Boyd Gaming Corporation

Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. and many more. Thank you. Thank you for watching. Good afternoon, and welcome to the Boyd Gaming Second Quarter 2026 Earnings Conference Call. This is David Strow, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today's call, which we are hosting on Thursday, July 23, 2026. At this time, all lines are in listen-only mode. Following our remarks, we will conduct question-and-answer sessions. If at any time during this call you require immediate assistance, please press star then zero for the operator. Our speakers for today's call are Keith Smith, President and Chief Executive Officer, and Josh Hirsberg, Chief Financial Officer. Our comments today will include statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. All forward-looking statements in our comments are as of today's date. and we undertake no obligation to update or revise the forward-looking statements. Actual results may differ materially from those projected in any forward-looking statement. There are certain risks and uncertainties, including those disclosed in our filings with the SEC, that may impact our results. During our call today, we will make reference to non-GAAP financial measures. Complete reconciliation of historical non-GAAP to GAAP financial measures Please refer to our earnings press release and our form 8K, furnished to the FCC today, both of which are 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. We'll be available for replay in the investor relations section of our website, shortly after the completion of this call. So with that, I would now like to turn the call over to Keith Smith. Keith?

Thanks, David. Good afternoon, everyone. Our second quarter results reflect the continued benefits of our diversified business model, success of our ongoing capital investment program, and broad-based growth and play across our customer segments. On a company-wide basis, revenues increased 3% and EBITDA grew 2% for the quarter when adjusting for the impact of last year's FanDuel transaction and the tax pass-through amounts related to our market access agreements. This performance was led by strong growth across our Midwest and South segment, solid contributions from Boyd Interactive, and increased management fees from Sky River. We also maintain operating efficiencies throughout the business, delivering property operating margins 40%. Thank you for joining us.

and our local customer.

