Q4 2024 Boyd Gaming Corp Earnings Call
Good afternoon, ladies and gentlemen, this is the operator this conference call will begin momentarily. Please standby.
[music].
Speaker Change: Good afternoon, and welcome to the Boyd gaming fourth quarter and full year 2024 earnings conference call.
Speaker Change: My name is David Straube, Vice President of corporate Communications for Boyd gaming I'll be the moderator for today's call, which we are hosting on Thursday February six 2025.
Speaker Change: At this time all lines are in listen only mode. Following our remarks, we will conduct a question and answer session.
Speaker Change: At any time during this call you require assistance. Please press Star then zero for the operator.
Speaker Change: Speakers for today's call are Keith Smith, President and Chief Executive Officer, and Josh Hirschberg, 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.
Speaker Change: All forward looking statements in our comments are as of today's date, and we undertake no obligation to update or revise support looking statements.
Speaker Change: 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 FCC that may impact our results.
Speaker Change: 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 and both of which are available at investors stop Boyd gaming Dot com.
Speaker Change: We do not provide a reconciliation of forward looking non-GAAP financial measures due to our inability to project special charges and certain expenses.
Speaker Change: Today's call is being webcast live at Boyd gaming Dot com and will be available for replay on our Investor Relations website. Shortly after the completion of this call. So with that I would now like to turn the call over to Keith Smith Keith.
Keith Smith: Thanks, David Good afternoon, everyone.
Keith Smith: 24 marked another successful year for our company as our diversified business model continued operating efficiencies and recent property investments all contributed to a strong full year performance.
Keith Smith: We generated over $3 9 billion in revenues in 'twenty 'twenty four setting a full year record and we achieved company wide EBITDAR of nearly $1 $4 billion, while maintaining property level operating margins of over 40%.
Keith Smith: These results demonstrate our companys continued ability to deliver a high level of performance.
Keith Smith: Looking at the fourth quarter, specifically, our performance was consistent with the solid results we have achieved over the last several quarters.
Keith Smith: Quarterly revenues surpassed the $1 billion Mark for the first time, well EBITDAR increased to nearly $380 million.
Keith Smith: Our fourth quarter performance much like our full year results. It was driven by our diversified portfolio fishing operations and contributions from our recent property investments, most notably a treasure chest.
Keith Smith: Importantly throughout our property operating segments, we continue to see strength in play to our core customers and stable trends in play from our retail customers now.
Keith Smith: Now, let's review segment results in more detail.
Keith Smith: Starting with our Las Vegas local segment.
Keith Smith: During the fourth quarter, we delivered our best year over year performance of 'twenty 'twenty four despite ongoing competitive pressures in the market.
Keith Smith: Excluding the Orleans and gold coast, our Las Vegas locals properties continue to perform better than the same store market and our operating margins continued to exceed 50%.
Keith Smith: From our core customers continue to grow across the segment during the quarter, while play from our retail customers improved.
Keith Smith: And our ongoing project to enhance the Suncoast is beginning to show its potential as this property posted a solid performance. Despite the addition of a new competitor in the market in late 2023.
Keith Smith: Next we delivered another strong performance in our downtown Las Vegas segment during the fourth quarter.
Keith Smith: Our recent enhancements at our downtown properties are providing us a solid foundation for long term growth.
Keith Smith: Similar to our Las Vegas local segment overall customer trends were consistent with recent quarters with growth in play from our core customers and consistency and play among our retail among our retail players.
Keith Smith: Visitation from our Hawaiian customers remains healthy well pedestrian traffic throughout the downtown area has been steady.
Keith Smith: Looking at the southern Nevada market more broadly.
Keith Smith: The metals of the local economy remains strong.
Keith Smith: With recent games unemployment personal income population and tourism related activity.
Keith Smith: Employment has grown for 45 consecutive months now with increases across most major employment sectors.
Keith Smith: Average weekly wages increased nearly 6% during the fourth quarter outpacing the national growth rate.
Keith Smith: Southern Nevada's population have surpassed $2 3 million residents and continues to show growth with home building permits increasing 13% over the prior year.
Keith Smith: Total visitation to Las Vegas remains healthy growing more than 2% over the prior year to nearly 42 million visitors in 2024.
Speaker Change: Yeah and airport traffic continues to achieve record levels exceeding 58 million passengers last year.
Keith Smith: By the end of the first quarter this year.
Keith Smith: Capacity is expected to increase by another 3%, which includes continued growth from international markets.
Finally residential and commercial construction activity remains robust throughout southern Nevada with more than $8 $5 billion of notable projects currently under construction.
Keith Smith: It all we remain confident in the long term strength of the southern Nevada economy as we enter 2025.
Keith Smith: Outside of Nevada, our Midwest and South segment achieved another quarter of growth led by continued strong results at treasure chest casino are.
Keith Smith: Our new facility a treasure chest has consistently performed ahead of expectations since opening in June and remains on track to exceed our targeted EBITDA return.
Keith Smith: Well the treasure chest was the strongest performer in this segment on a year over year basis. We were also pleased with the performance of our same store operations.
Keith Smith: After adjusting for certain one time benefits in the fourth quarter of 2023 same store revenue and EBITDAR grew slightly while margins remained consistent at 37%.
Keith Smith: And on both a total same store basis play from our core customers continue to grow while retail customer play remains stable consistent with recent quarters.
Keith Smith: Next our online segment once again contributed to company wide growth.
Keith Smith: With a strong fourth quarter performance, our online segment generated $76 million in EBITDAR for the full year after excluding $32 million one time fees.
Keith Smith: This performance reflects continued growth from our market access agreements, primarily with fans as well as contributions from our nascent online gaming business.
Keith Smith: Beyond the financial contributions from our online segment, we also have significant value and a 5% equity interest in <unk>.
Keith Smith: Across the country <unk> strengthening its position as America's leading online gaming company further enhancing the considerable value of our equity stake.
Keith Smith: Finally, our managed business closed out 2024 was another solid quarter of growth for the full year. This business generated $96 million in EBITDAR, driven mainly by management fees from Sky River Casino.
Keith Smith: The Sky River continues to perform at a very high level work has begun on a significant expansion of this property workers.
Keith Smith: Work is now underway on the first phase of that expansion, which will add 400 slots and a 1600 space parking garage to the property.
Keith Smith: Upon completion of phase one.
Keith Smith: First quarter of 2026 construction will begin in the second phase of the expansion, which will include a 300 room hotel two additional food and beverage outlets the day Spa.
