Q2 2025 Las Vegas Sands Corp Earnings Call
Thank you for holding we sincerely. Appreciate your patience please. Stay on the line and we'll be back in a moment.
Speaker Change: Good day, ladies and gentlemen, and welcome to the sand. Second quarter 2025 earnings call.
Speaker Change: At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments following the presentation.
Speaker Change: It is now my pleasure to turn the floor. Over to Mr. Daniel Briggs senior vice president of investor relations at Sans sir. The floor is yours.
Speaker Change: Thank you, joining the call. Today are Rob Goldstein our chairman and CEO. Patrick dont, our president and Chief Operating Officer Dr. Wolf with long Executive, Vice chairman of sans, China and Grant Cham, CEO and president of Sam's, China and EVP of our Asia population.
Speaker Change: Today's conference call will contain 4 of these statements. We will be making those statements under the Safe Harbor, provision of federal Securities laws. The language on board looking statements included in our press release and AK filing also applied to our commentator Press today,
Speaker Change: The company's actual results May differ, materially from the results reflected at those forward-looking statements. In addition, we will discuss non-gaap measures reconciliation to the most comparable. Gaap Financial measure are included in our press release.
Speaker Change: We have posted an Earnest presentation on our website. We will refer to that presentation during the call.
Speaker Change: Finally, for the Q&A session, we asked those with interests to please post 1 question 1, follow-up. So, we might allow everyone with interest to the opportunity to participate. This presentation is being recorded. I'll now turn the call over to Rob. Thanks Ben and good afternoon, thank you for joining us. Maria Bay Sands had a historic quarter. Eva do 768 million. We had forecasted the MDS. Could do 2.5 billion dollars annually. And then they just happened this year.
Speaker Change: All the pieces are in place to this property to continue to perform mass gaming and Slot. Wind did 843 million dollars, reflecting 97% growth in Q2 of 2019 and 40% higher than last year. Same quarter.
We are in the right place the right time. Singapore is a very desirable destination. Our product is as good as it gets. It's difficult to find superlatives that describe the magnitude of this result is unprecedented for a single building to perform like this. My child is 566 million, but they did not a quarter. We have underperformed this Market, we do not aggressive enough as it relates to customer. Reinvestment, we believe our buildings would be enough, we were wrong and so in the middle of the quarter, we changed our approach to enable us to increase market, share and IBA. We will however be marketed sensitive our assets Remain, the strongest in the world to Londoner is open and moving towards our goal of 1 billion.
Speaker Change: Annualized, even though.
Speaker Change: This new approach will create higher market, share and even do.
Speaker Change: At the same time, the cow's ggr sorry this corner a very positive sign, how was the whole thing now and the Congress? And the cows increased ggr and our strong assets will enable us to deliver improved results in the future. Let's turn the path to more common factors. Thanks Rob Macau was 566 million if we had held us expected in our rolling programme, our ibida would have been lower by 7 million.
Speaker Change: What adjusted for a higher than expected. Hold on the rolling segment. Our ibida margin for the Macau portfolio. Properties would have been 31.3% down. 80 basis points compared to the second quarter of 2024.
Speaker Change: All 2450 rooms and Suites at the lunar Grand were available for the last 2 months of the quarter. We are focused on delivering revenue and cash flow growth at The Londoner across the portfolio.
Speaker Change: And margin at The Londoner was 31.9%.
Speaker Change: We expect growth in ibida as revenues grow and as we use our scale and product advantages, together with targeted, reinvestment the better addressed every Market segment.
Speaker Change: Our attorney is Singapore, NBS is even do for the quarter was 768 million at a margin of 55.3%. If we had held as expected in our rolling programme, our Eid doll would have been lower by 107 million.
Speaker Change: There will, there will naturally be fluctuations in Old rates and any specific quarter driven by game mix and player preference.
Speaker Change: The record Financial results of rebate, Sands reflect the impact of high-quality investment in marketing leading products and the growth in high-value tourism.
We believe we are still an initial stages of realizing the benefits of our investments in rebate St.
Speaker Change: Earning to our program. A return Capital to shareholders. We were purchased 800 million of LVS stock during the quarter. We also paid our reoccurring dividends of 25 cents per share.
In addition during the second quarter and in July, we purchased 179 Million worth of seal stock increasing. The company's ownership percentage of seal to 73.4% as of today,
Speaker Change: We believe we're purchasing an LVS Equity through our share of purchase program where we immediately agreed it to the company, and its shareholders over the long term.
Speaker Change: We look forward to continuing to utilize the company's shareholders program to increase returns to shareholders.
Speaker Change: Thanks again for joining the call today. Now, let's take questions
Speaker Change: Thank you, ladies and gentlemen. The floor is now open for questions. If you'd like to enter the queue to ask a question. Please press star 1 on your telephone keypad now,
Speaker Change: If you're listening on speakerphone today, please pick up your handset to provide Optimum sound quality.
Also, we asked each participant to limit yourself to 1 question and 1 follow up.
