Earnings call transcript: Boyd Gaming’s Q3 2025 results exceed expectations

Boyd Gaming Corporation reported robust financial results for the third quarter of 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $1.72, compared to the forecasted $1.60. The company’s revenue also exceeded projections, reaching $1 billion against the anticipated $872.1 million. Following the announcement, Boyd Gaming’s stock rose by 2.4% in after-hours trading, reflecting investor confidence in the company’s performance and outlook. According to InvestingPro data, the company maintains impressive gross profit margins of 61.3% and trades at an attractive P/E ratio of 13.1x relative to its near-term earnings growth potential.

Key Takeaways

• Boyd Gaming’s Q3 revenue surpassed the $1 billion mark, beating forecasts by 14.67%.
• The company’s EPS of $1.72 exceeded expectations by 7.5%.
• Stock price increased by 2.4% in after-hours trading.
• Strong performance in the Midwest and South segments, with revenues up by 3%.
• Online segment EBITDA guidance for 2025 increased to $60 million.

Company Performance

Boyd Gaming demonstrated strong performance in Q3 2025, with revenue exceeding $1 billion. This represents a significant achievement, driven by growth in key segments such as the Midwest and South, which saw a 3% increase in revenues. The Las Vegas Locals segment also contributed significantly, with $211 million in revenues. The company’s disciplined marketing strategies and operational efficiencies have bolstered its competitive position across its 17 properties. InvestingPro analysis reveals the company’s strong financial health with an overall score of 2.82 (GOOD), supported by robust profitability metrics and consistent dividend growth over the past three years.

Financial Highlights

• Revenue: $1 billion, a 14.67% surprise over forecast
• Earnings per share: $1.72, a 7.5% surprise over forecast
• EBITDA: $322 million, maintaining a 37% margin
• Las Vegas Locals segment revenue: $211 million
• Midwest and South segment revenue: $539 million, up 3%

Earnings vs. Forecast

Boyd Gaming’s Q3 performance surpassed market expectations, with EPS beating forecasts by 7.5% and revenue exceeding projections by 14.67%. This marks a significant positive deviation from forecasted figures, highlighting the company’s operational strength and effective cost management.

Market Reaction

In response to the strong earnings report, Boyd Gaming’s stock price rose by 2.4% in after-hours trading, reaching $84.51. This movement reflects investor optimism and positions the stock closer to its 52-week high of $88.49. The positive market reaction underscores confidence in the company’s strategic direction and financial health. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels, though three analysts have recently revised their earnings expectations upward for the upcoming period. For deeper insights into Boyd Gaming’s valuation and more exclusive ProTips, subscribers can access the comprehensive Pro Research Report, available for over 1,400 US stocks.

Outlook & Guidance

Looking ahead, Boyd Gaming is projecting continued growth, with an online segment EBITDA expected to reach $30 million in 2026. The company has allocated a capital expenditure budget of $600 million for 2025 and plans to continue its $150 million quarterly share repurchase program. The Norfolk resort development is on track for completion in November 2027. InvestingPro data shows management’s commitment to shareholder returns through aggressive share buybacks and consistent dividend growth, with the company maintaining a solid return on equity of 36%.

Executive Commentary

CEO Keith Smith emphasized the company’s robust performance, stating, "Across the country, we continue to see strengthening play from our core customers." CFO Josh Hirsberg highlighted financial flexibility, noting, "We have outstanding flexibility to continue executing our strategy." These comments reflect confidence in Boyd Gaming’s strategic initiatives and financial health.

Risks and Challenges

• Potential softness in destination business, particularly at the Orleans Hotel.
• Economic diversification in Southern Nevada may present challenges as the local economy evolves.
• Maintaining competitive marketing spend while ensuring operational efficiencies.
• Expansion plans, such as the Norfolk resort, require significant capital investment and execution.

Q&A

During the earnings call, analysts inquired about the potential expansion of sports betting in Missouri with Fanatics, as well as improving hotel bookings over the next 90 days. The management’s responses indicated a cautious yet optimistic outlook, with a focus on maintaining a conservative balance sheet approach.

Full transcript - Boyd Gaming Corp (BYD) Q3 2025:

David Strow, Vice President of Corporate Communications, Boyd Gaming: Good afternoon and welcome to the Boyd Gaming third 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, October 23, 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, Chief Financial Officer. Our comments today will include statements that are forward-looking statements within the meaning of 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 statement. 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 8K furnished to the SEC today, both of which are available at investors.boydgaming.com. We 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. With that, I would now like to turn the call over to Keith Smith. Keith?

