Boyd Gaming (BYD) Q1 2025 Earnings Call

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DATE

Thursday, Apr 24, 2025

CALL PARTICIPANTS

Keith Smith: President and Chief Executive Officer

Josh Hirsberg: Executive Vice President and Chief Financial Officer

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Q1 Revenue: Nearly $1 billion

Q1 EBITDAR: $338 million

Property-level margins: 40%, consistent with prior year

Share repurchases: $328 million, acquiring 4.5 million shares

Dividend: Increased to $0.18 per share for April distribution

Total leverage: Approximately 2.8 times

Lease-adjusted leverage: About 3.2 times

Online segment EBITDAR growth: Nearly 14% year-over-year

SUMMARY

Boyd Gaming reported consistent results for Q1 2025 despite challenges from weather, the leap year, and Super Bowl comparisons. The company maintained stable core customer trends. Management emphasized a strong balance sheet and diversified business as key strengths for navigating potential headwinds.

Revenues in the Las Vegas locals segment for Q1 2025 were nearly even with the prior year. EBITDAR declined less than 4%, primarily due to the Orleans property.

Downtown Las Vegas achieved revenue and EBITDAR growth., benefiting from improved Hawaiian visitation compared to Q1 2024.

The Midwest and South segment grew revenues and EBITDAR. despite a 28% increase in weather-impacted days.

The company plans to open a modest transitional casino in Norfolk, Virginia, in November.

Management indicated no significant shifts in consumer behavior or spending patterns through the first three weeks of April.

INDUSTRY GLOSSARY

EBITDAR: Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent

Lease-adjusted leverage: A measure of debt that includes both traditional debt and lease obligations

Full Conference Call Transcript

David Strow: Good afternoon. And welcome to the Boyd Gaming First Quarter 2025 Earnings Conference Call. My name is David Strow, Vice President of Corporate Communications for Boyd Gaming Corporation. I will be the moderator for today's call, which we are hosting on Thursday, April 24, 2025. At this time, all lines are in listen-only mode. Following our remarks, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press then 0 for the operator. Our speakers for today's call are Keith Smith, President and Chief Executive Officer, and Josh Hirsberg, Executive Vice President and Chief Financial Officer. Our comments today will include statements that are forward-looking statements within the Private Securities Litigation Reform Act. All forward-looking statements in our comments are as of today's date, and we undertake no obligation to update or revise the forward-looking statements. Actual results may differ materially from those projected in any forward-looking statement. There are certain risks and uncertainties, including those disclosed in our filings with the SEC, that may impact our results. During our call today, we will make reference to non-GAAP financial measures. For a complete reconciliation of historical non-GAAP to GAAP financial measures, please refer to our earnings press release and our Form 8-Ks furnished to the SEC today, both of which are available at investors.BoydGaming.com. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project special charges and certain expenses. Today's call is being webcast live at boydgaming.com and will be available for replay in the Investor Relations section of our website shortly after completion of this call. So with that, I would now like to turn the call over to Keith Smith. Keith?

