Golden Entertainment Inc.
11/06/2025 | Press release | Distributed by Public on 11/06/2025 07:10
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
As used in this Quarterly Report on Form 10-Q, unless the context suggests otherwise, the terms "Golden," "we," "us" and "our" refer to Golden Entertainment, Inc. together with its subsidiaries.
The following discussion should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Reporton Form 10-K for the year ended December 31, 2024 (the "Annual Report") previously filed with the Securities and Exchange Commission ("SEC").
Forward-Looking Statements
This Quarterly Report on Form 10-Q, including Management's Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements can generally be identified by the use of words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "potential," "seek," "should," "think," "will," "would" and similar expressions, or they may use future dates. In addition, forward-looking statements include statements regarding our strategies, objectives, business opportunities and plans; anticipated future growth and trends in our business or key markets and business outlook; return of capital to shareholders (including through the payment of recurring quarterly cash dividends or repurchase of shares of our common stock); projections of future financial condition, operating results, income, capital expenditures, costs or other financial items; anticipated regulatory and legislative changes; and other characterizations of future events or circumstances as well as other statements that are not statements of historical fact. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. These forward-lookingstatements are subject to assumptions, risks and uncertainties that may change at any time, and readers are therefore cautioned that actual results could differ materially from those expressed in any forward-looking statements. Factors that could cause our actual results to differ materially include: changes in national, regional and local economic and market conditions, including a continued shutdown of the U.S. government; legislative and regulatory matters; increases in gaming taxes and fees in the jurisdictions in which we operate; litigation; increased competition; reliance on key personnel; our ability to comply with covenants in our debt instruments; terrorist incidents; natural disasters; severe weather conditions; the effects of environmental and structural building conditions; the effects of disruptions to our information technology and other systems and infrastructure; factors affecting the gaming, entertainment and hospitality industries generally; and other factors identified under the heading "Risk Factors" in our Annual Reportor appearing elsewhere in this report and in our other filings with the SEC. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the filing date of this report. We undertake no obligation to revise or update any forward-looking statements for any reason.
Overview
We own and operate a diversified entertainment platform, consisting of a portfolio of gaming assets that focus on casino and branded tavern operations. Our portfolio comprises eight casino properties located in Nevada and 72 branded taverns targeting local patrons located primarily in the greater Las Vegas, Nevada metropolitan area.
We completed the sale of our distributed gaming operations in Nevada on January 10, 2024 for cash consideration of $213.5 million plus working capital and other adjustments and net of cash transferred at closing. Prior to the sale, the results of our distributed gaming operations in Nevada were presented in our Distributed Gaming reportable segment. Refer to "Note 2 - Divestitures" and "Note 11 - Segment Information" in Part I, Item 1: Financial Statements for further information.
On April 22, 2024, we acquired the operations of Great American Pub ("GAP"), comprised of two tavern locations in Nevada, for cash consideration of $7.3 million. The acquired GAP taverns have been included in our Nevada Taverns reportable segment from the date of acquisition.
Operations
As of September 30, 2025, we conducted our business through three reportable segments: Nevada Casino Resorts, Nevada Locals Casinos and Nevada Taverns.
The following table sets forth certain information regarding our operations by reportable segment as of September 30, 2025:
| Location | Casino Space (Sq. ft.) | Slot Machines | Table Games | Hotel Rooms | ||||||||||||||||||||||||||||
| Nevada Casino Resorts | ||||||||||||||||||||||||||||||||
| The STRAT Hotel, Casino & Tower ("The STRAT") | Las Vegas, NV | 80,000 | 790 | 31 | 2,429 | |||||||||||||||||||||||||||
| Aquarius Casino Resort ("Aquarius") | Laughlin, NV | 69,750 | 1,018 | 29 | 1,905 | |||||||||||||||||||||||||||
| Edgewater Casino Resort ("Edgewater") | Laughlin, NV | 69,042 | 670 | - | 1,037 | |||||||||||||||||||||||||||
| Nevada Locals Casinos | ||||||||||||||||||||||||||||||||
| Arizona Charlie's Boulder | Las Vegas, NV | 41,969 | 583 | - | 303 | |||||||||||||||||||||||||||
| Arizona Charlie's Decatur | Las Vegas, NV | 67,360 | 699 | 9 | 259 | |||||||||||||||||||||||||||
| Gold Town Casino | Pahrump, NV | 10,000 | 140 | - | - | |||||||||||||||||||||||||||
| Lakeside Casino & RV Park | Pahrump, NV | 11,009 | 203 | - | - | |||||||||||||||||||||||||||
| Pahrump Nugget Hotel Casino ("Pahrump Nugget") | Pahrump, NV | 22,528 | 343 | 9 | 69 | |||||||||||||||||||||||||||
| Nevada Taverns | ||||||||||||||||||||||||||||||||
|
72 branded tavern locations
|
Nevada | - | 1,138 | - | - | |||||||||||||||||||||||||||
| Totals | 371,658 | 5,584 | 78 | 6,002 | ||||||||||||||||||||||||||||
Nevada Casino Resorts
Our Nevada Casino Resorts segment is comprised of destination casino resort properties offering a variety of food and beverage outlets, entertainment venues and other amenities. The casino resort properties in this segment cater primarily to a regional drive-in customer base seeking a value-oriented vacation experience, with guests typically traveling from Southern California or Arizona. Our casino resort properties in Nevada have a significantly larger number of hotel rooms compared to the other casino properties in our portfolio. While hotel stays at these casino resorts are typically longer, the overall frequency of visitation from guests is lower when compared to our Nevada Locals Casinos.