Keith Smith, President and Chief Executive Officer, Boyd Gaming: Thanks, David, and good afternoon, everyone. The third quarter was another quarter of growth for our company, with revenues once again exceeding $1 billion, while EBITDA was $322 million for the quarter. After adjusting for our recent FanDuel transaction, we continued to deliver revenue and EBITDA growth on a company-wide basis, while margins were consistent with the prior year at 37% as we successfully maintained efficiencies throughout our operations. During the third quarter, play from our core customers continued its long-term growth trend, and we saw further improvements in play from our retail customers. This strength in play drove healthy gaming revenue growth across all three of our property operating segments and more than offset the weakness in destination business. Across the portfolio, our results reflect continued broad-based improvements in customer demand, sustained operating and marketing efficiencies, and the success of our capital investments focused on enhancing our property offerings.

Now, turning to segment results, our Las Vegas Locals segment posted revenues of $211 million and EBITDA of $92 million for the quarter. Gaming revenues continued to grow during the quarter, driven by strong demand from our Locals customers. We continue to benefit from ongoing growth in play from our core customers, as well as improving trends in play from our retail customers. This growth in gaming revenue was offset by declines in our destination business, primarily at the Orleans. Excluding the Orleans, our Locals segment delivered year-over-year growth of 2% in both revenues and EBITDA, with gaming revenue growth in line with the broader Locals market for the quarter, while margins for the third quarter were consistent with the prior year at 47%, supported by disciplined marketing and operating efficiencies.

For the broader Las Vegas Locals market as a whole, gaming revenue growth was up more than 3% over the last 12 months, reflecting the resilience of the Locals market. The health of the Locals market is supported by solid wage growth throughout the Southern Nevada economy. Through August, average weekly wages were up more than 6% over the trailing 12 months, outpacing the national average. Over the last 10 years, the local population has grown at twice the national rate, reaching 2.4 million last year, and during the same timeframe, per capita income in the Las Vegas Valley has grown by more than 5% on an annual basis, while total personal income in Southern Nevada has nearly doubled. An important driver of this growth has been the increasing diversification of the local economy.

While hospitality has continued to grow over the past decade and currently represents approximately 25% of the local job market, job gains have been more substantial in other sectors. These include education, health services, transportation, warehousing, and professional and business services sectors. Construction jobs have also remained a steady performer, growing more than 5% since 2019. With more than $10 billion in projects currently underway across the Las Vegas Valley, construction employment should remain healthy well into the future. As we head into next year’s tax season, we believe that our customers around the country will benefit from the tax bill passed by Congress this summer, including new deductions for tips and overtime and an additional deduction for seniors, as well as a larger standard deduction for all taxpayers.

In all, the Southern Nevada economy remains resilient and is more diversified than ever, positioning our Las Vegas Locals business for continued success. Next, in our Downtown Las Vegas segment, revenues and EBITDA were in line with the prior year, supported by continued strength in play from our Hawaiian customers. Much like our Locals segment, growth in gaming revenues was offset by softness in destination business, including lower hotel revenues and reduced pedestrian traffic along the Fremont Street Experience. Next, our Midwest and South segment achieved its strongest third quarter revenue and EBITDA performance in three years. For the quarter, revenues rose 3% to $539 million, while EBITDA grew to $202 million, more than 2% over the prior year. Operating margins once again exceeded 37% as we remain disciplined in our cost structure and marketing spend.

Growth in the segment was broad-based, including continued gains at Treasure Chest, more than a year after the opening of our new land-based facility there. Similar to our Nevada segments, gaming revenues increased year over year in the Midwest and South, driven by continued growth in play from our core customers and further improvements in play from our retail customers. Next, results in our online segment reflected growth from Boyd Interactive, as well as changes related to our recent FanDuel transaction. Given current trends, we are increasing our guidance for this segment to $60 million in EBITDA for this year. For 2026, we expect approximately $30 million in EBITDA from this segment. Finally, our managed business had another strong performance with continued growth in management fees from Sky River Casino.

Demand has remained strong over the three years since Sky River opened, giving us and the Wilton Rancheria great confidence in the growth potential of the property’s ongoing expansion. The first phase of this expansion will add 400 slot machines and a 1,600-space parking garage upon completion in the first quarter of next year. Once this first phase is complete, we will begin a second phase that will further enhance Sky River’s appeal by adding a 300-room hotel, three new food and beverage outlets, a full-service resort spa, and an entertainment and event center. Upon its completion in mid-2027, we are confident this expansion will further strengthen Sky River’s position as one of Northern California’s leading gaming and entertainment destinations. In all, the third quarter was another quarter of growth for our company.

Across the country, we continue to see strengthening play from our core customers and improvements in play from our retail customers against the backdrop of consistent and efficient property operations. While the fourth quarter has just started, it is worth noting that the customer trends we saw in the third quarter have continued into October, including improving play from both core and retail customers. Our strong operating performance is supported by the investments we are making throughout our portfolio as we enhance our casino floors, food and beverage outlets, and hotel rooms. Hotel room renovations will be completed early next year at the IP Hotel, and work is set to begin next month on a room renovation project at the Orleans Hotel. We are also continuing our modernization project at Suncoast Casino, with the complete transformation of our casino floor as well as enhanced meeting and public spaces.

