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    LVS
    Earnings call· Mar 2025(Q1 FY25)

    LAS VEGAS SANDS CORP LVS

    Apr 23, 2025 Source

    Executive summary

    Las Vegas Sands Q1 FY25 — Record MBS EBITDA and Increased Share Repurchase

    Las Vegas Sands reported a record quarter for Marina Bay Sands, driven by high-value tourism and gaming investments, while Macao faced a challenging and competitive market with a sequential decline in performance. The company is focused on leveraging the fully opened Londoner to regain market share and improve revenue and cash flow in Macao. Capital allocation priorities include aggressive share repurchases and growing dividends from Sands China, alongside a strategic decision to exit the New York casino licensing bid.

    Highlights

    5

    • Marina Bay Sands (MBS) delivered a record adjusted property EBITDA of $605 million, an extraordinary achievement.

    • MBS mass gaming and slot win grew 73% from Q1 2019 and 13% year-over-year to $778 million.

    • The Londoner in Macao is now fully open with all 2,405 rooms and suites available, expected to elevate performance.

    • The Board increased the share repurchase authorization to $2 billion, demonstrating commitment to shareholder returns.

    • The company repurchased $450 million of LVS stock during the quarter.

    Concerns

    5

    • Macao EBITDA of $535 million was impacted by lower-than-expected hold in the rolling program, which reduced EBITDA by $10 million.

    • Macao portfolio EBITDA margin was 31.6% (adjusted for hold), down 280 basis points compared to Q1 2024.

    • The company lost market share in Macao both against the prior year and sequentially.

    • Macao OpEx was up roughly 7% across properties, driven by additional payroll costs and salary increases, leading to negative operating leverage.

    • The Macao market is described as highly competitive across all segments (base mass, premium mass, rolling) due to reduced liquidity.

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Macao
    EBITDA was impacted by lower-than-expected hold in the rolling program. The Londoner is now fully open, expected to drive future growth. The company lost market share both year-over-year and sequentially.
    Adjusted Property EBITDA: $535MAdjusted Property EBITDA (adjusted for hold): $545MAdjusted Property EBITDA Margin (adjusted for hold): 31.6%Adjusted Property EBITDA Margin (adjusted for hold) YoY change: down 280 bps
    		———$535M
    Macao - The Venetian
    Margin was 35.3%. Experienced a sharp decline in non-rolling revenues, especially in the premium mass segment. Spend per headcount was lower despite significant growth in non-rolling table headcount.
    		———35.3%
    Macao - The Plaza and Four Seasons
    Margin was 35.6%.
    		———35.6%
    Marina Bay Sands (Singapore)
    Delivered a record quarter for adjusted property EBITDA. Performance reflects high-quality investment and growth in high-value tourism. Updated hold expectation for rolling play to 3.7%.
    Adjusted Property EBITDA: $605MAdjusted Property EBITDA Margin: 52%Mass Gaming and Slot Win: $778MMass Gaming and Slot Win Growth vs Q1 2019: 73%Mass Gaming and Slot Win Growth YoY: 13%
    		———$605M

    Operational metrics

    20
    Macao EBITDA impact from hold
    $10M
    Q1 FY25

    EBITDA would have been higher by this amount if hold was as expected in the rolling program.

    MBS Rolling Play Hold Expectation
    3.7%
    ongoing

    Updated expectation based on game mix and demonstrated player preferences over the last 2 years.

    Mass Table Hold
    20.1%
    last year

    Mass table hold in the prior year.

    Mass Table Hold
    18%-19%
    prior years

    Mass table hold in years prior to last year.

    Baccarat Hold (historical standard)
    2.85%
    historical

    Standard baccarat hold percentage not long ago.

    Baccarat Hold (historical flat bets)
    2.6%-2.7%
    historical

    Baccarat hold percentage when flat bets were predominant.

    Potential Baccarat Hold
    4.1%
    future

    Potential baccarat hold percentage with increased side bets.

    Illustrative Hold Percentage
    3.4%
    illustrative

    Used as an example in discussion about smart tables and knowing exact hold.

    Illustrative Hold Percentage
    3.6%
    illustrative

    Used as an example in discussion about smart tables and knowing exact hold.

    Illustrative Hold Percentage
    2.4%
    illustrative

    Used as an example in discussion about guessing hold rates.

    Share Repurchase
    $450M
    Q1 FY25

    Amount of LVS stock repurchased during the quarter.

    Share Repurchase Authorization
    $2Bincreased
    current

    Increased authorization for share repurchases.

    Quarterly Dividend
    $0.25
    Q1 FY25

    Recurring quarterly dividend paid.

    Macao OpEx Growth
    7%YoY
    Q1 FY25

    OpEx across properties was up, driven by additional payroll costs and headcount for new assets.

    Venetian Arena Upgrade Cost
    $200M
    completed last year

    Cost of upgrading the Venetian arena, completed last year as a concession commitment.

    LVS Bonds Due
    $500M
    FY25

    Amount of LVS bonds maturing in 2025.

    SCL Bonds Due
    $1.625B
    current

    Amount of SCL bonds maturing, with a term loan option available.

    Non-Guangdong Visitation Recovery Rate
    75%
    Q1 FY25

    Recovery rate for visitation from non-Guangdong regions, indicating lagging overnight visitation.

    Londoner Rooms and Suites
    2,405
    Q1 FY25

    All rooms and suites at Londoner Grand are now fully available.

    Rooms Out of Service (average)
    1,600
    Q1 FY25

    Average number of keys unavailable during the quarter due to refurbishment.