And in Entertainment and event Center.
Keith Smith: Once fully complete in mid 2027. This expansion will position Sky River for continued long term growth further strengthening its reputation as one of northern California's leading gaming entertainment destinations.
Keith Smith: So we know both our fourth quarter full year results demonstrated our companys continued ability to deliver a high level of performance and we are building on our track record of success as we continue our program of investing in our nationwide portfolio.
Keith Smith: Ample of these investments is the ongoing renovation of our hotel room product we.
Keith Smith: We have recently begun hotel renovations at the Orleans, IP and Valley Forge, which account for nearly one third of our hotel rooms across the country.
Keith Smith: When combined with other recently completed hotel renovations, we will have refreshed and updated nearly 60% of our hotel room inventory by next year.
Keith Smith: We're also enhancing the customer experience throughout our properties.
Keith Smith: Example of this is the Suncoast, we opened a new sports book high limit room and premium Steakhouse in 2020 for.
Keith Smith: All of these new amenities have been well received by our customers, helping drive solid results of Sun coast over the last several quarters.
Keith Smith: Next to come at the Suncoast as a complete renovation of the casino floor, a new food Hall, and the expansion of the property as meeting space.
Keith Smith: Unveiled the first section of the Suncoast casino renovation earlier today and are on track to complete all property enhancements by early 2026.
Keith Smith: In addition to enhancing our properties, we continue to pursue strategic growth investments in our portfolio.
Keith Smith: Get them Aerostar, St. Charles we are making progress on the expansion of that property is meeting and Convention center.
Keith Smith: <unk> existing meeting and convention business the core part of its business model.
Keith Smith: With a four diamond rated hotel extensive amenities in close proximity to the St. Louis Airport Amir STAAR sees more demand than a concurrently accommodate.
Speaker Change: With demand already exceeding our current space. The Mercer team is having great success.
Speaker Change: <unk> future business Sports expanded convention center positioning the property to deliver strong results. Once our expansion is completed this fall.
Speaker Change: Next in southern Nevada, we remain on schedule to open cadence crossing casino in mid 2026.
Speaker Change: This development will replace our existing jokers casino with a modern casino entertainment experience.
Speaker Change: Hereby Master planned community of cadence is one of the fastest growing neighborhoods in the Las Vegas Valley and this development will position us to capitalize on the growth.
Speaker Change: Cadence crossing will begin as a smaller property with 450 slots and several restaurants, but as the cadence community continues to grow towards its full buildout of 12000 homes cadence crossing will grow with it with plans for a hotel more casino space and additional amenities.
Speaker Change: And as work continues on these projects.
Speaker Change: <unk> plans for the next investments at our property growth pipeline.
Speaker Change: One of these projects will be in central, Illinois, where we anticipate replacing our 30 year old riverboat casino at Paradise, with a compelling new entertainment destination.
Speaker Change: While it is still early in the design process, we could begin construction as early as the first half of 2026 pending regulatory approvals.
Speaker Change: We are confident that this project will deliver a solid return on our investment by driving incremental growth in visitation and business volumes at Paradise. Following its completion.
Speaker Change: In addition to ongoing investments in our existing properties. We're also investing to expand our portfolio with our resort development in Norfolk, Virginia, where construction is set to begin shortly.
Speaker Change: $750 million project will further diversify our portfolio by expanding our presence in one of the largest underserved gaming markets in the mid Atlantic region.
Speaker Change: We are confident in our ability to create a market leading resort experience in Norfolk that will attract customers from throughout the region, serving as a key growth driver for both the city of Norfolk and our company.
Speaker Change: The resort, which is scheduled for completion in late 2027 will include a casino with 500 slots and 50 table games, a 200 room hotel eight food and beverage outlets live entertainment and a 45000 square foot outdoor amenity Doug.
Speaker Change: Part of this project, we plan to open a modest transitional casino. This November.
Speaker Change: You know these investments form the foundation of our future growth.
Well, we are investing in these strategic growth opportunities. We're also continuing to return capital to our shareholders in the fourth quarter, we repurchased $203 million in stock, bringing our total repurchase activity for 2000 $24 billion to $686 billion.
Speaker Change: Well, we have repurchased more than our targeted level of shares over the last several quarters. This has been purely opportunistic looking ahead to 2025, we remain committed to $100 million per quarter in repurchase activity supplemented by our ongoing dividend program.
Speaker Change: In addition to investing in growth opportunities and returning capital to our shareholders. Our balanced approach to capital allocation includes maintaining a strong balance sheet. We ended 2024 with total leverage of approximately two five times, giving us a strong foundation to continue our successful approach to capital allocation.
Speaker Change: So as we look back on 2024, we're pleased with the performance of our company strong Foundation, we have built for the future. We continue to generate substantial free cash flow through our diversified business model and our consistent operating performance.
Speaker Change: Ongoing property investments are delivering solid returns and positioning us for long term growth.
Speaker Change: And we are successfully balancing these investments.
With our capital return program, returning nearly $750 million in capital to our shareholders in 2024, while maintaining the strongest balance sheet in our company's history.
Speaker Change: Finally, before I turn it over to Josh I wanted to take a moment to recognize a historic milestone for our company.
Josh Hirschberg: January one of this year, we celebrated Boyd gaming's 50 of here in business.
Josh Hirschberg: We've come a long way since salmon Bill opened a California teller casino and $19 75.
Josh Hirschberg: Since then our company has grown from a single property in downtown Las Vegas into one of the largest and most respected gaming companies in the United States.
Josh Hirschberg: And while our company is much different today than it was at $19 75 Division and integrity of Salmon Bill Boyd continue to guide us to this day.
Josh Hirschberg: Their commitment to growth and their commitment to making a positive difference for our team members and our communities are principles that we probably carry forward as a company.
Josh Hirschberg: Our success throughout these past five decades would not have been possible without the hard work of our team members and their dedication to delivering memorable service for our guests is what makes the Boyd experience unique.
Josh Hirschberg: Thank you for your time today I would now like to turn the call over to Josh.
Josh Hirschberg: Thank you Keith the fourth quarter represented the conclusion to a very good year for our company.
Josh Hirschberg: We finished 2024 generating nearly $1 $4 billion in EBITDAR.
Josh Hirschberg: With annual property level margins exceeding 40%.
Josh Hirschberg: As a result of our performance our diversified portfolio generates significant free cash flow that we are deploying to reinvest in our business and return significant capital to our shareholders.