Speaker Change: Your first question is coming from, Steven gremling from Morgan Stanley. Your line is live.
Hey, thank you. Uh, starting with Macau. I appreciate, you know, the acknowledgement of the shortfalls, some somewhat there. But perhaps remind us of how you're thinking about turning the tide, um, from a competitive standpoint and what kpis are, timing investors should maybe be thinking about in terms of seeing some of the the market share go in the opposite direction.
That looks like that. Stephen thank you for the question.
Speaker Change: I think we're around late, April, we started to implement a more aggressive customer reinvestment program. And I think we're seeing some encouraging initial results uh from those increased levels of reinvestment. Um as we get into May and June uh to Performance of a sale did improve, um, and I think we we will be continuing to adjust to, to the market conditions, uh, as and when necessary. Uh, we also looking at
Um, opportunity for us to perform data from our smaller properties, Parisian and Sans. Um, so overall the reception to Londoner has been, uh, uh, phenomenal. Uh, I I think we're, we're getting exceptional feedback from from customers, uh, and that's obviously growing nicely. Uh, but obviously this quarter is still just the start. Um, all of the rooms as Patrick referenced were available, uh, from late April, um, and we intend to continue to yield better at London and Macau. Um, so that that property has much further to go. Uh, and then the rest of the portfolio, uh, we have to adjust, uh, our reinvestment levels, uh, according to the product and according to the individual product mix within the property, uh, and I think this process has only just started and, and will continue to see, I think improvements in our results as we have done, uh, since May and June already. Uh, and as you can see, we have a sequential improvement in our Mass G.
Speaker Change: Market share.
Speaker Change: 8% for the quarter. Um and we intend to to drive, uh better improvements. Uh, and also hopefully recapture uh that market share in the coming quarters.
Speaker Change: So I just want to say 1 thing which is we're not where we want to be in Macau.
Uh, we feel like we've made great Investments. We have great products and we believe we can grow and eat a dog from here. We're very focused on it. We realize we have work to do in our reinvestment programs. We have things that we think we can do to be more competitive and we're going to take some action and we think we have uh an approach that we hope in the long run, we create growth for us, both on the revenue and even outside.
Speaker Change: So maybe 1 quick follow-up there, just on on Macau. Um you know you said, you're not where you want to be, does what does that mean for Capital allocation in that market? Um, you know I used to have a pretty healthy dividend payout and in that market as a percentage of free cash flow and earnings if you go I mean should we be waiting for that turnaround to see you go back down that path and if you start, you know, paying out a dividend is that is that prior kind of ratio of the right way to think about it, going forward.
Speaker Change: That, um, you know, we've always been focused on return of capital, particularly with the dividend at the scale level. Uh, you know, I think as we see the capex roll off from the London, which was a very meaningful investment, uh, that we feel will generate cash flow over the long term over very happy to make it. Uh, but that being said, uh, hopefully our capex profile looks better in the future as you can see from our capex expectations that we publish. And so when that happens, we'll look to return uh, to increasing dividend over time, uh, with the support of the SEO board. Uh, but for us, we think that the, the best use of free Capital there, um, other than investing in in growth projects is to return it to shareholders. And you've seen how we've handled in the past and we'll look forward to doing that again in the future.
Speaker Change: And I think the levels will be based on our expectations of cash flow production going forward.
Speaker Change: Great. I'll I'll yield to the floor. Thank you.
Speaker Change: Thank you. Your next question is coming from Sean Kelly from Bank of America. Your line is live.
Sean Kelly: Hi, good afternoon everyone, um, you know, for Grant or or whoever wants to take it, uh maybe we could just start in Macau. Um, you know, we did see across the market, a bit of an improvement sequentially. You know, as the quarter went on uh in in sort of overall market ggr, we've heard some mixed views about how either promotional driven or or VIP or event driven that was so, hoping to get a little bit of color on just what's driving that Improvement. How sustainable you think it is and just broader Health uh, of the macro in the market right now.
Sean Kelly: Sure, thanks for the question. Sean. I think the market clearly accelerated from May. Uh, and in June obviously, was was a standard performance. I think helped by, uh, the calendar of events that prevailed in June. Um, if you look at the segment breakdown clearly, as you can see from the dicj data as well, um, the rolling, the bip segment, uh, performed very well during the quarter, uh, and was up 26% year on year up by our estimates. But the, the non rolling and then slot win also improved, uh, and we're still in the high single digit growth region for for the quarter. So, I think there's some very encouraging signs. Um, I think a mix between, um, improved, uh, customer density but also, uh, the calendar of events and the offerings, by The Operators, helping to drive the increased patronage as well.
