Q1 2025 MGM Resorts International Earnings Call
Speaker Change: [music].
Unknown Executive: Good afternoon and welcome to the MGM Resorts International first quarter 2025 earnings conference call. Joining the call from the company today are Bill Hornbuckle, Chief Executive Officer and President.
Good afternoon, and welcome to the MGM resorts International first quarter 'twenty twenty-five earnings conference call.
Bill Hornbuckle: Joining the call from the company today are Bill Hornbuckle, Chief Executive Officer and President.
Unknown Executive: Corey Sanders, Chief Operating Officer Jonathan Halkyard, Chief Financial Officer and Treasurer Gary Fritz, President of MGM Interactive Kenneth Feng, Executive Director and President of MGM China Holdings Howard Wang, Vice President, Investor Relations Participants are in listen-only mode.
Corey Sanders: Corey Sanders Chief operating officer.
Speaker Change: Jonathan half yard Chief Financial Officer, and Treasurer, Gary Fritz President of M. G. M Interactive, Kansas thing Executive Director and President of MGM, China Holdings, and Howard Wang Vice President Investor Relations.
Speaker Change: Participants are in listen only mode. After the company's remarks, there will be a question and answer session.
Unknown Executive: After the company's remarks, there will be a question and answer session. In fairness to all participants, please limit yourself to one question and one follower.
Speaker Change: In fairness to all participants please limit yourself to one question and one follow up.
Unknown Executive: Please note, this conference is being recorded.
Speaker Change: Please note this conference is being recorded.
Howard Wang: Now, I would like to turn the call over to Howard Wang. Please go ahead. Thank you, Gary.
Speaker Change: Now I would like to turn the call over to Howard Wang. Please go ahead.
Howard Wang: Thank you Gary welcome to the MGM resorts International first quarter 2025 earnings call. This call is being broadcast live on the Internet at investors Dot MGM resorts Dot com and we have also furnished our press release on form 8-K to the SEC on this call. We will make forward looking statements under the safe Harbor provisions of the federal Sig.
Howard Wang: Welcome to the MGM Resorts International first quarter 2025 earnings call. This call is being broadcast live on the internet at investors.mgresorts.com. And we have also furnished our press release on Form 8K to the SEC. On this call, we will make forward-looking statements under the safe harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that could cause actual to differ from these forward-looking statements is contained in today's press release and in our periodic filings with the SEC. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise.
Howard Wang: These laws actual results may differ materially from those contemplated in these statements.
Howard Wang: Information concerning factors that could cause actual results to differ from these forward looking statements is contained in today's press release and in our periodic filings with the FCC, except as required by law. We undertake no obligation to update these statements as a result of new information or otherwise.
Howard Wang: During the call, we will also discuss non-GAAP financial measures when talking about You can find the reconciliation to gap financial measures in our press release and investor presentation, which are available on our website.
Howard Wang: During the call. We will also discuss non-GAAP financial measures when talking about the performance.
Speaker Change: You can find the reconciliation to GAAP financial measures in our press release and Investor presentation, which are available on our website. Finally this presentation is being recorded I will now turn it over to Bill Hornbuckle. Thank you Howard and before we get started on behalf of everyone at MGM, our condolences go out to the family friends and colleagues and all that.
Unknown Executive: Finally, this presentation is being recorded.
Howard Wang: I will now turn it over to Bill Hornbuckle. Thank you, Howard.
William Hornbuckle: And before we get started, on behalf of everyone at MGM, our condolences go out to the family, friends, colleagues, and all those who are impacted by the passing of Alexis Herman, our beloved and longtime MGM Resorts Board Director, and the first African American to serve as U.S. Secretary of Labor. Alexis was an incredible woman and a tireless champion of our company and our culture, helping us to ground every board deliberation with her compassion, her sound judgment, and valued business expertise. She was always so generous with her time, proving individual career mentorship to myself and many other leaders at MGM and throughout our community.
Bill Hornbuckle: So were impacted by the passing of a Lexus sharpened our beloved and longtime MGM resorts Board director and the first African American to serve as U S Secretary of Labor Alexa.
Alexis was an incredible woman and a tireless champion of our company and our culture, helping us to ground every board deliberation with their compassion or sound judgment and valued business expertise. She was always so generous with their time proving individual career mentorship to myself and many other leaders that M. G M and throughout our community.
William Hornbuckle: As a public servant, she will always be remembered for her hard work to secure low unemployment, safe work conditions, and a global standard for child labor, opening doors for individual pursuits and advancement of livelihoods.
As a public servant, she will always be remembered for her hard work to secure low unemployment safe work conditions in the global standard for child labor opening doors for individuals individual pursuits, and advancement of livelihoods, our life's work touched so many and she truly will be greatly missed.
William Hornbuckle: Her life's work touched so many, and she truly will be greatly missed.
William Hornbuckle: We at MGM are fortunate to have a foundation built on exceptional employees and leaders, and I'm pleased to share with you today that their efforts have driven yet another strong quarter of financial results highlighted by an impressive turnaround at BetMGM. Make no mistake, our ability to deliver outstanding experiences to our customers and strong results to our shareholders start with my colleagues across MGM Resorts, who have maintained record-level net promoter scores for our Gold Plus customers once again this quarter. Their collective hard work culminated in a notable milestone this month when our MGM Rewards Program crossed 50 million members, which represents growth of over 50% since 2020, an achievement that reflects the staying power of MGM's iconic brands and our powerful customer insights, which can amplify the Marriott partnership and drive on-me channel opportunities, particularly with BetMGM.
Speaker Change: With MGM, we're fortunate to have a foundation built on exceptional employees and leaders and I'm pleased to share with you today that their efforts have driven yet another strong quarter of financial results highlighted by an impressive turnaround at bet M. Jim Mcniel.
Bill Hornbuckle: Make no mistake our.
Bill Hornbuckle: Our ability to deliver an outstanding experiences to our customers and strong results to our shareholders start with my colleagues across MGM resorts will maintain record level net promoter scores for a gold plus customers once again this quarter there.
Bill Hornbuckle: Their collective hard work culminated in a notable milestone this month whenever M. Jeremy Awards program costs 50 million members, which represents growth of over 50% since 2020.
An achievement that reflects the staying power of Mgm's iconic brands and our powerful customer insights, which can amplify the Marriott partnership and drive omni channel opportunities, particularly with Beth M. G M I.
William Hornbuckle: I'm confident in saying no other mature gaming company has seen the database growth as strong as we have over this same period. As we navigate the balance of the year, our business is on solid footing. Led by our luxury offerings, we deliver an elevated experience to more guests than any of our competitors on the Las Vegas Strip, making us prime beneficiaries of a strong citywide events and convention calendar. Our business is also equipped with ample liquidity, a strong balance sheet, and operational agility. Specifically, our experienced operators and leaders have shown the ability to adjust quickly in varying economic conditions, which have presented themselves throughout the company's lifespan of nearly 44 decades.
Bill Hornbuckle: I'm confident in saying no other mature gaming company has seen the database growth as strong as we have over the same period.
Bill Hornbuckle: As we navigate the balance of the year our business is on solid footing led by our luxury offerings, we're delivering an elevated experience to more guests than any of our competitors and almost vegas strip, making us prime beneficiaries of a strong citywide events and convention calendar.
Bill Hornbuckle: Our business is also equipped with ample liquidity, a strong balance sheet and operational agility, specifically are experienced operators and leaders have shown the ability to adjust quickly in varying economic conditions, which have presented themselves throughout the companys lifespan of nearly 44 decades.
William Hornbuckle: We entered this year on offense with a $200 million EBITDA enhancement plan already in motion. We now believe we fully can implement more than $150 million in 2025. We're also seeing continued growth from our existing exclusive Marriott collaboration, which we still expect will account for 900,000 room nights this year, up from the 660,000 last year. Adding to these are diversity in geography and market mixes, once again proving to be a strength during these times of volatility. The setup in Las Vegas remains steady with a favorable room supply dynamic. As current rooms under construction represent only 1.6% of the existing supply among the lowest of the top 25 MSAs.
Bill Hornbuckle: We entered this year on offense with a 200 million EBITA enhancement plan already in motion. We now believe we fully can implement more than 150 million. In 2025. We're also seeing continued growth tomorrow existing exclusive Marriott collaboration, which we still expect will account for 900000 room nights. This year up from the 660000 last year.
Bill Hornbuckle: <unk>.
Bill Hornbuckle: Adding to these our diversity in geography and market mix is once again proving to be sprint strength. During these times of volatility.
Bill Hornbuckle: To set up in Las Vegas remains steady with a favorable room supply dynamic as current rooms under construction represent only 1.6% of the existing supply among the lowest of the top 25, Msas. Additionally, second quarter 'twenty 'twenty five airline capacity and Harry Reid Airport remains scheduled at record levels domestic flight capacity.
William Hornbuckle: Additionally, second quarter 2025 airline capacity at Harry Reid Airport remains scheduled at record levels. Domestic flight capacity in each month from April to June is up 2%, with 14 of the 25 largest metro markets increasing capacity into Las Vegas. Las Vegas Strip Resorts were solid despite the prior periods benefiting from the Super Bowl and the full room capacity at MGM Grand given its current room remodel program. As we approach the end of April, we continue to see a resilient operating environment with key metrics in line with what we would expect in the ordinary course of business.
