MGM Resorts’ first quarter results met Wall Street’s revenue expectations but drew a modestly negative market reaction, as sales declined compared to last year and operating margins compressed. Management attributed the softer revenue to challenging year-ago comparisons, particularly with last year’s Super Bowl impact, and incremental weather disruptions at regional properties. CEO Bill Hornbuckle emphasized the company’s progress in growing its digital business and loyalty program, noting, “Our MGM Rewards program crossed 50 million members, reflecting the staying power of MGM’s iconic brands.”
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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
- Market Capitalization: $9.22 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions MGM Resorts’s Q1 Earnings Call
- Brandt Montour (Barclays) asked about demand trends in Las Vegas, and CFO Jonathan Halkyard described record April occupancy and strong event demand, crediting the Marriott partnership and group bookings.
- Carlo Santarelli (Deutsche Bank) inquired about labor cost management, with Halkyard noting a reduction in full-time employees and increased use of digital interfaces to improve efficiency.
- David Katz (Jefferies) asked about cost variability in Japan, and Halkyard explained that the company has built in contingencies and hedged currency exposure, minimizing future cost uncertainty.
- Shaun Kelley (Bank of America) questioned investment pacing in Brazil’s digital launch, and Halkyard outlined a front-loaded marketing spend, expected to taper as the business matures over the next two quarters.
- John DeCree (CBRE) asked about balancing share repurchases with rising capital needs, and Halkyard stated that future buybacks will be moderated to prioritize funding for Japan and potential New York commitments.
Catalysts in Upcoming Quarters
The StockStory team will be watching (1) progress on the Osaka resort construction and New York casino license application, (2) continued profitability and user growth in BetMGM and MGM Digital’s Brazil operations, and (3) sustained margin discipline as capital expenditures rise. Additionally, we will monitor the impact of new suite and villa offerings in Macau and the performance of the Marriott partnership in driving Las Vegas occupancy.
MGM Resorts currently trades at $33.67, up from $31.44 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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