Boyd Gaming Unlocks Value, Strengthens Balance Sheet with FanDuel Sale

Boyd Gaming plans to use the estimated $1.4 billion in after-tax proceeds to fully pay down its credit facility debt, a step expected to reduce the company’s financial leverage to under two times. This strategic transaction and debt reduction will lead to estimated annual interest expense savings of about $85 million.

Financial Performance and Market Positioning

The gaming operator sustained robust financial health during the reporting period. Company revenues climbed 4% year-over-year to reach $358 million, continuing a 6.4% growth trend over the last twelve months. This strong performance also pushed EBITDAR up by 4% to $358 million.

Operational efficiency remained a key feature of the company’s model. Property-level margins exceeded 40% for the quarter, a consistent level since 2021.

The firm also maintained an industry-leading gross profit margin of 61.3%. Boyd’s total financial leverage closed the quarter at about 2.8 times, or 3.2 times when adjusted for leases. The upcoming debt repayment from the FanDuel sale is set to significantly lower this leverage, placing the company in a more flexible financial position.

Capital Strategy and Shareholder Returns

The company has a clear focus on capital allocation, balancing investment in its properties with returns to shareholders. Capital expenditures for the quarter totaled $124 million, bringing the year-to-date total to $251 million.

The full-year 2025 capital spending forecast remains at $600–650 million. These plans include maintenance capital, as well as funds for hotel renovations at the IP Hotel, Valley Forge Hotel, and Orleans Hotel. Growth projects, such as the new Cadence Crossing Casino and conference space at Ameristar St. Charles, are also funded through this budget.

The company returned $105 million to shareholders by repurchasing 1.5 million shares at an average price of $70.94 per share. Additionally, the regular quarterly dividend of $0.18 per share was paid, totaling $15 million. Following the FanDuel transaction, the board intends to increase the target for quarterly stock repurchases from $100 million to $150 million, starting in the third quarter. This move reflects confidence in the balance sheet and the business’s future cash flow.

Operating Segment Strength

Operational results were broad-based, with all segments posting growth. The firm saw continued strength among its core customers and improving trends from retail customers, especially in unrated play.

The Las Vegas Locals segment achieved its first year-over-year revenue and EBITDA growth in over two years, with margins near 50%. The Downtown Las Vegas segment also performed well, showing more than 1% growth in revenue and EBITDAR.

The Midwest and South segment recorded over 3% growth in revenue and EBITDAR, marking its highest quarterly result in nearly three years, despite facing negative impacts from flood-related closures and the timing of the Easter holiday. The Online segment grew both revenue and EBITDA, supported by Boyd Interactive and market access agreements, which were extended to 2038 as part of the FanDuel transaction.

Development Pipeline and Future Outlook

Boyd Gaming continues to execute on a robust development pipeline across its portfolio. The Ameristar St. Charles meeting and conference center is set for completion by the end of August 2025. This project has already seen strong pre-bookings, with over 90% coming from new customers.

In Virginia, the company is on track to open a transitional casino in Norfolk by November 2025. Construction on the full $750 million resort remains underway, with an expected opening in late 2027. The large-scale renovation of Suncoast Casino is currently in its most disruptive phase and is expected to finish in the first quarter of 2026. The new Cadence Crossing Casino in Southern Nevada is also advancing, with an opening planned for mid-2026.

Keith Smith, CEO of Boyd Gaming, stated that the $10 million original investment in FanDuel has now created nearly $2 billion in shareholder value. He emphasized that the company is “in an even stronger financial position” to continue its strategy of property investment, pursuing growth, and returning capital to shareholders.

The company also anticipates a positive impact from a new tax law passed by Congress, which includes provisions such as tax deductions on tips and overtime that are expected to benefit its operations, especially in Southern Nevada and the Midwest and South.