Churchill Downs (CHDN) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 net revenue of $628.5M, up $56.0M year-over-year, with growth across Live and Historical Racing, Gaming, and TwinSpires, supported by the Exacta acquisition.

• Operating income rose to $125.9M from $112.3M, and net income attributable to the company increased to $65.4M from $61.0M.

• Adjusted EBITDA reached $235.3M, a 7.8% increase year-over-year.

• Growth was driven by strategic investments, including Kentucky Derby enhancements and HRM expansion in Virginia and Kentucky.

• Strong balance sheet and consistent execution of growth strategies position the company for long-term shareholder returns.

Financial highlights

• Q3 net revenue was $628.5M (+9.8% year-over-year), with adjusted EBITDA of $235.3M (+7.8%).

• Nine-month net revenue reached $2.11B, up $209.6M year-over-year, and adjusted EBITDA was $922.6M, up $117.8M.

• Free cash flow for the first nine months was $591M, up 32% year-over-year.

• Cash flow from operations for the nine months was $641.1M, up $142.3M year-over-year.

• Diluted EPS for Q3 was $0.86, up from $0.79; adjusted net income was $72.1M, with adjusted diluted EPS of $0.97.

Outlook and guidance

• Major Kentucky Derby seating and hospitality projects to be completed in stages through 2028, increasing premium seating by 20%.

• HRM expansion in Virginia to reach 5,000 machines by end of 2025; new venues in Kentucky (Owensboro Q1 2025, Calvert City early 2026).

• Project capital expenditures for 2024 are expected at $450M–$550M; 2025 project capital expected at $250M–$325M.

• Maintenance capital for 2024 guided at $90M–$105M.

• Management anticipates sufficient cash flow and credit availability to fund operations and capital projects over the next twelve months.