Q2 2025 Churchill Downs Inc Earnings Call
Later, we will conduct a question and answer session and instructions will be given at that time.
Speaker Change: We ask all question and answer participants to please limit themselves to one question. As a reminder, this conference call is being recorded I would now like to introduce your host for today's conference Mr. Sam All Rich Vice President Investor Relations.
Speaker Change: Thank you Andrew Good morning, and welcome to our second quarter 2025 earnings Conference call. After the company's prepared remarks, we will open the call for your questions. The company's 2025 second quarter business results were released yesterday afternoon, a copy of this release announcing results and other financial and statistical information about.
Speaker Change: The period to be presented in this conference call, including information required by regulation G is available at the section of the company's website titled News located at Churchill Downs incorporated Dot com as well as in the website's Investor section before we get started I would like to remind you that some of the statements that we make today may include forward looking statements. These statements.
Speaker Change: <unk> involve a number of risks and uncertainties that could cause actual results to differ materially all forward looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC specifically the most recent reports on Form 10-Q and Form 10-K any forward looking.
Speaker Change: <unk> that we make are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events. During this call. We will present, both GAAP and non-GAAP financial measures a reconciliation of GAAP to non-GAAP measures is included in yesterday's earnings press release, the press release and Form 10-Q.
Bill: Are available on our website at Churchill Downs incorporated Dot Com and now I'll turn the call over to our Chief Executive Officer, Mr. Bill <unk>.
Bill: Thanks, Sam Good morning, everyone with me today are several members of our team, including Bill Mudd, Our President and Chief operating Officer, Marcia Dall, Our Chief Financial Officer, and Brad Blackwell, Our General counsel.
Bill: I will share an update on growth plans for our company, including with respect to the Kentucky Derby and our HRS businesses.
Bill: And then Marshall will provide insight into our financial results as well as an update on our capital management strategy.
Speaker Change: After she finishes we will take your questions.
Speaker Change: First regarding our second quarter results, we delivered all time record net revenue of $934 million, an all time record adjusted EBITDA of $451 million. This is the fifth consecutive second quarter that we have set records for net revenue and adjusted EBITDA.
Operator: This is a 2025 2nd Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question and answer session, and instructions will be given at that time.
Good day, ladies and gentlemen, and welcome to the Churchill Downs. Incorporated 2025 second quarter earnings conference call.
Operator: We ask all question and answer participants to please limit themselves to one question. As a reminder, this conference call is being recorded.
Speaker Change: Now, let's talk about our growth plans for the company, both near term and long term.
At this time, all participants are in a listen-only mode later. We'll conduct a question and answer session and instructions will be given at that time.
Speaker Change: First regarding our plans to grow Derby week in Churchill Downs racetrack.
We ask all question and answer participants to please limit themselves to 1 question.
Sam Ullrich: I would now like to introduce your host for today's conference, Mr. Sam Ullrich, Vice President, Investor Relations. Thank you, Andrew. Good morning and welcome to our second quarter 2025 Earnings Conference Call.
As a reminder, this conference call is being recorded.
Speaker Change: Over the last decade, we have expanded the Kentucky Derby into a week long celebration.
Speaker Change: In 2024, we delivered 20% growth $30 million of incremental adjusted EBITDA in one year.
Speaker Change: I will now like to introduce your host for today's conference, Mr. Samri, Vice President, investor relations.
Sam Ullrich: After the company's prepared remarks, we will open the call for your questions. The company's 2025 second quarter business results were released yesterday afternoon.
Speaker Change: Given 2024 was our 150 of running of the Derby. It proved to be a strong comparison for us to beat this year, particularly given the weather. We then experienced on Derby day, and yet we achieved nearly the same level of adjusted EBITDA in 2025 for Churchill Downs Racetrack as we did in 2024.
Sam Ullrich: A copy of this release announcing results and other financial and statistical information about the period to be presented in this conference call, including information required by Regulation G, is available at the section of the company's website titled News, located at www.churchilldownsinc.com, as well as in the website's Investor section. Before we get started, I would like to remind you that some of the statements that we make today may include forward-looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC, specifically the most recent reports on Form 10-Q and Form 10-K.
Speaker Change: We expect to show meaningful growth with the Derby in 2026 and beyond based primarily on five catalysts.
Speaker Change: The first is ticketing revenue driven by unique premium experiences.
Speaker Change: Thank you. Andrew. Good morning and Welcome to our second quarter 2025 earnings conference call. After the company's prepared remarks, we will open the call for your questions. The company's 2025 second quarter business results were released yesterday afternoon, a copy of this release announcing results and other financial and statistical information about the period to be presented in this conference call including information required by regulation. G is available at the section of the company's website, titled news located at Churchill Downs, incorporated.com, as well as in the websites investor section.
Speaker Change: Derby week begins with opening night on the Saturday before the Kentucky Derby week.
Speaker Change: We then have three days of racing and events on Tuesday, Wednesday, and Thursday, each separately themed and promoted before culminating with the Kentucky Oaks on Friday, and the Kentucky Derby on the first Saturday of May.
Speaker Change: This year, we had over 370000 people attend Derby week.
Sam Ullrich: Any forward-looking statements that we make are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information for future events.
Speaker Change: This is comparable to hosting five super bowls over the course of one week.
Speaker Change: Shaping the Kentucky Derby experience to be a week a week of spectacular racing and events gives us a range of different price points over the various days to attract develop and segment our customers with a finale, the Kentucky Derby itself, where we have proven our ability to design and segment customer experiences at an entirely different level.
Sam Ullrich: During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in yesterday's earnings press release. The press release and Form 10-Q are available on our website at www.churchilldownsinc.com.
Speaker Change: Before we get started, I would like to remind you, that some of the statements that we make. Today may include forward-looking statements, these statements evolve, a number of risks and uncertainties that could cause actual results to differ materially. All forward-looking statements should be considered and conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC. Specifically the most recent reports on form 10q and form 10K, any forward-looking statements that we make are based on assumptions as of today. And we undertake no obligation to update. These statements as a result of new information or future events. During this call, we will present both gaap and non-gaap financial measures.
Bill Karstanjen: And now, I'll turn the call over to our Chief Executive Officer, Mr. Bill Karstangian. Thanks, Sam. Good morning, everyone. With me today are several members of our team, including Bill Mudd, our President and Chief Operating Officer, Marcia Dall, our Chief Financial Officer, and Brad Blackwell, our General Counsel. I will share an update on growth plans for our company, including with respect to the Kentucky Derby and our HRM business. And then Marcia will provide insight into our financial results, as well as an update on our capital management strategy.
Speaker Change: The demand for the Kentucky Derby and for Derby week tickets is growing we will continue to deliver special customer experiences, while selectively and thoughtfully pricing them based on rising customer demand, especially for our premium offerings.
Speaker Change: Measures a Reconciliation of gaap to non-gaap measures is included in yesterday's earnings. Press release, the press release and form. 10 Q are available on our website at Churchill Downs, incorporated.com, and now I'll turn the call over to our chief executive officer. Mr. Bill, carstan.
Speaker Change: We expect that this approach will continue to generate meaningful adjusted EBITDA growth for Derby week going forward.
Bill Carstan: Thanks Sam. Good morning everyone with me. Today, are several members of our team, including Bill mud, our president and Chief Operating Officer Marsha doll, our Chief Financial Officer and Brad. Blackwell our general counsel,
Speaker Change: The second driver of long term growth for Derby week as our broadcast rights.
Bill Carstan: I will share an update on growth plans for our company including with respect to the Kentucky Derby and our HRM businesses.
Speaker Change: We have had a longstanding successful relationship with NBC. This year that partnership delivered record breaking results.
Bill Karstanjen: After she finishes, we will take your questions. First, regarding our second quarter results. We delivered all-time record net revenue of $934 million and all-time record adjusted EBITDA of $451 million. This is the fifth consecutive second quarter that we have set records for net revenue and adjusted EBITDA.
Marsha Doll: And then Marshall will provide insight into our financial results as well as an update on our Capital Management strategy.
Speaker Change: After she finishes, we will take your questions.
Speaker Change: Average viewership for the broadcast reached nearly $18 million, a 6% increase over 2024 and peak viewership climbed to almost 22 million people up 8% from last year's record.
Speaker Change: These are the highest derby viewership numbers, we've seen in decades, highlighting not only the strength of our media partnership but also the continued growth in the cultural relevance and reach of the event.
Bill Karstanjen: Now let's talk about our growth plans for the company, both near-term and long-term. first regarding our plans to grow Derby Week and Churchill Downs racetrack. Over the last decade, we have expanded the Kentucky Derby into a week-long celebration. In 2024, we deliver 20% growth, $30 million of incremental adjusted EBITDA in one year. Given 2024 was our 150th running of the Derby, it proved to be a strong comparison for us to beat this year, particularly given the weather we then experienced on Derby Day. And yet we achieved nearly the same level of adjusted EBITDA in 2025 for Churchill Downs Racetrack as we did in 2024.
Speaker Change: First regarding our second quarter results. We delivered all-time record net. Revenue of 934 million and all-time record adjusted Evita of 451 million. This is the fifth consecutive second quarter that we have set records for net revenue and adjusted Evita
Speaker Change: Now, let's talk about our growth plans for the company. Both near-term and long-term
Speaker Change: We also had over 285 million social media impressions during Derby week, a 67% increase from 2024.
Speaker Change: First regarding our plans to grow Derby week and Churchill Downs Racetrack.
Speaker Change: The interest in Derby week has simply never been higher.
Speaker Change: Over the last decade, we have expanded, the Kentucky Derby into a week-long celebration.
Speaker Change: In April of last year, we negotiated a new seven year contract with NBC that begins next year with a 152nd Derby.
Speaker Change: In 2024, we delivered 20% growth, 30 million of incremental adjusted ebit on.
Speaker Change: This will provide a $10 million increase in adjusted EBITDA for 2026.
Speaker Change: We were thrilled to announce that NBC will for the first time broadcast the Kentucky Oaks raised during prime time on National TV in 2026.
Bill Karstanjen: We expect to show meaningful growth with the Derby in 2026 and beyond, based primarily on five catalysts. The first is ticketing revenue driven by unique premium experience. Derby week begins with opening night on the Saturday before the Kentucky Derby. We then have three days of racing and events on Tuesday, Wednesday, and Thursday, each separately themed and promoted, before culminating with the Kentucky Oaks on Friday and the Kentucky Derby on the first Saturday of May. This year, we had over 370,000 people attend Derby. This is comparable to hosting five Super Bowls over the course of one week.
Speaker Change: Given 2024 was our 150th running of the Derby. It proved to be a strong comparison for us to beat this year. Particularly given the weather, we then experienced on Derby Day and yet we achieved nearly the same level of adjusted Ava in 2025 for Churchill Downs, Racetrack. As we did in 2024
Speaker Change: The race will be run during the eight o'clock to nine o'clock hour on Friday night May one.
Speaker Change: Previously the rates had been run between five and six PM and televised on an affiliated cable network with more limited distribution in viewership.
Speaker Change: We expect to show meaningful growth with the Derby in 2026 and Beyond based primarily on 5 catalyst.
Speaker Change: The first is ticketing Revenue driven by unique premium experiences.
Speaker Change: We believe the move to primetime coverage on NBC will serve as a catalyst for increased viewership in wagering.
Speaker Change: Derby week, begins with opening night on the Saturday before the Kentucky Derby.
Speaker Change: This enhanced visibility also strengthens the events appeal to current and prospective sponsors.
Speaker Change: Positioning the Oaks in Primetime also creates a compelling leading to the Kentucky Derby further amplifying awareness engagement and wagering around our flagship event.
Speaker Change: ing in events on Tuesday, Wednesday and Thursday, each separately, themed, and promoted before culminating with the Kentucky Oaks on Friday, and the Kentucky Derby on the first Saturday of May
Speaker Change: This year we had over 370,000 people, attend Derby week.
Bill Karstanjen: Shaping the Kentucky Derby experience to be a week of spectacular racing and events gives us a range of different price points over the various days to attract, develop, and segment our customers. with the finale, the Kentucky Derby itself, where we have proven our ability to design and segment customer experiences at an entirely different level. The demand for the Kentucky Derby and for Derby Week tickets is growing. We will continue to deliver special customer experiences while selectively and thoughtfully pricing them based on rising customer demand, especially for our premium offer.
Speaker Change: The third driver of long term growth as wagering.
Speaker Change: This is comparable to hosting 5, Super Bowls over the course of 1 week.
Speaker Change: This year, we once again set all time records for wagering on the Derby race, the full Derby day program and Derby week as a whole.
Speaker Change: Wagering on the Derby race was up 11% over last year's all time high.
Speaker Change: Shaping, the Kentucky Derby experience to be a week a week of spectacular racing and events gives us a range of different price points over the very days to attract develop and our customers with the finale, the Kentucky Derby itself.
Speaker Change: Derby day, wagering increased 9% over the previous record.
