Boyd Gaming Corporation

25 earnings conference call. My name is David Strau, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today's call, which we are hosting on Thursday, February 5th, 2026.

At this time, all... available at investors.boydgaming.com.

We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project special charges and certain expenses. Today's call is being webcast live at boydgaming.com and will be available for replay in the investor relations section of our website shortly after the completion of this call. With that, I would now like to turn the call over to Keith Smith. Keith?

Thank you, David. Good afternoon, everyone. 2025 was another successful year for our company as we continued to build upon our strong foundation, position our company for further growth, and deliver long-term value for our shareholders. For the full year, our operations continued their steady performance as we achieved record company-wide revenues. EBITDA for the year was approximately $1.4 billion, while property-level margins were 40%, both consistent with last year's. These results were supported by our diversified operations, continued growth in play from our core customers, and our focus on operational discipline and efficiencies. Beyond our operating performance, our company had several significant achievements throughout the year. In July, we unlocked a considerable value of our FanDuel ownership interest, generating cash proceeds of nearly $1.8 billion for our shareholders. We utilized these proceeds to reduce leverage below two times further fortifying our already strong balance sheet. Throughout the year, we continue to enhance the competitiveness and growth potential of our properties across the country through our ongoing capital investments. We further diversified our nationwide presence with the debut of our transitional casino in Norfolk, Virginia. And given the strength of our financial position and robust free cash flow, we returned more than $800 million to our shareholders in 2025, reducing our total share count by 11%. Following our successful performance in 2025, we are optimistic about 2026. In our Las Vegas local segment, we will benefit from two new investments, the opening of our new Cadence Crossing facility at the end of the first quarter and the completion of our Suncoast modernization project in the third quarter. In our Midwest and South segment, we will benefit from a full year of contributions from our meeting and convention center expansion at Ameristar St. Charles, and from incremental revenues and profits from our recent hotel room renovations and food and beverage improvements throughout the region. In both Nevada and the Midwest and South, we continue to see strong play from our core customers in improving trends among retail players in 2025. Building on these positive customer trends, we expect the implementation of last year's tax legislation will benefit consumer spending across the country in the coming months, particularly in Southern Nevada, given the unique demographics of this region. Our online segment will be supported by the continued growth of Void Interactive, and our managed and other business will benefit from the opening of a casino floor expansion at Sky River later this month. Now, turning to the fourth quarter. On a company-wide basis, revenues were $1.1 billion, while EBITDA was $337 million. These results reflect continued growth in gaming revenues, led by strong play from our core customers. Year over year, EBITDA comparisons in the quarter were impacted by approximately $40 million, primarily due to changes in our online segment, as well as severe winter weather in December. Adjusting for these items, company-wide EBITDA was even with the prior year, reflecting our operational discipline and cost controls throughout our business. Now moving to segment results. In a Las Vegas local segment, overall revenue trends were consistent with the third quarter, with growth in gaming revenues and declines in cash hotel revenues related to ongoing softness in destination business in the fourth quarter. Higher gaming revenues during the quarter were driven by continued growth in play from our core customers, with strong demand from Southern Nevada residents. This growth in gaming revenue would have been even stronger had it not been for the softness in destination business during the quarter. This weakness in destination business resulted in a decline of nearly $6 million in cash hotel revenues versus the prior year, with the majority of the decline coming at the Orleans consistent with what we experienced in the third quarter. Excluding the Orleans, our Las Vegas locals' business achieved EBITDA growth of nearly 2.5% in improvement over the third quarter, as margins once again exceeded 50%. Looking to 2026, we expect our Las Vegas Locals business will benefit from the opening of Cadence Crossing Casino late in the first quarter, the completion of the Suncoast project, and benefits to consumer spending from last year's tax legislation. In all, we remain confident in the long-term prospects for our Las Vegas Locals business. Next, in our downtown Las Vegas segment, play from our Hawaiian guests and our core customers remain stable in the fourth quarter. These trends were offset by an approximately 10% decline in pedestrian traffic on the Fremont Street experience during the quarter, as well as lower cash hotel revenues, both of these reflecting weaker destination business throughout the Las Vegas market. Next, our Midwest and South segment benefited from continued growth and play from both our core and retail customers during the quarter. However, year-over-year revenues and EBITDA were impacted by severe winter weather in December, as well as the permanent closure of Samstown Tunica in November. The combined EBITDA impact of weather and the Tunica closure was approximately $4 million during the quarter. After adjusting for these items, segment EBITDA grew by roughly 2% in line with our third quarter results. Looking ahead, we expect to benefit from our recent investments in non-gaming amenities throughout the Midwest and South, including the completion of hotel room renovations at the I.P., Valley Forge, and Diamond Joe Worth. We also expect incremental growth at Ameristar St. Charles following the opening of its expanded meeting and convention center this past September. Since the opening of this expanded facility, we have experienced significant levels of interest and strong forward bookings for this new space. And, similar to our Las Vegas segments, we expect our customers in our Midwest and South