And while we are only three weeks into the third quarter, the overall trends of the second quarter are continuing into July. Now looking at our results by segment. First, our Midwest and South segment delivered a strong performance on top of last year's solid results. Revenues grew 3% in the quarter led by growth in gaming revenues, while EBITDA grew 4% with property margin are expanding to nearly 38%. This was the segment's strongest margin in almost two years, demonstrating our continued ability to drive operating efficiencies throughout our business. These results were supported by growth and play from both our core and retail customers. Our guests continue to stay and spend closer to home. We're also benefiting from our property investments throughout the segment, our recent hotel renovations, and new food and beverage offerings contributing for strong performance across the Midwest and South. In addition, we continue to deliver growth at properties where we have made larger or strategic investments such as Treasure Chest and Ameristar St. Charles. Moving to our Las Vegas locals segment. While our Las Vegas locals business continues to be impacted by softer destination business and ongoing construction activity at the Suncoast, Overall gaming revenues for the segment were, even with prior year, with stable play from our core and retail customers. Excluding the Orleans and Suncoast, the remainder of our Las Vegas local segment achieved solid results for the second quarter. Revenues from these properties increased 4% in the quarter, driven by increases in gaming revenue, while EBITDA grew 3%, and margins once again exceeded 50%. The growth in gaming revenue is driven by increased play for our core and retail guests, demonstrating the underlying strength of our local's customer. And while results of the Suncoast for both our first and second quarter were impacted by construction activity, we expect to finalize our renovations of the casino floor and other public areas by the end of the third quarter. Once this work is complete, We will have modernized all public spaces in the building, including the entire casino floor, the sportsbook, bingo room, and the high limit room. And we will have significantly enhanced our food and beverage offerings, expanded and refreshed the property's meeting space. As a result, expect to deliver improved performance of the Suncoast starting in the fourth quarter. We are also finalizing plans for a refresh of the Orleans Casino floor and public spaces. We expect to begin this work at the Orleans in the first half of next year. At Cadence Crossing, visitation and revenues have been strong since its debut in late March, and we remain confident we will achieve our long-term return on this investment. Beyond these projects, we continue to invest in our properties throughout the Las Vegas Valley. We recently opened new restaurants at Gold Coast, Sam's Town, and Suncoast, and plan to introduce others throughout the Las Vegas Valley in the coming months. We have hotel renovations underway at the Orleans and Suncoast, both of which are expected to be complete by year end. And we are updating our sportsbook at Samsung and Aliante, both opening in time for the upcoming football season. In all, by early next year, we will have renovated over 70% of our Las Vegas hotel room inventory, introduced 17 new food and beverage concepts, and significantly enhanced our Southern Nevada presence with our new Cadence Crossing property and the investments we are making at the Suncoast. Together, these investments are elevating the competitiveness and the appeal of our Las Vegas Locals portfolio and positioning this segment for long-term growth. Our confidence in our Locals business is also supported by the growth of the Southern Nevada economy. Southern Nevada employment is increasing at the fastest rate of any major metro area in the country. Job growth is occurring across most major employment sectors. Further diversifying a local economy has added more than 200,000 jobs outside of the hospitality sector over the last decade. Employment growth is also driving further gains in local income, with weekly wages increasing at more than twice the rate of the national average. And Las Vegas remains an attractive destination for relocation. offering one of the most competitive cost-of-living environments in the Western United States. In all, Southern Nevada's continued growth in population, employment, and personal income support our confidence in our long-term prospects for our Las Vegas locals' business. Next, in our Downtown Las Vegas segment, trends in the business were consistent with recent quarters. While play from both core and Hawaiian guests was stable, Our downtown business was impacted by lower pedestrian traffic throughout the downtown area, reflecting continued softness in destination business. Next, our online segment achieved revenue and EBITDA growth on a comparable basis. These results reflected strong growth from Boyd Interactive, as well as contributions from our market access agreements that were consistent the last several quarters. Finally, our managed business grew EBITDA by 18% year over year. This outstanding performance was driven by the recent completion of the first phase of the Sky River expansion project, significantly increased the casino floor, and added a new multi-level parking structure. With phase one off to a strong start, we've now begun the work on phase two, which will add a 300-room hotel, three new food and beverage outlets, a full-service spa, and a new entertainment and event center. Once complete in early 2028, we are confident this expansion will further strengthen Sky River's position as one of Northern California's most successful and popular gaming destinations. So in all, our second quarter performance is driven by our diversified business model, broad-based growth and play from our core and retail customers, and the success of our recent capital investments. While we are investing in our properties across the country, We also continue to follow the development pipeline to drive long-term growth. In Virginia, our resort development on the Norfolk waterfront remains on time and on budget for a late 2027 opening. Once complete, the subscale resort will be a true market leader. A 65,000-square-foot casino, two-in-a-room hotel, eight food and beverage outlets, live entertainment, and an outdoor amenity deck. will also work for the most convenient gaming destination for many of the 1.8 million residents of the Hampton Roads region, as well as the 15 million tourists who visit nearby Virginia Beach each year. Next, in Illinois, our modernization of the Paradise Casino is in the design phase. Once complete, this project will transform Paradise into a single-level entertainment facility with a modern casino floor and enhanced amenities, positioning this property for growth well into the future. With Paradise in the design process, we're gearing up for our next growth projects. One such project is in Louisiana at our Amelia Bell property. Subject to regulatory approval, we're planning to convert this property to a land-based facility with a modern casino floor and enhanced food and beverage offerings. Once design work is complete, we expect to begin construction on this project in late 2027. As we invest in future growth of our business, We continue to balance our capital investments, our commitment to returning significant capital to our shareholders. To that end, we returned over $170 million to our shareholders during the second quarter in a combination of share repurchases and dividends. Going forward, we intend to continue repurchases at a $150 million per quarter base, supplemented by our quarterly dividend. In summary, this was another successful quarter for our company. On a company-wide basis, we grew both revenues and EBITDA on a comparable basis with strong performances for our Midwest and South operations, our online segment, our managed business, and much of our Las Vegas locals portfolio. We continue to drive growth and play from our core and retail customers on a company-wide basis. The capital investments we have made in our properties supported growth during the quarter and position our properties for future success. In addition, we continue to build our development pipeline to drive long-term growth. And we continued our commitment to returning capital to our shareholders, repurchasing nearly 1.9 million shares in the second quarter alone. Supported by a strong balance sheet, efficient operating model, and robust free cash flow, our company is well positioned for the future and to continue creating long-term shareholder value. I'd like to thank the entire Boyd team for their contributions to our continued success. Their hard work and dedication helped create memorable experiences for our guests, and we are grateful for all they do for our company. Thank you for your time today, and I'd now like to turn the call over to Josh.

