Caesars Entertainment Inc.

10/28/2025 | Press release | Distributed by Public on 10/28/2025 14:23

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and operating results of Caesars Entertainment, Inc., a Delaware corporation, and its consolidated subsidiaries, which may be referred to as the "Company," "CEI," "Caesars," "we," "our," or "us," for the three and nine months ended September 30, 2025 and 2024 should be read in conjunction with the unaudited consolidated condensed financial statements and the notes thereto and other financial information included elsewhere in this Form 10-Q as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Annual Report"). Capitalized terms used but not defined in this Form 10-Q have the same meanings as in the 2024 Annual Report.
We refer to (i) our Consolidated Condensed Financial Statements as our "Financial Statements," (ii) our Consolidated Condensed Balance Sheets as our "Balance Sheets," (iii) our Consolidated Condensed Statements of Operations and Consolidated Condensed Statements of Comprehensive Income (Loss) as our "Statements of Operations," and (iv) our Consolidated Condensed Statements of Cash Flows as our "Statements of Cash Flows." References to numbered "Notes" refer to "Notes to Consolidated Condensed Financial Statements" included in Item 1, "Unaudited Financial Statements," unless otherwise noted.
The statements in this discussion regarding our expectations of our future performance, liquidity and capital resources, and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. Our actual results may differ materially from those contained in or implied by any forward-looking statements. See "Cautionary Statements Regarding Forward-Looking Information" in this report.
Objective
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to be a narrative explanation of the financial statements and other statistical data that should be read in conjunction with the accompanying financial statements to enhance an investor's understanding of our financial condition, changes in financial condition and results of operations. Our objectives are: (i) to provide a narrative explanation of our financial statements that will enable investors to see the Company through the eyes of management; (ii) to enhance the overall financial disclosure and provide the context within which financial information should be analyzed; and (iii) to provide information about the quality of, and potential variability of, our earnings and cash flows so that investors can ascertain the likelihood of whether past performance is indicative of future performance.
Overview
We are a geographically diversified gaming and hospitality company that was founded in 1973 by the Carano family with the opening of the Eldorado Hotel Casino in Reno, Nevada. Beginning in 2005, we grew through a series of acquisitions, including the acquisition of MTR Gaming Group, Inc. in 2014, Isle of Capri Casinos, Inc. in 2017, Tropicana Entertainment, Inc. in 2018, Caesars Entertainment Corporation in 2020 and William Hill PLC in 2021. Our ticker symbol on the NASDAQ Stock Market is "CZR."
We own, lease or manage an aggregate of 52 domestic properties in 18 states with approximately 51,600 slot machines, video lottery terminals and e-tables, approximately 2,800 table games and approximately 45,600 hotel rooms as of September 30, 2025. In addition, we have other properties in North America that are authorized to use the brands and marks of Caesars Entertainment, Inc., as well as other non-gaming properties. Our primary source of revenue is generated by our gaming operations, which includes our casino properties, retail and online sports betting, and online gaming. Additionally, we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.
As of September 30, 2025, we owned 22 of our casinos and leased 24 casinos in the U.S. We lease 18 casinos from VICI Properties L.P., a Delaware limited partnership ("VICI"), pursuant to a regional lease, a Las Vegas lease and a Joliet lease (the "VICI Leases"). In addition, we lease six casinos from GLP Capital, L.P., the operating partnership of Gaming and Leisure Properties, Inc. ("GLPI") pursuant to a Master Lease (as amended, the "GLPI Master Lease") and a Lumière lease associated with our Horseshoe St. Louis property (together with the GLPI Master Lease, the "GLPI Leases").
We operate and conduct retail and online sports wagering across 33 jurisdictions in North America, 26 of which offer online sports betting. Additionally, we operate iGaming in five jurisdictions in North America. The map below illustrates Caesars Digital's presence as of September 30, 2025:
We have a partnership with NYRABets LLC, the official online wagering platform of the New York Racing Association, Inc., and operate the Caesars Racebook app in 22 states as of September 30, 2025. The Caesars Racebook app provides access for pari-mutuel wagering at over 300 racetracks around the world as well as livestreaming of races. Wagers placed can earn credits towards our Caesars Rewards loyalty program or points which can be redeemed for free wagering credits.
We continue to expand our Caesars Digital footprint into other states with the Caesars Sportsbook, Caesars Racebook and iGaming mobile apps as jurisdictions legalize or provide necessary approvals. No customers under 21 years old are allowed to wager on any of the Caesars Sportsbook, Caesars Racebook or iGaming mobile apps.
We periodically divest assets to raise capital or, in previous cases, to comply with conditions, terms, obligations or restrictions imposed by antitrust, gaming and other regulatory entities. The following is a summary of divestitures recently completed as of September 30, 2025:
Segment Property/Assets Date Sold Sales Price
Caesars Digital
World Series of Poker ("WSOP") Trademark
October 29, 2024 $500 million
Las Vegas The LINQ Promenade December 12, 2024 $275 million
Investments and Partnerships
We have investments in unconsolidated affiliates accounted for under the equity method which are recorded in Investments in and advances to unconsolidated affiliates on the Balance Sheets.
