8-K: Churchill Downs Inc. Reports Record Fourth Quarter and Full Year 2024 Results

Churchill Downs Incorporated announces record financial results for both the fourth quarter and full year of 2024, driven by growth across its racing, gaming, and wagering segments.

Summary

• Churchill Downs Incorporated (CDI) reported record fourth quarter and full year financial results for 2024.
• Net revenue for the fourth quarter was $624.2 million, an 11% increase compared to the prior year.
• Net income attributable to CDI for the fourth quarter was $71.7 million, up 24% from the previous year.
• Adjusted EBITDA for the fourth quarter reached $236.6 million, an 8% increase year-over-year.
• For the full year, net revenue reached $2.7 billion, an 11% increase compared to 2023.
• Full year net income attributable to CDI was $426.8 million, a 2% increase from the prior year.
• Adjusted EBITDA for the full year was $1.2 billion, a 13% increase compared to the previous year.
• The company successfully ran the 150th Kentucky Derby, generating record all-sources handle and Derby Week Adjusted EBITDA.
• CDI opened the Terre Haute Casino Resort in Indiana in April and May 2024, and The Rose Gaming Resort in Dumfries, Virginia in November 2024.
• Owensboro Racing & Gaming in Owensboro, Kentucky opened on February 12, 2025.
• The company ended 2024 with net bank leverage of 4.0x and returned $218.3 million to shareholders through share repurchases and dividends.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with record financial results and strategic growth initiatives. While risks are acknowledged, the overall tone is optimistic and suggests continued success for the company.

Positives

• Record fourth quarter and full year financial results demonstrate strong performance across CDI's business segments.
• Successful launch of new properties, including Terre Haute Casino Resort and The Rose Gaming Resort, contributed to revenue growth.
• The 150th Kentucky Derby generated record handle and Adjusted EBITDA, highlighting the strength of CDI's flagship event.
• The company's commitment to returning capital to shareholders through share repurchases and dividends is a positive sign for investors.
• The opening of Owensboro Racing & Gaming expands CDI's presence in Kentucky.

Negatives

• Fourth quarter revenue decreased $2.6 million in the Wagering Services and Solutions segment due to a $3.5 million decrease from our sports betting business and a $1.3 million decrease in TwinSpires Horse Racing.
• Full year 2024 net income attributable to CDI only increased 2% compared to an 11% increase in revenue.
• Fourth quarter Adjusted EBITDA decreased $5.1 million from our equity investment in Rivers Des Plaines primarily due to regional gaming softness, increased competition, and higher labor and benefit expense.
• Full year 2024 Adjusted EBITDA decreased $8.5 million from our equity investment in Rivers Des Plaines primarily due to inclement weather in January 2024, regional gaming softness, increased competition, and higher labor and benefit expense.

Risks

• The company acknowledges the impact of economic conditions on consumer confidence and discretionary spending.
• Increased competition in the gaming industry could negatively impact future results.
• The company faces risks associated with potential delays and cost overruns related to capital projects.
• The company acknowledges the potential impact of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change.
• The company acknowledges the potential impact of any pandemics, epidemics, or outbreaks of infectious diseases, and related economic matters on our results of operations, financial conditions and prospects.

Future Outlook

The company expects project capital to be approximately $350 to $400 million in 2025, funded by operating cash flows and the existing revolving credit facility.

Industry Context

Churchill Downs' strong performance reflects the continued growth in the gaming and entertainment sectors, particularly in regional markets and historical racing. The company's strategic investments in new properties and expansion of existing facilities position it well to capitalize on these trends. Competitors in the regional gaming market include Penn National Gaming, Boyd Gaming, and Caesars Entertainment.

Comparison to Industry Standards

• Comparing Churchill Downs to Penn National Gaming, which also operates regional casinos and racetracks, CDI's Adjusted EBITDA growth of 13% for the full year 2024 is a strong result.
• Boyd Gaming, another competitor in the regional gaming space, has also been focused on expanding its footprint through acquisitions and development projects.
• Caesars Entertainment, a larger and more diversified gaming company, has been focused on integrating its online gaming and sports betting operations with its land-based casinos.
• CDI's focus on historical racing machines (HRMs) in Virginia and Kentucky differentiates it from some of its competitors and has contributed to its strong growth in those markets.

Stakeholder Impact

• Shareholders will benefit from the company's strong financial performance and commitment to returning capital through share repurchases and dividends.
• Employees will benefit from the company's growth and expansion, which creates new job opportunities.
• Customers will benefit from the company's investments in new and improved entertainment experiences.
• Suppliers and creditors will benefit from the company's financial stability and continued growth.

Next Steps

• The company plans to continue investing in capital projects, with an expected spend of $350 to $400 million in 2025.
• CDI will focus on the completion of ongoing projects, including the Churchill Downs Racetrack Starting Gate Pavilion and Courtyard, and HRM venue expansions in Virginia and Kentucky.
• The company will continue to monitor economic conditions and competitive dynamics in the gaming and entertainment industries.

Key Dates

Keywords

Churchill Downs Incorporated, Kentucky Derby, gaming, historical racing machines, casino, EBITDA, revenue, net income, wagering, sports betting