Caesars Touts Digital Strength as Las Vegas Casinos Lag
Posted on: July 29, 2025, 07:30h.
Last updated on: July 29, 2025, 07:30h.
- Company says Q2 was one of the best stretches yet for digital business
- Revenue at Las Vegas Strip casinos declined, but regional sales rose
Shares of Caesars Entertainment (NASDAQ: CZR) declined in Tuesday’s after-hours session after the company reported one of its best quarters to date for its digital unit, but that wasn’t enough to offset weakness at its Las Vegas Strip casino hotels.
On the Strip where Caesars is the second-largest operator, revenue fell 3.7% to $1.05 billion from $1.10 billion a year earlier. Strip weakness for the likes of Caesars and MGM Resorts International (NYSE: MGM), which reports second-quarter results tomorrow, is widely expected for the June quarter and has largely been telegraphed by slack Nevada gross gaming revenue (GGR) data.
In a press release, CEO Tom Reeg acknowledged “softer market demand” in Las Vegas. Sell-side analysts expected Caesars to miss forecasts for the June quarter and some believe the same will be true for both Caesars and MGM in the third quarter, too.
With second- and third-quarter lethargy on the Strip arguably already baked into Caesars’ stock price, which is down 14.81% year-to-date, some analysts argue the investment community will shift its attention to the operator’s debut-reduction efforts and 2026 earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) outlook, among other issues.
Caesars Debt Reduction Efforts Paying Off
Due to its large debt burden, Caesars stock has been a play on interest rates. The Federal Reserve hasn’t cut borrowing costs yet this year and bond traders aren’t expecting that happen to this, likely furthering the central bank’s standoff with the White House.
However, Caesars is lowering debt on its own. Its net debt stood at $11.29 billion at the end of the second quarter, down from $11.42 billion a year earlier. Cash on hand climbed to $982 million from $866 million, underscoring the operator’s free cash flow potency that has been so widely regaled on Wall Street.
On July 8th we applied proceeds from the monetization of $225 million of our World Series of Poker (WSOP) seller note and a revolver draw to fully redeem $546 million of our 8.125% senior unsecured notes due 2027. This note redemption reduces run-rate interest expense by $44 million annually,” said CFO Bret Yunker in a statement. “Our nearest debt maturity is now January 2028 and our weighted average cost of debt is approximately 6.35%.”
He added the company will continue using free cash flow to pare debt and “opportunistically repurchase” its stock.
Caesars Digital Shines
While Caesars’ Las Vegas Strip segment disappointed in the second quarter, regional casino revenue increased by 3.6%, but Caesars Digital stole the show. That unit’s sales surged 24% to $343 million on earnings before interest, taxes, depreciation, and amortization (EBITDA) of $80 million. That EBITDA tally doubled year-over-year.
“Our Caesars Digital segment posted one of its strongest quarters ever, as momentum continues to build toward the financial goals that we originally laid out in 2021,” said Reeg in the statement.
Improvements in the interactive unit could stoke more calls for the parent company to spin that business off because analysts and investors have long argued the stock price doesn’t properly reflect improvements and rising profitability in the digital business.
No comments yet