While we are dealing with ongoing construction, we are encouraged that Suncoast Casino’s performance is in line with the prior year, further increasing our confidence in the long-term growth potential of this investment. Following completion of our Suncoast renovations around the middle of next year, we plan to begin a similar project at the Orleans as we look to further enhance our offerings at this important property. In addition to these property enhancements, we are continuing work on our growth capital projects with an annual budget of $100 million per year. In September, we completed our expanded meeting and convention center at Ameristar St. Charles. By nearly tripling the size of its meeting space, Ameristar can now accommodate more and larger events. This will create incremental visitation from new customers as well as groups who had previously outgrown our space.

We are already seeing great interest with strong bookings in the fourth quarter and into the next several years. In Southern Nevada, construction is progressing on Cadence Crossing, our newest Las Vegas Locals property. Scheduled to open in the second quarter of 2026, Cadence Crossing will replace our existing Joker’s Wild Casino with a modern and appealing gaming and entertainment facility. This investment will allow us to better serve the adjacent community of Cadence, one of the fastest growing master-planned communities in the nation. 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. Next, in Illinois, we are continuing the design and planning work for our new gaming facility at Paradise and expect to start construction in late 2026, pending regulatory approval.

Finally, development is well underway on our most significant growth opportunity, our $750 million resort development in Norfolk, Virginia. Pending regulatory approval, we are just a few weeks away from opening our transitional casino at the site. While we look forward to reaching this key milestone, our focus remains on the development of our permanent resort scheduled to open in November of 2027. This market-leading resort experience will feature 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 offering the highest quality gaming experience in the market, we will have the most convenient location for much of the 1.8 million residents of the Hampton Roads region, as well as the 15 million tourists who visit nearby Virginia Beach each year.

In all, our capital investments are delivering strong returns for our company, enhancing our competitiveness and supporting our long-term growth. At the same time, our substantial free cash flow and strong balance sheet allow us to continue returning capital to our shareholders. During the third quarter, we repurchased $160 million in stock and paid $15 million in dividends. So far this year, we have returned a total of $637 million to our shareholders. Share repurchases and dividends are important components of our balanced approach to capital allocation, and we intend to maintain a pace of $150 million per quarter in share repurchases, supplemented by our recurring dividend. In closing, we are pleased to deliver another quarter of strong performance as we continue to execute on our strategy and create long-term value for our shareholders.

During the quarter, we continue to benefit from strong growth in play from our core customers as well as improving play from retail. Our capital investment program is delivering excellent returns and positioning us well for future growth. Our teams across the country are successfully maintaining efficiencies and delivering consistent property operating results. We continue to return substantial capital to our shareholders while maintaining the strongest balance sheet in our company’s history. Our success is a reflection of the dedication and contributions of thousands of Boyd Gaming team members across the country, and we are grateful for all that they do for our company and our guests. Thank you for your time today. I would now like to turn the call over to Josh.

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Thanks, Keith, and good afternoon, everyone. During the third quarter, play from our core customers continued its long-term growth trend, while retail customers’ play also continued to improve. Our management teams did their part, remaining focused on operating efficiently and generating returns from our capital investments. As a result, excluding the effects of our recent FanDuel transaction, we continue to deliver growth in revenue and EBITDA despite weakness in our destination business. We are continuing our capital investment program to enhance our guest experience while expanding our opportunities for growth. During the third quarter, we invested $146 million in capital, bringing year-to-date capital expenditures to $440 million. We now expect total capital expenditures for this year to be approximately $600 million.

Our capital plans include approximately $250 million in recurring maintenance capital, an additional $100 million in maintenance capital related to hotel room renovation projects, $100 million in growth capital, which includes the recently completed meeting and convention space at Ameristar St. Charles and the ongoing Cadence Crossing Casino development here in Las Vegas, and then finally $150 million or so for our casino development in Virginia. Our growth capital projects remain on budget and on schedule. In terms of our shareholder capital return program, we paid a quarterly dividend of $0.18 per share during the quarter, totaling $15 million. Also, during the quarter, as Keith mentioned, we repurchased $160 million in stock, acquiring 1.9 million shares at an average price of $84.05 per share.

Actual shares outstanding at the end of the quarter were 78.6 million shares, an 11% reduction in our share count since the third quarter of last year. Since we began our capital return program in October 2021, we have returned more than $2.5 billion in the form of share repurchases and dividends, while reducing our share count by 30%. Going forward, we intend to maintain repurchases of approximately $150 million per quarter, supplemented by our regular quarterly dividend. This equates to more than $650 million per year, or more than $8 per share. With strong free cash flow, low leverage, and ample liquidity, we are maintaining the strongest balance sheet in our company’s history while continuing to invest in our business and return capital to shareholders. As you may recall, during the quarter, we closed on our transaction to sell our 5% stake in FanDuel.