Thanks, Keith. During the quarter, our Midwest and South segment delivered another strong performance, pivoting revenue and EBITDA growth, as well as achieving margins that were their highest in nearly two years. and in our online managed segments, we also produce strong results on a comparable basis. And in Las Vegas, excluding Orleans and Suncoast, the Las Vegas local segment generated revenue and EBITDA growth while continuing to deliver margins over 50%. As a result of Void Interactive's strong performance, we are raising four-year guidance for our online segment by $5 million. Thank you. Thank you. We remain on track to spend between $650 million and $700 million for the full year. Our full year capital expenditure estimate includes about $250 million in maintenance capital, $75 million in incremental hotel capital associated with our Orleans hotel remodel, which is on track to be completed by the end of this year. $50 million in growth capital, primarily related to completing cadence and the design and pre-construction efforts related to our Paradise project. Finally, $300 million for our casino resort development in Virginia. In terms of our capital return program, during the second quarter we paid $15 million in dividends and repurchased 156 million, 1.9 million shares, and an average price of $83.60 per share. Our actual share count at the end of the second quarter was 73.1 million shares. We plan to continue repurchasing approximately $150 million in shares per quarter, putting us on track inclusive of dividends to return more than $650 million to shareholders this year, representing approximately $9 share in value for our shareholders. Since we began our capital return program in late 2021, we have returned over $3 billion to our shareholders, reducing our share count by 35%. Even with our capital investments plus capital return program, our balance sheet remains strong. We finished the quarter with traditional leverage of 2.2 times and lease-adjusted leverage of 2.7 times. We have ample capacity available under our credit facility, and our next debt maturity is in December 2027, which we intend to refinance later this year or in the first half of 2027. Debt balances at June 30th reflected $267 million in tax credit payments made during the second quarter that were related to last year's FanDuel transaction. And finally, as a reminder, We previously announced we had entered into an agreement to sell our Shreveport property. We expect to complete the sale of this property by the end of July. So in conclusion, our second quarter results reflected the benefits of our diversified business model, our ongoing capital investment program, broad-based growth in play from our core and retail customers. Our strong balance sheet, consistent operating performance, and robust free cash flow all position us well to continue creating long-term value for our shareholders. David, this 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. We'll then 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.

Great. Hey, guys. Keith, you mentioned guests staying closer to home in the opening remarks. Can you talk a little bit more about what may be driving growth in the Midwest and South and maybe how sensitive you think that outlook is to all the macro volatility we're seeing? Thank you.

Sure. Look, I think we've seen guests or believe that guests are staying closer to home and spending their dollars closer to home for the last several quarters. You know, whether that's a result of just everything going on in the world or higher airfares, it just appears that our Midwest and South portfolio is, you know, outperforming our Las Vegas portfolio. And so whether that's, you know, what all that is driven by or how all that comes together, you know, there's a lot going on with the consumer these days. You know, for higher end consumer, if they're in the stock market, they're doing quite well. There are tax credits from one big beautiful bill. There are larger tax refunds this year. Those are all upset by things like higher gas prices and higher inflation. So all of that nets out. As we can report, we're seeing good growth from our core customers, good growth from our retail customers in the Midwest and South. Importantly, we also see that here in Las Vegas in our locals regions. You know, the locals region, for Boyd anyways, is really affected by declines in the destination side of New Orleans. But when it comes to the Las Vegas locals customer, we see good growth there also.

