Executive Summary / Key Takeaways

• Wynn Resorts leverages its ultra-luxury brand and operational discipline across prime global markets (Macau, Las Vegas, Boston) to generate robust Adjusted Property EBITDAR and maintain strong margins, despite facing challenging year-over-year comparisons and competitive pressures.
• The company is strategically focused on high-return growth, most notably the Wynn Al Marjan Island development in the UAE, which is progressing rapidly towards a targeted early 2027 opening and is expected to be a significant future EBITDA driver and free cash flow inflection point.
• Wynn is actively returning capital to shareholders through recurring dividends and opportunistic share repurchases, underpinned by strong liquidity, improving leverage metrics, and management's view that the stock is currently undervalued relative to asset value and growth prospects.
• Technological investments, such as the rollout of digital tables in Macau and enhanced data analytics, are aimed at improving operational efficiency, game security, and enabling more precise, data-driven player reinvestment to enhance profitability in a competitive market.
• While facing risks like the impact of tariffs on CapEx timing and intense competition in Macau, Wynn's focus on the resilient affluent customer base, disciplined cost management, and strategic global expansion positions it for long-term value creation.

Setting the Scene: Luxury, Global Reach, and a Strategic Foundation

Wynn Resorts, Limited stands as a premier designer, developer, and operator of luxury integrated resorts, distinguished by its unwavering focus on high-end hospitality, exquisite design, and exceptional service. Operating across the world's most significant gaming markets – Macau, Las Vegas, and Boston – Wynn has cultivated a brand synonymous with five-star experiences, earning accolades such as the most Forbes Travel Guide Five-Star Awards of any independent hotel company in 2025 and recognition on FORTUNE's World's Most Admired Companies list. This foundational strength in luxury positioning is central to Wynn's strategy, enabling it to attract and retain a resilient affluent customer base, even amidst broader economic uncertainties.

The company's history, marked by the opening of iconic properties like Wynn Las Vegas (celebrating its 20th anniversary in 2025), has shaped its operational blueprint: creating integrated resorts that seamlessly blend gaming, high-end retail, diverse dining, entertainment, and meeting facilities. This model is deployed globally, adapted to regional nuances but consistently upholding the Wynn standard. The industry landscape is intensely competitive, particularly in key hubs like Macau, where multiple concessionaires vie for market share, and Las Vegas, which continues to absorb new capacity. Wynn's overarching strategy in this environment is not merely to chase volume but to maximize EBITDA and margins through operational discipline, targeted investments in its assets, and leveraging its brand to command premium pricing and loyalty.

A critical, though often less visible, aspect of Wynn's competitive approach lies in its technological advancements. The company has been rolling out digital tables across Wynn Palace and Wynn Macau, aiming for full implementation by Chinese New Year 2025. This technology offers tangible benefits, including enhanced game security and reduced human error. More strategically, these smart tables, coupled with investments in data science and machine learning capabilities, provide an abundance of precise, bet-by-bet data. This data is intended to enable more precise and efficient player reinvestment decisions, moving beyond traditional methods to target specific customer segments more effectively. While specific quantifiable improvements in efficiency or cost savings from this technology rollout are not yet fully detailed, the strategic intent is clear: to use data-driven insights to optimize promotional spend and enhance profitability in Macau's competitive landscape, supporting the company's focus on EBITDA and margin over pure market share.

Segment Performance and Operational Dynamics

Wynn's operational performance in the first quarter of 2025 reflected a mixed picture, influenced by challenging comparisons and market-specific factors. Total operating revenues decreased by $162.5 million year-over-year to $1.70 billion, primarily driven by a $132.8 million decrease in Macau Operations revenues.

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In Macau, both Wynn Palace and Wynn Macau saw revenue declines in Q1 2025 compared to the prior year, decreasing by 8.7% and 19.9% respectively. This was largely attributed to lower VIP win percentages and a decrease in mass market table games win. Adjusted Property EBITDAR followed suit, decreasing by 20.0% at Wynn Palace and 34.3% at Wynn Macau. Management noted that poor VIP hold significantly impacted Q1 EBITDA in Macau, costing nearly $40 million. Despite this, underlying volumes showed some health, with VIP turnover up 31% and mass drop up sequentially. Recent trends in April and the Golden Week holiday in May showed mass drop in line with or up from the prior year and strong direct VIP turnover, alongside full hotel occupancy, suggesting demand remains present. The company continues to invest in the Macau properties, recently opening the Gourmet Pavilion food hall at Wynn Palace, which has already added 2,400 incremental daily restaurant covers, indicating increased visitation. Planned concession-related CapEx includes an event center and production show at Wynn Palace, intended to drive visitation through unique entertainment experiences, a strategy seen to resonate and drive market share in the market.

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Las Vegas Operations experienced a 1.8% decrease in operating revenues in Q1 2025, totaling $625.3 million. Adjusted Property EBITDAR decreased by 9.3% to $223.4 million. This decline was primarily due to the tough comparison against the prior year's Super Bowl, which significantly boosted Q1 2024 results. Management estimated the Super Bowl headwind to EBITDA was about $25 million initially, but only around $11 million when adjusted for hold differences between the periods. Excluding Super Bowl weekend, key volume metrics like drop, handle, RevPAR, and non-gaming revenues were reportedly up year-over-year. The slot business remains a bright spot, showing increased handle. Despite wage inflation, the Las Vegas team has largely mitigated payroll increases through cost discipline, maintaining OpEx excluding gaming tax per day at $4.3 million, up 4.1% year-over-year. The outlook for group business in 2025 is positive, expected to pace similarly to 2024 in room nights while pushing rate, contributing to management's view that the Las Vegas business will exit 2025 even stronger.

