Churchill Downs Inc. (CHDN) - Q2 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026. Churchill Downs Inc. operates through three primary segments: Live and Historical Racing, Wagering Services and Solutions, and Gaming. The company is a large accelerated filer headquartered in Louisville, Kentucky. Notable operational context includes the redevelopment of Casino Salem in New Hampshire into the Rockingham Grand Casino and the cessation of Historical Racing Machine (HRM) operations in Louisiana following a May 2025 court ruling.
Key Financial Metrics
| Metric (in millions) | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Total Net Revenue | $980 | $934 | $1,643 | $1,577 |
| Operating Income | $357 | $327 | $500 | $462 |
| Net Income (Attributable to CDI) | $241 | $217 | $324 | $294 |
| Diluted EPS | $3.42 | $2.99 | $4.58 | $3.98 |
| Adjusted EBITDA | $477 | $451 | $734 | $696 |
| Operating Cash Flow (YTD) | $512 | $487 | - | - |
| Total Debt (Gross) | $4,795 | - | - | - |
| Cash & Restricted Cash | $295 | - | - | - |
Material Changes vs. Prior Period
- Revenue Growth: Q2 2026 revenue increased $46 million (4.9%) year-over-year, driven by a record-breaking Derby Week at Churchill Downs Racetrack (+$21M), growth in Kentucky HRM venues (+$12M), and increased wagering activity.
- Segment Performance:
- Live and Historical Racing: Revenue up $33 million Q2; Adjusted EBITDA up $21 million.
- Wagering Services: Revenue up $9 million Q2; Adjusted EBITDA up $4 million.
- Gaming: Revenue up $4 million Q2, despite a $4 million negative impact from the cessation of Louisiana HRM operations. Growth in New York, Indiana, and Maryland offset this loss.
- Debt Reduction: Total debt decreased by $360 million to $4.795 billion as of June 30, 2026, primarily due to a $328 million paydown of the Revolver facility.
- Capital Expenditures: YTD capital expenditures decreased to $117 million in 2026 from $165 million in 2025.
Guidance, Outlook, and Risks
- Capital Projects: Management expects project capital expenditures to be approximately $180 million to $220 million for the full year 2026, focused on the Rockingham Grand Casino and Victory Run at Churchill Downs.
- Debt Maturities: The company is exploring options to fund upcoming senior note maturities (including $600 million in 2027 notes) using cash on hand, operating cash flow, revolver capacity, or new debt issuance.
- Regulatory Risks: Continued monitoring of the regulatory environment, particularly regarding HRM operations and potential legislative changes in key jurisdictions like Louisiana and Virginia.
- Market Risks: Exposure to interest rate fluctuations on variable rate debt ($1.7 billion outstanding); a 1% increase in SOFR would reduce net income by approximately $13 million.
Investor Verification Checklist
- Derby Week Sustainability: Verify if the record-breaking revenue from Derby Week represents a recurring annual trend or a one-time anomaly affecting full-year comparability.
- Louisiana HRM Impact: Confirm the long-term revenue replacement strategy for the $4 million quarterly loss from ceased Louisiana operations.
- Debt Refinancing: Assess the company's ability to refinance the $600 million 2027 Senior Notes maturing in April 2027 given current market conditions.
- Capital Project Costs: Monitor the $180-$220 million capital spend guidance for potential overruns related to the Rockingham Grand Casino development.
- Virginia Competition: Review the impact of increased competition in Central Virginia, which caused a $5 million net decrease in that region's HRM revenue.