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    Earnings call· Mar 2026(Q1 FY26)

    Red Rock Resorts Q1 FY26 earnings call RRR

    Apr 29, 2026 Source

    Executive summary

    Red Rock Resorts Q1 FY26 — Record Gaming Performance and Strategic Expansions

    Red Rock Resorts delivered a strong Q1 FY26, marked by record gaming performance and near-record hotel and F&B results, despite temporary construction disruptions and macro headwinds. The company continues to execute its strategic expansion plans at Durango, Sunset Station, and Green Valley Ranch, aiming to capitalize on favorable demographic trends in the Las Vegas locals market. Management remains confident in its long-term growth trajectory and disciplined capital allocation strategy, with April showing strong trends.

    Highlights

    5

    • Las Vegas operations delivered highest first quarter net revenue and second highest first quarter adjusted EBITDA in company history.

    • Gaming revenue and profitability achieved the highest first quarter in company history.

    • Hotel and Food & Beverage divisions delivered near record revenue and profitability, with F&B achieving its second best first quarter revenue and third best first quarter profit.

    • Converted 50.3% of adjusted EBITDA into operating free cash flow, generating $107 million or $1.03 per share.

    • Returned approximately $170.5 million to shareholders through dividends and share repurchases.

    Concerns

    4

    • Las Vegas operations adjusted EBITDA decreased 1.5% year-over-year to $232.4 million, with margin declining 113 basis points to 46.5%.

    • Consolidated adjusted EBITDA decreased 1.2% year-over-year to $212.6 million, with margin declining 129 basis points to 41.9%.

    • Anticipating $9 million in disruption costs at Green Valley Ranch and $2 million to $3 million at Durango in Q2 FY26 due to ongoing construction.

    • Higher gas prices and air travel-related disruption impacted March performance, though April trends are strong.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year Capital Expenditure
    $375M-$425M
    high materiality
    High
    Full-year Investment Capital
    $275M-$300M
    medium materiality
    Medium
    Full-year Maintenance Capital
    $100M-$125M
    medium materiality
    Medium
    Durango North Expansion Opening
    Summer 2027
    high materiality
    High
    North Fork Project Opening
    Early Q4 2026
    high materiality
    High
    North Fork Project Stabilization Revenue
    $40M-$50M
    medium materiality
    Medium
    Green Valley Ranch East Tower Renovation Completion
    Mid-September
    medium materiality
    Medium
    Sunset Station Gaudi Bar Reopening
    Coming weeks
    low materiality
    Low
    Sunset Station Remaining Amenities Opening
    Throughout 2026
    medium materiality
    Medium
    Sunset Station Next Phase Completion
    Extending into 2027
    medium materiality
    Medium
    Green Valley Ranch Next Phase Completion
    Extending into 2027
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Las Vegas operations
    Delivered the highest first quarter net revenue and the second highest first quarter adjusted EBITDA in company history, while maintaining near record adjusted EBITDA margin.
    Adjusted EBITDA: $232.4 millionAdjusted EBITDA growth YoY: -1.5%Adjusted EBITDA margin change YoY: -113 bps
    		$499.5 million0.9%—46.5%
    Consolidated basis
    Includes $4.7 million net revenue and $2.9 million adjusted EBITDA from the North Fork project.
    Adjusted EBITDA: $212.6 millionAdjusted EBITDA growth YoY: -1.2%Adjusted EBITDA margin change YoY: -129 bps
    		$507.3 million1.9%—41.9%

    Operational metrics

    41
    Adjusted EBITDA margin
    46.5%-113 bps YoY
    Q1 FY26

    Second highest first quarter adjusted EBITDA in history.

    Adjusted EBITDA margin
    41.9%-129 bps YoY
    Q1 FY26

    Includes North Fork project contribution.

    Operating free cash flow conversion
    50.3%
    Q1 FY26

    Conversion of adjusted EBITDA into operating free cash flow.

    Operating free cash flow per share
    $1.03
    Q1 FY26

    Per share basis.

    Cash and cash equivalents
    $134 million
    Q1 FY26

    Balance at the end of the first quarter.

    Total principal debt outstanding
    $3.6 billion
    Q1 FY26

    Balance at the end of the first quarter.

    Net debt
    $3.4 billion
    Q1 FY26

    Balance at the end of the first quarter.

    Net debt-to-EBITDA ratio
    4.07x
    Q1 FY26

    Ratio at the end of the quarter.