Keith Smith: Thanks, David. Good afternoon, everyone. During the first quarter, our company continued to deliver consistent results, growing revenues and EBITDAR on both the company-wide and property-level basis. Revenues for the quarter were nearly $1 billion, while EBITDAR was $338 million, and we maintained property-level margins of 40%, consistent with the prior year. During the quarter, our team successfully managed a number of issues, including significantly more weather-impacted days in our Midwest and South segment, comparison issues created by leap year, and the benefits of last year's Super Bowl in Las Vegas. Including the impact from these factors, play from our core customers continued to grow on a company-wide basis during the first quarter, while retail play was even with the prior year. With respect to recent trends in the business, we have not seen any meaningful shift in consumer behavior or spending patterns thus far in the second quarter. Through the first three weeks of April, customer trends have remained consistent with March. And while we are encouraged by the consistency of the trends in our business, we recognize that the last several weeks have brought an increased level of economic uncertainty. However, our management teams have successfully managed through periods of uncertainty before. And with the strongest balance sheet in our history, and a larger and more diversified business, we remain confident in our ability to manage through the current environment. Now let's review our performance by segment, starting with our Las Vegas locals business. During the quarter, revenues in the local segment were nearly even with the prior year, while EBITDAR was down less than 4%, primarily attributable to the Orleans. At the Orleans, while we continue to be impacted by competitive pressures, year-over-year declines in both revenue and EBITDAR narrowed during the quarter. The remainder of our Local segment, even with the difficult comparisons created by leap year and last year's Super Bowl, revenues for the quarter grew modestly, EBITDAR was even with the prior year, and operating margins once again exceeded 50%. Across the entire local segment, play from our core customers grew during the quarter, while retail play was consistent with fourth-quarter trends. And through the first three weeks of April, these trends have continued throughout our business. Next, Downtown Las Vegas achieved both revenue and EBITDAR growth during the first quarter. We continue to see encouraging customer trends downtown, with growth in play from both our core customers and retail customers, solid visitation from Hawaii, and healthy pedestrian traffic along Fremont Street. Additionally, recall that Hawaiian visitation to our downtown segment was temporarily impacted in last year's first quarter by higher airfares from Hawaii related to the Super Bowl. This created a favorable comparison during the first quarter of this year that will not continue in future quarters. Looking ahead, we remain confident in the future of our Southern Nevada operations. The long-term fundamentals of the Southern Nevada economy remain strong, with consistent growth in local population, employment, and tourism. Next, in the Midwest and South segment, both revenues and EBITDAR grew during the quarter, and margins were even with the prior year. We achieved this performance despite a 28% increase in weather impact days compared to last year, as well as the impact of leap year. During the quarter, play from our core customers continued to grow, while retail play was even with the prior year. Importantly, as we move past the impacts of weather, trends in late March and April were consistent with the last several quarters, similar to what we saw in our two Nevada segments. Looking ahead to the second quarter, keep in mind that we will anniversary the opening of our new Treasure Chest facility on June 6. Additionally, our Belterra Park and Belterra Resort properties were forced to close for several days earlier this month due to flooding on the Ohio River. Next, our online segment EBITDAR grew by nearly 14% year-over-year, driven by stable performance from our market access agreements and strong growth from Boyd Interactive, our online gaming business. On top of the continued growth we are delivering in our online segment, our 5% equity stake in FanDuel represents significant and growing value for our shareholders as FanDuel further strengthens its position as the nation's leading online gaming company. Finally, our managed and other business had yet another strong quarter, driven by continued growth in management fees from Sky River Casino. The foundation for future growth at Sky River is being laid with the ongoing expansion activity at this property. The first phase of this expansion, set for completion early next year, will add 400 slots and a 1,600-space parking garage, providing much-needed additional gaming capacity. The second phase will further diversify Sky River's offerings with a 300-room hotel, two new food and beverage outlets, a day spa, and an entertainment and event center. Once fully complete in mid-2027, this expansion will position Sky River to continue growing well into the future, strengthening its position as one of Northern California's leading gaming entertainment destinations. So in all, our revenue and EBITDAR growth in the first quarter reflected the strength of our diversified business, the resiliency of our customer base, and the appeal of our properties. We are further enhancing the competitiveness of our amenities as we refresh and update our hotels at the IP, Valley Forge, and Orleans. We are also continuing our property-wide renovation of the Suncoast. We began these improvements last year with the addition of several new amenities and have now begun a complete renovation of the casino and public areas. Disruption from this project has been minimal so far, and we will be moving into the most impactful phase of the casino floor renovations this summer, which fortunately is the property's slowest time of the year. We expect to complete these renovations during the first quarter of next year. On these property enhancements, we have several projects underway to strengthen the long-term growth profile of our business. These projects are located in markets with long-term growth potential, each providing the opportunity for a strong return on investment for our company. They are part of our $100 million in annual recurring growth capital. In Missouri, work is progressing on our meeting and convention center expansion at Ameristar St. Charles. The vast majority of pre-bookings for this new space are from entirely new customers, significantly expanding the property's reach and appeal when we open our expansion this fall. Earlier this month, we broke ground on Cadence Crossing Casino, adjacent to the master-planned community of Cadence in the Southeast part of the Las Vegas Valley. When it opens in mid-2026, this new property will replace our existing Joker's Wild Casino with a modern gaming entertainment facility designed to appeal to the thousands of new residents throughout the Cadence community. This property has been designed for continued growth, with future plans for a hotel, additional casino space, and more non-gaming amenities. As we near the completion of these investments, we are developing plans for the next phase of projects to strengthen our growth profile. One example is our plan to replace our thirty-year-old Paradise Riverboat Casino in Illinois with a modern and new entertainment facility. We are in the design phase of this project and expect to seek regulatory approval and begin construction in the next twelve months. In Virginia, construction is now underway on our $750 million resort project in Norfolk. This project will further diversify our portfolio by expanding our presence into one of the largest underserved gaming markets, the Mid-Atlantic region. Scheduled for completion in late 2027, this best-in-market resort will include a casino with 1,500 slots, 50 table games, a 200-room hotel, eight food and beverage outlets, live entertainment, and a 45,000-square-foot outdoor amenity deck. As part of this project, we plan to open a modest transitional casino in November of this year. Our development site is located near Downtown Norfolk with convenient interstate access. Importantly, it will be the most convenient gaming destination for a significant number of the 1.8 million residents of the Hampton Roads Metropolitan Area. It will also be the closest gaming resort to Virginia Beach, a tourism destination that attracts nearly 15 million visitors each year and is the state's largest city. Given all of these dynamics, we are excited about the long-term potential of our Norfolk project. While our capital investment program is an important part of our strategy to create long-term shareholder value, we also remain committed to returning capital to our shareholders. During the first quarter, we repurchased $328 million in stock and paid $15 million in dividends. While we remain committed to $100 million per quarter in share repurchases, with the current economic uncertainty, we will be much more conservative in buybacks above that level. As we balance our capital expenditure program and maintaining a strong balance sheet with returning capital to our shareholders. So in all, this was a good start to the year for our company. We continue to deliver year-over-year growth despite challenges from weather and the calendar during the quarter. We are encouraged that customer trends have held steady so far in April. We remain confident in the long-term prospects of our company and our strategy to create value for our shareholders. Before turning the call over to Josh, I wanted to personally thank our team members for their continued contributions to our company's success. Their hard work and dedication to providing memorable service keeps our guests coming back, and we are grateful for all that they do for our company. Thank you for your time today. I would now like to turn the call over to Josh.