Speaker Change: Thanks for that Grant and then maybe just to switch gears as a as a follow-up on, Singapore. Um, you know, Rob Rob, obviously, just incredible performance on the numbers. I mean, 7 over 750 million dollars from a single building in a single quarter, is kind of hard to wrap your brain around. Um, Can can you give us your best stab at how we should think about, you know, maybe a a run rate or sort of level of productivity for this for this property? Moving forward are, are we sustainably above, you know, 600 million dollars of IBA quarter? I know what we
With I think we have a good sense of what your stretch goal here is at 2 and a half billion core but just help us think about it to level set expectations. Given it it wasn't a fairly easy comp on the mass market. And obviously uh VIP, you know, it can be volatile quarter quarter on the, on the handle side. Thanks, I'm sorry to predict, isn't it? I mean, I don't think we forecasted 770 million quarter. I don't think we have a clear view of the this is sustainable this go forward. You know, it's it's proving though to be amazing market and we have the best assets by far in the market. So how High Is Up and how deep is that? Well I don't, I don't know. I mean the truth is it would be very difficult to dismiss these results and say we are now heading for 2.5 billion. Can we get to 2627? Can I continue? Hey Sean. It's very hard to predict it's not an easy Market. There's never been anything like this in the history of gaming anywhere. You know, when you realize this thing, this run rate is the 3 billion dollar asset. We don't expect to do that now, but I think yeah, 250 is realistic and and and doable but I would not want to
Venture a guess. I wouldn't want to dismiss the results because I'm an overhyped them and say every quarter is 750. I think that's unfair, but could we do 600 million plus or 650 possibly? Yeah, it depends on how strong the economy remains over there and and the super high-end, the Market's there and we dominated. And, you know, we're kind of alone in that in that place as far as the super high end. So it could be that we're looking at a whole new world of Singapore. And we'll have to wait and see. Time will tell. We just don't know because we didn't see this coming. This early.
Speaker Change: We both come later.
Let's see, here, the deal with it.
Speaker Change: Thank you very much.
Speaker Change: Thank you. Your next question is coming from Dan Pulitzer from JP Morgan. Your line is live.
That we should think about that that kind of gets you to where you want to be. Just looking at the Historical 33 to 35% C position. You've had in that market or, you know, how should we kind of assess, you know, your strategy there and when you your kpis for getting back to a level, you think is appropriate?
I, I think we should take this 1 step at a time. Our goal, we, we acknowledge our failure in believing our assets for so strong, to get overcome this, very different environment. We're used to. We've now jumped the water. We're not leading the market, we're simply in the mix and that's a good thing. Um, I believe our assets are short term goal in the. In in the year, quarters is to get. We Believe The Londoner and Venetian can generate 2 billion dollars between them. We believe that the 4 Seasons do 300 million. Plus, I do appreciate you for getting million. Plus, we need to understand, you can go 100 million dollars more because things are changing down the pencil. Um, our short term goal, my goal, and I hope the TV shows that is that we can get the 2.7 billion, uh, run rate, um, and come off the bottom here because I think it at 2223, we're just not performing well enough, we have the best assets. So, 3 things acceleration of ggr is very helpful. And the most important thing by far is that second thing is we have the best, the biggest Assets in the town, the most
Speaker Change: The best product. And third thing is we've come off uh our our thinking we've changed our thinking. So I'm hoping that Grant and team can see in the near future you know 600 plus 650 down the road and get us on the back of the 2627 range. Um, that's our short-term goal beyond that wait until the market matures, let's face it. If this Market turns on the, uh, accelerate this rate we might see everyone do much better. That would be the best thing involved in the cow but I think it's very possible that happens in 25 and 26/27. Um so this is just our acknowledgement that we did not do a good enough job in that environment and and we're doing it now and we have full phase in our team over there and our assets to perform and get us back in the game.
Speaker Change: Got it. Thanks. And that's that's helpful details. Um, just to follow up on Singapore. You know, is there any any way to kind of wrap our heads around that sudden acceleration in those gaming volumes because it does seem like it was, it was pretty concentrated on on just the gaming side and I mean we're trying to parse this out. If there was new customers maybe uh, reception to the the property improvements and new sweet product, anything in the event calendar, just just trying to make sense of what's obviously, you know, you know, typically the seasonally softest quarter of the Year here to to be so strong.
Speaker Change: I think a lot of it has to do with the product. You know, we've spent the last couple years reinvesting, their significantly, uh, not only in in the physical product, but also in the service levels and the experience that we can provide to people, and the type of customer we have coming through the property and the nature. We're a single force is today. The growing economy is a wealth creation in Southeast Asia. It it just it's all working. You know, we have a very strong view in this on the future of Singapore. And you can see by the type of customers that we have coming in that it's not only a, a very, uh, strong Market but it's very deep.
Um, and so for us yes, there's new customers coming in, they're attracted by what we have on offer. They're coming to Singapore to do business. They're coming to Singapore for a leisure travel and they're showing up on Radio based Sands and they're consuming. Um, so it's, it's great. It's a, it's a tribute to the team there and the investment that we've made and the way we execute, um, but really there, it's it's just reflection of who's coming into the market and the fact that uh, we provide experiences that are pretty unique and they're and they're really take advantage of it. We're we're a different building than we were 5 years ago.
