By BBBB
Penn Entertainment, Inc. has released its financial results for the three months ended March 31st, 2024.
Penn’s revenue totaled $1.61 billion, with an adjusted EBITDAR of $256.2 million, marking decreases of 3.9% and 46.4% respectively compared to the previous year. Net income plummeted from $514.4 million in Q1 2023 to a loss of $114.9 million in Q1 2024, accompanied by similar declines in other key metrics.
Operating income decreased from $199.1 million to a loss of $21.4 million, as total operating expenses rose by 10.5% to $1.63 billion. A contributing factor to the increased expenses was the launch of ESPN Bet in August of the previous year, which came after the resale of Barstool to its founder, Dave Portnoy, for $1. This move came despite the initial acquisition cost of $388 million in February 2023.
Key Highlights Q1 2024
Land-based
- Revenue – $1.4 billion
- Adjusted EBITDAR – $479.0 million
- Adjusted EBITDAR margin – 34.1%
Interactive
- Revenue – $207.7 million (including tax gross up of $116.6 million)
- Adjusted EBITDA loss – $196.0 million
Groupwide
- Revenue – $1.6 billion
- Net Income – $114.9 million loss
- Adjusted EBITDA – $101.4 million
- Adjusted EBITDAR – $256.2 million
Jay Snowden, Chief Executive Officer and President, said:
“Our property level performance showed resilience this quarter, with stable trends continuing into April following portfolio-wide severe weather through mid-February. Meanwhile, ESPN BET continues to drive strong top of funnel demand due to the reach and affinity for the ESPN brand, which led to record online sports betting handle and iCasino gross gaming revenue in the quarter. However, Interactive segment results were negatively impacted primarily by unfavorable hold from major sporting events.
We look forward to unveiling additional product enhancements and unique media integrations with ESPN ahead of the 2024 football season. Our improved online product offering will help engage, reactivate, and retain our expanding database, while also advancing our strategy to create a highly differentiated experience for sports fans and sports bettors.”
Speaking of the leadership of the company he added:
“To accelerate our technology and product improvements, we recently announced the hiring of Aaron LaBerge as the Company’s Chief Technology Officer. Mr. LaBerge brings more than 20 years of experience at The Walt Disney Company, most recently serving as the CTO for both Disney Entertainment and ESPN. In his new role, he will be responsible for driving technology strategy and execution for PENN, while leading a multinational team of technologists and serving as the key business leader for the Company’s Interactive division.
We are incredibly excited about the arrival of Mr. LaBerge, who is uniquely qualified to help us create a best-in-class digital experience for our customers, while further deepening our connections and integrations with ESPN.”
Snowden said of ESPN Bet’s current position and future growth:
“ESPN BET continued to attract new users this quarter while maintaining a disciplined approach to promotions and marketing expenses; however, our financial results were impacted by lower-than-expected hold and spend per user. On March 11, we launched ESPN BET in North Carolina with a VIP event featuring ESPN’s Stephen A. Smith, highlighting our opportunity to leverage key talent at ESPN. Our Hollywood Greektown property in Detroit was also the home of several ESPN broadcasts during the NFL draft held last week.
While we are pleased with the early ESPN BET adoption and engagement results, our focus heading into this football season will be on enhancing our product offerings, including a refreshed home screen and expanded parlay offerings. Simultaneously, with our partners at ESPN, we will reveal additional ESPN BET media integrations within their digital media app and industry leading fantasy product. We believe our enhanced product offering and media integrations will result in superior experiences for our customers, leading to higher retention, share of wallet, and spend per user.”
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