The STRAT: The STRAT is our premier casino resort property, located on Las Vegas Boulevard on the north end of the Las Vegas Strip. The STRAT is comprised of a casino, a hotel and a tower, which includes indoor and outdoor observation decks, thrill rides and the SkyJump attraction. The STRAT offers hotel rooms, gaming, race and sportsbook facilities in an 80,000 square foot casino, ten restaurants, two rooftop pools, a fitness center, retail shops and entertainment facilities.
Laughlin casinos: We own and operate two casino resorts in Laughlin, Nevada, the Aquarius and the Edgewater, which are located approximately 90 miles from Las Vegas on the western bank of the Colorado River. In addition to hotel rooms, gaming, race and sportsbook facilities at each property, the Aquarius has seven restaurants and the Edgewater offers five restaurants. The Edgewater also offers a bingo facility and dedicated entertainment venues, including the Edge Pavilion and the Laughlin Event Center.
The operations of Colorado Belle Casino Resort have remained suspended since March 2020 and we voluntarily surrendered our gaming license for the property on June 30, 2023.
Nevada Locals Casinos
Our Nevada Locals Casinos segment is comprised of casino properties that cater to local customers who generally live within a five-mile radius of our properties. Our locals casino properties typically experience a higher frequency of customer visits compared to our casino resort properties, with many of our customers visiting our Nevada Locals Casinos on a weekly basis. The casino properties within this reportable segment have no or a limited number of hotel rooms and offer fewer food and beverage outlets or other amenities, with revenues primarily generated from slot machine play.
Arizona Charlie's casinos: Our Arizona Charlie's Boulder and Arizona Charlie's Decatur casino properties primarily serve local Las Vegas gaming patrons and provide an alternative experience to the Las Vegas Strip. In addition to hotel rooms, gaming, race and sportsbook, and bingo facilities, Arizona Charlie's Boulder offers three restaurants and an RV park with 221 RV hook-up sites and Arizona Charlie's Decatur offers four restaurants and Keno.
Pahrump casinos: We own and operate three casino properties in Pahrump, Nevada, which is located approximately 60 miles from Las Vegas and is a gateway to Death Valley National Park. In addition to gaming and race and sportsbook facilities at each of our Pahrump casino properties, the Pahrump Nugget offers hotel rooms, four restaurants, bingo, a bowling center, and a 5,200 square foot banquet and event center. Our Lakeside Casino & RV Park also offers a restaurant and 159 RV hook-up sites.
Nevada Taverns
Our Nevada Taverns segment is comprised of branded tavern locations that offer a casual, upscale environment catering to local patrons offering superior food, craft beer and other alcoholic beverages, and are typically limited to 15 slot machines. Most of our branded taverns are located in the greater Las Vegas, Nevada metropolitan area and cater to local patrons seeking more convenient entertainment establishments than traditional casino properties. Our tavern patrons are typically younger than traditional casino customers, which diversifies our customer demographic. Prior to the sale of our distributed gaming operations in Nevada, we owned and operated the slot machines located within each tavern. Following the sale, slot machines at our branded tavern locations are owned and operated by the independent third party that acquired the distributed gaming operations from us. Accordingly, we typically receive a large percentage of the gaming revenue from the tavern slot machines in exchange for allowing the independent third party that acquired the distributed gaming operations to place the slot machines in our taverns. Our tavern brands include PT's Gold, PT's Pub, PT's Ranch, PT's Place, Sierra Gold, Sierra Junction, Sean Patrick's, Lucky's, Great American Pub and SG Bar. As of September 30, 2025, we owned and operated 72 branded taverns, which offered over 1,100 onsite slot machines.