Speaker Change: Where we have proven our ability to design and segment customer experiences at an entirely different level.
Speaker Change: And wagering for Derby week rose, 6% above last year's benchmark.
Speaker Change: By continuing to attract the best horses from around the world and benefiting from the Derby is expanding cultural relevance, we are seeing consistent growth in wagering across the week.
Bill Karstanjen: We expect that this approach will continue to generate meaningful adjusted EBITDA growth for Derby Week going forward.
Speaker Change: The demand for the Kentucky Derby, and for Derby week, tickets is growing. We will continue to deliver special customer experiences while selectively and thoughtfully pricing them based on Rising customer demand, especially for our premium offerings
Speaker Change: This also helps our twin spires horseracing business to attract both serious as well as casual betters.
Bill Karstanjen: The second driver of long-term growth for Derby Week is our broadcast writers. We have had a longstanding, successful relationship with NBC. This year, that partnership delivered record-breaking results. Average viewership for the broadcast reached nearly 18 million, a 6% increase over 2024, and peak viewership climbed to almost 22 million people, up 8% from last year's record. These are the highest Derby viewership numbers we've seen in decades, highlighting not only the strength of our media partnership, but also the continued growth in the cultural relevance and reach of the event. We also had over 285 million social media impressions during Derby Day.
Speaker Change: We expect that this approach will continue to generate meaningful adjusted. Evita growth for Derby week going forward.
Speaker Change: Twin Spires horse racing set records this year for wagering, new registrations and active players during Derby week.
Speaker Change: The second driver of long-term, growth for Derby week, is our broadcast rights.
Speaker Change: Our partnerships with <unk> and drafting has also set new Derby week Wagering Records, we intend to continue building on these positive trends.
Speaker Change: We have had a long-standing successful relationship with NBC this year that partnership delivered record-breaking results.
Speaker Change: The fourth driver of Derby week growth as sponsorship and licensing.
Speaker Change: Sponsorships of the Derby grew in 2025, and we expect it will continue to grow as we expand our national and global reach through our onsite attendance television and online audiences.
Speaker Change: Average viewership for the broadcast, reached nearly 18 million. A 6 increase over 2024, and Peak viewership climbed to almost 22 million. People up 8% from last year's record,
Speaker Change: Social media reach and other growth initiatives.
Speaker Change: These are the highest Derby viewership numbers we've seen in decades highlighting. Not only the strength of our media partnership, but also, the continued growth in the cultural relevance and reach of the event.
Speaker Change: And finally, the fifth driver of selective renovations and expansions through capital investment.
Bill Karstanjen: a 67% increase from 2024. The interest in Derby Week has simply never been higher.
Speaker Change: Over the last decade, we have made a series of strategic capital investments at Churchill Downs Racetrack aimed at elevating the guest experience during Derby week, and broadening our appeal to new audiences. These.
Speaker Change: We also had over 285 million social media Impressions during Derby week. A 67% increase from 2024.
Bill Karstanjen: In April of last year, we negotiated a new seven-year contract with NBC that begins next year with the 152nd Derby. This will provide a $10 million increase in adjusted EBITDA for 2020. We were thrilled to announce that NBC will, for the first time, broadcast the Kentucky Oaks race during primetime on national television in 2026. The race will be run during the 8 o'clock to 9 o'clock hour on Friday night, May 1st. Previously, the race had been run between 5 and 6 p.m. and televised on an affiliated cable network with more limited distribution and viewership. We believe the move to primetime coverage on NBC will serve as a catalyst for increased viewership and wage This enhanced visibility also strengthens the event's appeal to current and prospective sponsors.
Speaker Change: The interest in Derby week has simply never been higher.
Speaker Change: These investments have and will deliver best in class returns for our investors.
Speaker Change: In April of last year, we negotiated a new 7-year contract with NBC that begins next year with the 152nd Derby.
Speaker Change: We successfully completed the starting gate pavilion and courtyard project on time and on budget for this year's Derby.
Speaker Change: This will provide a $10 million increase in adjusted ebit off for 2026.
Speaker Change: Feedback from our guests in these newly remodeled areas has been overwhelmingly positive with many noting the significant elevated experiences.
Speaker Change: We were thrilled to announce that NBC will for the first time broadcast, the Kentucky Oaks race during Prime Time on National Television, in 2026,
Speaker Change: The race will be run during the 8:00 to 9:00 hour on Friday night May 1st.
Speaker Change: We are confident this project will generate strong returns for our shareholders as our customers experience and then spread the word about the improvements we've made to this section of our venue.
Speaker Change: Previously, the race had been run between 5 and 6:00 p.m. and televised on an Affiliated cable network with more limited distribution and viewership.
Speaker Change: We are making excellent progress on the renovations of two of our most prestigious and exclusive areas the finish lines suites and the mansion.
Speaker Change: we believe the move to Prime Time coverage on NBC will serve as a catalyst for increased viewership and wagering
Bill Karstanjen: Positioning the Oaks in prime time also creates a compelling lead-in to the Kentucky Derby, further amplifying awareness, engagement, and wagering around our flagship event.
Speaker Change: We expect both previously announced projects to be completed on time and on budget for Derby week 2026.
Speaker Change: this enhanced visibility also strengthens the events appeal to current and prospective sponsors.
Speaker Change: We are also deep into planning for our next project, which will be focused on the area between the first turn building and the Sky tariffs.
Bill Karstanjen: The third driver of long-term growth is wage This year, we once again set all-time records for wagering on the Derby Race, the full Derby Day program, and Derby Week as a whole. Wagering on, the Derby race was up 11% over last year's all-time high. Derby Day wagering increased 9% over the previous record. and wagering for Derby Week rose 6% above last year's benchmark. By continuing to attract the best horses from around the world and benefiting from the Derby's expanding cultural relevance, we are seeing consistent growth and wagering across the This also helps our Twin Spires horse racing business to attract both serious as well as casual bettors.
Speaker Change: Positioning The Oaks and prime time. Also creates a compelling lead in to the Kentucky Derby. Further amplifying awareness engagement and wagering around our Flagship event.
Speaker Change: This is an exciting undertaking for us and we will have more to share with you on our next earnings call. So stay tuned.
Speaker Change: The third driver of long-term growth is wagering.
Speaker Change: Strategic investments will remain a key part of our long term strategy for the Kentucky Derby as we seek to constantly improve our guest experience in summary, we anticipate that we will generate step function growth for Derby week in 2026.
Speaker Change: This year we once again, set all-time records for wagering on the Derby race. The full Derby Day program and Derby week as a whole
Speaker Change: Wagering on the Derby. Race was up, 11% over last year's all-time high
Speaker Change: Derby Day, wagering increased 9%, over the previous record.
Speaker Change: Based on growth in ticket revenue from pricing and from the strategic investments, we have made as well as from the new NBC contract increased wagering and growth in sponsorship and licensing.
Speaker Change: And wagering for Derby week, Rose 6% above last year's benchmark.
Speaker Change: By continuing to attract the best horses from around the world and benefiting from the derbies. Expanding cultural relevance, we are seeing consistent growth in wagering across the week.
Speaker Change: Churchill Downs race track and the Kentucky Derby remain the crown jewel in our portfolio and we're excited about the strong foundation. These growth catalysts provide for a vibrant and successful future.
Bill Karstanjen: Twin Spires Horse Racing set records this year for wagering, new registrations, and active players during Derby Week. Our partnerships with FanDuel and DraftKings also set new Derby Week wagering records.
Speaker Change: This also helps our Twin Spires horse racing business to attract both serious as well as casual Bettors.
Speaker Change: To inspires Force Racing set records this year, for wagering, new registrations and act.
Speaker Change: Next turning to our HR and progress first in Virginia.
Speaker Change: Players during Derby week.
Bill Karstanjen: We intend to continue building on these positive trends.
Speaker Change: As expected we have seen continued progress during the second quarter from the Roes, It's really encouraging because we are still in the early innings HSM facilities in new markets like Northern Virginia take time to attract develop and retain customers.
Bill Karstanjen: The fourth driver of Derby Week growth is sponsorship and licensing. Sponsorships of the Derby grew in 2025 and we expect it will continue to grow as we expand our national and global reach through our on-site attendance, television and online audiences. Social Media Reach, and other growth initiatives.
Speaker Change: Our Partnerships with FanDuel and DraftKings. Also set new Derby week, wagering records, we intend to continue building on these positive trends.
Speaker Change: The fourth driver of Derby week growth is sponsorship and Licensing.
Speaker Change: We saw meaningful growth in gross gaming revenues each month during the quarter when normalized for calendar differences.
Speaker Change: And we are continuing to build our customer database.
Speaker Change: Sponsorships of the Derby grew in 2025 and we expect it will continue to grow as we expand our national and Global reach through our on-site, attendance television on, and online audiences.
Bill Karstanjen: And finally, the fifth driver is selective renovations and expansions through capital investment. Over the last decade, we have made a series of strategic capital investments at Churchill Downs Racetrack aimed at elevating the guest experience during Derby Week and broadening our appeal to new audiences. These investments have and will deliver best-in-class returns for our investors. We successfully completed the Starting Gate Pavilion and Courtyard project on time and on budget for this year's Derby. Feedback from our guests in these newly remodeled areas has been overwhelmingly positive, with many noting the significant elevated experience. We are confident this project will generate strong returns for our shareholders as our customers experience, and then spread the word about the improvements we've made to this section of our venue.
Speaker Change: Social media reach and other growth initiatives.
Speaker Change: And Central Virginia, we are on schedule and on budget with our growth project at the Richmond HRS venue.
Speaker Change: and finally, the fifth driver is selective, Renovations, and expansions through capital investment,
Speaker Change: We expanded our gaming floor in May of this year and expect to complete the remaining phase in just a few weeks.
Speaker Change: We continue to make great progress in building the ROE Shire gaming parlor in Henrico County, we are excited for the planned opening of the subscale Entertainment venue in October of this year ahead of schedule and on budget.
Speaker Change: Over the last decade, we have made a series of strategic Capital Investments at Churchill Downs, Racetrack aimed at elevating the guest experience during Derby week and broadening our appeal to new audiences.
Speaker Change: These Investments have and will deliver best-in-class returns for our investors.
Speaker Change: In Kentucky.
Speaker Change: We are progressing well on the Marshall yards, HR and facility in Calvert City.
Speaker Change: We successfully completed the Starting Gate Pavilion and Courtyard project on time and on budget for this year's Derby.
Speaker Change: This will be an important addition to our portfolio of entertainment properties in the Commonwealth.
Speaker Change: We are planning to open this venue during the first quarter of 2026 on budget and on time.
Speaker Change: Has been overwhelmingly positive with many noting. The significant elevated experiences?
Speaker Change: In New Hampshire.
Speaker Change: We were thrilled to announce last week the execution of definitive transaction documents to acquire 90% of the casino sale and project located in the mall at Rockingham Park in Salem, New Hampshire closer to the Massachusetts border at exit two on Interstate 93.
Bill Karstanjen: We are making excellent progress on the renovations of two of our most prestigious and exclusive areas, the finish line suites and the main. We expect both previously announced projects to be completed on time and on budget for Derby Week 2020.
Speaker Change: We are confident this project will generate strong returns for our shareholders as our customers experience. And then spread the word about the improvements we've made to this section of our venue.
Speaker Change: We are making excellent progress on the renovations of 2 of our most prestigious and exclusive areas, the Finish Line Suites and the mansion.
Speaker Change: We intend to develop a state of the art gaming and entertainment destination to draw patrons to Salem from across the significant new England market and to support charitable organizations throughout New Hampshire.
Bill Karstanjen: We are also deep into planning for our next project, which will be focused on the area between the First Turn Building and the Sky Terrace. This is an exciting undertaking for us, and we will have more to share with you on our next earnings call, so stay tuned.
Speaker Change: We expect both previously announced projects to be completed on time, and on budget for Derby week 2026.
Speaker Change: Currently there is a temporary facility operating 100, HRS and <unk> table games.
Speaker Change: We are also deep into planning for our next project, which will be focused on the area between the first turn building and the Sky Terrace.
Speaker Change: We are targeting to close the transaction in the third quarter and then we will share more details on our future development plans.
Bill Karstanjen: Strategic investments will remain a key part of our long-term strategy for the Kentucky Derby as we seek to constantly improve our guest experience.
Speaker Change: This is an exciting undertaking for us and we will have more to share with you on our next earnings call. So stay tuned.
Speaker Change: In the near term, we anticipate continuing to operate our chasers poker room in Salem, and we've retained the rights to the associated <unk> license.
Bill Karstanjen: In summary, we anticipate that we will generate step function growth for Derby Week in 2026. based on growth in ticket revenue, from pricing, and from the strategic investments we have made, as well as from the new NBC contract, increased wagering, and growth in sponsorships and licenses.
Speaker Change: We will evaluate and pursue viable alternative uses for the second <unk> license, which will potentially be an exciting additional opportunity.
