MGM RESORTS INTERNATIONAL earnings calls

Las Vegas leisure demand timing

Q (Brandt Montour · Barclays): Is leisure demand in Las Vegas finding a bottom in August or September, or is October improvement just seasonality from conventions and events?

A: Management said the main shortfall vs. last year was lower ADRs. October looks better partly due to seasonality and events, but the booking window is still last-minute and they need relief from fuel and airline pricing.

"For us, the push was the yield on pricing and getting folks to come particularly from a leisure and an FIT perspective, who were willing to pay up, if you will, in terms of ADRs." — William Joseph Hornbuckle (CEO)

Is October a real bottom? Luxury vs low end

Q (Ayesha Khanna Molino · Barclays): Is the October stabilization a durable bottom, and did the low-end weakness spread into luxury properties or did the bifurcation remain?

A: Management said October shows sequential improvement and they expect further stabilization as the event calendar improves in Q4 and beyond. They did see ADR impacts across the portfolio in late summer but said bifurcation has been returning in October and they are monitoring closely.

Capital allocation: buybacks vs Japan vs digital

Q (David Katz · Jefferies): How will you allocate capital between buybacks, large Japan investment, internal redevelopment, and digital opportunities? Also, how will you prepare for a new Strip competitor opening?

A: They said they bought back 250 million shares over the past 3–4 years but Japan will require about $1 billion per year for 2 years, which will limit but not eliminate buybacks. They have already invested in MGM Digital (including Brazil) and will keep investing in room product and high-end assets; they welcome a new competitor because it can regenerate the market and bring new customers.

"So I think going forward, our opportunities to repurchase our shares will be impacted by that somewhat." — Jonathan S. Halkyard (CFO)

High-end customers and lower cash taxes

Q (Robin Farley · UBS): Did the highest-end players not show up in Q3 in Macau and Vegas? And why did your cash tax guidance drop so much—is it bookkeeping or a real change?

A: Management disagreed that the high end did not show up, saying high-end play remains productive and they even hosted some of their biggest customers. On cash taxes, they said guidance fell materially due to fine-tuning CapEx timing, tax treatment, and some refund work that reduced the 2026 estimate.

"it is really a result of just fine tuning our CapEx and the tax treatment of that under the-- when we will fulfill as well as just some work around refunds that we have been doing." — Jonathan S. Halkyard (CFO)

Vegas mix and cost controls

Q (Shaun Kelley · BofA): Why did revenue not flow through to EBITDA as expected in Las Vegas—did mix shift to casino and other revenues—and where can you find more cost offsets?

A: They said a lot of the quarter’s margin behavior came from high-end gaming (a big slot tournament and high-end baccarat) which is high margin. Marketing shifted toward casino customers (casino marketing mix rose from about 20% to over 30%), which increases upfront spend; operations are focused on efficiency, with FTEs effectively flat year over year while handling occupied rooms.

"A lot of that high end play because we had a massive slot tournament with high end play." — William Joseph Hornbuckle (CEO)

Las Vegas recovery and share repurchases

Q (Dan Politzer · JPMorgan): Given RevPAR declines despite a strong U.S. travel backdrop, how should we think about Las Vegas recovery and attracting higher-quality customers? Also, will you be more aggressive on share repurchases and were you locked out by the People Inc. situation?

A: Bill said higher airfares (up about 45%) and jet fuel and international travel issues have hurt Las Vegas, but they see value and expect to push through as things normalize. Jonathan said they did not repurchase in Q3 because of company circumstances, those issues are now concluded, and the capital structure allows them to consider taking leverage up to buy shares if appropriate.

"Yes. We chose not to repurchase shares in the third quarter because of just the circumstances surrounding the company" — Jonathan S. Halkyard (CFO)

Funding Osaka and Brazil outlook

Q (John DeCree · CBRE): How will you fund the roughly $1 billion per year equity contributions for Osaka in 2027–2028? And what is your view and appetite for Brazil after the recent shutdown there?

A: Jonathan said they will fund Osaka contributions from cash on hand and free cash flow and may use yen facilities; the project is fully funded with ORIX and a senior Japanese credit facility and will likely be refinanced after opening. Gary said Brazil was surprise-affected by political events; they put contingency plans in place, reduced fixed costs, and are relying on their local partner while watching Congress and courts and planning multiple scenarios.

"But the reality is we will be funding these out of our cash on hand and our free cash flow over the next couple of years." — Jonathan S. Halkyard (CFO)

Month-to-month cadence; Mid-Atlantic iGaming

Q (Barry Jonas · Truist): Can you describe month-to-month ADR trends through the quarter to help Q4 visibility? And what do you think about iGaming moves in the Mid-Atlantic and the impact on National Harbor?

A: Jonathan gave monthly ADR context: July was roughly flat year-over-year, August was down mid single digits, September was down high single digits, and October is looking more like July; November (F1) is shaping up well while December has some conventions rotating out. Bill said they are optimistic about iGaming expansion (citing Michigan as an example), are engaged with state governments and lobbyists, and believe Virginia or Maryland additions could be accretive if they happen.

"October right now is looking a lot more like July." — Jonathan S. Halkyard (CFO)

Regional margins and international recovery

Q (Chad Beynon · Macquarie): Anything to call out on regional same-store margins this quarter? And does international travel need lower airfares to recover for 2027 events on the Strip?

A: Ayesha said a material hold impact at a couple properties affected the quarter, but teams reduced same-store FTEs and remain focused on efficiency. Bill said Mexico demand is strong and now the number 1 import market, Canada was down about 30-something percent to Las Vegas but is rebounding, and generally international travel is on the mend though it will take time and is impacted by airfare and political factors.

"Jonathan noted in his remarks, we had a bit of a hold impact at a couple of our properties, which was material for the quarter." — Ayesha Khanna Molino (COO)

Macau margin question (setup)

Q (Steven Wieczynski · Stifel): How much of Macau margin decline was promotional versus other factors like labor or event calendar?

A: Bill deferred the technical Macau margin answer to the local China team and asked Kenny to answer the question.

"Well, Steven, we kept Kenny up. So, Kenny, I am going to let you answer this 1." — William Joseph Hornbuckle (CEO)

Macau margin drivers and People Inc. talks

Q (Kenneth Feng): Was the Macau margin decline promotional or due to other factors? And are the discussions with People Inc. finished, including rumors about flipping the table or pursuing them?

A: Kenny said MGM China’s margins are around 26.9% and in the mid- to high-twenties range, with impacts from lag factors, event calendars, and high-end play, and that they focus on efficiency and targeting premium mass customers. Bill said talks with People Inc. are done, both sides agree, they will refocus on their business, praised board members who participated in strategy, and are excited to return focus to the core business.

"Barry, of note, and Joey have been great board members from IAC and now People Inc. that participated heavily in our vision and our thinking for longer term." — William Joseph Hornbuckle (CEO)