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Wynn Resorts Ltd - $WYNN - Earnings Analysis: Strong operational performance with record annual Adjusted Property EBITDAR in 2024.

By sagebytes in Business —

Business Model

Wynn Resorts generates revenue primarily through its casino operations, hotel room bookings, food and beverage sales, and entertainment, retail, and other services at its properties in Las Vegas, Macau, and Boston.

Revenue Sources

  • Casino operations, including table games and slot machines.
  • Hotel room bookings across luxury resorts.
  • Food and beverage services at restaurants, bars, and lounges.
  • Entertainment, retail, and other guest services.

Income Statement Analysis

  • Total operating revenues remained nearly flat compared to Q4 2023, decreasing marginally by 0.09%.
  • Operating income increased by 2.56% year-over-year, indicating improved operational efficiency.

Capital Allocation

During the fourth quarter of 2024, Wynn Resorts repurchased approximately 2.14 million shares of its common stock for $200 million, bringing total share repurchases for the year to approximately 4.35 million shares for $386 million. The company also declared a quarterly cash dividend of $0.25 per share payable on March 5, 2025. Additionally, Wynn continued to invest in its development projects, including contributing $99 million during the quarter to the Wynn Al Marjan Island project in the UAE, bringing the total equity contribution to $631.7 million.

Management Commentary

Our future is bright. And it is this bright future coupled with the fact that our stock price continues to inappropriately reflect the value of our assets that drove us to repurchase $200 million of stock in the fourth quarter and another $150 million thus far in Q1.

We already have our budgeted group and convention room nights for 2025 on the books at healthy ADRs and transient booking demand over the last two weeks has been extremely robust.

EBITDA during the F1 event in 2024 was about $20 million lower than in 2023, primarily due to a decline in RevPAR stemming from lower overall Las Vegas room rates during that event.

This year we didn't have the benefit of hosting the Super Bowl here in Las Vegas, which impacts February, and that's about a $25 million EBITDA headwind for Q1 versus 2024.

Overall Sentiment: Management maintains a positive outlook, emphasizing strong performance, future growth opportunities, and disciplined capital allocation, while acknowledging short-term challenges affecting certain segments.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.