Results of Operations
The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and condensed notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2025 and 2024.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Gaming | $ | 77,078 | $ | 75,684 | $ | 236,069 | $ | 240,880 | |||||||||||||||
| Food and beverage | 39,623 | 41,849 | 122,975 | 128,623 | |||||||||||||||||||
| Rooms | 25,394 | 28,938 | 81,987 | 89,760 | |||||||||||||||||||
| Other | 12,723 | 14,762 | 38,250 | 43,351 | |||||||||||||||||||
| Total revenues | 154,818 | 161,233 | 479,281 | 502,614 | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Gaming | 20,454 | 20,141 | 61,516 | 67,796 | |||||||||||||||||||
| Food and beverage | 32,870 | 34,226 | 100,589 | 102,702 | |||||||||||||||||||
| Rooms | 15,034 | 16,202 | 46,463 | 48,888 | |||||||||||||||||||
| Other | 5,082 | 4,276 | 12,430 | 11,140 | |||||||||||||||||||
| Selling, general and administrative | 55,517 | 57,056 | 164,221 | 173,130 | |||||||||||||||||||
| Depreciation and amortization | 22,868 | 22,626 | 67,812 | 67,362 | |||||||||||||||||||
| Loss (gain) on disposal of assets | 1,901 | (256) | 1,953 | (242) | |||||||||||||||||||
| Gain on sale of business | - | - | - | (68,944) | |||||||||||||||||||
| Preopening expenses | 210 | 234 | 430 | 377 | |||||||||||||||||||
| Total expenses | 153,936 | 154,505 | 455,414 | 402,209 | |||||||||||||||||||
| Operating income | 882 | 6,728 | 23,867 | 100,405 | |||||||||||||||||||
| Non-operating expense | |||||||||||||||||||||||
| Interest expense, net | (7,941) | (7,959) | (23,167) | (27,255) | |||||||||||||||||||
| Loss on debt extinguishment and modification | - | - | - | (4,446) | |||||||||||||||||||
| Total non-operating expense, net | (7,941) | (7,959) | (23,167) | (31,701) | |||||||||||||||||||
| (Loss) income before income tax benefit (provision) | (7,059) | (1,231) | 700 | 68,704 | |||||||||||||||||||
| Income tax benefit (provision) | 2,401 | 6,398 | 1,773 | (20,951) | |||||||||||||||||||
| Net (loss) income | $ | (4,658) | $ | 5,167 | $ | 2,473 | $ | 47,753 | |||||||||||||||
Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024
Revenues
The $6.4 million, or4%,decrease in revenues for the three months ended September 30, 2025 compared to the prior year period resulted from decreases of $2.2 million $3.5 million, and $2.1 million in food and beverage, rooms, and other revenues, respectively, offset by $1.4 million increase in gaming revenues primarily driven by our Nevada Taverns segment. Lower hotel occupancy rates at our casino properties during the three months ended September 30, 2025 compared to the prior year period resulted in lower food and beverage, rooms, and other revenues, as well as the impact of lowervisitation rates at The STRAT tower. In addition, the year-over-year decrease in other revenues was attributable to certain of our taverns operating under a space lease arrangement where we received a fixed monthly rental fee recognized as other revenue during the prior year period. These taverns operated under a participation agreement with revenue recognized as gaming revenues in the current year period.
The $23.3 million, or5%,decrease in revenues for the nine months ended September 30, 2025 compared to the prior year period resulted from decreases of $4.8 million, $5.6 million, $7.8 million, and $5.1 million in gaming, food and beverage, rooms, and other revenues, respectively. We experienced lower hotel occupancy rates at our casino properties during the nine months ended September 30, 2025 compared to the prior year period, which resulted in lower revenues. In addition, the decrease in gaming revenues for the nine months ended September 30, 2025 compared to the prior year period was further impacted by the exclusion of the results of our distributed gaming operations in Nevada following the date of sale on January 10, 2024.
Operating Expenses
The $1.4 million, or 1.9%, decrease in operating expenses for the three months ended September 30, 2025 compared to the prior year period resulted primarily from decreases of $1.3 million and $1.2 million in food and beverage and rooms operating expenses, respectively, offset by $0.3 million and $0.8 million increases in gaming and other operating expenses, respectively. The increase in other operating expenses was primarily due to an increase in hosted events at the Edge Pavilion at the Edgewater. The decreases in food and beverage and rooms operating expenses were primarily driven by lower hotel occupancy rates at our casino properties during the current year period. The decrease in hotel occupancy also resulted in a decrease in maintenance labor costs.