Pompano Joint Venture
In April 2018, we entered into a joint venture with Cordish Companies ("Cordish") to plan and develop a mixed-use entertainment and hospitality destination expected to be located on unused land adjacent to our Pompano property. As the managing member, Cordish will operate the business and manage the development, construction, financing, marketing, leasing, maintenance and day-to-day operation of the various phases of the project. Additionally, Cordish is responsible for the development of the master plan for the project with our input and will submit it for our review and approval. While we hold a 50% variable interest in the joint venture, we are not the primary beneficiary; as such, the investment in the joint venture is accounted for using the equity method. We participate evenly with Cordish in the profits and losses of the joint venture, which are included in Transaction and other costs, net on the Statements of Operations.
During the nine months ended September 30, 2025, we received distributions totaling $23 million and recorded $1 million of income related to the joint venture. As of September 30, 2025 and December 31, 2024, our investment in the joint venture was $97 million and $119 million, respectively.
Reportable Segments
Segment results in this MD&A are presented consistent with the way our management reviews operating results, assesses performance and makes decisions on a "significant market" basis. Management views each of the Company's casinos as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, and their management and reporting structure. Our principal operating activities occur in four reportable segments: (1) Las Vegas, (2) Regional, (3) Caesars Digital, and (4) Managed and Branded, in addition to Corporate and Other.
Presentation of Financial Information
The presentation of financial information herein for the periods after our completed divestitures, described above, is not fully comparable to the periods prior to such divestitures.
This MD&A is intended to provide information to assist in better understanding and evaluating our financial condition and results of operations. Our historical operating results may not be indicative of our future results of operations because of the factor described in the preceding paragraph and the changing competitive landscape in each of our markets, including changes in market and societal trends, as well as by factors discussed elsewhere herein. We recommend that you read this MD&A in conjunction with our unaudited Financial Statements and the notes to those statements included in this Quarterly Report on Form 10-Q.
Key Performance Metrics
Our primary source of revenue is generated by our gaming operations, which includes our casino properties, retail and online sports betting, and online gaming. Additionally, we utilize our hotels, restaurants, bars, entertainment venues, retail shops, racing and other services to attract customers to our properties. Our operating results are highly dependent on the volume and quality of customers staying at, or visiting, our properties and using our sports betting, horse racing and iGaming applications.
Key performance metrics include volume indicators such as drop or handle, which refer to amounts wagered by our customers. The amount of volume we retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. Slot win percentage is typically in the range of approximately 9% to 11% of slot handle. Table games hold percentage is typically in the range of approximately 16% to 23% of table games drop. Sports betting hold is typically in the range of 7% to 11% and iGaming hold typically ranges from 3% to 5%. In addition, hotel occupancy, which is the average percentage of available hotel rooms occupied during a period, is a key indicator for our hotel business in the Las Vegas segment. Complimentary and discounted rooms are treated as occupied rooms in our calculation of hotel occupancy. The key metrics we utilize to measure our profitability and performance are Adjusted EBITDA and Adjusted EBITDA margin. See "Results of Operations" section below.
Significant Factors Impacting Financial Results
The following summary highlights the significant factors impacting our financial results for the three and nine months ended September 30, 2025 and 2024:
•Economic Factors Impacting Discretionary Spending - Gaming and other leisure activities we offer represent discretionary expenditures that may be sensitive to economic downturns, which impact the behavior among the components of our customer mix differently. We monitor current and recent trends, including inflation, interest rates, global hostilities, trade tension and related actions, such as the imposition of tariffs between the United States and other countries, and the associated effects, if any, on travel, visitation, our customers, and our operations.
•Debt Transactions -On July 8, 2025, we fully redeemed all of the $546 million outstanding principal amount of the CEI Senior Notes due 2027 and paid the related accrued interest and expenses with borrowings under the CEI Revolving Credit Facility and proceeds received from the partial repayment and sale of $225 million of notes receivable related to the previously disclosed WSOP trademark sale. We refinanced and extended the maturities of outstanding debt in the amount of $4.4 billion in February 2024, shifting a portion of our outstanding debt from fixed rate to variable rate debt, and reduced interest rate margins for both the CEI Term Loan B and CEI Term Loan B-1 in May 2024. These refinancing activities have resulted in a significant reduction in interest expense and associated cash paid for interest for the three and nine months ended September 30, 2025.
•Impairment Charges -During the three and nine months ended September 30, 2025, we did not recognize any impairment charges. During the nine months ended September 30, 2024, we recognized impairment charges in our Regional segment related to trademarks, gaming rights and goodwill totaling $118 million.
Results of Operations
The following table highlights the results of our operations:
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in millions) 2025 2024 2025 2024
Net revenues:
Las Vegas $ 952 $ 1,062 $ 3,009 $ 3,191
Regional 1,536 1,446 4,359 4,196
Caesars Digital 311 303 989 861
Managed and Branded 73 68 214 206
Corporate and Other (a)
(3) (5) (1) (8)
Total $ 2,869 $ 2,874 $ 8,570 $ 8,446
Net income (loss) $ (39) $ 9 $ (202) $ (235)
Adjusted EBITDA (b):
Las Vegas
$ 379 $ 472 $ 1,281 $ 1,426
Regional 506 498 1,385 1,400
Caesars Digital 28 52 151 97
Managed and Branded 18 19 51 54
Corporate and Other (a)
(47) (40) (145) (123)
Total $ 884 $ 1,001 $ 2,723 $ 2,854
Net income (loss) margin (1.4) % 0.3 % (2.4) % (2.8) %
Adjusted EBITDA margin 30.8 % 34.8 % 31.8 % 33.8 %
____________________
(a)Corporate and Other includes revenues related to certain licensing arrangements and various revenue sharing agreements and includes eliminations of transactions among segments to reconcile to the Company's consolidated results. Corporate and Other Adjusted EBITDA includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees, cybersecurity and other general and administrative expenses.
