Churchill Downs Incorporated (CDI) has reported record results across revenue, net profit and adjusted EBITDA for Q3, while the group has also announced plans to open a new historical racing machine (HRM) venue in Kentucky.
For the three months to 30 September, revenue at CDI amounted to $628.5m (£484.8m/€582.0m). This is 9.8% higher than Q3 last year and a new quarterly record for the group.
Record gaming and historical racing revenue
CDI posted growth across its three core businesses: live and historical racing, TwinSpires and gaming. The latter was the main source of revenue at $269.7m, an increase of 10.4% and a new all-time high.
Growth in the gaming segment was primarily due to the April opening of the Terre Haute Casino Resort in Indiana. However, this was partially offset by regional gaming softness and increased competition, to the tune of $7.1m.
Revenue from live and historical racing climbed 12.8% to a record $247.5m. CDI said this was driven by growth across its Virginia properties, including the new Rosie’s Emporia venue that opened in September last year.
Finally, the TwinSpires online horse race betting operation saw the slowest growth in Q3. Revenue was up 5.6% to $118.7m, helped by the acquisition of historical horse racing technology specialist Exacta in August 2023. CDI said this added $9.6m in revenue to the segment.
Net profit reaches record $65.4m in Q3
In terms of expenses, operating costs were 9.2% higher at $502.6m for the quarter. Costs were higher in all areas, with the exception of TwinSpires, where spending dipped slightly.
However, revenue growth meant operating profit for Q3 climbed 12.1% to $125.9m. After finance-related costs, pre-tax profit topped $86.1m, an increase of 5.6%.
CDI paid $19.9m in income tax, meaning it ended Q3 with a net profit of $65.4m, up 7.2% and another record. In addition, adjusted EBITDA for the quarter climbed 7.8% to all-time high of $235.3m.
Year-to-date profit edges down on Arlington sale
As for the year-to-date, revenue for the nine months to the end of September amounted to $2.11bn, up 11.0%. During this period, CDI noted growth across all business segments.
Operating profit was up 27.2% to $582.2m despite a rise in costs. Pre-tax profit, however, dipped 1.6% to $482.2m due to CDI in the previous year having benefitted from the sale of its Arlington Heights racecourse site in Illinois. The venue was offloaded to the Chicago Bears NFL franchise.
After paying $125.4m in income tax, CDI was left with $355.1m in net profit, down 1.3% from last year. However, adjusted EBITDA came in 14.6% higher at $922.6m.
Churchill Downs to open new Kentucky venue
In other news, CDI has set out plans to develop a new HRM entertainment venue in Calvert City, Kentucky. The 23,000sqft facility will feature 250 HRMs, a sports bar and a sportsbook.
CDI said the venue will serve as an extension of Oak Grove Racing, Gaming and Hotel. It will be its eighth historical horse racing entertainment venue in Kentucky.
The project is expected to cost between $40m and $50m.
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