The $9.5 million, or 4%,decreasein operating expenses for the nine months ended September 30, 2025 compared to the prior year period resulted primarily from decreases of $6.3 million, $2.1 million, and $2.4 million in gaming, food and beverage, and rooms operating expenses, respectively, offset by $1.3 million increase in other operating expenses. The changes in the operating expenses were primarily attributable to the year-over-year trends observed for the three months ended September 30, 2025 discussed above. In addition, the decrease in gaming operating expenses was also impacted by the exclusion of the results of our distributed gaming operations in Nevada following the sale on January 10, 2024.
Selling, General and Administrative Expenses
The $1.5 million, or 3%, decrease in selling, general and administrative ("SG&A") expenses for the three months ended September 30, 2025 compared to the prior year period was primarily attributable to a decrease in costs related to utilities, legal and advertising fees.
The $8.9 million, or 5%, decrease in SG&A expenses for the nine months ended September 30, 2025 compared to the prior year period was primarily attributable to the trends observed during the three months ended September 30, 2025 discussed above. In addition, we incurred $2.3 million in the transaction costs related to the sale of our distributed gaming operations in Nevada during the prior year period.
SG&A expenses are comprised of marketing and advertising, utilities, building rent, maintenance contracts, corporate office overhead, information technology, legal, accounting, third-party service providers, executive compensation, share-based compensation, payroll expenses and payroll taxes.
Depreciation and Amortization
Depreciation and amortization expenses for the three and nine months ended September 30, 2025 were comparable to the prior year period.
Loss/Gain on Disposal of Assets
The loss on disposal of assets for the three and nine months ended September 30, 2025 was primarily driven by disposal of certain assets in our Nevada Casino Resorts reporting segment. Gain on disposal of assets for the three and ninemonths ended September 30, 2024 was primarily driven by the disposal of used equipment in our Nevada Locals Casinos reporting segment.
Gain on Sale of Business
The gain on sale of business of $68.9 millionduring the prior year period related to the sale of our distributed gaming operations in Nevada completed on January 10, 2024.
Preopening Expenses
Preopening expenses consist of labor, food, utilities, training, initial licensing, rent and organizational costs incurred in connection with the opening of branded tavern and casino locations as well as food and beverage and other venues within our casino locations. Preopening expenses for the three and nine months ended September 30, 2025 and 2024 were primarily related to our planned new branded tavern openings within our Nevada Taverns segment.
Non-Operating Expense, Net
The non-operating expense, net for the three months ended September 30, 2025 was comparable to the prior year period. The $8.5 million, or 27%,decrease in the non-operating expense, net for the ninemonths ended September 30, 2025 compared to the prior year period was primarily attributable to the $4.1 million decrease in interest expense net of interest income as a result ofthe reduction in the amount of debt obligations outstanding, as well as $4.4 million decrease in loss on debt extinguishment and modification primarily due to the write-off of debt issuance costs and discounts as a result of the redemption of all of our 7.625% Senior Notes due 2026 ("2026 Unsecured Notes") on April 15, 2024. We did not have any debt extinguishment or modification transactions for the three and nine months ended September 30, 2025 and did not incur any costs associated with any such transactions during the current year period.
Income Taxes
The effective income tax rates were 34.0% and (253.3)% for the three and nine months ended September 30, 2025, respectively, which differed from the federal income tax rate of 21% primarily due to the pre-tax loss and excess tax benefit on option exercises. The effective income tax rates were 519.7% and 30.5% for the three and nine months ended September 30, 2024, respectively. The effective income tax rate for the three months ended September 30, 2024 differed from the federal income tax rate of 21% primarily due to the benefit recorded from the reduction of our uncertain tax positions ("UTP") payable during the prior year period. The effective income tax rate for the nine months ended September 30, 2024 differed from the federal income tax rate of 21% primarily due to the tax effect of the sale of our distributed gaming operations in Nevada and the benefit recorded from the reduction of our UTP.
