Caesars Entertainment Misses Q1 Forecasts, Net Revenue Drops to $2.7B

Caesars Entertainment Inc. announced net revenue of $2.7 billion for the first quarter ending March 31, 2024, which missed forecasts on Wall Street significantly. Shares on Caesars (Caesars Entertainment 44,51 +2,06%) fell by more than 4% during trading hours after Q1 results were announced.

Caesars announced a loss of 73 cents per share for the first quarter. Net revenue was $2.8 billion for the same period last year. Net losses also increased for Caesars, which amounted to $158 million in Q1. At this time last year, Caesars announced a net loss of $136 million for Q1 in 2023.

Caesars Digital showed some promise with adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $5 million against $4 million last year. However, same-store adjusted EBITDA for the first quarter of this year was $853 million against $947 million last year.

Casino Revenue in Las Vegas Falls

Net revenue for Caesars dropped 4.5% year-over-year, with $1.03 billion in revenue against $1.13 billion in 2023. That resulted in a net income of $198 million in Las Vegas, which was almost $100 million less than 2023’s net income of $293 million. This change reflected a 30% drop.

Overall, the company posted adjusted EBITDA of $440 million in Las Vegas, another significant dip from last year’s $533 million, 15.7% down from last year.

“Operating results during the first quarter in Las Vegas are a combination of record occupancy, driven by the Super Bowl and international visitation for Chinese New Year, offset by lower-than-expected hold. In our Regional segment, results reflect weather related weakness in January and early February partially offset by our new property openings,” Tom Reeg, CEO of Caesars Entertainment, said.

“Caesars Digital delivered strong revenue growth despite lower-than-expected hold in online sports due to unfavorable outcomes for the Super Bowl and March Madness. Moving past the first quarter headwinds, we remain optimistic toward improved operating results throughout the balance of the year.”

Caesars Regional Also Faces Negative Metrics

Caesars Regional was not too much different from the rest of the company’s results, facing negative metrics across the board year-on-year. Caesars posted $1.36 billion in net revenues from its regional business, which was down 2% from last year.

However, net income was just $41 million, a 45.3% slip from last year’s income of $75 million. Overall, Caesars Regional had $433 million of adjusted EBITDA, a minor slip of 3.3% from last year’s total of $448 million.

Caesars has also increased its debt undertaking. According to its latest financial results, Caesars had $12.4 billion in aggregate principal outstanding debt. Net debt was $11.7 billion for Q1, which was higher than Q4 of 2023, which stood at $11.4 billion.

In terms of liquidity, Caesars posted $726 million in cash and cash equivalents for Q1, which was down by almost $300 million from last quarter’s total of $1 billion.

“On April 26th, our Caesars Virginia joint venture successfully closed on a new five-year $425 million pro rata bank financing. This financing will be used to fund the remaining capex associated with the permanent casino resort facility, which is expected to open in December 2024. Excluding joint venture capex, we estimate 2024 cash capex spend of $800 million. We anticipate using free cash flows to continue to reduce debt in 2024,” Bret Yunker, Chief Financial Officer, said.

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