Churchill Downs (CHDN) Q2 2024 earnings summary

Executive summary

• Achieved all-time record net revenue of $890.7 million in Q2 2024, up 16% year-over-year, driven by record Kentucky Derby Week, new property openings, and growth across all segments.

• Adjusted EBITDA reached a record $444.8 million, up 22% year-over-year, reflecting strong segment performance and operational efficiencies.

• Net income attributable to Churchill Downs rose to $209.3 million from $143.0 million, a 46% increase year-over-year.

• Kentucky Derby delivered significant growth in ticketing, sponsorship, and wagering, with the new Paddock Project enhancing guest experience and monetization opportunities.

• Signed a new seven-year Kentucky Derby broadcast agreement with NBC and opened Terre Haute Casino Resort.

Financial highlights

• Q2 2024 net revenue: $890.7 million (+16% year-over-year); Adjusted EBITDA: $444.8 million (+22%); net income: $209.3 million ($2.79/share diluted), up from $143.0 million ($1.86/share).

• Record free cash flow of $437 million ($5.85/share) in the first half, up $65 million from 2023.

• Operating income margin: 37% in Q2 2024, up from 29% last year.

• Cash from operations for six months: $471.7 million (+$69.1 million year-over-year).

• Operating expenses increased $17.8 million in Q2, mainly due to new properties and higher SG&A.

Outlook and guidance

• 2025 project capital expected to be about one-third of 2024’s projected spend, as major projects complete.

• Project capital investments for 2024 expected to be $450–$550 million, with major projects underway in Kentucky, Virginia, and New Hampshire.

• Bank covenant net leverage expected to be at or slightly below 4x by year-end, declining further in 2025 as new investments ramp.

• Full deployment of 5,000 HRMs in Virginia targeted by end of 2025, with ongoing optimization of machine allocation.

• Multi-year development plans for Churchill Downs Racetrack to be detailed in the next earnings call.