Earnings call transcript Q4 2022

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Operator

Greetings and welcome to the Penn Entertainment Fourth Quarter Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Joe Jaffoni, Head of Investor Relations. Please go ahead.

Joe Jaffoni

Thanks, Frank and good morning everyone and thank you for joining Penn Entertainment’s 2022 fourth quarter conference call.

management’s and comments answers. to as as get questions your will presentation momentarily and well We [Operator Instructions]

will disclosure. today’s statements. Please I note Now, review that discussion the contains Safe Harbor forward-looking

actual and that assumptions risks, involve differ materially. statements could Forward-looking cause results to uncertainties

our information, details on release more factors. For press risk for see please specific

It’s over the to company’s go CEO, call pleasure now please . the Jay ahead. my turn to Snowden. Jay,

Jay Snowden

Todd with George, morning, answer everyone. well who Head I our Wyomissing CFO, Good in our team Felicia Joe. members Thanks, of questions other here Operations, as as executive of and Hendrix am during my Q&A. help can

and As we weather of parts country our wrapped from Penn in earnings in presentation, solid the December. another corresponding year year at investor headwinds you severe can up macroeconomic despite certain release see ongoing and the throughout

Revenues quarter for $XXX.X and million we adjusted billion, generated $X.XX EBITDAR. the in were fourth

midpoint guidance For above slightly the revenue the our our EBITDAR results year, of and were ranges.

quarter note Year’s, on into which We New also January. a has and performance ended with across portfolio Christmas high the continued between the strong

illustrates World in in fourth Mattress year-over-year winning and launches X quarter Ontario. on million in several Mack deck in despite by our segment, profitable earnings our driven $XX revenue growth the Astros the successful state bet Series our Interactive was Slide the was which with the impressive growth

in long-term swing Barstool an this our $X.XX $X our opportunity to and just XXXX XXXX, Sports, we Interactive the includes proprietary guiding which to summer. reflect million of Sportsbook a of next scratch to guidance on new does plan a billion of EBITDAR guidance profitability will we $X.XXX what of are quarter. U.S. billion platform for in acquisition see own tremendous update not later are we be in opportunities, Slide beginning our our X, It this you as to XXX% believe for to surface including This roughly technology segment will us. close On we revenue $XXX Notably, in month range in range transition anticipating our the growth billion. will and we are $X.XX growth of billion adjusted to a the Barstool we of

felt our for retail the and to Bluffs, of January volumes key seeing some prudent Council we and not business Charles Lands. we here in a given side, uncertain times supply a Lake as sit our was it including as the build markets, Chicago today, was we in us. slowdown On element strong into month relatively of some increased conservatism actually economic guidance Nevertheless, very are

representing X.X increase. marketing quarter, last online in Turning the database. fourth Approximately XX% our to fourth new new signed enhancements year Slide up XXX,XXX X, of guests came database Notably, customers in our quarter offerings. generated technology the in approximately XX% over our million and these focused mychoice from strategy of year-over-year our rated a growth

to and reimagine Slide from XXXX XX capture and offerings technology, continuing XXXX. third-party XX, in in younger total annual segment the growing play the our we with demo of theoretical XX.X% retail increase from to XX.X% On steady show further XX-year-old refreshed greatly games, our concepts. are new To this restaurant and new enhanced hotel best-in-class we group, books, with sports to retail retain properties in

which is and industry-leading app contactless a and technologies, downloads we During mychoice XC’s call highlighted cashless, the on XX. Slide increase our and saw adoption quarter, we cardless also in our the meaningful of

of representing last approximately retail the XX% With are our in the XC’s active launch XX of Missouri company-wide properties EBITDAR. week, total now

which engagement XXX,XXX XC’s as represents mywallet a well in year and of new properties, of total in current As deposits rollout as the had of we million growth. received increased result continued properties customers end, technology at mywallet this $XX significant as sequential our

the combined those channels. device in our our in us superior and emphasized cross-marketing the past, to theoretical. a total ability customer loyalty efforts time visitation, who across And have on effective with wallet who increase with guests guests seamless, XX% use engage through we led has digital to increased demonstrate As a experience best-in-class deliver multiple

the On QX, the with track are we such temporary to-date, knowledgeable Barstool perform our a sports sportsbooks state well anticipating side, will fans. sportsbook are we retail Ohio. X in Sportsbooks, Based recently which casinos at permanent on opened in very on results passionate, our for

of us Massachusetts beyond. positions upcoming sportsbooks XX we Bowl, Sports, of operate birthplace Nevada. the addition week, Super This XX%, With states March excluding now across XX the of well market approximately Barstool for retail and this with obviously the share Madness

I our related expenses World the in unfavorable EBITDA Maryland generated betting sports of fourth quarter betting segment and adjusted Interactive positive to outcome inclusive Ohio in an – the in As Series. mentioned, online sports launches in our EBITDA

Barstool Maryland, Sportsbooks’ Following see to-date. Ohio strongest you launch marketing and XX, our successful omnichannel as will Kansas playbook in approach in on our to led Slide

Barstool footprint record depositors powerful to marketing database, Sports marketing customer first-time despite deep and a expense. launch contributed of external Our retail minimal number at engine

handle existing of more database. Importantly, our XX% online came our from than

seeing As growth. to Penn strong thanks Studios significant experiencing GGR and in our iCasino highlighted Slides handle on performance XX Ontario Game with iCasino year-over-year and XX, improved we are our results,

Studios for content continually Game Our future proprietary introduce new growth. ability to the from Penn sets nicely games, stage including