Josh Hirschberg: I'll now provide additional commentary on our fourth quarter and full year 2024 results and provide comments on our 2025 outlook.
Josh Hirschberg: Beginning with our online segment and this segment, we generated $108 million in EBITDAR for the full year of 2024, including $32 million and nonrecurring market access fees for.
Josh Hirschberg: For 2025, we expect to generate approximately $80 million to $85 million from our own line segment, which compares to the $76 million of run rate EBITDAR in 2024.
Josh Hirschberg: This segment includes contributions from our revenue share agreements and Boyd interactive.
Josh Hirschberg: For reference the tax pass through amounts reported as revenues and expenses in our own line segment were $128 million for the fourth quarter.
Josh Hirschberg: And $450 million for the full year of 2024.
This compares to $97 million in the fourth quarter of 2023 and $328 million for the full year of 2023.
Josh Hirschberg: And our managed business, we generated $96 million for the full year of 2024, primarily driven by the management fees, we earn from Wilton Rancheria Sky River Casino.
Josh Hirschberg: We expect to generate a similar amount of EBITDAR in 2025 from our managed and other businesses.
Josh Hirschberg: In terms of capital expenditures, we invested $111 million in capital during the fourth quarter, bringing total 2020 for capital spend of $400 million.
Josh Hirschberg: For 2025, our capital investment plans include maintenance capital.
Josh Hirschberg: Incremental maintenance capital related to our hotel room refurbishment initiative.
Josh Hirschberg: Recurring property growth investments and starting our development project in Virginia.
Josh Hirschberg: In terms of each of these capital spend categories, we estimate our recurring maintenance capital to be approximately $250 million per year.
Josh Hirschberg: We will spend an additional amount on maintenance capital related to hotel room Refurbishments. This year of approximately $100 million at IP.
Speaker Change: Sally Forge and the Orleans.
Speaker Change: Our initiative to upgrade our hotel rooms are scheduled to be complete in mid 2026.
Speaker Change: In terms of our recurring property growth investments, we expect to invest approximately $100 million each year in.
In 2025. This amount includes investments in the convention expansion at <unk>, St. Charles which is which is scheduled to open in the late in the fall of 2025.
Speaker Change: And the cadence crossing development here in Las Vegas expected to be complete in mid 2026.
Speaker Change: As these projects come to conclusion, we expect to begin the next round of projects.
<unk> potentially replacing our 30 year old River boat at Paradise.
Speaker Change: And finally, we are beginning work on our casino resort development in Virginia with estimated capital spending of $150 million to $200 million in 2025.
Speaker Change: The total investment in this project related to the development of the temporary and permanent facilities is estimated to be $750 million.
Speaker Change: The temporary facility is on track to open in November of this year, while the permanent resort is scheduled to open in late 2027.
Speaker Change: To summarize our capital plans for 2025, we estimate maintenance related and property growth capital of $450 million and an additional $150 million to $200 million for Virginia, resulting in total capex for 2025 of approximately $600 million to $650 million.
Speaker Change: In addition to these investments we remain committed to returning capital to our shareholders.
Speaker Change: We paid a quarterly dividend of <unk> 17 per share during the fourth quarter.
Speaker Change: Also during the quarter, we repurchased $203 million in stock at an average price of $71 79 per share acquiring two 8 million shares.
Speaker Change: When combined with our share repurchases with our dividend program, we returned nearly $750 million to our shareholders during 2024 or more than $8 per share.
Speaker Change: As of year end 2024, we had $640 million remaining under our current repurchase authorizations.
Speaker Change: And the actual number of shares outstanding at year end was $86 2 million shares.
Speaker Change: Since October 2021, we have returned nearly $1 $9 billion in capital to our shareholders in the form of share repurchases and dividends.
Speaker Change: <unk>, our share count by more than 23% over that time period.
Speaker Change: We ended the quarter with total leverage of about two five times and lease adjusted leverage of about two nine times, we have no near term maturities strong free cash flow supported by a diversified portfolio of assets and ample borrowing capacity under our credit agreement continuing to place our company in the strongest financial.
Precision in our history.
Speaker Change: Transitioning to our 2025 outlook and our Las Vegas local segment, we expect stability will return to the Orleans and gold coast during the second half of the year as we fully anniversary competition.
Speaker Change: We expect the other properties in our local segment to perform slightly better than the overall locals market consistent with the 2024 performance of these properties.
Speaker Change: In downtown Las Vegas, we expect growth during the year in line with the downtown market.
Speaker Change: In our Midwest and South segment, we expect to benefit from an incremental five months of the treasure chest expansion, which opened in June of 2024.
Speaker Change: For the remaining properties in this segment, we expect results similar to 2024.
Speaker Change: For the first quarter, it's worth noting this segment has been impacted by poor weather conditions throughout January similar to the first quarter of 2024.
Speaker Change: Beyond our expected performance for these three segments with the continued success of investments like the Fremont and treasure chest, our pipeline of investments continues to strengthen our EBITDAR and position us for future growth.
Speaker Change: David that concludes our remarks, we're now ready to take any questions.
Speaker Change: Thank you Josh we will now begin our question and answer session.
Speaker Change: Like to ask a question. Please press Star then one on your Touchtone phone.
Speaker Change: Prompt that your hand has been raised should you wish to withdraw your request. Please press Star then two.
Speaker Change: If youre using a speakerphone. Please use your handset when asking your question.
Speaker Change: We will pause for a moment, while we compile our list of questionnaires.
Speaker Change: Our first question comes from Steve <unk> of Stifel. Steve. Please go ahead.
Speaker Change: Yeah, Hey, guys, good afternoon, Hey, Keith and Josh So so without giving.
Speaker Change: Formal guidance for the full company, Josh you have given us some high level guidance around certain parts of Europe.
Speaker Change: Around certain parts of your business and just wondering if you could maybe help us again from a high level help us understand how you're thinking about maybe your.
Speaker Change: Your core customers versus your versus your retail customers.
Speaker Change: In 25, just I guess, just trying to understand how youre thinking about.
Speaker Change: Both of those segments and I would assume stability is what youre going to say, but I wanted.
Speaker Change: Wanted to ask that question anyway.
Speaker Change: Yes, so thanks, Steve I'll take a shot at it I think what.
Speaker Change: What we've seen really very consistently as our core customer has been really growing.
Speaker Change: And so we would expect that customer segment to continue to grow.
Speaker Change: To grow.
Speaker Change: In terms of retail I would divide that customer into really.
