Boyd Gaming Corporation has published its third quarter report, covering the period ending on Sept. 30. According to the report, it recorded a 3% year-on-year revenue increase for Q3, amounting to $903.2 million, compared to the $887.3 million reported for the same period in 2022.
Despite this revenue growth, the gaming and hospitality company saw a reduction in its net income. This decrease can be primarily attributed to the increase in operating costs and expenses. Specifically, the company’s net income for this quarter summed to $135.2 million ($1.34 per share), in contrast to the $157.0 million ($1.46 per share) it achieved during the third quarter of 2022.
Nonetheless, the increase in revenue signifies a positive trajectory for the company, as emphasized by Boyd Gaming’s President and Chief Executive Officer, Keith Smith, who expressed his satisfaction with the company’s performance during the quarter ending on Sept. 30.
After the financial reports were released, he said:
“Our third-quarter results reflect the value of our diversified business model. Continued strength in play from our core customers, strong results from Sky River and online gaming, and growth in our non-gaming business all contributed to a solid performance in the quarter.”
The economic pressures also affected Boyd’s revenue, a fact which Smith alluded to. In a press release, he highlighted how they registered fewer numbers in plays due to the current economic environment.
“Quarterly results were impacted by declines in play from our retail customers and ongoing cost pressures, both related to the challenging economic environment.”
Online: The Driver for Boyd Gaming’s Increased Revenue
Although the gaming division continues to be the primary revenue driver for the corporation, the 2023 Q3 figures showed a decrease compared to 2022. Gaming revenue amounted to $641 million, marking a 4% drop from the $668 million generated by the same division in 2022.
However, the performance of the online division covered the drop in gaming numbers. Online registered a growth of 72.3% year-to-year for the same period, moving from $52.4 million to $90.3 million.
The growth in revenue of Online is also reflected in the operating cost. Boyd Gaming spent 72.7% more than they did in 2022 in expenses, registering $79.1 million in expenses.
Getting into the Online gambling scene is starting to reap benefits for Boyd Gaming despite Keith stating it is a long-term play. Their entry into online gaming was marked after the acquisition of Pala Interactive for $170 million in Nov. 2022.
According to Boyd CEO, the rationale for getting into online gambling was so they could compete effectively.
“We bought the business and we chose to get more directly or directly involved in the online gaming business. We view it as a long-term play. This wasn’t about a short-term kind of IRR or ROI,” he said.
“This is really about kind of long-term controlling the journey of the customer having a holistic view of that customer and wanting to help build kind of another growth database and somebody we can market to. We’re not at a point of talking about returns on investment, but it is a long-term play. It is something where we view it as an important part of a long-term strategy; having both an online business as well as a strong land-based business to compete effectively.”
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