Blackjack branded quarter in For first Bet to year. the this theScore we of have games launch got set example,

in ecosystem. the province, record America first growth XX% iCasino Ontario I trends in strong is the our December. quality positive for the sports speaks really the to We through and and with net including this Ontario in Media think able market which and North now season, of and our revenues quarter betting our were NFL products stickiness of number theScore gross our a both maintain share top market in despite increase operators of to in

impressive have almost theScore relative XX, fully of has our cross-sell tools approximately to metrics to advanced our performance in tech retention, the promotional including Bet last rates owned led rates. summer with Turning provided our Slide and to platform the transition to an improvement us and trading hold that in iCasino, to in increase point an XXX U.S., basis in X-month a XX% XX% increase our

in Our success tech the this very Ontario Barstool later migration to terms in Sportsbook of of this the is and platform summer. upcoming Casino promising

ever well-known Despite see the space, we engagement as Media in you results advertising mobile the In into exceptional the and increase fourth and the year-over-year meaningful driven and December integration and by producing quarter and sporting College Meanwhile, Barstool as of completed record in sessions Bowl Sportsbook media XX. considering This into session experience. Basketball Slide than headwinds an broadcasting Barstool Barstool growth. in theScore live theScore’s new compelling theScore Arizona to Invitational was XXXX app. media continued will expanding engaged great tournament on product content November digital achieved annual more and Sports XX in a on the while impressive timing the currently business revenue XX, XX% and is verticals, during investing Media on produce revenues October, events, such and audience XX user with Sports including Barstool and initial

look this in the to of Penn later them We Barstool are Sports February about upcoming of family. the to the forward welcoming and Entertainment acquisition month remainder excited

opportunities for heard theScore’s organic Ontario we will integrated loyal us a often like customer audience the betting cross-selling those platform and in fully are Barstool’s media new of say, with us acquisition As powerful seeing you combination and today. provide that funnel have of vast top

Finally, for our it congratulate made take I before team journey. turning Felicia, over last we to on to a significant our want ESG to moment progress entire the year

well amount last relatively on a come a particularly I Committee as with the way being publicly short partnership and gaming and long am diversity. list have for of Magazine Nominating ESG Penn top best in as We our of traded employers diversity proud our as America’s of year Forbes internal by Board’s time Corporate company their Governance named committees. in

of Associates Gaming sports well. First addition, was came Executive in and in mobile Satisfaction in once and place Choice an again category their Annual the In iGaming Interactive betting Bristol Spectrum as Penn Penn survey first employer

our specifically to Corporate in publish inaugural with relates greenhouse and as we quarter, along it the gas to Responsibility April, assessment plan SASB it X XXXX our and of As fourth report. emissions X part finalized Social disclosure Scope our

training completed our second leadership phase diversity, on training inclusion our soon addition, focused will teams. begin mandatory of company-wide the In equity and we and

I Interactive as gaming Check proud Penn Penn RG gaming online first its in is iGaming for report programs the accreditation Council process comprehensive Gambling to regarded U.S. responsible accreditation received most Finally, operations. undergo the that the is Responsible this Accreditation am one of widely to from Interactive world. the operator which

with it hand that, over I Felicia, to will you.

Felicia Hendrix

Jay. Thanks,

solid EBITDAR achieved billion we of with million margin. and revenues quarter EBITDAR $XXX.X mentioned, fourth adjusted in the $X.XX a XX.X% adjusted of As

our slightly above were For and the ranges. year, the our EBITDAR revenue guidance of midpoint results

of EBITDAR adjusted generated Our retail properties million. $XXX.X

we to to the at have freezing Midwest. in storms prior holidays the our while particular severe the weather, and in not do Now impact like an typically did properties temperatures on demand, callout

as New weather Importantly, Christmas which we broke, continued Year’s, from to performance returned the January. saw demand through strong and

sorry, expense to For I was X cash Casino. million, taxes $X.X the million, million. $XX.X quarter, inclusive interest was associated awards for quarter was million. the project we Corporate Category adjusted settled $XX.X am in CapEx, debt the million Total cash our was mostly of CapEx EBITDA $XX.X and payments on cash which were $X.X million, – traditional segment, Morgantown stock-based $XXX.X Cash fourth Interactive of landlords $XX.X of XXX was with reported Hollywood our million. REIT

diluted Our average fully common million. was weighted $XXX.X of outstanding as XX/XX/XXXX, shares

$X.XXX guiding include color revenue range and billion and Barstool of range our billion know, billion. does provide earnings to billion we a an guidance acquisition will the As not we are This on next EBITDA to $X you $X.XX call. XXXX $X.XX to more on of Sports

of uncertain a can in EBITDA XXXX, normalized XX%. While incorporates some which markets and a EBITDA conservatively retail outlook margin sustain economy closer for that XX% implies retail view maintain to our an margins we in environment, new our we supply

there XXXX, segment, increase million from roughly of proceeds, roughly CapEx. year-over-year primarily loss $XXX an of the $XXX help Interactive the your $XX be XXXX and ‘XX break expense million cash-settled million improvement corporate certain EBITDA you of million. parts. insurance our awards. $XXX administrative a million, The moving me of expect XXXX the further as for to functions. for by a Total down of offset continued $XX several are is is and To inclusive stock-based guidance that $XXX modeling will is results support our assumes which driven million we centralization for of For CapEx let

begins we is continued the work year rollout properties: is are million and Columbus of as estimating million M the on at CapEx growth projects for as our CapEx, CapEx investments million $XXX technology maintenance new project For our and $XXX design sportsbooks and generating Barstool such at our growth Resort. X ROI remodels, $XX.X Joliet, hotel Aurora, retail properties.