Great. And that may be closing to my follow-up. I wanted to ask about the destination business and the locals. Was the negative, say, year-over-year EBITDA impact in this quarter about similar to what you guys saw last quarter? And maybe just walk us through how that shifts going into Q3 when I believe we'd last comparisons. Thank you.

Yeah, so Barry, this is Josh. I'll try to take that. So I would say that in the Las Vegas locals market or segment for us, Destination continued to be an impact. It was a similar level at around $5 million of EBITDA. That's a level we've seen really very consistently since Q3 of last year. I think when we anniversary it in Q3 of this year, it's not realistic to really expect it to kind of pivot to flat to positive. We just don't see any indication that those trends are changing. I think our expectation is things to be less bad. I think we've put a number out there around $3 million is kind of our best estimate for Q3. I think a similar amount probably for Q4, maybe a little bit not as bad as Q3, but a similar level. So destination for us has been very consistent. Don't expect to flip. just because we hadn't really seen any indication it's changing, getting worse or getting better, but I just don't think it's realistic to expect all of a sudden starting to improve once we get an anniversary. So it's kind of a less bad scenario for us. I think similarly with another impact during the quarter was Suncoast construction disruption. Keith mentioned it. It was the first quarter that we saw a full impact of construction disruption. and we estimate that to have been around about $3 million for Q2 and we expect that to be a similar level in Q3 before Suncoast comes online and starts to contribute in Q4. And then obviously the last piece of the Las Vegas locals, and you really didn't ask about this but I'll just volunteer it, is Cadence which has had a good start. in terms of revenue growth and we're kind of adjusting the expense side of things as we move through time. We expect Cadence to start contributing later in Q3 and then continue to ramp into Q4 and after. So those I think are the moving pieces that's going on within the Las Vegas market. And I think the last point I would make is that The truly local customer remains healthy for us, and that's what's on a gaming revenue side mitigating the impacts that we're seeing from destination customers and some of that construction disruption.

Great.

That's really helpful. Thank you.

Our next question comes from Steve Wisinski of Stiefel. Steve, please go ahead.

Hey guys, good afternoon. So Keith or Josh, wondering if you could go through the cadence of the second quarter in the Las Vegas Locals Market. Just trying to get a sense for maybe what you saw across the different months in the quarter and if they were pretty similar or they were dramatically different. And then Keith, you noted the first three weeks so far in the third quarter in July were similar to the second quarter. I just want to be sure that that means Outside of Orleans and Suncoast, the rest of the portfolio is performing in line with recent trends. I want to make sure I heard that right.

Yeah, so with respect to your last question, you heard it right, is that outside of Suncoast and the Orleans, the rest of the portfolio here locally as well as throughout the Midwest is performing the same as we saw in Q2. Once again, I know it's only three weeks, and we certainly expect it to continue, but it's only three weeks into the quarter. With respect to the cadence of the second quarter, every month is different. We look at the quarter in the aggregate. June was probably a little softer. May was a little stronger. April was fine. You combine them all and the quarter was pretty much what we expected. I would not take anything away from whether the fact May was a little stronger, June was a little weaker. I don't read any trends into that at all.

Steve, this is Josh. I would just add You know, Keith's comments around locals outside of Orleans and Suncoast and West and South are obviously correct. In reality, even Suncoast and Orleans are performing generally in line with what we expect, but we really hadn't seen a change in inflection in either direction or destination, and the construction disruption that we expected to occur in Q2 happened at the level that we expected as well. So I would say the business general big picture is performing just in line with what we expected coming into the quarter and all that continues to play out in a similar fashion so far in the first couple of weeks of July.

Okay, gotcha. Thanks for that, guys. And the second question would be around reinvesting in your portfolio. And I guess my question is, I mean, you've seen strong returns from the properties that you've reinvested in. So just wondering if that makes you guys think about getting a little bit more aggressive with other assets, whether that's in the regional portfolio, whether that's in the Las Vegas locals market, but any color there I think would be helpful. Thanks.

