Q1 2025 PENN Entertainment Inc Earnings Call

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Sometime In Time

Speaker Change: NFPC, Paul Doherty Patrick Groskowski, Geoffrey Starr Jeffrey Dreeben, Kristoffer von Staden Gordon Powell, Eric Dern Ralph Hodgkins, Justin Copeland

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Speaker Change: Please stand by, your program is about to begin. If you need audio assistance during a conference today, please press star zero.

Speaker Change: Greetings and welcome to Penn Entertainment, 1st quarter, 2025, earnings call. I would now like to show the conference over to Joe Jaffoni, investor relations, please go ahead.

Speaker Change: Thanks, Sam and good morning, everyone and thank you for joining Penn Attainments 2025 first quarter conference call, we'll get to management's presentation and comments momentarily as well as your question and answer.

Speaker Change: During the Q&A session, we ask that everyone. Please limit themselves to one question and one follow up.

Speaker Change: I'll quickly review the Safe Harbor, and then we'll quickly get and then we'll get right into the call. Please note that today's discussion contains forward looking statements forward looking statements involve risks assumptions and uncertainties that could cause actual results to differ materially for more information. Please see our press release for details on specific risk factors.

Speaker Change: It's now my pleasure to turn the call over to the company's CEO Jay Snowden Jay. Please go ahead.

Jay Snowden: Thanks, Joe and good morning, everyone I'm joined here and why I'm missing by our CFO Felicia Hendrix, our head of operations, Todd George and our CTO and head of interactive Aaron the birds as well as other members of our senior executive team as you see in our earnings release and accompanying investor presentation pen proper.

Jay Snowden: He has demonstrated strong resilience in the first quarter following severe weather challenges.

Jay Snowden: January weather was slightly better year over year. It was still much worse than anticipated and the weather impacted days in February across the portfolio were up over three times versus last year, which ultimately impacted our adjusted retail EBITDAR by at least $10 million in the quarter also worth noting we had a 5 million dollar one time accounting.

Jay Snowden: In the South region in Q1 last year that impacts year over year results.

Jay Snowden: Importantly, we saw a gaming revenue gaming volumes rebound nicely in March as the weather improved and that trend continued through April and into May.

Jay Snowden: Worth also noting this past weekend was the second best weekend of the year for revenue and number three in terms of overall visitation across the portfolio, you'll hear more about our second quarter trends from Todd in a moment.

Jay Snowden: The capital investments, we've been making at our properties over the last several years, including our new E. S. P. N bat retail sports books combined with continued cross sell from our industry, leading customer loyalty program had been contributing to our performance and the strong engagement this quarter with our VIP and Midwest customer segments.

Jay Snowden: As highlighted on slide seven during the quarter, we announced plans for a new land based Hollywood Casino in Council bluffs, Iowa to replace our existing three level ageing labor about the new state of the art facility will nicely complement the existing 160 room hotel and we believe it will significantly improve the customer experience and enhance the proper.

Jay Snowden: <unk> competitive position and the greater Omaha, Nebraska market.

Jay Snowden: Construction is expected to take approximately 18 to 24 months following the design and permitting and approval process.

Jay Snowden: While our four previously announced exciting development projects remain both on budget and on schedule.

Jay Snowden: Before turning to our interactive results I'd like to ask Todd to share a few comments on the second quarter trends as well as the competitive landscape.

Todd George: Thanks, Jack as highlighted on slide six in our Investor presentation, our retail business in April it was stable with revenue growth of 2% year over year across all properties and 4% across all properties. Excluding that it was impacted by new supply. We're mindful of the uncertain economic environment that our customers are facing but aren't.

Speaker Change: Charged by the trends, we have seen including our rated play being up in the quarter and continuing into April and now may whereas Jay mentioned, we just had one of our top weekends unrated play saw a slight decrease in Q1 compared to prior year, but returned to almost flat in April when compared to prior year.

Speaker Change: Q1, and Q2 results to date have been driven by increases in our core segments through increased spend per visit and I'll be a eye excuse me, our VIP segments, driven by increased visitation and spend per visit our database continues to grow to over 32 million members through a combination of online and core operations all fueling our omnichannel.

Speaker Change: Strategy.

Speaker Change: Property teams have done a tremendous job navigating the competitive landscape, while also picking up market share in 14 of our 17 markets not impacted by meaningful new supply year over year in Q1.

Jay Snowden: Jay mentioned over the last several years, we've made strategic investments in our properties enhancing the entertainment and hospitality amenities, improving the guest experience through technology that removes friction and costs and continuing to focus on our gaming offerings, we remain committed to providing highly competitive gaming offerings in each of our market.

Jay Snowden: Including new and expanded high limit areas Asian themed rooms, and the latest and most popular games. This constant focus on improving the guest experience is done with an eye towards efficiency as we continue to deliver the highest tax adjusted retail gaming margins among our regional peers as we think about our margins.

Jay Snowden: We're laser focused on generating returns on all of our spend particularly in light of headlines around the impact of tariffs to date, we have not seen a material impact on the cost side.

Jay Snowden: Notwithstanding this we have a tremendous procurement team that is helping us navigate pricing and supplier options as well as excellent marketers and F&B operators, who are adjusting promotions and F&B offerings to mitigate cost increases looking ahead. Following the opening of new competition. This February and Bossier Shreveport.

Jay Snowden: We can now focus our attention on our four growth projects to opening over the next 12 months, which we could not be more excited about back to you Jay.

Speaker Change: Alright, Thanks, Todd as Youll see on slide nine we are reaping the benefits of our Omnichannel strategy as our preexisting customers in Pennsylvania, and Michigan, So engaged with our Standalone Hollywood I Casino App are increasing their spend across both retail and online channels in Pennsylvania. For example in Q1, we saw year over year increases.

Jay Snowden: 21% and retail theoretical play and 165% and online theoretical play with the same cohort.

Jay Snowden: Similarly in Michigan in Q1, we saw year over year increases of 27% and retail theoretical play and 242% and online theoretical play.

Jay Snowden: During the quarter, our interactive segment had a negative $10 million EBITDA impact from the well publicized customer friendly sports betting outcomes in the quarter. During March madness. Despite this we generated record gaming revenue and significant year over year improvements in both adjusted revenue and adjusted EBITDA highlighting the improved flow through.

Jay Snowden: We are seeing in our business.

