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DATE
Thursday, April 23, 2026 at 5 p.m. ET
CALL PARTICIPANTS
- President and Chief Executive Officer — Keith Smith
- Chief Financial Officer — Josh Hirsberg
- Vice President of Corporate Communications — David Straub
TAKEAWAYS
- Company-wide revenue — Nearly $1 billion, with property-level revenues and EBITDAR up year over year due to higher gaming revenues.
- EBITDAR — $317 million for the quarter, supported by operating efficiencies and continued capital investments.
- Property-level margins — Exceeded 39% for the quarter, reflecting effective cost management.
- Midwest and South segment revenue growth — 4% revenue growth and 5% EBITDAR growth, with segment EBITDAR margins rising to nearly 37%.
- Las Vegas Locals segment operating margins — Margins exceeded 50% for the portion of the segment excluding Orleans and Suncoast properties.
- Construction disruption charge at Suncoast — Impacted results in the quarter, with management attributing $1.5 million impact in the first quarter and guiding to $2.5 million to $3 million impact in Q2; full disruption expected to continue through part of Q3.
- Downtown Las Vegas visitation — 11% year-over-year decline in pedestrian traffic on the Fremont Street Experience was explicitly noted.
- Online segment EBITDAR guidance — Management reiterated outlook of $30 million to $35 million in EBITDAR for the online segment for the year.
- Managed and Other segment outlook — Full-year EBITDAR expected at $110 million to $114 million.
- Capital expenditures — $155 million invested in the quarter, with full-year spending targeted at $650 million to $700 million; includes $250 million recurring maintenance, $75 million Orleans hotel remodel, $50 million growth capital (Cadence Crossing and Paradise), and $300 million for the Virginia project.
- Shareholder returns — $170 million returned in the quarter: $155 million in share repurchases (1.8 million shares at $83.94 average) and $14 million in dividends.
- Share repurchase authorization — $700 million currently authorized, with $500 million added earlier in April.
- Leverage — Ended quarter with traditional leverage at 1.8x and lease-adjusted leverage at 2.4x; next debt maturity in December 2027.
- Tax credits payment timing — Of the initially expected $340 million in related FanDuel tax credits, $290 million is to be paid in the second quarter.
- One-time corporate expense — Corporate expense was elevated by $6 million from one-time items, predominantly timing of charitable contributions.
- Cadence Crossing Casino opening — Opened March 25, with management noting “enthusiastic response” from guests and initial strong top-line performance.
- Virginia resort project — Remains on track with $750 million budget and late 2027 targeted opening; construction has commenced on the first floor.
- Paradise Casino expansion — Illinois Gaming Board approved modernization and expansion; project scheduled to complete late 2028.
- Sky River Casino expansion — First phase completed in Q1; ongoing development includes a 300-room hotel and entertainment facilities targeting early 2028 completion.
- Actual share count — 74.8 million shares at quarter end.
- Regular capital return pace — Management intends to maintain $150 million in repurchases per quarter plus quarterly dividends, equivalent to $9 per share for 2026.
- Cash tax benefit — Management stated a $45 million to $50 million incremental tax benefit for 2026 from accelerated depreciation.
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RISKS
- “results in our Las Vegas Locals segment reflected continued softness in destination business,” with management attributing a $5 million EBITDAR impact in the quarter and guiding for year-over-year destination business to remain “down, less bad but down” through Q3 before potential stabilization.
- Suncoast renovation project has created “a more material impact from disruption,” with $1.5 million EBITDAR impact in the first quarter and full disruption expected to continue through part of Q3.
- Downtown Las Vegas faces an explicitly cited “11% year-over-year decline in pedestrian traffic on the Fremont Street Experience” that mirrors similar declines in prior quarters.
- Management cautioned that last year’s benefits cost increases in the Midwest and South segment could recur if participation or program usage rises this year, stating “It is early, and we have taken steps to mitigate it.”
SUMMARY
Boyd Gaming Corporation (BYD +3.48%) reported higher company-wide revenues and EBITDAR, driven by strong Midwest and South segment results, while highlighting construction disruption at Suncoast and persistent softness in the destination business within Las Vegas as explicit drags. Shareholder capital returns remained active, with $170 million distributed and plans to maintain a $150 million per quarter repurchase pace, supported by added repurchase authorization. The Virginia resort and Paradise Casino expansion projects remain on schedule, while the corporate tax benefit from accelerated depreciation is projected to add $45 million to $50 million this year.
- Management reiterated full-year EBITDAR guidance of $30 million to $35 million for the online segment and $110 million to $114 million for the Managed and Other segment.
- Cadence Crossing Casino had “enthusiastic” early guest reception, yet management indicated “any EBITDA contribution,” in the first quarter given only a few operating days.
- Capital expenditures for the year are guided at $650 million to $700 million, split across maintenance, major remodels, new property development, and the ongoing Virginia project.
- The company ended the quarter with a 1.8x traditional and 2.4x lease-adjusted leverage ratio, noting its “strongest balance sheet” and ample capacity under its credit facility.
- Management addressed a $340 million FanDuel tax credits liability, specifying $290 million will be paid in the upcoming quarter after a partial payment in Q1.