Revenues, Adjusted EBITDA and Adjusted EBITDA Margin by Reportable Segment
We use Adjusted EBITDA and Adjusted EBITDA Margin to supplement our consolidated financial statements presented in accordance with United States generally accepted accounting principles ("GAAP"). Adjusted EBITDA is the primary metric used by our chief operating decision maker and investors in measuring both our past and future expectations of performance. Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to the users of our financial statements by excluding specific expenses and gains that we believe are not indicative of our core operating results. Furthermore, our annual performance plan used to determine compensation for our executive officers and employees is tied to the Adjusted EBITDA metric. Both are also measures of operating performance widely used in the gaming industry. The presentation of this additional information is not meant to be considered in isolation or as a substitute for measures of financial performance prepared in accordance with GAAP. In addition, other companies in our industry may calculate Adjusted EBITDA and Adjusted EBITDA Margin differently than we do.
We define "Adjusted EBITDA" as earnings before depreciation and amortization, non-cash lease benefit or expense, share-based compensation expense, gain or loss on disposal of assets and businesses, loss on debt extinguishment and modification, preopening and related expenses, impairment of assets, interest, income taxes, and other non-cash charges and non-recurring expenses that are deemed to be not indicative of our core operating results. We define "Adjusted EBITDA Margin" as Adjusted EBITDA as a percentage of reportable segment revenue.
The following table presents our revenues, Adjusted EBITDA and Adjusted EBITDA Margin by reportable segment and our Corporate and Other category reconciled to total revenue and total Adjusted EBITDA along with the reconciliation of total Adjusted EBITDA to our consolidated net income:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
| Nevada Casino Resorts | $ | 93,020 | $ | 99,547 | $ | 285,437 | $ | 301,652 | ||||||||||||||||||
| Nevada Locals Casinos | 35,789 | 35,405 | 113,531 | 112,262 | ||||||||||||||||||||||
| Nevada Taverns | 25,733 | 26,042 | 79,458 | 82,001 | ||||||||||||||||||||||
| Distributed Gaming | - | - | - | 6,019 | ||||||||||||||||||||||
| Total reportable segments | 154,542 | 160,994 | 478,426 | 501,934 | ||||||||||||||||||||||
| Corporate and Other | 276 | 239 | 855 | 680 | ||||||||||||||||||||||
| Total revenues | $ | 154,818 | $ | 161,233 | $ | 479,281 | $ | 502,614 | ||||||||||||||||||
| Adjusted EBITDA | ||||||||||||||||||||||||||
| Nevada Casino Resorts | $ | 21,463 | $ | 24,614 | $ | 72,202 | $ | 78,897 | ||||||||||||||||||
| Nevada Locals Casinos | 14,939 | 14,274 | 50,866 | 48,738 | ||||||||||||||||||||||
| Nevada Taverns | 5,291 | 5,317 | 18,516 | 20,669 | ||||||||||||||||||||||
| Distributed Gaming | - | - | - | 484 | ||||||||||||||||||||||
| Total reportable segments | 41,693 | 44,205 | 141,584 | 148,788 | ||||||||||||||||||||||
| Corporate and Other | (11,212) | (10,191) | (35,083) | (32,590) | ||||||||||||||||||||||
| Total Adjusted EBITDA | $ | 30,481 | $ | 34,014 | $ | 106,501 | $ | 116,198 | ||||||||||||||||||
| Adjusted EBITDA Margin by reportable segment | ||||||||||||||||||||||||||
| Nevada Casino Resorts | 23 | % | 25 | % | 25 | % | 26 | % | ||||||||||||||||||
| Nevada Locals Casinos | 42 | % | 40 | % | 45 | % | 43 | % | ||||||||||||||||||
| Nevada Taverns | 21 | % | 20 | % | 23 | % | 25 | % | ||||||||||||||||||
| (Loss) income before income tax benefit (provision) | $ | (7,059) | $ | (1,231) | $ | 700 | $ | 68,704 | ||||||||||||||||||
| Income tax benefit (provision) | 2,401 | 6,398 | 1,773 | (20,951) | ||||||||||||||||||||||
| Net (loss) income | (4,658) | 5,167 | 2,473 | 47,753 | ||||||||||||||||||||||
| Adjustments | ||||||||||||||||||||||||||
| Depreciation and amortization | 22,868 | 22,626 | 67,812 | 67,362 | ||||||||||||||||||||||
| Non-cash lease benefit | (86) | (65) | (291) | (298) | ||||||||||||||||||||||
| Share-based compensation | 2,059 | 2,969 | 7,335 | 8,688 | ||||||||||||||||||||||
| Loss (gain) on disposal of assets | 1,901 | (256) | 1,953 | (242) | ||||||||||||||||||||||
| Gain on sale of business | - | - | - | (68,944) | ||||||||||||||||||||||
| Loss on debt extinguishment and modification | - | - | - | 4,446 | ||||||||||||||||||||||
| Preopening and related expenses | 210 | 234 | 430 | 377 | ||||||||||||||||||||||
|
System implementation costs (1)
|
208 | - | 486 | - | ||||||||||||||||||||||
| Other, net | 2,439 | 1,778 | 4,909 | 8,850 | ||||||||||||||||||||||
| Interest expense, net | 7,941 | 7,959 | 23,167 | 27,255 | ||||||||||||||||||||||
| Income tax (benefit) provision | (2,401) | (6,398) | (1,773) | 20,951 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 30,481 | $ | 34,014 | $ | 106,501 | $ | 116,198 | ||||||||||||||||||
(1)System implementation costs represent expenses related to the implementation of new enterprise resource planning, finance, payroll and human capital management software.