complete the not will XX% interest to debt to expect that $XXX repayment own. for remaining Sports we The Barstool acquisition of we purchase of expenses. XX, complete do of we million expect acquired the approximately February $XXX On and transaction of million the cash remaining to in interest use the and inclusive be

cash million and expense, million roughly interest XXXX. for cash full year taxes we For the XXXX will year full of be the forecast $XXX for $XXX

Our no weighted year, further count $XXX.X is share repurchases, diluted million. assuming the fully average common be share for to projected

million Now in for share. per We speaking X.X total X $XXX million XXXX million authorization. quarter to brings shares $XX $XX.X for $XX.XX quarter end, shares on we currently repurchased an per million purchases we per price fourth X, million for $XXX or of incremental shares, share. million average shares or an XX.X our share. million in February have XXXX repurchased million This of Subsequent to at $XX.XX $XXX the our remaining $XX.XX

this received past further approval reminder, for we repurchase December. Board authorization $XXX million a As share

our stock intrinsic We continue this that price capture we the our does nor and current year not beyond. to valuation momentum believe reflect it faced does

we view committed As cadence ‘XX, via our Sports this well we to of sheet share our for needs balance for with Further, acquisition additional forward, as our growth program we remain cash think going opportunities. as dry Barstool of about which keeping repurchase our includes strength. the balance will powder

in repurchases. will near-term also share our future determining such, a leverage of factor lease-adjusted managing be net the the As cadence in

also about compared XXXX. you for could activity but think activity share opportunistic, share our which this as will lower you prudent to should assume repurchase So year that to the remainder of repurchase to lead we XXXX, continue be

XX, quarter $X.X the of XXXX. the cash ended For cash rate, at was our lower $X.X from our XXXX on include equivalents. Traditional ‘XX, we the net debt nearest activity. end balance XXXX. is to increase with December maturity fixed if of XX, in leverage due billion debt December billion leases and billion, lease-adjusted X.Xx repurchase our the is We with an in cash $XXX to XX% you of reflecting X.Xx net roughly of a and debt share liquidity, ended of million compared in year inclusive $X.X year our

turn And with to that, I Jay. it will back

Jay Snowden

of been parlay Alright. undertook live Bet a in noticeable Ontario full Nevada. have as we growth control in theScore track new as in And projects on back Thanks, led pre-migration own milestone technology number sports compared announced company able and as quickly In cannot as our was has successful our we be us Ohio of was in betting year closing, increase with add markets another XXXX, Entertainment. same results for which more roadmap, features retail With X retail well are a new our to thus which to product year to a X Penn online hold, we the in including the to our pleased a and we U.S. jurisdictions for record game betting in seeing tech we We both went far. this and look offering, opened to transformative of front Illinois, was huge here Felicia. to the on our sportsbooks, the stack tremendous what it Ontario Penn migration new rebrand a own in and

the this us and deliver than is Sportsbook More iCasino metrics complete competitors. meaningful are on offer our importantly, experience is migration promotional to our player stack are advanced revenue once and confidence tech able higher Ontario that upside the and helping summer our for per Barstool U.S. product capabilities This to there we retention gives in a with par in higher that

system, be migration about I well with iCasino long-term potential management our excited very performing in the which player the account own to is ahead, to Ontario. Looking space, our continue in beginning

experience brands and the online which behind to can customers, seamless better have steps a think impact we taking scenes both connect for also provide retail a more on are perspective omnichannel offerings. We to marketing our our from casino and meaningful a our

We more in the out starting or becoming I are play think getting see have space. the online about sports more And also some heard lot to rational environment betting promotional we rational a to extent. this

certainly we throughout instance, For in very launches. new Ohio trend this attractive our such year. compared markets this state think are as And CPAs could to prior continue

on spend. the remained as generate disciplined And As you very know, thus positive far, we EBITDA acquisition yielded impressive customer hold, of and we abnormally rather have has despite this covered QX earlier. marketing which than primarily we and strategy redundant tech external relied organic cost stacks to low results were in able

to reflected stack to our others quarter, order are as perspective But particularly approach marketing an be there we profitably game. as when certainly in I be share, forward, Looking more to is half guidance. measured Strategically, we own long convert our last the we market be our a continue to potentially play continue of think our will from in will opportunity second year to – post-migration we back. to noted this grow tech our pulling aggressive in EBITDAR

in more I I go for these on look and open forward with sharing ahead that, future quarters. think we Frank, to information can up And the questions. line topics

Operator

Securities. Thank first Our from you. Please Barry Instructions] question Jonas Truist with proceed. [Operator comes

Barry Jonas

Thank you. guys. morning, Good

reflect what’s out general hits in threats? specific headwinds just or supply there in there? specifically from costs also, guidance, margin the maybe opposed assuming are guess macro-related labor revenues to as the And XX% land rising there XXXX Thanks. base, you lower I does break the also new could For for like guidance you’re

Jay Snowden

comments Council took We hit no Todd earlier, property there will high Bluffs, on as we’re level. not know from the a anticipated that we our here’s team. look, corporate and at few the as on Lake budget, and number. continuing with out mean built – a to And some We level. this that Interactive guidance. that I I up XXXX and But is economist Charles, up based included try we at I’ll our mentioned Barry which we’re markets, from approach, some read in for well. we – to property by a impact on have Yes. we bottom Chicago came what land. – of

but anticipate read not banks continuing area, are experts and all that to for XXXX. are in to we the We’re say what continuing

And know what that high interactive, up – probably trends, what so the if about with we status it’s quo supply way about business year. We say conservatism, would prudent decided it what like today new on we being haircut on if organically the in we to will number at know but put guidance approach too conservative, we end the the then for level that to that some going of year, early the a and based what and like for we approach seeing took into up XXXX. felt new a that’s If level side of I in the just key we’re appropriate markets current going was the say how is play it’s to felt retail a midpoint is out. to came that’s