Speaker Change: Strategic investments will remain a key part of our long-term strategy for the Kentucky Derby, as we seek to constantly improve our guests experience in summary. We anticipate that we will generate step function growth for Derby week in 2026.
Speaker Change: Turning to exact a.
Bill Karstanjen: Churchill Downs Racetrack and the Kentucky Derby remain the crown jewel in our portfolio, and we're excited about the strong foundation these growth catalysts provide for a vibrant and successful Next, turning to our HRM progress. First in Virginia. As expected, we have seen continued progress during the second quarter from the rose. It's really encouraging because we are still in the early inning. HRM facilities in new markets like Northern Virginia take time to attract, develop, and retain customers. We saw meaningful growth in the gross gaming revenues each month during the quarter when normalized for calendar differences, and we are continuing to build our customer database.
Speaker Change: Our exact business has grown through the expansion of our <unk> operations in Kentucky, and Virginia as well as through our third party relationships in Kentucky, New Hampshire in Wyoming.
Speaker Change: Based on growth and ticket revenue from pricing, and from the Strategic Investments we have made, as well as from the new NBC contract increased wagering, and growth, and sponsorships, and Licensing.
Speaker Change: For our <unk> operations, the exact technology enables us to better optimize our gaming floor and reduce the technology fees charged to our venues.
Speaker Change: Churchill Downs, Racetrack in the Kentucky Derby remained, the Crown Jewel in our portfolio and we're excited about the strong Foundation. These growth catalysts provide for a vibrant and successful future.
Speaker Change: Next turning to our HRM progress first in Virginia,
Speaker Change: For our third party relationships the exact technology enables state of the art <unk> with a high level of service from our team to support their ongoing expansion and growth.
Speaker Change: We will grow our exact business in new Hampshire, as part of our Salem Casino development.
Speaker Change: As expected, we have seen continued progress during the second quarter from the rows. It's really encouraging because we are still in the early Innings, HRM facilities and new markets. Like Northern Virginia, take time to attract, develop, and retain customers.
Speaker Change: <unk> technology is already supporting the temporary facility.
Speaker Change: We saw meaningful growth in the gross gaming revenues each month during the quarter when normalized for calendar differences.
Speaker Change: Our technology also will also be utilized in a new third party facility in Wichita, Kansas, which is projected to open later this year or early next year.
Bill Karstanjen: In Central Virginia, we are on schedule and on budget with our growth project at the Richmond HRM venue. We expanded our gaming floor in May of this year and expect to complete the remaining phase in just a few weeks. We continue to make great progress in building the Rose Shire Gaming Parlor in Henrico County.
Speaker Change: And we are continuing to build our customer database.
Speaker Change: We are excited to support the expansion of <unk> in this new market.
Speaker Change: In Central Virginia, we are on schedule and on budget with our growth project at the Richmond, HRM venue.
Speaker Change: We continue to seek the right to implement HRS based electronic table games, we have developed a new ASRM roulette product with inner block and look forward to expanding our suite of games with them.
Speaker Change: We expanded our gaming floor in May of this year and expect to complete the remaining phase in just a few weeks.
Bill Karstanjen: We are excited for the planned opening of this upscale entertainment venue in October of this year, ahead of schedule and on budget.
Speaker Change: We believe this will be a great enhancement to the guest experience and we will provide additional support for the horse racing industry in the future. We are working to gain approval with the appropriate state authorities.
Bill Karstanjen: in Kentucky. We are progressing well on the Marshall Yards HRM facility in Calvert City. This will be an important addition to our portfolio of entertainment properties in the Commonwealth. We are planning to open this venue during the first quarter of 2026 on budget and on time.
Speaker Change: We continue to make great progress in building the rose. Sure gaming, parlor, and henriko County. We are excited for the planned opening of this upscale. Entertainment venue in October of this year ahead of schedule, and on budget.
Speaker Change: In Kentucky.
Speaker Change: In summary, the second quarter delivered another strong performance with record financial results and we believe the best is still to come.
Speaker Change: We are progressing well on the Marshall yards HRM facility in Calvert City.
Speaker Change: This will be an important addition to our portfolio of Entertainment Properties in the Commonwealth.
Speaker Change: Churchill Downs race track and the Kentucky Derby, our truly unique trophy assets with powerful growth catalyst for the future.
Bill Karstanjen: In New Hampshire, we were thrilled to announce last week the execution of definitive transaction documents to acquire 90% of the Casino Salem project located in the mall at Rockingham Park in Salem, New Hampshire, close to the Massachusetts border at Exit 2 on Interstate 95. We intend to develop a state-of-the-art gaming and entertainment destination to draw patrons to Salem from across the significant New England market and to support charitable organizations throughout New Hampshire. Currently, there is a temporary facility operating 100 HRMs and 13 table We are targeting to close the transaction in the third quarter, and then we'll share more details on our future development.
Speaker Change: we are planning to open this venue during the first quarter of 2026 on budget and on time,
Speaker Change: In New Hampshire.
Speaker Change: Beyond that we see important growth drivers across our HR and properties in jurisdictions, and our wagering services and solutions segments.
Speaker Change: And as we are demonstrating with the Salem project, we continue to identify and execute high quality growth initiatives that strengthen our business and generate strong returns for our investors.
Speaker Change: We were thrilled to announce last week. The execution of definitive transaction, documents to acquire, 90% of the casino Salem project located in the mall, at Rockingham Park in Salem. New Hampshire, close to the Massachusetts border at Exit 2 on Interstate 93.
Speaker Change: Our strategic decision, making disciplined capital allocation strong balance sheet and diversified portfolio of high performing assets have positioned us well to drive sustainable long term growth.
Speaker Change: We intend to develop a state-of-the-art gaming and entertainment destination to draw patrons to Salem from across the significant New England market and to support charitable organizations throughout New Hampshire.
Speaker Change: Currently there is a temporary facility operating 100 hrms and 13 table games.
Speaker Change: With that I'll turn the call over to Marcia and then we will take your questions Marsha. Thanks.
Bill Karstanjen: In the near term, we anticipate continuing to operate our Chasers Poker Room in Salem, and we have retained the rights to the associated HRM license.
Marcia: Thanks, Bill and good morning, everyone I'll start with a few insights into our financial results and then provide an update on capital management.
We are targeting the close the transaction in the third quarter, and then we'll share more details on our future development plans.
Speaker Change: In the near term we anticipate continuing to operate our Chasers, Poker Room in Salem.
Marcia: First regarding second quarter financial results as Bill shared we delivered all time record second quarter revenue and adjusted EBITDA.
Bill Karstanjen: We will evaluate and pursue viable alternative uses for the second HRM license, which will potentially be an exciting additional opportunity.
Speaker Change: And we have retained the rights to the associated. HRM license.
Marcia: And historical racing segment delivered all time record second quarter revenue and adjusted EBITDA.
Bill Karstanjen: Turning to Exacto. Our exacted business has grown through the expansion of our HRM operations in Kentucky and Virginia, as well as through our third-party relationships in Kentucky, New Hampshire, and Wyoming. for our HRM operation. The exacted technology enables us to better optimize our gaming floor and reduce the technology fees charged to our venue. For our third-party relationships, the Xacti technology enables state-of-the-art HRMs with a high level of service from our team to support their ongoing expansion and growth. We will grow our executive business in New Hampshire as part of our Salem Casino development. Exacted Technology is already supporting the temporary facility.
Speaker Change: We will evaluate and pursue viable alternative uses for the second HRM license which will potentially be an exciting additional opportunity.
Speaker Change: Turning to xacta.
Marcia: This segment represented nearly two thirds of our adjusted EBITDA for the quarter.
Marcia: The $17 million or 6% growth in adjusted EBITDA compared to the prior year quarter was driven primarily by our HCM growth in Kentucky and Virginia.
Speaker Change: our exact business has grown through the expansion of our HRM operations in Kentucky and Virginia, as well, as through our third-party relationships in Kentucky, New Hampshire and Wyoming
Marcia: Tricia Downs race track was down $1 million, which is less than 1% driven by a very high prior year comp as a result of running the 150, <unk>, Kentucky Derby last year.
Speaker Change: For our HRM operations. The exact the technology enables us to better, optimize our gaming floor and reduce the technology fees charged to our venues.
Marcia: The Derby delivered tremendous growth in 2024, and as Bill discussed we expect the Derby to deliver step function growth in adjusted EBITDA again in 2026.
Speaker Change: For our third-party relationships. The exact technology enables state-of-the-art, hrms with a high level of service from our team to support their ongoing expansion and growth.
Speaker Change: We will grow our exact business in New Hampshire, as part of our Salem, Casino development.
Bill Karstanjen: Our technology will also be utilized in a new third-party facility in Wichita, Kansas, which is projected to open later this year or early next year.
Speaker Change: Exacted technology is already supporting the temporary facility.
Marcia: All of our HCM properties in Kentucky delivered growth in the second quarter compared to the prior year, we had especially strong performance from our northern Kentucky, and Louisville HN venues and we also benefited from the opening of the Owensboro, Kentucky H M venue in February of this year the consumer trends in these <unk>.
Bill Karstanjen: We are excited to support the expansion of HRMs in this new market.
Speaker Change: Our technology also be will also be utilized in a new third-party facility in Witchita Kansas, which is projected to open later this year or early next year.
Bill Karstanjen: We continue to seek the right to implement HRM-based electronic table games. We have developed a new HRM Roulette product with Interblock and look forward to expanding our suite of games with them. We believe this will be a great enhancement to the guest experience and will provide additional support for the horse racing industry in the future.
Speaker Change: We are excited to support the expansion of hrms in this new market.
Marcia: Markets were strong for the quarter.
Marcia: In Virginia, or Northern Virginia, Richmond, and employee properties collectively delivered over $8 million of growth compared to the prior year.
Speaker Change: We have developed a new HRM roulette product with inner block, and look forward to expanding our suite of games with them.
Bill Karstanjen: We are working to gain approval with the appropriate state authorities.
Marcia: As expected, our Virginia handle tax rate was higher for the quarter compared to the prior year quarter due to the gaming tax structure and the increase in the number of HR EMS. We have since we opened the Roes in November of last year.
Bill Karstanjen: In summary, the second quarter delivered another strong performance with record financial results, and we believe the best is still to come. Churchill Downs racetrack and the Kentucky Derby are truly unique trophy assets with powerful growth catalysts for the future.
Speaker Change: We believe this will be a great enhancement to the guest experience and will provide additional support for the horse racing industry. In the future, we are working to gain approval with the appropriate State authorities.
Speaker Change: In summary the second quarter, delivered, another strong performance with record Financial results, and we believe the best is still to come.
Marcia: Our handle tax rate will transition from 139% to one 3% effective July one of this year.
Bill Karstanjen: Beyond that, we see important growth drivers across our HRM properties and jurisdictions and our wagering services and solutions sector.
Speaker Change: Churchill Downs, Racetrack and the Kentucky Derby are truly unique trophy assets with powerful growth Catalyst for the future.
Bill Karstanjen: And, as we are demonstrating with the Salem Project, we continue to identify and execute high-quality growth initiatives that strengthen our business and generate strong returns for our investors. Our strategic decision-making, disciplined capital allocation, strong balance sheet, and diversified portfolio of high-performing assets have positioned us well to drive sustainable long-term growth.
Marcia: Collectively our remaining Virginia properties were down $3 million, reflecting a comparison to a strong second quarter in 2024 as well as marginally from competition.
Speaker Change: Beyond that we see important growth drivers across our HRM, properties, and jurisdictions and our wagering services and solutions segments.
Marcia: All of our properties that reduce the level of unrated play.
Speaker Change: And as we are demonstrating with the Salem project, we continue to identify and execute high-quality growth initiatives that strengthen our business and generate strong returns for our investors.
Speaker Change: Our strategic decision-making.
Marcia: It is important to note that rated play at these Virginia properties reflected strong growth across all our metrics.
Marcia: Overall, we generated a combined 52% margin during the quarter for our same store, Virginia ATM properties.
Marcia Dall: With that, I'll turn the call over to Marcia, and then we will take your questions.
Discipline Capital, allocation strong balance sheet and diversified portfolio of high performing assets, have positioned us well to drive sustainable long-term growth.
Marcia Dall: Marcia? Thanks, Bill, and good morning, everyone. I'll start with a few insights into our financial results and then provide an update on capital management. First, regarding second quarter financial results, as Bill shared, we delivered all-time record second quarter revenue and adjusted EBITDA. Our live and historical racing segment delivered all-time record second quarter revenue and adjusted EBITDA. This segment represented nearly two-thirds of our adjusted EBITDA for the quarter. The $17 million or 6% growth in adjusted EBITDA compared to the prior year quarter was driven primarily by our HRM growth in Kentucky and Virginia. Churchill Downs racetrack was down $1 million, which is less than 1%, driven by a very high prior year comp as a result of running the 150th Kentucky Derby last year.
