Earnings Call Insights: Caesars Entertainment (CZR) Q3 2025
Management View
- Anthony Carano, President & COO, stated that “our diversified portfolio delivered third quarter consolidated net revenues of $2.9 billion and adjusted EBITDA of $884 million.” He highlighted strong volume growth in both sports and iCasino within the Digital segment, while noting adjusted EBITDA in Digital was negatively impacted by NFL hold in September and faced a tough comparison to the prior year, which included World Series of Poker (WSOP) results.
- Carano noted sequential improvement in Las Vegas operating trends into the fourth quarter, with regional revenues up year-over-year, driven by strong returns in Danville and New Orleans and growth from strategic reinvestment in the Caesars Rewards customer database. Regional EBITDA grew 4% on a hold-normalized basis during the quarter.
- Recent CapEx investments at Flamingo Las Vegas were cited as exceeding return expectations, with upcoming projects including a new Omnia Day Club at Caesars Palace, the rebranding of the Cromwell to the Vanderpump Hotel, and Project 10 by Luke Combs at the Flamingo.
- Eric Hession, President of Caesars Digital, reported that “Caesars Digital delivered net revenue of $311 million, adjusted EBITDA of $28 million and hold normalized adjusted EBITDA of $40 million.” He described a 29% net revenue growth in iCasino and a 15% increase in total monthly unique payers to 460,000. Hession detailed progress on the universal digital wallet and proprietary player account management system, now live in 22 states, with a full rollout expected by early 2026.
- Bret Yunker, CFO, stated, “In addition to redeeming $546 million of senior notes during the quarter, we repurchased $100 million of stock, including October activity. We’ve now repurchased close to $400 million of stock since mid-’24, shrinking our share base by 6%.” He added, “Our balance sheet remains in great shape with our nearest maturity in 2028 and a floating rate debt mix that will continue to benefit from interest rate cuts.”
- CEO Thomas Reeg explained, “Hold was down almost 600 basis points in Vegas in the quarter. On a year-over-year basis, it impacted us a little over $30 million.” He noted the improvement in Las Vegas trends through the quarter and projected continued recovery into Q4 and 2026, supported by “a record in ’25 versus ’24” group bookings and anticipated all-time records in 2026.
Outlook
- Management continues to expect sequential improvement in Las Vegas operating trends, driven by positive leisure trends and a strong group and convention calendar. Carano stated, “the segment is on track to deliver a record EBITDA year in 2025 due to our strong Q4 booking pace, where group mix should increase to 17%.”
- Reeg highlighted that “first quarter should be a new all-time record ahead of ’25 — I’m sorry, ’26 should be a full-time — a new record for the full year ahead of ’25, largely on strength in the first quarter of the year.”
- Hession reiterated, “We continue to see a business capable of driving 20% top line growth with 50% flow-through to EBITDA, which keeps us on track to achieve our long-term goals.”
Financial Results
- Caesars reported consolidated net revenues of $2.9 billion and adjusted EBITDA of $884 million for the quarter. On a hold normalized basis, consolidated EBITDA was $927 million.
- The Las Vegas segment reported same-store adjusted EBITDA of $379 million and hold normalized EBITDA of $398 million, with occupancy at 92% and ADR down 5% year-over-year. Regional segment adjusted EBITDA was $506 million and hold normalized EBITDA was $517 million, supported by 6% net revenue growth.
- Caesars Digital achieved net revenue of $311 million and adjusted EBITDA of $28 million, with iCasino net revenue up 29%.
- The company redeemed $546 million of senior notes and repurchased $100 million of stock, bringing total repurchases since mid-2024 to nearly $400 million.
Q&A
- Brandt Montour, Barclays: Asked about leisure recovery metrics in Las Vegas. Reeg responded that “the leisure customer continued to get better during the quarter. July was the worst. August built on that and then September, October has continued, but that leisure customer is still softer on a year-over-year basis. The difference is what you get in group activity allows us to compress rate much better than we were able to in the third quarter.”