INDUSTRY GLOSSARY
- EBITDAR: Earnings before interest, taxes, depreciation, amortization, and rent — a key profitability measure in the gaming and hospitality industry.
- VGT (Video Gaming Terminal): Electronic gaming devices commonly found in certain regional U.S. markets, providing slot-like experiences outside traditional casinos.
Full Conference Call Transcript
David Straub: And welcome to Boyd Gaming Corporation First Quarter 2026 Earnings Conference Call. This is David Straub, Vice President of Corporate Communications for Boyd Gaming Corporation. I will be the moderator for today’s call, which we are hosting on Thursday, April 23, 2026. At this time, all lines are in listen-only mode. Following our remarks, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star then 0 for the operator. Our speakers for today’s call are Keith Smith, President and Chief Executive Officer, and Josh Hirsberg, Chief Financial Officer. Comments today will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act.
All forward-looking statements in our comments are as of today’s date, and we undertake no obligation to update or revise the forward-looking statements. Actual results may differ materially from those projected in any forward-looking statement. There are certain risks and uncertainties, including those disclosed in our filings with the SEC, that may impact our results. During our call today, we will make reference to non-GAAP financial measures. For a complete reconciliation of historical non-GAAP to GAAP financial measures, please refer to our earnings press release and our Form 8-Ks furnished to the SEC today, both of which are available at investors.boydgaming.com.
We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project special charges and certain expenses. Today’s call is being webcast live at boygaming.com, and will be available for replay in the Investor Relations section of our website shortly after the completion of this call. With that, I would now like to turn the call over to Keith Smith. Keith?
Keith Smith: Thank you, David, and good afternoon, everyone. Our first quarter results once again demonstrated the benefits of our diversified business, our continued focus on operating efficiencies, and our ongoing capital investment program. Overall, company-wide revenues reached nearly $1 billion while EBITDAR was $317 million. On a property-level basis, first quarter revenues and EBITDAR grew year over year, led by continued growth in gaming revenues. We successfully maintained operating efficiencies throughout our business, with property margins again exceeding 39%. These results were driven by broad-based strength in our Midwest and South segment, partially offset by the continued impact of softer destination business in Las Vegas and construction disruption at Suncoast.
On a company-wide basis, play from both core customers and retail customers continued to grow during the first quarter, consistent with the trends we saw in 2025, and we are encouraged that the customer trends from the first quarter have continued into April. Now turning to segment results. Starting with our largest segment, our Midwest and South business achieved broad-based revenue and EBITDAR growth during the quarter. Overall, revenues grew 4% in the quarter, while EBITDAR grew 5%, and margins improved to nearly 37%. We also delivered continued growth in gaming revenues in the quarter, driven by increased play from both core and retail customers.
These positive results were supported by the ongoing trend of customers staying closer to home, as well as benefits from milder winter weather this year and strong returns from our capital investments throughout the segment. These investments include our recent hotel remodels at IP Biloxi and Valley Forge, our new convention space at Ameristar St. Charles, and additional food and beverage enhancements across the segment. In addition, our Treasure Chest property continues to deliver year-over-year growth. We plan to build on this strong performance with the addition of a new high limit room, which we expect to open early next year.
Moving to our Nevada operations, results in our Las Vegas Locals segment reflected continued softness in destination business, with the largest impact at the Orleans. We also experienced more significant construction disruption at the Suncoast during the quarter related to the modernization project currently underway. While the Suncoast management team has done a great job mitigating construction disruption thus far, our renovation work moved into the most popular part of our casino floor during the quarter, creating a more material impact from disruption. We anticipate this disruption will continue until we complete our renovation project late in the third quarter.
Excluding Orleans and Suncoast, revenues and EBITDAR for the remainder of the segment were in line with the prior year and operating margins exceeded 50%. Even with the impacts from Orleans and Suncoast, play from our core customers during the quarter was in line with the prior year in our Las Vegas Locals segment. Similar to our Midwest and South segment, we are actively investing in our Las Vegas Locals portfolio to drive continued growth. These investments include the recent opening of our newest Locals property, Cadence Crossing Casino, on March 25. While it is still early, this property has received an enthusiastic response from our guests. Another example of our investments is the modernization of our Suncoast property.
This project includes a complete transformation of our casino floor, enhanced food and beverage offerings, and updated meeting and public spaces, and remains on track for completion towards the end of the third quarter. We are also continuing to enhance our non-gaming amenities throughout the Las Vegas Valley. Our hotel room renovation at the Orleans is on track for completion later this year, and we plan to begin a similar project at the Suncoast Hotel this summer. Additionally, we opened several new restaurant concepts at the Gold Coast during the first quarter, with additional restaurant concepts now under development at Fremont, Aliante, and Sam’s Town.
In 2027, we plan to begin a modernization project at the Orleans similar to our current project at the Suncoast. Given the strong response from our guests to our recent enhancements, we are confident these capital investments will contribute to long-term growth in our Locals segment. Additionally, we remain confident in the underlying strength of the Las Vegas economy. Last year, Southern Nevada’s population reached 2.4 million people, up 16% over the last decade, a growth rate of more than twice the national average. At the same time, the local economy is more diversified, with approximately 90% of the jobs created in Southern Nevada over the last ten years coming from outside the hospitality industry.