Josh Hirsberg: Thanks, Keith, and good afternoon, everyone. Our first quarter reflected a continuation of the positive operating and customer trends over the last several quarters. Despite the weather impacts on our Midwest and South segment and the leap year comparison. While acknowledging that the recent past is not a guarantee of future performance, particularly in light of the current environment, customer trends from the first quarter are continuing into the first several weeks of April. Now some additional points on the quarter. The tax pass-through amount for our own segment was $130 million during the quarter, compared to $116 million in the year-ago period. Excluding the tax pass-through amount, company-wide margins for the first quarter this year would have been 520 basis points above the margin we reported. Beginning with this quarter, we are recording non-controlling interest activity related to our junior development. This amount reflects expenses incurred by the tribe related to the Virginia development. In terms of capital expenditures, we invested $127 million in capital during the first quarter. We continue to project total capital expenditures for the full year of $600 million to $650 million. As a reminder, these capital plans include approximately $250 million in maintenance capital, $100 million related to our hotel room projects at IP, Valley Forge, and The Orleans, $100 million in growth capital for the meeting and convention space at Ameristar St. Charles, and the new Cadence Crossing development here in Las Vegas. Finally, $150 million to $200 million for our casino development in Kenya. Given our current capital plans and today's environment, we have taken steps to mitigate the potential tariff impacts on these projects, and we have also identified capital projects that can be deferred if needed. On the operating side of the business, we have also taken steps to mitigate the potential impact of tariffs on our operating expenses. Moving next to our capital return program. We paid a regular quarterly dividend of $0.17 per share during the first quarter. As previously announced, we increased our quarterly dividend to $0.18 per share beginning with our April distribution. Also during the quarter, we repurchased $328 million in stock, acquiring 4.5 million shares. As of the end of the quarter, we had $312 million remaining under our current repurchase authorizations, and the actual number of shares outstanding at quarter-end is 81.9 million shares. Since we began our program to return capital to shareholders in October of 2021, we have returned over $2.2 billion in the form of share repurchases and dividends and reduced our share count by more than 27%. As Keith noted, we remain committed to repurchasing $100 million in shares per quarter. We will balance this commitment with our capital expenditure plans and ensuring we retain a strong balance sheet. Given the current environment, you should expect us to be more conservative in repurchasing amounts in excess of our $100 million per quarter commitment. We ended the quarter with total leverage of approximately 2.8 times and lease-adjusted leverage of about 3.2 times. We have no near-term maturities, robust free cash flow, and ample borrowing capacity. In conclusion, our company remains in excellent financial condition to continue executing our strategy. With that, I'd now like to turn the call over to David to open it for questions.

David Strow: Thank you, Josh. We will now begin our question and answer session. You will hear a prompt that your hand has been raised. Should you wish to withdraw your request, please press star then 2. If you are using a speakerphone, please use your handset when asking your question. We will pause for a moment while we compile our list of questioners. The first question comes from Carlo Santarelli of Deutsche Bank. Carlo, please go ahead.

Carlo Santarelli: Hey, guys. Thank you. Keith, you talked a little bit about it in your remarks. As it related to some plans at Paradise. You guys have had obviously great success at Treasure Chest. You're talking about kind of Paradise. You have several other kind of multilevel boats where, you know, the returns on these types of projects have been very good. How do you kind of think about some of the other assets that are similar in nature where, you know, that opportunity kind of make a land-based transition exists over the next few years just given kind of the success that's been seen not only by you, but by others in similar moves.