I would say that we're probably at a pace of reinvesting that we can comfortably handle right now. There's only so many things that you can do and do them in a high-quality fashion. So the team is fully engaged. We have a list of projects when we're done with these that we'll continue to engage on. But I wouldn't expect that that pace or the amount of money we spend is going to pick up. It will continue. but it won't pick up. I think we're pretty comfortable with the cadence and the trajectory we're on right now of these capital projects.

Okay, great. Thanks, guys. Appreciate it.

Yep.

Our next question comes from David Katz of Jefferies.

David, please go ahead.

Evening, everyone. Afternoon, everybody. You know, two things. You know, one, the internal investment on Amelia Bell, obviously it presents a return opportunity. You know, frankly, I'm just curious how, you know, the decision to focus on that one, you know, versus, you know, say some of the larger, you know, properties in the portfolio, or was this really just the next best opportunity?

Well, as you know, There's a number of factors that go into how we prioritize projects. It's not appropriate to go into those details at this point. It's the appropriate time to tackle Amelia Bell. It's not a one-off project. We can do multiple things at a time, and we are. Once again, there's a number of other projects that we'll continue to process, and we'll update you on as we get ready to start them. Amelia Bell doesn't postpone or take the place of anything else. It just happens to be next in line for us.

Understood. I think we all have talked about your boundaries for external M&A, and I think we probably have a pretty good sense of where some of the more obvious opportunities are, but I'd love to get a sense for what you're seeing out there, what your appetite is, and whether we might see some external property level M&A in the near term from you all.

At the risk of being repetitive or sounding like a broken record, we've had the same view on M&A. We have the same view on M&A today that we've had for quite a while. We're interested. We're always looking. It's got to be strategic. It's got to be the right asset in the right market at the right price. They have to be higher quality assets. The business is performing at a very high level. We're returning significant dollars to our shareholders. We have a strong balance sheet. And so we don't need to do M&A. But if the right opportunity comes along, we should only have our eyes open. We're not afraid to execute M&A. but once again, as it always has, has to tick those boxes. So I don't think it's any different than, unfortunately, the answer I've provided in the previous years, and it remains the same today. Nothing's changed for us. Just because we have a strong balance sheet and robust free cash flow doesn't have us be more or less aggressive.

I was repetitive first. Thanks.

Quite all right.

Our next question comes from Sean Kelly of Bank of America. Sean, please go ahead.

Yeah, hi. Good afternoon, everybody, and thanks for taking my question. Josh or Keith, I wanted to go back to locals for a second, and I think you had mentioned a bit about an ongoing or an additional renovation project at the Orleans starting in 2027, if I caught that correctly. Obviously, I think you're working on the rooms now, so could you just talk about Scope and scale there, if I caught that right, or correct me if I didn't. And then secondarily, and probably more importantly, just help us think on net, what's construction disruption going to look like in 27 versus 26 for the segment? Obviously, Suncoast and the Orleans rooms should be largely done by then. So on net, should we see a little less disruption next year than what we saw this year?

So a couple of comments. One, you heard correctly that we're in the design process for a refresh of the Orleans, the casino space, as well as the public spaces. It is one of our premier top properties and great proximity to the Strip. And so we are in the process of going through that. Don't have scale and scope to announce at this point. That'll come at a later date. As you think about construction disruption, one, we'd expect it to largely at the Suncoast, we'd expect it to largely conclude at the end of Q3. And therefore, in Q4, we expect the Suncoast to start producing better performance. As it relates to the Orleans, and I think I indicated in my prepared remarks that we'd be probably starting that project sometime in 2027, the initial part of that will be behind the Waldorf space right now. Think old phase, if you will. Therefore, there will be no construction disruption at the Orleans in 2027. There'll be no construction disruption at Suncoast in 2027. So as you think of the locals portfolio, it basically should be absent construction disruption.

