MGM Resorts International presented a mixed picture in its first-quarter earnings report on Wednesday. The group's total net revenue slightly increased by 4% to $4.5 billion year-over-year, but its consolidated adjusted EBITDAR fell by 9% to $580 million, and net profit shrank by 16% to $125 million. The real pillars of support came from Macau and the digital sector—the former saw a revenue jump of 9% to $1.1 billion, with table game winnings surpassing the $1 billion mark; the latter soared by 43% to $183 million year-over-year. Meanwhile, the Las Vegas headquarters barely managed to record its first year-over-year growth since 2024, with a slight increase of $4 million in revenue to $2.2 billion, while core gambling metrics such as casino income, table winnings, and slot machine earnings all slightly declined. CEO Bill Hornbuckle summarized the current market on the analyst call as "the market has changed, the consumer has changed," and the company's strategy in Las Vegas is to continue betting on its luxury brand matrix to cater to high-end customers.
Structural Anxiety and NBA Opportunities Behind Las Vegas's Slight Growth
Facing analysts' inquiries about the drag of low-end consumption due to lagging tourism, Hornbuckle's response revealed cautious optimism. He admitted that despite facing many headwinds, the company has not yet seen a real slowdown, but that doesn't mean it won't happen in the summer, as booking cycles remain short. Civic analysts in their research report pointed out that the Las Vegas market is showing moderate improvement, but the model still predicts a 2% decline for the MGM Vegas segment for the full year of 2026. To attract budget-sensitive and first-time visitors, several operators including MGM have recently started offering all-inclusive packages, with MGM's plan revolving around two-night packages at the Luxor and Excalibur hotels. Chief Operating Officer Ayesha Molino revealed that the market response has been "quite satisfactory," with a significant portion of interest coming from new customers.
Hornbuckle was pressed on MGM's stance regarding a potential NBA team in Las Vegas during the call. As a part-owner of the T-Mobile Arena, the only venue currently capable of hosting NBA games in the city, MGM is at the core of this gambit. The NBA Board of Governors has unanimously approved exploring Las Vegas as an expansion site, with the league hoping the new team could start playing as early as 2028—a timeline that makes building a new arena impractical, rapidly elevating the possibility of the T-Mobile Arena as a transitional option. Hornbuckle hinted at this direction with a half-joking remark—"I've already signed three NDAs."
Macau's 9% Growth Rate and Digital Loss Reduction Path
Macau operations continued to play the role of a profit ballast this quarter. The Chinese New Year holiday brought strong visitor numbers and massive gambling turnover, pushing MGM China's overall table game winnings up by 18% year-over-year, surpassing $1 billion. Hornbuckle gave a restrained judgment on Macau's prospects—he said "it's hard to say Macau is stable," but he feels "very good" about the market position, what the company is doing, and how it's being done, while also admitting that the company is still "under-equipped" in Macau and will continue to increase investments.
The digital sector is on a clear path to reducing losses. This quarter's EBITDAR loss narrowed from $34 million in the same period last year to $26 million. Gary Fritz, MGM's Chief Commercial Officer and President of Digital, stated that this year's losses in the digital sector are expected to be halved from last year's base, although regulatory and tax changes in Brazil might lead to slight additional investments, but the trend of narrowing losses will not change, paving the way for breaking even or fully balancing by 2027. From the balance sheet perspective, the group's total liabilities are approximately $38 billion, roughly the same as last year, with $90 million in stock repurchased this quarter.
PASA Official Website continues to track the regional operations and financial dynamics of global gambling giants, noting that MGM's multi-engine growth structure this quarter is exposing a core contradiction—the high growth rates of Macau and digital are diluted by the stagnant core gambling indicators in Las Vegas and the overall downward trend in domestic net profits in the US. How to maintain investors' patience for profit restoration during the long waiting period for the Japan project to land will be the biggest challenge facing Hornbuckle's team going forward.
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