Marcia: Our wagering services and solutions segment also delivered record second quarter revenue and adjusted EBITDA.
With that, I'll turn the call over to Marsha and then we will take your questions Marcia.
Marcia: EBITDA grew by nearly $2 million or 4% compared to the prior year quarter.
Marsha Doll: Thanks Bill and good morning everyone. I'll start with a few insights into our financial results and then provide an update on Capital Management,
Marcia: And the exact business contributed over $3 million of this increase from both third party customers and growth from our Virginia, and Kentucky, HR and properties.
Marsha Doll: First regarding second quarter Financial results as Bill shared. We delivered all-time records second quarter revenue and adjusted Ava.
Marcia: Our twin spires horse racing revenue benefited from a record level of wagering on Derby week.
Marsha Doll: Our live and historical racing. Segment delivered all-time records. Second quarter revenue and adjusted Ava.
Marsha Doll: This segment represented nearly 2/3 of our adjusted Eva for the quarter.
Marcia: Adjusted EBITDA for twin science was down slightly due to higher legal expenses compared to the prior year quarter.
Marcia: And last regarding our gaming segment, our wholly owned regional gaming properties performed relatively well in the second quarter.
Marsha Doll: The 17 million or 6% growth and adjusted Eva compared to. The prior year quarter was driven primarily by our HRM growth in Kentucky and Virginia.
Marcia: Regarding our Terre Haute casino and resort in Indiana, and it is important to note that we benefited from the initial gaming tax rate in the second quarter of the prior year due to the tiered structure and Indiana gaming tax rates and the state's fiscal year ending June 30th.
Marcia Dall: The Derby delivered tremendous growth in 2024, and as Bill discussed, we expect the Derby to deliver step function growth and adjusted EBITDA again in 2026. All of our HRM properties in Kentucky delivered growth in the second quarter compared to the prior year. We had especially strong performance from our Northern Kentucky and Louisville HRM venues, and we also benefited from the opening of the Owensboro, Kentucky, HRM venue in February of this year. The consumer trends in these markets were strong for the quarter. In Virginia, our Northern Virginia, Richmond, and Emporia properties collectively delivered over $8 million of growth compared to the prior year.
Marsha Doll: Church are Downs. Race track was down 1 million dollars, Which is less than 1% driven by a very high prior year comp as a result of running the 150th Kentucky Derby last year.
Marcia: The gaming tax rate has since normalized at the expected long term rate.
Bill Carstan: The Derby delivered tremendous growth in 2024. And as Bill discussed, we expect the Derby to deliver step function growth and adjusted ibida again in 2026.
Marcia: Regarding Louisiana, we've moved approximately 500 daytime machines from Louisiana.
Marcia: On properties in Virginia, and Kentucky, This will impact the comparability of our Louisiana results to the prior year.
Marcia: Our adjusted EBITDA or eight other wholly owned gaming properties decreased $3 $1 million.
Bill Carstan: All of our HRM properties, in Kentucky, delivered growth in the second quarter compared to the prior year. We had a specially strong performance from our Northern Kentucky and Louisville, HRM venues. And we also benefited from the opening of the Owensboro. Kentucky HRM venue in February of this year.
Bill Carstan: The consumer Trends in these markets were strong for the quarter.
Marcia: As a result, the casino margin for these properties was down one three points compared to the same period in 2024.
Marcia Dall: As expected, our Virginia Handle Tax Rate was higher for the quarter compared to the prior year quarter due to the gaming tax structure and the increase in the number of HRMs we have since we opened the rows in November of last year. Our handle tax rate will transition from 1.39% to 1.3% effective July 1st of this year. Collectively, our remaining Virginia properties were down $3 million, reflecting a comparison to a strong second quarter in 2024, as well as marginally from competition near a few of our properties that reduced the level of unrated play. It is important to note that rated play at these Virginia properties reflected strong growth across all our metrics.
Marcia: Regional gaming consumer behavior in second quarter improved.
Bill Carstan: In Virginia, our Northern Virginia Richmond and Emporia properties collectively, delivered over 8 million dollars of growth compared to the prior year.
Marcia: Overall for our same store regional gaming properties.
Marcia: <unk> increased spend per trip from rated players with the high end of our player database delivering growth.
Marcia: While unrated player trends for comparable to the prior quarter.
Bill Carstan: as expected, our Virginia handle tax rate was higher for the quarter compared to the prior year quarter due to the gaming tax structure and the increase in the number of hrms we have since we opened the roads in November of last year,
Marcia: Turning to capital management, we generated $455 million or $6 29 per share of free cash flow in the first half of the year, primarily finished John cash flow generated from our businesses, we spent $31 million in maintenance capital in the first half of the year.
Bill Carstan: our handle tax rate will transition from 1.39% to 1.3% effective July 1st of this year.
Marcia: And based on a review of our maintenance capital plans for the year, we have reduced the 2025 maintenance capital protection by $10 million to $80 million to $90 million.
Bill Carstan: Collectively our remaining Virginia properties. Were down, 3 million reflecting a comparison to a strong second quarter in 2024, as well as marginally from competition near a few of our properties that reduce the level of unrated play.
We spent $132 million and project capital in the first half of the year and continue to expect to spend between 250 and $290 million in 2025.
Marcia Dall: Overall, we generated a combined 52% margin during the quarter for our same store, Virginia H&M Properties. Our wagering services and solutions segment also delivered record second quarter revenue and adjusted EBITDA. adjusted EBITDA grew by nearly $2 million or 4% compared to the prior year quarter. The exacted business contributed over $3 million of this increase from both third-party customers and growth from our Virginia and Kentucky HRM properties. our Twin Spires horse racing revenue benefited from a record level of wagering on Derby Week. adjusted EBITDA for twins viruses down slightly due to higher legal expenses compared to the prior year quarter.
Bill Carstan: It is important to note that rated play at these Virginia properties reflected, strong growth across all our metrics.
Bill Carstan: Overall, we generated the combined 52% margin during the quarter for our same store of Virginia. Hm properties.
Marcia: Turning to share repurchases, we repurchased over $250 million of our stock in the second quarter under our share repurchase program.
Bill Carstan: Our wagering services and solution segment. Also delivered record, second quarter revenue and adjusted Ava.
Marcia: This week, we announced that our board approved a new common stock repurchase program of up to $500 million. This reflects our strong belief in the future growth of our company.
Bill Carstan: Adjusted Eva grew by nearly 2 million dollars or 4% compared to the prior year quarter.
Marcia: At the end of second quarter, our bank Covenant net leverage was four two times.
Bill Carstan: The exact business contributed over $3 million of this increase from both third-party customers and growth from our Virginia and Kentucky, HRM properties.
Marcia: Based on our capital investments and anticipated share repurchases, we expect our bank covenant net leverage to remain in the low four times range for the remainder of the year. We then expect our bank covenant net leverage to decline below four times in 2026, as our investments in Virginia and Kentucky.
Bill Carstan: Our Twins fires horse racing Revenue benefited from a record level of wagering on Derby week.
Marcia Dall: And last, regarding our gaming segment, our wholly owned regional gaming properties performed relatively well in the second quarter. Regarding our Terre Haute Casino and Resort in Indiana, it is important to note that we benefited from the initial gaming tax rate in the second quarter of the prior year due to the tiered structure of Indiana's gaming tax rates and the state's fiscal year ending June 30th. The gaming tax rate has since normalized at the expected long-term rate. Regarding Louisiana, we have moved approximately 500 HRM machines from Louisiana to our HRM properties in Virginia and Kentucky. This will impact the comparability of our Louisiana results to the prior year.
Bill Carstan: Adjusted, even though for Twins, fires was down slightly due to higher legal expenses compared to the prior year quarter.
Bill Carstan: And last regarding our gaming segment, our wholly owned Regional gaming properties performed relatively well, in the second quarter.
Marcia: <unk> continued to deliver meaningful adjusted EBITDA and free cash flow and given our expected level of share repurchases.
Marcia: We also expect improvement in our free cash flow from favorable cash taxes because of the federal tax Bill that was signed on July 4th.
Bill Carstan: Regarding our tarot Casino and Resort in Indiana. It is important to note that we benefited from the initial gaming tax rate. In the second quarter of the prior year due to the tiered structure of Indiana's gaming, tax rates and the state's fiscal year, ending June 30th
Marcia: The new tax provisions include making the 21% business tax rate.
Bill Carstan: At the expected long-term rate.
Marcia: Percent bonus depreciation rule permanent.
Marcia: The federal tax Bill also reinstate a 30%.
Marcia: EBITDA based interest deduction limitation, the additional interest deductions.
Marcia Dall: Our adjusted EBITDA for our eight other wholly owned gaming properties decreased $3.1 million. As a result, the casino margin for these properties was down 1.3 points compared to the same period in 2024. regional gaming consumer behavior in second quarter improved. Overall, for our same store regional gaming properties, we saw increased spend per trip from rated players, with the high end of our player database delivering growth, while unrated player trends were comparable to the prior quarter.
Bill Carstan: Regarding Louisiana, we've moved approximately 500 HRM machines from Louisiana to our HRM properties in Virginia and Kentucky. This will impact the comparability of a Louisiana results to the prior year.
Marcia: Bind with the 100% bonus depreciation will reduce our cash taxes and increase our free cash flow this year and in future years, we expect that the impact of lower cash tax payments in 2025.
Bill Carstan: Our adjusted Eva for our 8, other wholly, owned gaming properties, decreased 3.1 million. As a result. The casino margin for these properties was down 1.3 points compared to the same period in 2024.
Marcia: Will be $50 million to $60 million.
Bill Carstan: Regional gaming consumer behavior in second, quarter improved.
Marcia: Overall, we are pleased with the record results that our team delivered in the second quarter, we are well positioned to continue to grow through the remainder of 2025 and into 2026 and beyond fueled by the tangible pipeline of growth initiatives that bill discussed and supported by our strong balance sheet.
Bill Carstan: Overall, for our same store Regional gaming properties, we saw increased spend per trip from rated players with a high end of our player database delivering growth.
Marcia Dall: Turning to capital management, we generated $455 million, or $6.29 per share, of free cash flow in the first half of the year, primarily from the strong cash flow generated from our businesses. We spent $31 million on maintenance capital in the first half of the year. And based on a review of our maintenance capital plans for the year, we have reduced the 2025 maintenance capital projection by $10 million to $80 to $90 million. We spent $133 million on project capital in the first half of the year and continue to expect to spend between $250 and $290 million in 2025.
While unrated player, Trends were comparable to the prior quarter.
Speaker Change: With that I'll turn the call back over to Bill So that he can open the call for questions Bill.
Bill: Thanks, Marcia Okay, everyone, we're ready to take your questions.
Bill Carstan: Turning to Capital Management. We generated 455 million or $6.29 per share of free cash flow in the first half of the Year primarily from the strong cash flow generated from our businesses.
Speaker Change: Ladies and gentlemen to ask a question at this time. Please press star one on your telephone and wait for your name to be announced so withdraw your question. Please press star one again.
Bill Carstan: We sent 31 million on maintenance capital in the first half of the year.
Speaker Change: And our first question comes from the line of Barry Jonas with Truest.
Bill Carstan: And based on a review of our maintenance Capital plans for the year, we've reduced our 2025 maintenance Capital projection by 10 million to 80 to 90 million.
Barry Jonas: Hey, guys good morning.
Speaker Change: Really appreciate all the commentary around the setup for growth at the Derby next year.
Marcia Dall: Turning to share repurchases, we repurchased over $250 million of our stock in the second quarter under our share repurchase program. This week, we announced that our board approved a new common stock repurchase program of up to $500 million. This reflects our strong belief in the future growth of our company. At the end of second quarter, our Bank Covenant net leverage was 4.2 times. Based on our capital investments and anticipated share repurchases, we expect our Bank Covenant net leverage to remain in the low four-times range for the remainder of the year. We then expect our Bank Covenant net leverage to decline below 4.0 times in 2026 as our investments in Virginia and Kentucky continue to deliver meaningful adjusted EBITDA and free cash flow, and given our expected level of share repurchase.
Bill Carstan: We spent 133 million on Project capital and the first half of the year and continue to expect to spend between 250 and 290 million in 2024.
Barry Jonas: As we think about.
Speaker Change: Yeah.
Speaker Change: As we think about the setup for $1 52 year over year, maybe talk about your expectations around pricing at the lower end specifically at the starting gate pavilion.
Turning to share repurchases. We were purchased over 250 million of our stock in the second quarter on our share repurchase program.
Barry Jonas: Sure. Thanks, Thanks for the question Barry.
Bill Carstan: This week, we announced that our board approved a new common stock. We purchased program of up to $500 million. This reflects our strong belief in the future, growth of our company.
Speaker Change: So.
Speaker Change: Last year was the introduction of the starting gate.
Speaker Change: Pavilion.
Bill Carstan: At the end of second quarter, our bank Covenant, net leverage was 4.2 times.
Speaker Change: And.