Over the same ten-year period, per capita income has grown more than 5% on an average annual basis, and total personal income in Southern Nevada has nearly doubled. Southern Nevada’s cost of living remains below the national average, ranking among the most affordable of the nation’s 30 largest metro areas. All in all, the long-term fundamentals of the Southern Nevada economy remain strong. Moving next to Downtown Las Vegas. Trends were similar to recent quarters, with play from our Hawaiian guests and our core customers remaining stable during the quarter.
Similar to the fourth quarter, these trends were offset by weaker destination business throughout Las Vegas, as illustrated by an 11% year-over-year decline in pedestrian traffic on the Fremont Street Experience during the quarter. Next, in our online segment, Boyd Interactive continued to grow, while contribution from our third-party market access agreements was consistent with the second half of last year. As a result, we reiterate our previous guidance of $30 million to $35 million in EBITDAR for the online segment this year. Finally, our Managed and Other segment achieved another quarter of revenue and EBITDAR growth.
Sky River Casino opened its casino floor expansion in late February, followed by the opening of a 1,600-space parking garage in March, and we are encouraged by Sky River’s continued growth since the opening of this expansion. With the first phase now complete, we are underway with the development of a 300-room hotel, three new food and beverage outlets, a full-service spa, and an entertainment and event center. Once complete in early 2028, we are confident this expansion will further strengthen Sky River’s position as one of Northern California’s most popular and successful gaming resorts.
With a solid start to the year, we continue to expect our Managed and Other business to generate $110 million to $114 million in EBITDAR for the full year. In all, our first quarter performance is driven by our diversified portfolio, our strong operating efficiencies, and contributions from our capital investments throughout our portfolio. In addition to the property investments we are making to enhance our operations, we are continuing to build our development pipeline. Most significant of our development projects is our $750 million resort in Virginia, which remains on track for a late 2027 opening. With foundation work now complete, work has begun on the resort’s first floor and construction is starting to go vertical.
Once complete, this upscale resort will be a true market leader with a 65,000-square-foot casino, a 200-room hotel, eight food and beverage outlets, live entertainment, and an outdoor amenity deck. We will also offer the most convenient gaming destination for much of the 1.8 million residents of the Hampton Roads region, as well as the 15 million tourists who visit nearby Virginia Beach each year. Next, in late February, we received final approval from the Illinois Gaming Board for a proposed expansion and modernization of the Paradise Casino. Once complete in late 2028, this project will transform Paradise into a single-level entertainment facility with a modern casino floor and enhanced amenities, positioning this property for growth well into the future.
In Southern Nevada, we have additional growth opportunities at Cadence Crossing where we have significant land still available for development. Directly adjacent to our property is the master-planned community of Cadence, one of the fastest growing master-planned communities in the country with plans for more than 12,000 homes upon full build-out. Our Cadence Crossing property is designed to capitalize on the growing demand in the area, with plans for a future hotel, additional casino space, and more non-gaming amenities. As we continue to invest in our properties and build our development pipeline, we are successfully balancing these investments with a robust program of returning capital to our shareholders.
We returned nearly $170 million to our shareholders during the first quarter: $155 million in share repurchases and $14 million in dividends. Going forward, we intend to continue repurchases at a $150 million per quarter pace, supplemented by our quarterly dividend. With our strong balance sheet, diversified property portfolio, balanced approach to capital allocation, and experienced management team, we remain confident in our ability to continue creating long-term value for our shareholders. I would like to thank our team members for their contributions to our company. Their dedication to delivering memorable service is at the heart of our entertainment experience and drives our continued success. Thank you for your time this afternoon.
I would now like to turn the call over to Josh.
Josh Hirsberg: Thank you, Keith. During the first quarter, we continued to deliver consistent results supported by growth in property-level revenues and EBITDAR. This growth, along with our continued focus on operating efficiencies, resulted in property-level margins of more than 39%. Gaming revenue also continued to grow, with increased play from both our core and retail customers. Strength in property results during the quarter was driven by our Midwest and South segment, and as Keith mentioned, our online and managed segments also contributed to our results during the quarter, with both segments continuing to show growth on a comparable year-over-year basis.
We are also maintaining a balanced approach to capital allocation as we invest in our properties, pursue attractive growth opportunities, and return capital to shareholders, all while maintaining a very strong balance sheet. In terms of capital expenditures, during the quarter, we invested $155 million and expect to spend $650 million to $700 million in capital expenditures for the full year.
This amount includes approximately $250 million in recurring maintenance capital, $75 million in incremental hotel capital focused on the Orleans hotel remodel, which is expected to be completed by the end of this year, $50 million in growth capital primarily related to completing Cadence Crossing as well as the design and preconstruction activities for the Paradise modernization project, and finally, $300 million related to our Virginia project. We are continuing to balance our capital investments with returning substantial capital to our shareholders. During the first quarter, we paid $14 million in dividends and repurchased $155 million in stock, representing 1.8 million shares at an average price of $83.94 per share.
