is official, is there any work you’ve done trying to quantify the tailwind, whether quantitative or even, you know, anecdotal? Thanks. One follow up.

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: We have done some work around this. I don’t think we are, you know, in a position to go out and talk about what we think that means to the company, but certainly it impacts a lot of our customers here in Las Vegas as well as, you know, customers around the country who visit our property. It clearly is a positive for.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: Us.

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: Once again, we’ll wait and see how it all plays out. No tax on tips, or reduced tax on tips and reduced tax on overtime, as well as the deduction for seniors in different new tax brackets, is all going to benefit us going forward. We’re just not sitting here today in a position to quantify that for you.

Sure. Understood. You may not want to answer the question, but just in the spirit of the conversation, any high-level thoughts on maybe what % of the customer base might be subject to those, including the seniors in there?

From a senior standpoint, kind of 65 and older, roughly 40% of our customer base is in that age group. The good news for us there is they over index in terms of their spend or their total value to us. We’ll clearly derive some benefits from that group.

Got it. Just one quick one on repurchases. You repurchased $105 million in the quarter. I guess you clearly are signaling that you want to buy back more stock. The new run rate is $150 million of the increased authorization. I guess the question is you repurchased multiples of that in 1Q, presumably at higher prices. Definitely not being critical here, but just was there anything preventing you from buying more in the 2Q when I would suspect your stock was pretty depressed?

Yeah, look, I mean, there are times we are in blackouts where we’re not allowed to be in the market repurchasing stock. There’s always a lot of factors that go into those decisions as we sit and decide when and how much to buy back. It isn’t a straightforward decision as we go through that process. Part of Q2 was blackout as it relates to the FanDuel transaction, quite frankly.

Understood. Thank you.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thank you. Our next question comes from Jordan Bender of Citizens. Jordan, please go ahead.

Hey, everyone, good afternoon. I want to double click on the room rate dipping in Las Vegas comment you made earlier on the call. We’ve heard this commentary or we’ve seen some of the data out of Las Vegas, so it might be good to just touch on the locals market here. Is the dip that you’re seeing a function of summer seasonality or is there really anything sticking out as to why maybe it’s declining more than historical summers? Thank you.

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: I can’t comment on how and why properties in Las Vegas change their room rates. Summer room rates right now are lower than they were last year. Summer room rates are always low compared to the other seasons. This year they’re lower than last year in many cases by quite a bit. I don’t know why people are doing that. Obviously, it does impact properties like the Orleans Hotel, who have nearly 1,900 hotel rooms in terms of our ability. We’re not offering $19 hotel rooms and we’re not going to offer $19 hotel rooms. I don’t sit in their boardrooms or their marketing meetings or their hotel meetings. I actually can’t tell you.

All right. On the follow up, I just want to circle back on the share repurchases. You upped it by $50 million a quarter, I guess. Why did $150 million make sense? Does any of that play into kind of getting back within your historical leverage targets from what you see in the business today? Thank you.

Yeah, that’s a good question, Jordan. I think just as the $100 was a level that was set that you can expect from us, sometimes we’ll do more, but you could expect $100 in the past. I’d say that was the spirit in which we approached setting the $150. It’s a level that we’re comfortable with, setting the expectation from the market and people who follow us. We feel comfortable doing that in the context of not putting any pressure on other decisions that we’re trying to make or influence our balanced capital allocation approach. It’s a level that we’re comfortable with and feel comfortable that we’ll be able to continue to kind of achieve without people trying to get too far ahead of us, basically.

Great. Thank you very much.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thank you. Our next question comes from Brandt Montour of Barclays. Brandt, please go ahead.

Hello, everybody. Thanks for taking my question. A question for Josh. Your comments on regional customer feeling better, staying closer home, doing a few less trips and showing up at your door helped things. Clearly, when you look at that customer, I’m assuming a lot of those customers are unrated play. If those folks are not going on trips, does that mean that they would have a higher than average spend versus your other average customer? Is that the way we could think about that customer or not necessarily.