Speaker Change: Received rave reviews, so consistent with what we often see the word gets out people have now had a chance to experience.
Bill Carstan: Based on our Capital Investments and anticipated. Share repurchases, we expect our bank, Covenant. Net leverage to remain in the low 4 times range for the remainder of the year.
Speaker Change: The improvements and there is a chance for.
Speaker Change: <unk>.
Speaker Change: A word of mouth spread in.
Speaker Change: And that will show up we expect in demand and pricing for that section.
Speaker Change: So in general.
Marcia Dall: We also expect improvement in our free cash flow from favorable cash taxes because of the federal tax bill that was signed on July 4th. The new tax provisions include making the 21% business tax rate and 100% bonus depreciation rule permanent. The federal tax bill also reinstates a 30% EBITDA-based interest deduction limitation. The additional interest deductions, combined with 100% bonus depreciation, will reduce our cash taxes and increase our free cash flow this year and in future years. We expect that the impact of lower cash tax payments in 2025 will be $50 to $60 million.
Bill Carstan: We then expect our bank Covenant. Net leverage to decline below 4.0 times in 2026 as our investments in Virginia, and Kentucky continue to deliver meaningful adjusted, evida and free cash flow and given our expected level of share, repurchases.
Speaker Change: We're excited about that and expect that to be consistent with what we see when we do introduce new areas of our facility.
Bill Carstan: We also expect improvement in our free cash flow from favorable cash taxes because of the federal tax bill, that was signed on July 4th.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of David Katz with Jefferies.
David Katz: Thanks for taking my questions Bill I appreciate all the commentary around New Hampshire, I'd love to get just a little bigger discussion around how you see that market evolving in terms of the magnitude of investment the opportunity for returns what's the competitive landscape look like whats the whats the vision there.
Bill Carstan: The new tax Provisions include making the 21% business tax rate and 100% bonus depreciation rule permanent.
Bill Carstan: The federal tax bill. Also reinstates. A 30% of a of ibida based interest deduction, limitation.
Bill Carstan: The additional interest deductions combined with the 100% bonus depreciation will reduce our cash taxes and increase our free cash flow this year. And in future years,
David Katz: Good morning, David Thanks for the question.
Speaker Change: First I would say that when that deal is closed we will be able to explain a lot more about our plans, but since we are in this and this.
Marcia Dall: Overall, we are pleased with the record results that our team delivered in the second quarter. We are well positioned to continue to grow through the remainder of 2025 and into 2026 and beyond, fueled by the tangible pipeline of growth initiatives that Bill discussed and supported by our strong balance sheet.
Bill Carstan: we expect that the impact of lower cash, tax payments in 2025 and will be 50 to 60 million.
David Katz: This.
David Katz: Stage, where the transaction documents are signed but were going through the various approval processes.
David Katz: There is some there is some restriction of liability to talk completely about our plans, but I promise as we get the deal closed.
Bill Karstanjen: With that, I'll turn the call back over to Bill so that he can open the call for questions.
David Katz: We'll disclose quite a lot about about our plans, but let's let's talk in general.
Bill Carstan: Overall we are pleased with the record results that our team delivered in the second quarter. We are, well, positioned to continue to grow through the remainder of 2025, and into 2026 and Beyond fueled by the tangible pipeline of growth initiatives, that build discussed and supported by our strong balance sheet.
Bill Karstanjen: Bill? Thanks, Marcia. Okay, everyone. We're ready to take your questions.
David Katz: When you think about our location in <unk>.
Bill Carstan: Without altering the call back over to bill so that he can open the call for questions bill.
Operator: Ladies and gentlemen, to ask a question at this time, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.
David Katz: Salem or an exit two on I 93, which is a major interstate artery.
Bill Carstan: Thanks Marcia. Okay, everyone we're ready to take your questions.
Bill Carstan: Ladies and gentlemen to ask a question at this time, please?
Bill Carstan: Press star 1.
Bill Carstan: On your telephone.
David Katz: Coming out of downtown Boston, and running up to the suburbs and when we think about that market in general while their lines on the map delineating the new Hampshire border from from Massachusetts. That's all one market. So this is an opportunity for us to tap in not only to the new Hampshire.
Barry Jonas: And our first question comes from the line of Barry Jonas with True. Hey, guys, good morning. I really appreciate all the commentary around the setup for growth at the Derby next year.
Bill Carstan: To withdraw your question. Please press star 1 1 again.
Speaker Change: Your first question comes from the line of Barry Jonas with truist.
Bill Karstanjen: You know, as we think about as we think about the setup for 152 year over year, maybe talk about your expectations around pricing at the lower end, specifically at the starting gate pavilion. Sure. Thanks.
David Katz: Suburbs, but also to the Massachusetts <unk>.
David Katz: For Boston, So we think it's a very strong market.
Speaker Change: Guys, good morning. Uh uh, I really appreciate all the commentary around the setup for growth at the Derby next year. Uh, you know, as we think about um,
David Katz: Demographics, both in terms of the number of people and the wealth are there.
David Katz: Our location at the Rockingham Park Mall is a great location with us with a dedicated dedicated ingress and egress.
Speaker Change: Uh, as we think about the setup for 152 year-over-year, maybe talk about your expectations around pricing at the lower end, specifically at the Starting Gate Pavilion.
Bill Karstanjen: Thanks for the question, Barry. So, um, last year was the introduction of the starting gate, uh, and it received rave reviews. So consistent with what we often see, the word gets out. People have now had a chance to experience the improvements and there's a chance for. for word of mouth to spread and, and, um, And that'll show up, we expect, in demand and pricing for that section. So in general, we're excited about that and expect that to be consistent with what we see when we do introduce new areas of our facility. Thank you.
Sure. Thanks. Thanks for the question, Barry.
David Katz: Off the freeway, so it's easier to reach its a powerful mall that services.
Speaker Change: so um, last year was the introduction of the Starting Gate uh
David Katz: Massachusetts suburbs.
Speaker Change: Um, Pavilion.
David Katz: So we couldnt be more excited about the location.
David Katz: <unk>.
David Katz: And.
David Katz: The.
David Katz: The ease of access to the facility. So for this it will be in HRS facility, but also we have full table games. So we're very competitive with what.
Speaker Change: for Word of Mouth to spread and and, um,
David Katz: What you have with the Wynn property.
Speaker Change: And uh, that'll show up we expect and, and demand and pricing for for that section.
David Katz: In the Boston market and with other facilities in the region.
Speaker Change: so, in general, um,
David Katz: So we just think we have the.
David Katz: The best and brightest spot on the new Hampshire side from which to conduct our business.
Speaker Change: Uh, we're excited about that and and expect that to be uh, consistent with what we see when we do introduce new areas of our facility.
David Katz: And our next question comes from the line of David Katz with Jeffrey. Morning, thanks for taking my questions. Bill, appreciate all the commentary around New Hampshire.
David Katz: Thank you.
Speaker Change: Thank you.
Chad Beynon: Our next question comes from the line of Chad Beynon with Macquarie.
David Katz: And our next question comes from the line of David Katz with Jeffries.
Speaker Change: Hi, Good morning, Thanks for taking my question Bill I wanted to just circle back on some of the stats I mean kind of the outlook for the Derby.
Bill Karstanjen: I'd love to get just a little bigger discussion around how you see that market evolving in terms of the magnitude of investment, the opportunity for returns, what's the competitive landscape look like? You know, what's the what's the vision there? Good morning, David. Thanks for the question.
Speaker Change: Focusing more on <unk>.
Speaker Change: International attendance, which I think we've talked about now for a couple of years.
Speaker Change: How is what is the plan going forward and what's the focus.
David Katz: Morning. Thanks for taking my question Bill. Appreciate all the commentary around New Hampshire. I'd love to get. Just a little bigger discussion around. How you see that market evolving terms of the magnitude of investment opportunity for returns? What's the competitive landscape? Look like you know what's the what's the vision there?
Speaker Change: That and maybe a side bar of that.
Bill Karstanjen: So first, I'd say that when that deal is closed, we'll be able to explain a lot more about our plans. But since we're in this stage where the transaction documents are signed, but we're going through the various approval processes, there's some restriction of my ability to talk completely about our plans. But I promise as we get the deal closed, we'll disclose quite a lot about our plans.
Bill Carstan: Good morning, David. Thanks for the question.
Speaker Change: When you spoke about some of these impressions on social media I'm guessing most of those were domestically, but does it feel like just kind of the international marketing has improved over the past couple of years. Thank you.
Bill Carstan: So first, I'd say that when that deal is closed, we'll be able to explain a lot more about our plans. But since we're in this in this uh,
Chad Beynon: Yes, thanks, Chad so.
Chad Beynon: One of the advantages of Thoroughbred racing has it's a global game and most.
Chad Beynon: Large.
Chad Beynon: Just realized societies that you go to around the World you see Thoroughbred activity. So that's a huge start head start for us as we build the international component of the Kentucky Derby because they are already familiar with the Derby. They know, it's America's greatest race and arguably the greatest rates in the world.
Bill Karstanjen: But let's talk in general. When you think about our location in Salem, we're on exit 2 on I-93, which is a major interstate artery coming out of downtown Boston and running up through the suburbs. And when we think about that market in general, while there are lines on the map delineating the New Hampshire border from Massachusetts, that's all one market. So this is an opportunity for us to tap in not only to the New Hampshire suburbs, but also to the Massachusetts suburbs for Boston. So we think it's a very strong market. The demographics, both in terms of the number of people and the wealth, are there.
Bill Carstan: This um, stage where the transaction documents are signed, but we're going through the, the various approval processes. Uh, there's some there's some restriction of my ability to talk completely about our plans but I promise, as we get the deal closed, we'll uh, we'll, we'll disclose quite a lot about about our plans. But let's let's talk in general. Um, when you think about our location in uh, Salem we're on exit 2 on i93.
Chad Beynon: So this isn't a product of this isn't a brand that we have to introduce to the market, but it is one we have to develop in these different markets and.
Bill Carstan: 3, which is a, a major Interstate artery, uh, coming out of downtown Boston and running up through the suburbs. And when we think about that market in general while their lines on the map delineating,
Chad Beynon: That's a multiyear process and it started with our roads to the Derby.
Chad Beynon: European and now that European and Middle Eastern Road to the Derby The Japanese road to the Derby. These have all been steps to.
Chad Beynon: To solidify our connection to some of these other markets and to build inroads to not only.
Bill Karstanjen: Our location at the Rockingham Park Mall is a great location with us, with a dedicated ingress and egress off the freeway. So it's easy to reach. It's a powerful mall that services the Massachusetts suburbs. So we couldn't be more excited about the location and The. the ease of access to the facility. So for this, it will be an HRM facility, but also we have full table games. So we're very competitive with what you have with the Wynn property in the Boston market and with other facilities in the region. So we just think we have the best and brightest spot on the New Hampshire side from which to conduct our business.
Chad Beynon: Consumers, they're particularly high end consumers thats really the basket of consumers. We're most focused on internationally.
Chad Beynon: But also to sponsorships and potential sponsors. So this is.
Chad Beynon: An initiative internally, that's very very important to us.
Chad Beynon: Our real focus for us and I Hope, we'll show real progress as early as 2026, so with respect to social media, yes. The stats we tend to site.
Bill Carstan: The New Hampshire border from from Massachusetts, that's all 1 market. So this is an opportunity for us to tap in not only to the New Hampshire uh uh suburbs but also to the Massachusetts uh suburbs uh, for Boston. So we think it's a very strong Market uh the demographics both in terms of the number of people and the wealth are there uh our location at the Rockingham. Park Mall is a great location with us with a dedicated dedicated Ingress and egress um off the freeway. So it's easy to reach. It's a powerful mall that Services uh the Massachusetts suburbs. Uh, so we couldn't be more excited about the location. And, um,
Bill Carstan: and and, uh,
the uh,
Chad Beynon: Our U S stats, but we're also building and developing our social media inroads.
Chad Beynon: Internationally as well and as as we have stats on those going forward, we'll certainly share those with you.
Chad Beynon: Thank you.
Speaker Change: And our next question comes from the line of Dan pilots, there with J P. Morgan.
Bill Karstanjen: Thank you.
The, the ease of of access to the facility. So for this it will be an HRM facility. But also we have full table games. So we're very competitive with what, uh, uh, what you have with the wind property, uh, in in the Boston Market and with other facilities in the region. Uh, so we just think we have, uh, the best and brightest spot on the New Hampshire side from which to, to conduct our business.
Chad Beynon: And our next question comes from the line of Chad Beynon with Macquarie. Good morning. Thanks for taking my question.
Dan Pilots: Hey, good morning, everyone. Thanks for taking my question.
Bill Carstan: Thank you.
Speaker Change: I wanted to touch on the federal tax Bill.
Speaker Change: Marcia It was helpful. You laid out some of the impacts in 2025, I think you said $50 million to $60 million in cash tax savings.
In our next question, comes from the line of Chad bainan with McQueary.