Speaker Change: If you come and visit and you see it, uh, you'll see the differences and realize that we attract a very high level of of Patron. I think you also have to give credit to the government in Singapore, which allows us to dream and Excel, and the Patrick reference that building into the event. Last week, for the groundbreaking of member of our second building, it's an amazing place that the markets also 4 billion Asian people at the very top. End looking for an extraordinary experience and assets, we have them in Space over there. I think that the truth is that building is just the most
Desirable the super high-end and there's lots of it's a lot of people coming to Singapore and perpetually gambles, you know, is high in that part of the world. So we're just in a very fortunate position and I don't see it changing. I think it's we're in a very privileged position and hopefully goes on for quite a long time. So, we are not 1 to forecast and it's 600 million. 700 million, 800 million a quarter. But we know we're in the right place, right? Time was extraordinarily strong assets and an excellent government support, and a very strong market in terms of the Singapore, business station.
Speaker Change: I think 1 other thing that's important to note is, we started to see some inklings of this as we started. Finishing the renovation, but now, everything's pretty much done.
Speaker Change: Starting to show results. I mean, this is really just a direct result of the completion of the renovation and the type of customers that we can attract with the products that that's there. Now,
Speaker Change: Got it. Thanks, it's, it's nice to see the
Brant Montour: Thank you. Your next question is coming from Brant. Montour from Barclays, your line is live.
Brant Montour: Um, good afternoon, or good evening, everybody. Thanks for taking my question. Uh, so my first question is, I'm a cow, you know, I think from from where we sit, it's sort of hard to, um, we see, we see clearly a, uh, a strengthening of the, um, the Chinese, uh, consumer in your market and gambling propensity. I was wondering if you could flesh that out a little bit and talk about spend per visit improvements. Sequentially across either base mass or premium Mass, um, we all kind of thought it would be a premium Mass sort of recovery here in May and June, but but I look at at your slides, it looks like base Mass, operator table actually did better. So maybe you could just provide a little more color on on who's spending uh, more where
Brant Montour: Hi, Brian. Maybe I'll take that question. I think overall visitation is being very strong. Uh, you see, uh, the results for April and May but I'll fly over 20% year on year. Obviously a lot of that is driven by the day trip, uh, visitors from the greater Bay Area, but nonetheless, I think that's helping to to drive some of the base Mass uh recovery. Uh, but
Brant Montour: No question. I think the acceleration ggr is still primarily driven by the premium segments. Um, I think this quote, in particular, the market benefited from some, some big rolling play but also at the high end of, of the premium Mass. Uh, so I think that those Dynamics uh remain uh, similar to to previous quarters. But we're beginning to see also.
Increased level of visitation albeit more from the greater Bay Area in terms of day trips. Uh and of course from our results as well sequentially. I think you alluded to it. Clearly we we we grew quite significant in the base Mass uh long Rolling Wind uh against q1 uh and that's partly driven by the opening of the London, the grant.
Okay, that's super helpful and then just a quick follow-up on Macau, um, you know the The Londoner results clearly uh had a nice bounce here in the second quarter, um, and you alluded to it in your prepared remarks that some of the other properties didn't do quite as well, it might have to read between the lines that, uh, The Londoner is, is the property that it was received the most incremental reinvestment activity, and the other properties have not and that. And that's kind of next up in terms of your, uh, sort of blueprint or game plan here or or or, or is that not the right, uh, read through.
Brant Montour: No, that that's not the, that's not entirely accurate in terms of our higher investment levels that just went into the portfolio across the board. Um, I think what we are referencing earlier remarks is that we may need to further and we have been further adjusting, our reinvestment levels during the quarter, uh, towards the end of the quarter, uh, for some of our smaller properties, um, because we think those products given the, the size and, and the product level may need recalibration in the reinvestment levels, uh, versus, uh, the natural patronage that, uh, is, is flocking to Londoner. And also the strength of the property, like, Venetian continues to, to be able to track customers, uh, at or segments.
Brant Montour: Great color. Thanks everyone.
Brant Montour: Thank you.
Speaker Change: Your next question is coming from Robin fairly from UPS, your line is live.
Great, thank you. Um, just going back to the acceleration, you talked about in June and Macau. It seems like, you know, it driven, at least, the fair amount of it by the events calendar. And so, how do you get comfortable, that it's sustainable. Um, as you get past, you know, some of the July Events and, um, and the calendar not being as sustainable in terms of events,
Significant acts and that will obviously not be, um, a, a consistent, uh, pattern, uh, because acts come at different times of the year and different, different length, duration of of play and so on. But you can be sure that, uh, the calendar will continue to be filled, uh, with with great entertainment content. Uh, and I think Macau has really been successful in establishing itself as a regional center for uh entertainment. Uh be it from uh greater China artists, Asian artists and even International artists.
