MGM Resorts International (MGM) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights robust performance with record high revenues, improved EBITDA, and strong growth in digital ventures. The strategic Marriott partnership and positive outlook for Las Vegas and Macau operations further strengthen the sentiment. While there are concerns about the gaming loss tax and some unclear management responses, the overall tone remains optimistic with high-end customer focus and strategic growth initiatives in place. The positive financial metrics and optimistic guidance indicate a likely stock price increase.
Key Financial Performance
Consolidated Net Revenues Grew by 6% year-over-year, driven by record EBITDAR in Macau, a $470 million EBITDA turnaround at BetMGM North America, and investments in upgrading experiences across the portfolio.
Las Vegas EBITDAR Declined 4% year-over-year in Q4 2025, but showed stabilization compared to earlier declines in the year. The decline was attributed to headwinds in Las Vegas and disproportionate impact from Luxor and Excalibur properties.
MGM China EBITDAR Grew by 31% year-over-year in Q4 2025, achieving a record high for the quarter. This was driven by a 16.5% market share in Q4 and maintaining over 16% market share for the full year, along with high service levels and premium mass customer focus.
BetMGM North America EBITDA Improved by $470 million year-over-year in 2025, turning positive and resulting in a $135 million distribution to MGM in Q4. Monthly player volumes increased by 24%, and active player days increased by 14%.
Regional Operations Slot Win Achieved record fourth-quarter and full-year slot win in 2025, contributing to a 2% rise in net revenues in Q4.
Digital Check-ins Increased by 18% year-over-year, reducing average check-in time to 1.5 minutes from 6.5 minutes.
MGM Digital Net Revenues Grew by 35% year-over-year in 2025, driven by international markets like Sweden and Brazil.
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Operating Highlights
MGM Osaka: Groundbreaking for MGM Osaka, expected to be the world's largest integrated resort upon opening.
Room Renovations: Completed MGM Grand's room renovation, with 700-1,000 rooms offline per day in 2025, now fully available in 2026.
Luxury Gaming Tournaments: Hosted $5 million slot and $10 million baccarat tournaments, with plans to repeat in 2026.
Macau Market Share: Achieved record 16.5% market share in Q4 2025 and maintained over 16% for the full year.
BetMGM Expansion: BetMGM North America achieved a $470 million EBITDA turnaround and expanded into Brazil with a new sportsbook.
International Growth: BetMGM scaling in Sweden and Brazil, with Sweden as the top market.
Digital Check-ins: 18% increase in digital check-ins, reducing average check-in time to 1.5 minutes.
AI and Technology: 1 million chats through digital concierge, leveraging AI for guest engagement and productivity.
Slot Win Records: Achieved record slot wins in regional operations for Q4 and full year 2025.
Share Buybacks: Repurchased 37.5 million shares in 2025 for $1.2 billion, reducing share count by almost 50% over 5 years.
Japan Investment: Committed $350-$400 million for MGM Osaka in 2026, funded by yen-denominated credit facility.
Macau Branding Fee: Increased branding fee from 1.75% to 3.5%, securing MGM branding through the concession's life.
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Risk or Challenges
Las Vegas-specific headwinds: The company faced challenges in Las Vegas due to a return to a more balanced environment after years of exceptional growth. This included declines in EBITDAR and disproportionate impacts on properties like Luxor and Excalibur, which represent 6% of Las Vegas EBITDAR.
Macroeconomic uncertainties: The company acknowledged macroeconomic factors such as interest rates and tax regulations that could impact consumer behavior and overall performance.
Competitive pressures in Macau: MGM China operates in a highly competitive environment, requiring continuous focus on maintaining high service levels and adapting to customer preferences to sustain market share and margins.
Supply chain and construction risks: Ongoing construction projects in Japan (MGM Osaka) and Dubai (Bellagio, ARIA, MGM Grand Hotel towers) carry risks related to timelines, budgets, and execution, with the Japan project scheduled for completion in 2030.
Digital and international market challenges: The company is investing heavily in digital and international markets like Brazil and Sweden, which are new and evolving, posing risks related to market dynamics and regulatory changes.
Dependence on event-driven revenue: The company relies on major events like Formula 1, Super Bowl, and World Cup to drive visitation and revenue, which could be impacted by changes in event schedules or attendance.