Our actual share count at the end of the first quarter was 74.8 million shares. We currently have approximately $700 million under our share repurchase authorizations, which includes an additional $500 million authorized by our board earlier this month. Over the last four and a half years, we have returned $2.9 billion to our shareholders, reducing our share count by more than 33%. We expect to maintain repurchases of $150 million per quarter, supplemented by our regular quarterly dividend. This equates to more than $650 million per year, or approximately $9 per share in value for our shareholders in 2026. We have the strongest balance sheet in our company’s history.
We finished the first quarter with traditional leverage of 1.8x and lease-adjusted leverage of 2.4x. We also have ample available capacity under our credit facility. Our next debt maturity is in December 2027, which we intend to refinance later this year or in 2027. In terms of our debt balances, you may recall from our last earnings call that we had expected to pay approximately $340 million during the first quarter for tax credits related to the FanDuel transaction. We paid for a portion of these credits in the first quarter, and we now expect to pay the remaining $290 million during the second quarter.
During the first quarter, corporate expense was higher than usual due to one-time items, including the timing of charitable contributions. In conclusion, our first quarter results demonstrated the benefits of our business, our continued focus on operating efficiencies, and our ongoing capital investment program. We remain confident in our ability to drive growth in play from our core customers while making investments that elevate our product offerings and enhance our growth prospects. Our strong balance sheet, coupled with our consistent operating performance and robust free cash flow, position us well to continue creating long-term value for our shareholders. This concludes our remarks, and we are now ready to take any questions you may have.
Operator: Thank you, Josh. We will now begin our question and answer session. If you would like to ask a question, please press star then 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to withdraw your request, please press star then 2. If you are using a speakerphone, please use your handset when asking your question. We will pause for a moment while we compile our list of questioners. Our first question comes from Steve Wieczynski of Stifel. Steve, please go ahead.
Steve Wieczynski: Hey, guys. Good afternoon. So, Keith or Josh, I know this might be a tough question to answer, but with the destination traffic still somewhat soft in the Locals market as well as Downtown, I am wondering when you think that might inflect, given we now have a pretty significant headwind as well with fuel prices, which can impact whether that is driving traffic or flying traffic. How are you thinking about the destination business and when we might see that start to bottom out? Thanks.
Keith Smith: Sure. As we think about the destination business, a couple of things. One, the primary impact is at the Orleans, where we have almost 1,900 hotel rooms. That is the single biggest impact in our Locals portfolio. Two, with respect to the increase in gas prices, trends we saw in the first quarter, as we highlighted, were in line with last year. It is hard to discern the impact of gas prices when you have higher tax refunds coming out through the last several months and probably over the next several months. When does it turn?
When we get to the second half of this year, we start to run into easier comparisons because this impact of destination travel to Las Vegas started to occur in the second half of last year in a big way. So we get to easier comparisons. When does it fully turn back up? Hard to tell. Those are the high-level comments on the topic. I will see if Josh has anything he would like to add.
Josh Hirsberg: Yes. The only thing I would add is, as Keith alluded to, we started to see the visible impact of destination business on our performance in Q3 of last year. Since then, it has been a pretty consistent level of impact. It has been about $5 million to $6 million of EBITDAR each quarter since then. It was that way in Q3, Q4, and then again this quarter as well. We are expecting a similar impact in Q2.
Then, as we anniversary it, I do not think we expect it to flip on a dime and start to become positive all of a sudden, but we think it would continue to be down, less bad but down, year over year in Q3, gradually improve in Q4, and then maybe in the first half of next year start to see some overall growth out of that segment. That is based on what we are seeing today and the fact that it has been so consistent to date.
Steve Wieczynski: Okay. Got it. Thanks for that. If we flip to the Midwest and South, those results looked really solid and probably better than what we were looking for. For that whole portfolio, were the trends broad-based, or were there markets or pockets of strength versus other markets that you might call out?
Keith Smith: They generally were broad-based across the Midwest as well as the South and the East. We are very pleased with the level of performance, the growth in revenues, the level of flow-through, and, in particular, the margins. We had a very strong quarter there. We saw growth across all the demographics and all the ADT segments. In most places where numbers are published and you can discern the numbers, we gained market share. The business continues to grow. The capital investments we are making are having an impact and providing a return. It was a very strong quarter in the Midwest and South for us.
Steve Wieczynski: Okay. Got it. Thanks, guys. Appreciate it.
Operator: Yep.
Operator: Thank you. Our next question comes from Barry Jonas of Truist. Barry, please go ahead.
Barry Jonas: Hey, guys. Josh, I think I missed this. Did you talk about why corporate was up so meaningfully? If you could isolate if there is a one-timer? And then maybe how to think about that line item going forward?
Josh Hirsberg: Yes. There was about $6 million of one-time items and, by their nature, they will not continue going forward. One of them, the most prominent one, had to do with charitable contributions. Last year, and this is a timing difference, we accounted for it spread out over the entire year. This year, it was recorded in the period we actually made the contribution. That is the standout largely.
Barry Jonas: Got it. And then, you clearly have development projects in the pipeline, but I am curious to get your thoughts on M&A. There is plenty of speculation all around about M&A in the space. I am curious to get your thoughts on opportunities for Boyd. Thank you.