Bill Hornbuckle: And each month from April to June is up 2% with 14 of the 25 largest metro markets increasing capacity into Las Vegas.
Bill Hornbuckle: Oh, Las Vegas strip resorts were solid despite the prior periods benefiting from the Super Bowl and the full room capacity the MGM Grand given its current room remodel program.
Bill Hornbuckle: As we approach the end of April we continue to see a resilient operating environment with key metrics in line with what we would expect in the ordinary course of business. In fact April will be a record hotel month for our Las Vegas strip operations.
William Hornbuckle: In fact, April will be a record hotel month for our Las Vegas Strip operations. In our regional properties, operations remain steady with only a modest decline in revenue due to some inclement weather. Importantly, we ended the period strong with records for the month of March in RevPAR and Slot Win. Also, we have once again shown the ability to generate segment-adjusted EBITDA margins at or above 30%.
Bill Hornbuckle: And our regional properties operations remained steady with only a modest decline in revenue due to some inclement weather importantly, we ended the period strong with records for the month of March and Revpar and slot win and also we have once again shown the ability to generate segment adjusted EBITDAR margins at or above 30%.
William Hornbuckle: Switching over to China, MGM China is maintaining mid-team share, ending the quarter at 15.7, even with new supply ramping up in the market. We continue to be proud, and we're able to debut 10 new villas at MGM Macau today, with another 18 opening by the end of the year. At MGM Kotai, we're in the process of adding 60 new suites that are targeting a first quarter 2026 opening. These are welcome new room products that will help support demand from our premium gaming customers.
Bill Hornbuckle: Switching over to China, MGM, China is maintaining mid teens share ending the quarter at $15 seven even with new supply it ramping up in the market. We continue to be proud and we're able to debut 10, new villas at MGM Macau today with another 18 opening by the end of the year at MGM Cotai, we're in the process of adding.
Bill Hornbuckle: 16, new suites that are targeting a first quarter of 2026 opening. These are welcome new room products that will help support demand from our premium gaming customers.
William Hornbuckle: As solid as our various business segments have performed, the spotlight shined brightest on BetMGM this quarter. The venture reported an increase in net revenue from operations of 30% for the quarter and EBITDA of $22 million, representing a tremendous improvement of over $150 million from the prior year period. iGaming net revenues from operating grew 27% and online sports net revenues from operations grew 68%, each on the heels of strong engagement improvement. We have previously discussed the focus on iGaming and a more thoughtful and profitable approach towards customer acquisition, and the team has executed on it impressively for the year-over-year turnaround.
Bill Hornbuckle: As solid as our various business segments that performed the spotlight shine brightest on bet MGM. This quarter. The venture reported an increase in net revenue from operations of 34% for the quarter and EBITDA of 22 million, representing a tremendous improvement of over $150 million from the prior year period, I gaming net revenues Rob.
Bill Hornbuckle: <unk> grew 27% and the online sports net revenues from operations grew 68% each on the heels of strong engagement improvement. We have previously discussed our focus on our gaming and then more thoughtful unprofitable approach towards customer acquisition and the team is executing at an impressively for the year over year turnaround.
William Hornbuckle: MGM Digital, our consolidated international digital business that does not include the BetMGM venture, made great progress during the quarter as well, with a launch in Brazil and our first deployment of sports betting platform that we acquired from Tipico last year. In Brazil, we have seen evidence of early traction with healthy retention rates. Also having a fantastic media partner like Grupo Globo has provided flexibility in marketing, allowing us to be very deliberate on entry. We are focused on executing our marketing plan throughout the second quarter as this business continues to ramp. And we're excited to launch our live dealer platform from the MGM Grand later in May.
Bill Hornbuckle: M G M digital our consolidated international digital business. It does not include the bet MGM venture made great progress during the quarter as well with the launch in Brazil, and our first deployment of sports betting platform that we acquired from typical last year in Brazil, we have seen evidence of early traction with healthy retention rates also having a fantastic media partner.
Bill Hornbuckle: Like Grupo Globo, it provided flexibility in marketing, allowing us to be very deliberate on entry.
Bill Hornbuckle: We are focused on executing our marketing plans throughout the second quarter. As this business continues to ramp and we're excited to launch our live dealer platform from the MGM Grand later in May.
William Hornbuckle: In Japan, we've made meaningful progress. Earlier this month, we entered into an agreement with our general contractors to proceed with construction activities as planned, and we held an official groundbreaking ceremony in Osaka on April 24. Stateside, we remain on track to submit our RFP in New York over the summer and continue to expect to hear back on our licenses before year's end.
Bill Hornbuckle: In Japan, we've made meaningful progress earlier. This month, we entered into an agreement with our general contractors to proceed with construction activities as planned and we held an official ground opening breaking ceremony and art.
Bill Hornbuckle: Soccer on April 24th State side, we remain on track to submit our RFP in New York over the summer and continue to expect to hear back on our licenses before year's end.
William Hornbuckle: Overall, MGM is well-positioned for the future. We have market-leading operations in Las Vegas and the regions, and the resorts have received significant investment and care over most recent years. Our digital businesses in the U.S. and beyond are growing and turning profitable, and we have an inevitable pipeline of future project opportunities in Japan and hopefully New York, as well as a durable financial profile, including ample liquidity and a very solid balance sheet.
Bill Hornbuckle: Overall, MGM is well positioned for the future we have market leading operations in Las Vegas, and the reagents and our resorts have received significant investment in care over most recent years, our digital businesses in the U S and beyond are growing and turning profitable and we have an inevitable pipeline to future project opportunities in Japan, and hopefully New York.
Speaker Change: It's always a durable financial profile, including ample liquidity and a very solid balance sheet I'll now turn it over to Jonathan provides further details on the quarter. Thanks, Bill I'd like to Echo your comments about our team here at MGM resorts, we've delivered a really strong quarter of results. Despite a difficult year over year Super Bowl comp and over.
Jonathan Halkyard: I'll now turn this over to Jonathan to provide further details on the quarter. Thanks, Bill. I'd like to echo your comments about our team here at MGM Resorts. We've delivered a really strong quarter of results despite a difficult year-over-year Super Bowl comp and overall market volatility. These results are a testament to the strength of our operators, the teams who support them, and our employees who execute with excellence every day, so a huge thanks to the team. In Las Vegas, performance was solid, particularly when taking into account our expected year-over-year impact of about $65 million related to the Super Bowl last year, plus the impact from the room remodel at the MGM Grand this year, which we discussed in our last call.
Speaker Change: Market volatility. These results are a testament to the strength of our operators the teams who support them and our employees, who execute with excellence every day. So a huge thanks to the team.
Jonathan: And Las Vegas performance was solid, particularly when taking into account our expected year over year impact of about $65 million related to the Super Bowl last year, plus the impact from the room remodel at the MGM Grand This year, which we discussed in our last call segment, adjusted EBITDA was down $17 million.
Jonathan Halkyard: Segment-adjusted EBITDAR was down $17 million and included $37 million in business interruption proceeds during the quarter. When considering the puts and takes of the quarter, we more than made up for the headwinds. The value of the Marriott strategic relationships was notable this quarter, helping to achieve record first-quarter occupancy. The incremental customers also helped drive record first quarter slot win, which was up 7%. The regional operations held in well, and when adjusted for the $12 million of business interruption proceeds we received, the EBITDA decline was mostly attributed to challenging weather at the start of the quarter.
Jonathan: And included 37 million in business interruption proceeds during the quarter when considering the puts and takes of the quarter, we more than made up for the headwinds the value of the Marriott strategic relationships was notable this quarter, helping to achieve record first quarter occupancy.
Jonathan: The incremental customers also helped drive record first quarter slot win which was up 7%.
Jonathan: The regional operations held in well and when adjusted for the $12 million of business interruption proceeds we received the EBITDAR decline was mostly attributed to challenging weather at the start of the quarter. The regional operators ended the quarter on a high note as Bill mentioned with record March slot with Revpar in the regional hotel portfolio.
Jonathan Halkyard: The regional operators ended the quarter on a high note, as Bill mentioned, with record March slot win. RevPAR and the regional hotel portfolio impressed, hitting monthly records for each month during the quarter. In Macau, margins held in at 28% due to strong OPEX control and other efforts to maximize the efficiency of our assets. The result was also notable given the advent of several very successful initiatives to drive tourism, including the Macau 2049 Residency Show at KOTAI and the Pali Art Museum at MGM Macau. Importantly, MGM China increased its dividend payout policy to 50% of distributable profits, up from 35%.
Jonathan: When pressed hitting monthly records for each month during the quarter.
Jonathan: In Macao margins held in at 28% due to strong opex control and other efforts to maximize the efficiency of our assets. The result was also notable given the advent of several very successful initiatives to drive tourism, including the Macau 2049 residency show at Cotai and the Poly Art Museum.
Jonathan: At MGM, Macau importantly, MGM, China increased its dividend payout policy to 50% of distributable profits up from 35% and earlier this month MGM, China closed on a new larger revolving credit facility, which provides about $3 billion of liquidity and represents approximately.
