Most quarterly earnings calls focus on a single aspect of a company’s dealing the past three months.
But Penn Entertainment’s earnings conference call on Thursday covered a wide array of concerns about the operator’s finances. According to Penn Entertainment CEO Jay Snowden, the operator “continued to execute against our 2026 strategic priorities during the second quarter.”
“We’re on track to deliver more than 20% year-over-year adjusted EBITDA growth this year, driven by strong performance across our retail portfolio and significant adjusted EBITDA improvement in our interactive segment,” Snowden continued. “This growth, combined with our corporate overhead optimization, is benefiting cash-flow growth, which in turn is enabling us to deliver our balance sheet this year faster than originally expected.”
Penn Entertainment reported revenue of $1.5 billion for the second quarter. Segment Adjusted EBITDAR was $517.2 million and Segment Adjusted EBITDAR margins were 34.4%. Net income loss was $32.6 million.
Revenue in the quarter was negatively affected by “customer-friendly online sportsbook outcomes,” Snowden said, “particularly in June during the NBA Finals and World Cup, as well as lower volumes, in part due to our reduced marketing spend of lower value and unprofitable customer segments.”
Snowden reacted to the news that Flutter, during its recent earnings call, said it would increase investment in FanDuel. Snowden said that wouldn’t change Penn’s approach the upcoming to football season.
“You’re going to have prediction markets that are targeting customers for the first football season ever, given the timeline of when they went actually went live was close to Super Bowl last year,” Snowden said. “We already assumed it was going to be a very aggressive, irrational marketing, spend, advertising, and new customer acquisition approach this football season.
“I think this just speaks to it being aggressive, not only from a prediction market standpoint, but maybe some of the incumbent OSB only players as well. It doesn’t change the way we’re thinking about it. I think it is a very competitive marketplace out there right now.”
Snowden also commented on the Pennsylvania Supreme Court declaring skill games are slot machines in June. Penn has four properties in the commonwealth that could potentially benefit from that decision.
“We have four land-based casinos in the state of Pennsylvania and are well connected in Harrisburg,” Snowden said. “I think we’ll just have to see how that plays out. I think the date (for removal of the machines) is sometime in October.
“Missouri did come to a similar conclusion,” Snowden added. “The attorney general of Missouri has been doing a great job of shutting down these skill-based games.”
Penn Entertainment’s prospects in Alberta, Canada, also were viewed optimistically. Chief Technology Officer Aaron LaBerge said Penn’s experience in Ontario with theScore will be beneficial.
“We’re going into a competitive market, but we’re spending aggressively relative to what we did in Ontario,” LaBerge said. “And early results from a handle perspective, even though it’s a slow sports calendar, are very encouraging. We anticipate to being very aggressive, and we hope to have the same and similar market shares to what we enjoy in Ontario.”
Snowden also noted that Penn has “very compelling options from a capital allocation perspective” and would consider any M&A projects, especially in Las Vegas. But any acquisition would have to meet certain criteria.
“Would our customers love if we had a Las Vegas Strip location?” Snowden said. “I would say yes, but with the caveat that not just any location, not just any product, and we’re certainly not interested in acquiring an asset that’s going to require another $400-$700 million capex, and it’s got deferred maintenance. So, it would have to check a lot of boxes.”