We initially used proceeds from that transaction to repay our term loan A balance and borrowings outstanding under our revolver. As a result, our total leverage ratio declined from 2.8 times at the end of the second quarter to 1.5 times at the end of the third quarter. Our lease-adjusted leverage declined from 3.2 times to 2.0 times. Finally, beginning with this quarter’s financial results, we have provided the tax pass-through amounts as a separate line item on our GAAP income statement. Excluding the tax pass-through amount for this quarter, company-wide margins for the third quarter this year would have been 510 basis points above the margin we reported.

In conclusion, with strong play from our core customer and improving trends among our retail customers, efficient operations, robust free cash flow, and a strong balance sheet, we have outstanding flexibility to continue executing our strategy for creating long-term value for our shareholders. With that, I’d like to turn the call to David to open the call for questions. David?

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thank you, Josh. We will now begin our question-and-answer session. If you would like to ask a question, please press star, then one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request. 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 Barry Jonas of Truist Securities. Barry, please go ahead.

Hey, guys. I want to start on Vegas. Can you talk about what you see as the main drivers of the weakness you’re seeing in the destination business? Just help us feel comfort that you think the non-destination business won’t see any of that related weakness. Thank you.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: Maybe starting with the second half of your question, I think as we noted, we’ve seen strong play from our core customers. As we look at the database here and the source of our revenue here in Las Vegas, our Locals customers are performing extremely well, and our core customers are growing extremely well. The shortfall really was all about the destination business. It’s been kind of widely reported and talked about. How long that continues, we’ll all have to see. We have seen, as we look at our forward 90-day bookings in our hotels here in Las Vegas, improvements, still soft, but certainly better results than we saw three months ago. Have we turned a corner? Hard to say, but the 90-day booking results certainly look better than they did three months ago.

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Barry, one thing I would add to Keith’s remarks is when we, you know, pretty much the impact of the destination business, as we said in our remarks, are focused on the Orleans. When you separate the Orleans from the rest of the business, you see a couple of things going on. You see growth in gaming revenues throughout the remainder of the portfolio. You see growth in overall revenues. You see growth in EBITDA. You see consistency in margins. I think, you know, we see, and the gaming revenue kind of is growing in line with the overall market. I think we feel pretty good about the underlying customer trends overall. It’s just one aspect of the business that we’re trying to deal with.

In fact, you know, when you look at the segment’s performance, you could really attribute the EBITDA decline in Q3 all to the Orleans because it was down even more than what we’re seeing in the segment for the quarter.

Got it. That’s really helpful. Just as a follow-up, you know we’re starting to see some M&A deals come about. Curious if you could share your thoughts on the M&A pipeline, the environment, either in terms of buying whole assets or opcos. Thank you.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: Look, we obviously have a fairly successful track record of M&A based on a disciplined strategy of making sure it’s the right asset in the right market at the right price. We continue to look at it. We certainly note that a few things have traded recently. I don’t know that we’re necessarily seeing more pitch books across our desk, but we certainly pay attention and monitor opportunities. For the right opportunity, we’re certainly prepared to dig in. Other than that, I’m not sure we have a whole lot to comment on.

Great. Thank you so much.

Yep.

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

Steven Wieczynski, Analyst, Stifel: Yeah. Hey, guys. Good afternoon. Keith or Josh, if we think about the Midwest and South properties, I mean, those results were really solid, came in much better than we were expecting. If you think about that portfolio, wondering if the trends you witnessed there were pretty much broad-based or there were markets or pockets of strength versus other markets. I guess just trying to figure out if certain markets are kind of outperforming other markets. Obviously, you guys called out Treasure Chest, so I guess excluding Treasure Chest.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: I think when we look across that portfolio that comprises some 17 properties, it was generally broad-based. Look, there’s always one or two that don’t perform maybe quite as strong in any given quarter, but it generally was broad-based, strong results. We called out Treasure Chest Casino because it’s interesting to us and very positive that it continues to grow, even after anniversarying its opening. Josh, I don’t know if you have anything to add.

Steven Wieczynski, Analyst, Stifel: Not really, Keith. I think that covers it.

Okay. Keith or Josh, a little bit of a bigger picture question, but wondering if you kind of take a step back and look at your Vegas Locals assets, how do you think they’re positioned today from a CapEx perspective? What I mean is, do you think the majority of your assets in that market are in a pretty good spot relative to your peers in that region? Is it something where you guys might have to spend a little bit more across your portfolio over the next couple of years to keep up with some of that newer supply? I heard your comment about Orleans and Suncoast there.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: Right. We’ve been talking about the renovation work we’re doing at the Suncoast Casino for over the last year or so. That has been, I think, a very positive investment for us as we’re not even fully through it yet, and we’re seeing performance that’s in line with the prior year. That gives us confidence that this will be a successful investment. The Orleans Hotel needs a little bit of an updating also. It’s an important asset for us. Other than that, I think our portfolio of properties here in Las Vegas are well positioned. We’re looking at a number of restaurant projects just as part of our overall capital plan to make sure the properties remain competitive. It’s not significant capital, but it’s important capital to be competitive.