Jonathan Halkyard: And earlier this month, MGM China closed on a new, larger revolving credit facility, which provides about $3 billion of liquidity, and represents approximately $1 billion of increased capacity, and extends maturities for four years to 2030. BetMGM continued its acceleration in the first quarter, reported positive $22 million of EBITDA. That's up $154 million from last year. And it's worth noting that the prior year was impacted by a number of headwinds, but these results reflect the strong execution against the strategy and the start of its returns. The business is healthy and it remains on track for its guidance of $2.4 to $2.5 billion in net revenues from operations this year and positive EBITDA.
Jonathan: $1 billion of increased capacity and extends maturities for four years to 2030.
Jonathan: But MGM continued acceleration in the first quarter reported positive $22 million of EBITDA, that's up $154 million from last year, and it's worth noting that the prior year was impacted by a number of headwinds, but these results reflect a strong execution against the strategy and the start of its return.
Jonathan: Once the business is healthy and it remains on track for its guidance of $2 four to $2 5 billion in net revenues from operations. This year and positive EBITDA and recall that the bet MGM results are reflected one month in arrears, one recorded in the MGM resorts results.
Jonathan Halkyard: And recall that the BetMGM results are reflected one month in arrears when recorded in the MGM Resorts results. MGM Digital, which is our consolidated international digital business, and it doesn't include BetMGM, continues to make progress. Revenues in this segment were impacted by adverse effects of regulations in the Netherlands and some tough comps in our largest market, Sweden, though we've seen some meaningful recovery starting in April. The year-over-year segment adjusted EBITDA decline for MGM Digital was anticipated due to additional headcount for strategic growth as well as costs related to the launch of BetMGM in Brazil, where we've increased our marketing momentum to start the second quarter.
Jonathan: M. G M digital which is our consolidated international digital business and it doesn't include bet MGM continues to make progress revenues. In this segment were impacted by adverse effects of regulations in the Netherlands, and some tough comps in our largest markets, Sweden, though we've seen some meaningful recovery starting in April the year over.
Jonathan: <unk> segment adjusted EBITDAR declined for MGM digital was anticipated due to additional head count for strategic growth as well as costs related to the launch of bet MGM in Brazil, where we've increased our marketing momentum to start in the second quarter. We note that this quarter, we provided quarterly historical data in our Investor Pres.
Jonathan Halkyard: We note that this quarter, we provided quarterly historical data in our investor presentation for the MGM Digital segment to help with your modeling. In Japan, MGM's equity commitment has increased to 428 billion yen, of which we now have remaining about 392 billion yen to invest for our future 43.5% ownership stake. Despite the increase driven by updated spend estimates as we finalized our negotiations with contractors, we still have a high conviction and a high teens percentage return on this project and remain on time to open in 2030. One item impacting corporate expense I want to highlight is a $9 million charitable donation that we proudly made during the quarter for an important City of Las Vegas initiative that makes the balance slightly elevated, but otherwise this line item is consistent with our historical level.
Jonathan: <unk> for the M D M digital segment to help with your modeling.
Jonathan: In Japan, Mgm's equity commitment has increased to 428 billion yen of which we now have reman remaining about 392 billion yen to invest for our future 43.5% ownership stake. Despite the increase driven by updated spend estimates as we finalized our negotiate.
Jonathan: <unk> with contractors, we still have a high conviction in a high teens percentage of return on this project and remain on time to open in 2030.
Jonathan: One item impacting corporate expense I want to highlight is the $9 million charitable donation that we proudly made during the quarter for an important the city of Las Vegas initiative that makes the balance slightly elevated but otherwise. This line item is consistent with our historical levels.
Jonathan Halkyard: We remain dedicated to continuously improve our business. Recall, we estimate the collective impact of enhancements that we announced last year will boost EBITDA by a run rate of $200 million, and we're now pacing to capture more than $150 million, taking effect this calendar year, 35% of which comes from revenue actions and 65% from cost savings. Now, I view our cash flow generation as our consolidated adjusted EBITDA plus our non-cash rent minus our CAPEX. And this not only provides us the ability to remain committed to all of our capital projects, but also take advantage of any dislocations in our stock price as a result of market volatility.
Jonathan: We remain dedicated to continuously improve our business recall, we estimate the collective impact of enhancements that we announced last year will boost EBITDA by a run rate of $200 million and we're now pacing to capture more than $150 million, taking effect. This calendar year, 35% of which comes from revenue actions.
Jonathan: And 65% from cost savings.
Jonathan: Now I view, our cash flow generation as our consolidated adjusted EBITDA, plus our noncash rent minus our capex.
Jonathan: And this not only provides us the ability to remain committed to all of our capital projects, but also take advantage of any dislocations in our stock price as a result of market volatility.
Jonathan Halkyard: Like we did in the fourth quarter, we saw significant value in our share price in the first quarter, and we took advantage by repurchasing shares. When you strip out the value of MGM China at its market value and assign a consensus value to our BetMGM venture, you end up with an implied multiple of just 3.3 times trailing 12-month adjusted EBITDA. To say nothing of the value of MGM Digital, a business we know is capable of a billion dollars in run rate top line with double-digit EBITDA margins. We think the current price represents an attractive opportunity and have continued to buy back stock.
Jonathan: Like we did in the fourth quarter, we saw significant value in our share price in the first quarter and we took advantage by repurchasing shares when you strip out the value of MGM, China at its market value and assign a consensus value to our bet MGM venture.
Jonathan: End up with an implied multiple of just three three times trailing 12 month adjusted EBITDA to say nothing of the value of MGM digital business. We know is capable of $1 billion and run rate top line with double digit EBITDA margins.
Jonathan: We think the current price represents an attractive opportunity and have continued to buy back stock, we repurchased nearly 15 million shares for about $494 million in the first quarter and we purchased another 8 million shares in the second quarter to date for $215 million as we and April or <unk>.
Jonathan Halkyard: We repurchased nearly 15 million shares for about $494 million in the first quarter, and we purchased another 8 million shares in the second quarter to date for $215 million. As we end April, our share count is nearly 45 percent lower than it was when we began our buying program, and we've received board approval for the ability to repurchase another $2 billion of shares.
Jonathan: Fair Count is nearly 45% lower than it was when we began our buying program and we've received board approval for the ability to repurchase another $2 billion of shares I'll turn it back to bill.
William Hornbuckle: I'll turn it back to Bill. Thank you, Jonathan. When I think about our business, it starts in Las Vegas, which remains on solid footing with our luxury offerings driving key results. This is complemented by the stability of the regional operations and MGM China, which clearly is now outpunching its weight and maintains mid-teens market share. We've also witnessed significant improvements in our Better MGM Venture results, and with the MGM digital segment is showing good early traction. And as Jonathan once again articulated, we see a dislocation in the markets for the combined value of these businesses and are taking advantage by repurchasing our own shares.
Bill Hornbuckle: Thank you Jonathan.
Speaker Change: Do you think about our business it starts in Las Vegas, which remains on solid footing with our luxury offerings driving key results.
Speaker Change: This was complemented by the stability of the regional operations and MGM, China, which clearly is now I'll pension out punching its weight and maintained mid teens market share.
Speaker Change: We've also witnessed significant improvements in our bedroom jam venture results and with the MGM digital that digital segment is showing good early traction and as Johnson once again articulated we see a dislocation in the markets with the combined value of these businesses and are taking advantage by repurchasing our own shares with that operator, we'll open it up for quest.
Unknown Executive: With that, operator, we'll open it up for questions. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then 2.
Speaker Change: <unk>.
Speaker Change: We will now begin the question and answer session.
Speaker Change: To ask a question you May press Star then one on your telephone keypad.
Speaker Change: If you're using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: To withdraw your question. Please press Star then two.
Unknown Executive: As a reminder, in all fairness, please limit yourself to one question and one follow-up.
Speaker Change: As a reminder, in all fairness, please limit yourself to one question and one follow up.
Brandt Montour: The first question is from Brandt Montour with Barclays.
Brent: The first question is from Brent <unk> with Barclays. Please go ahead.
Brandt Montour: Please go ahead. Hello, everybody. Thanks for taking my question. Thanks for all the details today on the call.
Brent: Hello, everybody. Thanks for taking my question and thanks for all the details today on the call. Your first question is about Las Vegas, you know, obviously really reassuring commentary about April and how that's tracking I was wondering if you could just unpack that April comment in terms of the major kpis.
Jonathan Halkyard: The first question is about Las Vegas. You know, obviously, really reassuring commentary about April and how that's tracking. I was wondering if you could just unpack that April comment in terms of the major KPIs, you know, which of those KPIs are growing stronger, which are a little weaker? How do you think about it?
Brent: Which of those Kpis are growing stronger, which are which are a little weaker how how do you. How do you think about April.
Jonathan Halkyard: Jonathan, you want to kick off? Sure. Yeah, I mean, the first thing that we look at is just overall demand as evidenced by things like hotel occupancy and rate. And so, as we mentioned in our prepared remarks, April in Las Vegas is shaping up to be a record April for the company, which is, we think, a very positive. Another area that we look to is group performance and event performance. And also, we've seen very strong response to events here in the market and our property specifically, as well as groups and the actual number of group participants that materialize and come here and spend.
Brent: Sure Jonathan you want to take up sure.
Jonathan: Yeah, I mean, the first thing that we look at it is just.
Jonathan: Overall demand as evidenced by things like hotel occupancy.
