Churchill Downs Incorporated, a prominent player in the gaming and entertainment industry, has recently unveiled its first-quarter business results for the period ending March 31, 2024. The report highlights significant financial metrics and key developments, showcasing both areas of growth and challenges faced by the company.
Financial Performance
Churchill Downs reported a record-breaking net revenue of $590.9 million for the first quarter of 2024, marking a notable 6% increase compared to the corresponding period in the previous year. Despite this impressive revenue growth, the company’s net income experienced a significant decline, plummeting by 48% to $80.4 million. However, amidst these fluctuations, the quarter witnessed record adjusted EBITDA of $242.5 million, demonstrating a robust 9% increase compared to the prior year.
Live and Historical Racing Segment
The Live and Historical Racing segment emerged as a beacon of growth for Churchill Downs, with revenue soaring by 15% and adjusted EBITDA climbing by 23% compared to the first quarter of 2023. This upward trajectory was fueled by increased revenue from Kentucky HRM properties, Virginia properties, and the successful launch of Rosie’s Emporia property in September 2023.
TwinSpires
Churchill Downs’ online betting platform, TwinSpires, reported impressive growth, with revenue surging by 18% and adjusted EBITDA experiencing a remarkable 35% increase compared to the same quarter last year. The expansion of the retail and online sports betting business, coupled with the Exacta transaction, drove this notable growth trajectory.
Gaming Segment
In contrast, the Gaming segment encountered challenges, witnessing a decrease in revenue by $8.4 million. This decline was primarily attributed to the company’s decision not to renew the management agreement at Lady Luck Casino Nemacolin and adverse weather conditions affecting gaming properties in January 2024.
Strategic Initiatives
Churchill Downs Incorporated unveiled ambitious plans for strategic expansion, underscoring its commitment to growth in the gaming industry. The company announced the forthcoming launch of The Rose Gaming Resort in late September 2024 and Owensboro Racing & Gaming slated for the first quarter of 2025.
Corporate Transactions
In a bid to optimize its portfolio, Churchill Downs completed the sale of 49% of United Tote Company to NYRA Content Management Solutions. Furthermore, the company continued its share repurchase program, repurchasing $22.0 million worth of shares in the first quarter of 2024.
Net Income
The company’s net income for the first quarter of 2024 witnessed a significant decline, dropping to $80.4 million from $155.7 million in the prior year quarter. Factors influencing this decline included an after-tax gain on the sale of property in Arlington Heights, Illinois, in the previous year quarter, along with adjustments related to transaction, pre-opening, and other expenses.
Previous Performance
Churchill Downs had reported robust earnings for Q4 and the full year 2023, with net revenue reaching $2.5 billion, reflecting a record for the company and a noteworthy year-on-year increase of 36%.
Churchill Downs Incorporated’s first-quarter 2024 report showcases a mixed bag of financial performance, with record-breaking revenue but a notable decline in net income. Despite facing challenges in certain segments, the company’s strategic initiatives for expansion and optimization demonstrate a commitment to long-term growth and resilience in the ever-evolving gaming and entertainment landscape.