Boyd Gaming’s third quarter saw revenue growth ahead of Wall Street expectations, but the market reacted negatively, reflecting investor concerns about declining margins and ongoing softness in certain business segments. Management attributed the quarter’s results to continued strength from core gaming customers and improving trends among retail players, which offset weakness in the destination business, particularly at the Orleans property. CEO Keith Smith noted that “growth in gaming revenue was offset by declines in our destination business,” and cited ongoing capital investments as a factor in driving customer demand.
Is now the time to buy BYD? Find out in our full research report (it’s free for active Edge members).
Boyd Gaming (BYD) Q3 CY2025 Highlights:
- Revenue: $1.00 billion vs analyst estimates of $867.8 million (4.5% year-on-year growth, 15.7% beat)
- Adjusted EPS: $1.72 vs analyst estimates of $1.63 (5.8% beat)
- Adjusted EBITDA: $293.2 million vs analyst estimates of $280.6 million (29.2% margin, 4.5% beat)
- Operating Margin: 13.9%, down from 22.9% in the same quarter last year
- Market Capitalization: $6.16 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Boyd Gaming’s Q3 Earnings Call
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Barry Jonas (Truist) asked about the drivers of destination business weakness and whether this could spill over into non-destination segments. CEO Keith Smith assured that core and local customer segments remain strong, and softness is isolated to the Orleans.
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Steven Wieczynski (Stifel) inquired whether Midwest and South property performance was broad-based or isolated. Smith confirmed the strength was generally broad-based, with Treasure Chest highlighted for its ongoing growth post-renovation.
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Brandt Montour (Barclays) questioned potential disruption from upcoming Orleans renovations. CFO Josh Hirsberg said disruption is expected to be limited initially, with more details to be shared as project timing and scope are finalized.
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David Katz (Jefferies) sought insight into investment returns and hurdle rates for capital projects. Hirsberg stated the company targets 15%-20% cash-on-cash returns for major projects, with recent investments meeting or exceeding these targets.
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Stephen Grambling (Morgan Stanley) asked about leverage strategy in light of recent asset sales and lower leverage levels. Hirsberg explained that leverage may gradually rise with further capital investments but there are no immediate plans to increase debt solely to meet target leverage.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will track (1) progress and guest response to major renovation projects at the Suncoast and Orleans, (2) trends in core and retail customer play, particularly as tax law changes potentially boost disposable income, and (3) the impact of ongoing softness in the destination segment—including booking trends and broader tourism recovery. New property developments, such as Cadence Crossing and the Norfolk, Virginia resort, will also be important milestones for long-term growth.
Boyd Gaming currently trades at $76.82, down from $84.96 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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