Speaker Change: Two parts of our business one in Las Vegas, and one outside of Las Vegas, the retail customer for us and in the markets outside of Las Vegas have largely been stable, meaning bouncing around flat year over year in terms of growth for probably the better part of a year if not long.
Speaker Change: So we're really.
Speaker Change: Poised for that that part of the business to convert our pivot to positive at some point, although it hasn't at this at this juncture.
Speaker Change: And I think that's probably more reflective of the broader.
Economic issues facing that customer segment.
Speaker Change: In terms of Las Vegas.
Speaker Change: Throughout 2024, what we've seen is what I would call it stabilizing of impact.
Speaker Change: Stabilizing our recovering.
Speaker Change: Kind of performance from our retail customer, meaning getting less bad year over year sequentially. So year over year. The declines are getting less bad sequentially as we move through 2024, and I think as we look through to 2025.
Speaker Change: We would expect us to really kind of start to reach more stability, maybe still be down a little bit in the second half of the year, but once we fully anniversary. The competition I don't think we will start to see growth in that segment.
Speaker Change: <unk>.
Speaker Change: In 2525, our best opportunity for that would be in the second half, but I'm not sure. If we'll get there this year or not it will depend on things that are a little bit out of our control.
Keith Smith: Keith I don't know if theres anything you want to add to that.
Keith Smith: I think thats fairly summarizes where we're at with quarter in retail.
Keith Smith: Yes.
Josh Hirschberg: Perfect commentary thanks, Josh.
Speaker Change: The second question again, maybe maybe trying to dig in a little bit more towards towards guidance and I apologize but.
Speaker Change: Maybe help us think about.
Speaker Change: Flow through in 'twenty, five or a better understanding of how youre thinking about maybe some of that.
Speaker Change: The headwind or tailwind that you might be.
Speaker Change: Starting to encounter on the margin front as well and then just real quick a housekeeping question in terms of how youre thinking about.
Speaker Change: Corporate expense for the year would be helpful as well thanks.
Speaker Change: Yeah.
Speaker Change:
Speaker Change: So I'll take a shot at this in terms of flow through and margins look I think from an expense perspective, we continue to see expense pressures, but nothing like what we've seen kind of over the last several years. So I would stick with the theme of expenses moderating a while still a bit challenging.
Speaker Change: I think overall things continue to trend in a direction thats favorable from an expense perspective.
Speaker Change: And what we really need to start seeing is kind of better revenue growth from primarily that retail segment that we spoke about to get to kind of enhance our flow through but I think we're at a period of time, where we can manage our margins fairly effectively in this environment absent any significant change in our customer spend behavior.
Speaker Change: And I think that applies really across our portfolio.
Speaker Change: Yes, I think you've seen margins fairly consistent recently and that's what you should think about as you think.
2025, it's again, the LVL absent Orleans and gold coast exceed.
Speaker Change: Exceeding 50% margins in the MSR.
Speaker Change: Being consistent at 37% and as Josh said.
Speaker Change: Yes.
Speaker Change: Most expenses are moderating and we're able to manage through it so.
Speaker Change: You should think about 2025 think about consistency.
Speaker Change: And I think overall if.
Speaker Change: If you look at our property level margins, they've been consistently above 40% really sense since COVID-19 So man.
Speaker Change: Managing.
Speaker Change: Through all of the challenges while maintaining a very.
Speaker Change: Very healthy margins, but I think people were skeptical that we'd be able to maintain and I think we've after four years would hopefully have built some confidence that we can manage and deliver this level of performance consistently.
Speaker Change: You asked about corporate expense and.
Speaker Change: I think for 2025.
Speaker Change: I would build in about 3% to three 5% kind of growth in corporate expense we.
Speaker Change: We do have kind of a onetime item in 2025 were were making some larger donations that will hit corporate expansion. So I think a good number for for for this year is about $95 million.
Speaker Change: Okay, great appreciate the color thanks, guys.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Barry Jonas with Truth Securities Berry. Please go ahead.
Speaker Change: Hey, guys online was ahead of our expectations, even when factoring in the one timers just curious did the port NFL hold in the quarter flow through to you guys at all or were just other elements of growth enough of an offset.
Speaker Change: I think the answer to that is yes, and yes that we certainly were impacted in the army.
Speaker Change: <unk> space by.
Speaker Change: The lower hole during NFL season at the same time, we saw good growth in the business.
Speaker Change: And good growth from a market access agreements as well as <unk>.
Some growth from our small but growing online gaming business.
Speaker Change: Understood and then just as a follow up Keith there's lots of activity. These days on the Legislative front as you look at states discovery discussing gaming curious where do you see the greatest risks and maybe opportunities for Boyds perspective.
Speaker Change: Yes look as you look across the landscape. It's early in the season.
Speaker Change: Theres lots of gaming bills out there we're monitoring all of them.
Speaker Change: And paying attention and it's really hard to judge.
Speaker Change: One thing to most of these sessions, some someplace like Louisiana, Hasnt gone into session, yet and so we're monitoring them.
Speaker Change: Early.
Speaker Change: We've been through this.
Speaker Change: <unk> for a lot of years.
Speaker Change: And so we'll just have to see what happens, but I don't really have any other comments beyond that.
Speaker Change: Understood alright, thanks, so much guys nice quarter.
Speaker Change: Thank you thank.
Speaker Change: Thank you. Our next question comes from Carlos <unk> of Deutsche Bank Carlo. Please go ahead.
Speaker Change: Hey, guys. Thank you for taking my question, Josh you talked a little bit about regionals.
Speaker Change: Turning around a little bit for the last year on a same store basis.
Speaker Change: And obviously the last few months fourth quarter specifically.
Speaker Change: Sure.
Speaker Change: At least what we see from a <unk> perspective.
Keith Smith: Certainly kind of showed through in your net revenue in Keith's comments about what the same store portfolio.
Keith Smith: But then I guess, taking your commentary around 2025.
Keith Smith: It sounded as though you were insinuating a flattish year over year same store kind of EBITDA trajectory in my interpreting that right and then secondly is there anything that kind of.
Keith Smith: Hearing.
Keith Smith: Your willingness to maybe talk about an improving trend lines in 2012.
Keith Smith: Yes, So I think your interpretation is correct I think.
Keith Smith: For those of you, who remember and follow along we had what we thought was going to be a challenging comparison to Q4 of last year with all the one time benefits that we had that we didn't get the benefit of this year.
Keith Smith: We had a little bit better.
Keith Smith: Treasure chest and we expected in Q4, and we also had a little bit better performance throughout the portfolio quite honestly than we expected I think.