Keith Smith: Sure. Thanks for the question, Carlo. So it falls in the category of we have a list of these types of development projects. We prioritize that list based on what we believe the highest returns are. And we are kind of focused on the ones that provide the highest returns. Those are the only ones we're talking about. But trust me, there's a long list of additional projects that can continue to benefit the company and provide a good return on investment. We do have a number of three-story riverboats remaining that are older in nature that over the course of time, we'll have the opportunity to upgrade.

Josh Hirsberg: The only thing I would add to that, Carlo, is that Treasure Chest has exceeded all of our expectations in terms of that investment. And everyone's but Keith. I would say that from the perspective of Paradise, which is the next one up, it is a different dynamic in terms of the population density in the competitive landscape. So I wouldn't expect the same kind of return that we got from Treasure Chest to apply to Paradise. We expect a return that warrants the investment, but certainly potentially not at the level of Treasure Chest. Just wanted to clarify that.

Carlo Santarelli: Yep. Understood. And then just as a follow-up, as you guys kind of look at, you know, what you've seen in April to date and kind of when you take the entirety of the first quarter and acknowledging, you know, there were several moving parts, and several kind of difficult to comp and understand dynamics across not only the Midwest and South, but also in Las Vegas. When you talk about kind of the core customer remaining flat to up across most markets and retail kind of oscillating a little bit amongst the markets. How would you more or less categorize the outlook for each of those segments? And do you see anything especially as it relates to the core, changing in any of the markets?

Keith Smith: Yeah. So as we try and, you know, best as we can look through the noise that occurred during the first quarter, whether it be the Super Bowl here in Las Vegas or significantly more weather or leap year, you know, we see our core customer frankly continuing to grow. And continuing to show up and participate with us. And so that is a strength of ours and has been since we came out of COVID. We look at the retail customer and we look at the unrated side of the business, they also continue to perform on a very consistent basis. And, you know, once again, when you sort through the noise, you see very positive trends there. You know, they're consistent. They're growing a little bit. And so we feel very good about the direction. Now having said that, you know, we have three weeks of April under our belt, and we feel good about those three weeks, but it is three weeks. But you know, that's best as I, I guess, I can describe it.

Carlo Santarelli: Thank you, Keith. That's helpful. Thanks, guys. Yep. Thank you.

David Strow: Our next question comes from Shaun Kelley of Bank of America. Shaun, please go ahead.

Shaun Kelley: Good afternoon, everybody. Sorry. Can you hear me okay?

Keith Smith: Yep. We can hear you.

Shaun Kelley: Okay. Great. Yeah. Just wondering, Keith, can you, maybe just I want to talk about the buyback strategy at a high level. If we could just dig in on just the timing of the buy in Q1. Josh, you made some detailed remarks about not expecting to continue. But what was the opportunity you saw there? Or the sort of catalyst just given how much that actually is at this point? And then, you know, what would be the criteria? I mean, again, I get the uncertainty, but this is also the opportunity to possibly lean in a little bit and utilize the balance sheet capacity that you have. So just help us think about those different dimensions. Thanks.

Keith Smith: I think as you think about where we're at today and going forward, one of our priorities is maintaining a strong balance sheet. And so we will kind of balance the rest of our capital allocation program investing in our properties and returning capital to our shareholders with ensuring that we don't go so far as to impact our balance sheet in a negative fashion. So, you know, once again, we allow leverage to float up and float down based on our ability to see it coming back down. And so, you know, the current environment is a little less certain than it was maybe a month ago. And so we're just going to be cautious as both Josh and I said in our prepared remarks. As we balance all of that. As we think about what happened in the first quarter, I would just say look, you saw us buy in Q3 and Q4 over $200 million and we feel very good about the direction of the business overall. Felt very good about it coming into Q1. And, you know, we took advantage of kind of where we thought it was a good stock price. Buying under market and certainly have, you know, plenty of capacity to be able to do that. And so, you know, that was the result. But once again, going forward, we just want to make sure that we can, you know, see around the corner up there and before we buy too much more than a hundred million dollars a quarter.

Shaun Kelley: Perfect. Thanks. And just as a brief follow-up, Josh, you also mentioned a little bit about the capital projects and some of the steps you've taken to mitigate potential risks around tariffs. Just wondering, could you elaborate a little bit more there? Specifically on Norfolk, if you can give us a sense of either how much of the project is bought out at this point? I know it's still relatively early. And kind of how this conversation has maybe trended because we are seeing capital projects being delayed or, in some cases, fully canceled just given the uncertainty in the environment. And appreciate that's probably too extreme, but just how you're kind of working around what is definitely a dynamic environment. Thanks.