(b)See the "Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") for the Three and Nine Months Ended September 30, 2025 and 2024" discussion later in this MD&A for a description of Adjusted EBITDA and a reconciliation of net income (loss) attributable to Caesars to Adjusted EBITDA.
Consolidated comparison of the three and nine months ended September 30, 2025 and 2024
Net Revenues
Net revenues were as follows:
Three Months Ended September 30, Percent Change Nine Months Ended September 30, Percent Change
(Dollars in millions) 2025 2024 Variance 2025 2024 Variance
Casino $ 1,642 $ 1,599 $ 43 2.7 % $ 4,904 $ 4,691 $ 213 4.5 %
Food and beverage 436 438 (2) (0.5) % 1,299 1,295 4 0.3 %
Hotel 485 515 (30) (5.8) % 1,476 1,522 (46) (3.0) %
Other 306 322 (16) (5.0) % 891 938 (47) (5.0) %
Net revenues $ 2,869 $ 2,874 $ (5) (0.2) % $ 8,570 $ 8,446 $ 124 1.5 %
Consolidated net revenues remained substantially flat for the three and nine months ended September 30, 2025, as compared to the same prior year periods, with mixed results between gaming and non-gaming revenues. Casino revenues increased driven by significant growth in iGaming handle coupled with improved iGaming hold in our Caesars Digital segment and the recently completed development projects of Caesars Virginia and Caesars New Orleans, offset in part by certain competitive markets in our Regional segment. Net revenues in the Las Vegas segment were down, primarily due to lower gaming and non-gaming revenue, consistent with visitation trends city-wide and unfavorable table games hold, as compared to the three and nine months ended September 30, 2024.
Operating Expenses
Operating expenses were as follows:
Three Months Ended September 30, Percent Change Nine Months Ended September 30, Percent Change
(Dollars in millions) 2025 2024 Variance 2025 2024 Variance
Casino $ 909 $ 828 $ 81 9.8 % $ 2,657 $ 2,497 $ 160 6.4 %
Food and beverage 277 271 6 2.2 % 827 800 27 3.4 %
Hotel 156 152 4 2.6 % 462 428 34 7.9 %
Other 114 104 10 9.6 % 314 298 16 5.4 %
General and administrative 483 478 5 1.0 % 1,443 1,443 - - %
Corporate 75 76 (1) (1.3) % 241 234 7 3.0 %
Impairment charges - - - * - 118 (118) (100.0) %
Depreciation and amortization 352 326 26 8.0 % 1,073 979 94 9.6 %
Transaction and other costs, net (10) (5) (5) (100.0) % 26 14 12 85.7 %
Total operating expenses $ 2,356 $ 2,230 $ 126 5.7 % $ 7,043 $ 6,811 $ 232 3.4 %
____________________
* Not meaningful.
Casino expenses consist principally of salaries and wages, gaming taxes and marketing and advertising costs attributable to our gaming operations. Food and beverage expenses consist principally of salaries and wages and costs of goods sold associated with our food and beverage operations. Hotel expenses consist principally of salaries and wages and supplies associated with our hotel operations. Other expenses consist principally of salaries and wages, costs of goods sold associated with our retail operations, entertainment costs, including professional talent fees, reimbursable management costs (described below) and other operations.
Casino expenses increased for the three and nine months ended September 30, 2025, as compared to the same prior year periods. Casino expenses rose in connection with increased revenues in our Caesars Digital and Regional segments and targeted customer reinvestment in certain competitive markets in our Regional segment. Gaming taxes increased in connection with additional casino revenues, as well as the impact of increased gaming tax rates on sports betting wagers and iGaming in certain states, which took effect on July 1, 2025. Increased casino expenses were partially offset by decreased marketing expenses in our Las Vegas segment associated with the Super Bowl held in Las Vegas in the first quarter of 2024. Food and beverage and hotel expenses have increased due to incremental wages correlating with additional revenues associated with the opening of
Caesars Virginia's permanent facility and the completed expansion of Caesars New Orleans, as well as higher union and non-union wages. We continue to focus on labor efficiencies across the enterprise to manage increased labor costs.
General and administrative expenses include items such as information technology, facility maintenance, utilities, property and liability insurance, expenses for administrative departments such as accounting, compliance, purchasing, human resources, legal, internal audit, property taxes and marketing expenses indirectly related to our gaming and non-gaming operations.
Corporate expenses include unallocated expenses such as payroll, inclusive of the annual bonus, stock-based compensation, professional fees, cybersecurity and other various expenses not directly related to the Company's operations.
Impairment charges were recorded within our Regional segment in June 2024 as a result of a decrease in projected future cash flows at certain properties primarily due to localized competition.
