Caesars Entertainment (2ER) Q1 2026 Earnings Report

The call conveyed a generally positive operational and strategic picture: consolidated revenues grew 3% and adjusted EBITDAR was essentially flat, while the Digital segment posted record revenue and margin expansion (net revenue + strong flow-through and EBITDA margin up 566 bps). Las Vegas showed strong occupancy and improving group trends, and regionals grew revenue and benefitted from strategic investments and the Windsor addition. Headwinds include modest EBITDAR declines in Las Vegas and regionals on comparable events, sports volume softness and hold-driven variability, some short-term softness in April, and near-term cash outflows that delayed buybacks. Overall, the positives — especially digital momentum, solid revenue growth, and a constructive free cash flow outlook — outweigh the headwinds.

Management guided to sequential improvement in Las Vegas operating trends for the remainder of 2026 and said it expects to deliver strong free cash flow in 2026 as cash interest and CapEx decline; consolidated Q1 results were $2.9B net revenue (+$77M, +3% YoY) and $887M adjusted EBITDAR (+$3M), with Las Vegas adjusted EBITDAR $426M (vs. $433M prior year) on 95.3% occupancy and ADR +1%, Regionals $1.4B net revenue (+3% YoY) and $435M adjusted EBITDAR (‑$5M YoY, improved ex‑Super Bowl), and Digital posted record Q1 net revenue $374M and adjusted EBITDA $69M (18.4% margin, +566 bps) with flow‑through just over 66%; Digital detail: sports net revenue +9%, total volume ‑3%, mobile volume ‑1%, hold +100 bps to 8.3%; iCasino net revenue +18%, ~512k monthly unique players (+2%) and ARMP $219 (+15%), universal wallet/PAM live in 27 jurisdictions (target all by end of April); strategic/financial priorities include completing capital projects (Omnia May 15, Tahoe Master Plan June 2026, Augustus Tower early‑2027, Category 10 later in 2026), having invested >$3B in regional CapEx over five years, the Caesars Windsor acquisition ($54M, March 3), pursuing long‑term digital targets (20% top‑line growth with ~50% flow‑through to EBITDA and $500M+ digital EBITDA), targeting sub‑5x lease‑adjusted leverage, and returning to a mix of debt paydown and share repurchases as free cash flow accumulates (noting Q1 cash outflows included bonus, interest and the >$50M Windsor buyout and partnership expense roll‑offs that favor Q3/Q4 ’26 and Q1 ’27).