PENN Entertainment (PN1) Q2 2026 Earnings Report

The call conveyed clear operational momentum: record retail results, raised retail guidance, strong liquidity and balance sheet improvements, meaningful progress toward Interactive profitability, and successful ramp of multiple development projects. Short-term Interactive headwinds (modest revenue guide trim, Q3 Alberta investment-driven loss, occasional sportsbook hold volatility) and an aggressive upcoming marketing environment are risks but are being actively managed. On balance, the positive operational execution, guidance raise in retail, and strengthened balance sheet outweigh the interactive and market-competition challenges.

PENN reiterated and refined full‑year 2026 targets: Retail posted Q2 net revenue of $1.5B and adjusted EBITDAR of $517.2M (adjusted EBITDA margin 34.4%), with same‑store revenue and EBITDAR up ~2% and ~4%; management raised 2026 retail guidance to a midpoint revenue of $5.87B and midpoint adjusted EBITDAR of $1.963B (implying ~50 bps margin improvement in H2 and mid‑single‑digit retail EBITDAR growth roughly in line with the 5.6% Q2 pace), and said a $31M uplift at the retail midpoint flows fully to cash to accelerate deleveraging; Interactive revenue guidance was trimmed to $1.57B (including a skin‑tax gross‑up of ~ $830M vs. $820M prior; Q2 interactive revenue was $349.4M including a $185.5M gross‑up) while Interactive adjusted EBITDA guidance remains a $20M loss for 2026 (inclusive of a ~$20M Alberta investment; Q2 adjusted EBITDA loss was $9.5M, Q3 flagged as the largest loss, Q4 expected positive), Other adjusted EBITDA is guided to negative $119M; CapEx: Q2 total CapEx $98M (project CapEx $58M), 2026 maintenance CapEx $220M and project CapEx refined to $180M (total 2026 CapEx guidance $400M, down from $420M); liquidity and financing: total liquidity $1.9B (cash $887M), revolver undrawn and refinanced, Term A and revolver now maturing 2031, Term B repriced to 2033, $106.7M convertible notes repaid (removing 4.5M potential shares), ~$225M GLPI funding for Aurora, nearest maturity $400M 5‑5/8% notes due Jan‑2027; other cash outlook items include triple‑net lease payments ~$1B, cash interest (net) ~$150M, and PENN does not expect to be a cash taxpayer in 2026 (Q2 OSB hold negatively impacted results by roughly $3M; World Cup drove engagement with ~70% of sportsbook users wagering and ~45% of those betting soccer for the first time).