Depreciation and amortization expenses increased for the three and nine months ended September 30, 2025, as compared to the same prior year periods, primarily related to recently completed construction projects.
Transaction and other costs, net primarily includes non-cash losses on the write down and disposal of assets, gains and losses on the sale of certain assets, certain non-recurring litigation reserves, non-recurring asset recoveries, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with our new property openings and non-cash changes in equity method investments. For the three months ended September 30, 2025, as compared to the same prior year period, transaction and other costs decreased due to non-recurring asset recoveries. For the nine months ended September 30, 2025, as compared to the same prior year period, transaction and other costs increased due to non-recurring litigation reserves.
Other income (expenses)
Other income (expenses) were as follows:
Three Months Ended September 30, Percent Change Nine Months Ended September 30, Percent Change
(Dollars in millions) 2025 2024 Variance 2025 2024 Variance
Interest expense, net $ (576) $ (596) $ 20 3.4 % $ (1,729) $ (1,780) $ 51 2.9 %
Loss on extinguishment of debt (4) - (4) * (4) (51) 47 92.2 %
Other income 3 4 (1) (25.0) % 3 29 (26) (89.7) %
Benefit (provision) for income taxes 25 (43) 68 * 1 (68) 69 *
____________________
* Not meaningful.
Interest expense, net decreased for the three and nine months ended September 30, 2025, as compared to the same prior year periods, primarily due a reduction in outstanding debt and our strategic shift in our debt mix from higher fixed rate debt to variable rate debt during the first quarter of 2024, which has benefitted from recent interest rate cuts. Capitalized interest has also decreased for the three and nine months ended September 30, 2025, as compared to the same prior year periods, as construction projects in the prior year have been completed.
For the three and nine months ended September 30, 2025, loss on extinguishment of debt was related to the full redemption of the CEI Senior Notes due 2027. For the nine months ended September 30, 2024, loss on extinguishment of debt was primarily related to the prepayments of the CEI Senior Secured Notes due 2025, the Caesars Resort Collection Senior Secured Notes, and the partial prepayment of the CEI Term Loan B.
Other income for the nine months ended September 30, 2024 primarily represents a change in the estimate of our disputed claims liability.
The income tax provision for the three months ended September 30, 2025 differed from the expected income tax provision based on the federal tax rate of 21% primarily due to a decrease in federal and state valuation allowances against the deferred tax assets for excess business interest expense, primarily related to the change in tax law. The income tax provision for the nine months ended September 30, 2025 differed from the expected income tax provision based on the federal tax rate of 21% primarily due to an increase in federal and state valuation allowances against the deferred tax assets for excess business interest expense.
The income tax provision for the three and nine months ended September 30, 2024 differed from the expected income tax provision based on the federal tax rate of 21% primarily due to an increase in federal and state valuation allowances against the deferred tax assets for excess business interest expense.
Segment comparison of the three and nine months ended September 30, 2025 and 2024
Las Vegas Segment
Three Months Ended September 30, Percent Change Nine Months Ended September 30, Percent Change
(Dollars in millions) 2025 2024 Variance 2025 2024 Variance
Net revenues:
Casino $ 260 $ 294 $ (34) (11.6) % $ 795 $ 829 $ (34) (4.1) %
Food and beverage 270 283 (13) (4.6) % 834 866 (32) (3.7) %
Hotel 290 330 (40) (12.1) % 979 1,049 (70) (6.7) %
Other 132 155 (23) (14.8) % 401 447 (46) (10.3) %
Net revenues $ 952 $ 1,062 $ (110) (10.4) % $ 3,009 $ 3,191 $ (182) (5.7) %
Table games drop $ 658 $ 721 $ (63) (8.7) % $ 2,142 $ 2,342 $ (200) (8.5) %
Table games hold %
17.4 % 23.1 % (5.7) pts 19.3 % 20.9 % (1.6) pts
Slot handle $ 2,544 $ 2,605 $ (61) (2.3) % $ 7,654 $ 7,737 $ (83) (1.1) %
Hotel occupancy 91.6 % 97.1 % (5.5) pts 94.9 % 97.8 % (2.9) pts
Adjusted EBITDA $ 379 $ 472 $ (93) (19.7) % $ 1,281 $ 1,426 $ (145) (10.2) %
Adjusted EBITDA margin 39.8 % 44.4 % (4.6) pts 42.6 % 44.7 % (2.1) pts
Net income attributable to Caesars $ 132 $ 226 $ (94) (41.6) % $ 521 $ 696 $ (175) (25.1) %
Our Las Vegas segment's net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin decreased for the three and nine months ended September 30, 2025, as compared to the same prior year periods, primarily due to city-wide visitation trends that have resulted in lower gaming and non-gaming revenue. Table and slot volumes declined, coupled with unfavorable table games hold, particularly during the third quarter, resulting in current year third quarter table games hold at the low end of the typical range while prior year third quarter table games hold exceeded the typical range. Similarly, declines in city-wide visitation have resulted in lower hotel occupancy and room rates compared to the prior year periods. Other revenue declined as compared to the same prior year periods primarily due to the sale of the LINQ Promenade during the fourth quarter of 2024.
Slot win percentage in the Las Vegas segment for the three and nine months ended September 30, 2025 was within our typical range.