Keith Smith: When we remain cautious because.
Keith Smith: I don't think we've seen enough of strength in primarily the retail segment given my comments earlier to say that they have pivoted to contribute to sustainable kind of a growing a growing segment now maybe that will happen, but that's not what we're seeing in the customer <unk>.
Keith Smith: At this point, we're seeing just more.
Keith Smith: I'm trying to think of how to describe more consistency in their play that's not not pivoting to consistent growth if that if that makes sense. So that's the hesitation to kind of get excited about what it was.
Keith Smith: A little bit better quarter than maybe what we expected from the Midwest and south.
Keith Smith: Look I.
Keith Smith: I think it's just a natural hesitation to go think about the entire year ago too far on a limit at this point, there's a lot of things that can go on.
Keith Smith: We think it will overall be a better year, but.
Keith Smith: There's nothing that jumps out at you that says.
Keith Smith: You should predict something significantly greater.
Keith Smith: Yes.
Keith Smith: I know this isn't.
Speaker Change: I know this isn't related to your question Carlo, but I just want to.
Keith Smith: Remind people.
Speaker Change: January so far in the Midwest and South business has been very similar to January of last year with the weather. So.
Speaker Change: Not that that's an answer to your question, but I'm, just saying don't don't forget that.
Speaker Change: Understood and if I could just a follow up obviously you guys.
Speaker Change: Last three quarters have kind of stepped up the buyback to over 200.
Speaker Change: Very steady at 100 million a quarter and I think that the refrain has always been at least 100 million quarter.
Speaker Change: Certainly have gotten more aggressive with your buyback activities.
Speaker Change: Couple that with kind of the.
Speaker Change: The elements of the development pipeline, the capex that you're spending.
Speaker Change: On the room Remodels.
Speaker Change: Clearly the other projects that you talked about Virginia cadence potentially Illinois getting started later.
Speaker Change: Weirdness.
Speaker Change: Within the context of any current M&A or asset acquisitions portfolios that you might be looking at.
Speaker Change: Where do you guys have you guys kind of frame the returns on capital that youre spending relative to something that you might do outside of the company.
Speaker Change: Yes, so I think it's.
Speaker Change: Strictly an evaluation of the alternatives that we have in front of US based on the returns that they will generate.
Speaker Change: No.
Speaker Change: If we didn't have good projects like the treasure chest for instance, or some of the projects that we're pursuing for as part of the recurring.
Speaker Change: Property growth investments.
Speaker Change: Wouldn't be doing them would be investing more in returning capital to shareholders. So it's really a balance of where we can get the best returns.
Speaker Change: And we've mentioned before we have a pipeline of projects.
Speaker Change: We have plenty of projects to choose from we have to choose the best ones that have continued to generate superior returns and that's why we try to do it in a manner that we're doing it weigh that against repurchasing shares and then if another opportunity whether it be greenfield development or acquisition it'll just be evaluated in the same context.
Speaker Change: It will have to be a compelling opportunity relative to either investing in our portfolio or buying back shares.
Josh Hirschberg: Understood. Thank you Josh Thanks, Keith sure yes.
Speaker Change: Thank you.
Speaker Change: The next question comes from Jordan Bender of citizens JMP Jordan. Please go ahead.
Speaker Change: Good morning, everyone. Good to hear about the outperformance in the locals market, it's been a little bit tougher to decipher what the true growth.
Speaker Change: In the <unk> market has been with all the new competition, so without kind of getting into <unk> guidance can you maybe help us with what that exit rate actually kind of looks like and more specific to you guys.
Speaker Change: What would you contribute the outperformance that you're calling out versus the overall market.
Speaker Change: If you cut out for one second if you could re ask your question I apologize.
Speaker Change: Yes, I guess, it's been just a little bit tougher to decipher what the true underlying growth of the locals market.
Speaker Change: Bandwidth all the competition. So can you just kind of help us with what the exit rate is for the locals market into the new year, and then I guess more specific to you guys. What would you contribute your outlook of outperformance versus the market too.
Speaker Change: I think in terms of look art or our own performance.
Speaker Change: And our outperformance versus kind of what we call the same store market in 2024.
Speaker Change: A combination of having some refreshed product.
Speaker Change: Good marketing programs and just a good overall operation.
Speaker Change: The promotional environment here in Las Vegas has remained fairly stable and we remain very disciplined on that front as we've talked about in our prepared remarks, we've seen good growth from our core customers and continued steady growth from the growth from that group.
Speaker Change: And some stability as Josh talked about amongst the retail customers.
Speaker Change: In terms of kind of the exit rate of growth in the LVL as you think about 2025.
Speaker Change: <unk>.
Speaker Change: It's kind of tough to predict is it low single digits, probably if you were to depending on your estimate of where the new competitor.
Speaker Change: Much revenue the new competitor generated on a quarterly or annual basis. Throughout 2024, you have to subtract that out of the market I think what you'd be looking at as a marker kind of growing in that low single digit range. So I think that continues into 2025.
Speaker Change: Helpful and on the follow up any sense of what the Paradise move to land, but cost you guys.
Speaker Change: No we're still in the design phase I mean, it's.
Speaker Change: If you think about your treasure chest, which we quoted in the $100 million range, it's probably something similar it's not significantly larger or smaller.
Speaker Change: Great. Thank you very much.
Speaker Change: Thank you our.
Speaker Change: Our next question comes from David Katz of Jefferies. David. Please go ahead.
David Katz: Hi afternoon, congrats on your quarter.
Speaker Change: Excellent.
Speaker Change: I also wanted to go back to some of the capital allocation on the M&A side right because I know we've had conversations about.
Speaker Change: Properties smaller companies larger companies.
Speaker Change: It's a pervasive thing and so the follow up really is how.
Speaker Change: How do you think about risk tolerance levered.
Speaker Change: Leverage take on.
Speaker Change: And.
Speaker Change: Opco propco versus owned and operated a little insight there would help thanks.
Speaker Change: I don't think our views on this have changed much over the years.
Speaker Change: We certainly prefer.
Speaker Change: To purchase Holdco as opposed to Opco, but in today's world. Most of what we have the opportunity to buyer opco suit it doesn't discourage or dissuade us from looking at an asset because its in that structure once again preference to buy holdco.
Speaker Change: Because of leverage we've talked about this in the past.
Speaker Change: We are flexible with our leverage profile.
Speaker Change: Allowing leveraged to float up for an acquisition.
Speaker Change: As long as we can see it return to a level that we wanted to return to.