Lease and rent escalations: While lease terms cap rent escalators at 2%-3%, these still represent a fixed cost that could pressure margins if revenue growth does not keep pace.
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Guidance & Outlook
Las Vegas Growth Projections: MGM Resorts anticipates growth in Las Vegas for the full year of 2026, supported by completed capital projects such as MGM Grand's room renovation and high-limit slot rooms at Bellagio. Group and convention revenue is expected to grow mid-single digits, with a higher mix of group bookings and improved profitability.
Event-Driven Visitation: Major events like Formula 1, the Super Bowl, and the World Cup are expected to drive increased visitation to Las Vegas properties. MGM is leveraging its proximity to key venues and luxury offerings to capitalize on these events.
Luxury Offerings and Gaming Innovations: MGM plans to continue investing in luxury offerings, including hosting high-stakes gaming tournaments and enhancing VIP gaming environments. These initiatives are expected to attract high-value customers and drive revenue growth.
Macau Market Share and Growth: MGM China achieved record market share and EBITDAR in 2025 and expects continued strong performance in 2026. The company plans to maintain its premium mass customer focus and capitalize on its competitive positioning in Macau.
BetMGM North America Growth: BetMGM provided 2026 adjusted EBITDA guidance of $300 million to $350 million, with $50 million in expected CapEx. The venture aims to continue distributing excess cash to its parent companies and achieve $500 million in adjusted EBITDA by 2027.
International Digital Expansion: MGM Digital plans to expand its presence in international markets, including Brazil and Sweden, with investments in sportsbook platforms and marketing initiatives. The company expects solid top-line growth and reduced EBITDAR losses in 2026.
Japan and Dubai Development Projects: Construction of MGM Osaka in Japan is on track for a 2030 opening, with a 2026 funding commitment of $350 million to $400 million. In Dubai, Bellagio, ARIA, and MGM Grand Hotel towers are scheduled to open in the third quarter of 2028.
Operational Efficiency and Technology: MGM is focusing on operational efficiencies through AI and technology innovations, including digital check-ins and concierge services. These initiatives aim to improve guest experiences and productivity.
Macroeconomic and Regulatory Catalysts: Potential macroeconomic drivers, such as lower interest rates and favorable tax regulations, could benefit MGM's operations in Las Vegas and beyond. The company is optimistic about these factors contributing to growth in 2026.
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Shareholder Return Plan
Share Repurchase Program: We bought back over 15 million shares during the fourth quarter for $516 million, bringing our total 2025 share repurchase activity to 37.5 million shares for $1.2 billion, and that represents an average price of $32.43. Over the last 5 years, we've decreased our share count by almost 50%.
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Key Q&A
Q:What factors contribute to the path of reverting back to growth in Las Vegas?
A:Factors include stabilized occupancy, upcoming events like CON/AGG, strong performance in high-end luxury and gaming segments, and favorable convention pacing. The MGM remodel impact is also expected to stabilize, and the convention authorities anticipate 1 million more visitors.
Q:Were there any one-offs in the fourth quarter in Las Vegas or other segments?
A:Yes, the table hold was above average, contributing approximately $20 million to the bottom line in Las Vegas. Additionally, there were unusual corporate expenses in the fourth quarter and the first quarter of the previous year, which are not expected to recur.
Q:What initiatives are being taken to stabilize the value customer or leisure segment in Las Vegas?
A:Initiatives include revenue-driving and cost-side measures, city-wide sales, and efforts to drive visitation through large-scale events. The shortening of the booking window is being monitored, and responses to events have been positive.
Q:Why is the casino business performing well despite lower occupancy on the Strip?
A:Investments in high-end slot rooms and targeted marketing strategies, including BetMGM and Marriott channels, have driven strong performance. High-end customers continue to spend on experiences, and the database remains resilient.
Q:What is the outlook for Las Vegas margins and room renovations?
A:Operating expense growth is expected to remain in the very low single digits. The MGM Grand renovation impact was $65 million in EBITDA last year, and ARIA renovations are scheduled for late Q4, with minimal disruption expected.
Q:What is the margin environment in Macau, and what are the expectations for Lunar New Year?