Regional Segment
Three Months Ended September 30, Percent Change Nine Months Ended September 30, Percent Change
(Dollars in millions) 2025 2024 Variance 2025 2024 Variance
Net revenues:
Casino $ 1,084 $ 1,024 $ 60 5.9 % $ 3,159 $ 3,072 $ 87 2.8 %
Food and beverage 166 155 11 7.1 % 465 429 36 8.4 %
Hotel 195 185 10 5.4 % 497 473 24 5.1 %
Other 91 82 9 11.0 % 238 222 16 7.2 %
Net revenues $ 1,536 $ 1,446 $ 90 6.2 % $ 4,359 $ 4,196 $ 163 3.9 %
Table games drop
$ 1,203 $ 1,038 $ 165 15.9 % $ 3,359 $ 3,018 $ 341 11.3 %
Table games hold %
19.8 % 21.2 % (1.4) pts 20.4 % 21.2 % (0.8) pts
Slot handle $ 11,373 $ 10,434 $ 939 9.0 % $ 32,734 $ 30,836 $ 1,898 6.2 %
Adjusted EBITDA $ 506 $ 498 $ 8 1.6 % $ 1,385 $ 1,400 $ (15) (1.1) %
Adjusted EBITDA margin 32.9 % 34.4 % (1.5) pts 31.8 % 33.4 % (1.6) pts
Net income attributable to Caesars $ 56 $ 125 $ (69) (55.2) % $ 65 $ 115 $ (50) (43.5) %
Our Regional segment's net revenues improved for the three and nine months ended September 30, 2025, as compared to the same prior year periods, primarily due to the positive results driven by our recently completed Caesars Virginia and Caesars New Orleans development projects. These increases were partially offset by the continued impact of competition and inclement weather in several of our regional markets, as well as construction disruption in Lake Tahoe. Adjusted EBITDA remained stable for the three and nine months ended September 30, 2025, as compared to the same prior year periods, primarily due to increased labor costs and targeted customer reinvestment in certain competitive markets during the second quarter. Net income decreased for the three and nine months ended September 30, 2025, as compared to the prior year periods, due to additional depreciation expense resulting from the recently completed development projects.
Slot win percentage in the Regional segment for the three and nine months ended September 30, 2025 was within our typical range.
Caesars Digital Segment
Three Months Ended September 30, Percent Change Nine Months Ended September 30, Percent Change
(Dollars in millions) 2025 2024 Variance 2025 2024 Variance
Net revenues:
Casino (a)
$ 300 $ 282 $ 18 6.4 % $ 955 $ 794 $ 161 20.3 %
Other 11 21 (10) (47.6) % 34 67 (33) (49.3) %
Net revenues $ 311 $ 303 $ 8 2.6 % $ 989 $ 861 $ 128 14.9 %
Sports betting handle(b)
$ 2,476 $ 2,328 $ 148 6.4 % $ 8,097 $ 8,207 $ (110) (1.3) %
Sports betting hold % 7.8 % 8.6 % (0.8) pts 7.9 % 7.4 % 0.5 pts
iGaming handle $ 4,761 $ 3,826 $ 935 24.4 % $ 13,954 $ 10,861 $ 3,093 28.5 %
iGaming hold % 3.6 % 3.5 % 0.1 pts 3.6 % 3.4 % 0.2 pts
Adjusted EBITDA $ 28 $ 52 $ (24) (46.2) % $ 151 $ 97 $ 54 55.7 %
Adjusted EBITDA margin 9.0 % 17.2 % (8.2) pts 15.3 % 11.3 % 4 pts
Net income (loss) attributable to Caesars $ (21) $ 11 $ (32) * $ 18 $ (19) $ 37 *
____________________
* Not meaningful.
(a)Includes total promotional and complimentary incentives related to sports betting, iGaming, and online poker of $78 million and $66 million for the three months ended September 30, 2025 and 2024, respectively, and $223 million and $214 million for the nine months ended September 30, 2025 and 2024, respectively. Promotional and complimentary incentives for online poker were $4 million and $5 million for the three months ended September 30, 2025 and 2024, respectively, and $12 million and $11 million for the nine months ended September 30, 2025 and 2024, respectively.
(b)Caesars Digital generated an additional $193 million and $191 million of sports betting handle for the three months ended September 30, 2025 and 2024, respectively, and $661 million and $669 million for the nine months ended September 30, 2025 and 2024, respectively, which is not included in this table, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all, or a share of, the net profits. Hold related to these operations was 11.0% and 12.7%, for the three months ended September 30, 2025 and 2024, respectively, and 11.1% and 10.5% for the nine months ended September 30, 2025 and 2024, respectively. Sports betting handle includes $9 million and $10 million for the three months ended September 30, 2025 and 2024, respectively, and $31 million and $32 million for the nine months ended September 30, 2025 and 2024, respectively, related to horse racing and pari-mutuel wagers.