Bill Karstanjen: Bill, I wanted to just circle back on some of the stats and kind of the outlook for the Derby, focusing more on international attendance, which I think we've talked about now for for a couple of years. How is, what is the plan going forward and what's the focus to grow that and maybe a sidebar of that? When you spoke about some of these impressions on social media, I'm guessing most of those were domestically, but does it feel like just kind of the international marketing has has improved over the past couple years? Thank you. Yeah, thanks, Chad.
Speaker Change: This is a bit of a two parter one is.
Speaker Change: Sure.
Speaker Change: Can we just kind of extrapolate that and kind of for 2026 are the best way to think about it.
Speaker Change: And then along those lines in terms of your cash flow and capital allocation, obviously, you announced the $500 million repurchase you were active in the second quarter. How are you thinking about returning capital to shareholders from here just given that Derby cash Capex is still pause.
Chad bainan: Good morning. Thanks for taking my question, bill. I wanted to just circle back on some of the stats and kind of the outlook for the Derby. Uh, focusing more on International attendance, which I think we've talked about now, for, for a couple years. Um, How is
What, what?
Chad bainan: Plan going forward and what's the focus to to grow that and maybe a a sidebar of that?
Dan Pilots: Great Dan. Thank you for the question.
Speaker Change: When we think about the taxable impact for 2026.
Bill Karstanjen: So one of the advantages of thoroughbred racing is it's a global game. In most large industrialized societies that you go to around the world, you see thoroughbred activity. So that's a huge start, head start for us as we build the international component of the Kentucky Derby because they're already familiar with the Derby. They know it's America's greatest race and arguably the greatest race in the world. So this isn't a product or this isn't a brand that we have to introduce to the market, but it is one we have to develop in these different markets. And that's a multi-year process.
Speaker Change: We will benefit from the fact that we get 100% bonus depreciation again in 2026, and we will also benefit from the fact that we believe nearly all 100% of our interest will be deductible as well for tax purposes in 2026.
Speaker Change: Current estimates and obviously it could change is that it will be comparable.
Speaker Change: So the number that I shared regarding the 2025 impact of $50 million to $60 million.
Speaker Change: Regarding share repurchases as bill talked and as we've talked in the past we have a great strategy around capital management overall.
Bill Karstanjen: And it started with our roads to the Derby, the European and now the European and Middle Eastern road to the Derby, the Japanese road to the Derby. These have all been steps to solidify our connection to some of these other markets and to build inroads to not only consumers there, particularly high-end consumers. That's really the basket of consumers we're most focused on internationally, but also to sponsorships and potential sponsors. So this is an initiative internally that's very, very important to us.
Speaker Change: Our real focus is investing in the derby over the long term, we're investing very strategically to create great <unk> venues, especially in Kentucky and in Virginia, and now in New Hampshire, and we're very excited about that opportunity.
Speaker Change: Very thoughtful about.
Speaker Change: Strategically buying and selling assets over our journey together over the last 10 years.
Speaker Change: And we have a very significant focus on making sure we grow our dividend 7% per.
Speaker Change: Per year, that's been a pretty consistent track record for US and then after all of that we think about share repurchases in particular around investing and returning.
Bill Karstanjen: That's a real focus for us, and I hope we'll show real progress as early as 2026. So with respect to social media, yes, the stats we tend to cite are U.S. stats, but we are also building and developing social media inroads internationally as well. And as we have stats on those going forward, we'll certainly share those with you. Thank you.
Speaker Change: Capital to our shareholders when our stock isn't reflective in the market of what we believe the true long term value is and generally definitely where it's accretive to EPS and free cash flow.
Speaker Change: So we're very focused on making all of the right choices.
Speaker Change: To support the long term growth.
Speaker Change: And returns for our shareholders.
Speaker Change: Thank you.
Speaker Change: And our next question comes from the line of Daniel Guglielmo with capital one Securities.
Daniel Politzer: And our next question comes from the line of Dan Politzer with JPMorgan. Hey, good morning, everyone. Thanks for taking my call. I wanted to touch on the federal tax bill, Marcia, it was helpful, you laid out some of the impacts in 2025.
Speaker Change: Hello, everyone. Thank you for taking my question on the HR side of things, Kentucky, you had a really strong quarter in Virginia is ramping can you just give us a sense of how long. The runway is for those two states to continue to grow and demand when thinking about those markets as a maturity phase even on the horizon.
Marcia Dall: Hashtag Savings is this a bit of a two-parter? One, is there – can we just kind of extrapolate that and kind of – for 2026, or the best way to think about it? And then along those lines, in terms of your cash flow in capital allocation, obviously, you announced $500 million repurchase. You were active in the second quarter. How are you thinking about returning capital to shareholders from here just given that Derby cap access is still poor?
Speaker Change: Dan. Thanks for the question I think there's still a substantial runway that's that's for us to prove in the future, but our metrics look really good.
Speaker Change: And.
Speaker Change: There's a lot of cause for optimism. So we will keep executing our teams are really strong in both those jurisdictions and we have our game plan, we have our our processes and.
Marcia Dall: Great, Dan, thank you for the question. When we think about the taxable impact for 2026, we will benefit from the fact that we get 100% bonus depreciation again in 2026. And we will also benefit from the fact that we believe nearly all 100% of our interest will be deductible as well for tax purposes in 2026. So our current estimates, and obviously it could change as it will be comparable to the number that I shared regarding the 2025 impact of $50 to $60 million.
Speaker Change: Great Dan. Thank you for the question.
Chad bainan: When we think about the taxable impact for 2026.
Speaker Change: And we'll keep we'll keep firing ahead, but so far when we look at our metrics.
Chad bainan: We will benefit from the fact that we get 100% bonus depreciation again in 2026, and we will also benefit from the fact that we believe nearly all 100% of our interest will be deductible as well for tax purposes in 2026.
Speaker Change: We see lots of cause for optimism and evidence that we need to keep doing more of what we're doing.
Speaker Change: Thank you.
Speaker Change: And our next question comes from the line of Jordan Bender with citizens.
Jordan Bender: Good morning, everyone and thanks for taking the question I wanted to go into direction here that maybe isn't talked about as much with your company and Thats. It prediction markets a horse racing below there is always out there like the Interstate horse racing to protect the industry. So just curious with the direction that prediction markets are headed kind of what's your view around.
Chad bainan: Current estimates and obviously it could change is that it will be comparable.
Chad bainan: So the number that I shared regarding the 2025 impact of $50 million to $60 million.
Marcia Dall: Regarding share repurchases, you know, as Bill talked, you know, and as we've talked in the past, we have a great strategy around capital management overall. Our real focus is investing in the Derby over the long term. We're investing very strategically to create great HRM venues, especially in Kentucky and in Virginia, and now in New Hampshire, and we're very excited about that opportunity. You know, we are very thoughtful about strategically buying and selling assets over our journey together over the last 10 years. And, you know, we have a very significant focus on making sure we grow our dividends 7% per year.
Chad bainan: Regarding share repurchases as bill talked and as we've talked in the past we have a great strategy around capital management overall.
Our real focus is investing in the Derby over the long term, we are investing very strategically to create great HR venues, especially in Kentucky and in Virginia, and now in New Hampshire, and we're very excited about that opportunity.
Jordan Bender: That offering, particularly around how it might impact the Jeremy Thank you.
Speaker Change: Sure Jordan happy to talk about that that's a that's a subject that I personally pay a lot of attention to it's a fascinating subject.
Chad bainan: Very thoughtful about.
Speaker Change: I'm on the Executive Committee of the American Gaming Association, and that's an audience, where we talk about those sorts of things with respect to the Kentucky Derby and horse racing, we haven't seen it and I think the nature of of pair mutual wagering on horse racing doesn't make it as attractive.
Chad bainan: Strategically buying and selling assets over our journey together over the last 10 years.
Chad bainan: And we have a very significant focus on making sure we grow our dividend 7% per.
Marcia Dall: That's been a pretty consistent track record for us. And then after all of that, we think about share repurchases in particular around investing and returning capital to our shareholders when our stock isn't reflective in the market of what we believe the true long term value is. And generally, you know, definitely we're secretive to EPS and free cash flow. So we're very focused on making all of the right choices to support the long term growth and returns for our shareholders.
Per year, that's been a pretty consistent track record for US and then after all of that we think about share repurchases in particular around investing and returning.
Speaker Change: Target for prediction market activity. So we haven't really seen it and it is something that were real concerned about and certainly there is also.
Chad bainan: Capital to our shareholders when our stock isn't reflective in the market of what we believe the true long term value is generally.
Speaker Change: The important element of the Interstate Horse Racing Act, which essentially gives us an intellectual property right and the wagering rights around our product. So in essence, you need the approval of the content producer if you want to take wagering or conduct wagering activity on on our races or other para mutual.
Chad bainan: Where it's accretive to EPS and free cash flow.
Chad bainan: So we're very focused on making all of the right choices.
Chad bainan: To support the long term growth.
Chad bainan: And returns for our shareholders.
Daniel Guglielmo: Thank you.
Chad bainan: Thank you.
Daniel Guglielmo: And our next question comes from the line of Daniel Guglielmo with Capital One Security. Hello, everyone. Thank you for taking my question. On the HRM side of things, Kentucky had a really strong quarter and Virginia is ramping. Can you just give us a sense of how long the runway is for those two states to continue to grow demand? When thinking about those markets, is a maturity phase even on the horizon?
Speaker Change: Horse races.
Speaker Change: And our next question comes from the line of Daniel Guglielmo with capital one Securities.
Speaker Change: So I think that's an impediment to that activity happening on that platform.
Chad bainan: Hello, everyone and thank you for taking my question.
Speaker Change: But the platform in and of itself.
Speaker Change: It's a subject of a lot of discussion in the country and certainly we watch it.
Chad bainan: Side of things, Kentucky, you had a really strong quarter in Virginia is ramping can you just give us a sense of how long. The runway is for those two states to continue to grow demand when thinking about those markets as a maturity phase even on the horizon.
Speaker Change: But it's not a risk or a particular concern for what we do with the Kentucky Derby and para mutual wagering on horse racing.
Bill Karstanjen: Dan, thanks for the question. I think there's still a substantial runway that's for us to prove in the future. But our metrics look really good. and there's a lot of cause for optimism. So we'll keep executing. Our teams are really strong in both those jurisdictions. And we have our game plan. We have our processes. And we'll keep firing ahead. But so far, when we look at our metrics, we see lots of cause for optimism and evidence that we need to keep doing more of what we're doing. Thank you.
Dan: Dan Thanks for the question.
Speaker Change: Thank you.
Dan: There's still a substantial runway that's that's for us to prove in the future, but our metrics look really good.
Speaker Change: And our next question comes from the line of Ben Chaiken with Mizuho.
Ben Chaiken: Hey, good morning, Thanks for taking my question, just going back to the New Hampshire.
Dan: And.
Dan: There's a lot of cause for optimism. So we will keep executing our teams are really strong in both those jurisdictions and we have our game plan, we have our our processes and.
Speaker Change: <unk> the deal is not closed maybe more holistically in the region does this represent a pipeline of M&A, we could see more of in the region or just more of a one off for one reason or another.
Speaker Change: Thanks, Ben I appreciate I appreciate the question.
Dan: And we'll keep we'll keep firing ahead, but so far when we look at our metrics.
Speaker Change: Bob.
Speaker Change: We're focused on what we think is the best opportunity for our company in the region, which is which is <unk>.
Dan: We see lots of cause for optimism and evidence that we need to keep doing more of what we're doing.
Salem: Salem, So we're going to go out and execute that in <unk>.
Jordan Bender: And our next question comes from the line of Jordan Bender with Citizen. Morning, everyone. Thanks for taking the question.
Dan: Thank you.
Jordan Bender: And our next question comes from the line of Jordan Bender with citizens.
Speaker Change: Establish.
Speaker Change: For our company and for our investors that that's a smart investment in AR and a profitable one for for our company.
Jordan Bender: Good morning, everyone and thanks for taking the question I want to go into direction here that maybe isn't talked about as much with your company and Thats. It prediction markets a horse racing below there is always out there like the Interstate horse racing active protect the industry. So just curious with the direction that prediction markets are headed kind of what's your view around.
Bill Karstanjen: I want to go in a direction here that maybe isn't talked about as much with your company. And that's the prediction markets and horse racing. You know, Bill, there's laws out there like the Interstate Horse Racing Act to protect the industry. So curious with the direction that prediction markets are headed, kind of what's your view around that offering, particularly around how it might impact the Derby? Thank you. Sure, Jordan. Happy to talk about that. That's a subject that I personally pay a lot of attention to. It's a fascinating subject, and I'm on the executive committee of the American Gaming Association, and that's an audience where we talk about those sorts of things.
Speaker Change: Or do you think it's an area of state where there'll be lots of changes and lots of development over the next couple of years.
Speaker Change: We will certainly keep our eye on that and certainly are.