Speaker Change: Robin. I was just at the greens comments that I think it was last year. Uh, everyone gave us Credit in Singapore because Taylor Swift made the whole thing happen. She wasn't available this quarter and we still did pretty well. Um, I think the truth is so I think she was we couldn't get her a comment, but the truth is we have the cow. Yes, lots of events, but I've learned over the years, the events just rearrange, the custom visitations. They don't necessarily create new as much as they rearrange when people come and go. And I think that that market is just showing strength, the strength. I mean, June results. I think you just see a building and yes, there's no question. You have a, a Jackie Chun and some of these high-end entertainment stuff. But again I think you have to look at the strength of Market overall. And I believe it's there. I I haven't been there last month and looked for the first time to look a lot like, you know, pre-pandemic Macau, very strong. Lots of people at the tables. I don't believe they are retailers, even the special events that we create more visit.
Speaker Change: Is rearranged when you come.
But so, I wouldn't be that concerned with the event count. Although, it's chalk full events. Everyone has entertainment these days and terrific restaurants Etc. But I think you have to look at the overall results in the last few months to be very encouraged when the Cal appears to be headed.
Okay, great, thank you. And uh, for the follow-up just a just a quick 1 are. Are you thinking about revisiting, what you consider a normal? Hold person in Singapore, and I know you just raised it and q1, but I'm wondering if you're thinking about, whether that 3.7% was high enough for normalized. Hold thanks.
Speaker Change: I wouldn't let 1 quarter drive your thinking, I I think you have to stay focused on again. This is a very, very difficult thing for us and other competitors because as, you know, whole percentage is a, is a moving Target these days driven by who bets what, and how. And so it really does move as, you know, the smart tables that enable us to see much more. Clearly is a great insight to how the market should perform. I don't think we'll move our our whole percentage right now until we see more evidence but
Speaker Change: It does change with the market and the visitation and types of best customers. Make the old days, it was, you know, 2.85 3.25, that's no longer in Vogue. It's now very much, a moving Target depending on who's coming? What their betting side bets versus flat bets? I think we'll come back to you in the future. We need to reassess right now that we're flying where we're at.
Speaker Change: Okay, thank you.
Speaker Change: Thank you. Your next question is coming from Joe staff from Susana. Your line is live.
Speaker Change: Okay, thank you, good afternoon, um, in Singapore, uh, you know, maybe a different attempt to ask, you know, similar question that we've heard earlier on the call. But
can I ask about just sort of mass gaming Revenue, um, and how strong it was, you know, is that simply a function of
Speaker Change: You know better? Hold is it increased visitation, you know, it's
Speaker Change: admittedly another question that just try to how to bend, you know, try to Benchmark with the newer product that you have in Singapore, how strong this number could be, obviously VIP is, you know, a sep separate category different level of volatility, but
Speaker Change: you know, how much is there? Any way to disaggregate this number a little bit more for, for understanding
Speaker Change: I hate to say this, you know, I'd like to answer but it's very difficult for us to do it as well as you when you do it. 843 million dollars up, 97% pre-pandemic and 40% higher year on year. It's hard for us to get our hands around it, but the gulf lot of people show up and all these segments. And again, we outside amounts of money and your question is a fair 1. I wish we had better answers and how deep is the well, how high can this thing go?
Speaker Change: We share it over. We don't exaggerate this and say We Run 3 billion dollars, we also don't want to underplay it, we want to accept the fact that it happened and it's happening. Now, 2 quarters are really strong results. Hoping for a a similar second half of the year and it's hard to model. I'd be blunt with you. And I think 1 thing, I'd say, and you say mass gaming premium mass gaming is Alive. And Well, in those numbers, you know, these are non-rolling very high rolling period. Dunks. Concerns people better than a thousand dollars. In this premium Mass segment which is in that 847 number 843 is a lot of very, very high-end non- rollers, you know, which is different than the past Macau. So I appreciate the commentary of your questions. It's very fair. I wish we had more
Speaker Change: Insightful answers. But we keep watching this thing and saying, you know, we watched the quarter with amazement but just kept coming and I think it was just keep coming in Singapore, whether we beat the customers in different issue with a 3.7 3.3. We never could know, but if the volumes look strong and to me, it appears like in a run here that they last for a long time.
Speaker Change: Gotcha. And then maybe a follow-up, you know, Formula 1 is pushing the fourth quarter. It in Singapore, this year versus September last.
What's the right way to think about? You know, whether or not the rest of the building can absorb
Speaker Change: You know, that that normal activity or, you know is do you view that as you know a bit of a headwind?
Speaker Change: What we want is always a great event for Singapore. Uh, it's something that we fully support, we're going to go part of and we always welcome it and I think our patients really enjoy it. Um, you know, a lot of visitors show up in Singapore because of this event and, uh, for us whenever whatever it happens, it's great. So if it's third quarter, fourth quarter, we're happy with it. Um, you know, we do our best to support the initiative around it because we think it's, it's great for Singapore. It's it's great for re to Bay Sands and the type of customers that show up are always very helpful. But in, in terms of being able to accommodate customers in Q3 or during golden week with uh, Formula 1, it's fine. Either way it works.