You look at our slot floors, and I would put them on par with anybody’s in the market and probably better than most. I think we feel pretty good with the exception of, once again, needing to make, I think, an important investment in the Orleans Hotel to make sure it’s competitive for the long term.

Okay. Got it. Thanks, guys. Appreciate it.

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

David Katz, Analyst, Jefferies: Okay. Thanks for taking my question. I just wanted to get your updated thoughts on the investments that you’re making internally in the portfolio and how you’re thinking about returns, the timing to those returns or hurdle rates. It’ll help us think about forecasting out into the future. What’s the return process and after we think about the earning potential on them?

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Yeah. Hey, Davis, Josh. I’ll take it and then Keith, jump in and add anything. Generally, I think kind of for good rule of thumb and modeling purposes, we generally think of kind of a 15% to 20% kind of cash-on-cash type of return. You know, we certainly achieve that with Treasure Chest. I think we’re seeing the early signs of achievement with that, with the meeting space at Ameristar St. Charles. The next one up will be Cadence, which is like a $60 million investment. That’ll be in that. We fully expect that property, once it comes online, to generate incremental EBITDA above what we’re getting today from the current Joker’s Wild facility that would generate that return. After that, I think we’re more dependent on regulatory approval for Paradise, but we’re excited about that opportunity. Good rule of thumb is that 15% to 20%.

We’ve been fortunate enough to kind of meet or exceed that on the projects that we’ve announced to date. We have, as we’ve tried to condition the market to think about kind of a pipeline of these projects. We’ll continue to kind of vet or choose the ones that have the highest return potential throughout. A lot of the stuff around Suncoast, most of the hotel renovations, even the Orleans, will be in our maintenance capital budgets. As Keith mentioned, the early signs at Suncoast are, you know, we’re seeing new customers in the building. We’re seeing people visit more frequently. We’re encouraged by those types of investments, even though they kind of qualify in our book as maintenance capital. I hope that kind of gives you some color.

David Katz, Analyst, Jefferies: It does. If I can just follow up and clarify, when we’re thinking about the Orleans, because it’s in the maintenance budget, we aren’t necessarily sort of holding it to the same standard or thinking about its earnings power longer term in the same way with that 15% or 20%, right?

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Yeah, I think that’s right because it gets to be a blend of maintenance and capital and growth. It’s just hard to kind of distinguish between, yeah, you know, kind of what that project is, is it more maintenance or is it more growth? I think that’s why we put it in maintenance, really.

David Katz, Analyst, Jefferies: I got you. Thank you very much.

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Sure.

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. The first question is just a clarification about the Orleans Hotel project for next year, which you mentioned. Is that, I mean, you know, I imagine your hotel rooms, you mentioned a few things. Is that something we should consider, potentially some disruption impact? I know that, you know, it’s got easy comps here, and there’s a couple of different things going on in the market that’s affecting that property. How do you think about that property into next year?

David Katz, Analyst, Jefferies: I think it’s a little early to try to figure out kind of disruption. I don’t, I think our view would be that at the beginning of a project like that, if we’re even able to get it started in the second half of next year, it’d be more limited in terms of the disruption. Once we understand the actual program scope and the timing, we can provide better color on that. Our management teams at Suncoast have done a very good job to manage through the disruption to date at that property, and it’s been significant. That construction activity continues. We’re learning how to manage those processes. Each one will be unique and different. To date, we’ve been pretty good at managing through it at the Suncoast. No doubt it is affecting our performance in some way.

The fact that it is, like Keith said, in line with prior year at this point, that’s pretty encouraging. At this point, we wouldn’t be calling out expectations for disruption related to Orleans until we have better clarity on timing and the full scope of the project. Keith, I don’t know if you want to add to that.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: No, I think just tagging on to what Josh said, as you’re thinking about 2026 and thinking about the Orleans, yeah, I wouldn’t anticipate anything significant. As we begin to have more clarity on the timing of all of that and what’s going to take place first and second, and when we end up getting to, quote-unquote, "the middle of the casino," which, yes, we’ll have some disruption as we get into those types of things, we’ll be able to update you. At this point, as you’re modeling out 2026, I wouldn’t anticipate anything.

Great. That’s helpful. Just a quick second question about Midwest and South. How would you describe the promotional environment across your markets? Any sort of changes quarter over quarter, or has it been pretty consistent from competitors?

In several markets, you know, there have been competitors who’ve been, you know, stepping on the gas, so to speak, with respect to marketing spend and being more aggressive. We have generally remained very disciplined. It is reflective in our margins that remain consistent year to year. You know, while we may be up just a tick, just a little bit overall, once again, it is highly efficient, highly productive, highly efficient, highly productive dollars reflected, and we’re able to grow revenue. We’re able to grow EBITDA. We’re able to maintain margins. We are seeing some enhanced marketing by our competitors, but we’re not responding. Frankly, some of the enhanced marketing that we’re doing is in relation to declines in destination business, not in relation to what our competitors are doing.

Great. Thanks, everyone.