Perfect. Thank you very much.

Yep. Our next question comes from Ben Chankin of Mizuho. Ben, please go ahead.

Thanks for taking my question.

If I'm not mistaken, I think you said Exxon Orleans and Suncoast Revenuity were higher year over year. I think when you gave, I think you gave a similar update a quarter ago and it was closer to flat. Am I reading too much into that or did trends sequentially accelerate? Thanks.

You heard right, you know, absent Orleans and Suncoast, we did see growth in revenues and growth in EBITDA in the remaining Las Vegas locals' properties. I'll have to see if Josh has the numbers. I don't have the numbers handy in terms of did it accelerate in Q2 versus Q1.

Yeah, Q1, I think, Ben, you're right from memory. It was more flattish in Q1, and then we saw better performance from that group of properties in Q2. And I would say that it was, you know, it was contributions from a broader set of properties as we went into Q2. And we started to see, obviously, one difference is cadence. From an EBITDA perspective, that was not contributing so well. just the mix of properties changed and contribution from revenue versus EBITDA changed based on the mix of properties.

Understood. That's helpful. And then just one quick one on downtown. Did airfares impact the Hawaiian play at all and is that something you're watching for 3Q?

Airfares is something we've been watching for years and we take a look at Every day and every week we monitored for Q2. Did not have any material impact on the visitation. The play from our Hawaiian guests was relatively stable during the quarter. It wasn't materially impacted by airfares or anything else, but it was something we do pay attention to all the time because it has the potential to impact travel from Hawaii.

From the perspective of downtown, to date it's been really all about a similar impact or a similar topic that's been destination business. It's just not getting the walk or kind of the retail traffic downtown that we typically strip when they have a destination. So just destination in general is affecting downtown as well.

Understood. Thank you. Our next question comes from Steve Pizzella of Deutsche Bank.

Steve, please go ahead.

Hey, good afternoon. Thank you for taking my question. I think you mentioned by early next year, you'll have been renovated over 70% of Las Vegas hotel rooms inventory, plus the new F&B concepts. And you have, of course, Cadence Crossing. Do you expect that to lead to getting market share in the locals region?

We certainly expect to continue to grow.

Yes, I think the reality is if you look at our Las Vegas locals market share without your Leans and Suncoast, which as we've talked about quite a bit have been impacted for different reasons, but without those two properties, you've actually grown market share Las Vegas locals market. So with Suncoast coming back online, fully renovated, with Cadence Gaining its sea legs, so to speak. It's only been open for barely four months at this point, but as it continues to grow, yes, we'd expect to continue to grow our market share there.

Okay, thank you. Then just a quick follow-up. I wanted to see if we could get an update on the current promotional environment in locals in the Midwest and South.

Not much has changed. As I've said for a couple of quarters, those folks that have been aggressive, Our next question comes from Brant Montour of Barclays. Brant, please go ahead.

Great. Thanks for the question. So I wanted to circle back to the managed business. Josh, you gave an updated look at how you expect the full year to come in. The implied back half in that full year target would seem to sort of step back from the second quarter levels. And I just want to understand what's driving that, if there's a reason for it. maybe sort of post, you know, expansion, cool down. I don't know what you're seeing, but let us, whatever you can say to help us understand that would be helpful.

It is a little bit of a slowdown from what the business we saw in Q2, only anticipating that you open something new, you got a lot of demand, and it'll settle in at a level. but that's kind of what went into the expectation. There is still an expectation that it will grow and that's why we increased the guidance overall by three million bucks.

So five. No, it was three. So that'll just get spread evenly over the two quarters.

Okay. Okay. That's helpful.

And then online, similar question, a little bit different. You did guide up. It doesn't seem like you're looking for a step back per se, or at least it's not as obvious in the online back half. But maybe you just break out Pala or, sorry, Boyd Interactive, the iGaming piece. What's the sort of... You know, cadence of momentum there. You know, this is obviously an asset that gets overlooked, but it feels like you have some, you know, impressive growth under the hood. What else can you tell us about the path there?

