MGM Resorts International

Good afternoon and welcome to the MGM Resorts International second quarter 2025 earnings conference call. Joining the call from the company today are Bill Hornbuckle, Chief Executive Officer and President, Corey Sanders, Chief Operating Officer, Jonathan Halkyard, Chief Financial Officer and Treasurer, Mr. Gary Fritz, President of MGM Interactive, Kenneth Feng, Executive Director and President of MGM China Holdings, Mr. Hubert Wang, COO and President of MGM China Holdings, and Howard Wang, Vice President and Investor Relations. Participants are in a listen-only mode. After the company's remarks, there will be a question-and-answer session. In fairness to all participants, please limit yourself to one question and one follow-up. Please note this conference call is being recorded. Now, I would like to turn the call over to Mr. Howard Wing. Please go ahead.

Thanks, Chuck. Welcome to the MGM Resorts International second quarter 2025 earnings call. This call is being broadcast live on the internet at investors.mgmresorts.com, and we have also furnished our press release on Form 8K to the SEC. On this call, we will make forward-looking statements under the safe harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that could cause actual results to differ from these forward-looking statements is contained in today's press release and in our periodic filings with the SEC. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise. During the call, we will also discuss non-GAAP financial measures when talking about our performance. You can find the reconciliation to gap financial measures in our press release and investor presentation, which are available on our website. Finally, this presentation is being recorded. I will now turn it over to Bill Hornblum.