Caesars Digital's net revenues, net income (loss), Adjusted EBITDA, and Adjusted EBITDA margin improved significantly for the nine months ended September 30, 2025, as compared to the same prior year period, primarily due to higher iGaming handle and iGaming hold coupled with improved sports betting hold. For the three months ended September 30, 2025, as compared to the same prior year period, increases in iGaming handle and hold drove an increase in net revenues. Customer friendly sports betting outcomes resulted in sports betting hold at the lower end of our expected range which offset growth in sports betting handle. Net income (loss), Adjusted EBITDA and Adjusted EBITDA margin were negatively impacted by: (i) the loss of highly profitable licensing revenue in connection with the sale of the WSOP trademark, (ii) additional processing fees, platform costs, and gaming taxes resulting from increased iGaming volumes, and (iii) recent increases in online gaming tax rates in certain states.
As sports betting and online casinos expand through increased state or jurisdictional legalization, new product launches, and customer adoption, variations in hold percentages and increases in promotional and marketing expenses in highly competitive markets may negatively impact Caesars Digital's net revenues, net income (loss), Adjusted EBITDA and Adjusted EBITDA margin in comparison to current or prior periods.
Managed and Branded Segment
Three Months Ended September 30, Percent Change Nine Months Ended September 30, Percent Change
(Dollars in millions) 2025 2024 Variance 2025 2024 Variance
Net revenues:
Other $ 73 $ 68 $ 5 7.4 % $ 214 $ 206 $ 8 3.9 %
Net revenues $ 73 $ 68 $ 5 7.4 % $ 214 $ 206 $ 8 3.9 %
Adjusted EBITDA $ 18 $ 19 $ (1) (5.3) % $ 51 $ 54 $ (3) (5.6) %
Adjusted EBITDA margin 24.7 % 27.9 % (3.2) pts 23.8 % 26.2 % (2.4) pts
Net income attributable to Caesars $ 18 $ 19 $ (1) (5.3) % $ 52 $ 54 $ (2) (3.7) %
We manage several properties and license rights to the use of certain of our brands. These revenue agreements typically include reimbursement of certain costs that we incur directly. Such costs are primarily related to payroll costs incurred on behalf of the properties under management. The revenue related to these reimbursable management costs has a direct impact on our evaluation of Adjusted EBITDA margin which, when excluded, reflects margins typically realized from such agreements. The table below presents the amount included in net revenues and total operating expenses related to these reimbursable costs.
Three Months Ended September 30, Percent Change Nine Months Ended September 30, Percent Change
(Dollars in millions) 2025 2024 Variance 2025 2024 Variance
Reimbursable management revenue $ 53 $ 49 $ 4 8.2 % $ 159 $ 152 $ 7 4.6 %
Reimbursable management costs 53 49 4 8.2 % 159 152 7 4.6 %
Corporate & Other
Three Months Ended September 30, Percent Change Nine Months Ended September 30, Percent Change
(Dollars in millions) 2025 2024 Variance 2025 2024 Variance
Net revenues:
Casino $ (2) $ (1) $ (1) (100.0) % $ (5) $ (4) $ (1) (25.0) %
Other (1) (4) 3 75.0 % 4 (4) 8 *
Net revenues $ (3) $ (5) $ 2 40.0 % $ (1) $ (8) $ 7 87.5 %
Adjusted EBITDA $ (47) $ (40) $ (7) (17.5) % $ (145) $ (123) $ (22) (17.9) %
____________________
* Not meaningful.
Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") for the Three and Nine Months Ended September 30, 2025 and 2024
Adjusted EBITDA (described below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding our ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents net income (loss) before interest income and interest expense net of interest capitalized, (benefit) provision for income taxes, depreciation and amortization, stock-based compensation expense, (gain) loss on extinguishment of debt, impairment charges, other (income) loss, net income (loss) attributable to noncontrolling interests, transaction costs associated with our acquisitions, developments, and divestitures, and non-cash changes in equity method investments. Adjusted EBITDA also excludes the expense associated with certain of our leases as these transactions were accounted for as financing obligations and the associated expense is included in interest expense. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with accounting principles generally accepted in the United States ("GAAP"). Adjusted EBITDA is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected
in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, distributions to our noncontrolling interest owners and payments under our leases with affiliates of VICI and GLPI, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide Adjusted EBITDA information may calculate Adjusted EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements.
The following table summarizes our Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024, respectively, in addition to reconciling net income (loss) attributable to Caesars to Adjusted EBITDA in accordance with GAAP (unaudited):
Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2025 2024 2025 2024
Net loss attributable to Caesars $ (55) $ (9) $ (252) $ (289)
Net income attributable to noncontrolling interests 16 18 50 54
(Benefit) provision for income taxes (25) 43 (1) 68
Other income (a)
(3) (4) (3) (29)
Loss on extinguishment of debt 4 - 4 51
Interest expense, net 576 596 1,729 1,780
Impairment charges (b)
- - - 118
Depreciation and amortization 352 326 1,073 979
Transaction costs and other, net (c)
(3) 7 51 49
Stock-based compensation expense 22 24 72 73
Adjusted EBITDA 884 1,001 2,723 2,854
Pre-disposition Adjusted EBITDA (d)
- (5) - (13)
Total Adjusted EBITDA
$ 884 $ 996 $ 2,723 $ 2,841
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(a)Other income for the nine months ended September 30, 2024 primarily represents a change in the estimate of our disputed claims liability.
(b)Impairment charges for the nine months ended September 30, 2024 includes impairment within our Regional segment as a result of a decrease in projected cash flows at certain properties primarily due to localized competition.