So, I mean, if you think about online, just think about it as two big buckets. One is just the market access agreements. Obviously, they got renegotiated and changed with the FanDuel transaction last year. This year, consistent with what we said before, that's about $1 million a month, so about $12 million a year for market access. And then the rest is really Boyd Interactive and the growth inherent in that little business. So hopefully that gives you a sense.

Sure, that's helpful. Thanks very much.

Our next question comes from John Decree of CBRE.

John, please go ahead.

Hi, Keith, Josh. Good afternoon. I wanted to go back to an earlier comment. I think I heard in the prepared remarks about operating efficiency specific to Midwest and South, obviously something you all have been focused on in perpetuity, but we've noticed in one queue really that flow through in the Midwest and South kind of stepped back up into the you know 40 plus percent range we saw the same in in 2Q and last year you know we were getting some revenue growth but but really not the flow through and so Josh are you curious if you could kind of tell us if you've made any changes or or tweaks in the Midwest and South segment you know anything specific on the operating structure any cost cuts or you know if it's just kind of mostly block and tackle I'm not sure if you can kind of say how you got that that flow through back up to Thank you, John.

I think that the flow-through is really a reflection. We had a little bit of trouble in the second half of last year where we had revenue growth but more limited flow-through. As we dug into it more and more, it really became obvious that that was really largely a benefits-related issue. There were some other moving pieces, but So we reset some of our programs to try to address that. And I think we've gotten it under control now. We'll see as we move through the year. It will depend on usage of the plans and things of that nature as we move through the rest of the year. But for right now, outside of benefits, when we look at expenses just more broadly, I think we feel like they're very manageable. at this stage, and that's what you're seeing not only in the flow-through in the Midwest and South and the margins there, but also outside of Orleans and Suncoast, we're seeing good margin, maintaining good margins in the rest of the portfolio, as those were over 50% as well, not only reflecting the strength of the locals customer here in Las Vegas, but also kind of being able to manage our expense structure locally.

John, you said this. I mean, the management teams are focused on this every single day and every single week in terms of managing expenses, finding ways to continue to mitigate lower costs. And so it is something that is a huge focus all the time. Team, they're always working on. And some quarters are more successful than others.

Understood, Keith. Thank you, Josh. Thanks. I'll leave it there. That's all for me. I appreciate it, guys. Yep.

We have time for one last question from Dan Pulitzer of JP Morgan. Dan, please go ahead. Hey, good afternoon, and thanks for the question.

It sounds like in the locals business, you know, you're kind of getting through that destination softness, Suncoast, I think the disruption ends in the third quarter, and then you're going to have Cadence starting to contribute. When can we start penciling in top line growth again in this segment? Is it fair that we continue in the third quarter or is this, you know, something we'll have to wait for 27 for?

Yeah, so Dan, you know, ultimately I think at least from an IBIDAR perspective, we expect to kind of start to see maybe flat to growth in Q4. I'm not sure if you will see, I think you'll continue to see could see some revenue growth in Q3. That'll just depend on how quickly we finish out Suncoast, but the plans right now are for it to go late into Q3, so I'm not sure if we will really get the benefit of top-line growth from the segment in Q3. I think it's really all about Q4.

Got it. Thanks. And just a quick follow-up. Virginia, that's not something we hear a lot about. I get it's not opening until late next year. But I guess, can you just remind us how you think about the cash-on-cash returns for that $750 million to spend there?

Yeah. So, you know, the general targets are kind of a 15% kind of cash-on-cash return for a project like that. And that's generally what we would expect it to ramp up to. Maybe not necessarily in the first year, but certainly as it transitions from the first to second year.

Got it. Thanks so much, everyone.

Welcome. Sure. This concludes our question and answer session. I'd now like to turn the call over to Josh for concluding remarks.

Thanks, David, and thanks for everyone joining the call. If there's any follow-up questions, feel free to reach out to the company.