Encore Boston Harbor saw a 3.9% decrease in operating revenues to $209.2 million and a 9.0% decrease in Adjusted Property EBITDAR to $57.5 million in Q1 2025. The prior year period benefited from higher hold and a one-time OpEx credit. Slot volumes continue to hold up well, with slot win up about 3%. OpEx per day remained disciplined, up just 1% year-over-year despite labor cost pressures. Depreciation expense decreased by $17.4 million as certain assets reached full depreciation, providing a partial offset to revenue declines.

Financial Health and Strategic Capital Allocation

Wynn Resorts maintains a strong liquidity position, with global cash and revolver availability totaling $3.2 billion as of March 31, 2025. This includes $1.8 billion in Macau and $1.3 billion in the US. The company has made significant strides in strengthening its balance sheet, reducing gross debt by over $1.1 billion in the year leading up to Q2 2024 and $1.2 billion year-on-year as of early October 2024. This has contributed to a healthy consolidated net leverage ratio of just over 4.3 times as of March 31, 2025.

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The company's capital allocation strategy balances investment in high-return growth projects, debt management, and returning capital to shareholders. In Q1 2025, capital expenditures totaled $159.9 million, including significant investments in Las Vegas enhancements ($56.2 million), Macau property CapEx ($65.6 million), and future development projects ($33.5 million). A substantial portion of investing activity is directed towards the Wynn Al Marjan Island project in the UAE, with $58.2 million invested in Q1 2025, bringing life-to-date cash contributions to the joint venture to $682.9 million.

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Management is committed to returning capital to shareholders, evidenced by the increase in the share repurchase authorization to $1.0 billion in November 2024. In Q1 2025, the company repurchased 2.50 million shares for $212.0 million and continued buying in Q2 2025 with another $100 million purchased thus far. As of March 31, 2025, $613.0 million remained under the authorization. The company also paid a cash dividend of $0.25 per share in Q1 2025 and declared another $0.25 dividend payable in May 2025. This aggressive share repurchase activity, alongside recurring dividends, signals management's conviction that the stock is undervalued and that buybacks offer a meaningful return profile, particularly while industry multiples remain suppressed and the value of the UAE project is not fully reflected.

Outlook, Growth Initiatives, and Key Risks

The outlook for Wynn Resorts is heavily weighted towards the transformative potential of its development pipeline and the continued performance of its core luxury assets. The Wynn Al Marjan Island project in the UAE is a central pillar of the growth strategy, targeted for an early 2027 opening. Construction is advancing rapidly, reaching the 47th floor by Q1 2025, with topping out expected later in the year. The project secured a $2.4 billion construction facility in February 2025, a significant milestone. Wynn's remaining 40% pro-rata equity contribution is estimated between $650 million and $725 million. Management believes this project will open into a large, predicted $5+ billion GGR market and will be the only integrated resort in the near term, providing a significant first-mover advantage and ultimately driving meaningful EBITDA and diversifying the business. The acquisition of Aspinalls in London is strategically linked, intended to serve as a conduit for high-value guests to visit the UAE and other Wynn properties.

Beyond the UAE, Wynn is exploring potential greenfield opportunities in attractive gateway cities like New York and Thailand, leveraging its expertise and existing land banks in Las Vegas, Boston, and the UAE for potential future development. However, management emphasizes a disciplined approach, particularly in complex markets like New York, where concerns about online gaming cannibalization, build costs potentially impacted by tariffs, and local politics necessitate careful evaluation.

Key risks to the investment thesis include the impact of tariffs, which have already caused a delay of approximately $375 million in US CapEx projects, including the Encore Tower remodel, pending stabilization of tariff rates. While direct operational impacts are expected to be manageable, the indirect effects on broader economic growth and demand remain a source of uncertainty. The competitive environment in Macau is expected to remain intense, requiring continued operational excellence and strategic investment to maintain profitability and market position. The Wynn Al Marjan Island project, while promising, involves execution risk and a Completion Guarantee that could require significant funding under certain default scenarios. Furthermore, the collectability of gaming receivables, particularly from international customers, remains subject to global economic conditions.

Conclusion

Wynn Resorts presents a compelling investment narrative centered on its established leadership in the global luxury integrated resort market and its strategic pursuit of high-return growth opportunities. Despite facing near-term headwinds from challenging comparisons and market dynamics in Q1 2025, the underlying performance of its core assets remains solid, supported by a resilient affluent customer base, operational discipline, and targeted investments in property enhancements and technology.

The development of Wynn Al Marjan Island represents a significant catalyst, poised to deliver meaningful future EBITDA and mark an inflection point for free cash flow generation as North American CapEx moderates. Coupled with a commitment to returning capital through dividends and opportunistic share repurchases, Wynn is actively working to enhance shareholder value. While risks such as tariff impacts and competitive intensity warrant monitoring, Wynn's differentiated brand, disciplined strategy, and focus on technological advantages position it to capitalize on future growth and maintain its premium standing in the global gaming and hospitality landscape.