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, thanks for taking my question. On the Suncoast renovation, you mentioned, you know, in line with the prior year a few times, but I would think that there was still some disruption. To the extent that there was, could you quantify that impact in 3Q and then maybe how you’re thinking about 4Q, even if just anecdotally? Thanks.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: Yeah, I’d love to, but it’s really difficult to quantify the disruption. Look, when we say it was in line with prior year, revenue and EBITDA perspective, I think that says it all. There’s clearly disruption. We have fewer slots on the floor today than we did a year ago because we’re in the middle of the casino. There are a lot of walls up. There’s ceiling work being done. It is disruptive, and it will continue to be disruptive. If you were to walk in the building today, we have a temporary front desk because we’re doing work around the front desk area. To date and through Q3, and we’d expect it to be through Q4, things are in line with the prior year. Our customers are hanging in there with us. The management team is doing a great job of taking care of our guests.

The guests have had very, very strong positive reactions to what we’ve unveiled thus far. Everything’s working, but hard to quantify.

Okay. Understood. You have a large expansion at Sky River, I believe, that opens early next year, 1Q, I believe. Understanding you earn management fees here, is there anything we need to watch out for in Q4 in terms of construction just ahead of that opening?

From a construction standpoint, everything is on the outside of the building. There really isn’t any impact, on the negative side, to the ongoing construction or, quote-unquote, "the opening" whenever that happens sometime early next year. It’s park and garage along with some added casino space that will house the added slots. The second phase that I described, which includes a hotel tower and some more restaurants, also is on the outside of the building. There will be no immediate impact or construction disruption from that.

Thanks.

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.

Steven Pizzella, Analyst, Deutsche Bank: Good evening. Thanks for taking my question. Just curious, as we think about early next year, can you share any expectations you might have for a benefit from the tax bill?

David Katz, Analyst, Jefferies: Yeah, Steve. I mean, it’s a question we get asked quite a bit. We’ve not really found a way that we’re comfortable to kind of estimate the overall benefit from that. There’s several elements to it, and I think Keith mentioned them in his remarks, ranging from tax-on-tips to certain higher standard deductions and credit for seniors. I think ultimately, we come away thinking it’s just incremental benefit to us overall, but we have not quantified it in terms of revenue and EBITDA.

Steven Pizzella, Analyst, Deutsche Bank: Okay. Great. Thank you.

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

Hi, Josh. Hi, Keith. Good afternoon.

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Great. John?

Josh or Keith, I wanted to ask if you could provide a little color on kind of how the quarter played out and maybe Cadence month to month. We kind of use the state GGR data to help us, but July and August looked pretty strong. September maybe a little bit more mixed. Any color you could give us on how the quarter played out, particularly in the Midwest and South regions.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: I think as we look across our portfolio, it was fairly steady. You have to take into account, like in September, where the holiday fell different, and therefore we got a little bit bigger benefit technically in August than we did in September. That’s over the course of a 10-day period. It flips in one month versus the other. When we look at kind of core trends in the business week to week, not a lot of fluctuation. I don’t know that I have anything else to add other than that.

That’s great, Keith. Thank you. Maybe I know this one’s difficult to kind of track given the limited data, but I’m curious if you could give us a little bit more color, again, in the Midwest and South specifically on the retail play, some of the better trends you’re seeing there. Is that kind of year-over-year growth in kind of spend? You know, it’s more customers come in the door. You know, if you have any guesses, a number of theories, but kind of what might be driving that uptick in retail play.

It is a trend that actually has been going on for a couple of quarters now. We have actually been talking about it, and it continued through the third quarter, with the improvements kind of increasing, so to speak. I think we are seeing generally on the rated side increases in frequency and increases in spend. Both ADT or spend are going up and frequency is increasing, which are positive trends. Josh, I do not know if there is anything else to add.

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Yeah. I would just add, you know, just to clarify for everyone, retail is two buckets. It’s the lower end of the rated. That’s what Keith was just talking about in terms of spend and frequency. Then there’s the unrated component as well. We can kind of understand what’s going on with the lower end of the rated piece. What’s interesting as a group is the unrated business has also been improving sequentially over time as well and actually been a bigger driver of the retail component. Both the low end of the retail rated piece that we know about and the unrated segment have both been kind of in lockstep improving year over year as we’ve moved through this year. It’s been a consistent trend. It’s been very interesting to watch.

Sounds good. Thanks, Josh. Thank you, Keith.

Sure.

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

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thank you. Our next question comes from Daniel Politzer of JP Morgan. Dan, please go ahead.

