In This Article:
Hotel and casino entertainment company Caesars Entertainment (NASDAQ:CZR) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 1.9% year on year to $2.79 billion. Its non-GAAP loss of $0.54 per share was significantly below analysts’ consensus estimates.
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Caesars Entertainment (CZR) Q1 CY2025 Highlights:
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Revenue: $2.79 billion vs analyst estimates of $2.79 billion (1.9% year-on-year growth, in line)
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Adjusted EPS: -$0.54 vs analyst estimates of -$0.18 (significant miss)
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Adjusted EBITDA: $845 million vs analyst estimates of $874.8 million (30.2% margin, 3.4% miss)
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Operating Margin: 17.5%, in line with the same quarter last year
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Free Cash Flow was -$5 million compared to -$184 million in the same quarter last year
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Market Capitalization: $6.26 billion
StockStory’s Take
Caesars Entertainment’s first quarter results were shaped by steady performance in its core Las Vegas and regional casino businesses, alongside continued momentum in its digital segment. Management attributed the stable revenue trends to strong group and convention bookings in Las Vegas, growth from recently completed capital projects in New Orleans and Danville, and disciplined cost controls. CEO Tom Reeg noted that while the company faced headwinds from challenging year-over-year comparisons, weather disruptions, and a one-day calendar difference, the business demonstrated resilience across its main markets.
Looking ahead, leadership maintained a positive outlook on continued growth in digital gaming and ongoing stability in brick-and-mortar operations, while emphasizing caution around potential macroeconomic pressures and policy changes. Management stated that forward bookings in Las Vegas remain solid and that the company has not observed any material signs of consumer weakness. Reeg remarked, “We still do not see any of the consumer softness that investors seem to be worried about,” but also acknowledged that the company is prepared to adjust operating levers if broader economic conditions deteriorate.
Key Insights from Management’s Remarks
Caesars Entertainment’s management focused on the interplay between Las Vegas, regional, and digital performance, noting how each area contributed to the quarter’s outcomes and will shape the company’s trajectory this year.
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Las Vegas stability and group business: Las Vegas delivered flat year-over-year results despite a tough comparison with last year’s Super Bowl, aided by strong convention and group bookings. Management said group room nights accounted for 20% of the quarter’s mix, with expectations for a record year in group business.
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Regional segment improvement: The regional casino segment saw a notable sequential improvement, driven by the full-quarter contribution from the New Orleans and Danville properties. Both locations, recently completing their elevated capital expenditure cycles, are expected to provide steady cash flow moving forward.
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Digital segment acceleration: Digital net revenue rose 19%, fueled by robust iCasino growth (up 53%) and a higher mix of parlay bets in sports betting. Management highlighted new app features and product enhancements, with the Caesars Palace Online app leading growth and the Horseshoe app already contributing 7% of digital gaming revenue.
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Cost discipline and margin management: Operating expenses in Las Vegas fell 3% year-over-year, reflecting ongoing efforts to optimize labor, vendor contracts, and operational efficiency. The company also reported successful cost controls in the digital segment, resulting in an EBITDA flow-through rate above internal targets.
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Capital allocation and free cash flow priorities: With major capital projects completed, Caesars is transitioning into a “free cash flow harvesting mode,” prioritizing debt reduction while remaining opportunistic about share repurchases if valuation conditions are favorable.