MGM Resorts has reported record-setting second-quarter earnings, with a focus on a potential takeover offer from Barry Diller's People Inc also weighing on investor sentiment. CEO Bill Hornbuckle revealed during the analysts' call that an independent committee is currently reviewing Diller's proposal of $48.30 per share, made on June 1, shortly after Fertitta Entertainment acquired Caesars Entertainment.
"I'm confident our board will pursue the course of action that's in the best interest of the company and our shareholders," Hornbuckle stated, refraining from further comments on the offer.
For the quarter, MGM’s group revenue reached an impressive $4.5 billion, marking a 1% increase year-over-year. Adjusted EBITDA stood at $610 million, reflecting a 6% drop compared to the same period last year. Meanwhile, net income surged to $292 million, up from $49 million the previous year. The company concluded the quarter with $2.5 billion in cash and long-term debts amounting to $6 billion.
In Las Vegas, revenue totaled $2.2 billion, accompanied by an adjusted EBITDA of $735 million, both reflecting a 3% rise from the prior year. Despite this, analysts bombarded management with inquiries about how they plan to enhance low-end gaming experiences.
COO Ayesha Molino acknowledged the strength of the luxury segment but noted ongoing challenges in the lower-end markets such as Luxor and Excalibur. "Overall, I think we continue to see really strong strength in the luxury segment," Molino commented, explaining that efforts such as all-inclusive packages have sparked positive responses.
In March, MGM introduced two-night all-inclusive packages for $330 at its Luxor and Excalibur casinos. Hornbuckle emphasized that Las Vegas remains a "value" destination amidst complaints of rising prices since early 2025. He pointed to an incident in June where a $26 bottle of water at Aria drew significant backlash, noting that the company needs to address such perceptions. "We’ve booked over 30,000 room nights on (the promotion), and it has absolutely helped us stabilize occupancy," he added, reinforcing that these initiatives are countering adverse narratives.
The Las Vegas casino segment thrived during the quarter, with revenue climbing 17% year-over-year to $536 million. MGM achieved slot and table hold rates of 9.6% and 29.6%, surpassing the Strip's averages of roughly 8% and 16% for the same duration, according to data from the Nevada Gaming Control Board.
Looking ahead, MGM is considering renovations at Aria and Cosmopolitan, though no specifics were provided regarding cost or timing.
On a regional scale, MGM's same-store quarterly revenue reached a record $904 million, though overall net revenue dropped 4% year-over-year to $924 million. Segment-adjusted EBITDAR fell 9% to $280 million. Last April, the company closed a $546 million deal selling its Northfield Park racino operations in Ohio, completing an exit from the downstate New York casino license race.
Hornbuckle shared that renovations will commence by the end of the year at MGM's Borgata in Atlantic City and Beau Rivage in Mississippi, both contributing to the company’s recent regional revenue success.
The construction of a new Sphere entertainment venue near MGM National Harbor has also been on the agenda. Hornbuckle expressed excitement about the venue’s potential for boosting tourism. Sphere Entertainment CEO James Dolan noted plans for a 2030 opening, but no updates regarding the timeline for the inaugural event were shared.
In Macau, MGM China reported second-quarter revenue of $1.1 billion, showing no growth year-over-year. Adjusted EBITDAR fell 15% to $257 million, a decline partly attributed to the FIFA World Cup taking high-rollers away in June. When discussing promotional strategies, MGM China CEO Kenneth Feng emphasized the focus on optimizing the gaming floor's overall yield rather than relying solely on reinvestment.
On the digital front, MGM Digital's revenue rose 20% year-over-year to $196 million, though its adjusted EBITDAR loss widened to $31 million from $26 million over the same quarter last year. The results incorporate MGM’s LeoVegas subsidiary and do not reflect the performance of its joint venture, BetMGM, with Entain. BetMGM reported Q2 revenue of $711 million, a 3% increase driven by an 8% rise in iGaming revenue, while online sports betting revenue remained flat at $228 million. Adjusted EBITDA fell 15% to $74 million, and contributions back to MGM decreased 11% to $171 million. Hornbuckle dismissed concerns about maximizing BetMGM's output, affirming the structure of the partnership is effective.
Despite reporting adjusted earnings per share of $0.59—lower than analyst estimates of $0.63—investor sentiment remained positive. MGM stock closed at $45.66 on Thursday but has increased by about 22% in the past year. The company repurchased 4 million shares during the quarter, totaling roughly $164 million. As of June 30, approximately $1.4 billion from an April 2025 stock repurchase plan is still available.
Analysts like Macquarie’s Chad Beynon have a favorable outlook, raising the target price to $54, citing the enduring value of MGM’s Las Vegas footprint and promising regional performance as strong indicators for the future. Truist’s Barry Jonas also maintained a buy rating, noting the solid regional results, despite Macau's underperformance, and highlighting the strength of the Las Vegas convention market.
