PENN Entertainment, Inc.

Greetings and welcome to Penn Entertainment's second quarter 2025 earnings call. I would now like to turn the program over to Joe Giaffone in best relations, please go ahead.

Thank you, Emma. Good morning, everyone, and thank you for joining Penn Entertainment's 2025 second quarter conference call. We'll get to management's presentation and comments momentarily as well as your Q&A. During Q&A, we ask that everyone please limit themselves to one question and one follow-up. Now I'll quickly review the safe harbor disclosure. Please note that today's discussion contains forward-looking statements. Forward-looking statements involve risks, assumptions, and uncertainties that could cause actual results to differ materially. For more information, please see our press release for details on specific risk factors. Now my pleasure to turn the call over to Penn CEO, Jay Snowden. Jay, please go ahead.

Thanks, Joe. Good morning, everyone. Joined here in While Missing with Felicia Hendricks, Todd George, Aaron Laberge, as well as other members of our senior management team. As you can see from our earnings release and accompanying investor presentation, our diverse portfolio of retail properties delivered another solid quarter, particularly in those markets not impacted by new supply, where we saw revenue growth of 4% year over year. For the second quarter of 2025, we reported retail revenue of 1.4 billion and adjusted EBITDA of 490 million and adjusted EBITDA margins of nearly 34%. As noted on slide five, this performance by our best in class property teams was highlighted by theoretical revenue growth across all rated age and worth segments, as well as year over year theoretical revenue growth in unrated play, visitation and spend per visit. The first time we have seen this since Q1 of 2022, all of which have remained consistent through July as well. As you'll see on slide six and seven, we have been absorbing the impact of new supply in a few key geographic markets. Starting with Chicagoland, we are responding with the land side relocations of our Hollywood casinos in Aurora and Joliet to vastly superior locations and with new best in class, best in market assets. We're also planning to help mitigate the impact of new supply in Nebraska with the land side relocation of our Ameristar Casino Council Bluffs property in Iowa, which is currently scheduled to open at the end of 2027 or beginning of 2028. As we've discussed previously, our Margaritaville property is still the market leader, but it has been impacted by the recent new supply in Bossier City, Louisiana. This market has been in decline for two decades now and the new incremental supply, not surprisingly, has mostly cannibalized the incumbent operators. Our focus remains on continuing to enhance the guest experience in part through property improvements such as our recently renovated hotel rooms. We're also updating our hotel lobby, lobby bar and adding new non-gaming amenities. In addition, on June 16th, we were excited to welcome a privately funded 27 acre golf entertainment complex directly next door to our property, which is part of more than 75 million invested by third parties and Penn on gaming and non-gaming amenities in and around the property over the last several years. In Detroit, we expect that the ongoing construction and revitalization of the downtown business corridor adjacent to our Hollywood Greectown Casino will help boost visitation and spend in the Greectown neighborhood and at our property. The project is funded by a $20 million grant from the state of Michigan with a focus on revitalizing public spaces and improving the pedestrian experience with a more inviting environment, including the ability to host live events and festivals in the neighborhood. Construction around our property is scheduled to be completed in Q3 of this year and the entire project's scheduled to be completed in Q2 of 2026. Turning to slide eight, we are extremely excited for the August 11th opening of Hollywood Casino Joliet. Notably, this opening is occurring on budget and nearly six months ahead of its originally scheduled timeline. The new Hollywood Joliet is part of Rock Run Collection, a super regional commercial and residential development conveniently located adjacent to the Interstate 80 and Interstate 55 interchange southwest of downtown Chicago. From a financial standpoint, there will be no change to our 2025 retail guidance as it relates to the Joliet relocation as the earlier opening date will offset the ramp down of the existing facility the last couple of months to allow for game relocations. The approximate two-week closure and the marketing ramp of the new property, none of which was built into our original guidance for the year. As you'll see on slide nine, our other development projects remain on schedule and on budget. Our omni-channel engagement continues to positively impact our results with our online to retail player count growing 8% year over year and online to retail theoretical revenue growing 28% year over year. Turning to slide 10, our preexisting customers in Pennsylvania and Michigan who engage with our standalone Hollywood iCasino app are increasing their spend across both our retail and online channels. In Pennsylvania, year to date, we have seen year over year increases of 19% in retail theoretical play and 133% in online theoretical play from the same cohort. Similarly in Michigan, year to date, we have seen year over year increases of 28% in retail theoretical play and 242% in online theoretical play. These are encouraging trends for sure. Having both a retail and digital relationship with your consumer is clearly a major key to success for the industry moving forward. Transitioning to our interactive segment, we achieved record quarterly gaming revenue in both OSB and iCasino and Q2. And while still plenty of work to do, we delivered significant year over year improvements in adjusted revenue and adjusted EBITDA, highlighting strong year over year flow through we are seeing in our business in 2025. These results include approximately 2.9 million in severance costs incurred as part of our strategic workforce adjustments to drive efficiencies and support a modern scalable technology infrastructure. Excluding that one time expense, we would have come in slightly ahead of the midpoint of our digital Q2 guide and consensus. Our standalone iCasino app is continuing to expand its reach with over 70% of gaming revenue life to date through the second quarter generated by newly acquired retail native or reactivated users, which is also encouraging. As you'll see on slide 12, our interactive segment average MAUs have stabilized over the past two quarters and actually increased in Q2 25 on a year over year basis. Our MAU has also been on upward trajectory since launch. We are making great strides in advancing our in-house risk and trading platform and expanding our wagering options, including our Parlay and Intain products. As a result over the last two quarters, our hold rates have continued to improve and we expect this trend to continue as we make further refinements. Additionally, the continued month over month sequential growth of our Hollywood Casino standalone app coupled with our improved OSB cross-sell efforts are driving material growth in our iCasino users, volume, revenues and market share. The success of our standalone app is incremental to our overall iCasino performance with minimal cannibalization of our in-app iCasino products. On top of the Q2 momentum, July marked our highest ever iCasino GGR in both Pennsylvania and Michigan. Turning to slide 14, we continue to enhance our ESPN bet offering by introducing engaging new features such as the ability for customers to evaluate player statistics in relation to player prop bets. The benefits of the continued rollout of our new offerings is driving engagement. Since the spring, we have seen strong and consistent -over-year growth in first-time bettors, which are most recently up over 50% -over-year in July. Similarly, first-time deposits have more than doubled -over-year in July. Notably, our promotional expense as a percentage of handle has remained stable in the low single digits. Further, as we announced earlier this week, this football season will mark the launch of FanCenter, an exciting feature which leverages our connectivity with the ESPN ecosystem to enable players to bet on their favorite teams, players and fantasy lineups in ESPN bet. The dedicated hub powered by account-linking technology with ESPN creates the ultimate interconnected media, betting and fantasy experience. In addition to fantasy-related markets within FanCenter, a new find a bet icon on the ESPN fantasy app will allow players to view ESPN bet markets related to their roster and add selections directly to their ESPN bet slip. Last year, ESPN fantasy football set an all-time mark with more than 13 million playing the game. Opportunities like this to leverage the nation's number one fantasy app is a big part of why we did the deal with ESPN, and we look forward to continuing to work together to unleash the full value of this partnership. And with that, I'll turn it over to Felicia.