Nevada Casino Resorts
Revenues decreased by $6.5 million, or 7%, and Adjusted EBITDA decreased by $3.2 million, or 13%, for the three months ended September 30, 2025 compared to the prior year period. The decrease in revenues was primarily due to decreases of $0.4 million, $1.4 million, $3.4 million, and $1.3 million in gaming, food and beverage, rooms, and other revenues, respectively. The
decrease in revenues and Adjusted EBITDA for the three months ended September 30, 2025 was primarily driven by lower hotel occupancy rates and lower visitation to our casino properties during the current year period.
Revenues decreased by $16.2 million, or 5%, and Adjusted EBITDA decreased by $6.7 million, or 8%, for the nine months ended September 30, 2025 compared to the prior year period. The decrease in revenues was primarily driven by the decreases of $2.0 million, $3.9 million, $7.5 million, and $2.8 million in gaming, food and beverage, rooms, and other revenues, respectively. The decrease in revenues and Adjusted EBITDA for the nine months ended September 30, 2025 was primarily driven by lower hotel occupancy rates and lower visitation to our casino properties during the current year period.
Nevada Locals Casinos
Revenues increased by $0.4 million, or 1%, while Adjusted EBITDA increased by $0.7 million, or 5%, for the three months ended September 30, 2025 compared to the prior year period. The increase in revenues was primarily due to increases of $0.6 million and $0.1 million in gaming and other revenues, respectively, offset by decreases of $0.2 million and $0.1 million in food and beverage and rooms revenues, respectively. The increase in gaming revenue for the three months ended September 30, 2025 was primarily attributable to higher slot and bingo revenues. The increase in other revenues was primarily attributable to increased tenant lease revenue during the current year period. The decrease in food and beverage and rooms revenues for the three months ended September 30, 2025 was primarily attributable to the lower hotel occupancy rates compared to the prior year period. The increase in Adjusted EBITDA compared to the prior year period was primarily driven by the increase in gaming revenue and the reduction in operating expenses during the three months ended September 30, 2025.
Revenues increased by $1.3 million, or 1%, while Adjusted EBITDA increased by $2.1 million, or 4%, for the nine months ended September 30, 2025 compared to the prior year period. The increase in revenues was primarily due to increases of $1.5 million and $0.6 million in gaming and other revenues, respectively, offset by decreases of $0.5 million and $0.3 million in food and beverage and rooms revenues, respectively, due to the trends observed for the three months ended September 30, 2025 discussed above. The increase in Adjusted EBITDA compared to the prior year period was primarily driven by the increase in gaming revenue and the reduction in operating expenses during the nine months ended September 30, 2025.
Nevada Taverns
Revenues decreased by $0.3 million, or 1%, for the three months ended September 30, 2025 compared to the prior year period. Adjusted EBITDA for the three months ended September 30, 2025 was comparable to the prior year period. The decrease in revenues was primarily due to $0.6 million and $0.9 million decreases in food and beverage and other revenues, respectively, offset by a $1.2 million increase in gaming revenues. Our Nevada Taverns experienced lower visitation during the current year period, which impacted revenues for the three months ended September 30, 2025. The year-over-year decrease in other revenues also reflected that certain of our taverns during the prior year period operated under a space lease arrangement where we received a fixed monthly rental fee recognized as other revenue. These taverns operated under a participation agreement with revenue recognized as gaming revenues for the three months ended September 30, 2025.
Revenues decreased by $2.5 million, or 3%, and Adjusted EBITDA decreased by $2.2 million, or 10%, for the nine months ended September 30, 2025 compared to the prior year period. The decrease in revenues was primarily due to $1.2 million and $3.0 million decreases in food and beverage and other revenues, respectively, offset by a $1.7 million increase in gaming revenues. Our Nevada Taverns experienced slightly lower visitation during the current year period, which negatively impacted our food and beverage revenues for the nine months ended September 30, 2025. The year-over-year decrease in other revenues also reflected that certain of our taverns during the prior year period operated under a space lease arrangement where we received a fixed monthly rental fee recognized as other revenue. These taverns operated under a participation agreement with revenue recognized as gaming revenues for the nine months ended September 30, 2025. The decrease in Adjusted EBITDA from the prior year period primarily related to higher labor costs and cost of goods in the current year period.