Jonathan: And right and so as we mentioned in our prepared remarks April in Las Vegas is shaping up to be a record.
Jonathan: April for the company, which is we think a very positive another area that we'd look to his group performance and event performance.
Jonathan: And also we've seen very strong response to events here in the market and our property specifically as well as groups.
Jonathan: And in the actual number of group participants that materialize and come here and spend the final thing I'd add is that Marriott the Marriott partnership for Us is.
William Hornbuckle: The final thing I'd add is that Marriott, the Marriott partnership for us, is performing exceptionally well. We already have, just through April, 440,000 room nights that have been booked. And I'll do the math, it's over 20,000 room nights a week are being booked through the Marriott channel. And these are customers that we think are very accretive as compared to the customers that they've replaced. A couple of thoughts on that.
Jonathan: It is performing exceptionally well we already have.
Jonathan: Just through April 440000 room nights that have been booked.
Jonathan: And you know you do.
Jonathan: I'll do the math, it's over 20000 room nights, a week are being booked through the Marriott channel and these are these are customers that we think are very accretive as compared to the customers that they would that they replaced so.
Jonathan: A couple of thoughts on that Bill did you have any maybe one other thought Brent that kind of puts it into some perspective.
William Hornbuckle: Bill, did you have anything to add? Maybe one other thought, Brent, that kind of puts it into some perspective. Normally, we book about 40% of our business 30 days out. That window has extended both in March and April to like 43 and 44, something of that ilk. But we still got to the desired result, and in April, we actually, in the rooms department, beat that both with a combination of OCK and rate of note. And so while it may be coming in later, based on, obviously, the overall economic condition of people's mindset in the world, it is still coming to Las Vegas, and we're still the beneficiary of it.
Jonathan: Normally we book about 40% of our business 30 days out.
Jonathan: That window is extended both in March and April to like 43, and 44 something of that ilk, but.
Jonathan: But we still got to the desired result, and in April we actually in the rooms Department beat that both a.
Jonathan: The combination of <unk> and rate of note.
Jonathan: And so while it may be coming in later based on obviously, the overall economic condition of People's mindset in the world.
Jonathan: It is still coming to Las Vegas, and we're still the beneficiary of it. So we feel we feel excited by that as we think it excites me about the right word given the environment. We're in but we're encouraged by that given our as we think about in the balance of the year.
William Hornbuckle: So we feel excited by that, as we think of exciting about the right word, given the environment we're in. But we're encouraged by that, given, as we think about the balance of the year. And the only other thing I would add is our slot volumes continue to be positive, as we saw in the first quarter.
Jonathan: And the only other thing I would add is our slot volumes continue to be positive as we as we saw in the first quarter.
Brandt Montour: Great. That's all really helpful, everyone.
Jonathan: Great. That's all really helpful, everyone and and just following up on that and maybe you could just square. This with you know everything everyone sees on the news et cetera, but specifically with regarded regarding international inbound.
Brandt Montour: And following up on that, and maybe you could just square this with, you know, everything everyone sees on the news, etc. But specifically with regarding international inbound, you know, it's been pretty well documented that inbound from Canada has been soft and some other major source markets that you guys get business from. But, you know, specifically regarding your higher end, which we would think would skew even more toward that type of business, how are you able to make up for that?
Speaker Change: Now what's been pretty well documented that that are inbound from Canada has been soft and some other major source markets that you guys get business from but specifically regarding your higher end, which we would think that skewed even more toward that type of business. How are you able to make up for that.
William Hornbuckle: Well, on the higher end, it's not really having any impact at all. Actually, we just had an amazing event in April with, you know, our higher end component of it. It's really the, you know, leisure type business, the Canadian business that is down. But we've been able to make it up in our Marriott blocks and in our casino blocks. You know, WestJet's the biggest carrier. They they're down about 15 percent, but we're only down about three or four. And obviously, it's down and we all understand what's happening again. But again, Marriott, large scale casino base, BetMGM consistently, omnichannel pounding.
Speaker Change: Well on the higher end, it's not really having any impact at all I actually we just had an amazing event in April with you know our higher end component of it. It's really the you know leisure type business. The Canadian business that is down, but we've been able to make it up in our <unk>.
Speaker Change: Maryann blocks and in our casino blocks.
Speaker Change: Yeah, it's the biggest carrier they they're down about 15%, but were only down about three or four.
Speaker Change: And obviously, it's down and we all understand what's happening again, but again Mary a large scale casino base that MGM consistently omnichannel pounding.
Speaker Change: And ultimately.
Brandt Montour: And ultimately, a once in a lifetime BACRA return of $10 million, you know, helped.
Speaker Change: Once in a lifetime Bachman Turner with $10 million.
Speaker Change: You know helped.
Brandt Montour: Excellent.
Speaker Change: Excellent thanks, everyone.
Unknown Executive: Thanks, everyone.
Carlo Santarelli: The next question is from Carlo Santarelli with Deutsche Bank. Please go ahead. Hey guys, thank you. It looks like in your filings, you disclosed obviously some of your payroll and labor and the year over year increases appear to be less than some of the escalators. Could we kind of read into that, that part of that is the efforts as part of the $150 million that you expect to achieve this year? Or is that kind of in excess of, or is this kind of a separate initiative? You know, I generally, yes, you can read into that, that that's a, that is, I guess, really a result of our continuous efforts to manage our costs here.
Speaker Change: The next question is from Carlo Santarelli with Deutsche Bank. Please go ahead.
Carlo Santarelli: Hey, guys. Thank you.
Speaker Change: It looks like in the new filings you disclosed obviously some of your payroll and labor and.
Speaker Change: The year over year increases appear to be less than some of the escalators could we kind of read into that that part of that is the efforts as part of the $150 million that you expect to achieve this year.
Speaker Change: Or is that kind of in excess of or is this kind of a separate initiative I guess I should say.
Speaker Change: Hmm.
Speaker Change: I you know I generally yes, you can read into that that that's a that is.
Speaker Change: Really a result of our continuous efforts to manage our costs here.
Jonathan Halkyard: It is, it's certainly true that we've been able to manage growth in FTEs across the company. In fact, in the first quarter, we were down in FTEs across our regions, Las Vegas and our corporate office. So you know, it's not, we can't tie those numbers to any specific actions we've taken. The fact of the matter is that we're always managing our labor expenses, and you're seeing a reflection of that. And Carlo, I think in the front end of our business, we've seen, we're beginning to see more and more digital interaction, whether it's concierge or call centers, people calling down for, I want a pillow from my room.
Speaker Change: It is it's certainly true that we've been able to manage growth in ftes across the company in fact in the first quarter, we were down in ftes across our regions Las Vegas, and our corporate office.
Speaker Change: So it's not we can hi, those numbers to any specific actions. We've taken are the fact of the matter is that we're always managing our labor expenses.
Carlo Santarelli: And Youre seeing a reflection of that and then Carlo I think in the front end of our business. We've seen we're beginning to see more and more digital interaction.
Carlo Santarelli: Either it's concierge, our call centers people, calling down for I Wanna Pillow from my room.
William Hornbuckle: And so the digital interface, which is probably carrying 80% of the traffic now, at least initially, and ultimately a small spattering, although we're going to get more and more into this, of AI, is proven to be very productive.
Carlo Santarelli: And so the digital interface, which would probably carrying 80% of the traffic now at least initially.
Carlo Santarelli: And ultimately a small spattering, although we're going to get more and more news of AI is proven to be very productive and so we're going to continue down that track.
William Hornbuckle: And so we're going to continue down that track.
Carlo Santarelli: Great, thank you guys.
Speaker Change: Great. Thank you guys and then just a clerical kind of follow ups as it relates to to the business interruption insurance.
Jonathan Halkyard: And then just a clerical kind of follow-ups as it relates to the business interruption insurance. Is that in revenue in EBITDAR or just EBITDAR? And could you give us any color? I know this is hard to handicap, but on any further proceeds you might expect to receive later in the year or in subsequent years, or is this kind of wrapping it up? Yeah, it's an EBITDAR. It's not recorded as revenue. We have now collected over $100 million, of course, a lot in the third quarter last year, and then another good slug this quarter. We're not finished.
Speaker Change: Is that in revenue and EBITDAR or just EBITDAR and could you give us any color I know this is hard to handicap on any further proceeds you might expect to receive later in the year or in subsequent years or is this kind of wrapping it up.
Speaker Change: Yeah. It is a it's an EBITDAR, it's not recorded as revenue.
Speaker Change: We have now collected over $100 million of course, a lot in the third quarter last year and then another good slug of this quarter. We're not finished we are still in active discussions with our carriers.
Jonathan Halkyard: We're still in active discussions with our carriers, and we do have significant claims remaining. That being said, I think we have received the majority, I would say over 50% of what we expect. And it will be, I think, lumpy from here on out and not as significant as we've collected so far. But we're really, we're very pleased having brought $100 million in for our shareholders over the past six months.
Speaker Change: We do have significant claims remaining that being said I think we have we have.
Speaker Change: We've received the majority of our I would say over 50% of what we expect and it will be it will be I think lumpy from here on out and not as significant as we've collected so far but we're really we're very pleased having brought $100 million and for our shareholders over the past six months.
Carlo Santarelli: Great, thank you guys.
Speaker Change: Great. Thank you guys.