Josh Hirsberg: Yeah. So, you know, I would say we well, our first step was to go through the project list and figure out what we might be willing to defer given what you know, kind of the I would call it, the anxiety in the marketplace. But we have to remember that in our business today, we're not really seeing anything differently. And I would say, just before I get into kind of some details on how we thought about the capital projects, that you have to also remember that we're coming from this from a position of strength. Probably the most the strongest position our company's ever been in. In this type of environment before. So we feel very comfortable about kind of where we're sitting. So we have a very low levered balance sheet. We have a much larger company. Very diversified. And so again, just to reiterate, I think we approach these kind of decisions from a totally different perspective than maybe we had to in the past. In terms of kind of after evaluating kind of what projects we thought might be considered for deferral, we looked at each one of the capital projects. And really evaluated where they were in their development cycle as well as well as how much, where they were in the procurement cycle. And then from there, we identified, you know, the sources of what was coming from outside the country, what was coming in domestically. And we evaluated whether we had the opportunity to shift some of the external or the stuff being brought in that was subject potentially to tariffs to other vendors, to other products, to other sourcing methods. At the end of the day, when we got through that analysis, quite honestly, we felt very comfortable with the risk relative to our existing budgets. We don't feel like what we know today that any of our budgets would have to change. And I think with respect to Virginia in particular, the temporary is a, you know, a very small development effort. Remember, we don't expect much to come up from the from an economic perspective from the temporary casino. In terms of the permanent casino, that's being developed over a much longer period of time. So we have a lot more flexibility in terms of timing, purchase and all of that other stuff. We have pre-purchased some items to avoid the risk of tariffs, and we have kind of ensured that some of the longer lead items were taken care of. Some people talk a lot about steel and those factors. And, actually, the steel for Virginia would be produced or sourced from domestic product. Domestic sources here. So that takes a lot of the risk out of that project. Hopefully, that gives you a sense of kind of without going into too much detail, gives you enough of detail to understand kind of the diligence we've been through.

Keith Smith: And, Shaun, just to clarify, you know, what Josh is saying, he is not saying that we won't see cost increases. We have identified those areas that we will see cost or we expect to see cost increases because of either existing or possibly new tariffs. But as we've calculated them and looked at our budgets, we're comfortable that they're not going to hinder our ability to go forward and that we can handle those increased costs, whatever they may be, within the budgets that we have. It's not going to cause us to really change course.

Shaun Kelley: Really encouraging. Thank you. Thank you all.

David Strow: Thank you. Our next question comes from David Katz of Jefferies. David, please go ahead.

David Katz: Good afternoon. I'd love to just go out on the edge a little bit here. Given what you're seeing in your business, you know, given your capital position, and given, you know, what looks like pretty solid execution, what would be the boundaries of, you know, any M&A or underwriting potential? And, you know, is that a possibility in this environment?

Keith Smith: Well, look. I we talk about this environment. Best as I can tell, we've been in this environment for three, maybe going on four weeks, and so it doesn't really change our view of M&A. You know, we've always had an appetite for M&A. Just about what we do. The type of asset we buy, the price we're willing to pay. Again, it's got to be strategic. It has to be in a market that is, you know, a market we're not in. And something that we feel can, you know, move the company and move the needle for the company. And so we're interested in M&A today. We were interested in M&A last month. We're interested in M&A last year, but kind of said this over and over and over again. We're very cautious. We're very disciplined. We have, I think, a very good track record of doing these things. And the last three weeks of volatility, maybe three weeks in a day to the date all this started, hasn't changed our view.

David Katz: Understood. Thanks for repeating yourself. Just separately speaking, if we're, you know, looking hard at your numbers and when we talk about seeing things, can we just spend a second on, you know, is it number of visits? Is it spend per visit? Is it, you know, all of the above? Is it some element of, you know, new customer inflow? You know, a little specificity would, in the environment, quote, unquote, would help.

Josh Hirsberg: Yeah. So I think with respect to the core customer, you know, that growth is coming largely from a little bit of both of the items you mentioned, a little bit more in frequency and a little bit more in terms of budget. Maybe a little bit leaning maybe leaning a little bit more to budget, but not too heavily. And as you get into the retail piece, I'd have to kind of break retail into two components, unrated, which we have limited visibility in because they don't have a card. But we look overall at the volume of unrated is growing and so we can't tell whether that's driven by either frequency or and or a combination. In the lower segments of the database, I would say it largely follows the core. It's a little bit of frequency and a little bit more of spend on the budget side of things.

David Katz: Okay. Thank you. Nice quarter.

Keith Smith: Sure.

David Strow: Thank you. Our next question comes from Steve Wieczynski of Stifel. Steve, please go ahead.

