PENN Entertainment Crushes Q2 Estimates, Interactive Segment Narrows Losses, Hits Record Revenue
PENN Entertainment delivered a second-quarter financial performance that significantly surpassed analyst expectations, driven by a stable land-based casino business and notable progress in its burgeoning interactive division. The company posted a surprise profit and beat revenue forecasts, signaling that its high-stakes bet on the digital space with ESPN BET is beginning to show positive momentum.
The Financial Picture: A Decisive Beat
PENN reported earnings per share (EPS) of $0.10, a dramatic reversal from the consensus analyst forecast of a $0.02 loss per share. Total revenue for the quarter reached $1.77 billion, exceeding projections by $40 million.
The company’s retail casino operations generated nearly $490 million in Adjusted EBITDAR with a healthy margin of close to 34%. Overall liquidity remains strong, with PENN reporting $1.2 billion in total liquidity, including $672 million in cash.
The Interactive Growth Story: ESPN BET and iCasino Gain Traction
The company’s Interactive segment, which includes ESPN BET and Hollywood iCasino, was a key area of focus and demonstrated significant improvement. The division achieved record quarterly gaming revenue and showed a clear path toward profitability.
While the segment still posted an Adjusted EBITDA loss of $62.0 million, this represents a substantial $41 million year-over-year improvement. PENN’s leadership reiterated their forecast for the Interactive division to achieve profitability in 2026, with the fourth quarter of 2025 expected to be the first profitable quarter for the segment.
PENN is preparing to launch “FanCenter“ for the upcoming football season. This feature will be deeply integrated into the ESPN Fantasy app, allowing its massive user base (over 13 million last year) to seamlessly place bets related to their fantasy teams directly on ESPN BET. “FanCenter is going to drive…new user acquisition,” said an executive.
The standalone Hollywood iCasino app has been a standout success, particularly in key markets like Pennsylvania and Michigan. Over 70% of its gaming revenue has come from newly acquired, retail-native, or reactivated users, indicating it is growing the user base with minimal cannibalization of existing products. The app saw its net gaming revenue grow 29% and its monthly active users jump 49% year-over-year.
“Every quarter is getting better,” said CEO Jay Snowden. “The significant investments in Interactive are undoubtedly behind us. Our focus…remains operational execution and transforming our strategic investments into consistent long term returns.”
Stability in the Retail Core
PENN’s land-based casino business provided a solid foundation for the quarter. The company reported stable customer demand, with properties not affected by new competition seeing revenue grow by nearly 4% year-over-year.
The company continues to navigate the impact of new casino openings in key markets like Illinois and Louisiana. In response, PENN is executing on major development projects, including the relocation of its casinos in Aurora and Joliet, Illinois, to more advantageous locations. The new Hollywood Casino Joliet is set to open on August 11, nearly six months ahead of schedule.
“Having both a retail and digital relationship with your consumers is clearly a major key to success for the industry,” Snowden noted, highlighting the benefits of the company’s omnichannel strategy.
A Disciplined Capital Strategy
Alongside its operational performance, PENN highlighted its disciplined capital allocation strategy. The company repurchased $90.3 million of its own stock in the second quarter and remains committed to buying back at least $350 million in shares in 2025.
PENN also moved to strengthen its balance sheet by repurchasing approximately 70% of its 2026 convertible notes for $233.5 million, a move that eliminated about 9.6 million potentially dilutive shares.
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