On July 31, 2024, Ballys Corp (BALY, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Ballys Corp is a casino entertainment company with a growing omni-channel presence. It currently owns and manages 15 casinos across 10 states, a golf course in New York, a horse racetrack in Colorado, and has access to OSB licenses in 18 states. It also owns Bally's Interactive International, Bally Bet, and Bally Casino. The Company's casino operations include approximately 15,300 slot machines, 580 table games, and 3,800 hotel rooms.
Performance Overview
Ballys Corp reported company-wide revenue of $621.7 million for Q2 2024, reflecting a 2.5% year-over-year increase but falling short of the analyst estimate of $639.48 million. The company posted a net loss of $60.2 million, translating to an earnings per share (EPS) of -$1.24, which was above the analyst estimate of -$1.30 per share.
Segment Performance
The Casinos & Resorts segment generated $343.1 million in revenue, up 3.0% year-over-year. The North America Interactive segment saw a significant 94.7% increase in revenue to $49.2 million. However, the International Interactive segment experienced a 7.4% decline in revenue to $229.4 million, primarily due to challenges in the Asian market.
Financial Achievements and Challenges
Despite the revenue growth, Ballys Corp faced several challenges. The net loss widened to $60.2 million from $25.7 million in the same period last year. Adjusted EBITDAR for the quarter was $161.8 million, a decrease from $309.9 million in Q2 2023. The company attributed the decline to property-specific headwinds and increased promotional activities in certain markets.
Strategic Developments
Ballys Corp announced a $2.07 billion transaction with Gaming & Leisure Properties Inc. (GLPI), including $940 million for the construction of a permanent casino in Chicago. The company also entered into a definitive agreement to merge with The Queen Casino & Entertainment Inc., offering Bally’s stockholders $18.25 per share in cash or the option to retain their investment.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $621.7 million | $606.2 million |
| Net Loss | $(60.2) million | $(25.7) million |
| Adjusted EBITDAR | $161.8 million | $309.9 million |
Balance Sheet and Cash Flow
As of June 30, 2024, Ballys Corp reported cash and cash equivalents of $154.7 million, down from $163.2 million at the end of 2023. The company's long-term debt stood at $3.67 billion, slightly up from $3.66 billion at the end of 2023.
Commentary and Future Outlook
"Bally’s delivered solid 2024 second quarter operating results during what remains an active period for our Company," said Robeson Reeves, Bally’s Chief Executive Officer. "The combination of QC&E’s development pipeline also to our own growth pipeline provides the Company with a clear path toward additional revenue, cash flow growth and value accretion."
George Papanier, Bally’s President, added, "While certain market-specific events impacted performance, the rest of the portfolio grew 19% year-over-year, and excluding Chicago, grew 3%, demonstrating the resilience of the portfolio."
Analysis
Ballys Corp's Q2 2024 results highlight both growth opportunities and challenges. The company's strategic initiatives, including the Chicago project and the merger with QC&E, are expected to drive future growth. However, the widening net loss and challenges in specific markets underscore the need for effective management and strategic execution.
For more detailed insights and analysis, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Ballys Corp for further details.