Steve Wieczynski: Yes. Hey, guys. Good afternoon. So this might sound like a repeat of a couple other questions, but I'm going to ask it a little bit differently or hopefully, I am. So, you know, as we think about general trends being stable through April, it seems like, you know, even that unrated play segment has been pretty steady, you know, as well. But, you know, we're now starting to hear some of your competitors out there, you know, have started to talk about seeing a little bit of softness in unrated and even in their retail segments. So, you know, I guess the question is, you know, that segment seems pretty stable for you. But, you know, have you seen, you know, any change in spend across the non-gaming amenities in your assets, whether that's lower spend in food and beverage or hotel or etcetera? Or is that as stable as well? I'm just, I mean, just trying to figure out if your core customer is still, you know, coming to the properties and gambling, you know, maybe deferring spending across the non-gaming assets. And hope that makes sense.

Josh Hirsberg: So, you know, when we look at both F&B and hotel, it's up on a cash basis. And the only reason it would be down is largely Las Vegas related to the Super Bowl, drove a lot of room and F&B business. But, you know, when we look at the segments and we look at the individual components, I would say it largely mirrors what we're seeing on the kind of what we talked about on the customer side of things.

Steve Wieczynski: Okay. Gotcha. That makes sense. And then, you know, as we kind of look around the country, you know, have you seen any of your competitors start to get more aggressive with, you know, on the promotional side of things, you know, in order to try and combat any weakness that, you know, may be out there at this point?

Keith Smith: So look. I think as we look across the country, we haven't seen any significant changes in the overall promotional environment like any other month or like any other quarter. You know, you have some players get a little more aggressive for a month or so, but there's no structural change. Nobody's gotten extremely aggressive. Yeah, nothing to talk about.

Steve Wieczynski: Yep. Okay. Great. Thanks, guys. Appreciate it.

David Strow: Thank you. Our next question comes from Jordan Bender of Citizen. Jordan, please go ahead.

Jordan Bender: Hey, Robert. Good afternoon. You went through a period of weakness with inbound Hawaiian travel, which you spoke to in the prepared remarks. Curious if you could help us frame where you stand in terms of Hawaiian travel, whether that's in relation to 2019 or some of the levels around '21 and '22? Thank you.

Keith Smith: Sure, Jordan. I don't have those comparison points handy. The decline we actually saw in the first quarter of last year was specifically related to a spike in airfares around Super Bowl. And as that spike normalized, you know, in the second quarter of last year, we saw the business come back. And so when we the first quarter this year was what I would call a normal quarter. The business grew, but as, you know, it's up significantly over the first quarter of last year, but it's just a comparison issue. Because of that. I don't know how we compare to overall visitation from our Hawaiian guests vis a vis 2019 or 2021. Just don't have that data.

Jordan Bender: Understood. Thank you. And then just on the follow-up, Josh, do you have any impact from the weather in the quarter?

Josh Hirsberg: In terms of the dollar amount? Is that what you're asking?

Jordan Bender: Yeah. Any dollar amount related to EBITDA or EBITDAR in the quarter from weather.

Josh Hirsberg: Yeah. So, I think we estimated that to be about $5 million for the weather impact.

Jordan Bender: Great. Thank you very much. Sure. Thank you.

David Strow: Our next question comes from Brandt Montour of Barclays. Brandt, please go ahead.

Brandt Montour: Thanks for that. Thanks for the question. So on the local segment, Keith, you know, you talked about the sort of market share losses narrowing in the first quarter. Can you maybe talk about how that competitive landscape in that locals market for you has evolved? You know, I know this has been an ongoing thing, and it's been getting better. But as you know, I can assume that those competitors aren't necessarily sitting still and they're evolving as well. And so what's kind of the outlook for the balance of the year in terms of how you're lapping those comparisons and how you kind of expect to continue to narrow it from here.

Keith Smith: Yeah. A couple of comments. I think look, with respect to the overall Locals market, you know, if you look at the numbers that are out there, the locals market basically shrunk a little bit, you know, for the recent couple of months, maybe a half a percent. When you look at our performance and you strip out the Orleans, we actually outperformed. We did better than the overall local market. So without the Orleans, the business is performing better than the overall market, and that's been consistent for the last several quarters. The Orleans really is the one who's facing, you know, competitive competition. We talk about the Orleans and Gold Coast. Gold Coast has been performing better in recent quarters. And it's not, you know, there's nothing new going on. It is still a couple of properties in the neighborhood of New Orleans. They're not doing anything really new or different. We're beginning to cycle through the worst of that. As I said in my prepared remarks, kind of the gap at the Orleans has narrowed in the first quarter. And kind of given today's environment, we're really not in a position to, you know, comment about how we see the rest of the year rolling out.