    Product announcements

    1
    ProductTypeDetails
    Londoner Grand Rooms and Suitesmilestone

    Deals & partnerships

    1
    Third party (unnamed)Attempting to secure an agreement to transact the opportunity to bid for a casino license on the Nassau Coliseum site in New York.

    LVS has decided not to bid for a casino license in New York due to concerns about iGaming legalization. They are seeking a third party that may address both land-based and digital markets.

    Risks & headwinds

    4
    Macao market competitiveness and growthQ1 FY25 and ongoing

    Market not grown as anticipated; Macao EBITDA margin down 280 bps YoY (adjusted for hold); lost market share.

    Mitigation: Leveraging fully opened Londoner, comprehensive effort to reactivate customers, drive revenue and EBITDA across portfolio, continued investment in assets.

    Lower-than-expected hold in Macao rolling programQ1 FY25

    $10 million impact on Q1 FY25 Macao EBITDA.

    Mitigation: Focus on improving revenue and cash flow across the portfolio, utilizing scale and product advantages.

    Negative operating leverage in MacaoQ1 FY25

    Macao OpEx up roughly 7% across properties, outpacing revenue growth in non-rolling segment.

    Mitigation: Expect margin improvement as revenue grows, leveraging new assets and existing properties to secure higher-value customers and increase spend per headcount.

    Potential legalization of iGaming in New YorkFuture

    Impact on overall market opportunity and project returns for a land-based casino.

    Mitigation: LVS decided not to bid for a casino license; seeking to transact the opportunity with a third party that can address both land-based and digital markets.

    What to watch in Q2 FY25

    5

    Londoner Grand Ramp-up Progress

    Next quarter (Q2 FY25) and over the next 12 months
    CurrentAll 2,405 rooms and suites fully open as of mid-April.
    TargetIncreased customer growth, revenue, and EBITDA contribution from Londoner.

    Why it matters

    The Londoner's full operation is key to regaining market share and improving overall Macao performance, which has lagged.

    The Londoner is now fully open this time, 2,405 study rooms and suites as we prepare for Golden Week in May. Now we've complete the development projects, we expect this asset to elevate our performance.

    Q&A highlights

    7

    How is the company balancing share repurchases between LVS and its stake in the Hong Kong-listed SCL, given the valuation differences?

    Management sees meaningful value in both LVS and SCL equity and plans to be active in both. They aim to increase their stake in SCL towards 74.9% and will be aggressive in LVS share repurchases, viewing the current valuation as attractive.

    “I think on the LVS side, we think the valuation, where our stock is currently, is very attractive for us. We're going to be aggressive in the way that we buy back shares than we have done previously.”

    asked by Carlo Santarelli · answered by Patrick Dumont

    3 min read6 chapters

    Detailed Narrative

    01

    Macao Market Dynamics and Londoner Ramp-up

    The Macao market is described as competitive and not growing as anticipated. Despite this, management believes their assets position them to perform better. The Londoner is now fully open with all 2,405 rooms and suites available, particularly for the May Golden Week. The ramp-up of the Londoner is expected to take 12 months, with the goal of driving customer growth, revenue, and EBITDA. The company acknowledges losing market share in Q1, partly due to rooms being out of service, and aims for a comprehensive effort to reactivate and engage new customers across its portfolio, including Venetian, Parisian, Four Seasons, and Sands.

    02

    Marina Bay Sands (MBS) Record Performance

    MBS delivered a record adjusted property EBITDA of $605 million, with a margin of 52%. Mass gaming and slot win reached $778 million, representing 73% growth from Q1 2019 and 13% growth year-over-year. This performance is attributed to high-quality investment, market-leading products, and the growth of high-value tourism. The company believes it is still in the early stages of realizing the full benefits of its investments in MBS, with public space renovations continuing over the next 6-9 months.

    03

    Hold Percentage and Side Bets Impact

    The company updated its expectation for hold on rolling play at Marina Bay Sands to 3.7%, reflecting demonstrated player preferences over the last two years. Management highlighted the increasing adoption of side bets in baccarat across both Macao and Singapore, which significantly improves hold percentages. Historically, baccarat hold was around 2.6%-2.85%, but with side bets, it can reach 3.7% and potentially 4.1%, driving substantial EBITDA growth. The company is actively developing new games and merchandising these bets to customers.

    04

    Capital Allocation and Shareholder Returns

    Las Vegas Sands repurchased $450 million of LVS stock during the quarter and paid a recurring quarterly dividend of $0.25 per share. The Board increased the share repurchase authorization to $2 billion. The company views its current stock valuation as attractive and plans to be aggressive in buying back shares in both LVS and SCL. Sands China's Board also resumed its dividend, which LVS hopes to grow over time⏳ as CapEx rolls off and cash flow increases, enabling more capital return at the LVS level.

    05

    New York Casino Licensing Decision

    LVS has decided not to bid for a land-based downstate casino license in New York. The company remains concerned about the impact of potential iGaming legalization on market opportunity and project returns. LVS is seeking to transact the opportunity to bid for a license on the Nassau Coliseum site with a third party that may address both land-based and digital markets. The company believes the highest and best use of its capital in the near term is through share repurchases.

    06

    Macao Operating Expenses and Market Share

    Macao OpEx increased by approximately 7% across properties, primarily due to additional payroll costs from salary increases and increased headcount for new assets. This, combined with a decline in non-rolling revenues, particularly in the premium mass segment at The Venetian, resulted in negative operating leverage. Management aims to reverse this trend by driving customer and revenue growth with the fully operational Londoner and improving performance across the existing portfolio.

    AI-generated summary of the company’s earnings call. Not investment advice.