David Katz: The next question is from David Katz with Jefferies, please go ahead. Good afternoon, everybody, I think.
Speaker Change: The next question is from David Katz with Jefferies. Please go ahead.
David Katz: Good morning afternoon, everybody.
Speaker Change: I think I.
David Katz: I wanted to just follow up on the comments regarding Japan, and it says that you've sort of locked in with your contractor, just in the context that, you know, materials availability and cost, you know, has become a discussion point. You know, what variability is left in that, you know, from this point forward, given the size of the project?
Speaker Change: I wanted to just follow up on the comments regarding Japan and.
Speaker Change: And it says that you sort of locked in with your contractor just in the context that you know materials availability and cost you know has become a discussion point.
Speaker Change: Hum.
Speaker Change: What variability is left in that.
Speaker Change: From this point forward given the size of the project.
William Hornbuckle: Yeah, we thank you for the question, David. We've been hard at work with our partners with the contractors to, of course, define the project itself, get it designed and nail down the major contracts. On the one hand, there will be some variability in terms of costs as we go forward, related just to overall input costs. We've done, I think, a good job of building in contingency into our budget for that potential. On the other hand, unlike other parts of the world, really before we even commence on a project like this in the coming quarters, the project will be fully designed.
Speaker Change: Yeah, we are thank.
David Katz: Thank you for the question David.
David Katz: We've been hard at work with our partners with the contractors to course define the project itself get it designed to nail down the major contracts.
David Katz: So on the one hand, there will be some variability in terms of costs as we go forward related just to overall input costs. We've done I think a good job of building and contingency into our budget for that potential on.
David Katz: On the other hand, unlike other parts of the world.
David Katz: Really before we even commence on a project like this in the coming quarters. The project will be fully designed so in terms of scope, we don't expect that to be.
William Hornbuckle: So in terms of scope, we don't expect that to be a factor at all in any changes in the cost of the project.
David Katz: A factor at all in any and any changes in the cost of the project.
William Hornbuckle: And just a couple more items. We, together with our partners, we're going to be looking, as we go forward, for opportunities to be as cost efficient as possible in the construction. And then finally, for our equity commitment, we've already hedged over half of our commitment in the forward yen markets to lock in some of these favorable exchange rates with the dollar and the yen. So we're all fully hedged through the middle of 2027 in terms of our equity contributions.
David Katz: And just and just.
David Katz: Couple of more items.
David Katz: We together with our partners, we're going to be looking as we go forward for opportunities to be as cost efficient as possible in the construction and then finally for our equity commitment we've already hedged over half of our commitment in the forward yet in markets to lock.
David Katz: In some of these favorable exchange rates against with the dollar and the yen. So we're all fully hedged through the middle of 2027 in terms of our equity contributions and then David on the <unk>.
William Hornbuckle: And David, on the other side of the equation, because we haven't really focused on this in some time, we said in the prepared comments, high teens return. Look, if we use Singapore as a proxy, a couple of interesting stats, five times more the population, if you just think of the Kansai Basin, never mind all of Japan. We have the same number of table games. We'll have twice the number of slots. Singapore just did over 600 million in the first quarter.
David Katz: Sorry, the equation, because we haven't really focused on this in some time.
David Katz: We said in the prepared comments high teens return look if we use Singapore as a proxy a couple of interesting stats five times more of the population. If you just think of the con side based on never mind all of Japan.
David Katz: We had the same number of table games will have twice the number of slots, Singapore just did over 600 million in the first quarter.
William Hornbuckle: To think this thing can't five years from now, or four, no, it's five years from now, it's 2030, do over 2 billion in EBITDA in return is, you know, we're excited by what the opportunity could ultimately be there. Noted.
David Katz: To think this thing can't five years from now or four and five years from now to 2030 due over 2 billion in EBITDA and return.
David Katz: As you know.
David Katz: Ah we're excited by what the opportunity could ultimately be there.
David Katz: Noted.
David Katz: And just following up quickly on your comment regarding the Bonvoy partnership, it sounds like it's going obviously quite well. I don't know if that's exceeded or meeting your expectations, but any possibility or thoughts about expanding that in some fashion going forward that you might be willing to share a little bit with us? It's exceeded it. I think you know this by the deal. We've obviously committed to W. Over the first 10 years, we have yet another property here in Las Vegas we need to commit. And so we're spending time and energy eventually thinking about that.
David Katz: And just following up quickly on your comment regarding the bond Boy you know partnership.
David Katz: It sounds like it's growing obviously quite well I don't know, if that's exceeded or meeting your expectations, but any possibility or our thoughts about expanding that in some fashion going forward that you might be willing to share a little bit with us.
David Katz: It's exceeded it I think you know this by the deal we we've obviously committed to W. Over the first 10 years, we have yet another property here in Las Vegas, we need to commit and so we're spending time and energy eventually thinking about that and then.
William Hornbuckle: And then, you know, Tony and I have talked briefly about the notion of international and potentially where this relationship could go, whether it's Japan or other places. And so we'll spend some more time thinking about that.
David Katz: And I have talked briefly about the notion of international and potentially where this relationship could go whether it's Japan or other places and so we will spend some more time thinking about that but there's nothing definitive but notionally. That's we love this partnership so far and so.
William Hornbuckle: But there's nothing definitive. But notionally, we love this partnership so far. And so, you know, all things considered.
David Katz: All things considered.
William Hornbuckle: I would, David, I just add, there has been one, I consider it an important expansion and the partnership recently, which is the inclusion of group customers here in Las Vegas, where now if you're coming as part of a big meeting or convention, and you're staying with us, you can get your Bonvoy points. That makes us a very appealing destination for meeting planners, and not to mention the participants themselves. So I think that's going to really help turbocharge the production out of the Marriott deal. Thanks and good evening.
David Katz: I would David I'd just add.
Speaker Change: There has been one I consider it an important expansion in the partnership recently, which is the inclusion of group customers here in Las Vegas.
Speaker Change: Now if you are coming as part of a big meeting our convention and Youre staying with US you can get your bond boy points.
Speaker Change: That makes us a very appealing it.
Speaker Change: Destination for meeting planners and not to mention the participants themselves. So I think that's going to really help turbocharge the production out of the Marriott deal.
Speaker Change: Got it thanks and good evening.
Shaun Kelley: The next question is from Shaun Kelley with Bank of America. Please go ahead. Good evening, everyone. Thanks for taking my question. Bill or Jonathan, I wanted to expand, just to maybe wrap up on Japan, since we were talking about it.
Shaun Kelley: The next question is from Shaun Kelley with Bank of America. Please go ahead.
Speaker Change: Yeah.
Shaun Kelley: Hi, good evening, everyone. Thanks for taking my question.
Speaker Change: Hello, Jonathan.
Jonathan: Wanted to expand just just to maybe wrap up on Japan. Since we were talking about it could you just remind us of the overall budget either in dollars or in yen for the project as we sit here today I, just sort of a housekeeper there and let out of your equity contribution there just again for kind of modeling and then the strategic question.
Shaun Kelley: Could you just remind us of the overall budget, either in dollars or in yen, for the project as we sit here today, just sort of a housekeeper there, and the let-out of your equity contribution there, just again for kind of modeling?
Shaun Kelley: And then the strategic question would be on New York. We obviously saw one of the large participants in the market here sort of change their programming or planning around that. We've definitely heard other people discussing sort of their strategy to that market.
Jonathan: And it would be on New York, We obviously saw one of the large participant in the market here sort of change there.
Jonathan: Cramming or planning around that we've definitely heard other people discussing sort of their strategy to that market, where does it have to be upset.
William Hornbuckle: Where does MGM sit as it relates to New York? Thanks.
Jonathan: Any are you doing.
William Hornbuckle: You do Japan, if I can. Yeah. So our, in terms of the overall cap table for the project right now, you know, our commitment of $428 billion, oh, sorry, a billion yen, is about a 43.5% equity interest. Our partners, Oryx, and then minority shareholders make up the balance of that. And then we have a 530 billion yen credit facility on the project. So that's the cap table as it stands right now. We expect our equity, our contributions to occur over the next four years, including 2025, about 600 million U.S. to 700 million per year. And then the credit, along with our equity partners, and then the bank facility will kick in at that point in 2028 and carry the funding through to the opening in 2030.
Jonathan: Thank you, yes so.
Jonathan: Our in terms of the overall.
Jonathan: Cap table for the project right now and our commitment of $428 billion.
Speaker Change: Sorry billion yen.
Speaker Change: Ah is a about a 43, 5% equity interest our partners or X and then minority shareholders make up the balance of that and then we have a 530 billion yen credit facility.
Speaker Change: And.
Speaker Change: On the project. So that's the that's the cap table as it stands right now we expect our equity Concho our contributions.
Speaker Change: To occur over the next four years, including 2025 about 600 million USD $700 million per year.
Speaker Change: And and then the credit along with our equity partners and then the the bank facility will kick in at that point in 2028 and carry the funding through to the opening in 2030. So that's just kind of a rough overview.
William Hornbuckle: So that's just kind of a rough over. And then on New York, we are planning to make our submission at the end of June, which I think we all understand is the date. We haven't changed appreciably the plan we like we came up with. I think we're comfortable with the city we're going through and got most of our environmental impact study done, et cetera. And so we really haven't changed the plan. It is of interest. We watch where the others are going and potentially where they'll go. It's our anticipation they'll still be three licenses. You know, we'll take a unique position.
