Red Rock Resorts (RRR) Q2 2024 earnings summary

Executive summary

• Net revenues for Q2 2024 increased 16.9% year-over-year to $486.4 million, driven by the opening of Durango Casino Resort and strong Las Vegas operations.

• Adjusted EBITDA for Q2 2024 was $201.7 million, up 15.0% year-over-year, with Las Vegas operations achieving record results and Durango ramping up.

• Net income attributable to the company was $69.8 million, down 6.8% year-over-year, reflecting higher interest and operating expenses.

• Operating income rose 10.5% to $140.2 million for the quarter, with continued favorable customer trends and spend per visit.

• Durango is expected to become a high-margin property, with expansion planned to add casino space and amenities.

Financial highlights

• Las Vegas net revenue: $483.2M, up 17.1% year-over-year; Adjusted EBITDA: $223.1M, up 15.6% year-over-year; Adjusted EBITDA margin: 46.2%.

• Consolidated net revenue: $486.4M, up 16.9% year-over-year; Adjusted EBITDA: $201.7M, up from $175.3M; Adjusted EBITDA margin: 41.5%.

• Casino revenues grew 18.6% to $319.6M; food and beverage and room revenues increased 18.2% and 11.7%, respectively.

• Converted 58% of Adjusted EBITDA to operating free cash flow, generating $117.6M ($1.11/share) in Q2; YTD free cash flow $246.2M ($2.33/share).

• Hotel and food & beverage segments delivered record Q2 revenue and profit.

Outlook and guidance

• Management expects continued impact from inflation, higher interest rates, and commodity price volatility through 2024.

• Full-year 2024 capital spend (excluding Durango project close) expected between $140M and $180M; anticipated capital expenditures for the remainder of 2024 are $60–$100M, mainly to close out Durango.

• Cash on hand, operations, and credit facility are expected to be sufficient to fund requirements and service debt for the next twelve months.

• Expect continued stability in the locals market and customer database into Q3.

• Facing tough non-gaming comps for the rest of 2024 due to prior COVID-related rebookings; positive momentum expected in 2025.