Caesars Entertainment reported its quarterly earnings for the first time since being acquired by Fertitta Entertainment in late May. The results for the second quarter and the first half of the year presented a mixed picture, with a notable decline in its Las Vegas operations.
The company did not hold an analyst call this quarter due to the acquisition, which is expected to finalize in spring 2027. Neither Caesars nor Fertitta has offered significant comments regarding the $17.6 billion deal. Recently, two Fertitta executives, CFO Richard Liem and general counsel Steven Scheinthal, received their licenses in Nevada related to the acquisition, but they did not disclose any long-term plans. Last week, Caesars declined to provide any comments on the deal.
The quarterly financials showed a 3% year-over-year increase in net revenue, bringing it to $2.99 billion, with the half-year total reaching $5.9 billion, which also marked an increase. This exceeded analysts' expectations of $2.96 billion for the quarter.
However, adjusted EBITDA decreased by 4% year-over-year to $920 million for the quarter and by 2% for the half-year, totaling $1.8 billion. While Caesars reported a $62 million loss in net income for the quarter, this was an improvement from the $82 million loss reported in the same period last year. For the first half of the year, the net income was a loss of $160 million, down from a $197 million loss in the previous year.
The Las Vegas sector experienced significant challenges:
– Second quarter net revenue dropped 3.5% to $1 billion.
– First half net revenue fell by 2% to $2 billion.
– Net income for Q2 decreased 26% to $156 million, while H1 net income declined 15% to $332 million.
– Adjusted EBITDA for Q2 fell 13% to $410 million, and for H1, it decreased 7% to $836 million.
At the end of the quarter, Caesars reported $965 million in cash and equivalents, an increase from $887 million at the end of 2025. During this time, its total outstanding debt reduced slightly from $11.9 billion to $11.8 billion.
In contrast, the company's regional operations showed more promising results, with net revenue rising nearly 10% for the quarter to $1.5 billion, and a 6% increase for the half-year to $3 billion. Adjusted EBITDA also saw an increase of 11% to $488 million in Q2 and 5% to $923 million in H1. However, net income for the quarter was just $23 million and only $3 million for the half-year, marking a 66% decrease year-over-year.
The landscape for Caesars’ regional assets might soon evolve under Fertitta if the acquisition goes through. Fertitta’s Golden Nugget brand competes with Caesars in several markets, which are predominantly regional and include places such as Lake Tahoe, Laughlin, Atlantic City, Lake Charles, and Biloxi. Fertitta has already submitted a Hart-Scott-Rodino antitrust application to the Federal Trade Commission, with state regulators possibly requiring divestitures, similar to the requirements faced in 2020 when Caesars merged with Eldorado Resorts.
Digital operations for Caesars saw a rare decline in Q2, although year-to-date performance remained strong. The digital segment’s quarterly net revenue was $351 million, a 2% increase year-over-year, but adjusted EBITDA dropped 15% to $68 million, and net income decreased by 31% to $27 million. For the half-year, revenue was up 7% with adjusted EBITDA rising 11% to $137 million, and net income reached $49 million, a 25% increase from the first half of 2025.
Truist analyst Barry Jonas highlighted the regional operations as a bright spot despite the weaknesses in Las Vegas. He noted that lowered online sports betting hold affected digital results, although iGaming showed strength in Q2. While the Fertitta acquisition is definitive following the expiration of a go-shop period on July 11, its closure may still be delayed.
Jonas maintained a hold rating and kept the target price at $31. Caesars’ reported earnings per share loss was $0.30, missing analysts’ expectations for a loss of $0.05 per share. On Tuesday, Caesars’ shares traded flat, remaining just under $30.
