Churchill Downs Incorporated (CDI) has announced record-breaking revenue for the second quarter of 2023, driven by remarkable performances in its live and historical racing as well as gaming segments. While the company achieved new highs in adjusted EBITDA, net income experienced a decline compared to the previous year. This report delves into the key financial highlights, outlining the factors contributing to the Q2 success and the nuanced impact on net income.
Record Revenue and Adjusted EBITDA
Churchill Downs Incorporated reported record net revenue for Q2 2023, reaching $768.5 million, marking a substantial 32% increase compared to Q2 2022’s $582.5 million. The company’s adjusted EBITDA also soared to new heights, totaling $363.7 million, reflecting a robust 25% growth from the previous year’s $291.2 million. These achievements were primarily attributed to stellar performances in the live and historical racing as well as gaming segments.
Net Income Dynamics
Despite the record-breaking revenue and adjusted EBITDA, net income witnessed a 58% decline, settling at $143 million for Q2 2023, in contrast to the robust $339.3 million reported in the same period last year. This decline was influenced by several factors, including an after-tax gain on the sale of the Calder property in 2022, an increase in costs due to Presque Isle impairment in 2023, and other nonrecurring expenses. Excluding these factors, Q2 net income increased by $21.8 million year-over-year.
Segment Performance
The live and historical racing segment proved to be a standout performer, with revenue surging by 48% to $408 million compared to $275.9 million in Q2 2022. The adjusted EBITDA for this segment also witnessed a notable increase, reaching $223.5 million, reflecting a substantial 36% growth from the previous year’s $163.9 million. Churchill Downs Incorporated highlighted the success of Derby Week, where the 149th Kentucky Derby contributed to a record Derby Week all-sources handle. The debut of the new First Turn Experience further enhanced the segment’s performance.
Churchill Downs Incorporated’s second-quarter results underscore its impressive revenue growth and achievement of new adjusted EBITDA highs. While net income experienced a decline due to specific factors, the overall financial performance reflects the resilience and success of the company’s live and historical racing and gaming segments. As Churchill Downs continues to navigate the dynamic landscape of the gaming industry, the Q2 results position the company for continued success and strategic advancement.