Brandt Montour: Fair enough. I do have another local question. And, again, not looking for any sort of guidance, but more of a historical look back. You know, the common sense, I mean, would suggest that, you know, locals is, you know, has clear linkage to the Las Vegas Strip. Given the worker, you know, where folks that frequent those your casinos, you know, make wages, etcetera. The historical correlation, can you talk about that maybe in prior recessions? And if you think that that would be less so, in today's market given, you know, how this how the locals market has evolved over the last ten or fifteen years?

Keith Smith: Yeah. Look. The benefit the greater Las Vegas community is that it's done a wonderful job of diversifying its economy. And so there, you know, are tremendous more businesses here today. They are diversified. It's not just all about gaming. And so our customers historically, you know, a large portion of them maybe were dependent on tourism business. They're certainly today, the world is different as we have much more, you know, diversified employee base here in the city. So, you know, I don't think you can look back at prior recessions and draw anything from that. In terms of what may happen today because, you know, the economy here in Southern Nevada is just different than it was ten or fifteen years ago.

Brandt Montour: Okay. Thanks, everyone. Thank you.

David Strow: Next question comes from Ben Chaiken of Mizuho. Ben, please go ahead.

Ben Chaiken: Hey, thanks for taking my questions. Understanding future tax policies are fluid, have you done any work, Josh or Keith, on the percentage of your customer base in locals in downtown that are potentially impacted by the proposed no tax on tips? Policy?

Josh Hirsberg: Ben, we really haven't. May we recognize that there would be a benefit.

Keith Smith: Yeah. We haven't seen done anything, Ben.

Ben Chaiken: Okay. How still helpful. And then bigger picture question. Josh or Keith, whoever wants to take this. You have the Stardust iGaming platform, which we really don't spend a lot of time talking about. Maybe you could expand on your ambitions with this product. Or, you know, investment opportunities to the extent that you want to, you know, get more into the B2C iGaming business? Thanks.

Keith Smith: Sure. So we launched it a couple of years ago with the sole intent to make sure that we had a product that spoke to the customers in the markets where we operate. We got into this never intending to be a national leader or looking to attain a podium position across the US. It really always was about making sure that our customers went home at night in the states where it's legal, that we had a product that they could participate in. And so it was a very modest investment to start off with. I think it's performing, you know, right on or ahead of our expectations in terms of gaining traction. Where it has launched in places like New Jersey and Pennsylvania. It's doing, you know, quite well. Very pleased with it, and we're prepared to grow into other states, once again, where we do business, or maybe an adjacent state to where we gain customers from, when state legislatures happen to approve it. So it continues to be a modest investment. You know, you shouldn't expect to see us go out and make any significant acquisitions to bolster that. I think it's a great platform. We're having great success. You may see us do some smaller acquisition to beef it up, but nothing significant.

Ben Chaiken: Understood. Thanks. Yep. Thank you.

David Strow: Our next question comes from Joe Stauff of Susquehanna. Joe, please go ahead.

Joe Stauff: Thank you. Good afternoon, Keith and Josh. Wanted to ask about land-based cap land-based OpEx in particular. You know, and just seeing where it is for you certainly in the current quarter and the last couple quarters. You've had to manage through a lot of inflationary factors, especially wages. Over the past, say, year and a half or so, just wondering, are you in a position now where you think you can, you know, do you have some flexibility to manage that lower? You know, what seems to be the right balance in terms of, you know, just your overall land-based OpEx and the levers that you have today?

Josh Hirsberg: Yeah. So, Joe, I think that, you know, our guys are constantly working on being very focused on reducing overall operating expenses as you can imagine. So while this is commonsensical, to the extent they saw opportunities, we would be taking advantage of those. So I think we're always looking for those opportunities, looking for ways to be more efficient, looking for ways to utilize technology to help us be more efficient. I think the one thing I would say just the environment that we are in, and this may be, you know, part of your slide question, which is, you know, in periods of softness, I think one of the things that we have that we learned from COVID is there's really no concept of fixed cost beyond property taxes, insurance, rent, and interest expense. So everything becomes a variable cost, and you evaluate those and make gains where you can. That's what we try to do every day. But in times of softer revenue or whatever, it creates other opportunities to adjust hours, adjust amenities, and things of that nature. But that's how I'd kind of give you a sense of answering your question.

Joe Stauff: Thank you. Yeah. Thank you.

David Strow: Our next question comes from Chad Beynon of Macquarie. Chad, please go ahead.

Chad Beynon: Hi, good afternoon. Thanks for taking my question. Josh, Keith, I wanted to ask about the data that we've seen with Canadian travel. Obviously, here in the US, we're seeing it in all major cities, but some of the data came out in Las Vegas and showed that visitation was down. So wanted to get a sense of what your exposure to those customers are in the downtown market and in Orleans. And then the second part of that is if we do see, you know, that piece of business, which I think makes up about 5% of visitation, in all of Las Vegas, if you think that there could be some room rate discounting during this period. Thank you.