Keith Smith: Our comments on M&A are consistent with what we have said in the past. We have grown a lot through M&A. We are always looking at things. We have our eyes open and understand what is going on in the market and what is available or may be becoming available. We have a disciplined process and set of filters to work through. We will continue to look. If the right opportunity presents itself that is strategic and has the right return profile, you would see us execute. Absent that, we have a great company, a strong balance sheet, and good earnings, producing great EBITDA, and we will continue to stick to our knitting until we find the right opportunity.
Josh Hirsberg: And, Barry, jumping back to your first question, I looked at consensus for corporate expense for Q2, Q3, and Q4, and that is generally a good expectation of what to expect for the remaining quarters of the year.
Barry Jonas: I got you, Josh. Thank you so much, guys.
Operator: Thank you. Our next question comes from Shaun Kelley of Bank of America. Shaun, please go ahead.
Shaun Kelley: Hi, good afternoon, everyone. Thanks for taking my questions. Josh or Keith, two questions, one macro and then one detailed. On a detailed question, I think I caught in the prepared remarks you said foot traffic on the Fremont Street Experience was down 11%. If I caught that correctly, and if not, please correct it. I feel like we saw a bit of an inflection on Strip visitation that we get from broader LVCVA data, and that actually looked a lot closer to flat, and it was down a lot last year. In Q1, it looked a lot closer to flat. Any thoughts as to why that might be a slightly different pattern than the broader Strip?
Keith Smith: We did quote that it was down 11%. That number represents traffic under the canopy, under the Fremont Street Experience itself. It was down a similar amount in Q4. I cannot comment on foot traffic on the Strip. I do know the convention calendar was stronger in the first quarter, with CONEXPO in town that was not there last year. I am sure that drove some of the increased traffic on the Strip. We did not see it make its way Downtown. The good news is the decline in visitation is similar; it did not accelerate. It was stable. No other explanation as to why some of that increased visitation did not make its way Downtown.
We are not overly concerned at this point. Las Vegas has a long history of seeing roughly 50% to 55% of all visitors to Las Vegas making their way Downtown, and I suspect that will continue over time.
Shaun Kelley: Got it. Thanks for that, Keith. Maybe just another high-level one. If we zoom out, it feels like the macro backdrop, plus tax refunds and no tax on tips, should be a great setup for Las Vegas Locals. Even if we strip out destination, which is a little idiosyncratic, it feels like Locals are flat and Regionals are up. Conceptually, any KPI you are pointing to as to why the Locals may not be participating quite the same way the Regions are?
Keith Smith: When we think about our out-of-state or non-Nevada properties, we commented that for several quarters now people are simply staying closer to home and spending their money closer to home. We are a beneficiary of that, having properties spread across 10 states. In Nevada, our Locals properties are not 100% Locals; there is a certain amount of destination and regional business that is part of that. We have commented in the past that our pure Local business—people with ZIP codes in and around our properties—is actually quite good, mostly for the same reason. They are staying close to home and spending money closer to home. When you dig into the weeds, the pure Locals are actually performing well.
Shaun Kelley: Perfect. Thank you.
Operator: Thank you. Next question comes from Benjamin Nicolas Chaiken of Mizuho. Ben, please go ahead.
Benjamin Nicolas Chaiken: Hey, thanks for taking my questions. Josh, back to some of the earlier Q&A regarding your back-half expectations in Vegas. If the impact from the destination customer has been constant, which you quoted at around $5 million or $6 million, how do I bridge that with your response to an earlier question suggesting that 2H would be down, juxtaposed against Keith’s comments earlier where you said that ex-Orleans and Suncoast things were flat? Maybe I misheard you, but could you clarify the moving parts in the back half and how you are thinking about it?
Josh Hirsberg: I will try to give you an answer. From the perspective of destination, assuming no change in consumer behavior, we would expect destination to have a similar level of impact in the first half and then just get less bad. If it was down five, maybe it is down a little bit less in Q3 and a little bit less in Q4, maybe approaching flat. You then have to recognize the two other factors we spoke about. One is Suncoast disruption. We only had a partial first-quarter impact from that disruption, so that will be a full quarter in Q2 and a full quarter in Q3 before that project is complete.
You will start to see some benefit from Suncoast’s complete renovation and modernization of its floor beginning in Q4. The other element is Cadence. Cadence opened with great top-line performance. Like any other new opening, we have to let it settle in at a revenue level and then adjust the expense structure. Q1 had only a couple of days, so we did not get any EBITDA contribution, but a lot of revenue from it. We expect it to trend up and start hitting full stride maybe later in Q3, certainly by Q4. In Q3, you are going to have two pressures: destination and Suncoast disruption still going on, with Cadence not yet hitting full stride.
In Q4, you should have much less destination impact, Suncoast in the rearview mirror, and Cadence hitting full stride. Hopefully, that triangulates to what you interpreted from our comments.
Benjamin Nicolas Chaiken: Very helpful. I appreciate it. One other quick one. In Virginia, you have been clear that the temporary casino in Norfolk is more of a placeholder with little or no expected profit. However, there is a temporary casino out there that recently opened that is generating around $10 million to $15 million a month. Is this something you would consider doing—i.e., increasing the size and scale of your temporary asset after seeing that response?
Keith Smith: The size and scale of our temporary asset is based on the limitations of the site that we are building on. There is no ability to make it any larger. We certainly would have done that from day one. It was not a cost or capital allocation issue. To build a permanent project on that site, we did not have the square footage to allow for anything larger. It is a breakeven and it is what it is for the next year and a half until we open in November 2027. It is not about desire; it is about constraints.
