MGM Resorts International (MGM) Q2 FY26 earnings call: guidance and Q&A

Can you provide more color on the cadence of Las Vegas performance in Q2 and July, and how recent initiatives are helping?

April and May were strong, with May being exceptionally strong due to events. June was more challenged, but July has been good. Healthy group business, major events, and all-inclusive packages (for Luxor/Excalibur) have contributed to stability and positive momentum, though the company acknowledges work is needed for Q4.

“April and May were strong. May was exceptionally strong, driven by events and other activity. In April, we had our $10 million baccarat tournament, which was extremely successful. June was more challenged. I think it's the summer heat picked up and we got into the real throes of summer. July, on the other hand, has been good.”

asked by Dan Politzer · answered by William Hornbuckle

Given the historical share buybacks and current stock price, how do you view the attractiveness of the stock, especially with long-term drivers like Osaka?

The company bought back fewer shares this quarter ($164 million at about $37 per share), considering it a good use of capital. Management's view on the sum-of-the-parts valuation of the company has not changed, implying they still see value.

“We have -- we bought back fewer shares in this past quarter, only about $164 million worth at about, I would say, about $37 a share or thereabouts. So, of course, we think that, that's been a good use of capital. As it relates to the current value of the stock, we've gone through this on a number of prior quarters in terms of the sum of the parts valuation. And our view, given the current trends really hasn't changed from that.”

asked by Dan Politzer · answered by Jonathan Halkyard

Despite record group and convention bookings, RevPAR is slightly down. What's driving this, and do you see a path to RevPAR growth this year?

Overall Las Vegas revenue and EBITDAR are growing. RevPAR is a non-cash metric. The luxury segment and group business show strong health, while the lower-end segments (Luxor, Excalibur) remain challenged, though all-inclusive offers are helping to stabilize them.

“We have seen growth in overall Las Vegas revenue as well as EBITDAR. And so we're pleased with what we're seeing there. In terms of RevPAR, I just note that, that's -- it is a noncash metric. Overall, I think we continue to see really strong strength in the luxury segment. As we've noted, the lower end of the segment, particularly Luxor and Excalibur, those do remain challenged, but we've been deploying offers such as the all-inclusive, we've seen positive reaction to that.”

asked by Barry Jonas · answered by Ayesha Molino

Will the increased investment in luxury offerings stay within normal CapEx bounds, or are larger projects contemplated that might push CapEx levels higher?

Most planned improvements, like room renovations at ARIA, will be done within existing CapEx levels. However, expanding the footprint or adding capacity in Las Vegas would likely be additive to the base CapEx. Management emphasized their belief in Las Vegas's long-term future and willingness to invest aggressively in luxury experiences.

“One of the ways I also think about it, and I think this is probably pretty useful in terms of modeling is that we can do quite a lot of work and improvement within our existing footprint in that level of CapEx that we've been spending in the last three or four years. To the extent that we expand the footprint, we add capacity, we add square footage to our portfolio here in Las Vegas, then it would likely be additive to that base level of CapEx.”

asked by Shaun Kelley · answered by Jonathan Halkyard

Can you provide more color on the impact of the all-inclusive offers on Luxor and Excalibur, specifically whether it's driving upward momentum?

The all-inclusive offers have booked over 30,000 room nights, helping to stabilize occupancy and improve the value narrative for Las Vegas. Notably, nearly half of the guests booking these packages are first-time visitors to MGM, and the packages have shown a healthy margin profile, particularly on weekends.

“I mean we've booked well over 30,000 room nights on it. It absolutely has helped us stabilize occupancy. And again, I think I commented earlier, the narrative around Las Vegas not providing value and everyone getting beat up on that. We think -- we don't think we know it's helped. We followed it closely through social media and otherwise. And it's a great value at the end of the day is the bottom line.”

asked by David Katz · answered by William Hornbuckle

Do you subscribe to the thesis that customers are staying closer to home, benefiting regionals, and is this a zero-sum game with Las Vegas?

Las Vegas is still impacted by lower international travel, and while regionals are healthy, management doesn't see it as a one-to-one trade-off. They are optimistic about Vegas's recovery with macroeconomic stabilization and a return of international travel, noting consistent visitation and play in regional markets.

“Las Vegas is still down on international travel. And while we're picking up some additional seats, particularly as you look at a place like Canada, we're off considerably. And so it needs to continue to focus on that. And then obviously, particularly in the summer, Southern California is a major drive market. Our driving traffic hits over 50% generally of how people get here, principally driven again by that market.”

asked by John DeCree · answered by William Hornbuckle

What are you observing in Macau's promotional environment, and how aggressively are you protecting market share?

Macau remains competitive, but MGM competes on a 'package' of products, services, innovation, and promotion, not just reinvestment. Recent capital projects like suite conversions and premium gaming spaces have been well-received. The strategy focuses on optimizing yield, and the company is confident in sustaining mid-20s to high-20s operating margins.

“Macau has always been a competitive market and will continue to be. MGM, like past five, six years, has demonstrated a consistent and deep understanding of our customers. We deliver the appropriate offerings cater to premium demand. I want to see like here, we are not -- it's not purely like a promotion reinvestment. What we are competing is a package is our products, our services, our innovation and then our promotion.”

asked by Steven Wieczynski · answered by Xiaofeng Feng

Have the all-inclusive offers translated into growth in your database, specifically attracting new customers?

Yes, the offers are drawing a new customer base, with half of the participants being brand new to MGM. This is considered 'startling and importantly promising,' especially given that first-time visitors to Las Vegas generally are under 15% of total visitation.

“No, it's a great question. Half of the participants in this package are brand new, which if you think about Las Vegas in general right now, I think we're under 15% of first-time visitors in total in terms of visitation. And so it is drawing a new customer base, presumably younger, but I don't think I know that yet, but we're going to try to do some data on that. But yes, it's 50%, which is frankly startling and importantly promising.”

asked by Steven Wieczynski · answered by William Hornbuckle