Jay Snowden: E S. P N bet and the score back continue to drive strong top of funnel performance, including successful cross sell into our casino business, which achieved record N. G. R and average M. A use in Q1 as highlighted on slide 13. This momentum is bolstered by the compelling early results of our Standalone I Casino App in Pennsylvania and Michigan.

Jay Snowden: And which recently expanded into new Jersey in Ontario.

Jay Snowden: We're also encouraged to see that 70% of our Standalone I casino theoretical revenue is coming from incremental sources, including newly acquired customers digitally reactivated players and players who were previously retail only customers.

Jay Snowden: This stat along with the Omnichannel results. We highlighted earlier suggests that we are seeing minimal cannibalization from our Standalone I casino offering on retail play and on our integrated eye casino in the E. S. P N bet and the score bad apps are Standalone I Casino App has also seen a 134 basis points higher hold rate versus the <unk>.

Jay Snowden: Great and I casino offerings, driven by higher slot mix.

Jay Snowden: Turning to slide 14, we recently introduced several OSB product enhancements, including new features leveraging account linking such as adding E. S. P. N favorites to the App homepage and creating our new met club rewards program. This program offers players who have linked their accounts access to special weekly giveaways, including Booth.

Jay Snowden: And deposit bonuses as well as access to free E. S. P N bat merchandise and we have plans for even greater benefits for linked customers. Later this year, particularly around fantasy football Aaron and his team have done a tremendous job building upon our strong technology Foundation, which will be further enhanced by the recent addition of Deli turchin.

Speaker Change: As our new Chief product Officer, Bill He brings a wealth of experience to pen having most recently served as SVP of product at fan door. He will lead the product teams overseeing our digital sports betting sports media and I casino gaming experiences and with that I'll turn it over to Alicia.

Alicia: Thanks, Jay we've talked for the first quarter, we reported retail revenue of $1.4 billion and adjusted EBITDA of $457 million and adjusted EBITDA margins of 33, 1% as Jay mentioned, our retail segment showed strong resilience during the quarter. Despite the.

Alicia: Impact of new supply in key markets and some severe weather challenges, which impacted adjusted retail EBITDA by at least $10 million.

Alicia: As the weather subsided retail performance return to business as usual and that momentum continued into a into April and we.

Alicia: We are mindful, however that the consumer in many of our suppliers are facing uncertainty. We have operated on we have operated in uncertain times before and have experienced with mitigating both slowing volumes and cost pressures, if we exit face those consumer dynamics again.

Alicia: As we've highlighted in the past, we estimate that approximately 45% right revenue declines can be offset through cost reductions inclusive of being flexible with labor and marketing.

Alicia: Regarding costs had highlighted that our tremendous procurement team is working hard to insulate us from tariff related cost pressures on the Cogs side of our business. This is the same team that has saved us tens of millions of dollars in Cogs over the past several years. Despite a sharp increase in inflation due in part to the advantages of our scale.

Alicia: Moving to the interactive we reported first quarter adjusted revenues, excluding the skin tax gross up of $162 million and interactive adjusted EBITDA of a loss of $89 million, which is a 107 million dollar improvement year over year customer friendly sports betting outcomes impacted interactive.

Alicia: EBIT in interactive adjusted revenue by $15 million and adjusted EBITDA by $10 million.

Alicia: <unk> expense was higher than expected in the quarter, given legal and advisory related costs of $7.7 million, we will likely incur incremental legal and advisory costs in the second quarter. However, it is difficult to project. These nonrecurring expenses at this time.

Alicia: In the quarter, we reported a $215 million pre tax gain on a financing arrangement that we entered into in February 2021 with a third party, which provided the company with upfront cash proceeds while permitting us to participate in future proceeds uncertain claims this arrangement, which was booked as debt on our <unk>.

Alicia: Balance sheet was resolved and resulted in the gain which includes cash received in 2021 a $772 5 million and noncash interest accreted since that time of $143 million.

Alicia: The table on page eight of our earnings release summarizes our cash expenditures in the quarter, including cash payments to our REIT landlords cash taxes cash interest and total capex of our total $125 million of Capex in the quarter $96 million was project capex related to our <unk>.

Alicia: For development projects.

Alicia: We ended the first quarter with total liquidity of $1 $5 billion inclusive of $592 million in cash and cash equivalents, we deleveraged in the quarter and expect to continue our deleveraging trajectory in 'twenty 'twenty five and beyond.

Alicia: Year to date, we have repurchased $35 million of shares at an average price of $16.83 as we delever throughout the year you should expect to see the magnitude of our share repurchases increase particularly in the back half of this year. You should also expect us to consider combining opportunistic repurchase activity with.

Alicia: The programmatic approach to seek to take advantage of market volatility and what we view to be a severely dislocated stock price.

Alicia: Our 2025 retail guidance is unchanged from the ranges and drivers we provided on our fourth quarter earnings call for interactive are 2025 revenue and EBITDA ranges are also unchanged other than the flow through of the customer friendly sports betting outcomes of $15 million to revenues and $10 million.

Alicia: EBITDA, we continue to forecast a skin tax gross up $520 million for the year.

Alicia: For the second quarter, our interactive revenue guidance range is $280 million to $320 million, including a $116 million skin tax gross up and our EBITDA guidance range is a loss of 70 million to a loss of $50 million or so.

Alicia: Second quarter interactive EBITDA guidance represents a year over year improvement of roughly $43 million at the midpoint.

Alicia: Our second quarter interactive guidance demonstrate we continue to expect each quarter of the year to generate lower interactive EBITA losses sequentially, culminating in positive EBITDA in the fourth quarter and we reiterate our outlook for generating positive interactive EBITDA in 'twenty 'twenty six.

Alicia: Last quarter, we provided you with other segment EBIT, our guidance of $121 million, which includes corporate expense given the current uncertainty regarding our nonrecurring legal and advisory fees. We are not updating guidance for this segment at this time.

Alicia: As Jay mentioned, our for our growth projects are on time and on budget. We continue to forecast total company Capex for 'twenty, 'twenty, five or $730 million and reiterate our full year project Capex forecast of $490 million, we do not expect to experience any noteworthy tariff related <unk>.

Alicia: Opex increases on the four growth projects as they are near completion.

Alicia: With the Joliet opening around the corner, we continue to evaluate trying on G. L. P. S balance sheet as a financing option for the project as a reminder, G. L. P. I has committed up to $130 million of Joliet total 180 million dollar capex at a cap rate that as a spread to G. L. P is cost of capital at the time.