Yeah. First of all, I’m not sure that we, since they’re unrated, we don’t know a lot about that bucket of customers. I would say that you shouldn’t think of them in one light or the other, meaning they’re not necessarily customers that are not worth a lot and they’re not necessarily customers that are worth a lot. It’s a portfolio of customers just like maybe anything else that we talk about. I don’t know that you can extrapolate anything from that. It’s a higher quality customer spending more money in that segment or not. I think all we can say is that the volume, that is the overall play that we received from our unrated customers, has improved since Q2 last year and sequentially as well.

Okay, hopefully that’s helpful.

That is helpful. Just a follow up on the locals market. I think heading into this past quarter, we were looking out at the year for locals and sort of expecting less bad comps over time. You guys still had competitive pressure. You just did a pretty good quarter. I don’t know, maybe, what the broader market grew and if you lost share in the second quarter or if we’re sort of past that promotional environment pressure, with the caveat that we know that summer room rates are low and affecting Orleans, maybe from a different side now. I wonder if you could square those thoughts.

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: Sure. As you look at the Las Vegas Locals market, we only have data through May. June data will come out, I think, next week in Las Vegas. We look at it in three month increments to take out some of the variations or movements. Over the last three months, we’ve performed either in line or slightly better than the overall market. Our market share has generally stayed the same, maybe gone up just a smidge. We feel pretty good about the overall performance, both of the market as well as our own performance.

The one thing, Brent, that I would add to your question is that, you know, we talked about kind of the competitive pressures just getting less bad throughout 2025. Obviously, we don’t give individual property-level information, but that is exactly what’s continuing to happen. There’s some push and pull based on our comments earlier. Right. We’re talking about primarily the Orleans. That’s the property that also would be affected by a softer destination consumer. Generally, it is trending in the direction that we talked about. Overall, the entire segment was benefited by this pickup in unrated play. The trends that we talked about before are continuing, if not feel a little better with the support of unrated play, with the exception of maybe a property like the Orleans that’s feeling this rate pressure.

I know it’s a lot of pieces, but just wanted you to know that the competitive environment from our perspective is trending along just like what we expected. It’s just getting better and better with the passage of time.

That makes perfect sense. Thanks for that, guys.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thank you. Our next question comes from Steven Pizzella of Deutsche Bank. Steven, please go ahead.

Hey, good afternoon and thank you for taking our questions on the cost side. Just curious about what you are seeing in terms of the operating expense environment currently in both the Midwest and South and local segments.

Steve, thanks for the question. I would say that, you know, costs for us are, I mean, we always see pressure from cost and cost increases, but I think we’re doing a really good job of managing those costs. You can kind of really see it in the consistency of our margins both in Las Vegas, in the Midwest and South, and for that matter, downtown. Despite, say, in the Midwest and South, South having some issues with the shift in the calendar and the flooding, our margins essentially have been stable. In Las Vegas we talked a lot about some of the pressures from competitive issues and things of that nature. Our margins also are continuing to be very stable. From my perspective, we always wring our hands around costs and are trying to manage them more efficiently and trying to offset increases.

Our guys are doing a really good job of doing that and that’s what’s showing up in the results, quite honestly.

Okay, thanks. I just wanted to look further into non-gaming spend if we could. Have you seen any changes in spending in your F&B and entertainment?

Not really. I would say if you look at our results you’ll see FNB was up, and that’s reflective of not only our core customer continuing to be stable and growing, but also now the retail customers showing up in the second quarter. On the hotel side, that was largely Las Vegas through the destination related comments that we made earlier. There’s not really, I think the spending from our customers is in conjunction with what we’re seeing for their demand on the gaming floor, lower.

Okay, great. Appreciate it. Thanks.

Thank you. Our next question comes from Steven Grambling of Morgan Stanley. Steven, please go ahead.

Thanks. You touched on this a couple of different ways, but putting together your commentary around investing into growth, do any subsegments or regions stick out in offering potential for the best returns on invested capital in this backdrop? How might that rank order compare to investing in digital or greenfield markets?

