MGM continues to mull Diller takeover bid as Q2 revenue reaches new record

Despite posting all-time best marks for Q2 group revenue and same-store regional quarterly revenue, trepidation over the health of Las Vegas and a potential takeover offer from Barry Diller’s People Inc. both loomed over MGM Resorts’ second-quarter results published Wednesday.

MGM CEO Bill Hornbuckle opened the company’s call with analysts by saying an independent committee “continues to evaluate” the $48.30-per-share offer from Diller that was lodged 1 June, just days after MGM’s competitor Caesars Entertainment was acquired by Fertitta Entertainment.

“I’m confident our board will pursue the course of action that’s in the best interest of the company and our shareholders,” Hornbuckle concluded, without commenting further on the matter.

MGM’s group revenue of $4.5 billion for the quarter was a Q2 record and a 1% increase year-over-year, while adjusted EBITDA of $610 million was about 6% off YoY. Net income, however, skyrocketed to $292 million from $49 million a year ago. MGM ended the quarter with $2.5 billion in cash against long-term debt of $6 billion.

In Las Vegas, revenue of $2.2 billion and adjusted EBITDA of $735 million were both 3% increases over last year. But this was not enough to hold back a barrage of questions from analysts about the market, who pressed management about its plans to bolster low-end play.

“Overall, I think we continue to see really strong strength in the luxury segment,” COO Ayesha Molino said. “As we’ve noted, the lower end of the segment, particularly Luxor and Excalibur, those do remain challenged, but we’ve been deploying offers such as the all-inclusive and we’ve seen positive reaction to that.”

Value in Las Vegas

In March, as Molino alluded to, MGM rolled out all-inclusive two-night packages at Luxor and Excalibur for $330. Hornbuckle, perhaps more than any other Las Vegas CEO, has repeatedly harped on the idea that the city is still a “value” destination.

Las Vegas travelers have become increasingly agitated over rising costs since the start of 2025. The most infamous example came last June, when a viral post about a $26 bottle of water at MGM’s Aria casino sparked outrage and national headlines. Hornbuckle has since mentioned that example multiple times with analysts in conceding that the company went too far. This latest all-inclusive deal, he said Wednesday, is a step in the other direction.

“We’ve booked over 30,000 room nights on (the promotion), it absolutely has helped us stabilise occupancy,” he said. He added that “we don’t’ think, we know” that the deal has helped counter the value narrative on social media and elsewhere.

With that in mind, the company did enjoy favourable Las Vegas casino results for the quarter — that segment’s revenue jumped 17% YoY to $536 million. MGM finished the quarter with slot and table hold rates of 9.6% and 29.6%, respectively. For comparison, the Strip as a whole posted average hold rates of about 8% and 16% across Q2, according to Nevada Gaming Control Board data.

Hornbuckle as well as MGM CFO Jonathan Halkyard said that MGM is contemplating room remodels at Aria and the Cosmopolitan beginning later this year, but no costs or timelines were given.

Regional renovations and DC Sphere

On the regional side, same-store quarterly revenue was a record $904 million, but net revenue slipped 4$ YoY to $924 million and adjusted EBITDAR decreased 9% to $280 million.

MGM’s $546 million sale of the operations of its Northfield Park racino in Ohio closed in April, a move that followed the company’s abrupt exit from the downstate New York casino licence race last October. There doesn’t appear to be any other regional intrigue for the operator at the moment, with Hornbuckle saying Wednesday there’s “nothing imminent” in terms of M&A.

He did note, however, that “between now and the end of the year” MGM will begin renovations at both its Borgata casino in Atlantic City and the Beau Rivage casino in Mississippi. He said both properties were “major contributors” to the company’s same-store regional record last quarter.

The MGM boss was asked again this quarter about the new Sphere entertainment venue being built outside of Washington, D.C., a smaller version of the now-famous venue on the Strip. This new Sphere is “literally on the doorstep” of MGM National Harbor in Maryland, Hornbuckle said, so the company is “pretty excited” by the tourism it could generate.

Macau and BetMGM

Q2 was rather ho-hum in Macau for MGM China, whose revenue of $1.1 billion was flat YoY while adjusted EBITDAR fell 15% to $257 million. Part of this dip was attributed to the FIFA World Cup tournament, which pulled away many high-rollers throughout June, and this sentiment was noted market-wide. When asked whether the operator will be more aggressive in promotions, MGM China CEO Kenneth Feng said that is just one part of the equation.

“Our strategy is really to focus on optimising the yield of every table, every slot, every square foot of the casino floor,” Feng said. “That’s our strategy. It’s not purely a reinvestment, it’s a package…We are confident, we feel comfortable that we can sustain such margin going forward. This level is sustainable.”

On the digital side, MGM Digital saw revenue increase 20% YoY to $196 million as its adjusted EBITDAR loss widened from $26 million last year to $31 million this year. These results encompassed MGM’s LeoVegas subsidiary and are separate from its BetMGM joint venture with Entain.

Speaking of BetMGM, that company posted Q2 revenue of $711 million (+3% YoY), driven mainly by an 8% increase in iGaming revenue ($483 million). Online sports betting revenue was exactly flat at $228 million, while adjusted EBITDA fell 15% to $74 million and contributions back to MGM fell 11% to $171 million. Hornbuckle was asked whether BetMGM is being “maximised” under the JV structure as MGM continues to invest in its own digital business, but the idea was dismissed.

“Obviously, we’re the brand, they’re the technology,” he said. “There’s always things to learn…The JV is in good shape. While you never say never to anything, there’s nothing contemplated.”

Analysts bullish on MGM

Analysts reacted positively to the results, though the company’s stock was virtually unchanged at $45.66 at close Thursday. MGM repurchased 4 million shares, worth about $164 million, during Q2, and about $1.4 billion in repurchases remains available from a plan authorised last April.

Macquarie analyst Chad Beynon maintained an outperform rating while raising the target price to $54. Beynon cited the “enduring value of MGM’s Vegas footprint, a best-in-class Regional portfolio, improving Macau returns, and path to profitability for MGM Digital” as the biggest positives for the company.

Barry Jonas of Truist maintained a buy rating while holding the target price unchanged at $55. Jonas praised the “solid” regional performance while noting the lag in Macau, and said Las Vegas results were just about in-line with expectations and highlighted the market’s “strong” convention business.