Alicia: Jay also mentioned our exciting plans for the New Hollywood Casino in Council Bluffs, Iowa. The estimated project budget is approximately $180 million to $200 million in G. L. P. I has agreed to provide funding of up to $150 million at a cap rate of seven 1%, which may be structured at Panther.

Alicia: Option as either rents or a five year term loan given the potential for construction costs to rise due to increased tariffs, particularly on steel. We are currently evaluating opportunities to lock in costs now and exploring other ways to minimize our exposure to potential cost increases.

Alicia: For 2025 net cash interest expense, we continue to forecast $150 million net cash taxes are expected to be roughly $70 million. That's $70 million. We continue to expect to be free cash flow positive in 2025, and beyond and our basic share count at the.

Alicia: End of the quarter was 151 million shares and as I always mentioned, we typically have 15 million dilutive shares annually inclusive of the 14 million share dilution from the converts.

Alicia: And I'll turn it back to Jeff Alright.

Jeff Alright: Alright, Thanks, Felicia in closing I want to reiterate that our core retail business remained strong and is growing we have four exciting retail development projects under construction, albeit deliberate on or ahead of schedule and on budget along with our planned landside relocation of a marriage Star Council bluffs. These projects will collect collectively enhance our portfolio.

Jeff Alright: Grow our free cash flow profile and serve as a catalyst for Penn's retail segment. Despite the current market concerns around consumer discretionary behavior, our core business is trending in the right direction.

Jeff Alright: Solid employment numbers and low gas prices always bode well for regional gaming as you know.

Jeff Alright: Meanwhile, our digital business is continuing to evolve supported by our well known brands differentiated IP, a fully owned technology stack and newly recruited industry, leading talent. We are nearing an inflection point and we anticipate each quarter of 25 to deliver a lower loss sequentially throughout the year and our interactive division to be profitable in the fourth quarter of 'twenty five.

Jeff Alright: <unk> and the full year of 26 and beyond.

Jeff Alright: We have strong conviction in our ability to deliver profitability in 2026 and beyond when this segment as mentioned on our last earnings call and in our shareholder letter in this year's proxy. We are fully committed partners and ESPN, who are continuing to work with us to deepen the integration of ESPN bet into E. S. P. N overall ecosystem, we have continued.

Jeff Alright: Momentum in our eye casino business, and importantly, we maintain strategic Optionality and control over our future as we head into 2026.

Jeff Alright: Our focus for the balance of this year remains on operational execution in order to transform our strategic investments into consistent long term results and value for our shareholders.

Jeff Alright: As we also stated in our recent letter to shareholders. We are confident that Penn is best days are ahead, and we are moving with speed discipline and determination to realize the full potential of this company for all of our shareholders.

Jeff Alright: And with that we can please open the line for our first question.

Speaker Change: At this time, if you would like to ask a question. Please from Costar and one on your telephone keypad you may remove yourself from the queue at any time for a question star to once again that is star one to ask a question. We'll take our first question from Brent My tour with Barclays. Please go ahead.

Speaker Change: Good morning, everybody.

Brent Mytur: For taking my questions. So first off maybe just starting with digital you know the outlook for that segment doesn't seem like it's changed all that much.

Speaker Change: But you know you had some some serious emphasis on I gave me in the deck and.

Speaker Change: And market share for the OSB side, it's been trending a little bit below I believe plan. So when you think about those different pieces.

Speaker Change: How do you how would you describe what's changed under the surface for the rest of the year within digital within your guidance.

Speaker Change: Yeah, Brian I would I would say that generally our assumptions that we put out last quarter for the year Havent changed if you know OSB comes in a little light of the share projection in an online casino comes in a little bit ahead, we think that you know that those those offsets are fine if that.

Speaker Change: It does happen.

Speaker Change: We're optimistic that we're going to continue to grow share in both online sports betting and online gaming between now and the end of the year, one may outpace the other and that would be perfectly fine with us as long as we have momentum in both aspects of the business and we feel comfortable with the guide that we put out for the full year.

Speaker Change: Okay. Thanks for that Jay and then just a follow up on I gaming.

Speaker Change: Yeah, We know I know, it's early clearly it seems like you're pretty happy with the launch so far.

Speaker Change: How far away is that segment from bean contribution positive.

Speaker Change: And and maybe qualify.

Speaker Change: The answer with with with how much Youre currently standing in your OSB promo budget.

Speaker Change: To drive the cross sell that's driving that momentum and I gaming today.

Speaker Change: Yeah, I'll I'll attempt to answer it.

Speaker Change: And Ah Theres congestion jump in here I would say that we are pleased so far with the launch of our Standalone Hollywood Casino apps, particularly in Pennsylvania, and Michigan, where we have land based properties with the same brand name we have healthy retail business is there as I mentioned at the beginning the Standalone <unk>.

Speaker Change: Casino apps had been really good for us and that they're 70% incremental so you know there's very little cannibalization from the Hollywood offering that was within the E. S. P. N that app and you should expect as you would hear from not just us, but our competitors that are margin profile within I casino is off.

Speaker Change: Do you see stronger than it is within online sports betting and the promotional spend within sports betting just by nature of the business and the competitive side of it is higher than it is with an eye casino as well so that dynamic I think will continue I would expect that the eye casino momentum will will you'll see more of that in there.

Speaker Change: Quarters ahead, we have I think some really good plans to continue to cross sell I.

Speaker Change: I would say, we're pleased with cross sell but there's still a lot of opportunity. There. If you compare the online sports betting audience within our ecosystem and how much is cross sold into I gaming compared to others in the space Theres still opportunities for us to be more effective in there in that area.

Speaker Change: So I think overall at a high level.

Speaker Change: That's where we're at I think you should expect us to share more detail in terms of concept contribution margin profit within these segments in future quarters, We havent really offered that previously, but we're happy with the progress so far yeah, how extreme force cross sell has continued to ramp up.

Speaker Change: Just last week, we saw all time highs in our average weekly D or use crossline casino and in terms of the promotional dollars were seeing really effective promotion from our land based database to drive people into our casino, which has been very nice to see and obviously, we will then moderate that with strategic reallocation from OSB.

Speaker Change: And the high casino in states, where we think it matters. So we're really happy with the trajectory. So far yeah, I would I would just add to what Jane Eyre and shared.

Speaker Change: You know really tremendous progress, where we've got our VIP team, whether you're working at a property or online.