Distributed Gaming
This reportable segment was comprised of our distributed gaming operations in Nevada sold on January 10, 2024. Refer to "Note 1 - Nature of Business and Basis of Presentation" and "Note 2 - Divestitures" in Part I, Item 1: Financial Statements for further information. The decreases in revenues and Adjusted EBITDA compared to the prior year period reflected the exclusion of results from our distributed gaming operations in Nevada following its date of sale.
Adjusted EBITDA Margin
Adjusted EBITDA margins for Nevada Casino Resorts and Nevada Locals Casinos reportable segments remained relatively consistent for the three and nine months ended September 30, 2025 compared to the prior year periods. The lower Adjusted EBITDA margin in the Nevada Taverns segment for the three and nine months ended September 30, 2025 was primarily attributable to increases in labor costs and lower visitationcompared to the prior year period.
Liquidity and Capital Resources
As of September 30, 2025, we had $58.3 million in cash and cash equivalents. We believe that our cash and cash equivalents, cash flows from operations and borrowing availability under our $240 million revolving credit facility (the "Revolving Credit Facility") will be sufficient to meet our capital requirements during the next 12 months. As of September 30, 2025, we had borrowing availability of $205 million under our Revolving Credit Facility (refer to "Note 6 - Long-Term Debt, Net and Finance Leases" in Part I, Item 1: Financial Statements for additional information regarding our Revolving Credit Facility). Commencing in February 2024, our Board of Directors has declared a recurring quarterly cash dividend of $0.25 per share of our common stock, the first of which was paid on April 4, 2024. Refer to "Note 7 - Shareholders' Equity and Stock Incentive Plans" in Part I, Item 1: Financial Statements for further discussion on dividends.
Our operating results and performance depend significantly on national, regional and local economic conditions and their effect on consumer spending. Declines in consumer spending would cause revenues generated by our operations to be adversely affected.
To further enhance our liquidity position or to finance any future acquisition or other business investment initiatives, we may obtain additional financing, which could consist of debt, convertible debt or equity financing from public and/or private credit and capital markets.
Cash Flows
Net cash provided by operating activities was $72.8 million and $69.8 million for the nine months ended September 30, 2025 and 2024, respectively. The $3.0 million, or 4%, increase in operating cash flows for the nine months ended September 30, 2025 compared to the prior year period was primarily related to the timing of working capital spending.
Net cash used in investing activities of $32.8 million for the nine months ended September 30, 2025 was related to capital expenditures, primarily at our Nevada Casino Resorts properties. Net cash provided by investing activities of $155.1 million for the nine months ended September 30, 2024 was primarily related to the cash receipts of $204.1 million from the sale of our distributed gaming operations in Nevada in January 2024, offset by $41.7 million in capital expenditures, primarily at our Nevada Casino Resorts and $7.3 million spent on the acquisition of GAP.
Net cash used in financing activities was $39.5 million and $354.0 million for the nine months ended September 30, 2025 and 2024, respectively. The $314.5 million, or 89%, decrease in net cash used in financing activities during the nine months ended September 30, 2025 primarily related to the $276.5 million payment to redeem and repay in full our 2026 Unsecured Notes in April 2024 and a decrease of $32.4 million in the aggregate amount paid for the repurchases of our common stock under our share repurchase program during the nine months ended September 30, 2025 compared to the prior year period. In addition, we received $3.2 million in cash proceeds from option exercises during the nine months ended September 30, 2024. The decrease in net cash used in financing activities was partially offset by the increase of $5.4 million for cash dividends paid and $0.4 million increase in the amount paid for tax withholdings upon the vesting of RSUs and PSUs during the ninemonths ended September 30, 2025. We also received $15 million in net proceeds from borrowings under our Revolving Credit Facility during the ninemonths ended September 30, 2025.
Long-Term Debt
Refer to "Note 6 - Long-Term Debt, Net and Finance Leases" in Part I, Item 1: Financial Statements for discussion of our debt instruments.