Speaker Change: And then on New York.
Speaker Change: We are planning to make a submission at the end of June which I think we all understand is the date.
Speaker Change: We haven't changed appreciably in the plan.
Speaker Change: We like what we came up with I think we're comfortable with the city with which we're going through and got most of our environmental impact study done et cetera.
Speaker Change: And so we really havent changed the plan. It is of interest we watch where the others are going and potentially where they'll go it's our anticipation that will still be three licenses.
Speaker Change: We will take a unique position I think I think we always have there.
Shaun Kelley: I think we always have there. And so it's, you know, all things being relative and see what happens. You never know. It is New York. We'll make our submission next month. All right. Thanks so much.
Speaker Change: And so it's you know all things being relative and see what happens you never know it is New York.
Speaker Change: We'll make a submission next month and an excellent.
Speaker Change: Thanks, So much and then just to change gears for a second on MGM digital I think.
Shaun Kelley: And then, just to change gears for a second on MGM Digital, I think, you know, I caught that it sounds like you're going into a little bit of a marketing phase there in Brazil. Can you just remind us of maybe the cadence of, you know, investment around, especially this year, as I think it's a little, you know, lumpy as you're kind of building out that business versus kind of what maybe, you know, your exposure or your processes for, you know, the year, the year after. Just help us think about the investment period here. Yeah, thanks.
Speaker Change: Court date, it sounds like Youre going into a little bit of a marketing phase there in Brazil can you just remind us of maybe the cadence of investment around especially this year as I think it's a little lumpy as you kind of building out that business versus kind of what maybe your exposure or your processes for the year. The year. After just don't help.
Speaker Change: Think about the investment period here.
Speaker Change: Yeah. Thanks things are starting off terrific in Brazil, we've been live since Q1 in terms of the pacing of investment.
William Hornbuckle: Things are starting off terrific in Brazil. We've been live since Q1. In terms of the pacing of investment, you know, we believe that the first half of this year, probably bleeding over a little bit into Q3 is the core of our marketing deployment. We probably got off to a little bit slower start than we anticipated. So that may shift out by a month or so. But principally, the marketing, the real marketing dig against the business will occur over, let's call it the next six months. And then we'll see, you know, those, those investments begin to tether.
Speaker Change: Believe that the first half of this year, probably believing over a little bit into Q3 as the core.
Speaker Change: Our marketing deployment.
Speaker Change: We got off to a little bit slower start than we anticipated so that may shift out by by a month or so but principally the marketing the <unk>.
Speaker Change: Real marketing dig against the business will occur over let's call. It the next six months.
Speaker Change: And then we will see those those investments begin to tether thats the current plan.
William Hornbuckle: That's the current plan. Thank you.
Speaker Change: Thank you.
Stephen Grambling: The next question is from Stephen Grambling with Morgan Stanley. Please go ahead. Hey, thanks. I think over the past four years, your purchases have been about almost now 95% of the current market cap. And you also highlighted the discount and EBITDA multiple on the domestic business.
Stephen Grambling: The next question is from Stephen Grambling with Morgan Stanley. Please go ahead.
Stephen Grambling: Hey, thanks.
Stephen Grambling: I think over the past four years your repurchases have been about almost now 95% of the current market.
Stephen Grambling: You also highlighted a discounted EV to EBITDA multiple on the domestic business. So I'm curious are there other opportunities to create value by monetizing assets or simplifying the story that you're thinking about or that you would think about it.
Jonathan Halkyard: So I'm curious, are there other opportunities to create value either by monetizing assets or simplifying the story that you're thinking about or that you would think about if in a stock state? Yeah, well, you know, thanks for that question. And we have seen a tremendous opportunity recently just in repurchasing our own shares. I mean, we put a page in the presentation this quarter that we've done from time to time. But really, the situation with the trading in the stock has just presented us with, we think, a fantastic opportunity to repurchase shares for the shareholders. I mean, you brought up ways to kind of monetize that.
Stephen Grambling: <unk> right now.
Stephen Grambling: Yeah.
Stephen Grambling: Thanks for that question and.
Stephen Grambling: We have seen a tremendous opportunity recently just in repurchasing our own shares.
Stephen Grambling: We put a page in the presentation. This quarter that we've done from time to time, but but really the situation.
Stephen Grambling: The situation with the trading in the stock has just presented us with.
Stephen Grambling: We think a fantastic opportunity to two <unk>.
Stephen Grambling: Repurchase shares for the shareholders I mean, you brought up ways to kind of monetize that.
William Hornbuckle: If you look not too far in the past where we were able to sell Gold Strike in Tunica for, I think that was about 11 times EBITDA, the Mirage for, I think it was 14 or 15 times EBITDA, and now we can buy the Bellagio and Aria for three times EBITDA. So we think that that's a pretty good use of capital, and that's why we've been so aggressive in the past four months. And then, Stephen, remember, I suspect you do, that Northfield Park and Springfield are ongoing discussions, so those are assets that we've been talking about for a while.
Stephen Grambling: You can look not too not not too far in the past, where we were able to sell our goldstrike and tunica for I think that was about 11 times EBITDA. The Mirage for I think it was 14 or 15 times EBITDA and now you know we can buy the <unk> and ARIA for three times EBITDA.
Stephen Grambling: We think that that's a pretty good.
Stephen Grambling: Pretty good use of capital and that's why we've been so aggressive in the past past four months and then Stephen remember I suspect you do that Northfield Park in Springfield are ongoing discussions.
Stephen Grambling: Those are assets that we've been talking about for a while.
William Hornbuckle: Yeah, makes sense. And maybe one quick follow up just on the digital side, I guess. Is there any way to think about the contribution from an omni-channel standpoint, the benefits that you're getting outside of just... that MGM individually, but how it may benefit the retail business as well or the brick and mortar business. Yeah, well, look, we certainly see beyond just the direct benefits, you know, between the marketing synergy, and the synergies with, with our host teams here in Vegas helping bed MGM. On the regional side, I mean, it's just like another reason for folks to be an MGM customer, you know, in region is the fact that they can continue that relationship with us, both in their on property play, and play at home.
Speaker Change: Maybe just maybe one quick follow up just on the digital side I guess.
Speaker Change: Is there any way to think about the contribution from an omnichannel.
Speaker Change: Yes standpoint.
Speaker Change: But you are getting outside of just.
Speaker Change: That MGM individually, but how it may benefit the retail business as well or the paperboard business.
Speaker Change: Yeah, well look we certainly see beyond just the direct benefits between the marketing synergy and the synergies with our with our host teams here in Vegas, helping bet MGM on the regional side I mean, it's just another reason for folks to be an MGM customer and region.
Speaker Change: The fact that they can continue that relationship with us both on their own property play and.
Speaker Change: And play at home and we built the rewards ecosystem to underscore that we have event programming around that too.
William Hornbuckle: And we've built the rewards ecosystem to underscore that we have event programming around that. To encourage customers for their play in both channels. And that's really, you know, borne fruit and markets like Detroit and in the capital area as well. And what we have seen definitely in this quarter, in particular trips up pretty significantly in our span, it's on a little bit lower base, but they're pretty significant numbers we're beginning to see out of that channel. Great.
Speaker Change: Encourage customers for their play in both channels and.
Speaker Change: And that's really borne fruit in markets like Detroit, and and then the capital area as well.
Speaker Change: We have seen definitely in this quarter in particular, our trips up pretty significantly in our spend and its on a little bit lower base, but they're pretty significant numbers are beginning to see out of that channel.
Speaker Change: Great. Thank you so much.
Stephen Grambling: Thank you so much.
John Decree: The next question is from John DeCree with CBRE. Please go ahead.
John Decree: The next question is from John decree with CBRE. Please go ahead.
John Decree: Hi, good afternoon, everyone.
Hi, good afternoon, everyone.
Jonathan Halkyard: Jonathan, maybe for you to piggyback on that last question, can you talk a little bit about how you think of share repurchases going forward as CapEx starts to ramp up? I think if I heard correctly, your equity contribution for Japan would be up six to 700 per year beginning this year, and New York maybe around the corner if you're lucky enough for that opportunity. And so how should we think about your approach to balance sheet management and repurchasing as that CapEx steps up a little bit? I guess the specific question there is, would you let leverage go up a little bit to take advantage of all the opportunities in front of you if they should stay this way?
Speaker Change: Jonathan maybe for you to piggyback on that last question can you talk a little bit about how you think of share repurchases going forward as capex starts to ramp up I think if I heard correctly.
Speaker Change: Your equity contribution for Japan, We've got six to 700 per year, beginning this year and New York, maybe around the corner, if you're lucky for that opportunity and so how should we think about your approach to balance sheet management, and and repurchasing as that Capex steps up a little bit I guess the specific question there is.
Speaker Change: Would you let leverage go up a little bit to take advantage of all the opportunities in front of you if they should stay this way.
Speaker Change: Hum.
Jonathan Halkyard: Yeah, you know, I've probably been saying for six quarters that our pace of share repurchases was going to come down slightly. And we haven't really done that just because we've looked at the math, some of which I just went through and said, this is a really compelling opportunity. But that being said, yeah, our Japan equity investments are now closer. New York is coming closer. So it'll be important for our own planning to reserve some capital for those investments. I would not be adverse to letting leverage tick up a little bit in order to fund some of these opportunities.