A:Macau margins remain in the mid-to-high 20s, with rational competition and stable reinvestment rates. Lunar New Year bookings are strong, with high player quality and a focus on premium mass and yield management.
Q:What is the stabilization trend in Las Vegas, and can growth occur with RevPAR declines?
A:Stabilization is seen in moderating ADR declines and strong casino revenue growth. RevPOR was slightly up in Q4, and continued stabilization is expected to support growth despite RevPAR declines.
Q:What is driving the higher table hold in Las Vegas?
A:The higher table hold is driven by increased high-end activity, particularly in baccarat, where MGM has a significant market share.
Q:What is the outlook for the regional segment?
A:The regional segment remains steady, with investments in high-limit rooms paying dividends. Exciting developments like the potential Sphere in Maryland could drive additional visitation.
Q:What is the expected impact of the World Cup on Las Vegas?
A:The World Cup is expected to bring incremental visitation, particularly from high-end customers traveling through the region. Advanced bookings are being monitored.
Q:Is there evidence of trade-down behavior in Las Vegas?
A:No significant evidence of trade-down behavior has been observed. Digital gaming is seen as additive rather than a substitute for brick-and-mortar gaming.
Q:What is the status of the 90% gaming loss tax deductibility issue?
A:The company is closely monitoring the impact and partnering with industry colleagues to advocate for a fix. Slot handle strength remains significant despite the tax change.
Q:What is the approach to share buybacks and capital allocation?
A:Share buybacks are prioritized based on perceived value, supported by strong free cash flow. MGM China’s float must remain at 22%, limiting direct buybacks there.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer on the potential long-term impact of the 90% gaming loss tax deductibility issue, offering only general comments about monitoring and advocacy efforts. Additionally, while they discussed stabilization trends in Las Vegas, they did not provide specific numerical guidance on RevPAR growth or detailed breakdowns of expense management strategies.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ARIA
America venture
BetMGM North
BetMGM distribution
California
China BetMGM
Grand room
International Full
Las Vegas
MGM Osaka
North America
Northfield
Officer MGM
President Chief
Vegas MGM
book year
brand market
city event
completion
concession
feedback
group convention
improvement
lease
maintenance
mind
minute
night book
parent
promotion Chief
proximity
renewal
rent
room renovation
source cash
sportsbook
stabilization
strip
success
tournament
venue
win slot
MGM Transcript
MGM Resorts International (MGM) Q4 2025 Earnings Call Transcript
Positive2-6
The earnings call highlights robust performance with record high revenues, improved EBITDA, and strong growth in digital ventures. The strategic Marriott partnership and positive outlook for Las Vegas and Macau operations further strengthen the sentiment. While there are concerns about the gaming loss tax and some unclear management responses, the overall tone remains optimistic with high-end customer focus and strategic growth initiatives in place. The positive financial metrics and optimistic guidance indicate a likely stock price increase.
MGM Resorts International (MGM) Q3 2025 Earnings Call Transcript
Positive10-29
The earnings call presents a mixed picture: positive developments in strategic areas like BetMGM, MGM China, and digital investments, alongside challenges in Las Vegas. The company's focus on disciplined capital allocation, including share buybacks and cash distributions, is favorable. Despite some negative financial metrics and disruptions, optimistic guidance and strategic moves, like the Japan project, bolster the outlook. The Q&A reveals management's proactive approach to challenges and opportunities, supporting a positive sentiment. Overall, the strategic initiatives and optimistic guidance outweigh the negative aspects, suggesting a positive stock price movement.
MGM Resorts International (MGM) BofA Securities 2025 Gaming And Lodging Conference (Transcript)
Neutral9-4
MGM Resorts International (MGM) Q2 2025 Earnings Call Transcript
Positive7-30
The earnings call highlights several positive factors: strong top-line growth, successful cost management, and strategic partnerships like Marriott. Despite some challenges, such as decreased visitation in Vegas, management is optimistic about Q4 due to strategic initiatives and events. The Q&A section reveals confidence in digital expansion and shareholder returns. The sentiment is further bolstered by the aggressive share repurchase program and improved financial metrics, suggesting a positive stock price movement over the next two weeks.
MGM Report
Frequently Asked Questions
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