markets will continue to stay and spend closer to home with consumer spending supported by the economic benefits of last year's tax legislation. Next, our online segment achieved EBITDA of $63 million for the full year, driven by a solid performance from Boyd Interactive and contributions from our third-party market access agreements across the country. Looking ahead, we project our online segment will generate EBITDA of $30 to $35 million in 2026, reflecting continued growth from Boyd Interactive and changes in our revenue share agreements related to the FanDuel transaction last year. Finally, in our Manage Another Business, management fees from Sky River Casino continued to grow. And with the first stages of Sky River's expansion project nearing completion, we are confident this growth will continue into 2026. The first phase of this expansion is expected to come online at the end of February. adding approximately 400 slots and a 1,600-space parking garage adjacent to the property. Following the opening of this first phase, we will begin construction on phase two. Scheduled for completion in late 2027, this next phase will add a 300-room hotel, three new food and beverage outlets, a full-service spa, and an entertainment and events center. With the opening of Sky River's casino floor expansion in late February, we project our managing other business will generate EBITDA of $110 to $114 million in 2026. So in all, our successful performance in 2025 was supported by continued strength and play from our core customers and strong returns from the capital investments we have been making across our portfolio. Building on the success of our recent capital investments, we will continue reinvesting in our properties in 2026 to enhance the overall customer experience and drive growth from our existing portfolio. For example, in January, we completed our hotel room renovation at IP Biloxi, the largest hotel in our Midwest and South segment. Work is now underway on hotel room renovations at the Orleans, where we expect to complete work in the fourth quarter of this year. We will also soon begin a hotel room update at Suncoast, which we expect to be complete by the end of the year. With the completion of these projects, we will have updated approximately 60% of our nationwide hotel inventory over the last several years. Separately, the modernization of our Suncoast property is well underway, with nearly half of the casino floor now complete. The property has continued to perform well throughout the construction process, further increasing our confidence in the growth potential of this investment. We expect this project to be completed toward the end of the third quarter of this year. Once our Suncoast Casino remodel is complete, we plan to start a similar project at the Orleans during 2027. In addition to these property enhancements, we are continuing our growth capital investments nationwide. We plan to open Cadence Crossing Casino in late March, enhancing our Las Vegas locals' presence with a modern gaming entertainment facility. The adjacent community of Cadence is growing rapidly, with more than 1,200 new homes sold in 2025 alone. This is the third best sales performance of any master plan community in the country. With strong residential growth continuing throughout the neighborhood, we believe Cadence Crossing Casino will be well positioned to deliver a strong return on our investment. And with significant land still available at Cadence Crossing for future development, we will have the opportunity to expand this property to meet the growing demand. Our next growth project will be the development of a new $160 million gaming facility at Paradise in East Peoria. We are continuing to work with state regulators to finalize our plans for the development of a single-level facility with a modern new casino floor and enhanced amenities for our guests. Once we receive final approval from the Illinois Gaming Board, site preparations will begin and we anticipate starting construction in 2027. Once complete in 2028, this investment will significantly enhance the competitiveness and appeal of Paradise, positioning us for incremental long-term growth at this property. And finally, work is well underway on our $750 million resort development in Norfolk, Virginia. We reached a key milestone in November when we opened our transitional casino adjacent to our development site. While this was an important step for our Virginia project, our focus remains on the development of our permanent resort. Foundation work is now largely complete for the permanent building, and construction is now going vertical. Once complete in late 2027, this upscale resort will feature a 65,000 square foot casino, 200 room hotel, eight food and beverage outlets, live entertainment, and an outdoor amenity deck. In addition to offering market leading amenities, our resort will be the most convenient gaming destination for much of the Hampton Roads region, as well as the 15 million tourists who visit nearby Virginia Beach each year. While we continue to invest in our existing portfolio and new growth opportunities across the country, our strong balance sheet and robust free cash flow allow us to successfully balance these investments with our ongoing capital return program. We repurchased $185 million in shares during the quarter, supplemented by $14 million in dividend payments. We plan to continue repurchasing $150 million in shares per quarter, supplemented by a quarterly dividend. So in all, 2025 was a year of notable achievements for our company. Our operations delivered another year of strong and consistent results. We positioned ourselves for future growth as we continue to invest in property improvements and growth projects. We also return more than $800 million in capital to our shareholders in 2025. And we unlock significant value for our shareholders through the FanDuel transaction, allowing us to further strengthen our financial position. Looking ahead, we are well positioned to build upon the strong foundation we have created as we continue to invest in our nationwide portfolio. And with positive customer trends across the country and strong results from our capital investments, we are confident in our ability to build on our success and continue delivering long-term value for our shareholders. I'd like to conclude my remarks by thanking our entire team for their contributions to our company. Thanks to their hard work and dedication, we delivered yet another successful performance for our shareholders. Thank you for your time today. And now I'd like to turn the call over to Josh.