Speaker Change: Yeah, you know I've, probably been saying for six quarters that our pace of share repurchases was going to work.
Speaker Change: Going to come down slightly and we haven't really done that just because we've we've looked at the math some of which I just went through and said this is really compelling opportunity, but that being said yeah. Our Japan equity investments are now closer in New York is coming closer so it'll be important for our own <unk>.
Speaker Change: Lanning to reserve.
Speaker Change: Some capital for those investments.
Speaker Change: I would not be adverse to letting leverage tick up.
Speaker Change: A little bit in order to fund some of these opportunities we do enjoy the diversification of our operations.
Jonathan Halkyard: You know, we do enjoy the diversification of our operations here in Las Vegas in the regional markets. We have a nice dividend flow at MGM China, and we are really not investing any more capital in MGM or MGM Digital for that matter. Those investments are behind us and those businesses are really primed to grow. But I do think that for the remainder of this year, we'll not be as aggressive as we've been in the first four months, just recognizing some of the things that are in front of us right now. Got it. Understood. That's helpful, Jonathan.
Speaker Change: Herein.
In Las Vegas, and the regional markets, we have a nice dividend flow at MGM China.
Speaker Change: And we are really not investing any more capital in bet MGM or MGM digital for that matter those investments are.
Speaker Change: Are behind Us and those businesses are really primed to grow so, but I do think that for the remainder of this year will not be.
Speaker Change: As aggressive as we've been in the first four months just recognizing some of the things that are in front of us right now.
Speaker Change: Got it understood. That's helpful. Jonathan and then if I could for a follow up change gears to Macau, a little bit and we've asked a lot of questions on this call.
John Decree: And then if I could, for a follow-up, change gears to Macau a little bit. I know we've asked a lot of questions on this call. previously about Vegas and indicators that you see there as it relates to domestic demand. We probably have similar questions as it relates to Macau and the Chinese consumer. So I'm curious if you could give us any insight as to what you're seeing really since the beginning of the month when the tariffs went into effect, if there's been much change in how you're booking business and kind of visitation levels you're seeing in Macau and anything you could share would be helpful.
Speaker Change: Previously about Vegas, and indicators that you see there as it relates to domestic demand, we probably have similar questions as it relates to Macau and the Chinese consumer. So curious if you could give us any insight as to what.
Speaker Change: What what Youre seeing.
Speaker Change: It really since the beginning of the month when the tariffs went into effect if there's been much change in how youre booking business and kind of visitation levels Youre seeing in Macau and anything you could share would be helpful.
Kenneth Feng: Kenny, you're living it every day. Why don't you take this? Yeah, okay. Thanks for the question. So far, we are not seeing any material impact. and we are continuing to closely monitor the situation. In Q1, our business was resilient and we saw our market share. As we all know, China government is taking all kinds of measures, policies to spur the economy. Macau is resilient, Macau market is resilient, it's unique. So we see our business is quite stable. Actually, we just had like, today is the first day of Golden Week and we had a pretty good, stronger pre-holiday week.
Speaker Change: Your living it every day why don't you take this.
Speaker Change: Yeah. Okay. Thanks for the question on so far we are not seeing any material impact.
Speaker Change: And there we are continuing to closely monitor the.
Speaker Change: The situation in.
Speaker Change: Q1, our big in our.
Speaker Change: Our bedroom and wanted to be lenient.
Speaker Change: We saw all market share.
Speaker Change: As we all know China picking.
Speaker Change: Taking all hands off of megahertz policies to spur the economy.
Speaker Change: Macau is resilient.
Speaker Change: Home market is the medium anything unique.
Speaker Change: So we see our business is quite stable actually.
Speaker Change: We just had that I got today is the first day of our Golden week.
Speaker Change: And we had a pretty good still.
Speaker Change: Longer pretty pretty holiday week.
Kenneth Feng: And today is the first day, so our booking is pretty strong. We feel confident for this upcoming holiday. Thanks. I appreciate it.
Speaker Change: And today the first day.
Speaker Change: So all the booking is pretty strong.
Speaker Change: Feel confident.
Speaker Change: For the upcoming holidays.
Speaker Change: Yeah.
Speaker Change: Thanks.
Unknown Executive: Thanks all.
Speaker Change: Appreciate it thanks Paul.
Barry Jonas: The next question is from Barry Jonas with Truist. Please go ahead. Hi guys, with with the likelihood of higher tariffs, could you talk a little bit more about how that could impact operations and budgets for some of your domestic development pipeline? Uh Right now, it's... It's hard to see how it would have much of an impact on the development pipeline. We've been focused more in the near term on its potential impact on just cost of sales and operational considerations, and it's quite a small impact. We've done virtually all of our slot purchases for the year.
Speaker Change: The next question is from Barry Jonas with Truest. Please go ahead.
Barry Jonas: Hey, guys.
Barry Jonas: The likelihood of higher tariffs could you talk a little bit more about how that could impact operations and budgets are for some of your domestic development pipeline.
Barry Jonas: Uh huh.
Barry Jonas: Right now it's it's.
Barry Jonas: Hard to see how.
Barry Jonas: It would have much of an impact on the development pipeline, we've been focused more in the near term on its potential impact on just cost of sales and operational considerations and it's quite a small impact we've we've.
Barry Jonas: We've done virtually all of our slot purchases for the year, we have alternatives as it relates to some of the consumables.
William Hornbuckle: We have alternatives as it relates to some of the consumables that might be subject to tariffs. So we think we can manage that impact considerably during the year. Same goes on our technology investments. We've done a lot of that in the past 18 months, things like PC refreshes and those types of things. So that will be a very limited impact. And I don't really see much of an impact that's going to have on our development ambitions, at least in the next year or so. I mean, Barry, the only thing on the obvious horizon is New York.
Barry Jonas: That we that might be subject to tariff. So we think we can manage that impact.
Barry Jonas: Considerably during the year same same goes on our technology.
Barry Jonas: Investments, we've done a lot of that in the past 18 months things like.
Barry Jonas: P C refreshes and those types of things so that will be a very limited impact.
Barry Jonas: And I don't really see much of an impact that's going to have on our development ambitions at least in the next year. So that would be Barry the only thing I know, obviously horizon is new York would be domestic and we don't we're not building a high rise even still be de minimis.
William Hornbuckle: That would be domestic. And we're not building a high rise, so even the steel will be de minimis. Got it, got it.
Bill Hornbuckle: Got it got it okay and just for a follow up Bill you know I saw you were out in UAE recently can you maybe talk about next steps there for that have a child in Dubai in any gaming opportunities and then just also interesting to see Barry Diller was with you is that strictly from a board perspective or are there.
William Hornbuckle: Okay, just for a follow up, Bill, you know, I saw you were out in the UAE recently. Can you maybe talk about next steps there for the hotel in Dubai and any gaming opportunities? And then just also interesting to see Barry Diller was with you.
William Hornbuckle: Is that strictly from a board perspective? Or there may be some ways you can work closer with IAC?
Bill Hornbuckle: There may be some ways you can work closer with IAC. Thank you.
William Hornbuckle: Thank you. Well, look, we've worked closely with IAC ever since the inception of their investment. I mean, Joey has been instrumental in some of our digital business, and very ultimately with creative and the content pieces of our business. And so it's always been integrated in that context. They're very active board members, and we enjoy that. Actually, Paul Salem, Barry and myself and one other individual on our team, who's been kind of overriding this thing for the last couple years, a gentleman named Ari Castrati, went out there, key mission was to see the prince and to update him on our project, tell him the opportunity that we thought it could bring not only in the context of a fully integrated resort, like we're building MGM Aria Bellagio, but the potential gaming could bring to not only UAE, but Dubai specifically.
Bill Hornbuckle: Well look we've worked closely with IAC ever since the inception of the investment I mean that Joey has been in terms of instrumental in some of our digital business.
Bill Hornbuckle: And Barry ultimately with creative and content pieces of our business and so it's always been integrated in that context. They are very active board members and we enjoy that.
Speaker Change: Actually Paul Salem, Barry and myself in one of their individual and our team we've been kind of overriding. This thing for the last couple of years, a gentleman named already Castrati went out there key mission was to see the prints.
Speaker Change: And to update him on our project tell him the opportunity that we thought it could bring not only in the context of a fully integrated resort like we're building MGM ARIA bellagio, but the potential gaming could bring to not only UAE, but dubai, specifically and the whole notion of entertainment and the kind of unique things that we could bring.
William Hornbuckle: And the whole notion of entertainment and the kind of unique things that we could bring to the city. And it was a great conversation. It's completely in their hands. This is just like the States. It's in the province of any one of the individual rulers to determine whether they want gaming or not. They haven't said yes, they haven't said no. We are building an environment that can accommodate it. And that building is due to complete third quarter of 27. We're literally up on the fifth floor of the MGM tower as we speak. And so it's pretty exciting building.
Speaker Change: The city.
And it was a great conversation.
Speaker Change: It's completely in their hands. This is just like the states. It's a it's in the province of any one of the individual rulers to determine whether they want gaming or not.
Speaker Change: They haven't said, yes, they haven't said no.