Josh Hirsberg: We have to get the permanent open in a certain time frame, and we have limited space for a temporary.
Benjamin Nicolas Chaiken: Yep. Appreciate it.
Josh Hirsberg: Thank you.
Operator: Thank you. Our next question comes from Daniel Brian Politzer of JPMorgan. Dan, please go ahead.
Daniel Brian Politzer: Hey, good afternoon. Thanks for taking my question. In terms of the fundamentals and cadence of the quarter, can you talk about how you see it come in? The beginning of the quarter looked very strong. March looked a little soft. It sounds like April has stabilized. Any way to unpack how the quarter progressed?
Keith Smith: In the Locals market or overall?
Daniel Brian Politzer: Both—Locals and Midwest and South. I think.
Keith Smith: Thank you. On the cadence of the quarter—January, February, March—January had milder weather this year versus last year, as well as a better calendar. February was pretty normal, and March was a calendar issue, but nothing unusual we would call out. In Nevada, it is largely the same. We saw some benefits from the large convention in Las Vegas earlier in the quarter. January had an extra weekend day. February was pretty normal. March was maybe a little soft, but nothing unusual we would call out.
Josh Hirsberg: What was unique for us in March was that it was when we started to see the largest impact on Suncoast from disruption. That is the only difference really.
Daniel Brian Politzer: Got it. Thanks. More of a housekeeping follow-up. In terms of cash taxes, can you remind us what the expectation is for 2026 and if there is a benefit from the one big bill?
Josh Hirsberg: We are currently estimating a tax benefit of about $45 million to $50 million.
Daniel Brian Politzer: Got it. Thanks so much.
Operator: Thank you. Our next question comes from David Brian Katz of Jefferies. David, please go ahead.
David Brian Katz: Appreciate all the commentary so far. I wanted to ask a different question, not an M&A are-you-or-aren’t-you, but can you talk about the boundaries you have set for yourself, which I imagine are likely the same? Are there any changes in the kinds of things you are seeing or in the credit support for things that may come up, or any difference in what that market brings in front of you on a regular basis?
Keith Smith: I will try to address it. Over the last three to five years post-COVID, we have a strong balance sheet and a large, strong business. Anything we look at has to be significant and able to move the needle. It has to be in stable tax and regulatory environments, and it has to be an asset that strategically makes sense to add to the portfolio. There are things out there that make sense. We are not afraid, because of our strong balance sheet and strong cash flow profile, to do larger transactions. We look at small, medium, and large transactions.
We look at a lot of things over the course of a year and will continue to do that until something makes sense to us. We have been fairly consistent. I do not think much has changed in how we view it. Josh, anything you would like to add?
Josh Hirsberg: A couple of thoughts. We are in the best position we have ever been in to make an acquisition, but that does not mean we will find one that makes sense to execute upon. Ultimately, it is basic capital allocation—where can we get the best returns versus buying back our own stock or making investments internally in our own portfolio. That is working quite well at this point. Whenever an opportunity comes along, we have to evaluate it in the context of what we are doing today. That is a fundamental philosophy of how we think about transactions and growing the company.
David Brian Katz: Perfect. If I can lay out one more hypothetical. Virginia was gesturing at the notion of iGaming this year, and if one day it gets there, how would you envision your participation? Would you participate?
Keith Smith: You could envision us participating. Through Boyd Interactive, we have a small online gaming business that has grown nicely. We are live in New Jersey and Pennsylvania. We are supportive of iGaming rollout across the U.S. If it happens in Virginia, we will be supportive there, and you will see us participate. We think it is additive and complementary to what we do, and we would be supportive if and when that opportunity presents itself.
Operator: Thank you. Our next question comes from John G. DeCree of CBRE. John, please go ahead.
John G. DeCree: Hey, guys. I know we have not talked too much about Cadence Crossing yet—it has been a little less than a month. Could you give us any anecdotes from the opening and first couple of weeks—visitation levels, new customer sign-ups—anything you could share?
Keith Smith: I do not have specific data in front of me, John, but we had a great opening. The place was full and continued to have great customer response through the first couple of weeks. I am sure it has leveled off a little bit. As Josh indicated earlier, you open these buildings and you focus on driving revenues, and over the next several months we will focus on refining the cost structure. We are very happy with the opening, the level of participation, and new customer sign-ups. I just do not have the data sitting here today.
John G. DeCree: That is fair. Thanks, Keith. Maybe broader promotional environment in Las Vegas—true Locals versus Orleans, which is more destination. As that market lacks some visitation, have you seen any material change in the promotional competitiveness in the last quarter as it relates to Locals and destination?
Keith Smith: In the traditional Locals market, it remains fairly rational. Those properties or companies that have tended to be a little aggressive continue to be aggressive, and those of us who have remained more rational have maintained that profile. Nothing much has changed in the traditional Locals environment. At the Orleans and the destination market, the Strip is getting a little more aggressive, whether in room pricing, room products, or some all-inclusive packages trying to entice people into their buildings. We have not seen any impact from that, but from our vantage point they have probably gotten a little more aggressive.