Thanks, Keith. 2025 was another successful year for our company. We generated EBITDA of approximately $1.4 billion, consistent with each of the last five years. Revenues achieved record levels while property operating margins remained at 40%. On a company-wide basis, play from our core customers continues to grow, accompanied by increased play from our retail customers. Our diversified portfolio consistently generates substantial free cash flow, which we are actively deploying to create long-term value for our shareholders. Our strategy for value creation is built upon investing in our properties, growing our portfolio, and returning significant capital to our shareholders while maintaining a strong balance sheet. In terms of investing in our properties, during the fourth quarter, we spent $148 million. bringing total capital expenditures to $588 million for the full year. Our capital investments are focused on strengthening our overall customer experience as well as targeted growth projects. For full year 2026, we expect capital expenditures to approximate $650 to $700 million, including $250 million in recurring maintenance capital, $75 million in growth capital related to Cadence Crossing and Paradise, $250 to $300 million related to our Virginia project, and $75 million related to additional hotel room renovations. As an aside, this should be the last year of our incremental hotel capital spend. Our recurring maintenance capital budget will continue to include our recurring hotel spend. In addition to our property and growth capital investments, we are utilizing our free cash flow and strong balance sheet to return significant capital to shareholders. During 2025, we returned $836 million to shareholders in the form of dividends and share repurchases. $58 million in dividends and $778 million in share repurchases. For the full year, we repurchased 10.1 million shares at an average price of $76.91 per share, with our actual share count finishing the year at 76.4 million shares, a reduction of 11% from year-end 2024. Since October 2021, the month we began our capital return program, we've returned more than $2.7 billion to our shareholders in the form of recurring dividends and share repurchases. reducing our share count by 32% over that time period. During the fourth quarter, we paid $14 million as a regular dividend of 18 cents per share and repurchased $185 million in stock or 2.3 million shares at an average price of $81.18 per share. Going forward, we expect to maintain repurchases of approximately $150 million per quarter supplemented by our regular quarterly dividend. This equates to more than $650 million per year, or more than $8.50 per share. Moving to the balance sheet, as a result of last year's FanDuel transaction, we finished the year with total leverage of 1.7 times and lease-adjusted leverage of 2.2 times. During the first quarter, we will pay approximately $340 million for tax credits that will satisfy our tax obligations related to the fan door transaction. We anticipate that leverage will approach approximately two and a half times in 2026, taking into account this tax credit payment, as well as our capital investments and our ongoing capital return program. In terms of our 2026 outlook, across our portfolio, we expect customers to continue to spend closer to home. which was a key driver of our business in 2025 for both our Nevada and Midwest and South businesses. We also expect to benefit from the opening of Cadence Crossing in March, the completion of the Suncoast renovation in the third quarter of 2026, and a full year of new meeting and convention space at Ameristar St. Charles, as well as the economic benefits to consumers from last year's tax legislation. As Keith noted, we expect continued growth from both Boyd Interactive and management fees from Sky River. Also keep in mind, as you think about the first quarter of 2026, the significant weather events in January impacting our results in the Midwest and South. So as we begin 2026, we remain confident in the strength of play from our core customer, the investments we're making, and our ability to create long-term value for our shareholders. David, that concludes our remarks, and we're now ready to take any questions.