Keith Smith: Yeah, a couple of comments. I think for Las Vegas as a whole, and it probably depends on what numbers you look at, it's closer to 3%. But regardless, look. For us as a company, it's less than one-tenth of 1%. Here in Las Vegas, it might be worth a few hundred thousand dollars to us. It's not a big piece of business. And so, you know, look, we're concerned about any loss of customer, whether it be from Canada or any other destination. But specific to Canada, it's not a big piece of business for our company.

Chad Beynon: Okay. Thank you. And then a second one, I guess, just focusing on another potential risk, the Hawaiian sports betting bill, given that there's no casinos, lottery, sports betting, iGaming in Hawaii if this is passed if you believe that think we've seen cannibalization as much with sports betting to land-based, but if you would view that as a risk or is there something that you could do to, I don't know, partner or mitigate some of those customers who might not be coming to the United States to gamble if they have it on their phones? Thanks.

Keith Smith: Well, look. As I think most people know, we have a fifty-year relationship with the people in Hawaii and the residents there and the communities there and have spent the last fifty years supporting them and welcoming them here to our properties in Las Vegas. To the extent there is any form of gaming in Hawaii, you should expect that Boyd Gaming Corporation will be part of it. With respect to sports betting, I don't think it'll have any impact on our business here. It is, you know, something that they want to do. You know, will it change our overall budgets? Maybe. But, you know, is it going to change them making trips to Las Vegas just because they can bet on sports online in the islands? I don't believe so. So I don't see it as a major impact. You should assume if anything moves forward there, that our company would, you know, have a role. We probably have the best brand and the most respected gaming company for the residents there in Hawaii.

Chad Beynon: Great. Thank you very much. Appreciate it.

Keith Smith: Thank you.

David Strow: Our next question comes from John DeCree of CBRE. John, please go ahead.

Max Marsh: Hi. This is Max Marsh on for John DeCree. Thanks for taking my question. Trend throughout 2024 is core customer visitation being a little bit down, but spend per visit being up. Does that consumer have a higher risk of being impacted by a recession or perhaps promotional intensity stepping up in the event of an economic downturn?

Josh Hirsberg: Are you talking you're talking about in relation to the core customer? Is that I just I couldn't hear the first part of your question.

Max Marsh: Yeah. So, look, I think perhaps to put it in context, the core customer has been the most consistent of any of our customers throughout. We've not since COVID, we I can just because I know this, we've not seen a quarter where that customer has been down. They've been flat. And that's been the worst it's been with respect to that the trend within that customer. Those of you who were around during the financial crisis in 2008 and 2009, the issue wasn't that the core customer didn't show up. It was the unrated customer and the lower-end retail customer was still showing up. They just weren't spending money. The core customer was the most stable even in that dramatic of a change in the economy. So, you know, the core customer is named that for a reason. They're core to our business, and they've been very consistent.

Max Marsh: Great. That's all for me. Thank you very much.

Josh Hirsberg: Thank you.

David Strow: Our last question comes from Barry Jonas of Truist Securities. Barry, please go ahead.

Barry Jonas: Hey, guys. Any updated thoughts on Eastside Cannery here?

Keith Smith: No. Really not. Our views haven't changed. The property has not reopened post the COVID crisis. And we've said in the past that really the market out there really doesn't support the opening of an additional property. And sitting here today, it still doesn't support the opening of, you know, additional capacity in that area. And so no really no other views on that.

Barry Jonas: Okay. Great. And then just, you know, in the past, you talked about the Trop I-15 Interchange Project having some impact. Any updates there? In terms of continuing impact and maybe when that should pass?

Keith Smith: No. I appreciate the question. Look, it's something we haven't talked a lot about over the last several quarters, but it certainly has had an impact on the business mainly at the Orleans. We're hopeful that later this year that that project will kind of finish to a point where that interchange at Trop and the I is cleared up. I mean, it is the main ingress and egress point. It is the main corridor for people to get to the Orleans. We've had to have them come up alternative streets. And, unfortunately, during many periods of time, those alternative access points, like off of Russell, which is a street right before Tropicana, have been closed at the same time. Trop has been closed. So it's created great confusion amongst our customers. So we're hopeful that later this year, that project will be at a point where we no longer have to worry about it or complain about it, but it's not there yet.

Barry Jonas: Helpful. Alright. Thanks so much. Sure.

David Strow: Very thank you. This concludes our question and answer session. I'd now like to turn the call over to Josh for concluding remarks.

Josh Hirsberg: Thanks, David, and thanks to everyone for joining our call. If you have any follow-up questions, please feel free to reach out to the company. This concludes the call today, and you can now disconnect.

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