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Red Rock Resorts (RRR) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Consumer Discretionary· Apr 29, 2026

Source: earnings call transcript

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

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

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%

RRR operating KPIs by quarter

RRR operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Capital expenditures Investment capital
~$87.2M Capital spend in the quarter was $117.2 million which includes approximately $87.2 million in investment capital as well as $30 million in maintenance capital. Source: earnings call transcript
~$94.4M Capital spend in the quarter was $139.8 million, which includes approximately $94.4 million in investment capital as well as $45.4 million in maintenance capital. Source: earnings call transcript
—
Capital expenditures Maintenance capital
$30M Capital spend in the quarter was $117.2 million which includes approximately $87.2 million in investment capital as well as $30 million in maintenance capital. Source: earnings call transcript
$45.4M Capital spend in the quarter was $139.8 million, which includes approximately $94.4 million in investment capital as well as $45.4 million in maintenance capital. Source: earnings call transcript
+51.3%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

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

Moonshine Flats Brings 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

Higher gas prices Q1 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 disruption Q1 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 properties Q1 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

Green Valley Ranch East Tower Renovation Completion

Mid-September 2026
Current Underway
Target Completed

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.

Find out whether RRR delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.