Boyd Gaming Corporation (NYSE:BYD) is a leading geographically diversified operator of 28 gaming entertainment properties across the United States. Headquartered in Las Vegas, Nevada, the company has a strong presence in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania. In addition to its brick-and-mortar operations, Boyd Gaming owns and operates Boyd Interactive, a thriving business-to-business (B2B) and business-to-consumer (B2C) online gaming platform.
Business Overview
Boyd Gaming's operations are organized into four reportable segments: Las Vegas Locals, Downtown Las Vegas, Midwest & South, and Online. The Las Vegas Locals and Downtown Las Vegas segments encompass the company's gaming entertainment properties in the Las Vegas metropolitan area, while the Midwest & South segment includes its operations in the central and southern United States. The Online segment represents the company's online gaming and sports betting activities through collaborative arrangements with third-party operators.Financials
In the fiscal year 2023, Boyd Gaming delivered impressive financial results, with annual revenue reaching $3.74 billion and net income of $620.02 million. The company's strong operational performance was reflected in its annual operating cash flow of $914.52 million and free cash flow of $540.57 million.For the first quarter of 2024, Boyd Gaming reported total revenues of $960.52 million, a slight decrease of 0.4% compared to the prior-year period. Net income for the quarter was $136.47 million, down from $199.73 million in the first quarter of 2023. The company's operating cash flow for the quarter was $250.73 million, and free cash flow was $160.38 million.
Segment Performance
The Midwest & South segment, which accounts for the largest portion of the company's revenue, generated $500.77 million in the first quarter of 2024, a 2.2% decrease from the same period in 2023. This decline was primarily due to an 2.1% decline in slot handle and a 1.4% decrease in table game drop. The segment was impacted by severe winter storms in January, which temporarily disrupted operations.The Las Vegas Locals segment reported revenues of $225.62 million in the first quarter of 2024, a 6.1% decrease from the same period in 2023. This decline was primarily due to a 4.5% drop in gaming revenues, driven by competitive pressures and overall market softness. However, the segment's non-gaming revenues, including food & beverage and room, increased by 1.5% and 2.2%, respectively, during the quarter.
The Downtown Las Vegas segment reported revenues of $53.53 million in the first quarter of 2024, a 5.4% decrease from the prior-year period. This decline was largely attributable to a 4.5% drop in gaming revenues, as the segment faced increased competition and a difficult comparison to the prior-year quarter, which benefited from a rebound in Hawaiian visitation.
The Online segment, which includes the company's online gaming and sports betting activities, generated revenues of $146.17 million in the first quarter of 2024, a 19.0% increase from the same period in 2023. This growth was driven by a $20.0 million increase in reimbursements of gaming taxes and other expenses paid on behalf of the company's online partners.
Liquidity
As of March 31, 2024, Boyd Gaming had $283.55 million in cash and cash equivalents, and $4.49 million in restricted cash, resulting in a working capital deficit of $120.0 million. The company's total debt stood at $2.90 billion, with a leverage ratio of 2.4x.Boyd Gaming remains committed to a balanced capital allocation strategy, which includes investing in growth opportunities, maintaining a strong balance sheet, and returning capital to shareholders. In the first quarter of 2024, the company repurchased $105.5 million worth of its common stock and paid $16.26 million in dividends.
Outlook
For the full year 2024, the company expects its Online segment to generate $65 million to $70 million in Adjusted EBITDAR, and its Managed & Other segment, which includes the Sky River Casino management fees, to contribute approximately $90 million in Adjusted EBITDAR.Boyd Gaming is actively investing in its operations to drive future growth. In the first quarter of 2024, the company opened its new land-based Treasure Chest Casino near New Orleans, which has already seen revenues nearly double compared to the prior-year period. The company is also expanding the meeting and convention space at its Ameristar St. Charles property in Missouri and developing a new Cadence Crossing Casino in the southeast Las Vegas Valley.