Speaker Change: Understood. Thanks a lot.
Thank you. Your next question is coming from Chad Bain. And from McCreery, your line is live.
Chad Bain: Hi, good afternoon. Thanks for taking my question.
Speaker Change: Wanted to go back to Macau, rob, you, you mentioned 27, as, as the near-term, you know, Northstar and hopefully that eventually moves, uh, kind of back to 3, uh, but wanted to approach it from a margin standpoint. So Londoner had nice Improvement in margin. Um, you know, the collective, uh, was down 80s points as as you guys called out, um, in the flow through,
Was obviously uh negative here for the quarter but does margin matter as much in terms of how you're thinking about running the business or or given some of the commentary that we've spoken about with promos, you know, maybe we shouldn't have a margin Target in mind just because a simple inflation and uh different approach towards promo or or is that still the case to get to you know, closer to a 40% margin, long term. Thanks.
Speaker Change: So I I think the key thing about Macau is that there's a very large fixed cost base in our property portfolio.
Speaker Change: And so our margin is going to be determined by how much revenue we can go through these buildings.
Speaker Change: And so if our promotional activity, um, if our customer reinvestment, makes this a little less competitive and we have less Revenue, our margins will be impacted.
Speaker Change: So I think for us, um xold, right? If you ignore the impacts of old, if we continue to, to have the best properties where we have great proper offerings for our customers, a great experience is, and then we reinvest in a, in a more Market, competitive way. We think, we'll still have the ability to drive Revenue at an appropriate margin
And so if you look at the margin regime, where we are today um that's okay for now, but if we grow the business over time, there might be some opportunity for some up for some upside. But I don't think we're looking at um, at specific eBid do margin in terms of our reinvestment guides. Our reinvestment guidance, is going to be based on the market and hopefully, we'll go revenues based on our product work.
We put a whole lot of new product into the market. This last quarter, right? The The Londoner. Um, The Londoner Grant is a whole new building.
Speaker Change: Uh, and the casino performance there has been great. We have tremendous slot performance coming out of the launderer total portfolio and I think for us as as you heard Grant as you heard Rob mentioned before, um we have some work to do. That being said, we think there's opportunities at the Parisian. We think there's opportunities at the 4 Seasons and even downtown at the Sands. We think there's opportunity.
Speaker Change: So while we keep pushing the Venetian and The Londoner our segmentation has different reinvestment requirements.
Speaker Change: And cash flow growth. And so we're not targeting a specific, Eva margin, but we'll leave over time as we have the opportunity to grow revenues, uh, the marginal cost margin does matter. But even matters more. And in any business, you got to be sensitive to the environment you're playing in and the environment there has changed and we want to expense it enough. So now we really adjust that a couple of our strong assets and you add that to a growing a surging ggr and I think you have a good formula but obviously we always want to be margin sensitive but we want to be even the sensitive too. So it's a combination of it's not a simple question to answer each building performance differently.
Speaker Change: Great. Thank you. Both. And then, um, the news that we've seen, in terms of the movement from the, uh, Thai cabinet, uh, you know, with with drawing the, the bill at this point for for legalized casinos. Um, I guess there's probably no update from from your end because we're probably reading the same information but anything to talk about their or any other potential developments that that you guys plan to pursue outside of uh the 2 markets that you're in. Thank you.
Speaker Change: I think we're constantly looking at new development growth opportunities in new jurisdictions. We we're evaluating them as they come along. Uh, you know, it's something that we feel like in Thailand, there's a great opportunity there, uh, if the legal framework, and the rigorous work framework is appropriate. It's something we'll definitely look at and consider, uh, as as of right now, as you just mentioned, there's not a whole lot to think about
Speaker Change: Pilot is the greatest opportunity in Asia. What's left of those countries? But it's so hard to tell. It's going to happen day to day it changes, but it certainly is for anybody in our industry. A very important place if it ever actually comes to fruition
Speaker Change: Thanks, appreciate it.
Speaker Change: Thank you. Your next question is coming from Lizzie Dove from Goldman Sachs, your line is live.
Lizzie Dove: Hi there, thanks for taking the question. Um, you mentioned earlier that the goal of the London area is to move towards the goal over the billion dollars in annualized. But curious you know, timing of that. How much more reinvestment going to Promotions are needed to get there and yeah more. So just a Cadence to get there.
Lizzie Dove: I think we've only just started um, ramping up the property.
I mean if you think about um The Londoner Grand, it really only fully launched in in May onwards. So we're still in the very early innings.
Of the ramp up in London.
Now, uh, and we already running, you know, close to 800 million annualized. So we we do see opportunity to yield higher and higher, um, across all of the hotels in London in Macau, especially in London a grand. Um, I think Patrick just referenced there with, with seeing exceptional slot and DTG performance out of the London already way surpassing, uh, what this building was achieving in 2019 and I think we're seeing, um, high levels of non-rolling table, uh, performance as well. And so, as all these segments,
Lizzie Dove: Continue to grow. Uh, and we put higher quality customers into the, uh, Suites and the rooms. Uh, we will, uh, get to, to, to that, uh, 1 billion annualized that wrong reference. That's, that's the goal. Um, we don't know exact timing, uh, but we really only at the very start of of the ramp up of the property.
