MGM Resorts International Q2
The top line
The rise in net revenue to $2.27bn represented a near 700% bounceback on Q220. Consolidated Adjusted EBITDAR hit $617m, a record helped by record margins of just below 40%.
Regional lead the way up 859% to $856.3m while Las Vegas was up 566% to $1bn. MGM China reported revenue down 11.2% to $310.6m.
BetMGM incurred an EBITDAR loss of $49.6m.
All about liquidity: Events are moving at a pace with MGM. The news on MGM Growth Partners (see below) adds a further $4.4bn to the company’s cash at hand and following on from the deal for CityCenter with Blackstone which netted $1.9bn means that post-transaction, MGM will have $11.6bn of liquidity available. What it does with that cash is not yet clear.
Asked about this “sizeable, deployable cash position”, CEO Bill Hornbuckle name-checked all the options including share buybacks and the potential for large-scale M&A – “we have expressed our desires in digital” – but suggested “time is our friend.” “We won’t go too far afield,” he added.
This could yet include Japan where a decision on the Osaka bid is due in Q4. According to the RFP proposal with JV partner Orix, MGM would need to commit up to $2.25bn to that project.
Circus Maximus: The other big news this week was of course the launch of the Caesars Sportsbook and Hornbuckle paid them the compliment of suggesting they would be a “real competitor”, particularly given the close-up match-up between the two companies in terms of the omni-channel opportunity. Adding some color on its own metrics, MGM said 15% of new BetMGM players came from MGM and 31% of new MLife sign-ups came from BetMGM. Hornbuckle said BetMGM was now “heavily into our loyalty push” with another big product launch coming soon and the team “working around the clock” on preparing for the next football season.
Is that all you can eat? Asked about the sustainability of the near 40% EBITDA margins across the business, Hornbuckle stressed that this would not be long-term. He did say, though, that margins are likely to settle up on previous levels. Asked about how this should be explained to shareholders, Hornbuckle said “the message is (that) we have learned a lot and we are going to be appreciably better than what we were before.” Specific measures cited as being past their sell-by date? The buffet.
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