MGM Resorts International delivered its third-quarter results today, spotlighting its continuous share repurchase efforts and significant revenue growth in its BetMGM unit. Riding high on the performance of its MGM China arm, the Bellagio operator reported a record consolidated net revenue of $4.2 billion for the September quarter, marking a 5% increase from the previous year. However, adjusted earnings per share fell to 54 cents from 64 cents a year earlier.
Despite challenging year-over-year comparisons for some Las Vegas Strip operators, MGM disclosed a 1% uptick in third-quarter Strip revenue, reaching $2.1 billion. Adjusted earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) improved to $731 million from $714 million, reinforcing MGM’s stature as the largest operator on the Strip.
MGM also quelled concerns regarding potential weaknesses in some regional markets by revealing a rise in sales at its regional casinos, which jumped to $952 million from $925 million. Adjusted EBITDAR in these markets climbed 2% to $300 million from $293 million.
BetMGM, a 50/50 joint venture between MGM and Entain Plc, lagged behind rivals such as FanDuel and DraftKings in market share but demonstrated notable progress in the July to September period. The company boasted an almost 20% increase in net revenues year-over-year for the third quarter, more than doubling the growth rate of the preceding quarter. Although the US sports wagering market is predominantly controlled by FanDuel and DraftKings, iGaming represents a promising and more open frontier with higher margins and profit potential. BetMGM is strategically positioning itself to capture a larger share of this market, a move expected to yield long-term benefits. Currently, iGaming is permitted in seven states, but this number is anticipated to grow as states seek new revenue sources.
MGM’s commitment to stock buybacks remains steadfast. Over the past several years, MGM has been a dedicated purchaser of its own shares, continuing this trend in the third quarter by repurchasing over $300 million worth of shares. This brings the year-to-date total to approximately $1.3 billion. CFO Jonathan Halkyard highlighted that since 2021, the company has reduced its shares outstanding count by 40% through buybacks. MGM concluded the third quarter with $944 million in free cash flow, and the company’s relatively low debt and strong liquidity continue to support these repurchase activities.
