MGM Resorts Sets New Revenue Record as Q1 Activity Surges

Article by : Erik Gibbs May 7, 2024

• 
• 

Casino and hospitality company MGM Resorts International has announced its financial results for the first quarter of 2024, marking an important achievement in its performance. The quarter showcased record revenue, reaching $4.4 billion, indicating a notable 13% increase from the previous year. The company’s adjusted EBITDAR (earnings before interest, taxes, depreciation, amortization and restructuring or rent costs) climbed to a robust $1.2 billion, demonstrating operational efficiency and strong performance in key segments.

Jonathan Halkyard, MGM’s Chief Financial Officer, attributed much of the quarter’s success to the company’s Las Vegas Strip properties. With luxury resorts serving as a competitive advantage, the Strip witnessed a commendable 5% surge in top-line growth.

Looking ahead, Halkyard provided optimistic projections, indicating that the current rate trajectory exceeds that of the previous year for the remaining quarters, with a promising uptick in group room bookings.

Bill Hornbuckle, the CEO and President of MGM Resorts, outlined the company’s strategic growth pla,n which focuses on initiatives aimed at enhancing shareholder value. This includes leveraging resort operations to generate sustainable free cash flow, strategic investments in international digital and luxury integrated resorts, and a commitment to returning capital to shareholders through share repurchases.

Hornbuckle also highlighted the success of the collaboration with Marriott, revealing that the initiative surpassed expectations with over 130,000 room nights booked in January alone, positioning it as a significant growth driver for the fiscal year.

Delving into the specifics of revenue distribution, MGM’s Las Vegas Strip resorts reported robust earnings of $2.3 billion, marking a respectable 4% increase year-over-year. However, adjusted EBITDAR for the Strip slightly dipped to $828 million compared to $836 million in the corresponding period of the previous year.

Meanwhile, regional operations experienced a revenue decline to $909 million from $946 million in the first quarter of 2023, with adjusted regional EBITDAR settling at $274 million, indicating a 12% decrease.

In contrast, Macau operations emerged as a standout performer, experiencing a staggering 71% surge in revenue, reaching $1.1 billion compared to $618 million in the same quarter of 2023. The adjusted EBITDAR for Macau properties also witnessed a substantial uptick, climbing to $301 million from $169 million in the previous year.

Financial markets responded positively to MGM Resorts’ performance, with the company’s stock closing at $39.75 on the Nasdaq, representing a modest increase of $0.31 (0.79%). After hours, the stock continued its upward trajectory, reaching $40.75, up by $1 (2.52%), reflecting investor confidence in the company’s growth trajectory.