Reinvestment levels back to the customer. Uh and and we see we see the response. Uh, and we see the initial signs, I encouraging. Uh and of course um it it is it is more biased towards the the high-end segments uh where uh the levels of customer.
Speaker Change: Got it. Thank you.
Lizzie Dove: Thank you.
Lizzie Dove: Thank you. Your next question is coming from George Troy from Citigroup. Your line is live.
Thank you very much for taking my question. Um, so over the past several months, uh we've seen you guys took the side. Best from Mary base says, and introduced them to your account operations. And just recently, we saw you guys added a progressive, jackpot to your background music account. And we believe that all those also brought in from um, Mary based. And so my question is, do you still have any best practices at mbas as that your account operations can learn from?
Uh, it's a work in progress. George we obviously we trade information back and forth based on best practices and and we saw a lot of success in Singapore with size beds and they will see them in Macau. And we continue as, you know, ahead of us, we're over there. You're showing at the top of this. It's, it's frightening, but congratulations. I think the truth is, we're learning as we go, and I'm, I'm a firm believer, that these markets, aren't that different in terms of the customer uh, activity. And I think in the end you'll see a lifetime result in Macau and time. It's newer to Macau Market. If you go longer, it approved there but we're really confident that this new era of smart tables side bets, uh, which is increasing whole percentage for everyone. All of our competitors as well is highly positive but the industry and and an exciting for the customers. So time will tell how long it takes.
Lizzie Dove: To see the uh increased whole percentage and how much they uh they moved towards the side bets but we're a big Believers in this long as you know we're trying to be very Innovative as you alluded to in your comments uh and how we we view the markets and gambling is changing every day. We want to be leaders in that in that evolving process.
Thank you very much for the great color algebra to you. Thank you.
Lizzie Dove: Thank you.
Speaker Change: Thank you. Your next question is coming from David Katz, from Jeffrey's. Your line is locked.
David Katz: Um afternoon everyone, thanks for taking my questions. Um, I wanted to start with Singapore where, you know, there's obviously significant investment coming um you know for further expansion and you know, things have started to finally really go well in in the core building and, you know, frankly been waiting for it for a few years. I want to make sure, you know, when there isn't construction disruption, or, you know what, and what if anything, just to make sure, you know, could sort of impact, the momentum that you have there in Singapore.
David Katz: so, just a couple of things, uh,
The site is adjacent to rebate Sans. So in the renovation work, we did at rebay Sands in the prior years that you reference. It was actually an actively an operating building while we were doing it.
David Katz: So it's a little bit like changing your tires in the middle of an F1 race.
David Katz: While you're driving and so we did that. And so the good news is the building is in terms of sweet motivation. And interior is is complete and we're starting to see the benefits of that, the results of this quarter, our expansion, uh, and we actually have the groundbreaking last week, uh,
Dr. Alison was there Rob? Was their grandma was there. I was there some other members of the lbs management team and most importantly, the Prime Minister and the minister of Grace Foods responsible for portfolio, was there and it was, it was an amazing groundbreaking and we're very happy to have the government support. And we're very fortunate to be in Singapore. And so, you know, this is, this is a very important complex for tourism for both Leisure and business tourism in the market and for us, any disruption is something we take really seriously. And so, the good news is we have a, a little bit more than 78% directly next door, and it's it's own site. And so, when we build this ultimately, there will be connections back to where they advance. But during the construction, it's not going to impact our ability to conduct operations. So unlike the renovation, we just did. This is something separate in the state and then we'll bridge over to it.
David Katz: During the construction process, but it won't be disrupted.
Speaker Change: Perfect. And if I can ask 1, quick follow-up on the, the Strategic, um, you know, evolution in Macau. Um, you talked about reinvestment rates, um, but I wanted to ask about credit and whether that's, you know, a, a tool that you would be using and and how that starts to show up, does it sort of show up maybe later on and and, you know, on the cost side of the equation? Is there any of that in there that we should be keeping our eye out for
Speaker Change: We extend credit to some premium patrons in the direct rolling programs. Uh, but
Speaker Change: It has been a consistent practice of ours when we were experiencing it, uh, but it's not a significant part of the ggr.
Speaker Change: Okay, thank you.
Speaker Change: Thank you.
Speaker Change: Thank you. Your next question is coming from John decree, from CBR e, your line is live.
John Decree: Hi everyone. Thanks for taking my questions.
John Decree: Wanted to ask 1 about your retail Mall portfolio. Um, particularly retail sales, every single little bit of acceleration in mainland, China. Looks like in Macau, you've seen a little bit of list in the 2 queue, as well. Um, we got a lot of questions about the sustainability of ggr growth, which you filled it already today. But curious, if you could give us some thoughts on what you're seeing in the retail Mall, particularly on the the luxury side of things.
