Business Context and Reporting Period
Company: Boyd Gaming Corporation (NYSE: BYD)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Three months ended March 31, 2026
Business Overview: Boyd Gaming operates 27 brick-and-mortar gaming entertainment properties across the U.S. and manages the Sky River Casino in California. The company also operates Boyd Interactive, an online gaming business. The company is organized into four reportable segments: Las Vegas Locals, Downtown Las Vegas, Midwest & South, and Online.
Key Financial Metrics
| Metric (in millions, except per share) | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $997.4 | $991.6 |
| Operating Income | $164.0 | $199.9 |
| Net Income | $104.3 | $110.9 |
| Net Income Attributable to Boyd Gaming | $105.5 | $111.4 |
| Diluted EPS | $1.37 | $1.31 |
| Adjusted EBITDAR | $317.4 | $337.5 |
| Cash and Cash Equivalents | $372.7 | $311.5 |
| Long-Term Debt (Net) | $2,271.9 | $2,045.6 |
| Capital Expenditures | ($155.2) | ($169.9) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 0.6% to $997.4 million, driven by a 1.8% increase in gaming revenues (slot win up 2.6%) and higher online reimbursements. This was partially offset by a 34.3% decrease in core online revenue due to the termination of certain market access agreements following the FanDuel equity sale.
- Operating Income Decline: Operating income decreased 18.0% to $164.0 million. The decline was primarily due to a $26.8 million increase in depreciation and amortization (driven by new assets in Norfolk, VA, and renovations) and a $21.8 million increase in project development and writedown costs. These were partially offset by the absence of a $32.3 million asset impairment charge recorded in Q1 2025.
- Net Income: Net income decreased 6.6% to $104.3 million. The reduction in operating income was partially mitigated by a $20.0 million decrease in interest expense, resulting from lower debt balances and interest rates.
- Segment Performance:
- Midwest & South: Revenues increased 4.1% and Adjusted EBITDAR increased 5.1%.
- Las Vegas Locals: Revenues decreased 2.6% and Adjusted EBITDAR decreased 6.2% due to softness in destination business and construction disruptions.
- Online: Revenues decreased 4.7% and Adjusted EBITDAR decreased 64.0% due to lower market access fees.
Guidance, Outlook, and Management Commentary
- Capital Allocation: Management continues to focus on a balanced capital allocation approach, investing in the business while returning capital to shareholders. The company repurchased 1.8 million shares for $155.0 million in Q1 2026 and declared a quarterly dividend of $0.20 per share.
- Development Projects:
- Norfolk, Virginia: A transitional casino opened in November 2025. The full resort is expected to open in late 2027. The company expects to spend approximately $300 million on this project in 2026.
- Cadence Crossing: Opened March 25, 2026, replacing the Jokers Wild casino.
- Par-A-Dice: Design and pre-construction activities for a transformation into a single-level entertainment facility are underway.
- Debt Refinancing: In January 2026, the company entered into an Amended and Restated Credit Agreement, providing a $1.45 billion revolving facility and a $1.2 billion Term A loan facility. The company drew $400 million under the Term A facility in Q1 2026. Total contractual availability under the Credit Facility is $2.24 billion.
- Acquisition: On April 1, 2026 (subsequent to period end), the company acquired Design Works Studios, LLC, an online game content developer, for approximately $53.4 million.
- Risks: Key risks include competition in online gaming, regulatory changes, the sufficiency of cash flows to meet capital requirements, and the impact of macroeconomic conditions on customer spending.
Investor Verification Checklist
- Online Revenue Sustainability: Verify the long-term impact of the terminated FanDuel market access agreements on the Online segment's revenue and margin profile.
- Capital Expenditure Execution: Monitor the $300 million projected spend for the Norfolk, VA resort and the $650-$700 million total capital spend for 2026 to ensure alignment with cash flow generation.
- Debt Covenant Compliance: Confirm continued compliance with the Consolidated Total Net Leverage Ratio (max 4.50x) and interest coverage ratios under the new Credit Agreement.
- Asset Dispositions: Track the expected sale of the Sam's Town Shreveport property, agreed upon in February 2026, for potential proceeds and impact on the balance sheet.
- Working Capital: Note the working capital deficit of $353.0 million as of March 31, 2026, and monitor liquidity management strategies.