Speaker Change: So, they're they're driving people regardless of if they drive them to a property or online that's been a really well executed and then really.

Speaker Change: The key it's not really the promotional dollars as Jay mentioned, it's that rebranding to Hollywood. So it's just ease of finding that online products. So it's going from Hollywood Hollywood, that's been a tremendous help.

Speaker Change: Excellent thanks, everybody.

Speaker Change: Okay.

Speaker Change: We'll take our next question from Carlo Santarelli of Deutsche Bank.

Carlo Santarelli: Hey, guys. Thanks, so much.

Todd George: Hey, Todd I don't know whoever wants to take this one if you think about normal cadence over the course of the year of seasonality.

Todd George: We come to a couple of conclusions, but I think important in kind of understanding yours is more or less recognizing the.

Todd George: The anniversary of some of the competitions that are coming off. So if you guys kind of maybe walk us through the next 12 to 18 months of where you'll start to lap some of the things that are maybe hurting you a little bit more pronounced than others.

Carlo Santarelli: I'll, let you have that tough yeah. Thanks, Jay So Carlo the the last Big one was obviously the life project and in Bossier City. So you know what.

Todd George: We'll lap that and February of next year, but.

Todd George: It will be a little bit noisy for the for the next 12 months at least just because of our projects starting to open.

Todd George: I feel very comfortable that you know within the next 12 to 14 months say.

Todd George: 12 to 13 months I guess now we're in in May.

Todd George: We will have all of our properties open. So you know the year over year comparisons are going to be a little bit little bit fuzzy just because of that but for the most part we started to lap everything we just did have an expansion in Nebraska.

Todd George: In the last I think three or four weeks, we were just out there to kind of look around at that market. So those are the those are the two competitive.

Todd George: Competitive impacts that we'll see over the next year, but then we'll be offsetting that with with our new openings.

Todd George: We feel I think really really good about the timing of when we'll be going landside in council bluffs, because the rest of the competition will have sort of settled in and so you just look at the construction timeframe will be coming into the market with a really new updated products are easier access to the casino one level versus three level is much more efficient for both.

Todd George: On the cost side as well as revenue opportunities to the upside and that was all part of our license renewal in the state of Iowa with our Q S O there but.

Todd George: But Phil feel good about you know what we have in front of US is largely in our control you know we're gonna be the one the company that's opening up new projects as opposed to you know trying to fight off new supply in key markets, which for the first time in a long time, we'll be able to say that.

Todd George: Great. Thank you and then just along those lines.

Speaker Change: A two part question related to the pipeline.

Speaker Change: Obviously some of the financing stuff is in place, but there's also some called upon financing that you guys could pursue could you comment a little bit about how you're thinking about the timing of that and also how we should think about disruptions as we get closer to the openings.

Speaker Change: Those are periods things like that but with some of the land based conversions.

Speaker Change: Yeah, I'll, let Felicia hit the financing question and then Todd you can speak a little bit about the disruption on openings, yes, Carlo our view really hasn't changed we've really been trying to think about the financing is as matching it to the openings.

Speaker Change: If we took financing today for example, we'd be paying rent on a property that's not open yet and so I would think about that in terms of of matching you know obviously we're also.

Speaker Change: We're committed to the G. L. P S balance sheet for Aurora and the other three projects Joliet and then Colombia are at our discretion and you know in addition to looking at the timing. We're also looking at G.

Speaker Change: G. L. P is on the cap rates that G. L. P. I it would be offering us versus what we could get in the open market versus using our balance sheet. So we have a lot of optionality around that but I would say the first thing the thing that we're mainly focused on is that matching of timing.

Speaker Change: One last point that was covered in our releases that council bluffs is a little bit of a different potential structure and so that can be either in the form of rents or is a five year term loan. So if if if if we decide that it's rent then obviously again you'd wait until matching taking the financing around openings. So you're paying rent once you open the doors, but with the <unk>.

Speaker Change: Five year term loan obviously, we could be starting to take the funding and financing and advance well advance of the opening.

Speaker Change: And then Carlo to your question on disruption So I would I would look at it this way the Columbus hotel as well as the additional tower and meeting space at the M. A minimal to zero disruption I mean, it's it's simply adding a product so no real disruption there.

Speaker Change: Even the council bluffs property, it's it's a minimal downtime as we approach that and then the only thing with Aurora enjoy yet.

Speaker Change: Please keep in mind. This is not just moving from a river boat to land based this is moving from a riverboat to a far better location with.

Speaker Change: 10 to 12 backs the the traffic counts that we currently see so that downtime. If you look at what the other operators have been able to do in a in Illinois.

Speaker Change: You know, it's looking at that two to three week period, we just had a very very productive meeting with the Illinois Gaming Board and really appreciate all of their efforts with us and the leadership teams out there with Ruben and Greg.

Speaker Change: We think we can get that time at the lower end of the range. So I think you can start thinking about maybe a two week downtime, but more to come on that as we finalize the opening date.

Speaker Change: Great. Thanks, everybody.

Speaker Change: Uh huh.

Speaker Change: We will take our next question from Shaun Kelley with Bank of America.

Shaun Kelley: Hi, Good morning, everybody. Thank you for taking my questions.

Speaker Change: For whoever wants to take it maybe we could just start with kind of the digital promotional landscape just kind of curious on first of all for the Standalone I Casino App did you all sort of lean in on the promotional level. There just as you're trying to get that product up and rolling or.

Speaker Change: Is that a little bit more organic and then just sequentially as we think about sort of what you're offering in market <unk> and sort of what your expectations were or how they promo has come in across both OSB and in digital.

Speaker Change: First quarter. Thanks.

Speaker Change: Yeah, I would say promos that really kind of come in where we anticipated them to be both in sports betting and I gaming and I would say both for the industry as well as what we intended to do in the first quarter as it relates to what was going on in the fourth quarter of last year.

Speaker Change: And specifically to I gaming, we really are focused in the early days of these standalone.

Speaker Change: Hollywood I casino App launches on organic cross Sellable from sports betting as well as from a retail database and that's been really effective. We're just now starting to get into more of the performance based marketing spend and so that's why we're confident you'll continue to see improved results as we move forward through the remainder of the year.

Speaker Change: Great. Thanks, Jay and then just as a follow up and maybe switching over to the land based side just big picture, what's it take right now to kind of get some cost leverage on the revenue side, what what's the sort of opex run rate.