I out guidance. that’s the there gaming right think only we’re now company providing

probably how like to best Todd, the you add. other approach. things conservative that we felt may So do have in But being was

Todd George

continue industry and The couple think maybe marketing. with to all of other Barry, impressed only approach pleased I that’s to and right. our very we Jay, a be items, the

amenities. us. our continue much dollar envision do we’re from labor way offset the approach a the technology very some But we those yielding increases. with improvements we in a and looking business potential to marketing But non-gaming rational at all of So especially for see that of

continuing our room and bit labor point, adding little of for approach really Jay’s of evolution business the model increases. a a it’s to So conservative

Operator

Beynon proceed. with comes Please Our from Chad Macquarie. next question

Chad Beynon

just in continuing question. X more January, the into just details dissecting Jay, and you trends. the of taking morning, the land-based more about in maybe terms little you but One thanks even how kind then months went a of good into some thinking talked it going for Hi, you’re side, on bit ‘XX, in about quarter fourth my

visit change really standpoint? a but the I As rise been there of the that’s we visit visitation recovery rates the spend market. of that more saw what spend from per equity around and kind still saw become saw is it’s housing terms volatile different well fears prior interest any and Was the leading per more tiers. off markets we of you as levels, know in within

you the if throughout kind wondering of was Just and saw consistent? Thanks. flow anything ebb if quarter it

Jay Snowden

actually where been time point, we It’s interesting are look as really because, your little it of at softens there back Chad, just sort ‘XX a of up periods bit. to

it per then June. going back visit forward. July softness. of bit in a notice little of on around that from period did little a X cylinders hit a and visitation came we spend We saw We were And and You right all hitting perspective.

was by of weather, due has bit and to there little December. Some it was of others. kind which late a mid general just And through mid-November of us to then malaise highlighted been

looking I year. then And New at robust like of and year the between continued something year good stronger holidays really so that, can to we remember. has as we’re momentum any last much And start on new. Year’s kind is through than this January, as got Then the January this the of Christmas

we potentially factors. lost come the probably December is numbers could bit of out. in what to over There There to moved January. starting see a be You’ll several little state

did certainly, So just malaise. somewhat softness, to yes, those we feel and out. good. a But due a not weather little of But currently dynamics how really sure play pocket exactly little see trends

Todd George

to Todd. of I that. this rates. Yes, lot is thing do impact is, point Chad, on only – – is would the your on that into I The factors interest we think go there only add a

decrease to the that and country mild just a So equation pricing, supply thing the and that as demand we the across that in lot relatively of other due and into all especially did some key of see gas well. markets, factors winter, that our in

last or they line you year that per that, looking at above were are significantly in in seeing when where XXXX. actually the numbers slightly above So spend start and visit we’re from

Jay Snowden

actually now question potentially I the those a that least looking beginning it’s And labor this unemployment can a was years. percentage, Powell but And to relatively his, for words, as the down just is XXXX really something see seeing customer about be our certainly you’re It over it what years been I’ve are employment. paraphrasing whole Todd other been levels that well. its he’s erosion to two as yesterday which well. tight of It’s think, growth, would impacts how say, really lot market. which, any could real thought talk to years back really consumer. only triggered that they desired to the relates and before come And in watch And asked XX at jobs, potentially the because we down for there it’s would wage has peaks, cause that consumer, on – long come our having get encouraging, me very Chair about this that factors in inflation my to we’ve tightly talk one, and a that I a doing housing the at is time. our behavior. up great recession core in held correlated level not economic as customer he’s over looking for ideal highlighted behavior customer is shape. whether it’s cautiously off seen correlation health, without optimistic is a though starting disinflation about That And this that back we’ve and

seem in to seem or on consumer our visitation that slight a businesses big Those really and related behavior mean X% our consumer bigger gas a gas visit prices rates end. move price are or shifts overall anything tightly I the the eye interest keep of that to continue than have shift to So don’t in but Todd behavior mentioned, and spend affect XX%. we different, that’s impact to an per those super to two much on. patterns

Operator

Kelley from comes question of America. Bank next Please Our Shaun with proceed.

Shaun Kelley

bit hoping everyone. online in morning, I kind we trend a was delve of into good little more quarter. could Hi, Jay, the the core

You about Obviously, GGR big you about Ontario momentum. a year-on-year? saw what core Can OSB is some in hit of trend rate pretty from but iGaming there? saw think really to you And there showed some us Mattress help help the in could sort continues of the us side. strong growth obviously, gain think growth you Mack, you and kind

Jay Snowden

question, It’s spot because Yes. great in now describe Shaun. it’s right I’ll we’re level. And interesting at a a a in high sort peculiar of a that U.S. the

that’s and We work the then, product really going which focused continuing of U.S., we’re entire now. as in have going because have to North always into platform And we will, migration in across later we later own engineering around the the across a is One, we two of on course, Ontario to of our lot teams in are in that preparation to, this America here product that. sometime the summer. summer, best-in-class U.S. will be platforms our iterate primarily this sure innovate the things July that portfolio and right for a happen upcoming and on course, making our

resources at those in really run focus on and that not the are that we focusing where and been to we enhancement. throw third-party innovate really the platforms not U.S., able focus to here where on we have been that’s iterate And which understandably platforms, has been so is have the been the

and think U.S. acquisition, bit has our bit, as market the isn’t on focused a here currently share I driving in was So that really to it behind. a in haven’t we our this everybody U.S. the a winter competitive And as here in softened and as product else been up little ago. compared knowing sports this fallen we’ve year fall betting,

focus that so conscious okay We And that. decision we to the want on retention. with we’re made

