MGM Resorts International

Good afternoon, and welcome to the MGM Resource International Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining the call from the company today are Bill Hornbuckle, Chief Executive Officer and President, Aisha Molino, Chief Operating Officer, Jonathan Helkier, Chief Financial Officer, Gary Fritz, Chief Commercial Officer and President of MGM Digital, Kenneth Fung, Chief Executive Officer of MGM China Holdings, and Howard Wong, Vice President, Investor Relations. Participants are in 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 is being recorded. Now, I would like to turn the call over to Howard Wong. Please go ahead.

Thanks, Michael. Welcome to the MGM Resorts International fourth quarter and full year 2025 earnings call. This call is being broadcast live on the internet at investors.mgmresorts.com, and we've 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 differ from these forward-looking statements as 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 GAAP 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 Hornbuckle.

Thank you, Howard. To everyone dialing in, we truly appreciate your flexibility in joining us this earlier than expected call and look forward to inviting you with some important color and detail about our fourth quarter and four-year performance. Before I get started, I'd like to introduce everyone on today's earnings call to Aisha Molino, our new Chief Operating Officer. Aisha was previously our Chief Public Affairs Officer and President and Chief Operating Officer of ARIA and Vidara, which flourished under her leadership and we are thrilled to have her in the COO role. I also want to congratulate Kenny Fang, who has been leading the MGM China as President and Executive Director since 2020, and it is no stranger to these earnings calls on his recent promotion to Chief Executive Officer of MGM China. And finally, I'd like to congratulate Tian Han on his promotion to Chief Operating Officer. Tian has also been integral to the success of MGM China in recent years, and I'm extremely excited to see the great things the entire Macau team does going forward. MGM Resorts is the leading global integrated resort operator across physical and digital channels, converging gaming and hospitality with entertainment and sports, and its diversity helped us once again to achieve consolidated growth for the fourth quarter and the full year 2025. It's worth noting some of our key accomplishments last year. Achieving record 4Q and four-year EBIT dollar in Macau while maintaining margins and outsized market share throughout the year. Accomplishing a nearly $470 million EBITDA turnaround at our BetMGM North America venture, which commenced distribution to its parents in 4Q. Breaking ground in MGM Osaka, which we believe will be the world's largest and great resort upon opening. and investing in upgrading experiences across our portfolio from dining to enhanced VIP gaming environments in Las Vegas to our regional operations, and most notably in Macau. These, along with other successes throughout the year, drove growth and consolidated net revenues of 6% and positioned us well for further progress into 2026. Last year marked the return to a more balanced environment after several years of exceptional growth in Las Vegas, And even with the Las Vegas-specific headwinds, we were able to achieve record full-year slot win in 2025 driven by our luxury offerings. From this reset baseline, we see a path to grow in Las Vegas for the full year of 2026. First off, we will benefit from a full-year contribution from the various capital projects completed last year, including and notably MGM Graham's room renovation. We had anywhere from 700 to 1,000 rooms offline per day for most of last year. but that will not be in the case in 2026. We've received tremendous positive feedback on the refreshed product and are excited to have the full complement of rooms available this year. Other projects completed mid to late 25 include the high-limit slot rooms at Bellagio and additions to our already deep roster of elite dining experiences with Carbone Riviera here at Bellagio and Gymkhana at Aria. Within the group, and Convention Channel, we are experiencing mid-single-digit revenue growth in 2026. This year's mix will be closer to 20%, and the quality of the groups I feel has improved because of meticulous action carried out last year focused on improving profitability. To date, we've had solid performances during citywide events, including CES in January, and we're excited for the return of CONAG with expectations of getting back to 2023 attendance and achieving more than our fair share among the 140,000 attendees arriving into Las Vegas. Even more exciting is the fact that we have group and convention room nights on the books for future years, that we've had more group and convention nights on the books for future years than we've ever had in our history. While 2026 event calendar can continue to fill out, we're seeing comparable arena capacity citywide events relative to last year, which will help provide stabilization levels of business given the proximity of our properties to the golden triangle of venues, Allegiant, T-Mobile, and MGM Grand Garden Arena. Ten polling events, such as Formula One, also continued to drive visitation this year, and our strip properties saw higher room rates and increased cash ticket sales at the Bellagio Fountain Club, which remained the premier ultra-luxury hospitality venue to watch the race. We are continuing to invest when we see the greatest growth potential in our luxury offerings. This includes casino operations, We are out to improve on the success of last year's first one-of-a-kind invitation-only gaming experiences, bringing previously