Thank you, Howard. I want to start by focusing on a strength that often gets overlooked, which is the power of MGM's unmatched portfolio diversity. The benefits of having a global presence in both the brick and mortar and digital domains drove a record highest ever consolidated net revenue results this quarter. Our vision is to be the world's premier gaming entertainment company. Pursuing that vision is paying significant dividends as we generate revenues in multiple streams across the globe. You're seeing the power of our portfolio diversity strategy on full display this quarter. We've accelerated digital growth combined with record-setting results in China, and at our regional properties more than offset a choppy period in Las Vegas. We recognize that the substantial share buybacks completed in recent years must be coupled with an active growth pipeline to fully unlock the company's value. In 2Q, our diversity is proving to be the bridge uniting the benefits of a lower share count and growth. We are positioned at kickoff of unleashed significant value with notable near-term catalysts in BetMGM and Las Vegas and mid to long-term catalysts in MDM Digital and our development projects, both domestic and international. Our BetMGM North America venture reported their second quarter results yesterday, raising full year 2025 guidance for a second time since the previous earnings call, which implies an EBITDA turnaround of nearly 400 million compared to last year. In iGaming, there was a solid growth in average monthly actives and key engagement metrics, such as active player days, while sports betting continues to focus on the areas that drill first quarter profitability, more targeted player acquisition, tighter management of lower value players, and retention of more valuable active players, all of which are benefiting from site components enhancements, including performance, discoverability, and most importantly, speed. With more efficient marketing spend, incremental revenue flow through jumped to 66% year to date. This winning formula has given us greater conviction in our BetMGM North America's Ventures ability to generate 500 million of annual reported EBITDA in the coming years. Our Las Vegas resorts are also poised to drive results higher in the near term. And I want to take this opportunity to emphasize that Las Vegas remains fundamentally solid. We saw a record 2Q table games volume and record slot volumes at our ultra-luxury properties. This quarter's adjusted EBITDA decline was in fact isolated from two specific factors. One, the MGM grant accounted for over 80% of the decline where results were impacted by uniquely disruptive room remodel and severely abnormal hold and midweek weakness at two of our value-oriented properties. On the groups and convention side, our bookings are pacing up double digits thanks to a robust 2026 convention calendar that includes the return of Con Ag. The Las Vegas Convention Center is spending $1.6 billion to renovate its legacy campus and expand the West Hall and remains on track to finish by the end of this year. We will also benefit from greater Las Vegas Convention attendance, particularly with our expansive luxury offerings. Las Vegas also recently celebrated the groundbreaking of the new 1.8 billion MLB stadium at the former site of Tropicana, which is expected to bring 400,000 new visitors annually to Las Vegas. This puts the NFL, the NHL, and MLB home venues which also hosts a significant number of other sports and entertainment events, all within one mile of each other. The resulting golden triangle will be surrounded by MGM properties, and importantly, the Dome Stadium will bring meaningful game and entertainment inventory during the summer midweek periods, which will increase the value of our rooms during that period. Our exclusive Marriott relationship also continues to drive performance with a higher quality customer. We remain on budget to book 900,000 room nights through the strategic channel, And so our 2Q room nights increased 31% this quarter versus last year. Marriott customers consistently spend about 150 per room night more than all other customers. And year to date, the average over 20,000 room nights booked per year. We averaged over 20,000 room nights booked this year per week. The pace has accelerated in July, and we had our best Marriott bookings week ever just two weeks ago. Our international presence brings us another near-term driver as we look to continue the momentum at MGM China, which absolutely shined in the second quarter with record-adjusted EBITDA and market share of 16.6%, representing the highest sequential gain amongst all concessionaires. What's even more impressive was that our share increased every month of the quarter, ending June at 1.3 times our first share of the market. We now have all 28 villas at MGM Macau available as of this month, And while MGM Cotai has begun converting standard rooms into 63 new suites by 1Q of 26, all of which will help us further uphold our complementary position of the properties. And MGM Macau is a leading player in the Peninsula and Cotai as a preferred destination for premium mass players. We are also benefiting from the continued momentum of our domestic regional operations. Their stability is highly valued during times of volatility and we achieved our best second quarter results in both net revenue and slot win. Three of our regional properties reported record high ever net revenues, and we saw strong performance across the gaming, hotel, and food and beverage segments. Customers have responded positively to our focused capital improvements, and New Jersey is a great example. A few years ago, we upgraded the former water club into what is now the MGM Tower Borgata, which since May has been complemented by an elevated Asian gaming and overall VIP experience, including a new bar and restaurant. The new 25,000 square foot gaming space includes 51 tables, gaming salons, and a high-limit area. The customer response to thoughtful, targeted capital spending has been encouraging, driving double-digit GGR growth and outperforming the market by a wide margin since its debut. Beyond our numerous near-term catalysts, we have mid- and long-term drivers that are making meaningful progress with each passing quarter. one of which is MGM Digital, our consolidated international digital business that does not include the BetMGM North America venture. The segment showed solid improvement, notably a near break-even performance when excluding our investment in Brazil. Our BetMGM Brazil venture partner, Grupo Globo, continues to provide us with beneficial flexibility in terms of marketing and investment, and our launch is making great strides as we are seeking all key measures seeing all key measures increasing, including strengthening player fundamentals, and our bullish long-term view of the Brazilian market remains unchanged. Stateside, towards the end of the second quarter, we launched MGM's live studio from the gaming floor at the MGM Grant. Content from our live dealer studio, which is currently available in seven countries, is provided internally to our international operations and is also monetized to other online operators. Earlier this month, we launched our own sportsbook product in the second market, made possible by our acquisition of TIBCO's US technology platform, as the integration into our in-house tech stack continues as planned. On the development front in Japan, the first pylon was poured early this month. When MGM Osaka opens in 2030, we will be the sole licensing operator, which is notable in a country where robust tourism, an appetite for gaming, and a population of over 120 million people. Considering these factors and how similar metrics drive other Asian destination gaming markets, we believe MGM Osaka has the potential to generate multi-billions of dollars annually for MGM. Progress in Dubai has also started to gather steam with an expected opening date of the second half of 2028. And in New York, we submitted our application in June and are hopeful to be awarded one of the three gaming licenses that will be issued in December. Few companies can take on any of these projects on an individual basis. but our unmatched scope, scale, and international experience allow us to manage all of these simultaneously while maintaining ample liquidity and a solid balance sheet. Reporting record highest ever consolidated net revenues is not possible without the tremendous contribution from some of our, all of our employees across all business segments, and it's worth highlighting that we have had another record gold NPS score in the second quarter despite the ongoing room remodel disruptions at the MGM grant. As you can see, it's an incredibly exciting time here at Resorts, and I will now hand this over to Jonathan to provide some additional color on our performance.