    Total distributions to LLC unitholders
    $139.9 million
    Q1 FY26

    Made during the quarter.

    Distribution to Red Rock Resorts
    $82.1 million
    Q1 FY26

    Portion of LLC unitholder distribution used to fund dividends and share repurchases.

    Special dividend per Class A common share
    $1
    Q1 FY26

    Previously declared.

    Quarterly dividend per Class A common share
    $0.26
    Q1 FY26

    Previously declared and regular cash dividend declared for Q2 FY26.

    Class A common shares repurchased
    635,000
    Q1 FY26

    Under previously announced $900 million share repurchase program.

    Average price per share repurchased
    $6.32
    Q1 FY26

    Average price for Class A common shares repurchased.

    Total shares outstanding
    104.4 million
    Q1 FY26

    Reduced after share repurchases.

    Total capital returned to shareholders
    $170.5 million
    Q1 FY26

    Combined dividends and share repurchases.

    Capital expenditure
    $117.2 million
    Q1 FY26

    Total capital spend in the quarter.

    Durango North expansion cost
    $385 million
    total

    Estimated total cost for the project.

    Durango North expansion added slot machines
    400
    total

    Additional slot machines and other gaming.

    Durango North expansion added casino space
    275,000 sq ft
    total

    Additional space on the north side of the property.

    Sunset Station renovation cost (podium refresh)
    $53 million
    total

    Total cost for the renovation.

    Sunset Station next phase cost
    $87 million
    total

    Total cost for the next phase of enhancements.

    Green Valley Ranch next phase cost
    $56 million
    total

    Estimated total cost for the next phase of enhancements.

    North Fork project total cost
    $750 million
    total

    Total all-in project cost, fully financed.

    North Fork outstanding note balance from Tribe
    $80.6 million
    Q1 FY26

    Outstanding note balance due from the Tribe as of the end of the quarter.

    Payroll growth
    a little under 3%
    Q1 FY26

    In line with the Valley.

    COGS growth
    flat to down
    Q1 FY26

    Another large cost.

    Green Valley Ranch hotel disruption impact on margin
    almost half
    Q1 FY26

    Contributed to EBITDA margin degradation.

    Green Valley Ranch room nights offline
    27,000
    Q1 FY26

    Due to renovation, representing about 10% of inventory.

    Green Valley Ranch room inventory offline
    10%
    Q1 FY26

    Percentage of total inventory offline due to renovation.

    Hotel revenue growth
    positive year-over-yearYoY
    Q1 FY26

    Despite 27,000 room nights offline at Green Valley Ranch.

    Q1 to Q2 seasonality (EBITDA)
    down 8% to 9%vs Q1 FY26
    Q2 FY26

    Typical seasonal cadence.

    Q2 FY26 disruption cost
    $9 million
    Q2 FY26

    Expected disruption due to construction delays.

    Q2 FY26 disruption cost
    $2 million to $3 million
    Q2 FY26

    Anticipated disruption from heavy construction at Durango site.

    Tax refunds increase (US economy)
    $43 billionup 17%
    Q1 FY26

    Compared to last year, providing more discretionary income.

    Average tax refund increase
    $333up 11%
    Q1 FY26

    Compared to last year.

    Hotel guests from out of town
    87%
    current

    Majority drive from regional states.

    Developed land in Las Vegas Valley
    more than 450 acres
    current

    Undeveloped land in highly desirable locations.

    Development properties
    6
    future

    Most robust pipeline in the gaming industry.

    Development properties
    1
    future

    Most robust pipeline in the gaming industry.

    Dividend per Class A common share (declared)
    $0.26
    Q2 FY26

    Regular cash dividend declared by the Board of Directors.

    Industry KPIs

    2
    MetricValueDetails
    Group booking pace booking windowthird highest first quarter revenue
    Net unit growth development pipeline6 development properties in Las Vegas, 1 in Renoproperties

    Product announcements

    5
    ProductTypeDetails
    Durango North Expansionexpansion
    Sunset Station Podium Refreshupdate
    Sunset Station Next Phaseexpansion
    Green Valley Ranch Guestroom, Suites and Convention Spaces Refreshupdate
    Green Valley Ranch Next Phaseexpansion

    Deals & partnerships

    1
    Moonshine FlatsBrings its signature Country Western Bar and live music concept to Las Vegas for the first time as part of the Durango North expansion.

    Part of the Durango North expansion project, enhancing dining and entertainment offerings.