Speaker Change: Operating expense pressure you all are facing is it sort of in the low single digit range, just kind of where are you feeling. It. Obviously you made some comments on tariffs it doesn't sound like you're feeling much incrementally, but obviously this has usually been something you've been you've been really disciplined and probably better than peers.

Speaker Change: I think it's largely labor is the one that's continuing to be a bit of a creep nowhere near the levels and on a year over year basis percentage wise that we were seeing last year and the year before but.

Speaker Change: But that's the primary driver I think we have a good handle on marketing within our control are our procurement team as noted by both hot and Felicia does an excellent job and now there are some we're seeing a little bit of noise from a cogs perspective, but the teams are really creative and you find alternative options to keep your pricing where it needs to be in and make sure you are.

Todd George: Not having to raise prices on consumers. It's one of the real benefits I think during times like now a regional gaming as you know you can walk in and our prices Havent changed from last year or five years ago, or 10 years ago, whether you're a gaming customer non gaming customer so Todd anything to add yeah. The only thing I would add Shaun Jedi inflation, we're talking about this yesterday keep in mind that.

Speaker Change: Our revenue mix when it when.

Speaker Change: When we do more in the northeast and Midwest than we do in the South and West.

Speaker Change: We have higher tax rates there. So there was a bit of a shift in in revenues in Q1, So that did lead to a little bit of a margin erosion, but we think as we worked through the weather I think Ada.

Speaker Change: Eight of the last 10 weeks, we have seen year over year improvement in volumes and rated play so and that's been across the board. So as that kind of revenue mix comes back we should be able to pick up the benefit there that's right and I'd note did note in the prepared remarks, but might as well hit it here again, we had a 5 million dollar accounting good Guy in Q1 last year.

Speaker Change: So as you're looking at the comparisons year over year keep that in mind, both in terms of EBITDA as well as margins in the South region.

Speaker Change: Thank you.

Speaker Change: Thanks, Ron.

Speaker Change: We'll take our next question from Barry Jonas at your Securities. Please go ahead.

Hey, guys good morning.

Speaker Change: Wanted to start with ESPN.

Speaker Change: I think the new ESPN DTC products should be out soon should we be thinking of this as a potentially mean for catalyst for you guys. I think any color here would be helpful. Thanks.

Speaker Change: Well I think I think the world will here very soon so I don't want to comment too much on the product, but I will tell you is we think it's a first in market integration and we're incredibly excited about it its very cool and we think it will have a difference in terms of driving users and exposure to our core platform.

Speaker Change: So we're very excited about it and can't wait for you guys to see it.

Speaker Change: Okay.

Speaker Change: Got it got it and then either for Jay or Todd I think another Pennsylvania land based casino operators talked about potentially exiting and.

Speaker Change: In response to skill based gaming can you maybe just talk about the risks you see around skill based in the state and and beyond thanks.

Speaker Change: Yeah happy to.

Speaker Change: You know we've spoken about this on previous earnings calls and you.

Speaker Change: It's a complicated issues skill based gaming, we view skill based games as largely there you know look alike slot machines and.

Speaker Change: They really if if theyre going to be competitive with us they really need to be regulated and taxed like us as well, we feel very strongly about that and so it's it's sort of it's an ongoing discussion at the legislative level and the state of Pennsylvania, I know others have commented on the impact to their business. It obviously impacts all of us on the land based side Theres tens.

Speaker Change: Thousands of these things sprinkled across the state and we'll.

Speaker Change: We'll see where it goes but we felt like there's hopefully some some potential outcome that's going to be good for the industry as well so I'm cautiously optimistic on that topic currently.

Speaker Change: Great Alright, Thank you Jay.

Jay Snowden: Thanks Max.

Jay Snowden: We'll take our next question from Joe Stauff with Susquehanna.

Joe Stauff: Thank you good morning.

Speaker Change: I wanted to.

Joe Stauff: Go back and maybe ask.

Joe Stauff: Another question about just the ramp that you have with the casino Standalone product.

Speaker Change: Jay I think you said is 70% of the new customers correct casino standalone or incremental do you mean.

Speaker Change: And then of what is whether it be ESPN bet channel of customer <unk>, a retail customer can you just clarify that 70% of incremental piece.

Jay Snowden: Yeah happy to 70% incremental to our I casino business, meaning that the the 30% is coming came over from the Hollywood offering within E. S. P. N bet. The other 70% is a combination of retail who had <unk>.

Jay Snowden: <unk> engaged with us in our digital I casino products are reactivated customers the customers who have been dormant within our database or just brand new to the entire ecosystem.

Jay Snowden: Gotcha.

Jay Snowden: Yeah.

Jay Snowden: And.

Speaker Change: I'll follow up maybe also to clarify on on the new App coming out from ESPN.

Jay Snowden: Does this require you guys or.

Jay Snowden: Lot of work in terms of say <unk>.

Jay Snowden: Integrations that you have to do above and beyond what youre doing in terms of the core product that ESPN bed.

Jay Snowden: It would.

Jay Snowden: <unk> Standalone.

Jay Snowden: Well, we certainly.

Jay Snowden: I don't know if I would say a lot of work, but it's certainly a bespoke integration that's going to be.

Jay Snowden: Linked and associated with the content that you watch so we have created different types of markets and processes for sharing that in real time, with ESPN, which will which will manifest itself in the product. So we think it's the best in class and first of its experienced as it relates to watching live live.

Jay Snowden: Live events as it relates to better integrations.

Jay Snowden: We're excited about the work we've done and I think the world go to and then obviously the experience will be best for customers, who have linked their E. S. P. N account with ESPN bet and so Aaron maybe comment on just sort of the progress we're continuing to see on linked as a percentage of total users yeah. So actually in the quarter, we've instead of talking about link users we.

Jay Snowden: Creative rewards club called ESPN met club.

Aaron: When you think about me club users a very high percentage of those of our MAA US Army club users, they're logging in to seven times more to a product.

Jay Snowden: Replacing 60% more weekly bets the generating more handle their holding better. These are really our best customers not just for ESPN bad, but for ESPN as well and so we think with flagship and the continued integrations that Jay talked about as it relates to the fantasy work, we're doing for football is going to be.

Jay Snowden: A big accelerant to us continuing to deliver against our guidance.

Jay Snowden: I see I see thank you.

Jay Snowden: Thanks, Jeff.

Speaker Change: We will take our next question from Chad Beynon with Macquarie.