in Ontario us want the both that but all the once to our platforms to that’s Here second focus very really own allow half we’re across migrate on to going metrics the convert Ontario in retention acquisition we’re in we U.S., progress year. in we the of in pleased seeing over and lean to with U.S. and

think, capabilities the us we CRM platform expect that we and have season capabilities, we have just that be, capabilities, U.S. standpoint into louder I and marketing head to should point at today. football bonusing a don’t you as So ‘XX, promotional from parlay in that capabilities knowing

thinking across of it. on growth about America. iCasino North We’ve So focused been that’s been sort we’ve the way

progress quarter. U.S. happy We’ve made speaking, OSB the but We’re then can we’ve half that iCasino, to some generally seen a we’re here the progress. fourth duplicate we in long the And nice in Ontario way in there got we we’ve believe seeing trends really go, and second of year.

Shaun Kelley

cohort just this seeing? Thank like talk fascinating. think help demographics talk really little type, broader can very – – it about to And kind slide data just much. I bit my the And some implications spending other find streams this you implications maybe keep book age just follow-up I kind as how when behind you of change the about the are as you know by short. evolve obviously, some Could that? little a you about here initiative us the for little bit in sports on the your how might bit What what business? of a broader of you of there. are you’re has and been But investing revenue demographics that retail a shift the

Todd George

is I’ll take this Shaun, Todd. that. Yes.

maybe in the where pandemic see as investment few only our the table of mix our and a especially so this point, allow we of a of games, But you can level. amenities the non-gaming trend you’ll game the of of greater offerings coming now not involved price you entertainment enter bit lot really different a last out offering. spot a years So which different electronic in at sort a

performing looking bit. all property, folks walk Pay a that And hotels, [ph] coming fourth that just quite to, the in the the last and casino. all with the have well. they that our some work to been we then retail are the quite more offering those the Greektown looking just that hotel completed And making those up Apple in out year, it’s at we’re ramp they that currency offerings and can sticking really that Amazon in now lot of quarter different did So been just XCs the find starting our and of of that we technology as at in relatable we the way features forms that and then see use put Venmo first well the restaurant used around to of a in of as

in of got So front us. we’ve road a great map

we’re just think great Jay so scratching surface far. we’ve I seen earlier, mentioned as the results but that, on

Operator

comes question Joe Please from next JPMorgan. Greff proceed. Our with

Joe Greff

that us EBITDA first towards weighted everybody. Good Ohio, talking I it Do on for That’s in the it you details talk think half? betting Interactive, you can you’re follow-up I the roughly for Or know could really profitability. some And on in the it’s in the days of full sports bit second hoping a $XX be was profitable and about in million year. positive morning, GGR segment that? Thanks. me. impact about early little give half? a If you land-based then can but is all on

Jay Snowden

Yes.

say, about on which positive, breakeven-ish, by sort about Todd X lot pretty movement side of We of should a two both negative, as I’ll quarters being a not a for XXXX think can the quarter, little Joe. little those, you of cadence first question, there. interactive will one. grab think first the both Ohio maybe hit hit good a second I the is would and the the you

where NFL. football be Third not significant, both numbers, negative quarter they as of will negative but we season, really some is first for will month plan September and college the being have we

quarter get lean quarter to volumes levels year. should so And the highest And about cadence the where the for won’t we expect of to then an you be really the it. of positive see but the from standpoint, come profitability to number entire that I starting that have would that would in is a with think you XXXX. for be you marketing that will fourth That

Todd George

would also well what was could won And launched and But our been teams it volumes relates a and the have together. would as were to one have earlier or weekend launch just record because out the Year’s had Sportsbook last it Barstool was really working then maybe we and Joe, another seen so And up most property corporate talking amazing And day picked Jay. game for if opening, Thanks, the I good an of Ohio would have everybody properties day. marketing, This properties. see. Ohio Eve. really since we’ve New huge just beating all-time Ohio our State we that have for to in Jay successful

really been great states what So complement other time. existing to for with there. experiencing in XX XX-year-old demo the seen we’ve coming that that’s in, a It’s to database again, our in things first

in be So the budget year. more with all exceeding it with pleased looking I not our Ohio properties could now prior way we’re four of at right

Jay Snowden

to last holiday which be And day, that just was weekend. Saturday, on was super was clear record Saturday all-time not January. volume just a a that It in

being lot they younger So the introduced restaurant we sports to of addition gambling and and to retail fun do most good once that to is just attribute customers in, do in, things sports, for but the of offerings. of – do than and coming a on some partaking entertainment portion part, people to the new realizing other people a the come betting, bet there influx of

encouraging. very Yes, So

what’s I in think we’re collaboration and these in month. smarter effect in and terms our done launch the first the state job a and the share new planning have for we’re Todd for time just great we opposed in and interactive omni-channel really to all to as a markets, retail getting handle of market – between team just every

Operator

Ryan Hallum Our next question Please with Craig proceed. comes Capital. Sigdahl from

Ryan Sigdahl

I quarter. Interactive, so likely the standpoint and Good QX. that to previous probably from here will But only potentially the for operator the a Jay expectation QX, swing EBITDA in in given a Series loss on Mattress in to report positive want your likely that World on our congrats stay morning, Felicia. was loss, Mack the

Given went or cost $X EBITDA? better side report that it that to Was side? of positive what the primarily million user the

