WYOMISSING, Pa. – PENN Entertainment reported improved results in the first quarter of 2025 compared to the previous year, but they missed Wall Street estimates. This has become a habit over the past year.
Perhaps that’s why in late April, the Wyomissing- based operator of casinos, sports betting and entertainment announced they intended to name two new directors to the Board of Directors to replace two directors who chose not to stand for election and one who was retiring.
This move was made following negotiations with HG Vora Capital Management, and it may foreshadow a management shake-up at PENN in the future. In its statement about the new directors’ appointment, PENN said the Board believes a costly and distracting proxy fight is not in the best interests of PENN and its shareholders. Both new directors, Johnny Hartnett and Carlos Ruisanchez, have decades of experience in the gaming and entertainment industries.
PENN avoided commenting on the boardroom drama in its quarterly report.
CEO Comments
Jay Snowden, Chief Executive Officer and President, said in a statement: “PENN’s properties demonstrated strong resilience in the quarter following severe weather challenges earlier in the year, as gaming volumes rebounded in March and remained consistent through April and early May.”
He reported that in its Interactive segment the company generated record gaming revenue and significant year-over-year improvements in both revenue and adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) despite industry-wide unfavorable sports betting hold.
Snowden also pointed out that corporate overhead costs were higher by approximately $8 million in the quarter due to legal and advisory expenses.
Also, Snowden reported that through May 7, 2025, PENN has repurchased $35 million of shares and remains committed to its previously stated goal to repurchase at least $350 million of shares this year.
Core Business Trends
Property level highlights
The company reported revenues of $1.4 billion; adjusted EBITDAR (EBITDA plus Rent) of $457.0 million; and Adjusted EBITDAR margins of 33.1%.
“Portfolio-wide weather events in January and February negatively impacted Adjusted EBITDAR by at least $10 million,” said Mr. Snowden. “Core business trends were otherwise stable, particularly in markets not impacted by the continued growth of new supply.”
Snowden reiterated that the company’s customer loyalty program, PENN Play™, combined with its investments in hospitality and entertainment offerings, contributed to strong engagement with VIP and “mid-worth” customer segments.
“We are also seeing the benefits of our differentiated omni-channel strategy,” he noted, “as those pre-existing customers in Pennsylvania and Michigan who have engaged with our standalone Hollywood iCasino app have increased their spending meaningfully across both retail and online channels.”
Record Online Gaming Revenue
Snowden noted several Interactive segment highlights: Revenues of $290.1 million (including tax gross up of $128.2 million); and adjusted EBITDA loss of $89.0 million.
“Our Interactive segment generated significant top and bottom-line year-over-year growth,” he commented, “highlighting the improved flow through we are seeing in the business. These results are despite customer-friendly sports betting outcomes that negatively impacted Adjusted EBITDA by approximately $10 million in the quarter.”
According to Snowden, ESPN BET and theScore BET continue to provide a strong top of funnel for PENN’s online casino platforms.
He also said online casino momentum is bolstered by the early results of the company’s standalone iCasino app in Pennsylvania and Michigan, which recently expanded into New Jersey and Ontario. Additionally, since the year began, PENN has rolled out several ESPN BET product enhancements and new features leveraging account linking, including adding ESPN favorites to the app homepage and creating a new rewards program.
“Throughout the year we plan to continue executing our strategy to provide a differentiated, personalized digital offering while also working to deliver on our performance goals,” concluded Mr. Snowden.
Liquidity and Financial Position
PENN reported that total liquidity as of March 31, 2025 was $1.5 billion inclusive of $591.6 million in cash and cash equivalents. Traditional net debt as of the end of the quarter was $2.1 billion.
About PENN Entertainment
PENN Entertainment, Inc., together with its subsidiaries, is a provider of integrated entertainment, sports content, and casino gaming experiences. PENN operates 43 properties in 20 states, online sports betting in 19 jurisdictions and iCasino in five jurisdictions, under a portfolio of brands including Hollywood Casino®, L’Auberge®, ESPN BET™ and theScore BET Sportsbook and Casino®. In August 2023, PENN entered into an exclusive long-term strategic alliance with ESPN, Inc. and ESPN Enterprises, Inc.
