Caesars slips to FY24 net loss, remains confident about digital EBITDA target

Group revenue for the 12 months through to 31 December 2024 topped $11.2 billion (£8.89 billion/€10.71 billion). This is 2.5% lower than the previous year, according to data published yesterday (25 February) by Caesars.

Caesars attributed this primarily to its Las Vegas and regional segments, with both divisions seeing declines in 2024. Managed and branded revenue was also down, although there was some positive news from the digital segment.

Revenue from the digital business, which comprises igaming and online sports betting, was up 19.5%. This continues an upward trend seen in recent years, but the trajectory was not as high as seen in 2023 (77.6%).

Caesars: Digital EBITDA to reach $500 million in 2025

While digital growth may not have been quite as impressive as in other recent years, Caesars remained confident of its long-term earnings goals.

In May 2023, Caesars stated a digital EBITDA target of $500 million within two years. Now, CEO Tom Reeg said in an earnings call that this is set to become a reality by the end of 2025.

For context, digital adjusted EBITDA in 2024 amounted to $117 million, up 207.9% from the $38 million posted in 2023.

“I’d expect you’re going to start seeing the best quarters we’ve ever posted to date shortly,” Reeg said. “And all of our targets remain the same. Recall that we laid out our targets before we even launched Caesar Sports, that we could reach $500 million of EBITDA.

“We’re well on that path. The remaining piece at the end of 2025 will be the roll-off of some big partnership contracts in the beginning of 2026. Then I’d expect we’d be at our targets. And recall those targets have not moved since those were just numbers on a spreadsheet almost four years ago at this point.”

High hopes remain for regional, Las Vegas

Regional properties, the group’s largest source of revenue, posted a 4.1% drop in revenue to $5.54 billion last year. Reeg said, however, that this segment continues to improve, with a “solid and stable” customer base.

This division will also likely be helped by last October’s completion of the Caesars New Orleans expansion, followed by the opening of Caesars Virginia in December. Reeg said those set up the regional segment for a more positive performance in 2025 and beyond.

As for Las Vegas, revenue dipped 1.5% year-on-year to $1.34 billion. Caesars put this down partially to a tough comparative year, as 2023 included the city’s first hosting of a Formula 1 race.

However, Reeg again noted a steady customer base for the segment. He also made reference to the addition of several other amenities that should support the business moving forward.

“We opened Gordon Ramsay’s Burger and Pinky’s at Flamingo, activating the Strip frontage at Flamingo for the first time since we’ve owned Caesars,” he said. “We opened Caramella’s at Planet Hollywood. There [are] a number of food and beverage product[s] that [have] come online.

“We’ve still got returns from our hotel projects. We have an anniversary, the opening of the balcony rooms at Versailles. So, we feel very good about what 2025 looks like.”

Also in 2024, $274 million came from managed and branded operations, down by 10.8%. A further $5 million was reported in corporate and other losses.

Overall, casino revenue was 1.6% lower at $6.27 billion. Hotel revenue was down by 3.5% to $2.02 billion, food and beverage revenue fell 0.7% and other revenue slipped 7.2% to $1.25 billion.

Net loss hits $278 million

Spending-wise, total operational costs were 1.3% lower for the year at $8.94 billion. Other expenses topped $2.43 billion, leaving a pre-tax loss of $124 million, wider than $60 million in the previous year.

Caesars paid $87 million tax – compared to 2023 when it took $888 million in benefits – and also accounted for $67 million in losses from non-controlling interests.

As such, it ended 2024 with a net loss of $278 million, in contrast to a $786 million profit in 2023. Adjusted EBITDA was also 4.6% lower year-on-year at $3.72 billion.

What happened in Q4?

In terms of the final quarter of 2024, total revenue was 0.9% lower at $2.8 billion.

Results followed similar trends for both the regional and Las Vegas businesses. However, digital revenue was also marginally lower on the back of customer-friendly sports results towards the end of Q4.

Operating expenses were 7% lower at $2.13 billion, while after other costs, pre-tax profit was $43 million compared to a $40 million loss in 2023.

Caesars paid $19 million in tax and included $13 million in total losses from non-controlling interests. This meant net profit for Q4 hit $11 million, an improvement on the $72 million loss reported in the previous year’s final quarter.

However, adjusted EBITDA dropped 4.6% to $882 million.

“As we look ahead to 2025, the brick-and-mortar operating environment remains stable and we are expecting another year of strong net revenue and adjusted EBITDA growth in our digital segment,” Reeg said.

“When combined with lower capex and cash interest expense, 2025 is expected to deliver significant free cash flow, which we expect will be used to further reduce leverage.”