MGM Resorts International Reports Q1 2023 Financial Results

LAS VEGAS—MGM Resorts International reported financial results for the quarter ended March 31, 2023.

“MGM Resorts is executing across all of its geographies and channels with record first quarter Las Vegas Strip Adjusted Property EBITDAR, consistently strong Regional Operations profit, MGM China’s swift return to profitability, and BetMGM’s anticipated positive earnings later this year,” said Bill Hornbuckle, CEO and president of MGM Resorts. “Beyond our continued exceptional results, our future growth and expansion plans are promising. In April, we achieved the landmark approval of MGM’s development plan in Osaka, Japan. The application process in New York is progressing and our global digital expansion plans remain a major focus as we continue to grow LeoVegas and the MGM digital brand worldwide.”

“MGM Resorts achieved net cash flow provided by operating activities of $704 million and free cash flow of $564 million during the first quarter,” said Jonathan Halkyard, chief financial officer and treasurer of MGM Resorts. “Our balance sheet continues to improve as we received $450 million in gross cash proceeds from the sale of Gold Strike Tunica and repaid $1.25 billion in unsecured notes upon maturity during the quarter. With $4.5 billion of cash on the balance sheet, we expect to continue to return capital to our shareholders through ongoing stock repurchases and pursue long-term growth opportunities through international digital acquisitions and the development opportunities we have with Japan and New York.”

Consolidated Results

• Consolidated net revenues of $3.9 billion, an increase of 36 percent compared to the prior-year quarter. The current quarter benefited from the inclusion of the operating results of The Cosmopolitan of Las Vegas, which was acquired in May 2022, partially offset by the disposition of The Mirage and Gold Strike Tunica in December 2022 and February 2023, respectively. Additionally, results improved over the prior year quarter due to increased business volume and travel activity primarily at MGM China and Las Vegas Strip Resorts;
• Operating income was $731 million compared to $106 million in the prior year quarter due to a $398 million gain on the disposition of Gold Strike Tunica in the current quarter and the increase in net revenues discussed above, partially offset by an increase in rent expense related to the VICI and The Cosmopolitan leases, which commenced in April 2022 and May 2022, respectively;
• Net income attributable to MGM Resorts was $467 million, which was impacted by the items affecting operating income above, compared to a net loss attributable to MGM Resorts of $18 million in the prior year quarter;
• Diluted income per share of $1.24 in the current quarter compared to diluted loss per share of $0.06 in the prior year quarter;
• Adjusted diluted earnings per share of $0.44 in the current quarter compared to $0.01 in the prior year quarter;
• Consolidated Adjusted EBITDAR of $1.1 billion;
• Net cash flow provided by (used in) operating, investing, and financing activities was $704 million, $212 million, and ($2.4 billion), respectively; and
• Free cash flow of $564 million.

Las Vegas Strip Resorts

• Net revenues of $2.2 billion in the current quarter compared to $1.7 billion in the prior year quarter, an increase of 31 percent. The current quarter benefited from the inclusion of The Cosmopolitan, an increase in business volume as the early part of the prior year quarter was negatively affected by the spread of the omicron variant, and an increase in RevPAR, partially offset by the disposition of The Mirage;
• Same-store net revenues (adjusted for acquisitions and dispositions) of $1.9 billion in the current quarter compared to $1.5 billion in the prior year quarter, an increase of 22 percent;
• Adjusted Property EBITDAR of $836 million in the current quarter compared to $594 million in the prior year quarter, an increase of 41 percent;
• Same-store adjusted property EBITDAR of $706 million in the current quarter compared to $561 million in the prior year quarter, an increase of 26 percent; and
• Adjusted property EBITDAR margin of 38.4 percent in the current quarter compared to 35.7% in the prior year quarter, an increase of 271 basis points primarily due to an increase in rooms revenue, as discussed above.

Regional Operations

• Net revenues of $946 million in the current quarter compared to $891 million in the prior year quarter, an increase of 6 percent, due primarily to an increase in non-gaming business volume;
• Same-store net revenues (adjusted for dispositions) of $919 million in the current quarter compared to $833 million in the prior year quarter, an increase of 10 percent;
• Adjusted property EBITDAR of $313 million, which was flat compared to the prior year quarter;
• Same-store adjusted property EBITDAR of $302 million in the current quarter compared to $285 million in the prior year quarter, an increase of 6 percent; and
• Adjusted property EBITDAR margin of 33.1 percent in the current quarter compared to 35.2 percent in the prior year quarter, a decrease of 206 basis points, due primarily to an increase in contribution from lower margin non-gaming revenue.

MGM China

• Net revenues of $618 million in the current quarter compared to $268 million in the prior year quarter, an increase of 130 percent, and a decrease of 16 percent compared to the first quarter of 2019. The current quarter was positively affected by the removal of COVID-19-related travel restrictions;
• Adjusted property EBITDAR of $169 million in the current quarter compared to Adjusted property EBITDAR loss of $26 million in the prior year quarter, which included a charge of $18 million related to litigation reserves, and a decrease of 12 percent compared to the first quarter of 2019; and
• Adjusted property EBITDAR margin of 27.4 percent in the current quarter compared to 26.3 percent in the first quarter of 2019.

Corporate Expense

Corporate expense, including share-based compensation for corporate employees, increased to $128 million in the first quarter of 2023 from $111 million in the prior year quarter, due primarily to an increase in payroll expense.

MGM Resorts Share Repurchases

During the first quarter of 2023, the company repurchased approximately 12 million shares of its common stock for an aggregate amount of $487 million, pursuant to its repurchase plans. The remaining availability under the February 2023 repurchase plan was approximately $2.0 billion as of March 31, 2023. All shares repurchased under the company’s repurchase plans have been retired.