Jay Snowden

not then you at iCasino can slides we to probably yet better the want in expected, lots in our reasons. seen we’re look as provided. is great say, it, see results that some Again, progress. of share Yes. iCasino, one which we grown we but as market in have had of we where be you in we Ontario I would And have than for

say it’s two I structure So is quite reasons. would primary predictable. those the are really The cost

working and third-party our have you’re our and of in of is part predictable. happens when internal our resources we product least budget, third-party of cost the you’re not plan on and a resources platforms on surprising, this ramp other that part what own engineering But We’re full quite paying the up areas migration. – and outside, on then still ramping seeing but at while is we’re you’re for

be structure results to what things to the tend with what so would year. the than happens structure. It’s shouldn’t a cost So surprise really going depend percentage the more with fluctuate on cost those the hold throughout really revenues, happens

Todd George

all new But other unique we low, thing it’s expense I on little our launch The well. this especially keeping for that would Agree great to us, partnerships the Jay and The with always Yes. as that with these into business a states, add, bit thing model structure helps that. touched as CPA with only have. and earlier. we that

Ryan Sigdahl

of And then with sportsbooks the recent any thoughts retail live next months. curious your just couple hit follow-up, Thanks. for and plans over there the the Massachusetts three my launch with then on

Jay Snowden

Ryan. for XXXX. there, obvious since in for Yes. I look, have launched year Massachusetts mean being appreciate we it, – XXth betting was expectations They celebrating Barstool’s Barstool sports we’re following. high reasons. I founded in huge

feeling we in our numbers, we’re about good market but again, long-term we’re is is results, what based launch relationships seen haven’t Ohio. there all Ohio, seeing And with really there our the So audience. loyalty in we’re and on and own share seeing

total with there, well wagers. Obviously, Bowl for just we not We won’t a right currently of a in be and expect We planned. may to states, as from live what retail was that at revenue. but population Super reminder market currently very of a not know, be time there regulators until the least which we’re And Madness for think is be similar. March to those as yesterday top-performing expect sportsbook, timing, that be standpoint great only have is mobile our before one share to a live significant from with Massachusetts just we

And will in get we live we think March. a and have early Massachusetts. May in information Ohio call both will I lot as we QX be more on about So our

Operator

Needham Our Please next question with from Bernie & proceed. Company. comes McTernan

Bernie McTernan

Great. Good much morning. synergies? how it’s Thanks profitability, for revenue taking the is questions. growth synergies, by synergies To swing driven cost interactive that of organic start, just the $XXX whether or versus million in

Jay Snowden

in up engineering actually against we have because ‘XX, of I the we continue costs kind synergies our through out end year, to own ramp have building like platform have we got that we product and carries don’t team. working of Well, third-party said, us on – redundancy cost really while the

us and cross-sell business the So, into the percentage. it’s Those improved results us it’s one a in the benefit also seeing we results, half of hold of second sports lot our less we And of slides the synergy, iCasino having retention are more and certainly the course, highlighted are year. betting growing factors. that from of increased

once think account itself then of and lowest think control will at tech our U.S., players. look and are average more on of the hold we top I you that services. in the reverse the the we We own trading that, own our to six start stack player management, are percentage if all So, of

the and offerings you move today. with whole more you for partners, can those parlays. put – when think in have that you seeing partners percentage are you have mostly the betting front way I to consumer that roadmap right are especially We third-party the great retail on center what masses But the the with can and product control of start of

sitting of in total right U.S. XX% on the are at still wagers We parlays. around

than a competitors. of our that’s think I lot most lower

that. to forward look we So,

for much going profitability I around to synergies. those think are growth more it’s the XXXX and be enhancements, but

will cost synergy lot you XXXX, costs us those as side on the hear from roll off. start to of more think some I a third-party

Bernie McTernan

Understood. that when But later happens buying to should be XXX% it, or the we anything have on should time. differently. that we weeks, And two once acting anything in it you Barstool guidance control complete there of could of expect? get a know is out call I operationally

Jay Snowden

think opportunities. cross-sell I certainly, integrated deeply more

for an are We have of things. with Miami an retreat – Erica. of and lot this as sorts in just team on got executive spend executive we We along a all actually time

And so to I more think come.

but we spend have closed a on not it QX on get questions after slides us to rather will will call, some on are we full our Erica into will on it, few May have to time and we call. join – happy today in the that. on the acquisition. this We Happy answer probably until about

Operator

Please from next Our Montour proceed. with Barclays. question comes Brandt

Brandt Montour

Hey my everybody. for Thanks taking morning. Good questions.

follow-up one in points, mix and the parlay on to those the Jay, I wanted parlay the Ontario actually So, U.S. in of mix

there way of the mix more to, where it the there? Ontario parlay is at it the own from look there the I are market stack. that asking get Ontario. the another the of that you let’s you of talk your see Slide parlay assume maybe Is about up guys you outperformance that’s extent If in XX, being upside tech whole able on say, you the And because mix U.S.? for to to leader go essentially? Is

Jay Snowden

Yes.

is versus still we U.S., are go, full parlay say the that that between are we it seeing as there early our very innings delta though Brandt, the Ontario offerings. to performance I relates think I to more would even Ontario in in in

So, to even that if top U.S. players there whole what Ontario the a are the see some you in in are four doing, players top significant Ontario And is three can than or being percentage compare still our – U.S., the higher trails are in what the you that of in still percentage hold it the where to is pretty we doing think in U.S. I delta.

currently a ultimately couple we us being. So, to I term point in there improve to run are U.S. anticipate hundred probably rating here opportunity would longer XXX percentage of we basis for where where our versus say is given hold the

Brandt Montour

probably Okay. half of And comments Great. getting I I want the you that of we marketing about does can more that what should louder. and then competitive to organic, information, that type out guys give you. you to the it would helpful. terms marketing do? your really Thanks. any be have provide second don’t know That’s but Is entail? this increased don’t on year – helpful. tended spend? follow-up in considering Thank you Is there of a be Anything it something And

Jay Snowden

Yes. I would say both.

little us, think see I a – you more aggressive. We are will

us to on in You shouldn’t us weekend, probably else on and organic the lot and see But more expect I think media, leaning on cross-sell of will commercials you a opportunities there, like a see acquisition. user that. more more paid running aggressive than digital every heavy anything be TV anything focus

I think and theScore at being Our even our audience. showcase to we platform partners that to have Barstool, great louder, a knowing

do more obviously, fourth are going we So, drive market we can should profitability we you are the think a where share. picking and some where we aggressive. quarter But have us to real XXXX, into way going still just in it up in be to expect then some momentum

in way and a take We into beyond. profitable it doing learnings ‘XX are those and

Operator

next Please proceed. Our John question comes from with DeCree CBRE.