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: Yeah, look, I think as we think about the return on, you know, any type of M&A investment, whether it be on the digital side or whether it be greenfield or whether it be an actual acquisition of an existing asset, obviously, you know, a lot of factors go into play here. We don’t think about year one or year two return. We think about it over a longer period of time. It all depends on, once again, the price and the quality of the asset. We don’t necessarily force rank them. We do have hurdle rates that we look at and we want to achieve in order to make an investment regardless of which of those buckets we’re going to invest in.

The only thing I would add to that is M&A is one alternative. Reinvesting in our portfolio is another. You’ve seen us do that quite successfully with Treasure Chest Casino and now coming online with the meeting space at Ameristar St. Charles and Cadence Crossing Casino. It is really trying to find the best alternative among all the different choices that we have. Virginia’s kind of in the pipeline, but that’s going to be a good investment as well. We’re really evaluating all the time kind of M&A from a strategic perspective, but also a return perspective weighed against development opportunities, weighed against opportunities to reinvest in our existing portfolio and then buying back our shares as well, absent higher returning alternatives.

Hopefully this starts to sound like a broken record because we believe we’re kind of adding the same or executing on the same approach from our capital allocation perspective that we’ve been doing for quite some time. Hopefully this sounds familiar to people.

Yeah, I guess I meant more around organic growth, not M&A. You know, as you think about renovations or where you’re spending, whether. I mean, you gave the example, a couple of different examples there, but are there more likely to be spend within locals, the South and Midwest. Digital is another one of those. Is anything sticking out as you look at these different markets based on either the trends you’re seeing or the competitive dynamic?

Yeah, I mean I would just jump in and say not really. I mean, online is going to grow as opportunistically as maybe smaller acquisition opportunities come along or as it grows organically. I think from the perspective of reinvesting in different segments of our business, it could be that the highest returning next opportunity is in the Midwest and South just because of whatever that particular opportunity is. I think we purely do it based on an economic return of where we can get the best return as opposed to force ranking it. Las Vegas is a better market than Missouri, just picking one out of the air. It’s where we can get the best return for the incremental dollars, and yeah, that’s how we think about it.

Fair enough. Thank you.

Yep.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Our next question comes from Daniel Politzer of JPMorgan. Daniel, please go ahead.

Hey, good afternoon and thanks for taking my question. I wanted to just focus on the Midwest and South for a bit. This was the highest quarter of GGR growth, at least from the publicly reported data we’ve seen in some time, despite starting to lap Treasure Chest. To the extent it sounds like you’re attributing this to unrated play, shouldn’t that be showing up in the margin structure, or were there any other kind of one-offs to think about in the quarter, whether it’s a promotional environment or mix of revenues.

Are you saying because it was unrated play we should have a higher margin? Is that what you’re saying?

I mean, I think that usually that does come with higher margin. The flow through in this quarter versus other quarters, just given the revenue growth, I would think just given that comment on the unrated play would have been.

A little bit higher.

That’s why I’m asking if maybe there’s something I’m missing. Yeah.

The only thing I would point out is the margins have been consistent, number one, and number two is we did have flooding that took two properties out of commission for basically each a week. Then the shift of Easter. That’s basically it. There’s nothing else really going on in the segment.

Got it. Just kind of one higher level one. In terms of the quarter and the cadence, it seems like trends did improve throughout the quarter. Is there any kind of comment on what you’re seeing quarter to date as we look into July here?

I would say, and Keith, jump in and add anything that I might leave out, that first of all, we’ve been burned by trying to answer this question in the past because it’s a limited snapshot of what’s going on. It’s literally been three weeks, and three weeks don’t make a trend or a quarter. Just note that disclaimer if things were to change in the future. Basically, I would say the trends that we saw in Q2 are continuing into Q3. That being, as has historically been the case, the core customer has continued to be a consistent source of business for us and has continued to grow. On the retail side of things, we continue to see the unrated play contribute to that segment. The first three weeks are just like the quarter we just came out of.