Thank you, Josh. We will now begin our question and answer session. If you would like to ask a question, please press star then one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to withdraw your request, please press star then two. If you are using a speakerphone, please use your handset when asking your question. We will pause for a moment while we compile our list of questioners. Our first question comes from Barry Jonas of Truist Securities. Barry, please go ahead.

Hey, guys. It's Patrick Keogh on for Barry. Nice quarter, and thank you for taking our questions. First, we'd like to dig into locals play a little bit more. Could you possibly bifurcate between real locals play and destination locals play? How have each trended in Q4 and into the new year? Thank you.

Yeah, so when we look at our Las Vegas locals market here, what we saw during the quarter, and we saw this in the third quarter also, was very strong play from Las Vegas local residents, people who live here and participate with us. The real weakness, and we saw that in Q3, we saw it again in Q4, the real weakness was in true destination play, regional play, people coming in from out of town, staying with us. That's what resulted in a $6 million decline in hotel revenue, primarily at the Orleans because it's our biggest hotel, which is slightly elevated from Q3 where it was $5 million. So the core Las Vegas locals market is strong. The destination part of that, which really for Boyd is focused at the Orleans, is where the weakness is. But the rest of the market is strong.

And the only thing to reiterate is in our comments, I think we've pointed out, you know, the destination business, you can kind of see the most obvious impact in hotel revenues, right? You saw it in Q3. You saw it in Q4 in terms of a $5 million to $6 million decline in cash revenues. But it also is more broadly impacting our business. It affects the amount of gaming revenue we're reporting, the amount of F&B And while it is primarily Orleans and primarily a Las Vegas phenomenon, to some degree it's affecting larger hotel products, even in the Midwest and South, like at IP, for instance, which is our largest hotel product outside of Las Vegas. It's also being impacted to some degree by weakness in destination or our customers' willingness to travel.

That's very helpful. Thank you for the color. As our follow-up, your balance sheet is in a great spot. Could you share any updated thoughts on the M&A pipeline or overall environment on whole assets or opcos? Thanks again.

Yeah, look, we obviously over the years have been very active in the M&A area, not in the last five or six years, but historically we have been. We remain interested. We remain open to it. We do look at things. We have the same very disciplined approach today that we've had over the years in terms of making sure it's kind of the right asset and the right market at the right price. And so a lot of things go through the top of the funnel, and it's just that at the end of the day, thus far in recent years, nothing's kind of come out of the bottom of the funnel. But we remain interested, and we continue to look at things, and I'm not sure there's a lot more I can say.

The only thing I would add is I think that we have probably the most capability to make an acquisition that we've ever had in terms of the strength of our balance sheet. But I think just because we can doesn't mean we necessarily will. It has to be the right opportunity. And in the meantime, we'll continue to remain focused on operating our business efficiently, reinvesting in our portfolio, not only to improve the overall customer experience, but kind of enhance the growth of that portfolio, things like Virginia, things like Cadence, things like the Ameristar meeting space. And then as long as our stock continues to create value for us, we'll continue to buy, continue to return capital to shareholders.

I appreciate the caller. Thanks again.

Sure.

Thank you. Our next question comes from David Katz of Jefferies. David, please go ahead.

Hi, evening. And thanks for taking my question. I wanted to follow up on that second topic. You know, Keith, you sort of characterized the, you know, the right market, right price, the right, you know, characteristics. Can you just shed a bit more light into that? And, you know, I know we've always had conversations about, you know, structure being, you know, holdco versus opco and propco, etc., What are your current views with respect to those frameworks as you look at stuff?

Yeah, so with respect to M&A, the discipline hasn't changed over the years with kind of being the right market and the right asset and the right price and the right terms. The way the industry has evolved over the years, which is a lot more opco in existence than a decade ago, we acknowledge that in order to buy certain assets, we're going to have to accept an APCO structure. That is fine with us. We prefer to buy Holco. We prefer to have Holco assets, but we are not letting structure deter us from acquiring the right asset. And so, once again, while we prefer Holco, we're willing to accept APCO, but at the end of the day, it goes back to the right asset, the right price, the right market, the right time. So, um, structure is not, is where they stop. Go prop goes, not really an issue for us.

Understood. And if I can just follow up one more time on that, um, should we assume that, um, you know, operating improvements or operating execution on your part would be, you know, one of the ways that you can add value, but you would also consider sort of putting capital into a target, you know, as appropriate, um, you know, that's on the table as well.