- Montour, Barclays: Inquired about regional promo strategy. Reeg stated, “as the quarters go by, we become more efficient in that marketing, you’re dialing back more that’s not working and expanding what does.”
- Daniel Politzer, JPMorgan: Queried about stimulating leisure demand and structural pricing issues in Las Vegas. Reeg explained, “our occupancy percentage was over 90% in the quarter. It’s stronger as we move into the fourth quarter… It doesn’t take a lot to turn that back the other way.”
- Steven Pizzella, Deutsche Bank: Asked about regional performance and fourth quarter comps. Reeg clarified the September calendar shift and projected margin improvement as marketing is refined.
- Lizzie Dove, Goldman Sachs: Sought clarity on Vegas outlook for next year. Reeg said, “the big question… is the consumer. Is this leisure demand — are we going to see it continue to improve and recover? Or do we stall at some point that’s shy of where we were before.”
- David Katz, Jefferies: Asked about digital run rate for Q4. Reeg responded, “the big swing factor… is game outcomes… our hold for the first 4 weekends was above last year’s hold, but below our budgeted hold.”
- John DeCree, CBRE: Asked about higher acquisition marketing spend in Digital. Hession replied, “it was spend that as we went through the quarter, we steadily increased heading into football and heading into a strong acquisition period for the iCasino side.”
Sentiment Analysis
- Analysts expressed cautious optimism but pressed management on leisure demand recovery, regional promo strategies, digital segment seasonality, and cost controls, indicating a neutral to slightly skeptical tone.
- Management maintained a confident and measured tone in prepared remarks, emphasizing sequential improvements, capital discipline, and long-term growth targets. In Q&A, management addressed concerns directly but acknowledged ongoing market softness and volatility, particularly in Las Vegas and Digital sports outcomes.
- Compared to the previous quarter, management’s sentiment is more focused on operational challenges but remains confident in recovery and growth, while analysts’ tone has shifted to more probing and detail-oriented questioning.
Quarter-over-Quarter Comparison
- Guidance language shifted from projecting a “soft summer” in Las Vegas in Q2 to emphasizing sequential improvement and recovery into Q4 and 2026.
- Strategic focus has evolved to highlight increased group bookings, refined regional marketing, and continued CapEx investments in Las Vegas.
- Key metrics such as Las Vegas segment EBITDA, occupancy, and ADR declined sequentially, while regional and digital segments showed resilience and targeted growth.
- Management confidence remains steady, but with greater acknowledgment of short-term headwinds. Analysts’ focus has increased on digital profitability and regional cost structure.
- The tone has shifted to more granular discussions of marketing efficiency and digital product advancements.
Risks and Concerns
- Management identified ongoing softness in Las Vegas leisure demand, with Reeg noting, “there is definitely — has been softness in leisure demand for Las Vegas in the summer months.”
- Volatility in sports outcomes impacted Digital EBITDA, and higher acquisition marketing spend was flagged as a short-term drag.
- Labor costs and potential structural pricing issues in Las Vegas were discussed, but management indicated contract-related increases were manageable.
- Regulatory uncertainty in prediction markets and ongoing operational challenges in regional markets were highlighted.
Final Takeaway
Caesars Entertainment’s third quarter results underscore a challenging summer for Las Vegas, offset by sequential improvements and robust group booking trends heading into the fourth quarter. The company remains committed to strategic reinvestment in its portfolio and digital innovation, targeting 20% top-line growth and 50% EBITDA flow-through in Digital. Management continues to balance free cash flow between debt reduction and share repurchases, projecting a record EBITDA year for Las Vegas in 2025 and sustained digital momentum through 2026. Short-term headwinds in leisure demand and sports outcomes persist, but the company’s diversified approach and focus on operational efficiency signal confidence in long-term growth.