Speaker Change: So as long as we can see a way to Delever quickly then we're okay with levered lending leveraged float back up.
Speaker Change: And.
Speaker Change: I would say that over the years once again, we've developed a good discipline when it comes to M&A or acquisitions I think we've done.
Speaker Change: It's quite an expertise and look it's got to be first of all a good strategic fit and the right market. It's got to be the right sized assets kind of a high quality asset.
Speaker Change: And thats kind of not a different set of facts today than it's been over the last several years.
Speaker Change: So that's when we think about M&A, we think about leverage we think about an opco propco oversold.
Speaker Change: Again, I think it's consistent over the last several years, but that is how do we think about it.
Speaker Change: Got it thank you very much.
Speaker Change: Thank you.
Brent: Our next question comes from Brent <unk> of Barclays. Please go ahead.
Brent <unk>: Hello, everybody. Thanks for taking my question.
Brent: I wanted to circle back on.
Brent: On the sort of post election trends question.
Brent: If you look at the Midwest and south regions that Werent affected by weather was there sort of anything encouraging at all I mean, we have seen sort of incremental.
Brent: Lift across many of our other sector as demand demand being called out just with consumers got a little bit better in any excess foot traffic or spend per visit or anything that you did see that was encouraging.
Brent: Because I think it's always.
Brent: We've said this in the past, it's always hard to discern kind of from a.
Brent: Sumer standpoint.
Brent: It is motivating them.
Brent: <unk> come out and participate.
Brent: In our business.
Brent: Is it a pre election post election phenomena.
Brent: Where are they.
Brent: Maybe less coming out less frequently pre election, and they came out more post election.
Brent: The revenue growth in the markets kind of across the board was it a little stronger post election, and pre election, Yes, I think it was depending on what markets you look at but for the most part yes. It was stronger in the fourth quarter is that a matter of the election is that a matter of consumers feeling better.
Brent: Matter of higher paychecks.
Brent: Always hard to sort through that but clearly the facts are little more growth in our markets in the fourth quarter than in the third quarter.
Brent: Could be seasonality.
Brent: Hard to hard to discern but does.
Brent: Does it feel like the consumer feels a little bit better today than they did earlier in the year.
Brent: I don't know, maybe a little bit, but not materially so not enough to take it and run with it I guess is what we're trying to say.
Speaker Change: That's really helpful guys, a follow up I have is on the Paradise project.
Speaker Change: Just sort of comparing its treasure chest, which you did with the build costs and I appreciate that but just digging into sort of the quality and qualified aspects of that project. When you think about treasure chest, which was which was a slam dunk.
Speaker Change: There were.
Speaker Change: Sort of a built in market in its area and you were taking out a ton of friction when you.
Speaker Change: When you took it from the boat to land I'm just curious if there is.
Speaker Change: A similar sort of.
Speaker Change: Natural factor in that project that will get you the sort of immediate lift and then if there's other factors in that market, we should consider when we think about.
Speaker Change: Parable IRR.
Speaker Change: Generally outside of development costs for the Paradise project, comparing it to treasure chest.
Speaker Change: I would encourage you to completely separate the two projects the market dynamics are completely different.
Speaker Change: Populations in the areas of completely different the level of competition surrounding Paradise.
Speaker Change: With all of the VLT or Btt's, Illinois is significantly greater than it is.
Speaker Change: In the New Orleans or were at the counter area and so outside of build costs, while the dynamics will be different.
Speaker Change: We.
Speaker Change: You save money was there less friction going from a riverboat operation to a non riverboat operation yes, absolutely.
Speaker Change: But the dynamics other than that it will be completely different I think we were all surprised just to be clear about the level of pick up a treasure chest, we expected a great return.
Speaker Change: We didn't expect to double revenues.
Speaker Change: Have revenues be up kind of 80% pre.
Speaker Change: Pre project, so I think thats been a homerun and I would not factor that into our Paradise development.
Speaker Change: Loud and clear thanks, everybody next quarter.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Next question comes from Dan <unk> of Wells Fargo, Dan. Please go ahead.
Dan Wells: Hey, good afternoon. Thanks for taking my questions first one is really the local centric but it.
Dan Wells: It could relate to the Midwest and south as well the current administration's they propose reducing or eliminating taxes on tips and more recently overtime pay and social security payments.
Dan Wells: It seems like it would play right into your sweet spot, but perhaps you can put some numbers around any of this impact if you think it might be incremental to your business either from a cost or revenue standpoint.
Dan Wells: Okay.
Dan Wells: Obviously its statement of the obvious but I'll say it anyways, which is look it all depends on what shape of bill takes and what the exact.
Dan Wells: No.
Dan Wells: Guardrails, R&M parameters or specifics of any bill that gets passed clearly any.
Dan Wells: If the local consumer whether it be here in Las Vegas, or what's going to be deal largely to locals throughout the country is healthier.
Dan Wells: Lower taxes on their income.
Dan Wells: It.
Dan Wells: We will support our business, we will benefit from it what does that translate to in terms of dollars couldnt begin to tell you.
Dan Wells: Is it millions of dollars, yes, how many.
Dan Wells: One to 10 10 to 20 actually don't know because it all depends on what that bill looks like but it will be incremental.
Dan Wells: So the business as we think about the business today.
Dan Wells: Got it yes, no I get it's still early but it's something worth asking and then just pivoting back to the balance sheet net leverage.
Dan Wells: Sounds like it's going to be up from I think a year and you said about $2 nine just given the capex, you've laid out and kind of at the EBITDAR expectations. I guess as you think about buying back stock and organic growth opportunities maybe versus M&A.
Dan Wells: Is there a threshold or through our leverage target through which to think about.
And maybe along with that is there a scenario.
Dan Wells: Clearly your stock has been performing well, we consider using that.
Dan Wells: Your stock as a currency in an M&A transaction.
Dan Wells: Yes look in terms of how we would fund an M&A transaction, it's all very fact specific.
Dan Wells: Ill comment on than we historically have not used our equity as currency, but its all very fact specific in terms of leverage a little bit earlier that we would be very accommodating from a leverage profile standpoint for the right acquisition to our leverage to go up.
Dan Wells: So as long as we could see it coming down in the future and that remains true.
Dan Wells: Look we're fairly disciplined in terms of looking.
Assets in terms of M&A and it's again.
Dan Wells: If we find the right asset and find the right opportunity.