unheard-of prizes into a 5 million slot tournament and a 10 million baccarat tournament. We'll be hosting both of those tournaments again this year. We're also busy continuing to innovate, especially around the opportunities divided by the geographic proximity of major sports events, including this weekend's Super Bowl in Northern California, and the international visitation accompanying the upcoming World Cup, given several matches taking place in Los Angeles and Southern California. We know these programs are working as our two top luxury offerings, Bellagio and Aria, together saw a 7% increase in EBITDA in 2025. We also continue to build on efficiencies driven by our technology innovation, which drove an 18% increase in digital check-ins that have resulted in a significant improvement to check-in speed. which now averages one and a half minutes versus the six and a half minutes while checking in through the additional front desk, not including your wait time in line. We also saw one million chats through our digital concierge last year as we utilize AI to both transform guest engagement and accelerate productivity. And finally, we are busy at work creating programming that will target and highlight the great value MGM has to offer. We'll share more of that and that exciting news in announcements soon. At the end of the day, there's nothing comparable to Las Vegas. People are visiting to have unforgettable experiences, and their exceptional value is the optionality of what our guests can enjoy and discover on any particular visit. There's also value in the unmatched energy and excitement that surrounds everything you do in this town. That's why Las Vegas was selected to host the College Football Playoff National Championships in 2027 and the Final Four in 2028. Las Vegas is where the NBA is exploring expansion, and Major League Baseball is now establishing operations. We've also extended our relationship with F1 for five years, and there has always been and always will be extraordinary value here in Las Vegas. Our regional operations continue to deliver solid results regardless of the macroeconomic thanks to their outstanding asset quality, their strong demographic placement, and experienced operating teams. During the quarter, they reported not only record fourth-quarter slot win, but also the best full-year slot win ever. MGM China remains a strong outperformer, ending the year with a record high quarterly and full-year segment adjustment at EBITDA. We achieved a 16.5% market share during the fourth quarter and impressively maintained share of over 16% for the full year, a record market share level for an annual period as our operating team continues to command a strong understanding relationship with the premium mass customer driving the market. Considering our execution, reflecting in our ability to maintain an over-indexed market share and solid EBITDA margins, MGM China's trading value is at sub-seven times forward EBITDA, multiple versus an industry average of over eight and a half times, seems significantly discounted to us. Yesterday, we heard impressive results from Adam and Gary on our BetMGM North America venture. BetMGM beat 2025 guidance during the year, where they started by inflecting positive and ending by turning annual EBITDA around by nearly $470 million. Their strong performance resulted in a $135 million distribution of MGM during the fourth quarter. And during 2025, monthly player volumes increased 24%, while active player days increased 14%. This momentum remains positive, highlighted by the plan outlined on the earnings call to reach $500 million of adjusted EBITDA in 2027. MGM Digital also continues to see encouraging momentum. We are excited by the scaling of the MGM brands in key international markets, where Sweden continues to be our top market. We exited 2025, making significant headway in Brazil, particularly after the December launch of our in-house sportsbook. The Brazilian market is new, robust, and evolving, and we are confident that our product and our JV with Globo and the value of global marketing assets have created abundant opportunities that are worthy of sustained investment in the coming year. Progress also continues with our development projects, setting a long-term growth pipeline for our business. Construction remains on schedule in Dubai with Bellagio, Aria, and MGM Grand Hotel Towers scheduled to open in 3Q of 2018. And in Japan, construction remains on time and on budget for MGM Osaka. Currently, about 20% of the foundation piles have been installed or completed, and the project remains on track to open in 2030. The outlook for the coming year is encouraging. With a more constructive backdrop and a stabilizing environment, our message last quarter holds true. We are optimistic that growth in Las Vegas can be achieved this year. There are also potential macro catalysts that could benefit both Las Vegas and MGM more broadly, including lower trending interest rates, certain tax regulations, including no tax on overtime and tips, and other stimulus benefiting consumers and further progress at the Las Vegas airport, as about 50% of the lost capacity left by Value Airlines and select international carriers has been backfilled by other airlines. Beyond the macro drivers, MGM is driving convention and group nights with more future room nights on the books, We also continue identifying opportunities to operate more efficiently and make further progress on our AI and technology initiatives, all while our improved liquidity and cash flow generation allows us to pursue innovative ideas and strategic investments that can and will deliver meaningful value. With that, I'll now turn this back to Jonathan to provide additional details on our performance for the quarter.