John Decree: Thanks for the question. The retail Mall tenant sales, started to see a good recovery in the second quarter. Um, so we were in positive 10 and sales year-on-year basis. Uh, with growing by about 10% across the retail World portfolio Macau. Um, and within that luxury is was still relatively weaker versus the rest of the portfolio, but we did start to see uh within the quarter uh signs that even the luxury sales were improving uh positive.
John Decree: Because also, we have been introducing some, uh, pretty amazing, uh, Flagship stores in some of the key luxury brands in the portfolio. So you'll continue to see, uh, that being a feature of the 4 Seasons more, uh, into, um, at the beginning of 2026. Uh, so there are some, uh, improvements that we are making ourselves, uh, that should help to lift the, the luxury sales portion, of, of the more. But overall, uh, we're happy to see that the more is back in the positive, uh, sales territory, double digit growth, in the second quarter compared to to last year.
Speaker Change: Great. Thanks Grant. Maybe if I could follow up with 1, big picture question about visitation. So, visitation from Mainland, X Guangdong. Which you highlight in your slide deck is kind of sluggish to recovery. Um, relative to the day tripping in the Bay Area, giving you a room base in Macau, it seems like this is probably a pretty big opportunity. So feel curious.
Your views, if if there's an opportunity um and what can be done to kind of help, Macau start to penetrate deeper into to Mainland and see some of that visitation outside of Guangdong come back.
Grant Cham: Yeah, it's a great question. I think, Dan and his deck has the breakout of the provinces, uh, visitation, uh, as a compared to 2019 things on page, 20 of the deck. I think, what, what you see is, yes, you're right overall excluding gwanggong, the recovery of dissertation is still, um, still lagging. But within that, it's very uneven. So some of the, uh, wealthier Coastal provinces and the major cities we are seeing, uh, recovery beyond the 2019 presentation levels, um, and some of the other provinces are lagging much more significantly. So, I I agree. It is an opportunity, um, and I think Macau and The Operators are continuously, um, doing the, the destination marketing row shows across the different parts of mainland China, as well as overseas, and that will continue. Transportation is, is, is continue to improve in.
Grant Cham: Terms of, um, pricing and and connectivity. Um, and of course, uh, the availability of hotel rooms. Uh, and of course, we we've been adding, uh, high quality inventory as have some other operators as well. So we, we expect all of those factors to drive better penetration in the long run visitation numbers, especially helping to drive that overnight, uh, visitation, which is clearly the highest spending segment. But
With that said the overall Hotel inventory in Macau is not significantly growing so that will continue to act as a constraint on the overall of a night visitation. But I think what you'll see is a continued uh Improvement in in the quality of the tourism uh coming to stay overnight. In Macau.
Grant Cham: That's really helpful. Thanks a lot Grant. Thanks all.
Thank you. Your next question is coming from Steve wisinski. From stifel. Your line is live.
Speaker Change: Started construction on ir2. Um but you know based on what you've witnessed, you know, over the last 6 months, 8 months coming out of ir1 and the kind of the crazy numbers that you guys have been putting up over there, out of ir1 has that changed your your internal return assumptions for ir2 at this point.
Speaker Change: I don't think so. Look, I think we generally have a view that Murray Bay Sands in Singapore is an investment driven story.
Speaker Change: and so the more we invest in high-quality assets, the better service levels we have the more we're going to have pricing power, we're going to be able to differentiate our product and the more high-value tourism we'll be able to bring in
And because of that, we'll get more Revenue, we'll get more even time so you're seeing that happen, this quarter in Singapore, it's the full product full power of our suite products, the full power of our food and beverage offerings, our mice offerings, everything's really coming together. All the entertainment, we do the high level of service, but we we have a great premium Mass customer base there. Um, look the shopping, all the other things that we've added. Uh, it's, it's really a very unique lifestyle program that we offer to people. And and so for us ir2 is just an extension of that. Um, you know, look, our goal is to have the best hotel in the world there, uh, to have the best gaming experience, the best food and beverage, and then have this live, entertainment venue. Um, the likes of which we've never had before in terms of, to be able to drive customer visitation.
Speaker Change: So we feel very strongly about this, you know, it's a 6 billion dollar um investment 2 billion, dollars of of Premium that we have to pay the government. And we feel very strongly about the quality of that investment, at work and go. So, adjustment and models is not where we're at now. It's a very long way away. Uh, you know, we've got a couple years before it opens. Uh, but in our minds this quarter and actually to be fair, what we'll be seeing uh, in the quarters, leading up to this, in terms of the high quality of Patron that we have just validates. The fact that we feel very strongly, this will be high quality assessment. And so while we have an adjusted, our models, uh, in any, any formal way, I I think this is just validates long term in our minds, the quality of the market and and the strength of Singapore.
Okay, gotcha, appreciate that. Patrick
Speaker Change: Thanks Steve.
Speaker Change: Thank you that completes our Q&A session everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. We thank you for your participation.