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: Yeah. I do think you have to be careful and look at this kind of by the segments that we operate in, in Las Vegas versus Downtown versus MSR. While I think the trends are generally consistent with what we saw in Q2 as it relates to core and unrated, here in Las Vegas, we talked about the renovation project, the Suncoast going on. It’s being in its most disruptive phase. We have to take that into account as we think about Q3 and Q4. We’ve done a great job and our customers have kind of hung with us so far this year at the Suncoast and performing very well. We are entering a very disruptive period of time. The softness on the Strip, which impacts the Orleans mainly, we’ll see how that continues to play out. Downtown, some softness as it relates to just visitation to Downtown.

Because if the Strip is soft, then Downtown tends to be a little soft also. The MSR more normal. Once again, benefit of Treasure Chest is anniversarying itself, but still performing well. As people are not traveling maybe as much, we’re getting the benefit of them staying closer to home and visiting our properties in the Midwest and South regions. I think probably as much color as we have. As Josh said, it’s three weeks worth of data and so we’re kind of cautious about talking about it.

Got it. Makes sense. Thanks for the detail.

You’re welcome.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Our last question comes from Chad Beynon of Macquarie. Chad, please go ahead.

Josh Hirsberg, Executive Vice President and Chief Financial Officer, Boyd Gaming: Hi, good afternoon.

Thanks for taking my question. I wanted to ask about the overall CapEx, Josh, you ran through that in your prepared remarks. I know it was about three months ago when the tariff announcements were announced and there’s been some volatility there. It doesn’t sound like there was any change in terms of your spend, but I know you were talking about maybe mitigating some of the potential impacts that could happen. Can you help us think about maybe any, I don’t know, guaranteed contracts? Are you more comfortable now versus three months ago when the news was just kind of coming across the desk?

Thanks. Yeah, Chad, thanks for the question. I think, you know, if you look back at our remarks in the first quarter, we had done a lot of work around understanding what we could do to mitigate tariffs, operating expense side, but also a capital expense side, whether it was finding alternative sources, sources, pre-ordering stuff, ordering stuff from different countries, all that kind of acrobatics. I think that now that we’ve been at it for another three months or so, we feel much more comfortable that we can kind of manage through it. Obviously, we don’t know the final picture with respect to tariffs, but I just think we’ve gotten better at it and we’ve gotten more comfortable with how to kind of manage through it. In Q1, we said, you know, we’re comfortable with the risk and our budgets are.

We don’t believe our budgets are at risk from a capital perspective. We didn’t, you know, while cost may go up, we felt like we had enough contingency and enough flexibility with respect to timing where we were in those procurement processes, where those projects were, that we were going to be able to manage through it. I would say that really hasn’t changed. If anything, we’ve just gotten more and more comfortable with our ability to manage through it. I think it’s really important to say this as well is, you know, back then we were approaching a potentially uncertain environment at 2.5 times leverage. Now it’s 1.8 times leverage or whatever. You know, we’re probably in a much better position than the company has ever been in to deal with any kind of uncertainty, whether it’s man-made or otherwise.

We come at it from a position of real strength. I think that’s what, you know, we’ve tried to communicate to the investment community. The reason we want to run at a lower leverage is so that we have the flexibility to tell you here’s what we’re going to do, and in most cases, or a large number of cases, be able to execute that and not change direction because of something that’s going on out of our control. The FanDuel transaction took us to a level, a lower level of leverage than maybe we thought we would be at. The same philosophy applies. Hopefully that gives you some help.

Chad, makes sense. Thank you very much. Appreciate it.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: Welcome.

David Strow, Vice President of Corporate Communications, Boyd Gaming: This concludes our question and answer session. I’d like to turn the call over to Josh for concluding remarks.

Thanks, David. Thanks to everyone for joining our call today. If you have any follow-up questions, including any ones related to the FanDuel transaction, please feel free to reach out to Amir or myself and we’ll be happy to try to help you out. Thank you much.

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