Chad Beynon: Hi, Good morning, Thanks for taking my question on.

Chad Beynon: On the interactive side wondering if you could chime in on your view of the predictive markets and if you think your customers would be interested in that product and kind of how you view it from a regulatory standpoint. Thank you.

Chad Beynon: Yeah, I would say you know you've heard from others, probably similar from US we're staying very close that there. There's there's a lot going on right now in prediction markets as it relates to federal regulations versus state level regulations.

Chad Beynon: It is interesting that does exist as you guys know and has for a long time over in Europe. I think it is definitely more more of a niche market for a variety of reasons I think it's largely incremental especially if it's something that's being offered in states, where our online sports betting is not currently illegal.

Chad Beynon: So we are well I think more to come on that it's obviously not priority one for US we've got a lot in front of US right now in terms of execution and delivering on guidance for the remainder of the year and continuing to improve on all the areas that Aaron and Todd mentioned, both an interactive and retail, but where we're staying close to it and if this ends up being an opportunity for the industry.

Chad Beynon: You should expect us to be participating.

Chad Beynon: Thank you and then.

Separately, just kind of looking at the bricks and mortar portfolio you have one of the pressure fleets in the industry and you're upgrading some of the assets.

Chad Beynon: That need to be.

Chad Beynon: Are there assets in the portfolio that maybe are viewed as non core maybe lower EBITDA performing properties ones were maybe don't move the needle as much that you could potentially explore divesting to deleverage the balance sheet.

Chad Beynon: Okay.

Chad Beynon: We would never say no to that question it really depends on the situation. It depends on you know if you got an offer if there's an imbalance.

Speaker Change: I would just remind you that our assets are largely tied up as part of our master leases and so it's not it's not as simple as just so you know where you were interested in potentially divesting an asset or two that you just make calls and transact.

Speaker Change: To the highest bidder, there's a landlord implications and involvement and so it's just it's not as clean as I sort of think about it maybe if you were a holdco company and you can make those calls and kind of go through a process like that I would say, maybe a better way to think about it is that some of the assets. We have that are a little bit more challenge from our infrastructure.

Speaker Change: Sure.

Speaker Change: Just.

Speaker Change: How old they are quite frankly.

Speaker Change: We have more river boats in Mississippi, We do in Louisiana, We have another one in Illinois, and there's some really interesting potential opportunities in some of those markets to do things along the lines of what we've already announced and Aurora and Joliet, Illinois as well as the Council bluffs.

Speaker Change: You should expect to hear more from us on some of those other opportunities that we think will have really strong return profiles based on what we're seeing throughout the industry right now on those that have gone some old river boats onto land.

Speaker Change: Great. Thank you very much.

Jeff Alright: Thanks, Jeff.

Speaker Change: Well go next to Ben Schachter with Mizuho.

Ben Schachter: Hey, good morning, Thanks for taking my questions.

Ben Schachter: Casino side it sounds like both from the data that we get and also the commentary in your prepared remarks that you are having some success on the market share side, especially for the Standalone Casino gaming App are you seeing anything that makes you want to lean into marketing or investments in that product and one follow up thanks.

Ben Schachter: We are we're seeing really nice retention results, we have a great product. There we knew we did going in and so I would say you know we're just getting started on some of the new performance based marketing spend let's see how strong the our top of funnel is in those efforts and what the CPA is look like let's see.

Ben Schachter: Retention looks like for those newer users versus those that came over maybe they were reactivated or came over from a retail database, but you should expect for as long as we're seeing encouraging results and attractive cpas and strong retention and we're going to continue to lean in and.

Ben Schachter: Push on our game and we think it's a real big opportunity for us as a company and we have a great product with great team overseeing that that's continuing to get better every day. So I would say, yes overall to that.

Ben Schachter: And as our cross sell continues to improve which is doing really well at the moment as we grow our sports book versus just going to continue to driver our casino business as well obviously.

Ben Schachter: Got it and then switching to switching gears a little bit too.

Speaker Change: Bob do you have the option of a term loan versus rent.

Speaker Change: I guess from my seat it seems like the August choice would be chairman, but maybe I'm missing something maybe talk about the.

Speaker Change: The thought process deciding between term loan and rent and then I think Jay your suggestion is a few other projects on the horizon do you think youll have flexible financing options there as well.

Speaker Change: I'll hit the last one first and then inflation you can hit the council bluffs question.

Speaker Change: Yes, we think will have flexible financing because we do have options. We can always a finance these projects on our own balance sheet. We have landlord relationships that are very healthy and it's great to have those relationships and have that optionality and when youre thinking about these projects and so I was just gonna depend on you know what are what's the credit market look like at the time that you're.

Speaker Change: Needing to fund these projects, there's times, where it might be more obvious that you want to do this on your own balance sheet versus work with a landlord or other financing sources. Please.

Speaker Change: Please I'll hand, it over to you on south of Us.

Speaker Change: Yeah. So just on the on the Optionality into like half of what Jay just said I mean, we really owe that Optionality in council bluffs to our great relationship with <unk>.

Speaker Change: And it's fantastic to be able to have that.

Speaker Change: Ahead of us and you're right on it on the surface.

Speaker Change: Structuring it more as a alone is more attractive than rent them. As you know ranked Iraq will escalate every year and so having that that loan could ultimately be the better decision and that we'll have time and we'll make that Dan I don't want to you know kind of pre.

Speaker Change: Determining what we're going to do but having that optionality is very favorable.

Speaker Change: Okay helpful. Thank you.

Speaker Change: We will take our next question from Brian.

Speaker Change: Okay.

Speaker Change: Great. Thanks for taking question.

Speaker Change: Big focus for investors.

Speaker Change: Marketplace.

Speaker Change: In terms of.

Speaker Change: Alright, Thank you guys.

Speaker Change: I would love any color. Thank you.

Speaker Change: Yes.

Speaker Change: I've heard others talk about that.

Speaker Change: Gotcha.

Speaker Change: Okay.

Speaker Change: In 2025 other than essentially Missouri later.

Speaker Change: Yes.

Speaker Change: Albert.

Speaker Change: Any progress there, we're actually quite excited about Alberta, and our success in Ontario and <unk>.

There was good news yesterday it continues to move along through the process.

Speaker Change: We're cautiously optimistic that will happen sometime in the next couple of quarters as well or hopefully before the end of the year.

Speaker Change: And obviously those are those new launches or new province launches are part of what's been driving those higher handle.

