Net profit up at Boyd Gaming as revenue hits record $860.7m in Q1

Total revenue for the three months to 31 March 2022 was $860.7m (£684.5m/€809.0m), compared to $753.7m in the corresponding period last year.

“Our first quarter results were a great start to 2022 as we delivered another remarkable quarterly performance across our business and continued the momentum of a record 2021,” Boyd chief executive Keith Smith said.

Breaking down revenue by vertical, gaming remained by far Boyd’s primary source of revenue, with this area of the business generating $668.0m in revenue during the quarter, up 8.1% year-on-year.

Food and beverage revenue also increased by 4.4% to $63.7m, while room revenue jumped 63.1% to $42.4m and other revenue 32.6% to $86.6m.

Breaking this down by geographical performance, Boyd’s Midwest and South segments led the way with $583.7m in revenue, a new quarterly record.

Revenue within the Las Vegas Locals sector also reached a record $227.6m, with the remaining $49.5m in revenue coming from the Downtown Las Vegas region.

Looking at spending in Q1, overall operating costs and expenses were 9.0% higher at $609.7m.

Other net expenses in Q1 amounted to $40.3m, primarily down to $37.7m worth of interest expenses. 

This left a pre-tax profit of $210.8m, up 56.9% year-on-year. Meanwhile, adjusted earnings before interest, tax, depreciation, amortisation and rent costs (EBITDAR) rose 15.8% year-on-year to $338.8m.

Boyd paid $47.8m in income tax during the quarter, which meant it ended the period with a net profit of $162.9m, a 59.4% year-on-year increase.

Near the end of the quarter, Boyd struck a deal to acquire Pala Interactive, the igaming software and services supplier that is majority owned by the Pala Band of Mission Indians, for $170.0m.

Agreed through its Boyd Interactive Gaming subsidiary, Boyd said the deal would include all Pala Interactive subsidiaries and be paid for in cash. Pala Interactive currently provides B2B services in eight US states and in Canada, while it also offers B2C services in New Jersey and Canada.

Smith described the acquisition as an important step for Boyd, that would provide the operator with “the technology and expertise to build a leading regional online casino gaming operation”. 

“In all, the first quarter was an excellent start to 2022, as our proven operating strategy and experienced team continue to create long-term value for our shareholders,” Smith said in conclusion.

Looking ahead to the rest of 2022, Smith said the business expected to see its meeting and convention business recover as business travel resumes, while it would look to expand its non-gaming amenities in downtown Las Vegas.

Its casino operations will expand further with two projects either underway or set to begin in 2022. Boyd is to manage Sky River Casino in Northern California, which is under construction, on behalf of the Wilton Rancheria Tribe.

It is also targeting a summer start for construction on a land-based facility at Treasure Chest in Louisiana, replacing its riverboat casino. This is scheduled to open in late 2023.

While Smith said the acquisition of Pala would position the operator to take a direct approach to the emerging igaming opportunity, it remained committed to its sports betting partnership with FanDuel.

“By leveraging the FanDuel brand and the expertise of one of the nation’s clear leaders in online sports betting, we have built a profitable sports betting business that will contribute approximately $30m in EBITDAR to our results this year,” he said. “And through our 5% equity ownership in FanDuel, we have the opportunity to participate in the expansion of sports betting across the country.”