MGM Resorts International (MGM, Financial) released its 8-K filing on July 31, 2024, reporting its financial results for the second quarter ended June 30, 2024. MGM Resorts, the largest resort operator on the Las Vegas Strip, continues to show robust performance with record consolidated net revenues and significant growth in its MGM China operations.
Company Overview
MGM Resorts International (MGM, Financial) is a leading global hospitality and entertainment company, operating iconic properties such as MGM Grand, Mandalay Bay, Park MGM, Luxor, New York-New York, and Bellagio on the Las Vegas Strip. The company also has significant regional assets in the U.S., a 56%-owned MGM China operation, and expanding digital and sports betting platforms.
Q2 2024 Financial Highlights
For the second quarter of 2024, MGM Resorts reported:
- Record consolidated net revenues of $4.3 billion, a 10% increase year-over-year.
- Net income attributable to MGM Resorts of $187 million, compared to $201 million in the prior year quarter.
- Consolidated Adjusted EBITDAR of $1.2 billion.
- Diluted earnings per share (EPS) of $0.60, slightly below the analyst estimate of $0.61.
- Adjusted EPS of $0.86, up from $0.59 in the prior year quarter.
Performance Analysis
MGM Resorts' performance in Q2 2024 was driven by strong results in its Las Vegas Strip properties and a significant rebound in MGM China. The Las Vegas Strip resorts reported net revenues of $2.2 billion, a 3% increase from the prior year, primarily due to higher room revenues and increased catering and banquets revenue. Adjusted Property EBITDAR for the Strip was $782 million, a slight increase from $777 million in the previous year.
Regional operations remained flat with net revenues of $927 million, while Adjusted Property EBITDAR decreased by 2% to $288 million. MGM China, however, saw a remarkable 37% increase in net revenues to $1.0 billion, with Adjusted Property EBITDAR rising by 40% to $294 million, reflecting the continued recovery post-COVID-19 restrictions.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Consolidated Net Revenues | $4.3 billion | $3.9 billion | 10% |
| Net Income | $187 million | $201 million | -7% |
| Adjusted EBITDAR | $1.2 billion | $1.1 billion | 9% |
| Diluted EPS | $0.60 | $0.55 | 9% |
| Adjusted EPS | $0.86 | $0.59 | 46% |
Strategic Developments
MGM Resorts made significant strides in its international digital strategy, including the acquisition of Tipico's U.S. platform and a strategic relationship with Playtech to offer live casino content from the Las Vegas Strip. These moves are expected to enhance MGM's sports betting and online gaming offerings.
"We made significant progress with our international digital strategy by adding both an in-house sports product and live dealer capabilities to our online gaming offerings," said Bill Hornbuckle, CEO and President of MGM Resorts International.
Share Repurchases and Cash Flow
During the second quarter, MGM Resorts repurchased approximately 10 million shares of its common stock for $413 million, reducing overall shares by nearly 40% since the beginning of 2021. The company reported Free Cash Flow of $613 million for the first half of 2024.
"We continued to deliver on our Free Cash Flow growth algorithm in the second quarter, driving strong financial returns thanks to a solid baseline of cash flow from our domestic resorts, the continued growth of our digital business, and the resumption of dividends from MGM China," said Jonathan Halkyard, CFO and Treasurer of MGM Resorts International.
Conclusion
MGM Resorts International's Q2 2024 results highlight the company's strong recovery and growth trajectory, particularly in its Las Vegas and MGM China operations. While the diluted EPS slightly missed analyst estimates, the overall financial performance and strategic advancements position MGM well for continued success in the coming quarters.
Explore the complete 8-K earnings release (here) from MGM Resorts International for further details.
