Casino and sports betting operator Penn National Gaming (NASDAQ:PENN) reported first-quarter earnings Thursday morning. Here are the key highlights for investors.
What Happened: Penn National reported first-quarter revenue of $1.56 billion, up 22.7% year-over-year. The total came in ahead of estimates of $1.53 billion according to data from Benzinga Pro.
The company reported earnings per share of 29 cents, missing a consensus estimate of 43 cents per share.
“Penn National gaming generated record first quarter result... These results reflect our continued progress in meeting our strategic objectives,” said CEO Jay Snowden.
Property level revenue totaled $1.42 billion with increased visitation levels and higher spending from guests.
The company’s interactive segment, which includes the Barstool Sportsbook, saw revenue of $141.5 million in the first quarter and reported an adjusted EBITDA loss of $10.0 million. Snowden also highlighted the company’s media business, anchored by Barstool Sports and its acquisition of theScore.
“Our media business is building momentum, as theScore grew revenue 42% year-over-year in Q1 2022 and continues to garner high levels of engagement. Barstool Sports Inc has also continued to expand its audience and reach while pursuing new growth opportunities.”
A second Barstool sports bar was opened in Philadelphia in the quarter.
Penn National bought back 3.8 million shares in the first quarter at an average price of $46.04 totaling $175.1 million. The company has $574.9 million remaining on a current share buyback authorization.
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What’s Next: Penn National reported the recent successful launches of Barstool Sportsbook in Lousiana and theScore Bet in Ontario.
“Although early, we have been very encouraged by the results,” Snowden said of Ontario.
Penn will transition to a proprietary risk and trading platform in the third quarter for theScore Bet in Ontario, which Snowden said will increase product features. Barstool Sportsbook will transition to theScore’s trading platform in the third quarter of 2023, which will provide cost and revenue synergy opportunities.
The company said property visits and spending have trended higher in the second quarter to date.
“We remain encouraged by the ongoing visitation from younger demographics and are focused on continuing to reimagine our properties and offering to enhance the entertainment appeal to this steadily growing segment of consumers,” Snowden said.
While highlighting the media division, Snowden also said Barstool will continue to extend its live sporting event reach with a broadcast of an alternative commentary of the Canelo v. Bivol boxing match on DAZN.
“Looking forward, we believe there is upside for the media business as we begin to realize the benefits of cross promotion with Barstool Sports and additional monetization opportunities.”
The success of the first quarter and early readings of the interactive segment in Canada led to the company raising full year guidance.
The company raises its full year revenue guidance from a prior range of $6.07 billion to $6.39 billion to a new range of $6.15 billion to $6.55 billion. The current Street estimate is $6.31 billion.
Penn is also raising its adjusted EBITDAR guidance to a range of $1.875 billion to $2.00 billion.
PENN Price Action: Penn National shares are down 4.7% to $36.90, near the low end of its 52-week trading range of $35.59 to $93.02.
