PENN Entertainment Release Q3 Financial Overview

PENN Entertainment has released its financial results for the third quarter ending September 30. The company reported a decrease in net income compared to the previous year, with significant figures outlined as follows:

For the third quarter of 2023, PENN Entertainment recorded revenues of US$1,619.4 million (£1.33 bn/€1.52 bn), slightly below the $1,625.0 million reported in the same period in 2022. The company experienced a net loss of $725.1 million, a stark contrast to the net income of $123.2 million from the previous year.

Adjusted EBITDA was reported at $298.5 million, compared to $440.4 million in 2022, reflecting changes in operational performance. Additionally, the adjusted EBITDAR, which accounts for rent expenses associated with triple net operating leases, stood at $445.1 million, down from the $471.9 million reported in the prior year.

Rent expenses related to these leases were $146.6 million for the quarter. The payments to REIT landlords under triple net leases totalled $235.0 million, slightly increasing from the $232.0 million in the previous year.

Lastly, the diluted loss per common share was $4.80, a decrease from the earnings of $0.72 per share in the third quarter of 2022.

Jay Snowden, Chief Executive Officer and President, said: “Our property level performance was stable in the third quarter reflecting solid results from our rated traditional core customer. We continued to see relative strength in several locations, including our casinos in Ohio, Kansas, Massachusetts, and Missouri, which highlights the benefits of our geographically diversified portfolio of premier regional gaming assets and the addition of retail sports betting offerings at many of our properties. Third quarter Interactive segment results reflect curtailed marketing in the U.S. as we prepared to transition our online sportsbook to the ESPN BET brand. Finally, we are excited to announce that we plan to simultaneously launch ESPN BET on November 14 across the 17 states in which we operate online sports betting, subject to final approvals. This strategic alliance is expected to further expand our digital ecosystem and drive re-engagement with the millions of customers in our digital and retail databases, leading to compelling cross-sell opportunities.

“Retail performance this quarter was supported by a slight uptick in volumes from our rated customers, offsetting softness in our unrated segment in the South region, the continued return of our 65+ demographic, and moderate growth in our spend per visit trends,” said Mr. Snowden. “Additionally, our portfolio benefited from new and sustained engagement driven by our market-leading retail sportsbook concepts. With the recent launch of our enhanced customer loyalty program, PENN Play™, we have continued to drive database growth and customer engagement. Our database now has over 27 million members, with approximately 40% of our growth for the quarter coming from our online offerings. Our continued investments in technology to improve the customer journey has led to 2.2 million app downloads, and we are seeing a double-digit premium in retail theoretical from guests that engage with us through the PENN Play app versus non app users. Finally, the adoption of our industry-leading cashless, cardless and contactless technology (“3C’s”), which is now deployed at twenty-one properties, with more on the way, has resulted in approximately $225 million in deposits into the PENN Wallet.

“We are also pleased to announce that we expect to break ground on our four growth projects throughout November and December of this year. These investments in the aggregate will create long-term shareholder value driven by their attractive return profiles and also contribute to our strong free cash flow generation upon opening in late 2025 and early 2026.”