American powerhouse, MGM Resorts International, has triumphantly posted record first-quarter results, with much credit due to the company’s bustling Las Vegas Strip casino hotels and the auspicious outset of a points partnership with well-established Marriott International.
The gaming giant, also operator of the prestigious Aria, announced a prosperous earnings per share of 74 cents on a non-generally accepted accounting principles (GAAP) basis in the exhilarating first three months of the year. Revenue was high and mighty at $4.4 billion, surpassing analyst’s predictions of per share earnings of 58 cents on a smaller sales figure of $4.23 billion.
The partnership between MGM Collection and Marriott Bonvoy, a highly strategic collaboration benefiting MGM’s 17 national properties such as the opulence on the attractive Las Vegas Strip, and the brand’s key regional casino hotels, started the year with a bang. Almost in disbelief, MGM CEO Bill Hornbuckle exclaimed, “We achieved record consolidated revenues in the first quarter.”
The arrangement allows customers to book stays at these illustrious venues via Marriott’s website. MGM Rewards members get to profit from the partnership too, reaping Marriott Bonvoy points. Since the January launch of the license agreement, the alliance has exceeded initial estimations with over 130,000 room nights secured, and the company predicts this synergistic relationship will drive growth throughout the year.
Though the Strip demonstrated its characteristic charm by pulling in an increase of first-quarter revenue from $2.2 billion to $2.3 billion, MGM wasn’t oblivious to a simultaneous reduced EBITDAR. However, hope wasn’t lost as other areas, specifically the MGM China unit, sprinted ahead.
MGM’s regional casinos showcased a 9% slip in the same-store adjusted property EBITDAR for the first-quarter. But this blip didn’t tamp down MGM’s flame. The China unit essentially stole the show with a staggering 71% escalation to $1.1 billion in net revenue, along with a 78% surge in adjusted property EBITDA.
The company’s casino division in this region swam strong currents and weathered a storm far better than most; after all, MGM boasts a 56% stake in the accomplished Macau unit.
MGM also paid homage to its innate propensity for buying back its own shares, purchasing 12 million of its shares during the early quarters of 2024, supported by a grand $377 million free cash flow generated in the first quarter.
CFO and Treasurer Jonathan Halkyard proudly stated that this repurchase “provides our shareholders with incremental future benefits from the free cash flow growth of our resort operations, digital profitability, and the development opportunities of Japan and New York.” Good news indeed for its faithful investors.
From 2021 until now, the gaming company has managed to trim its shares outstanding by a hefty 36%, making it one of the most significant reductions executed by any US-based firm within this period.