Look, I think if you look at our past acquisitions, well, I'd have to go through and check the box, but to a large extent, you know, every one of them have improved EBITDA as a result of better execution, and many of them have received additional capital. You know, we bought Ameristar St. Charles in 2018, and we just spent money to expand their meeting convention center and do a few other things. So we would absolutely invest in these properties to help them continue to grow or improve their competitive position as part of an acquisition, absolutely.

Okie doke. Thank you.

Thank you. Our next question comes from Ben Chaiken of Mizuho. Ben, please go ahead.

Hey, thanks for taking my question. This is really a two-part. So a few calls ago, you know, you mentioned that 40% of your customer base was 65 and older. I guess, number one, can you remind us, was that the overall company or was that just kind of the Nevada segment? And then part two is, you know, obviously there's some other changes related to the one big beautiful bill or the tax bill. depending on tax bracket, or you've got SALT, SNAP, so obviously some good, some not particularly helpful. Where do you think your Midwest and South customer nets out? Is it a positive, negative, neutral? And then how do you think about the variables for that customer? Thanks.

So the roughly 40% of our customer base being 65 plus was company-wide. With respect to the one big beautiful bill, Look, I think whether it's the Nevada consumer or the Midwest consumer, they're going to receive a benefit, and we expect that they will receive a significant benefit in the early part of this year. Obviously, we think Southern Nevada will get an outsized benefit simply because of the unique demographics we have here with a number of tip workers, a number of retirees in this town. But clearly, we expect, and based on work we've done, we expect that our Midwest customers will also get a good benefit from the one big, beautiful bill. Now, what ultimately that is, what they do with it, how much of it shows up in our business, TBD, obviously. It's too early to tell. It's only, you know, 1st of February, so we'll be watching and following it closely, but we do expect there to be, you know, very positive impacts to consumer spending, both in Nevada and across the country, from the tax legislation.

Got it. But it doesn't sound like you're concerned around any of the snap changes impacting your customer cohorts. Is that a fair submission?

That is a fair comment.

Okay. And then just one quick one. I think we were expecting Suncoast to be at kind of peak margin disruption in 3Q, 4Q of this year. Is there any way to quantify the 4Q impact, either the margins or EBITDA from the Suncoast disruption? Thanks.

So as we think about this year, 2026, we'd expect that project to be complete to the end of Q3. And therefore, you know, Q4, we should be starting to see, you know, see the benefits of not having construction disruption. The impact of construction, you know, significant in Q2 and Q3. Sitting here today, I'll have to look at Josh to see if he has any commentary on the potential impact. I don't have it for you.

I think what we've been surprised at is that the ability to discern the disruption has been minimal. So the property has actually been doing pretty well, maintaining year-over-year performance or actually growing in some quarters despite the disruption that's been going on at the property. So the property management teams and the operating teams have done a really good job of managing through it. I think the real question is, how much better could it have done without the construction? That's a difficult number to come up. I'd just say, at this point, we've managed through it without the disruption that we expected. The guys have done a great job with that. We'll continue to work through it and not really expect much in the way of change of performance than what we've seen since we started the project. But we'll kind of live through it and report on it as we see it if it occurs. But I'd say today we don't expect to see much.

I appreciate it. Thank you.

Thank you. Our next question comes from John Decree of CBRE. John, please go ahead.

Hi, this is Max Marsh on for John Decree. Thanks for taking my question. I was wondering if you could give us some updated expectations out of the temp in Virginia from an operational perspective. Previously forecasted break even there, but revenues look pretty good so far. Can you guys make some money there before the permanent opens?

I think the guidance we've given on that and the guidance I think you'll continue to hear from us is we expect it to break even. That's kind of the level it's running at today. you know, whether it's slightly positive or slightly negative is not big enough to move the dial for us. So you should just continue to think of it as a break-even proposition through the opening of the permanent facility in late 2027.

Great. Thanks for that.

And just as a follow-up here, there's been some chatter about iGaming expanding to a couple new states. Now that you guys have a more defined iGaming product and strategy, how do you think about your approach to new state launches? Do you have an opportunity to maybe gain a little bit more market share in a new state launch?

Yeah, look, we're obviously supportive of iGaming around the country. And so as it looks to expand, they're looking at bills in a number of states, including Virginia right now, to pass iGaming legislation. So We're supportive of it as long as the bill has all the right elements and is a fair bill. We're supportive, and we look to be able to expand. So we're paying attention to all the states that are talking about iGaming and looking for a way to participate. Void Interactive has been a good source of growth over the last year or two, and we expect it to continue to grow. And we'll grow, frankly, quicker as other states adopt or legalize iGaming.