Share Repurchase Program
Share repurchases may be made from time to time in open market transactions, block trades, pursuant to a Rule 10b5-1 trading plan or in private transactions in accordance with applicable securities laws and regulations and other legal requirements, including compliance with our finance agreements. There is no minimum number of shares that we are required to repurchase and the repurchase program may be suspended or discontinued at any time without prior notice. Refer to "Note 7 - Shareholders' Equity and Stock Incentive Plans"in Part I, Item 1: Financial Statements for additional information regarding our share repurchase program and common stock purchases made pursuant to our share repurchase program.
Other Items Affecting Liquidity
The outcome of the following specific matters, including our commitments and contingencies, may also affect our liquidity.
Commitments, Capital Spending and Development
We perform on-going refurbishment and maintenance at our facilities, of which certain maintenance costs are capitalized if such improvement or refurbishment extends the life of the related asset, while other maintenance costs that do not so qualify are expensed as incurred. The commitment of capital and the related timing thereof are contingent upon, among other things, negotiation of final agreements and receipt of approvals from the appropriate regulatory bodies. We intend to fund such capital expenditures through our operating cash flows and Revolving Credit Facility.
Refer to "Note 10 - Commitments and Contingencies" in Part I, Item 1: Financial Statements for additional information regarding commitments and contingencies that may also affect our liquidity.
Other Opportunities
We may investigate and pursue expansion opportunities in our existing or new markets from time to time. Such expansions will be influenced and determined by a number of factors, which may include licensing availability and approval, suitable investment opportunities and availability of acceptable financing. Investigation and pursuit of such opportunities may require us to make substantial investments or incur substantial costs, which we may fund through cash flows from operations or borrowing availability under our Revolving Credit Facility. To the extent such sources of funds are not sufficient, we may also seek to raise such additional funds through public or private equity or debt financings or from other sources. No assurance can be given that additional financing will be available or that, if available, such financing will be obtainable on terms favorable to us. Moreover, we can provide no assurances that the investigation or pursuit of an opportunity will result in a completed transaction.
Critical Accounting Policies and Estimates
Management's discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the balance sheet date and reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates and judgments, including those related to the application of the acquisition method of accounting, long-lived assets, goodwill and indefinite-lived intangible assets, revenue recognition, income taxes and share-based compensation expenses. We base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We believe that our estimates and assumptions are reasonable, based upon information presently available; however, actual results may differ from these estimates under different assumptions or conditions.k
As of the date of the most recent quantitative impairment test performed as of October 1, 2024, the estimated fair value of an indefinite-lived trade name within the Nevada Casino Resorts reportable segment did not significantly exceed its carrying value. To the extent we become aware of new facts and circumstances impacting our operations, we will revise our cash flow projections accordingly, as the estimates of future cash flows are highly dependent upon critical estimates, judgments and assumptions, such as: the valuation methodology, the estimated future cash flows for each of our reporting units, the discount rate, future growth rates, and royalty rates used to calculate the present value of such cash flows. Future adverse changes in projections for future operating results or other key assumptions could lead to future indefinite-lived trade name impairments, which could be material.
A description of our critical accounting estimates can be found under Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report. For a more extensive discussion of our accounting policies, refer to "Note 2 - Summary of Significant Accounting Policies" in Part II, Item 8: Financial Statements and Supplemental Data in our Annual Report. There were no material changes to our critical accounting policies and estimates during the three and nine months ended September 30, 2025.
Seasonality
We believe that our businesses are affected by seasonal factors, including holidays, weather and travel conditions. Our casino properties and branded taverns in Nevada have historically experienced lower revenues during the summer as a result of fewer tourists due to higher temperatures, as well as increased vacation activity by local residents. Our branded taverns typically experience higher revenues during the fall which corresponds with several professional sports seasons. While other factors like unemployment levels and market competition may either offset or magnify seasonal effects, some seasonality is likely to continue, which could result in significant fluctuation in our quarterly operating results.
Recently Issued Accounting Pronouncements
See "Note 1 - Nature of Business and Basis of Presentation" in Part I, Item 1: Financial Statements for information regarding recently issued accounting pronouncements.
Regulation and Taxes
Our business is subject to extensive regulation by state gaming authorities. Changes in applicable laws or regulations could have a material adverse effect on us.
The gaming industry represents a significant source of tax revenues to regulators. From time to time, various federal and state legislators and officials have proposed changes in tax law, or in the administration of such law, affecting the gaming industry. It is not possible to determine the likelihood of possible changes in tax law or in the administration of such law. Such changes, if adopted, could have a material adverse effect on our future financial position, results of operations, cash flows and prospects.
Off Balance Sheet Arrangements
We have no off balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
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