(c)Transaction costs and other, net primarily includes costs related to non-cash losses on the write down and disposal of assets, certain non-recurring litigation reserves, non-recurring asset recoveries, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with our new property openings, and non-cash changes in equity method investments.
(d)Adjustment for pre-disposition results of operations reflecting the subtraction of results of operations for the LINQ Promenade prior to divestiture, for the relevant periods. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company's auditors for the periods presented. The additional financial information is included to enable the comparison of current results with results of prior periods.
Liquidity and Capital Resources
We are a holding company, and our only significant assets are ownership interests in our subsidiaries. Our ability to fund our obligations depends on existing cash on hand, cash flows from our subsidiaries and our ability to raise capital. Our primary sources of liquidity and capital resources are existing cash on hand, cash flows from operations, availability of borrowings under our CEI Revolving Credit Facility and proceeds from the issuance of debt and equity securities. We may, from time to time, seek to repurchase our common stock or prepay our outstanding indebtedness. Any such purchases or prepayments may be funded by existing cash balances or the incurrence of debt. The amount and timing of any repurchase of debt or common stock will be based on business and market conditions, capital availability, compliance with debt covenants and other considerations. Our cash requirements may fluctuate significantly depending on our decisions with respect to business acquisitions or divestitures and strategic capital and marketing investments.
As of September 30, 2025, our cash on hand and borrowing capacity was as follows:
(In millions) September 30, 2025
Cash and cash equivalents $ 836
Revolver capacity (a)
2,085
Revolver capacity committed to letters of credit (83)
Revolver capacity committed as regulatory requirement (46)
Total $ 2,792
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(a)Revolver capacity includes $2.1 billion under the CEI Revolving Credit Facility, maturing in January 2028, and $25 million under the CVA Revolving Credit Facility, maturing on April 26, 2029, less $40 million reserved for specific purposes.
During the nine months ended September 30, 2025, our operating activities generated operating cash inflows of $998 million, as compared to operating cash inflows of $766 million during the nine months ended September 30, 2024, primarily due to changes in working capital, coupled with the results of operations described above.
On October 2, 2024, we announced that our Board of Directors ("Board") authorized a $500 million common stock repurchase program (the "2024 Share Repurchase Program"). Under the 2024 Share Repurchase Program, we may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. During the three and nine months ended September 30, 2025, respectively, we acquired 3,134,500 and 7,322,966 shares of our common stock at an aggregate value of $79 million and $179 million. Under the 2024 Share Repurchase Program, as of September 30, 2025, we have authorization to repurchase up to $271 million more of our outstanding common stock. Subsequent to September 30, 2025, we acquired 770,556 shares of our common stock at an aggregate value of approximately $21 million. See "Share Repurchase Program" below for details.
On July 8, 2025, we fully redeemed all of the $546 million outstanding principal amount of the CEI Senior Notes due 2027 and paid the related accrued interest and expenses with borrowings under the CEI Revolving Credit Facility and proceeds received from the partial repayment and sale of $225 million of notes receivable related to the previously disclosed WSOP trademark sale.
We expect that our primary capital requirements going forward will relate to servicing our outstanding indebtedness, rent payments under our GLPI Leases and VICI Leases, and the expansion and maintenance of our properties. Beginning in 2025 we have had, and expect to continue having, additional cash uses for operating activities as a result of federal and certain state income taxes.
A significant portion of our liquidity needs are for debt service and payments associated with our leases. Our estimated debt service (including principal and interest) is approximately $188 million for the remainder of 2025. We also lease certain real property assets from third parties, including VICI and GLPI. The VICI Leases are subject to annual escalations, that take effect in November of each year, based on the Consumer Price Index ("CPI"). In addition to the CPI escalator, our VICI Leases are also subject to a variable rent adjustment based on certain historical net revenues of our leased properties which began in November 2024. The next such lease year with a variable rent adjustment begins November 2027. We estimate our lease payments to VICI and GLPI to be approximately $338 million for the remainder of 2025.
We make capital expenditures and perform continuing refurbishment and maintenance at our properties to maintain our quality standards. Our capital expenditure requirements for the remainder of 2025 include the completion of expansion and rebranding projects and hotel renovations. In addition, we anticipate continued investment in our Caesars Sportsbook and iGaming applications.
Cash used for capital expenditures totaled $648 million and $1.0 billion for the nine months ended September 30, 2025 and 2024, respectively, related to our growth, renovation, maintenance, and other capital projects. The following table summarizes our capital expenditures for the nine months ended September 30, 2025, and an estimated range of capital expenditures for the remainder of 2025.
Nine Months Ended September 30, 2025
Estimate of Remaining Capital Expenditures for 2025
(In millions) Actual Low High
Growth and renovation projects $ 188 $ 30 $ 50
Caesars Digital 64 15 25
Maintenance projects 278 75 100
Total estimated capital expenditures from unrestricted cash 530 120 175
Caesars Virginia (a)
118 - 20
Total $ 648 $ 120 $ 195
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(a)Capital expenditures associated with Caesars Virginia are expected to be funded from cash on-hand generated from the operations of Caesars Virginia, or through the Caesars Virginia, LLC Credit Agreement.