John DeCree

have We on country? iGaming usually more happening stuff? about a it’s there. Texas both little bit. for of good of Jay, type sense all maybe secondarily, a view Thanks a taking everyone. what’s I road know of probably have long rumblings And Georgia of the that and potential But been any that states. on regulation still you curious pretty possible thoughts type then and some Hi Maybe to a in around if regulating additional there questions. gears shift stuff. in has gaming the

Jay Snowden

those. of iGaming Yes, first, lot on at not side, happy I would say, XXXX. to momentum the a look hit we as legislatively

that a the something Illinois Iowa. lot neighboring in in seen in our we the states. starts of start Indiana whether just move probably happens, that’s industry, by opinion that have once or historically to are as to will We or And faster move it in Midwest,

not ‘XX. handicap to So, It’s how our right I in perspective, or Honestly, from whether know happens active something real fine. that’s now. wouldn’t not

generally second for feel we that platform beyond. a iGaming going think on competitively once to and more I a get of good we we about are the half be really and to lot ‘XX prepared

of matter states a will New or legalize it’s on In year, to and I think casino, pretty no online will see side, But state and this confident. path. problem. be that online Michigan. that XXXX, not like start bit It’s states eventually have and slower also our to of down only if maybe couple the if legalized something for So, you continue betting, the feel a go, little – it’s sports Jersey natural Pennsylvania it’s in would time perspective have seen launched a we a

plays And so see out. how it’s will we – that just

Georgia, say As there. real a it to relates history any we lot to not on Georgia, don’t have

reading are So, of are what sort we reading. you

has us long of now time, keep with that all interest have really connected. There a Georgia in wasn’t of both We lobbyists interest. and salt than and ever. because any been Texas to grain there there little appetite seems is be But states, more an take now for a that really a there

pretty like we on. good pulse Texas have So, a is

the for investments in are we a been in decade horse a racing time And have now. Texas over strategic long owners. We making

We we this It’s in if us up Texas really and something happen well ownership this in very when think year. of and/or in early number have Texas. does controlling cycle positions sets for racetracks that a legislative in

active. cycle this the legislative Governor to There than be meets we health are more a As you know, ever is Senate and There side support Texas, the legislature really But have really is openness every X we years. a seems and the lot the from very TBD. conversation and only on seen. a

lot happy we of regulatory early, the be it tuned trying been have we this I to my opportunity in and and significant stay like as engaged. for don’t way. on company. And because outcomes, handicap real I own legislative we very more, Texas exciting I could are so or would personal one a it’s share, but time We believe spending to are know a say

Operator

comes Susquehanna. Please next Our proceed. from question Stauff Joe with

Joe Stauff

there it’s with and the obviously meager Thank given slim wanted you Jay, ask or morning. Ontario, you you. I pretty information. to important Good that respect to have assets market, very a

from is some and little incumbents some so you that’s are of competition comment encouraging bit can just you competitive have and kind success. the initial guys landscape, doing a you what heavy And pretty maybe about leading to

Jay Snowden

that can’t which operator. international was far every good is for speak I operator great Ontario, Look, a there by Ontario many, most it were when you we got market and a U.S. major It’s some the But have in. competitive years Yes. in question. of operate market. many every for

able and for time, base has about of in point so all showcase us that our about in history XX, and with updates and conversations that. games favorite getting Slide long to favorite have only a more, by the loyalty that. the deck community lot and fan of encouraged and to. a a theScore of their momentum features two be we theScore, their a we sports on And and things on and there their to for knew And is teams highly to obviously teams slide market, really, results betting check scores favorite are on lot to,

Ontario, was So, in Certainly, boost. in in Media acquired it brand ecosystem. but a that’s theScore a very We well, very the strong strong predominantly U.S. as Ontario.

here huge a have what of are that than very work the piece. different lot we Then we capabilities a that’s and in U.S. think we about the to platform with talked I So, course, the have

the in of control being about that on what’s what capabilities. be are playing in U.S. so the in able and us the migration to your field a compete and queue, product good feel And level prioritizing roadmap really you makes

that’s it based our regulators for additional supplied calculate an the is the that the And market also us, influx operators. are information been been our publicly market those share on holding is as factors. steady we impressive it’s that there So, share, two limited of in despite Ontario by

business number in continue And prepared to grow the because in been seen excited season we have results Ontario from the both in share I QX have online held market and saw QX our the to football grow operating operators on over stronger than online really online about through casino. by here mentioned casino really sports yet we our we As of much Ontario betting, U.S. remarks, in and our cross-sell in XX%, what to

Joe Stauff

mean, in your then specific other investments CapEx, retail that cashless of are and there? you Barstool’s does but sort I what investments sense. plans terms going and Makes in guess branding any your XXXX, that to I are for Felicia, make year will XXXX project of And guess provided some what you expand that numbers make, and into this

