MGM Resorts rode the strength of its Macau and digital segments to a slight group revenue increase in its Q1 results released Wednesday, with regionals holding steady and Las Vegas posting its first year-over-year revenue increase since 2024.
The company’s net revenue of $4.5 billion in Q1 represented a 4% increase YoY, but consolidated adjusted EBITDAR fell 9% to $580 million and net income slid 16% to $125 million. All of MGM’s segments – Las Vegas, regional, China and digital – notched YoY revenue increases for the quarter. Every segment reported adjusted EBITDAR declines, however, with the exception of digital, which trimmed its EBITDAR loss from $34 million a year ago to $26 million this quarter.
In Las Vegas, Q1 revenue of $2.2 billion was a slight ($4 million) increase YoY, but segment adjusted EBITDAR was down 8% to $749 million. On a granular level, Las Vegas hotel revenue was almost exactly flat at $751 million, but gaming metrics like casino revenue (-5%), table games win (-1%) and slot win (-1%) were down slightly.
As with Caesars the day prior, MGM CEO Bill Hornbuckle and others faced several questions about Las Vegas, especially about lower-end play impacted by ongoing tourism lags.
“The market’s changed, the consumer has changed. Luckily for us we have a lot of luxury product and brands that can cater to that, and it’s going to continue,” Hornbuckle told analysts. “Despite many headwinds, we have yet to see a slowdown. That doesn’t mean over the summer that can’t happen, because booking cycles still remain short.”
Citizens analyst Jordan Bender indicated in a research note that conditions in Las Vegas appear to be moderately improving. Nevertheless, Citizens’ models project a 2% decline for MGM’s Las Vegas segment in 2026.
New deals, new NBA team?
In recent weeks, a number operators including MGM and Caesars have begun offering all-inclusive packages in efforts to regain budget and first-time travellers. MGM’s deal centres around two-night stays at either Luxor or Excalibur, and this elicited much interest from analysts on Tuesday.
“We’ve been really pleased with the response to the all-inclusive package, we’ve seen really steady momentum since we first deployed that and the customer response has been really good,” said MGM COO Ayesha Molino. She added that a “significant portion” of that interest has come from new customers.
Hornbuckle was asked about MGM’s stance regarding a potential NBA franchise in Las Vegas, given that the company is a part-owner of T-Mobile Arena, the only venue in the city that can currently host NBA games. The league’s board of governors voted unanimously last month to explore Las Vegas as a relocation site, which had been rumoured for years.
While the prospective team owner might prefer to develop their own arena, T-Mobile is looking increasingly likely as an interim option. The NBA has indicated a desire for expansion teams to begin play as early as 2028, too soon for a greenfield venue. Hornbuckle, who joked that he was “already under three NDAs”, seemed to indicate that things are trending in that direction.
“T-Mobile is part of that conversation, whether it’s short-term or long-term, all roads lead to it for now … so we’re intimately involved in those conversations,” he said. MGM has been “asked how we would position T-Mobile for any and all bidders” and there has been “extensive interest”, Hornbuckle said.
Strength in Macau
MGM China saw a 9% revenue increase to $1.1 billion in Q1, while adjusted EBITDAR slipped 4% to $273 million. The quarter included the Chinese New Year holiday, which saw robust visitation and a spike in handle for Macau overall. For MGM, Macau table games win eclipsed $1 billion in Q1, an 18% jump over last year.
“It’s always difficult to say Macau is ‘stable’, but I feel good about it, I feel very good about our market position and what we’re doing and how we’re doing it,” Hornbuckle said, while noting the company is still “under-suited” in the market and will build more.
MGM Osaka, the lone Japanese-licensed integrated resort, is progressing “on time and on budget for a 2030 opening”, Hornbuckle said. Japan recently began the process of potentially issuing more casino licences, but the company is confident its first-mover advantage will be significant even if others are awarded.
Trimming digital losses
Digital revenue, which comes from MGM subsidiary LeoVegas and not BetMGM, rose 43% YoY to $183 million. The segment also trimmed about $8 million in EBITDAR losses on the quarter. MGM has faced questions over its long-term vision for the BetMGM joint venture with Entain, but there are indications that its own digital footprint is expanding as it is working toward profitability.
“We’ve indicated in that past that we would see the loss this year for the digital segment halving relative to last year, we might see a little bit more investment this year than that, given some of the regulatory changes and tax changes in Brazil, but we’re definitely anticipating the loss to materially narrow … which then sets us up in 2027 for close to a break-even year, if not 100% getting there,” said Gary Fritz, MGM chief commercial officer and president of digital.
From a balance sheet perspective, MGM reported total liabilities of around $38 billion, an amount that remained practically flat from the year-ago quarter. The company bought back $90 million worth of shares in Q1, with the stock closing on Wednesday down 1% to $39.27. While MGM is up about 24% over the last 12 months, the company is still considerably below 2023 highs of around $50 a share.
Jess Marquez
Jess has covered the global gaming industry since 2022. A native of Reno, Nevada, he’d like to note that it’s Ne-va-da, not Ne-VAH-da.
Original article: https://igamingbusiness.com/finance/quarterly-results/mgm-q1-results/
