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Hospitality and casino entertainment company MGM Resorts (NYSE:MGM) met Wall Street’s revenue expectations in Q1 CY2025, but sales fell by 2.4% year on year to $4.28 billion. Its non-GAAP profit of $0.69 per share was 51.5% above analysts’ consensus estimates.

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MGM Resorts (MGM) Q1 CY2025 Highlights:

• Revenue: $4.28 billion vs analyst estimates of $4.27 billion (2.4% year-on-year decline, in line)

• Adjusted EPS: $0.69 vs analyst estimates of $0.46 (51.5% beat)

• Adjusted EBITDA: $637.1 million vs analyst estimates of $1.14 billion (14.9% margin, 44.2% miss)

• Operating Margin: 9%, down from 10.5% in the same quarter last year

• Free Cash Flow Margin: 7.5%, down from 8.6% in the same quarter last year

• Market Capitalization: $9.5 billion

StockStory’s Take

MGM Resorts’ first quarter results were shaped by progress in its digital business and continued emphasis on loyalty programs and strategic partnerships. CEO Bill Hornbuckle attributed the company’s performance to the rapid turnaround at BetMGM, robust engagement from its MGM Rewards program—which surpassed 50 million members—and strong contributions from the Marriott partnership in driving hotel occupancy. Management also pointed to record March results in key metrics, particularly on the Las Vegas Strip, and highlighted the ability of certain segments to generate adjusted EBITDA margins at or above 30%.

Looking ahead, management emphasized ongoing investments in international projects and digital expansion. Hornbuckle noted, “Our digital businesses in the US and beyond are growing and turning profitable,” and described the company as well positioned for future growth with a pipeline that includes new developments in Japan and potential opportunities in New York. CFO Jonathan Halkyard reinforced the focus on operational agility and disciplined capital allocation, indicating that while share repurchases have been aggressive, capital will be reserved for large-scale projects moving forward.

Key Insights from Management’s Remarks

Management’s remarks highlighted several operational levers and strategic initiatives that shaped the quarter’s financial performance. The company noted that digital segment gains, loyalty program expansion, and new partnerships were key contributors, while cost discipline and international investments continue to play central roles.

• Digital turnaround at BetMGM: The BetMGM business reported a 34% increase in net revenue and positive EBITDA, reversing prior losses. Management credited a more targeted approach to customer acquisition and improved engagement in both iGaming and online sports.

• Loyalty program growth: MGM Rewards reached 50 million members, up over 50% since 2020. Hornbuckle called this database growth unmatched among mature gaming peers and tied it directly to omnichannel opportunities, particularly in leveraging the Marriott partnership.

• Marriott channel drives occupancy: The Marriott partnership delivered over 440,000 room nights through April, with management describing these guests as highly accretive and supportive of record first quarter slot win. Group customers now also earn Marriott Bonvoy points, further boosting appeal for conventions.

• International expansion momentum: The company made progress in Japan by finalizing contractor agreements and breaking ground in Osaka, with management remaining confident in the project’s high-teens percentage return potential. In Macau, MGM China maintained a mid-teens market share and increased its dividend payout policy.

• Cost discipline and digital efficiency: The company reduced full-time equivalent employees across regions, aided by increased use of digital customer interactions for services like concierge and call centers. Management indicated that such digital interfaces handle a significant portion of initial traffic for these services, helping contain labor costs, with AI adoption noted as an emerging element.