Speaker Change: Results on a year over year for the last several years. This was a slower year in terms of state launches. So I think you should expect to see handle growth for the industry, but it's probably going to be.

Speaker Change: Significant this year because of that dynamic than it has been in the last several until you get to those state launches in <unk>.

Speaker Change: We're probably going to see a little bit more muted just generally from a seasonality standpoint, when you get the Q2 and Q3, there's just less big event things going on and it'll probably start to inflect to stronger growth results. When you get to the September through the remainder of the year.

Speaker Change: Understood. Thanks, Jay.

Jay Snowden: Thanks Bernie.

Jay Snowden: Our next question comes from Jordan Bender Assembly.

Jordan Bender: Good morning, everyone for sports betting you talked you talked about what's ahead of you some initiatives might be easier to achieve and others.

Jay Snowden: Oh for sports betting that the relationship continues with Ian.

Jay Snowden: Can you maybe expand on some of the low hanging fruit between the two businesses that might help customer growth and retention through the end of the year. Thank you.

Jay Snowden: Yeah, I think I'll, let Aaron answer most of that I I.

Jay Snowden: We hit it at a high level and maybe Arundel double click on some of those opportunities obviously the streaming direct to consumer launch for the S. P. N. This late summer early fall, that's going to be a big opportunity for us to drive top of funnel as well as strong retention and look we're finally getting to a point after being live with E. S. P.

Jay Snowden: N bet for a year and a half where the real deep integrations that we all were excited about when we did the deal and shook hands and those are all starting to happen now having that linkage between E. S. P N and ESPN bed and now you go onto our betting App and you you know your favorite teams are all right on the top of the home screen and so you can scroll through and see if you want to place bets.

Jay Snowden: What's your favorite teams because we have that information.

Speaker Change: And then you get to football season with fantasy. There's we're finally going to be able to do the things that we were hoping to do it just took a little bit of time, but maybe you can spend yes look I would say in addition to the Mint club, which is sort of special offers for link users with that one quickly your favorites get pulled over into ESPN bet.

Speaker Change: You can go and embed the markets for your favorite teams, where we're already finding too as those users love Tibet Parlays more.

Speaker Change: In those same replacements, which is actually very good but your favorites don't just appear in ESPN bet. They follow us through the ESP and ecosystem experienced two including.

Speaker Change: Their new flagship product, which means you'll have a personalized betting experience not just within ESPN debt, but within ESPN and we've been working towards that over the past year. You can now start to really see the benefits of that especially moving into football. This year. If your fantasy player and ESPN has the biggest fancy platts.

Speaker Change: The U S.

Speaker Change: There is no better place to come play fantasy and that your team than ESPN at ESPN bet. It will it will be no question and the the product is going to be native it's going to be integrated not only into the ESP embed experienced but there will be a derivative version of that within the ESPN experience and you'll see more.

Speaker Change: As we move across the two so we are super excited not only about flagship coming up but also.

Speaker Change: The NFL season is going to be really special as it relates to fancy and Ben that's a level of differentiation and personalization that isn't happening today. It should be effective were not going to get ahead of ourselves of like how much better than what's but that's why we are confident that market share will continue to grow between now and the end of the year, Boston sports betting as well as in our game and again for different.

Speaker Change: Reasons, but we should see continued growth in both of those areas.

Speaker Change: Really helpful color and then the follow up Felicia, it's taking the comments about the stock dislocation in your prepared remarks understanding there is a price for anything and you spoke to the brick and mortar side of the business already but could you look to do something strategically before the opt out cause next year, if you're not getting credit within your values.

Speaker Change: <unk>.

Speaker Change: And that's on the online side sorry.

Speaker Change: Yeah.

Speaker Change: I wouldn't there's really nothing to say on that topic in terms of next year I hit that on our last earnings call. That's in the contracts.

Speaker Change: Both sides have the option at the third anniversary of we haven't had a threshold level of of revenue market share to.

Speaker Change: To decide if they want to rework the deal or continue on or exit and that hasn't changed so but where we're focused our partners are focused we're excited about what's ahead of us.

Speaker Change: Let's see where we are as we trend through the next couple of quarters.

Speaker Change: I think it'll probably be not all not just obvious to us that a hobbyist to others as well with what path is going to make the most sense, but we're staying focused and our teams are staying focused on working together to deliver a really great and differentiated experience and we're confident that it's going to create you know it's going to deliver solid results and.

Speaker Change: Through football season going into 2026, we've got you know.

Speaker Change: An opportunity to really show why we did this deal in the first place and for whatever reason if those things arent working then you've got Optionality as you head into 2026, So I would say nothing's really changed there, but we're excited about what's in the queue.

Speaker Change: Great. Thank you very much.

Speaker Change: We'll take a question from Brian <unk> with Craig Hallum.

Brian: Hey, Good morning, guys. Jay you mentioned I think is the response to a question maybe for your prepared remarks, but turning performance marketing back on was that in context of the Hollywood Casino Standalone or also.

Brian: ESPN bet and both sides because I believe it's been turned off since December of 2023. So just how you think about <unk>.

Brian: Average in that channel and maybe accelerating the customer acquisition and getting them into the funnel to experience user experience that youre building here.

Speaker Change: Yeah, It's all a balance as you can appreciate Ryan in terms of how much youre doing there outside as it relates to sports betting outside of what you're spending with ESPN. So we've been doing performance marketing and online sports betting.

Speaker Change: Outside of ESPN not as much obviously in the last six months as the previous six months, but I think we're getting smarter and more surgical around what's working what's not and where to invest and where not to but my comments were more specific to us since.

Speaker Change: Since the launch of Hollywood Casino. Our initial first few months, we're really focused on organic cross sell and obviously activating reactivate reactivating customers that had been dormant.

Speaker Change: Now, it's an opportunity for us to get a little bit more aggressive on the performance based marketing and see what type of customer profiles come in how much quality that we have there what are the CPA is what's the retention and we just just got started recently, but we're seeing some nice top of funnel results.

Speaker Change: It makes sense and then just a quick follow up timeline for lunch in West Virginia.

Speaker Change: Do we have the latest on the Hollywood Standalone for West Virginia.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah. It's it's sometime in the next couple of quarters I don't have the date in front of me Ryan. We're obviously working with the regulators there, but we are live as you know, Pennsylvania, Michigan, New Jersey, We just launched the score casino in Ontario, and so West Virginia is the last state at least <unk>.

