PENN Entertainment, Inc. (“PENN” or the “Company”) (Nasdaq: PENN) has disclosed its financial performance for the first quarter ending March 31, 2024.
At the property level, key highlights include revenues totaling $1.4 billion and achieving Adjusted EBITDAR of $479.0 million, maintaining Adjusted EBITDAR margins at 34.1%. The interactive segment of PENN Entertainment showcased revenues of $207.7 million (including tax gross up of $116.6 million) and recorded an Adjusted EBITDA loss of $196.0 million.
A summarized breakdown of the first quarter results reveals revenues amounting to $1,606.9 million, compared to $1,673.3 million in the prior year quarter. Net loss reported at $114.9 million, contrasting with net income of $514.4 million in the same period last year. Adjusted EBITDA stood at $101.4 million, a decline from $332.2 million in the prior year quarter. Diluted earnings per common share were reported at $(0.76), down from $3.05 in the prior year quarter.
Additionally, Adjusted EPS for the quarter was $(0.79) compared to $0.39 in the prior year quarter. Adjusted EPS factors in various elements such as transaction-related expenses, legal matters including litigation settlements, and non-operating items like gains and losses on acquisitions and investments.
The detailed financial results provide insights into PENN Entertainment’s performance during the first quarter of 2024, reflecting the company’s ongoing financial trajectory and operational strategies.
Jay Snowden, Chief Executive Officer and President, said: “Our property level performance showed resilience this quarter, with stable trends continuing into April following portfolio-wide severe weather through mid-February. Meanwhile, ESPN BET continues to drive strong top of funnel demand due to the reach and affinity for the ESPN brand, which led to record online sports betting handle and iCasino gross gaming revenue in the quarter. However, Interactive segment results were negatively impacted primarily by unfavorable hold from major sporting events. We look forward to unveiling additional product enhancements and unique media integrations with ESPN ahead of the 2024 football season. Our improved online product offering will help engage, reactivate, and retain our expanding database, while also advancing our strategy to create a highly differentiated experience for sports fans and sports bettors.
“To accelerate our technology and product improvements, we recently announced the hiring of Aaron LaBerge as the Company’s Chief Technology Officer,” said Mr. Snowden. “Mr. LaBerge brings more than 20 years of experience at The Walt Disney Company, most recently serving as the CTO for both Disney Entertainment and ESPN. In his new role, he will be responsible for driving technology strategy and execution for PENN, while leading a multinational team of technologists and serving as the key business leader for the Company’s Interactive division. We are incredibly excited about the arrival of Mr. LaBerge, who is uniquely qualified to help us create a best-in-class digital experience for our customers, while further deepening our connections and integrations with ESPN.
“Weather events in January and early February impacted all our regional property segments; however, both visitation and volumes subsequently rebounded with stable trends continuing into April. Strength in our mid-worth and VIP customer segments offset impacts from known new supply and relative softness in our lower worth and unrated customer segments. Our talented operators continue to drive strong performance by leveraging our industry leading customer loyalty program, PENN Play™, our market leading retail sportsbook offerings, and highly efficient capital improvements. Across the portfolio, we continue to capitalize on cross-sell opportunities from our retail sportsbooks, which has helped sustain our momentum in our Ohio properties and re-energize properties such as Plainridge Park in Massachusetts and Hollywood Casino at Kansas Speedway. And with winter now behind us, we are seeing great progress with our four growth projects, all of which remain on budget and on schedule.
“ESPN BET continued to attract new users this quarter while maintaining a disciplined approach to promotions and marketing expenses; however, our financial results were impacted by lower-than-expected hold and spend per user. On March 11, we launched ESPN BET in North Carolina with a VIP event featuring ESPN’s Stephen A. Smith, highlighting our opportunity to leverage key talent at ESPN. Our Hollywood Greektown property in Detroit was also the home of several ESPN broadcasts during the NFL draft held last week. While we are pleased with the early ESPN BET adoption and engagement results, our focus heading into this football season will be on enhancing our product offerings, including a refreshed home screen and expanded parlay offerings. Simultaneously, with our partners at ESPN, we will reveal additional ESPN BET media integrations within their digital media app and industry leading fantasy product. We believe our enhanced product offering and media integrations will result in superior experiences for our customers, leading to higher retention, share of wallet, and spend per user.”
“On April 23rd, we issued our 2023 Corporate Social Responsibility Report, which details the significant progress PENN has made in advancing our Environmental, Social and Governance (“ESG”) initiatives over the last year. More recently, we celebrated Black History Month in February by holding numerous events across the company to drive open and meaningful conversation around Diversity, Equity & Inclusion. One of our most popular panels featured ESPN anchor Elle Duncan and Tiffany Murphy, CEO of The Culture Equity, one of our minority vendor partners. We also celebrated women’s achievements during the month of March, including hosting a virtual panel discussion for Team Members with three of PENN’s female Board members. Finally, our properties across the country took part in Earth Day last week, volunteering hundreds of hours to help clean up our communities and learn more about the importance of sustainability in our operations,” concluded Mr. Snowden.