Speaker Change: We're working hard to build our expertise in that region of the country and in that state. So that we understand and can evaluate effectively the market in general.
Jordan Bender: Net offering, particularly around how it might impact the Jeremy Thank you.
Speaker Change: Sure Jordan happy to talk about that.
Speaker Change: Thank you.
Speaker Change: A subject that I personally pay a lot of attention to it is a fascinating subject.
Joe Stauff: Our next question comes from the line of Joe Stauff with Susquehanna.
Speaker Change: I'm on the Executive Committee of the American Gaming Association and that's.
Speaker Change: Audience, where we talk about those sorts of things with respect to the Kentucky Derby and horse racing, we haven't seen it and I think the nature of of para mutual wagering on horse racing doesn't make it as attractive.
Speaker Change: Thank you good morning, Bill Marcia.
Bill Karstanjen: With respect to the Kentucky Derby and horse racing, we haven't seen it, and I think the nature of parimutuel wagering on horse racing doesn't make it as an attractive target for prediction market activity. So we haven't really seen it, and it isn't something that we're real concerned about. And certainly there is also the important element of the Interstate Horse Racing Act, which essentially gives us an intellectual property right and the wagering rights around our product. So in essence, you need the approval of the content producer if you want to take wagering or conduct wagering activity on our races or other parimutuel horse races.
Joe Stauff: I thought the yolks schedule change was interesting.
Joe Stauff: I know a lot of people coming in certainly for the race get there pretty late on Friday.
Speaker Change: Target for prediction market activity. So we haven't really seen it and it is something that were real concerned about and certainly there is also.
Joe Stauff: And I'm wondering strategically what.
Ken: The goal of doing that is it to drive attendance, Ken can you generate incremental.
Speaker Change: The important element of the Interstate Horse Racing Act, which essentially gives us an intellectual property right and the wagering rights around our product. So in essence, you need the approval of the content producer if you want to take wagering, our conduct wagering activity on on our races or other pair mutual.
Ken: Yes, I'll say ticket sales in attendance or is it more about what you've talked about the promotional value.
Ken: Of the lead in into Saturday.
Joe Stauff: Thanks for the question Joe.
Joe Stauff: It's designed to move everything in a positive direction.
Bill Karstanjen: So I think that's an impediment to that activity happening on that platform. But the platform in and of itself, it's a subject of a lot of discussion in the country, and certainly we watch it. But it's not a risk or a particular concern for what we do with the Kentucky Derby and paramutuel wagering on horse racing.
Speaker Change: Horse races.
Speaker Change: So I think thats, an impediment to that activity happening on that platform.
Joe Stauff: But within that positive direction points of emphasis.
Speaker Change: But the platform in and of itself.
Joe Stauff: The opportunity to be on National TV has a chance to build a national profile of the Oaks, which is a pretty special race, but certainly it's the case that a lot of folks come to the Derby and it's all about the Derby in and they don't have a months as much of.
Speaker Change: It's a subject of a lot of discussion in the country and certainly we watch it.
Speaker Change: But it is not a risk or a particular concern for what we do with the Kentucky Derby and pair mutual wagering on horse racing.
Joe Stauff: And understanding of the historical relevance enter the Specialness of the Kentucky Oaks.
Ben Chaiken: And our next question comes from the line of Ben Chaiken with Mizzou. Hey, good morning. Thanks for taking my question. Um, just going back to New Hampshire, um, you know, understanding the deal is not closed, maybe more holistically in the region.
Speaker Change: Thank you.
Joe Stauff: A chance to build that brand with a national broadcasting platform is really really important for driving wagering for driving sponsorship opportunities for driving sponsorship awareness. So among.
Speaker Change: And our next question comes from the line of Ben Chaiken with Mizuho.
Ben Chaiken: Hey, good morning, Thanks for taking my question, just going back to the New Hampshire.
Ben Chaiken: We're standing the deal is not closed maybe more holistically in the region does this represent a pipeline of M&A, we could see more of in the region or just more of a one off for one reason or another.
Bill Karstanjen: Does this represent a pipeline of M&A we could see more of in the region or just more of a one-off for one reason or another? Thanks, Ben. Appreciate appreciate the question.
Joe Stauff: All our growth catalysts, we think they'll move in the right direction, we expect them to move in the right direction, but is a particular point of emphasis we want to drive handle we want to drive national awareness, we want to drive sponsorship opportunities and we think it's a great springboard to remind people that the Kentucky Derby is the.
Ben Chaiken: Thanks, Pat I appreciate I appreciate the question.
Bill Karstanjen: We're focused on what we think is the best opportunity for our company in the region, which is Salem. So we're going to go out and execute that and establish for our company and for our investors that that's a smart investment and a profitable one for our company. I do think it's an area, a state, where there'll be lots of changes and lots of development over the next couple of years, and we'll certainly keep our eye on that and certainly are working hard to build our expertise in that region of the country and in that state, so that we understand and can evaluate effectively the market in general.
Ben Chaiken: Rob.
Speaker Change: We're focused on what we think is the best opportunity for our company in the region, which is which is <unk>.
Speaker Change: Salem, So we're going to go out and execute that in <unk>.
Joe Stauff: The next day, so come CV Oaks Friday night on NBC and it feeds right into the next day, when we have the Kentucky Derby.
Speaker Change: Established.
Speaker Change: For our company and for our investors that that's a smart investment and a profitable one for for our company.
Joe Stauff: Thank you.
Speaker Change: And our next question comes from the line of branch come on tour with Barclays.
Speaker Change: Do you think it's an area of state where there'll be lots of changes and lots of development over the next couple of years.
Speaker Change: Good morning, everybody. Thanks for taking my question I was hoping you could talk a little bit more about.
Speaker Change: We will certainly keep our eye on that and certainly are.
Speaker Change: The plan for the area between the first turn in the <unk>.
Speaker Change: Working hard to build our expertise in that region of the country and in that state. So that we understand and can evaluate effectively the market in general.
Speaker Change: <unk> no no.
Speaker Change: How much youre going to be able to say.
Speaker Change: But I guess the question would be is there.
Speaker Change: Yes.
Speaker Change: Sort of going to is this replacing.
Joe Stauff: Thank you.
Speaker Change: The third the three year plan in a way and how is the scope.
Speaker Change: Thank you.
Joe Stauff: Our next question comes from the line of Joe Stauff with Susquehanna. Thank you. Good morning, Bill, Marcia. I thought the Oaks' schedule change was interesting. You know, I know a lot of people coming in, certainly for the race, get there pretty late on Friday. And I'm wondering, strategically, what... You know, the goal of doing that, is it to drive attendance? You know, can can you generate incremental, you know, say ticket sales and attendance? Or is it more about what you talked about the promotional value of the lead in into Saturday?
Joe Stauff: And our next question comes from the line of Joe Stauff with Susquehanna.
Speaker Change: Different than what you had been thinking for this area in the old plan and then lastly, do you think do we think it will be ready for 27% and with it and it would it potentially disrupt 26 in any way I know thats a lot.
Bill Marcia: Thank you good morning, Bill Marcia.
Bill Marcia: I thought the schedule changes the interesting.
Bill Marcia: Sure.
Speaker Change: That was a multipart question brands, let me make sure I.
Bill Marcia: I know a lot of people coming in certainly for the race get there pretty late on Friday.
Speaker Change: Catherine.
Speaker Change: I think what you want out of that.
Speaker Change: And I'm wondering strategically what.
Speaker Change: Okay.
Speaker Change: So so first we have a lot of opportunity at our facility for capital improvement to grow our events and so this this space.
Speaker Change: The goal of doing that is it to drive attendance, Ken can you generate incremental.
Speaker Change: As a clear and obvious one. This this is one where there isn't currently a major structure that we would have to take down there are seats, there, but there isn't a major structure. We are very very focused as a team and refining our cost estimates refining our timing refining our plans because when we.
Speaker Change: So ticket sales in attendance or is it more about what you've talked about the promotional value.
Speaker Change: Of the lead in into Saturday.
Joe Stauff: Thanks for the question, Joe. It's designed to move everything in a positive direction. But within that positive direction, points of emphasis. The opportunity to be on national television is a chance to build the national profile of the Oaks, which is a pretty special race, but certainly it's the case that a lot of folks come to the Derby and it's all about the Derby, and they don't have as much of an understanding of the historical relevance and the specialness of the Kentucky Oaks. So a chance to build that brand with a national broadcasting platform is really, really important for driving wagering, for driving sponsorship opportunities, for driving sponsorship awareness.
Joe Stauff: Thanks for the question Joe.
Joe Stauff: It's designed to move everything in a positive direction.
Joe Stauff: But within that positive direction points of emphasis.
Speaker Change: Explain what we're going to do to the market, we really want it to be locked down in certain <unk> and <unk>.
Joe Stauff: The opportunity to be on National TV has a chance to build a national profile of the Oaks, which is a pretty special race, but certainly it's the case that a lot of folks come to the Derby and it's all about the Derby and and they don't have as much as much of.
Speaker Change: Stress tested.
Speaker Change: So that we are sure we will deliver so I expect that we will do that at the next earnings call. We are in the process of doing it now, but as a as an area of the track, it's not an area where theres a significant structure. There now this is what we call affectionately in the company the gap in the smile. So.
Joe Stauff: And understanding of the historical relevance enter the Specialness of the Kentucky Oaks.
Joe Stauff: A chance to build that brand with a national broadcasting platform is really really important for driving wagering for driving sponsorship opportunities for driving sponsorship awareness. So among.
Speaker Change: I don't expect that it will not be disrupted for the 2026 Derby will explain 2027, 2028, 2029 et cetera in good time.
Bill Karstanjen: So among all our growth catalysts, we think they'll move in the right direction. We expect them to move in the right direction, but as a particular point of emphasis, we want to drive handle, we want to drive national awareness, we want to drive sponsorship opportunities, and we think it's a great springboard to remind people that the Kentucky Derby is the next day. So come see the Oaks, Friday night on NBC, and it feeds right into the next day when we have the Kentucky Derby.
Speaker Change: But I.
Speaker Change: I promise and it is my expectation that this will be an exciting project for everybody to digest and understand and there'll be a lot to be enthusiastic about when they see it.
Joe Stauff: All our growth catalysts, we think they'll move in the right direction, we expect them to move in the right direction, but is a particular point of emphasis we want to drive handle we want to drive national awareness, we want to drive sponsorship opportunities and we think it's a great springboard to remind people that the Kentucky Derby is the.
Speaker Change: Thank you.
Speaker Change: And our next question comes from the line of Shaun Kelley with Bank of America.
Shaun Kelley: Hi, good morning, everyone. Thanks for taking my questions.
Joe Stauff: Next day, so come see the Oaks Friday night on NBC and it feeds right into the next day, when we have the Kentucky Derby.
Speaker Change: Bill you made some interesting points around as you expand or think about expanding.
Shaun Kelley: Derby week.
Shaun Kelley: Or the reach thereof.
Shaun Kelley: Sponsorships and I was just wondering if you can kind of go back and remind us a little bit of.
Brandt Montour: And our next question comes from the line of Brandt Montour with Barclays.
Joe Stauff: Thank you.
Speaker Change: And our next question comes from the line of branch come on tour with Barclays.
Shaun Kelley: How does some of the sponsorship relationships work how long in duration.
Brandt Montour: Good morning, everybody. Thanks for taking my question. I was hoping you could talk a little bit more about the plan for the area between the first turn and the Sky Terrace, and I don't know how much you're going to be able to say, but but I guess the question would be, you know, is this. sort of going to, is this replacing the three-year plan in a way? And how is the scope sort of different than what you had been thinking for this area in the old plan? And then lastly, you know, do we think it would be ready for 27 and would it potentially disrupt 26 in any way?
Speaker Change: Good morning, everybody. Thanks for taking my question I was hoping you could talk a little bit more about.
Shaun Kelley: <unk>, what's your ability to kind of up level of some of that as as the reach of the event and maybe the global experience continues to grow we continue to see a pretty significant demand for sort of these luxury unique experience I was wondering if there is room for your sponsorship opportunity to keep up with that.
Speaker Change: The plan for the area between the first turn in the <unk>.
Speaker Change: <unk> no no.
Speaker Change: How much youre going to be able to say, but I guess the question would be is this.
Speaker Change: Sort of going to is this replacing.
Speaker Change: The third the three year plan in a way and how is this scope.
Sean: Thanks, Sean.
Shaun Kelley: Uh huh.
Speaker Change: That's a fascinating topic for me and I've I've been in the company for 20 years now 11, as the CEO and I've really seen sponsorships evolve and change over that period of time at this point in our.
Speaker Change: Sort of different than what you had been thinking for this area in the old plan and then lastly, do you think.
Speaker Change: Do we think it will be ready for 27% and would it would it potentially disrupt 26 in any way I know thats a lot.