Jay Snowden

correctly, million, broke million say growth and question $XXX at the you Columbus, towards what $XX M CapEx that when jump I Ohio if the we Vegas. Joe, and and and in of, down it, Felicia in $XX saw $XX the the a But Resort is year, Illinois, that hotel Felicia, it, would in call plans two four understand can Las million that projects here. million, for is total number talked going I of earlier hotel call roughly your year, the the you about in in the I

of So, XXXX. rest exactly how think about $XXX the million, about the talked we is it

return us have And You have in launching $XXX spend you and that sportsbooks. discretionary projects types retail that it. with have but maintenance, would got sort of are got you of million lot that then be that Barstool-branded done a million work million referencing, we and consider of although $XXX we – us. does going $XXX a out, exact XC’s more have towards the behind roll gotten associated

those very that spent renovation, hotel million focus saw more returns that’s entertainment got XXXX, million. projects have we of on $XXX additions, last beverage, we the We doing really on the that which food we is in in more are with the for and why we $XXX that ‘XX. are that And early pleased

there for look know ‘XX. big if to to the Felicia, our identical look the is projects, four outside more anything like plans growth, they in of CapEx So, almost ‘XX add… what I don’t

Felicia Hendrix

new think are that is projects, elsewhere. right. underscore for just we us No, while that’s in And exactly I to usual it’s business these as investing point that growth

Operator

Please Steve Our Stifel. with Wieczynski next question proceed. comes from

Steve Wieczynski

Yes. Hey morning. Good guys.

what what back to it it on And question right pretty and pretty quo. look I what is upside Barry’s of you now are handle a seeing guidance But first is, Jay, want call. be competition that But to Is obviously, think called ask, if January. you think stays the mean you the potential have it you. go this I want actually think So to I was be consumer range? there to going to could the headwinds of out is new for end the like. the I that’s good it in status – it through guidance front those going much to year. I And fair upper to your on was

Jay Snowden

we we it the per year, something range is how read is and happen the housing then seeing business of quo market year. today, from in holds We that. If that know those remainder conservative. the provided. later the a don’t that this in ‘XX, hold that the we like living be I there are of looks trends guidance in Yes. build January, year labor that this do be seeing what we anticipated that the visitation does what the to in if happen steady then going market else visit to because and upside going answer some yes, and to concern is status something to to for would a level are what took we to conservatism doesn’t for seeing steady if of continue just midpoint haircut recessionary If the to the that’s really throughout spend January, that and in

Steve Wieczynski

at any of seeing on update the so Okay. labor And gotten I better you has you labor don’t of on And talked labor Todd. guys? question, could you kind a then out us just or are think Thanks there far what mentioned for availability guys either quick all or any for call. from the And you give perspective? Jay. second you

Todd George

Steve. Sure,

little question a our is part answer we seen applications second easier jobs. that inflow Yes, most in a have and So of to of pickup of for candidates the bit it.

encouraging. that’s So, been very actually

at to go with most able full offerings. are more our capacity we So, of

quo. what part, a pressure. where of just have there say status much of it’s portfolio, standpoint. first with the Colorado bit kind upward a minimum passed But recently wage they our some little I there On more would is is of from of pockets

are any But is just a We minimum the I by for more overall, for going a mandate more so wage. backwards not or little up is bit flow, a to there pay there need it guess pressure, from means. talent. offsets Federal But mandate state

Operator

Grambling with proceed. Morgan Stephen comes Please question next from Our Stanley.

Stephen Grambling

Thanks.

Just couple quick interactive. on follow-ups of a

or implementation First, how over state out your how and rollout? the as of should think CPAs post of on rolling and the they not time. you at testing follow-up targeting expenses or about ramping a in on a Ohio, do marketing comments any as the states marketing we implementation. Are about the the thinking promotions then are kind be might states or of stack, legacy maybe change introduction And tech How mature? costs markets cadence changing level you the simultaneous across doing

Jay Snowden

Yes.

time. cadence we first stack live planning to all in states go across at the of So, part Stephen, the is the around question, your one tech U.S.

on plan at need time is to between college got one And July. we preparation football We based baseball volume have feel this. for in continue have U.S. now go up. X.X and regulators that are there for targeting that when contingencies be the the all-star literally to really we weekend We plan all that us But we plan. can any to of you in in with closely before with imagine sports now influx that the confident make in nothing is very to right going starting live world and the our on of been the adjustments for we have and working course, and live months for NFL

is that’s plan. tech are from the promotional rational. a stack environment more seeing the we perspective, CPA So, then And that

mobile once live. around to CPAs a that a certainly in, ago. space, question Massachusetts more media attractive Ohio and just But CPAs seeing years, year Kansas. your for there an You little are have that of a more see are that years, the new will we sports across advertising a X were some are markets attractive, we a now they launched are online little betting Maryland which that been X in year, than goes paid the a live little perspective for from means spend market like less seeing

focus what in focus. for perspective. QX. improved little more our be a there confident think little of environment there optimism part But just having aggressive football XXXX. got more product to of a attractive much And where the a more of into us an is also be all gives stack to not environment We get in welcome and I but operators when are some us is been We It’s profitability. bit a season there so top definitely it that. level from We allows XXXX, bit tech efficient, more we we that’s going maybe think here the bit an will from of the CPA to in little a year

Operator

Mr. you. your call Snowden, presentation the remarks. with now or will closing turn Please to continue back I

Jay Snowden

and this appreciate you morning. early Great. forward to May in cover QX speaking Thanks everyone I joining for to with time results. your us look

Operator

does for you That day We a participation today. disconnect call for conference your great thank you Have everyone. conclude the line. please your that and ask

PENN Entertainment (PENN) 2 Feb 232022 Q4 Earnings call transcript