Speaker Change: Currently for us to launch a Standalone Hollywood Casino, App, which should be good for us because we have a Hollywood branded casino there. It's the largest casino in the state of West Virginia. So I would say sometime in the next couple of quarters.

Speaker Change: Very good thanks, guys. Good luck.

Speaker Change: I'm sorry.

Speaker Change: Okay.

Speaker Change: We'll take our next question from John decree with CRB.

John Decree: Hi, good morning, everyone. Thanks for taking all the questions.

Speaker Change: J R or Todd you guys have as good of a pulse of as anyone on the regulatory and legislative process.

Speaker Change: Ohio, considering I gaming was probably not on our bingo card.

Speaker Change: For this year and it's a big state for you guys in the retail network. So maybe two part question.

Speaker Change: What are you guys seeing on the Legislative front and then how do you like your position or how do you think about your positioning in a state like Ohio, where you kind of get to start maybe from the starting line with everyone else and then given where you are a big retail presence in terms of quickly launching versus maybe where you started before playing catch up.

Speaker Change: Yeah happy to we're obviously very involved and engaged in Ohio.

Speaker Change: A bill has not been put forward yet I know there there's articles being written about.

Speaker Change: Bill being worked on right now.

Speaker Change: I would say look we now have a much more competitive I gaming products and we have a standalone app. In addition to what we offer with N E. S. P. N bet that we know is competitive.

Speaker Change: And we're better operators in that space than we were even six months ago or nine months ago.

Speaker Change: Every state is a bit differently, we're not going to necessarily be on the same page with every other company because some some markets. We have noticed some markets. We have a small casino in some markets. We've got you know like the state of Colorado Gaming laws were passed there where the casinos are only in the mining towns in the mountains, an hour and a half away from the population so.

Speaker Change: That's not a good scenario for us if we have one of those large casinos, which we do in Black Hawk, Colorado. So.

Speaker Change: It really does depends.

Speaker Change: We're obviously very focused on doing what's in the best interest of our shareholders and so Ohio will stay close as we would in any other state, but I want to comment too much because I know that bill is still being worked on currently.

Speaker Change: Okay. Thanks, James I appreciate it.

Speaker Change: Alright, well take one more question.

Speaker Change: We will take our final question from Jesse <unk> with Stifel. Please go ahead.

Speaker Change: Great. Good morning, Thanks for squeezing me in.

Speaker Change: I wanted to touch on more on the casino side of interactive Jay you shared a lot of detail on the momentum that youre seeing following the Standalone app launch and improvement in the product, which is just quite noticeable anecdotally I'm curious if you look at your competitor that holds that number one spot for product and maybe even some of the other players that round out the top three top four just what are some key areas.

Speaker Change: Does that you've identified where you think there is still room to close any gaps that you still see out there on product.

Speaker Change: In 2006 and beyond.

Speaker Change: I'll take a stab and aeronautics, yes, I'll jump in there I'd say it was also hit sports betting I think the biggest opportunity for US right now beyond sort of the more.

Speaker Change: Organic things that we're working on with our partners at ESPN around integrations and personalization is around live betting I think where our product offering today is good but it needs to be better than good and so we're working hard on that we just launched some streaming offerings since our live betting is getting.

Speaker Change: The experience is improving every day right now and but we got we got more work to do there in terms of live betting with same game Parlays and just live betting generally in reducing latency and things of that nature. So on.

Speaker Change: On the sports betting side I would say, mostly around live as it relates to online gaming.

Speaker Change: I don't it's not a product mix issue at all I think we have great products.

Speaker Change: We have great variety that we have our own games that we've developed that are that performed quite well, especially in the areas of digital blackjack and then some slot cases as well as slot themes, but I would say overall for us, it's probably more around CRM and promotional.

Speaker Change: Additional engine and just that same level of personalization and you want people to feel they're being treated different and better within the experience and the ecosystem that you provide than anyone else and so we're still working on that the product teams hard at work to make sure that we're creating some some points of differentiation that are improved versus anyone else.

Speaker Change: I would just add just build on personalization I think is one of the things, we're really focusing on and I casino, just reducing the friction elevating and putting the games you care about in front of me you're getting you into them faster. The same exact approaches were taking with the sports book as well, but we think thats going to be just make it easier and more fun for you to get into what you wanted.

Speaker Change: Quickly as he can.

Jay Snowden: As Jay said, we've got a nice product mix, our UI is world class.

Jay Snowden: Our games are world class. So just getting you into what you want is.

Jay Snowden: As quickly as possible I think is going to make a difference and we're working hard on that.

Jay Snowden: Great. That's helpful. Thanks for that and then just following up on something Felicia said earlier in the prepared remarks.

Speaker Change: Could you talk to.

Speaker Change: Some exposure to tariffs on the steel side with the Council bluffs project and some strategies or some exploration in place of them ways to try to mitigate or get around that I was hoping to just expand on that a little bit further based on your discussions right now that your expectation that you could fully fixed season, and any sort of gnps or or is the <unk>.

Speaker Change: Understanding that tariffs will be carved out kind of from here onward in respect of steel specifically are there opportunities to resource domestically or is it more about sort of leaning on your suppliers and things of that nature.

Speaker Change: Ah I can take that one so.

Speaker Change: We're not looking at a at a high rise there so the need for steel is not as high as if we were building a hotel tower at Sam It's a one level casino that Jay touched on.

Speaker Change: But also we were in a really good position from a timing standpoint, so we can kind of spot the market and look to lock in we have a great procurement team is both which now I've mentioned as well its great D&C team that that can work through this and then work those changes into design.

Speaker Change: This is very much a known issue D. In our design and construction and procurement teams are working together on that already so again is this.

Speaker Change: Tariff noise kind of plays out over the upcoming months, we feel good about the ability to lock in when the time is right and as you know I'll just underscore we didn't provide a a budget range for council bluffs, just because of whats going on in the marketplace right now around tariffs. So the four other growth projects that we're getting close to opening we wrote a lot more precise.

Speaker Change: Or what those budgets were going to be in the early days because we didn't have that as a factor. So that's why the range is there.

Great. Thanks very much.

Speaker Change: Alright, Thanks, Jeff Thanks, everybody for joining us this morning, and look forward to speaking with all of you again on our Q2 earnings call in August have a great day.

Speaker Change: This does conclude today's program. Thank you for your participation you may disconnect at anytime.

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