Hey, good afternoon, everyone. Thanks for taking my questions. I was wondering maybe we can walk through the fourth quarter. It seems like there’s a few moving pieces there. Maybe just to get some clarity, I think Tunica is closing in November. In Norfolk, I think there’s a temporary casino that opens also in November. I don’t know if you gave it, I don’t think you gave an update for managed and other, but that would help. Any impact from the cybersecurity incident in the quarter. Thanks.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: I think as you think about Tunica, you should expect obviously a fairly negligible impact. I wouldn’t adjust your models for anything related to that or for Norfolk, for that matter. We’ve talked in previous calls about this as a very small, modest, temporary facility, and our focus really is on the permanent. You assume that this will be a break-even as you think about the fourth quarter or even next year. As you think about the cyber event, once again, not much we can say other than what was in the 8K, which is it did not have any impact to our business operation. We’ve got cyber insurance to backstop us. There was a third question in there. I lost track of the fourth I lost track of.

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: They managed another.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: I’ll let you answer that.

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Managed another, I think the key for managed another, it’s going to be a pretty stable business in Q4 relative to when you think about the trends of this year, just because the business is operating at or very near capacity. Once it gets the incremental slots early next year, that’s in the quarters following that, I think, is where we’ll start to see the benefit of that. Eventually, from the expansion of the hotel and meeting space in probably mid.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: 2027.

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: I think for managed, another for Q4 will be very similar to what you’ve seen in the quarters of the other earlier quarters of this year.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Got it. Just for my follow-up, I don’t think you paid the taxes in the quarter on the FanDuel stake sale. When can we expect that? Along with the tax on the tax front, the one big beautiful bill, is there any impact or, you know, offset you could get from that that may be applied here?

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Not much of an offset. More than likely, the payment will occur sometime in the first quarter of next year.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thanks so much.

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Yep.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thank you. Our next question comes from Steven Grambling of Morgan Stanley. Steven, please go ahead.

Hey, thank you. I was hoping you could dig into the balance sheet a little bit. Just how are you thinking about the optimal leverage of the business, particularly if M&A opportunities maybe don’t come to fruition? Could we see that leverage pick back up, or what would you be looking to do in terms of optimizing the balance sheet longer term?

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Yes, Steve. Before the FanDuel transaction, our leverage was about 2.8 times, and our leverage target was around 2.5 times long term. As a result of the FanDuel transaction, which happened in late July, early August, our leverage is, as I stated in my remarks, around 1.5 times. I think, based on just the capital plans that we have now, primarily related to Virginia coming up, the capital related to the permanent of Virginia, our leverage will tick up over time. It’ll go back up to around probably in the next year and a half or so to around 2.5 times. I think it’s odd to talk about your optimal leverage being, at least for us, it’s odd for optimal leverage to be above where a target above where we are. I think that it doesn’t, it’s not something we strive to achieve given where we are today.

To the extent that we have opportunities, I guess the way I would say it, in other words, we’re not trying to hit the target just because we’re at 1.5 times and we want to be at our target leverage. It could be that our leverage remains at 1.5 times over time. We don’t think that’s probably the right leverage, but we don’t have anything that warrants increasing our leverage at this point. We’ll continue to think through this and continue to be kind of prudent on how we think about it. It’s kind of like we were in a good place and doing everything we were doing at 2.5 times. We happened to get a big windfall. We’re 1.5 times, and that doesn’t really change the way we think about anything that we were doing before.

If opportunities come along, if we decide to buy back more shares or return more capital, then that’ll be just part of our thought process that we develop over time. Until then, we’ll be running the business between 1.5 to 2 times, and it’ll gradually tick up as a result of our capital plans and the plans we have in place today. Keith, I don’t know if there’s anything you want to add to that.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: No, look, I think what Josh was alluding to is, first, it’s only been, it’s less than 90 days since we’ve received the payment, and leverage has been pushed down to 1.5. We want to take a long-term view, be thoughtful about what to do with the current leverage, how best to position the company. Could be M&A, could be other things, could tick back up. We don’t have an answer for you right now other than we understand it, and we’re having thoughtful discussions about where that should be. I’m sure we’ll have more to talk to you about in future quarters, but nothing really to say right now.

That all makes sense. If I can sneak one unrelated follow-up in, as we look at the Las Vegas Locals market, and you talked about this 6% wage growth there, it seems like it’s about as wide as I’ve seen it relative to the GGR growth for that market in aggregate. Do you think that there’s a lead lag here, or is there anything else that you would point out that’s maybe creating that wider gap versus history? Thanks.

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Yeah. Steve, I think that, I mean, it’s a good observation, but I think, perhaps, at least in our business, the impact of the destination business is shown and visible on the income statement when you look at hotel revenues year over year. You can look at that and see they were down about $5 million. That destination business is a significant amount of hotel room nights. While it’s primarily at the Orleans Hotel, it affected really every property in Las Vegas and outside of Las Vegas to some degree. There is F&B, there’s banquet business that’s highly profitable to us, and there’s a significant amount of gaming revenue associated with that business. It’s a very profitable business to us. While it’s very difficult to estimate the impact, I think the reality is that that’s probably what’s creating that gap.

There’s wage growth that we’re seeing show up in our business in terms of a stronger local customer. If you had backed up and said, "Okay, we had that wage growth and destination business," you would see probably a healthy gaming revenue growth that would mirror maybe what your expectations were. That’s how I think about it, at least.