Dan Wells: Likely to execute but Josh talked earlier about we look at share buybacks and the return we get from that and we look at the returns from our internal investments. So we look at M&A and we try and balance it all we talk about this balanced approach to capital allocation it's not.
Dan Wells: Investing in any one thing or allocating it at any one place it's trying to allocate it across the board. So that we have a very strong foundation to continue to grow from.
Dan Wells: So.
Dan Wells: Yes.
Dan Wells: It's the best I can do at Josh.
Dan Wells: The only thing I was going to add Dan you mentioned the two nine that you referenced was lease adjusted leverage.
Dan Wells: Current leverages about two and a half today and lease adjusted leverage today is two nine times.
Dan Wells: Didn't say that it was going out to two point now I just wanted to be clear yes.
Dan Wells: Alright got it thank you.
Dan Wells: Thanks, Dan.
Speaker Change: Our next question comes from Shaun Kelley of Bank of America, Sean. Please go ahead.
Shaun Kelley: Hi, good afternoon, everyone.
Shaun Kelley: Josh and Keith most of my questions have been asked and answered, but a couple of small ones first of all on Norfolk, If we could.
Shaun Kelley: Obviously, a bit more color on the kind of facility timing, but could you just help us out there with scope and scale of that project in terms of position count or just kind of how we should think about it.
Shaun Kelley: And maybe also just any plans around ramp up our marketing just given the size of what youll start with there.
Speaker Change: Yes, so here's how I think about it is actually pretty simple so.
Speaker Change: Mostly on the cost of it is built within the $750 million overall project costs.
Timing is November of this year and from a financial return standpoint, or incremental EBITDA standpoint, you should assume zero.
Speaker Change: It will be a small modest facility.
Speaker Change: And you should just assume it's breakeven.
Speaker Change: Might be slightly positive might be slightly negative you should assume breakeven.
Speaker Change: Okay.
Speaker Change: We're basically at the same time going to be focused on building. The ultimate project, that's what small to start with.
Speaker Change: I mean, sorry, just maybe to push on that for a moment then like what would be the point of doing it if the contribution was here or is it.
Speaker Change: Requirement to get something open and operating as a part of the development agreement or something.
Speaker Change: Yes, it's part of the overall development agreement will be opening a temporary facility.
Speaker Change: Transitional facility.
Okay.
Speaker Change: Thats helpful. Thanks, Thanks for that and then second follow up would just be just going back to treasure chest and obviously.
Speaker Change: The property has been a big success, but there was some concern as particularly as New Orleans opened up.
Speaker Change: And some incremental improvement there that perhaps you'd see a little bit of spillover a little bit of impact have you.
Speaker Change: You observational or seen anything I mean, we've obviously got access to some of the state level reported data, but just as you look at it as the run rate cooled off there at all or have you been.
Speaker Change: Generally impressed by the levels Youre seeing any change in behavior as that thing as that asset started to stabilize.
Josh Hirschberg: Josh will.
Speaker Change: I'd be happy with this comment.
Speaker Change: Jewelry for Q2, our Q4 performance from a revenue standpoint, it was better than our Q3 performance. So I think maybe whatever went on in downtown New Orleans assisted us overall.
Speaker Change: Okay set the bar low then thank you very much.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Joe Stauff of Susquehanna Joe. Please go ahead.
Speaker Change: Okay. Thanks, Keith Josh.
Speaker Change: Question on the.
Speaker Change: The renovations sleeve of your Capex.
Speaker Change: Outlook $100 million.
Speaker Change: And wondering similar to your project Capex sleeve of $100 million.
Speaker Change: That should should that also be something that we assume you'll continue.
Speaker Change: Say going forward.
And then I was wondering if you could just.
Speaker Change: Kind of comment.
Speaker Change: From your perspective in terms of your.
Speaker Change: Where are you seeing regional competitive pressure in terms of what markets I mean, certainly we can.
Speaker Change: We can guess, but I was just wondering.
Speaker Change: From your perspective, where you see the.
Speaker Change: The bigger sort of impacts from competitive pressure I think you <unk>.
Speaker Change: Answered one of them right in Sean's question thus.
Speaker Change: Thus far but I was wondering if you can comment on the other areas.
Josh Hirschberg: Look I'll answer the last question as Josh talked about the Capex side of your question, but from a competitive standpoint.
The promotional landscape the competitive landscape has been.
Josh Hirschberg: Fairly.
Josh Hirschberg: Consistent for 'twenty four we don't see much change in 'twenty five look there were some some new additions to new supply additions in northern Illinois, and impact I will a little bit in there as it goes.
Josh Hirschberg: A project in eastern Illinois outside of Chicago that potentially impacts northwest, Indiana. It's early.
Josh Hirschberg: But so we're watching those none of those have had a significant impact on us and so as we think about is there a market, where we will see larger competition that another market.
Josh Hirschberg: Once again, the New Orleans market week towards our treasure chest operation continues to perform at a very high level.
Josh Hirschberg: Can't speak to what everyone else is going on in the market there, but we're continuing to do well in.
Josh Hirschberg: Everything seems pretty stable.
Josh Hirschberg: Yes.
Josh Hirschberg: I think we're pretty well.
Josh Hirschberg: Keith's comments you are saying.
Well insulated from competition and reality.
Speaker Change: At least for the foreseeable future I think from the just to clarify on the $100 million room refurbishment projects.
Josh Hirschberg: You can think of that as well.
Josh Hirschberg: We're catching up coming out of Covid capital kind of stuff and so when we started talking about that we would say we said it was going to be $100 million in 2024 and $100 million in 2025, and then it would go away.
Josh Hirschberg: It's playing out as we actually spent less in 2024, that's going to be what gets shifted out to 2026 and Thats why we think it will be done in mid 2026, so to the extent, we're able to hit the $100 million that we expect to spend this year and then there'll be another 50 in the first half of next year, and then that will be done.
Josh Hirschberg: Got.
Josh Hirschberg: To the extent that for some reason because it takes us longer or whatever and we don't spend the full 100, youll see that rollover, but.
We've got the projects identified we've got the budgets identified its $200 million, it's just really spread over what time period that we execute on those so that's that and then that's not to be confused with the $100 million we spend.
Josh Hirschberg: Every year that we started spending every year for the growth projects like Fremont treasure chest meeting space at <unk>, St. Charles cadence crossing and then eventually Paradise and others to comp that's a recurring $100 million of growth capital.
Speaker Change: Understood and can I squeeze one more in in how to think about just.
Josh Hirschberg: The potential construction disruption.
Josh Hirschberg: In the locals market from your Suncoast.
