MGM Resorts Reports Record $4.33 Billion Q2 Revenue

Bill Hornbuckle CEO of MGM

MGM Resorts International has unveiled its second-quarter revenue figures, rising to $4.33 billion. Marking a 9.8% uptick from the corresponding period in 2023.

The financial metrics paint a picture of MGM’s resurgence, with net income attributable to the company reaching $187 million in Q2, while the free cash flow for the first six months of the year stood at a formidable $613 million. Diluted earnings per share clocked in at $0.60, a notable improvement from the $0.55 recorded in 2023.

MGM Resorts CEO William Hornbuckle has set his sights on an enticing opportunity in Thailand. During the company’s earnings call on July 31, Hornbuckle disclosed plans to explore this burgeoning market in August, remarking, “That is a venture that we’re interested in. And if we do, do that, we’ll do it through MGM China Holdings.”

MGM Resorts’ performance can be largely attributed to the 37.4% growth witnessed in Macau, where revenue soared to $1.02 billion.

Adjusted EBITDA for the quarter stood at a robust $1.2 billion, while growth in Macau also propelled the region’s adjusted EBITDA to a record-breaking $294 million, marking a staggering 40.7% year-over-year increase.

Hornbuckle, beaming with pride, remarked on the “outstanding performance” in Macau, achieved “without any real capital enhancements from where we left this market in 2019.” He further asserted, “We’re obviously outperforming. And remembering the market has only returned to 80% recovery. Well, MGM is well above that. We still see opportunities not only for growth in the market, but ultimately for us to steal additional share.”

Turning the spotlight to Las Vegas, MGM Resorts witnessed a 2.7% revenue uptick, reaching an impressive $2.21 billion for the quarter. This growth can be attributed to a rise in room revenue, driven by an increase in average daily room rates and a surge in catering and banquets revenue.

Hornbuckle underscored the company’s strategic focus, stating, “We invest meaningfully in our strip luxury offerings as this is where we see the most opportunity for profitable growth.” He elaborated, “In fact, 75% of our 2024 domestic property capital budget will be focused on these properties. This includes room remodels, which are under way now at the MGM Grand and suite updates across our Las Vegas portfolio.”

MGM Resorts’ Regional business segment exhibited stability, with revenue marginally higher at $927 million in Q2. Hornbuckle expressed contentment with this segment’s performance, highlighting plans for future growth, including a planned launch in New York.

“We’ll maintain our market-leading positions in the regional markets, including an expansion in New York,” he affirmed. “With our regional properties, again, I want to reiterate they are stable and free cash flow generating, and we’re excited to have the properties that we do within our portfolio.”

The remaining $177 million in net revenue for the quarter stemmed from management and other operations, reflecting a robust 40.5% year-over-year increase.

Dissecting the revenue streams, casino activity accounted for $2.2 billion, marking an 8.8% uptick from the previous year. Rooms revenue climbed 10.3% to $899 million, while food and beverage revenue surged 7.9% to $802 million. However, revenue from entertainment, retail, and other sources dipped 4.5% to $402 million, with reimbursed costs remaining level at $12 million.

Despite the revenue growth, MGM Resorts grappled with higher operating costs, which rose 8.8% to $3.87 billion in Q2. Non-operating expenses also surged 73.0% to $154 million, impacting profitability.

Pre-tax profit slipped 4.2% to $271 million, and while MGM received $12 million in tax benefits, this was offset by a $95.7 million deduction for profit from non-controlling interests. Consequently, the company concluded Q2 with a net profit of $187 million, down 7% year-over-year.

Zooming out to the first half of the year, MGM Resorts’ total net revenue reached $8.71 billion, reflecting an 11.5% year-over-year increase. Once again, Macau emerged as a driving force, with revenue within the region surging 52.6% during the six-month period.

Las Vegas revenue also climbed 3.1% to $4.46 billion, while Regional revenue remained stable at $1.84 billion. Revenue from management and other operations witnessed a 29.8% uptick, reaching $340 million.

Casino revenue for H1 climbed 16.2% to $4.45 billion, room revenue increased 1.5% to $1.86 billion, and food and beverage revenue rose 7.2% to $1.57 billion. However, entertainment, retail, and other revenue dipped 2.9% to $806 million, while reimbursed costs amounted to $24 million.

Operating costs reached $7.77 billion, up 17.3%, and non-operating expenses jumped 54.6% to $269 million. As a result, pre-tax profit hit $615 million, down 33.7% due to higher spending.

After paying $32 million in taxes and discounting $178 million in net profit from non-controlling interests, MGM Resorts posted a bottom-line net profit of $405 million, down 39.4% from the previous year. Adjusted EBITDAR stood at $2.43 billion.

Hornbuckle exuded confidence, stating, “We’re excited by the progress we’re making as a company against our strategic priorities and anticipate carrying our current momentum forward into the back half of the year.”

Separately, BetMGM, the joint venture between MGM Resorts and Entain, celebrated a significant milestone, with revenue reaching $1 billion in the first half of the year, representing a 6% year-over-year increase, despite no new state launches, revenue grew 9% year-over-year in Q2, following a slower first quarter.

However, BetMGM posted negative EBITDA of £123 million in the first half and expects a similar figure in the second half, suggesting a full-year negative EBITDA of £250 million.