    Risks & headwinds

    3
    Higher gas pricesQ1 FY26 (March), Q2 FY26 (early days)

    Not quantified for direct impact, but noted as a headwind in March. No impact seen in April.

    Mitigation: Not explicitly stated, but management noted no impact seen in April trends.

    Air travel-related disruptionQ1 FY26 (March)

    De minimis impact due to majority of hotel guests driving from regional states.

    Mitigation: Customer base primarily regional drivers, mitigating impact.

    Temporary construction impacts at propertiesQ1 FY26, Q2 FY26, extending through summer for Durango.

    $9 million disruption at Green Valley Ranch in Q1 FY26. Anticipated $9 million disruption at Green Valley Ranch and $2 million to $3 million at Durango in Q2 FY26.

    Mitigation: Actively managing impacts to minimize operational disruption. Crossover play to other properties helps mitigate loss of visits.

    What to watch in Q2 FY26

    5

    Green Valley Ranch East Tower Renovation Completion

    Mid-September 2026
    CurrentUnderway
    TargetCompleted

    Why it matters

    Completion of renovations will allow the property to maximize its full capital investment and potentially drive increased ADR growth and customer satisfaction.

    the East Tower, we're limping along a little bit, and so we're expecting kind of the suite product and the final rooms to be delivered in mid-September.

    Q&A highlights

    6

    Quantify the impact of higher gas prices and air travel disruption on Q1 performance and Q2 outlook.

    Management stated that higher gas prices in Nevada have shown no impact on Q1 performance or April trends. Air travel impact was de minimis as most hotel guests drive from regional states.

    “in early days. as judged by our Q1 performance and what we're seeing in April, we've seen no impact from higher gas prices.”

    asked by Zachary Silverberg · answered by Stephen Cootey

    2 min read6 chapters

    Detailed Narrative

    01

    Durango Performance and Expansion

    Durango continues to be a significant growth driver, expanding in the Las Vegas locals market and driving incremental play. The December expansion, adding 25,000 sq ft of casino space and a high-limit slot area, has shown strong financial performance and positive guest feedback. The Durango North expansion, a $385 million project scheduled to open in Summer 2027, will add 275,000 sq ft, 400 slot machines, a 36-lane bowling facility, luxury movie theaters, and new dining/entertainment, including Moonshine Flats.

    02

    Strategic Property Renovations

    Red Rock Resorts is undertaking significant investments at Sunset Station and Green Valley Ranch. Sunset Station's $53 million podium refresh is well underway, with new amenities opening throughout 2026, and a subsequent $87 million phase extending into 2027. Green Valley Ranch is undergoing a comprehensive refresh of guestrooms, suites, and convention spaces, with the West Tower and convention areas reopened to strong customer reviews, while East Tower renovations are expected to complete by mid-September 2026. A $56 million next phase for GVR is also underway, extending into 2027.

    03

    North Fork Project Progress

    Construction at the North Fork project is progressing, with the facility now having permanent power. The first phase of the casino floor is expected to turn over in late June, keeping the project on pace for an early Q4 2026 opening. The total all-in project cost remains approximately $750 million and is fully financed. The outstanding note balance due from the Tribe is $80.6 million. Management expects the property to be profitable from day one and stabilize at $40 million to $50 million in revenue.

    04

    Capital Allocation and Shareholder Returns

    The company generated $107 million in operating free cash flow, converting 50.3% of adjusted EBITDA. It returned approximately $170.5 million to shareholders in Q1 FY26 through a $1 per share special dividend, a $0.26 per share quarterly dividend, and the repurchase of 635,000 Class A common shares at an average price of $6.32 per share. The company maintains a net debt-to-EBITDA ratio of 4.07x and expresses comfort with its balance sheet flexibility.

    05

    Market Trends and Customer Segments

    Red Rock Resorts continues to see strength in its core local guests, with robust spend per visit and net theoretical win across local, regional, and national customer segments, driving record Q1 gaming revenue and profitability. Hotel and F&B operations also delivered near-record results. While March saw some impact from higher gas prices and air travel disruption, April trends are strong, and the promotional environment remains stable.

    06

    Future Greenfield Development

    The company is actively working on plans for two additional new greenfield projects in Las Vegas, in addition to a potential room expansion at Durango. They have 6 development properties in Las Vegas and 1 in Reno. No immediate announcements are planned, but management expects more visibility into the development plan by next year, emphasizing a deliberate approach to ensure project perfection.

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