Speaker Change: We are building an environment they can accommodate it.
Speaker Change: That building is students complete a third quarter of 2007, where literally up on the fifth floor of the MGM tower as we speak and so it's pretty exciting building, it's an exciting project a truly interesting resort.
William Hornbuckle: It's an exciting project, a truly interesting resort with all kinds of features. And so hopefully we'll get to add gaming, but the ball truly now having made this, taking this and them taking us, receiving us in their court.
All kinds of features.
Speaker Change: And so hopefully we'll get to add gaming, but.
Speaker Change: The ball truly now having made this taking this and had them taking us receiving us is in their court.
Unknown Executive: Great. Thank you so much.
Speaker Change: Great. Thank you so much.
Chad Beynon: And the final question today is from Chad Beynon with Macquarie. Please go ahead. Hi, good afternoon. Thanks for taking my question.
Speaker Change: And the final question today is from Chad Beynon with Macquarie. Please go ahead hi.
Chad Beynon: Hi, good afternoon, Thanks for taking my question.
Speaker Change: Just wanted to circle back a little bit on some of the Vegas comments around non gaming Bill.
William Hornbuckle: Just want to circle back a little bit on on some of the Vegas comments around non gaming. Bill, you mentioned the impact from from Marriott, just from kind of a qualitative level, but We're non-gaming KPIs up if we think about, you know, excluding the Super Bowl from year-over-year standpoint, whether we're thinking about January, March, or just kind of taking out that $65 million impact. Just trying to get a sense of if you're seeing any sensitivity given where prices are on some of the food and beverage, shopping, etc. at your properties. Thanks. It really no, no change in trend during the quarter as it relates to non gaming spend.
Speaker Change: So you mentioned the impact from from myriad just from kind of a qualitative level, but.
Speaker Change: Where non gaming kpis up if we if we think about you know excluding the Super Bowl from year over year standpoint, whether we're thinking about January March or just kind of taken out that $65 million impact.
Speaker Change: Just trying to get a sense of if you're seeing any sensitivity given where prices are on some of the food.
Speaker Change: Food and beverage shopping et cetera at your properties. Thank you.
Speaker Change: It really no no change in trend during the quarter as it relates to non gaming spend no things like entertainment spend kind of ebb and flow with the number of events.
Corey Sanders: No, things like entertainment spend kind of ebb and flow with the number of events that are that are going on in town. And as it relates to spend per cover in our food and beverage or retail, those, those trends were all pretty consistent during the quarter. You take the Super Bowl out of it, our revenue for occupied rooms actually up about 3%. Okay, perfect. Thanks, Corey. Sorry, go ahead.
Speaker Change: That are that are going on in town and as it relates to.
Speaker Change: Spend per cover.
Speaker Change: And our food and beverage or retail those those trends were all pretty consistent during the quarter. When you take the Super Bowl out of it our revenue per occupied rooms are actually up about 3%.
Speaker Change: Okay perfect. Thanks, Brian.
Speaker Change: Oh, sorry go ahead.
Speaker Change: No. One we finished one thing on programming because I think it's important and look we all have eyes wide open on where all of this could go.
William Hornbuckle: One thing on programming, because I think it's important. And look, we all have eyes wide open on where all of this could go. But if I think about the calendar, we have a half a million more seats available in the market this next coming quarter, the second quarter, than we did the first quarter between events of the Legion, T-Mobile and all the big block event houses. So we're adding a half a million seats, everything from Post Malone to Gaga's coming back. We're hosting an Inouye fight, Coldplay, and I could Beyoncé, I could go on and on and on.
Speaker Change: But if I think about the calendar, we have a half a million more seats available in the market. This next coming quarter. The second quarter than we did the first quarter between events at Allegiant T mobile at all the Big block event houses. So we're adding a half a million seats everything from post Malone the guys coming back we're hosting in anyway side coal play and I could be.
Speaker Change: Honestly I could go on and on and on.
William Hornbuckle: So activity case is ripe and good, better than 24, replicates somewhat 23. And so we're excited by that. Time to tell, you know, when, like I said earlier, 44% of your bookings in the last 30 days, you don't know until you know. But we like the programming, we like the momentum. We like our ability to control expenses. I think we're in good shape there. And you know what we've been able to do with labor and other costs, I think, collectively put us in the position that we're in. Great, thank you.
Speaker Change: <unk> case is ripe and good better than 'twenty four replicate somewhat 23.
Speaker Change: So we're excited by that time to tell you know when like I said earlier, 44% of your book in the last 30 days you don't know until you know, but we like the programming we like the momentum we like our ability to control expenses I think we're in good shape, there and what we've been able to do.
Speaker Change: With labor and other costs I think.
Speaker Change: <unk> put us in a position that we're in.
Speaker Change: Great. Thank you and then back on the tariffs one of.
William Hornbuckle: And then back on the tariffs, one of the other competitors in the space paused a major project in the U.S. here just because of uncertainty around cost and just getting the materials in. I know you're far out from planning anything major like New York in the U.S., but as you think about regular CapEx or maybe even a little bit further on some of those bigger projects, do you think this will change how you're thinking about ROIs to the point where maybe something would be off the table or it's still high enough above the cost of capital that it's kind of a no-brainer still?
Speaker Change: The other competitors in the space paused.
Speaker Change: A major project in the U S. Here, just because of uncertainty around cost and just getting the materials and I know you're you're far out from from planning anything major like New York and the U S. But as you think about regular capex or maybe even a little bit.
Speaker Change: Further on some of those bigger projects do you think.
Speaker Change: This will change how you think about rois to the point, where maybe something would be off the table or its still high enough above.
Speaker Change: Above the cost of capital that is kind of a no brainer still.
William Hornbuckle: Thank you. Well, yeah, if you take New York out, and I think our capital issue is about $800 million, which is a couple hundred million in what we consider true growth capital, and there's about $600 million in core issues tied to IT, tied to room remodels. This year, as you know, we're doing MGM. I think next year is ARIA, followed by Cosmopolitan in 27. Where we source for those projects, meaning those room remodels, because that's the biggest thing that I think could be tariff-related, we'll have to pay close attention to. But unless something happens more macro with the environment and our balance sheet, we wouldn't change our thinking around those significant remodels.
Speaker Change: If you take if you take New York out.
Speaker Change: And I think our capital issues about $800 million, which is a couple of hundred meaning what we consider true growth capital and there's about 600 million and core issues tied to tighter room remodels.
Speaker Change: This year as you know we're doing MGM I think next year is already a followed by cosmopolitan in 2007.
Speaker Change: Where do we source for those projects meeting those room remodels because that's the biggest thing that I think could be tariff related.
Speaker Change: We will have to pay close attention to but unless something happens more macro with the environment and our balance sheet, we wouldn't change our thinking around those significant remodels.
Unknown Executive: And so, no, I guess the answer to the question really is no, other than that. Great. Thank you guys. Appreciate it.
And so.
Speaker Change: No I guess I answered the question really is no other than that.
Speaker Change: Great. Thank you guys appreciate it.
Unknown Executive: Ladies and gentlemen, this concludes our question and answer session.
Speaker Change: Ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to Bill Hornbuckle for any closing remarks.
William Hornbuckle: I would like to turn the conference back over to Bill Hornbuckle for any closing remarks. Thank you, operator. And again, I'd like to thank everyone for joining us today. I think maybe to reiterate, we have a best in class, high quality portfolio of assets, both digital and physical, we think will generate and continue to generate meaningful cash flow, enabling us to take advantage of just about any opportunity, whether that's building in Japan, or buying back shares at attractive multiples. I think we need to reiterate what Jonathan walked you through, understand the macro environment, but we are literally trading at 3.3 times multiple in our core business.
Bill Hornbuckle: Thank you operator, and again I'd like to thank everyone for joining us today I think maybe to reiterate we have a best in class high quality portfolio of assets, both digital and physical we think will generate and continue to generate meaningful cash flow, enabling us to take advantage of just about any opportunity, whether that's building in Japan or buying back shares at attractive <unk>.
Speaker Change: <unk>.
Speaker Change: We need to reiterate with Johnson walked you through understand the macro environment, but we are literally trading at three three times multiple in our core business and we see significant insight, obviously ultimately with our digital businesses.
William Hornbuckle: And we see significant insight, obviously, ultimately, with our digital businesses. As we look ahead, we're confident that our experience management team, which is adopted through numerous economic cycles, will further provide the ongoing resilience of the business we've had so many times before. Obviously, we have seen this, we're all veterans in many of these activities, good, better or worse. And we really think we're in a good space and a good And so we like where we are, generally speaking.
Speaker Change: As we look ahead, we're confident that our experienced management team, which has adopted through numerous economic cycles will further provide the ongoing resilience of the business. We've had so many times before obviously, we have seen this where all veterans and many of these activities good better or worse.
Speaker Change: And we really think we're in a good space in a good place and.
Speaker Change: And we do think Las Vegas is resilient and its proven itself to be and so we like where we are generally speaking.
Unknown Executive: So thank you all for joining us today.
Speaker Change: Thank you all for joining us today.
Unknown Executive: The conference is now concluded. Thank you for attending today's presentation.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
You may now disconnect. Copyright © 2020 Mooji Media Ltd. All Rights Reserved.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Okay.
Yeah.
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