Operator: Thanks, everyone.
Keith Smith: Yep.
Operator: Our next question comes from Brandt Antoine Montour of Barclays. Brandt, please go ahead.
Brandt Antoine Montour: Hi, everybody. I think we have covered a lot of ground. One question on the Locals business. Some of the things that you called out, Josh, on how to think about impacts throughout the year—setting those aside and looking at the underlying business—seasonality from the first quarter to second quarter has been a little different over the last couple of years. Consensus is looking for stronger Q2 versus Q1 seasonality, but if you go back a couple years, it was maybe more flat to down. Can you help us think about, before the impacts, what the underlying business typically looks like from the first to second quarter, all else equal?
Josh Hirsberg: You bring up a good point. Early coming out of 2020, there was limited seasonality given the strength of the consumer and stimulus. As we moved through time—around 2023, I believe—seasonality started to return. Q2 tends to be a little better than Q1 in the Locals business. Q4 really depends on how the holidays fall, in particular New Year’s. Typically, Q4 will be as strong, if not better, than Q1. Despite the challenges with destination business and the Suncoast disruption, we look through those to some extent because we can see the end of Suncoast disruption, and destination will not always be a pressure point.
When we separate those impacts and look at the fundamental Las Vegas Locals business, it continues to be a good business that is just temporarily affected by these items.
Keith Smith: It is important to note that the Suncoast renovation and modernization project has been going on for more than a year. Through the first year, the management team did a great job managing through the disruption. It is only in the last several months, as we moved into a more impactful area, that we have seen some real disruption.
Operator: Thanks, everyone.
Keith Smith: Yep.
Operator: Our next question comes from Chad C. Beynon of Macquarie. Chad, please go ahead.
Chad C. Beynon: Good afternoon. Thanks for taking my question. Really good results in the Midwest and South, your biggest business. I wanted to ask about the flow-through. That was pretty strong, almost close to 50%. If you are generating the revenues you put up in this quarter, can you continue to see flow-through that high, or is there anything else we should think about—like inflation on OpEx or other expenses—that would dampen that a bit? Thank you.
Josh Hirsberg: The challenge for us last year was really driven by benefits. We did not talk a lot about it at the time, but it impacted results. We have tried to address that coming into 2026. It is still early. We think we have it under control, but we will not know until we see participation and usage of the programs as we move throughout the year. Looking at our expense structure last year versus this year, the biggest categories are what you would expect. Marketing as a percent of revenue is essentially the same. Wages are going up 2% to 2.5%, but the bigger increase was around benefits last year.
So far this year, we have not seen that level of increase. It is early, and we have taken steps to mitigate it. This is how the segment should perform generally.
Chad C. Beynon: Okay. Thank you. Then on the Downtown business, can you talk about forward bookings or longer-haul flight prices? Are there ways to package in more perks to help when flight prices are higher?
Keith Smith: A large part of our Hawaiian business comes through packages. It has been a standard part of the Downtown product for decades. We have seen airline prices start to go up recently. Hawaiian business in the first quarter was stable, and the first couple of weeks of April remained stable. We are monitoring airfares coming out of Hawaii because we know that could impact our customers, but to date everything is stable. We have a 50-year history with our customers coming out of the Hawaiian Islands, as well as local Hawaiians from California and those that live here in Las Vegas. We will continue to treat them right and do what we have to do to maintain their loyalty.
Josh Hirsberg: Keith, I think you covered it.
Chad C. Beynon: Sounds great. Thanks, guys.
Operator: Yep.
Operator: Next question comes from Analyst of Wells Fargo. Please go ahead.
Analyst: Hey, guys. Thanks for the question. A lot of what I would ask has already been asked, so a bigger-picture one. There is lots of disruption right now between you and your peers in the Locals market. Once we come out the other side and look out for the next few years, what would you deem a healthy level of Las Vegas Locals gaming revenue growth—both at GGR and post-promotional levels—to think about continuing to add additional assets into the market as well?
Josh Hirsberg: Traditionally, the Locals market has grown at 3% to 5%, a little higher than what we have seen in traditional regional riverboat markets or Midwest and South markets. Coming out of COVID, the customer we are catering to is a much higher quality core customer, and there is potential for higher growth as we invest more and upgrade our products. But that is theoretical at this point. I would be more comfortable relying on that 3% to 5% growth out of the Locals business, and that is what we would expect.
Analyst: Would you say 2027 would be a good year to really look for that—a clearing event for the amount of disruption happening in the market?
Josh Hirsberg: I think our disruption is really isolated. You will be able to see that. For us to hit those numbers, it is more about having destination business come back. We are being thoughtful about not having too many properties disrupted at once. We need a stable operating environment in Las Vegas, similar to what you are seeing in the Midwest and South. That segment is performing like we would expect it to perform. Customers are staying close to home and not traveling. We just need a clearing, stable operating environment in Las Vegas. In our case, it is not as much driven by our CapEx and disruption.
Analyst: Okay. Thanks so much.
Operator: Our next question comes from Jordan Maxwell Bender of Citizen. Jordan, please go ahead.
Jordan Maxwell Bender: Hey. Good afternoon. We have not seen a ton of M&A post-COVID to give us evidence, but after properties have run much more efficiently, when you look at M&A are you finding it harder to underwrite synergies with a lot of the costs stripped out compared to prior to 2020?