Thank you very much.

Yep.

Thank you. Our next question comes from Steve Wisinski of Steeple. Steve, please go ahead.

Hey, Keith. Hey, Josh. Good afternoon. So, Josh, I'm going to try to ask a guidance question without asking a guidance question. You know, Keith gave us some help in terms of, you know, how to think about the online, how to think about managed In the past, Josh, you know, I think from a high-level perspective, you've kind of given some thoughts, you know, around the locals market downtown, Midwest and South, maybe just how you're thinking, you know, about the year, headwinds, tailwinds. You know, can you grow those markets? Is there margin opportunity? I guess any kind of high-color or, you know, high-level remarks would be helpful. Thanks.

Yeah, so I'll try to help, Steve, and then Keith, jump in if you think I missed anything. I think... In Las Vegas, I think the real uncertainty is when does the destination business turn around? We don't really have any visibility at this point given destination softness was consistent between Q3 and Q4 in our view. So I think as we look at the Las Vegas locals, we are pleased with all of the properties. Destination is largely affecting the Orleans. So outside of the Orleans, Our properties are growing in revenue. We're maintaining our margins above 50%. We expect that to continue going forward. I think as we get into the second half of the year, there's the possibility that we can do better just relative to comping to destination business. And by that, I mean, I don't know if that means growth or if that means just less bad, but I think the comparison will get a little bit easier in the second half of the year, and that's pretty obvious. I think we'll obviously be benefited by cadence coming online, call it the end of March. And I think that, as Keith mentioned in his remarks, we should see good consumer kind of health or fortification from the benefits here in Las Vegas in particular because of the limited tax on tips and standard deductions and things of that nature. Look, I think in the Midwest and South for us, just moving there and excluding weather where we've already seen pretty significant weather in January, and we were hopeful that we were past the really bad weather that we saw in the first quarter of last year, but it seems like we're living through it again this year. But I think we're encouraged by what we're seeing, and really this is true of Las Vegas as well as the Midwest and South. The core customer continues to be good. We continue to see good trends in the retail customer piece of our business. And that may sound counterintuitive because then at the same time, you know, we're having trouble in some areas because of destination business. That's a subset of those customer bases. But away from that, those customers are doing, those customer segments are actually going quite well. So I think we really need destination to turn around to really have a business that is well-positioned given our margin and discipline around operating. I think in the Midwest and South will continue to benefit, as I stated in my remarks, people staying close to home, Ameristar St. Charles meeting space. And so I think there's growth potential in both of our areas. Las Vegas segments and our downtown segment, but it could be stronger if destination kind of came back to the table. And we just don't have visibility to that. So, Steve, I hope that gives you some comfort or some answer to your question. I don't know if there's anything else you would want to ask about that, but happy to try to address it.

Yeah, no, that's great. Thanks, Josh. And then real quick, second question. The You obviously called out weather so far in the first quarter. I don't think you quantified it yet, or I don't think you quantified it. But just as we kind of think about modeling out the first quarter, how material was January in terms of an impact on the Midwest and South, just so we can kind of reset our models?

Yeah. So I would say at this point, it's very similar to last year. So, you know, last year I think we quantified about a $5 million impact, and I would say that's what we've seen approximately so far this year.

Yeah, it's very curious. We sat here a year ago on this same call and had $5 million worth of weather in January, and that's what it looks like this year.

Yeah. Okay. So Q1 this year right now is feeling a little bit like Q1 last year for the Midwest and South.

Okay, got it. That's great color. Thanks, guys. Really appreciate it.

Thank you. Our next question comes from Jordan Bender of Citizens Bank. Jordan, please go ahead.

Hi, everyone. Good afternoon. Thanks for the question. I want to circle back on the comments around the weaker destination play across some of the larger properties in the regions. It was something maybe newer that we've heard. Is this something that started when we started to see some of the weakness in Las Vegas last summer? Is this more of a newer trend that you're starting to notice?

I think you probably need to narrow Josh's comment, depending on how you heard it. The largest hotel we have outside of Las Vegas is the IP in Biloxi at 1,000 rooms. And that's really what Josh was referring to. The other rooms are in the 200 to 400 category and are not being impacted by destination business. They generally run pretty good occupancies and pretty good rates. And so it really is about the IP. And the IP has been impacted for probably the last six months, just like Las Vegas. So you should think about it as the IP, not a broader issue.