We have agreements with certain professional sports leagues and teams, sporting event facilities and media companies for tickets, suites, advertising, marketing, promotional and sponsorship opportunities including communication with partner customer databases. Some of the agreements provide us with exclusivity to access the aforementioned rights within the casino and/or sports betting category. As of September 30, 2025 and December 31, 2024, obligations related to these agreements were $342 million and $421 million, respectively, with contracts extending through 2040. These obligations are composed of various third-party agreements which have been entered into by us for certain of our Las Vegas and Regional properties, or our Caesars Digital segment. The agreements include leasing of event suites that are generally considered short-term leases for which we do not record a right of use asset or lease liability. We recognize expenses in the period services are received in accordance with the various agreements. In addition, assets or liabilities may be recorded related to the timing of payments as required by the respective agreement.
We have periodically divested assets to raise capital or, in previous cases, to comply with conditions, terms, obligations or restrictions imposed by antitrust, gaming and other regulatory entities. If an agreed upon selling price for future divestitures does not exceed the carrying value of the assets, we may be required to record additional impairment charges in future periods which may be material.
Weexpect that our current liquidity, including availability of borrowings under our committed credit facility and cash flows from operations will be sufficient to fund our operations, capital requirements and service our outstanding indebtedness for the next twelve months and beyond.
Debt and Master Lease Covenant Compliance
The CEI Revolving Credit Facility, the CEI Term Loan A, the CEI Term Loan B, the CEI Term Loan B-1 and the indentures governing the CEI Senior Secured Notes due 2030, the CEI Senior Secured Notes due 2032, the CEI Senior Notes due 2029 and the CEI Senior Notes due 2032 contain covenants which are standard and customary for these types of agreements. These include negative covenants, which, subject to certain exceptions and baskets, limit our ability to (among other items) incur additional indebtedness, make investments, make restricted payments, including dividends, grant liens, sell assets and make acquisitions.
The CEI Revolving Credit Facility and the CEI Term Loan A include a maximum net total leverage ratio financial covenant of 6.50:1. In addition, the CEI Revolving Credit Facility and the CEI Term Loan A include a minimum fixed charge coverage ratio financial covenant of 2.0:1. From and after the repayment of the CEI Term Loan A, the financial covenants applicable to the CEI Revolving Credit Facility will be tested solely to the extent that certain testing conditions are satisfied. Failure to comply with such covenants could result in an acceleration of the maturity of indebtedness outstanding under the relevant debt agreement.
The GLPI Leases and VICI Leases contain certain covenants requiring minimum capital expenditures based on a percentage of net revenues along with maintaining certain financial ratios. The GLPI Leases require the Company to maintain a minimum adjusted revenue to rent ratio of 1.20:1, applicable to the operations of the underlying leased properties.
The CVA Revolving Credit Facility and the CVA Delayed Draw Term Loan contain covenants which are standard and customary for this type of agreement, including a maximum net total leverage ratio financial covenant of 4:1 and a minimum fixed charge coverage ratio financial covenant of 1.05:1, applicable to the operations of Caesars Virginia.
As of September 30, 2025, we were in compliance with all of the applicable financial covenants described above.
Share Repurchase Programs
During the three and nine months ended September 30, 2024, we reached the limit of authorized repurchases under our $150 million common stock repurchase plan announced on November 8, 2018, by acquiring 3,872,478 shares of common stock at an aggregate value of $141 million.
On October 2, 2024, we announced that our Board authorized a $500 million common stock repurchase program. Under the 2024 Share Repurchase Program, we may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. We repurchased 1,262,990 shares of our common stock at an aggregate value of $50 million during the fourth quarter of 2024.
During the three and nine months ended September 30, 2025, respectively, we acquired 3,134,500 and 7,322,966 shares of our common stock at an aggregate value of $79 million and $179 million. Under the 2024 Share Repurchase Program, as of September 30, 2025, we have authorization to repurchase up to $271 million more of our outstanding common stock. The 2024 Share Repurchase Program has no time limit and may be suspended or discontinued at any time without notice. There is no minimum number of shares of common stock that we are required to repurchase under the 2024 Share Repurchase Program.
Subsequent to September 30, 2025, we acquired 770,556 shares of our common stock at an aggregate value of approximately $21 million.
Contractual Obligations
There have been no other material changes during the nine months ended September 30, 2025 to our contractual obligations as disclosed in Part II, Item 7 of the 2024 Annual Report. See Note 5to our unaudited Financial Statements, which is included elsewhere in this report, for additional information regarding contractual obligations.
Other Liquidity Matters
We are faced with certain contingencies, from time to time, involving litigation, claims, assessments, environmental remediation or compliance. These commitments and contingencies are discussed in greater detail, when applicable, in "Part II, Item 1. Legal Proceedings" and Note 5to our unaudited Financial Statements, both of which are included elsewhere in this report. See also "Part I, Item 1A. Risk Factors-Risks Related to Our Business" which is included elsewhere in the 2024 Annual Report.
Critical Accounting Policies and Estimates
Our critical accounting policies and estimates are included in the 2024 Annual Report. There have been no material changes since December 31, 2024. We have not substantively changed the application of our policies, and there have been no material changes in assumptions or estimation techniques used as compared to those described in the 2024 Annual Report.
Off-Balance Sheet Arrangements
We do not currently have any off-balance sheet arrangements.
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