Josh Hirschberg: Projects as well as Orleans.
I think we there could be some I mean.
Josh Hirschberg: That is a risk to any commentary that we talk about.
Josh Hirschberg: And elaborate.
Josh Hirschberg: Surgery on an operating live gaming operation and so we.
Josh Hirschberg: We've done this before downtown.
Josh Hirschberg: Where we take.
Josh Hirschberg: Little bits and pieces of the casino floor and work our way across it and there will be some periods of time, where we have.
Josh Hirschberg: Disruption to our operations at this point we're not.
Josh Hirschberg: We're planning to mitigate that and we're not planning for disruption, but life will happen and we will let you know when that does happen.
Josh Hirschberg: But.
Josh Hirschberg: Yeah.
Josh Hirschberg: The reason we call out the hotel rooms is not only so that you know we've got capital is close every once in a while we run into unexpected issues with those as well. So again, we're not expecting we're plant trying to plan around it but some of these buildings are really old and you have to take out more of a tower than you expected and we've encountered that.
Before and those who followed us.
Josh Hirschberg: We have learned with us as we've experienced that so.
Josh Hirschberg: We're trying to let you know what we're doing.
Josh Hirschberg: And so if something goes awry you go okay that kind of makes sense, it's not it's not a surprise and we will be surprised by the disruption.
Guys are surprised by it so.
Josh Hirschberg: That's kind of what we're trying to do here.
Josh Hirschberg: Okay. Thanks, a lot.
Josh Hirschberg: Yes.
Josh Hirschberg: Thank you.
Speaker Change: Our next question comes from John Decree of CB R. E. John Please go ahead.
Speaker Change: Hi, Josh Hi, Keith Thanks for taking my question.
Speaker Change: Maybe shift gears to the online business, a little bit I know, we covered a lot of ground already but.
Speaker Change: Josh gave us really good detail on Capex investments for the upcoming year and even into 2026. So curious if you have much plans.
Investing in the online business this year, particularly here kind of I gaming business. I know you gave us EBITDA guidance, but curious if there's any kind of opex investments in that and then.
Speaker Change: I guess then the bigger picture question is what would you need to see in that business to kind of.
Speaker Change: Push more investment dollars to.
Speaker Change: To the gaming business is it more kind of state legislation, that's kind of how you think about investing in gaming.
Speaker Change: Over a multiyear period.
Speaker Change: Okay.
Speaker Change: We are very pleased with the platform we have it is scalable and so as well.
Speaker Change: Other states legislators begin to consider this and potentially approve this it's not going to require significant capex to to do anything to critical scale up to take advantage of those opportunities.
Speaker Change: We're happy with kind of the platform, we have and where it's at I would not assume any significant capex in that business and it will continue to have modest growth going forward.
Speaker Change: We will accelerate probably.
Speaker Change: Only only when other states begin to legalize this product.
Speaker Change: Understood. Thanks, Keith if I could sneak one more in.
Speaker Change: Not not a ton free to add.
Speaker Change: It's more of a strict phenomenon I'm curious.
Speaker Change: If you've seen any business differentiators in the locals market during F. One this year.
Speaker Change: It would be just less disruption or a different levels of visitation and then similar question about expectations for Super Bowl this year.
Any meaningfully variance in your business volumes in the locals market.
Speaker Change: Yes, So look I think we should think about F. One.
Speaker Change: Last year.
Speaker Change: The programming and the city was different so it's maybe hard to unpack it because it was a raiders game in town Raiders play Denver that weekend and so there was more demand there was more demand for hotel rooms, there was a different customer in town, which was good.
Speaker Change: Because the prior year the town just didn't fill up to the extent it was expected look year over year room rates were down.
During the <unk>.
Speaker Change: I am frame because the.
Speaker Change: No.
Speaker Change: Irrational exuberance as they say from year, one of F. One kind of subsided. So.
Speaker Change: It was a little less disruptive, but it still takes.
Speaker Change: Months to put that together, which disrupts the strip and still takes.
Speaker Change: More than a month to tear it down which disrupts the strip in terms of Super Bowl I think what you want to think about is Super Bowl is always a great time in Las Vegas always one of our busiest weekends im not sure room rates will be quite as high year over year.
The growth rates will be down year over year from the Super Bowl standpoint, Tom will still before it will still be a very strong weekend for us just.
Speaker Change: On the non gaming side, maybe not quite as robust as it was last year.
Speaker Change: That's great. Thanks, Keith I appreciate all that color and congratulations to all on the I think milestone anniversary.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our final question comes from Chad Beynon of Macquarie Chad. Please go ahead.
Chad Beynon: Hi, good afternoon.
Speaker Change: Thanks for taking my question just one for me.
Speaker Change: Josh you talked about the managed and other segment in 2025 essentially being.
Flat year over year, obviously trees don't grow to the sky, but this has been one of the higher growth areas of your company and I know Theres a phase one into phase two so.
Speaker Change: Should we assume that you might just be.
Speaker Change: Being a little conservative.
Speaker Change: Given all the volatility in the market in terms of this property growing or is there something else in the database or competition or maybe disruption with phase one.
Speaker Change: <unk>.
Speaker Change: It should kind of limit limit some of the growth that we've seen in the past couple of quarters. Thanks.
Speaker Change: Yeah.
Speaker Change: One of the things that limits growth as it is a very high performing property as we sit here today and Theres only so many people who can put in that building.
Speaker Change: On a weekend, which is when most of the business is.
Speaker Change: Is generated and so there are just natural limitations, we cannot add capacity to the four walls, we live in today.
Speaker Change: Therefore, just.
Speaker Change: Boeing that business much beyond what it is today.
Speaker Change: It is very difficult.
Speaker Change: Nickel standpoint.
Speaker Change: It is at capacity on weekends and holiday weekends, just almost every weekend. So it's a physical limitation as much as anything.
Speaker Change: I think the next opportunity for growth to the point you made Chad is once the phase one is done and we get that up and running and work out the kinks out, but that's probably a 2026 sometime in 2026 kind of contribution.
Speaker Change: It's not disruption.
Speaker Change: <unk>.
Speaker Change: The project is.
Speaker Change: Largely outside the existing four walls.
Speaker Change: Yeah.
Speaker Change: Okay. Thank you both nice quarter I appreciate it.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: This concludes our question and answer session I'd now like to turn the call over to Josh for concluding remarks, thanks, David and thanks for everyone. Joining the call today. If you have any follow up questions feel free to reach out to the company.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.