Understood. Thanks. Josh, this might be splitting hairs a little bit, but you said two and a half times least suggested leverage in 26. Is that you'll get to there at some point of the year? Is that a year-end kind of target we should be thinking about?

Yeah, so that was meant to, I'm glad, thank you for clarifying. Not only am I thankful that Keith is here to interpret my comments for you guys, but thank you for asking this question to help me clarify. The two and a half times was traditional leverage, Jordan. So, you know, we're at, I think I said 2.2 times lease adjusted right now. So, the lease adjusted would be north of the two and a half times, probably just under three if I was estimating. I think that The two and a half times obviously depends on people's expectations for the business and CapEx programs and spend and the timing of all that. But, like, kind of based on how we're thinking about it, that would have been a year-end type of estimate for 2026. Great.

Glad I asked, and thank you very much. Thanks.

Thank you. Our last question today comes from Daniel Pulitzer of J.P. Morgan. Daniel, please go ahead.

hey good afternoon everyone thanks for squeezing me in um i wanted to follow up on that the comments on virginia um it sounded like you guys were pretty supportive which i think was would be surprising just given you know you're building this big property there can you can you maybe help us better think through why that might be the case um and kind of how you're thinking about the the the chances that this actually goes through and you know passes legislation

Well, look, I'm not going to provide any commentary on its chances of passage, but I think with respect to being generally supportive of it, once again, depending on exactly what's included in the bill, right? We're supportive of iGaming as a concept in states around the country, but the devil's always in the detail and what's included in the bills and what's the tax rate and how many skins and a variety of other factors. Set the details aside for a second. The Look, we've always been supportive of iGaming or iCasino. We think it is complementary to the business. I know some in the industry feel like it is detrimental. We think it's complementary. We've been involved and around the fringes of this for years. We see it as a new customer base. We've lived through this, whether it be in Pennsylvania, whether it be in New Jersey in the very early days when they launched iGaming and we were part of that. We've seen it evolve. We understand the customer. We understand who it is and who it isn't and how it can benefit the land-based properties. And so it just broadens the overall appeal of our product. It broadens the customer base. We don't think it is detrimental to the overall business. That's just our own philosophy. We know that many agree, and we certainly understand that some don't.

Right, that's helpful. And then just following up on the locals business, right, there's obviously a good degree of concern out there on the demand for the strip. And, you know, if that could bleed into the locals business, you know, given it's a much more diversified economy, how are you thinking about that risk? Is this something that you're concerned about? Have you seen any kind of signs of a little bit of fatigue or softening from that customer base?

No, we haven't, whether it be kind of the current situation or in years past when the business on the strip has ebbed and flowed, we haven't really seen an impact to the overall locals market. As we commented a couple of times through the course of this call, in our Las Vegas locals business, the real strength is from people who live here and play with us here, the true local residents, Southern Nevada residents. And so we're not seeing anything bleed over. those are not customers who are generally going to go and play on the strip. And once again, as we get into 2026, we expect consumers across Southern Nevada to, you know, have more discretionary income as a result of the tax legislation from last year. So nothing concerning, nothing we're seeing, nothing I'm worried about sitting here today.

Yeah. And Daniel, the one thing I would add is, or a couple of things I would add is, is, you know, when you look at the performance of the portfolio and can kind of narrow down the destination impact to just the Orleans. You see, our business continues to perform pretty much as it has over the last several years in terms of the locals business. You know, we continue to see revenue growth. We continue to see our ability to drive margin efficiencies and EBITDA growth. And really kind of the focus of the weakness in our business has been destination, and that's focused on the Orleans. And so I think that, you know, if we were starting to see impacts beyond kind of some kind of bleeding over from the challenges the strip are facing into our business, I think we would see it in other parts of our business as well. We're just not seeing it in our – everything we see in terms of kind of a near-term outlook don't suggest that either.

Got it. Thank you so much. Thank you. This concludes our question and answer session. I'd now like to turn the call back over to Josh for concluding remarks.

Thanks, David, and thank you to each one of you joining our call today. I know at times you can have competing demands on your time, so we appreciate you allocating some of that to us. If you have any follow-up questions, feel free to reach out to the company, and we'll be happy to assist. Thank you.