Bill Karstanjen: I know that's a lot. That was a multi-part question, Brandt, so let me make sure I capture what you want. Pick what you want out of it. Okay. So first, we have a lot of opportunity at our facility for capital improvement to grow our event. And so this space is a clear and obvious one. This is one where there isn't currently a major structure that we would have to take down. There are seats there, but there isn't a major structure. We are very, very focused as a team in refining our cost estimates, refining our timing, refining our plans, because when we explain what we're going to do to the market, we really want it to be locked down and certain and stress-tested so that we are sure we will deliver.
Speaker Change: That was a multipart question brands, let me make sure I.
Shaun Kelley: And our.
Shaun Kelley: History with sponsorships. This is now more and more about intentionality, it's about curating.
Catherine: Hi, Catherine.
Speaker Change: Typically you want to add.
Catherine: Okay.
Shaun Kelley: Our sponsors to make sure that we select and work with partners that are great fits for us as well as us being great fits for them. So as we look internationally and as we look to develop not just internationally, but with our current sponsors with other categories of sponsors that we havent, Phil it's not about putting somebody in that seat.
So first we have a lot of opportunity at our facility for capital improvement to grow our event and so this this space.
Catherine: As a clear and obvious one. This this is one where there isn't currently a major structure that we would have to take down there are seats, there, but there isn't a major structure. We are very very focused as a team and refining our cost estimates refining our timing refining our plans because when we.
Shaun Kelley: Not about its not about just finding somebody this is about specially being particularly careful and focused about.
Shaun Kelley: Building relationships that are win wins for both parties. So there is a level of sophistication and focus for our sponsorship approach.
Catherine: Explain what we're going to do to the market, we really want it to be locked down in certain and in.
Catherine: Stress tested.
Shaun Kelley: Really evolved and become more sophisticated over time, and that's where we are today. So this isn't about just taking phone calls and whoever comes through the front door. This is about building win win partnerships.
Catherine: So that we are sure we will deliver so I expect that we will do that at the next earnings call. We are in the process of doing it now, but as a as an area of the track, it's not an area where theres a significant structure. There now this is what we call affectionately in the company the gap in the smile. So.
Bill Karstanjen: So I expect that we will do that at the next earnings call. We are in the process of doing it now, but as an area of the track, it's not an area where there's a significant structure there now. This is what we call affectionately in the company the gap in the smile. So I don't expect it. It will not be disrupted for the 2026 derby. We'll explain 2027, 2028, 2029, et cetera, in good time.
Shaun Kelley: It's really encouraging that we're seeing increased international.
Shaun Kelley: Interest from folks, but those are relationships and.
Catherine: I don't expect that it will not be disrupted for the 2026 Derby will explain 2027, 2028, 2029 et cetera in good time.
Shaun Kelley: And.
Shaun Kelley: Partnerships to build and explain overtime.
Shaun Kelley: Thank you.
Bill Karstanjen: But I promise, and it is my expectation, that this will be an exciting project for everybody to digest and understand, and there will be a lot to be enthusiastic about when they see it.
Speaker Change: Our next question comes from the line of Jeff Stansell with Stifel.
Catherine: But I.
Catherine: I promise and it is my expectation that this will be an exciting project for everybody to digest and understand and there'll be a lot to be enthusiastic about when they see it.
Speaker Change: Hey, good morning, Marsha Bill Thanks for taking our question I wanted to ask on the Roes specifically can.
Speaker Change: Can you just expand a bit further on more specifically on strategies in process underway to drive trial and repeat visitation to keep ramping topline and then similarly on the on the margin side do you think that that property already has the right labor and cost structure to sort of ramp into or is there still some work to be done.
Bill Karstanjen: Thank you.
Shaun Kelley: And our next question comes from the line of Shaun Kelley with Bank of America. Hi, good morning, everyone. Thanks for taking my questions. Bill, you made some interesting points around as you expand or think about expanding Derby Week, or the reach thereof, around sponsorships. And I was just wondering if you could kind of go back and remind us a little bit of how do some of these sponsorship relationships work? How long in duration are they? What's your ability to kind of up-level some of that as the reach of the event and maybe the global experience continues to grow?
Thank you.
Catherine: And our next question comes from the line of Shaun Kelley with Bank of America.
Shaun Kelley: Hi, good morning, everyone. Thanks for taking my questions.
Speaker Change: Bill you made some interesting points around as you expand or think about expanding.
Shaun Kelley: Derby week.
Speaker Change: Optimizing fixed cost thanks.
Speaker Change: Or their reach thereof.
Speaker Change: Sponsorships and I was just wondering if you can kind of go back and remind us a little bit of.
Jeff Stansell: Jeff Thanks for the question.
Jeff Stansell: I remain incredibly bullish and excited about excited about the Roes in northern Virginia. It is a very large market and and generating awareness and trial is a multi year process. So we're well underway. It's about building our brand in that market driving.
Speaker Change: How does some of the sponsorship relationships work how long in duration are they what's your ability to kind of up level of some of that as as the reach of the event and maybe the global experience continues to grow we continue to see a pretty significant demand for sort of these luxury unique experiences I'm wondering if there's room for your sponsors.
Bill Karstanjen: We continue to see a pretty significant demand for sort of these luxury, unique experiences, and wondering if there's room for your sponsorship opportunity to keep up with that. Yeah, thanks, Sean. That's...
Jeff Stansell: Awareness driving sampling.
Speaker Change: <unk> opportunity to keep up with that.
Jeff Stansell: And then getting.
Speaker Change: Thanks, Sean.
Jeff Stansell: Our database built out so it's progressing really well really proud of the team.
Bill Karstanjen: It's a fascinating topic for me, and I've been in the company for 20 years now, 11 as the CEO, and I've really seen sponsorships evolve and change over that period of time. At this point in our history with sponsorships, this is now more and more about intentionality. It's about curating our sponsors to make sure that we select and work with partners that are great fits for us as well as us being great fits for them. So as we look internationally and as we look to develop, not just internationally, but with our current sponsors, with other categories of sponsors that we haven't filled, it's not about putting somebody in that seat.
Speaker Change: <unk>.
Speaker Change: That's a fascinating topic for me and I've been in the company for 20 years now 11, as the CEO and I've really seen sponsorships evolve and change over that period of time at this point and are at.
Jeff Stansell: You'll see our margins.
Jeff Stansell: Improve when we're at a stage youll see them improve constantly but.
Jeff Stansell: We're not trying to maximize margins on a per quarter basis. At this moment. This is about building trial building awareness and building database and that's the investment that you have to make this isn't this is about making an investment in that market.
Speaker Change: And our.
Speaker Change: Our history with sponsorships. This is now more and more about intentionality, it's about curating.
Speaker Change: Our sponsors to make sure that we select and work with partners that are great fits for us as well as us being great fits for them. So as we look internationally and as we look to develop not just internationally, but with our current sponsors with other categories of sponsors that we havent, Phil it's not about putting somebody in that seat.
Jeff Stansell: So that we can we can build the relationships with the customers as wonderful as it is to be in a market like that with the demographics. We see it's also a complex market theres a lot going on there's a lot of entertainment options. So driving awareness driving participation. We have the right plan, we have the right.
Bill Karstanjen: It's not about just finding somebody. This is about being particularly careful and focused about building relationships that are win-wins for both parties. So there's a level of sophistication and focus for our sponsorship approach that's really evolved and become more sophisticated over time, and that's where we are today. So this isn't about just taking phone calls and whoever comes to the front door.
Speaker Change: Not about its not about just finding somebody this is about specially being particularly careful and focused about.
Jeff Stansell: Team and you'll see consistent we believe youll see consistent improvement.
Speaker Change: Building relationships that are win wins for both parties. So there is a level of sophistication and focus for our sponsorship approach.
Jeff Stansell: And gain.
Jeff Stansell: For an extended period of time going forward.
Jeff Stansell: Yeah.
Bill <unk>: Thank you I would now like to turn the call back over to CEO Bill <unk> for any closing remarks.
Speaker Change: Really evolved and become more sophisticated over time and Thats, where we are today. So this isn't about just taking phone calls and whoever comes through the front door. This is about building win win partnerships and it's really encouraging that we're seeing increased international <unk>.
Bill <unk>: I just want to thank everyone for their time today and for their interest and investment in our company. We take your your trust in Us and your investment with US very very seriously. We work for you our job is to drive shareholder value to drive improvement and we take that very very seriously. This is an exciting time for us. This is an exciting.
Bill Karstanjen: This is about building win-win partnerships, and it's really encouraging that we're seeing increased international interest from folks, but those are relationships and Partnerships to build and explain over time. Thank you.
Speaker Change: Interest from folks, but those are relationships and.
Speaker Change: Partnerships to build and explain overtime.
Bill <unk>: Path that we're on so we're happy to get after it and looking forward to getting after it and I look forward to talking to you.
Jeffrey Stantial: And our next question comes from the line of Jeff Stantial with Steve. Hey, good morning, Marcia. Bill, thanks for taking our question.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Geoff Stanley with Stifel.
Speaker Change: Hey, good morning, Marsha Bill Thanks for taking our question I wanted to ask on the Roes specifically can.
Bill Karstanjen: I wanted to ask on the Rose specifically, Bill, can you just expand a bit further on more specifically on strategies and process underway to drive trialing and repeat visitation to keep ramping top line? And then similarly, on the on the margin side, do you think that that property already has the right labor and cost structure to sort of ramp into? Or is there still some work to be done optimizing fixed costs?
Bill <unk>: Next quarter, thanks, very much everyone.
Bill <unk>: Ladies and gentlemen, thank you for participating this does conclude today's program and you may now disconnect.
Speaker Change: Can you just expand a bit further on more specifically on strategies in process underway to drive Trialing and repeat visitation to keep ramping top line and then similarly on the on the margin side do you think that that property already has the right labor and cost structure to sort of ramp into or is there still some work to be done.
Bill Karstanjen: Thanks. Jeff, thanks for the question. I remain incredibly bullish and excited about the Rose in Northern Virginia. It's a very large market and generating awareness and trial is a multi-year process. So we're well underway. It's about building our brand in that market, driving awareness, driving sampling, and then getting our database built out. So it's progressing really well. Really proud of the team. You'll see our margins. improve when we're at a stage, you'll see them improve constantly but We're not trying to maximize margins on a per-quarter basis at this moment. This is about building trial, building awareness, and building database.
Speaker Change: Optimizing fixed cost.
Jeff: Jeff Thanks for the question.
Jeff: I remain incredibly bullish and excited about excited about the Roes in northern Virginia.
Jeff: Very large market and and generating awareness and trial is a multi year process. So we're well underway. It's about building our brand in that market driving awareness driving sampling.
Jeff: And then getting.
Jeff: Our database built out so it's progressing really well really proud of the team.
Jeff: You'll see our margins.
Jeff: Improve when we're at a stage youll see them improve constantly but.
Jeff: We're not trying to maximize margins on a per quarter basis. At this moment. This is about building trial building awareness and building database and that's the investment that you have to make this isn't this is about making an investment in that market.
Bill Karstanjen: And that's the investment that you have to make. This is about making an investment in that market so that we can build the relationships with the customers. As wonderful as it is to be in a market like that with the demographics we see, it's also a complex market. There's a lot going on. There's a lot of entertainment options. So driving awareness, driving participation. We have the right plan. We have the right team. And you'll see consistent, we believe you'll see consistent improvement and gain for an extended period of time going forward.
Jeff: So that we can we can build the relationships with the customers as wonderful as it is to be in a market like that with the demographics. We see it's also a complex market theres a lot going on there's a lot of entertainment options. So driving awareness driving participation. We have the right plan, we have the right.
Jeff: Team and Youll see consistent we believe youll see consistent improvement.
Jeff: Gain.
Jeff: For an extended period of time going forward.
Bill Karstanjen: Thank you.
Bill Karstanjen: I would now like to turn the call back over to CEO Bill Karstanjen for any closing remarks. I just want to thank everyone for their time today and for their interest and investment in our company. We take your trust in us and your investment with us very, very seriously. We work for you. Our job is to drive shareholder value, to drive improvement, and we take that very, very seriously. This is an exciting time for us. This is an exciting path that we're on. So we're happy to get after it and looking forward to getting after it.
Bill: Thank you I would now like to turn the call back over to CEO Bill <unk> for any closing remarks.
Bill: I just want to thank everyone for their time today and for their interest and investment in our company. We take your your trust in Us and your investment with US very very seriously. We work for you our job is to drive shareholder value to drive improvement and we take that very very seriously. This is an exciting time for us. This is an exciting.
Bill: The path that we're on so.
Bill: We're happy to get after it and looking forward to getting after it and I look forward to talking to you.
Bill Karstanjen: And I look forward to talking to you next quarter. Thanks very much, everyone.
Bill: Next quarter, thanks, very much everyone.
Operator: Ladies and gentlemen, thank you for participating.
Speaker Change: Ladies and gentlemen, thank you for participating this does conclude today's program and you may now disconnect.
Operator: This does conclude today's program, and you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].