Keith Smith: Post-COVID, it is probably more the expectation of the sellers than our ability to underwrite synergies. Sellers now have a very high expectation of getting a part of those synergies as part of any purchase price, even though we have to do all the work to achieve them and take the risk. That is the bigger dynamic. It is less about operations being more efficient today. That would be my answer.
Jordan Maxwell Bender: Okay. And then on Sam’s Town—you mentioned it was a small property. What was the rationale behind that sale? Looking across your entire portfolio, are there assets that fit similar criteria that you could look to divest?
Keith Smith: You are referencing Sam’s Town Tunica or the sale of Shreveport?
Jordan Maxwell Bender: The sale of Shreveport.
Keith Smith: The Sam’s Town Tunica and Shreveport properties are in the same general category. They are very small properties from an EBITDA production standpoint and no longer critical to the success of the portfolio. There was a point in time when Sam’s Town Tunica, being our first property outside Nevada, and Shreveport were important as we had our early growth spurt. Given the profile today, the competitive landscape, and where we are going as a company, they did not make sense for us to continue. Are there more? I do not think so. We are pretty happy with the portfolio absent those two properties. They were very small, not significant producers to the overall EBITDA of the company.
Jordan Maxwell Bender: Great. Thank you very much.
Operator: Our next question comes from Analyst of Citi. Please go ahead.
Analyst: Hey, good afternoon, evening at this point. Thanks for fitting me in. Is there any way to quantify the Suncoast disruption to the Locals market in the first quarter and for the year? As I think about the roughly $7 million shortfall versus a year ago in the Locals market, that was bigger than where the Street was. Is the Suncoast disruption bigger than previously thought or just earlier than previously thought? Ultimately, what portion of that delta was Suncoast versus the destination shortfall, which you have outlined at $5 million to $6 million, and then the underlying Locals customer?
Josh Hirsberg: The Locals business was off year over year by about $6.5 million. I would attribute probably $5 million to destination and about $1.5 million to Suncoast disruption, recognizing that it was not a full quarter. We will get a full quarter impact in Q2 and part of Q3 as well. We have been very pleased with the management team at Suncoast in terms of how they have managed through construction disruption, to the point where we did not really see it before. The property was performing on par with prior year, in some cases exceeding prior year. We basically said we would let you know when we see it, and now we are seeing it.
It became a big bite in terms of the area of the casino being affected.
Keith Smith: We will continue to see this in Q2 and partway through Q3 until we get open. It is temporary. It is a combination of fewer slot devices on the floor and having hit our most popular area of the floor as part of the process.
Analyst: Got it. Two clarifications. The $1.5 million impact in the first quarter—what does a full quarter look like? Is that a $3 million impact for both Q2 and Q3? And cutting to the chase, whereas previously we were holding out hope that the Locals segment could eke out a little bit of growth this year, it does not sound like we should be assuming that anymore. Is it still possible, likely, or unlikely that Locals can eke out a little bit of growth based on that fourth-quarter improvement?
Josh Hirsberg: We have given you enough information to take your own projections and figure it out. For your first part, Suncoast’s impact of $1.5 million implies $2.5 million to $3 million for Q2 and $2 million to $2.5 million for Q3 is a reasonable expectation. Then Suncoast should start contributing to results. As I said earlier, you will get benefit from Cadence.
Keith Smith: Then some easier comparisons as we get through the second half of the year. We do not typically provide guidance. We are getting close to the line. As Josh said, I think there is enough information out there to figure it out from there.
Analyst: That is helpful color. Thank you.
Operator: The last question comes from Steven Donald Pizzella of Deutsche Bank. Steve, please go ahead.
Steven Donald Pizzella: Hey, good afternoon and thanks for taking my question. On Paradise, post the approval of the expansion and modernization, given the success you have had at Treasure Chest, how would you compare the build and returns of this project to Treasure Chest?
Keith Smith: It is not a fair comparison. We are confident we will get a return on the investment; otherwise, we would not proceed. But Treasure Chest is a completely different market than New Orleans, and different than East Peoria. East Peoria has a significant number of VGTs, which are legal in Illinois—six at every bar/tavern in the area—a significant quantity that compete with our product. That is not the case in the New Orleans market. We will get a reasonable return on our investment, but I would not compare it to Treasure Chest.
Josh Hirsberg: You have to realize the Treasure Chest returns after tax are probably over 25%. It was a good investment.
Steven Donald Pizzella: Okay. Thanks. And on the cash taxes, did you say a $45 million to $50 million benefit for this year?
Josh Hirsberg: Not a refund; it is a timing difference. We get accelerated depreciation that makes you depreciate quicker and then end up owing taxes on it three years from now instead of five years from now. The benefit of the accelerated depreciation yields about a $45 million to $50 million incremental tax benefit to us for this year.
Steven Donald Pizzella: Okay. Thank you.
Operator: This concludes our question and answer session. I would now like to turn the call over to Josh for concluding remarks.
Josh Hirsberg: Thanks, and thanks to everyone joining the call today. Should you have any follow-up questions or need any clarifications, feel free to give us a call. Thank you.
