Boyd Gaming Q2
The top line
Revenue more than quadrupled YoY to $893.6m (up 18.6% sequentially and a 5.6% increase on Q219) with net income coming in at $113.7m compared to a loss of $108.5m in the prior year period. Total adjusted EBITDAR hit $385.4m from $16.1m in Q220, up 23.8% sequentially.
Company-wide margins came in at 43% while the Las Vegas locals unit hit 57%. The overall figure represented a 1.6k bps expansion on Q119.
On the earnings call, the company reiterated its FY21 forecast of $20m in EBITDA being generated from the FanDuel sports-betting partnership (5% ownership) and its own Stardust igaming operations.
Peaky blinder: Talking about the record margin performance, Kevin Smith, president and CEO, believed it was sustainable. “This confidence stems from the fundamental driver of these results: our more efficient business model, our ability to target our core customer and the consistency of the customer base.” CFO Josh Hirsberg added that Boyd was now “more comfortable with our business shifting to a high-margin business.” Macquarie noted the 57% margins achieved in the Las Vegas locals unit were “some of the strongest margins we have ever seen across all of gaming.” However, management cautioned against simply multiplying the Q2 figures by four to get to a year-end revenue and EBITDA projection.
“Q2 was probably a little peaky,” said Hirsberg. “So it’s probably not fair to take Q2 and times it by four. It would be a little aggressive.”
Off the hook: While Boyd is not a big convention business in Vegas, Hirsberg did have some insight into what we can expect from some of Boyd’s peers in their upcoming results. “One thing we have seen that may be applicable is that the forward bookings at our hotels are beginning to match 2019 levels.” Smith added that at the company’s one convention hotel, the Orleans, in June “the phones were ringing a lot and we were beginning to book a lot of business.”