That’s helpful. Thank you.

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

Hi, in terms of Hawaii, I think you said revenue was steady. I’m wondering about headcount and volumes. How are things there?

Keith Smith, President and Chief Executive Officer, Boyd Gaming: Specifically coming out of Hawaii?

Yes. Downtown.

Look, you know, downtown volumes on the street are down, and that’s frankly driven by visitation to Las Vegas because there’s a strong, strong correlation between visitor volumes downtown and visitor volumes to Las Vegas. Visitation on the street is down, which is what kind of impacted what we call a destination business in the downtown area for us. You know, kind of our core market, which is the Hawaiian market, performed, you know, normally, but you know, we felt softness in the destination business. We felt softness from lack of tourism on the street.

Okay. With respect to the Tunica closure, I’m just wondering if there’s, you know, just leaving the building and leaving town, something that maybe happens with the gaming equipment. Did you try to sell that property? Curious as to what happened there.

I think the way to think about the closure of Tunica, first of all, when we’re all done with this, the site will be scraped clean. We’ll take everything down. We’ve already found homes for the equipment and all the recoverable assets, so to speak, in the building. The property had gotten to a point where EBITDA was fairly small and the level of capital maintenance capital required to maintain it at our standards was growing. Frankly, there was not going to be a good return on that capital investment to maintain that building to our standards because we do have standards as to how we want our buildings to look and feel and what we want our guests to experience. We were just looking at the data, looking at the maintenance capital that was going to be required and the current level of EBITDA and where the market is.

It just made sense to close the building down. Not a decision we came to lightly, but it’s a decision we came to. Once again, we will be able to reuse a lot of the gear and a lot of the equipment, sell off some stuff that we don’t have use for. Everything will be scraped clean. It’ll be turned back into just raw land, and we’ll attempt to dispose of the land.

Last one. Thank you. I really applaud your conservatism with the balance sheet. If we look at your properties that are leased, are you happy with the EBITDA coverage of interest and rent at this point? As you are with your leverage, how do you feel about the rent coverage picture?

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Yeah. I think we’re happy with it, and our landlord’s happy with it, quite honestly. They don’t have a corporate guarantee, but they really don’t need one given the coverage there. Everything’s a happy partnership there.

Great. Thank you so much.

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

Keith Smith, President and Chief Executive Officer, Boyd Gaming: Hi. Good afternoon, Josh and Keith. Thanks for taking my question. First one on the opening or start of Missouri sports betting. I know you have a partnership with Fanatics. I believe it might be the first with them. I know that includes some of their branded retail sports books at your property. Could you maybe talk about anything you’re willing to disclose in terms of the relationship and then maybe future opportunities with this company given their ascension on market share that we’ve been able to track? Thank you. Yeah. You’re right. We have two properties in Missouri, Ameristar Kansas City and Ameristar St. Charles, and both of them received licenses, as did Fanatics yesterday when the Missouri Gaming Commission issued licenses so people could be prepared to open the 1st of December.

It is our first relationship with Fanatics, and whether or not that expands is always hard to tell. It’s a strong relationship thus far. We know some of the folks in that organization, so we have a good relationship there. We’ll see, once again, how it develops and what other opportunities exist to take that relationship further. Nothing really to report other than that at this point.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Okay. Great. In terms of some of the near-term, I guess, inflection in Vegas and in the destination market, we met with a lot of the companies on the Strip in the past couple of weeks, and some pointed to November. Others obviously talked about F1 maybe being more of a good guy this year, and then the strength into Q1. Should all of that help you as well? In terms of internal bookings, are you viewing maybe November as kind of an inflection point where you’re starting to see good year-over-year growth? I guess that would be more Downtown, maybe excluding Orleans with some of the things that you’ve talked about. Thank you.

Keith Smith, President and Chief Executive Officer, Boyd Gaming: Yeah. Once again, I noted earlier that as we look at our kind of 90-day booking pattern today, sitting here today or, you know, a week or so ago, it is much more positive than it was three months ago. It’s still soft, but it is significantly better than it was three months ago. That makes us, you know, feel good about kind of the next several months, you know, given those numbers. That’s, you know, true for Downtown Las Vegas as well as it is for our Las Vegas Locals properties with hotels. We’ll see how it all comes together. As the Strip continues to do better, as occupancy and rate on the Strip continue to rebound, clearly that will benefit us. It’s just an indication that people are traveling again and coming back out. That will help us.

Overall, our own bookings are, once again, better over the next 90 days than they were a couple of months ago.

David Strow, Vice President of Corporate Communications, Boyd Gaming: Thanks, Keith. Appreciate it.

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

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

Josh Hirsberg, Chief Financial Officer, Boyd Gaming: Thanks, David, and thanks to everyone for joining the call and the questions we’ve received today. If you have any follow-ups, please feel free to reach out to the company. This concludes our call and you can now disconnect. Have a good day.

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