Published on: October 30, 2024, 04:24h.
Last updated on: October 30, 2024, 04:24h.
MGM Resorts International (NYSE: MGM) announced its third-quarter results today, emphasizing its ongoing share repurchase initiatives and revenue growth at BetMGM.
With support from MGM China, the Bellagio operator reported a record consolidated net revenue of $4.2 billion for the September quarter, marking a 5% increase year-over-year. Adjusted earnings per share declined to 54 cents from 64 cents in the previous year.
Despite challenges faced by some Las Vegas Strip operators, MGM reported a 1% increase in third-quarter Strip revenue to $2.1 billion, with adjusted EBITDAR rising to $731 million from $714 million. MGM is the leading operator on the Strip.
MGM reassured about its performance in regional markets, citing a rise in sales at its regional casinos to $952 million from $925 million, and an increase in adjusted EBITDAR to $300 million from $293 million.
BetMGM Progresses
BetMGM, a joint venture between MGM and Entain Plc (OTC: GMVHY), showed improvement in the July-September period, although it trails competitors like FanDuel and DraftKings (NASDAQ: DKNG) in market share.
BetMGM reported record 3Q net revenues, growing nearly 20% year-over-year, outpacing the growth achieved in the previous quarter,” stated the gaming company.
While the US sports wagering market is dominated by FanDuel and DraftKings, BetMGM is focused on capturing market share in the iGaming sector, which offers higher margins and profit potential.
The expansion of iGaming represents significant growth potential for operators like BetMGM, with more states expected to legalize this form of online wagering in the future.
MGM’s Share Repurchase Strategy
Over the years, MGM has been actively repurchasing its own shares, a trend that continued in the third quarter.
“In the quarter, we bought back over $300 million in shares, bringing our total for the year to approximately $1.3 billion,” said CFO Jonathan Halkyard in a press release.
Since 2021, MGM has reduced its outstanding shares by 40% through repurchases. With $944 million in free cash flow at the end of the third quarter, MGM’s strong financial position supports its share buyback program.