PENN Entertainment (PENN) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $1.64 billion, up 1.2% year-over-year, driven by Interactive segment growth and offset by declines in the South and Northeast due to weather, competition, and remodeling disruptions.

• Net loss for Q3 2024 was $37.5 million, a significant improvement from a $725.1 million loss in Q3 2023, which included a $923.2 million Barstool disposal loss.

• Interactive segment outperformed expectations, aided by higher parlay mix, lower promotional expenses, and ESPN BET account linking launched in October.

• ESPN BET expanded to 19 states, including New York, with seven new branded retail sportsbooks and significant user and handle growth.

• Recognized for board diversity and DEI initiatives, including top employer accolades.

Financial highlights

• Q3 2024 retail revenue was $1.4 billion and Adjusted EBITDA was $193.5 million, down from $298.5 million in Q3 2023.

• Interactive segment revenues rose to $244.6 million, with Adjusted EBITDA loss of $90.9 million, a 12% sequential improvement from Q2.

• Ended Q3 with $1.8 billion in liquidity, including $834 million in cash and no debt maturities until 2026.

• CapEx for Q3 totaled $132 million, with $69 million allocated to four development projects; $261.7 million for the nine months ended September 30, 2024.

• Net loss per share was $(0.24) for Q3 2024; Adjusted EPS was $(0.25).

Outlook and guidance

• Expect Q4 2024 retail revenues of $1.36–$1.38 billion and Adjusted EBITDA of $440–$460 million, factoring in ongoing construction disruption in Lake Charles.

• Interactive segment guidance for 2024 EBITDA remains unchanged, with industry-wide hold negatively impacted by customer-friendly outcomes in Q4 to date.

• Standalone Hollywood iCasino app launch planned for Pennsylvania in early Q1 2025, with more jurisdictions to follow.

• Growth projects at Hollywood Joliet, Aurora, Columbus, and M Resort remain on track, with completions expected between 2H 2025 and 1H 2026.

• Total 2024 CapEx expected to be ~$500 million, including $275 million for projects.