MGM Resorts International (MGM) Q2 2025 Earnings Call Transcript

MGM Resorts International (NYSE: MGM) Q2 2025 Earnings Call dated Jul. 30, 2025

Corporate Participants:

Howard Wang — Vice President of Investor Relations

William J. Hornbuckle — Chief Executive Officer and President

Jonathan Halkyard — Chief Financial Officer

Corey Sanders — Chief Operating Officer

Gary Fritz — President of MGM Resorts International Interactive

Kenneth Xiaofeng Feng — President and executive Director

Hubert Zhi Qi — Chief Operating Officer at Mgm China

Analysts:

Barry Jonas — Analyst

David Katz — Analyst

Brandt Montour — Analyst

John DeCree — Analyst

Shaun Kelley — Analyst

Chad Beynon — Analyst

Dan Politzer — Analyst

Steve Wieczynski — Analyst

Stephen Grambling — Analyst

Presentation:

Operator

Good afternoon, and welcome to the MGM Resorts International Second Quarter 2025 Earnings Conference Call. Joining the call from the company today are Bill Hornbuckle, Chief Executive Officer and President; Corey Sanders, Chief Operating Officer; Jonathan Halkyard, Chief Financial Officer and Treasurer; Mr Gary Fritz, President of MGM Interactive; Kenneth Feng, Executive Director and President of MGM China Holdings; Mr. Hubert Wang, COO and President of MGM China Holdings; and Howard Wang, Vice-President and Investor Relations.

Participants are in a listen-only mode. After the company’s remarks, there will be a question-and-answer session. In fairness to all participants, please limit yourself to one question and one follow-up. Please note this conference call is being recorded.

Now I would like to turn the call over to Mr Howard Wang. Please go ahead.

Howard Wang — Vice President of Investor Relations

Thanks, Chuck. Welcome to the MGM Resorts International second-quarter 2025 earnings call. This call is being broadcast live on the Internet at investors.mgmresorts.com, and we have also furnished our press release on Form 8-K to the SEC. On this call, we will make forward-looking statements under the safe-harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements.

Additional information concerning factors that could cause actual results to differ from these forward-looking statements is contained in today’s press release and in our periodic filings with the SEC. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise.

During the call, we will also discuss non-GAAP financial measures when talking about our performance. You can find the reconciliation to GAAP financial measures in our press release and investor presentation, which are available on our website. Finally, this presentation is being recorded.

I will now turn it over to Bill Hornbuckle.

William J. Hornbuckle — Chief Executive Officer and President

Thank you, Howard. I want to start by focusing on a strength that often gets overlooked, which is the power of MGM’s unmatched portfolio diversity. The benefits of having a global presence in both the brick-and-mortar and digital domains drove a record-high-ever consolidated net Revenue results this quarter. Our vision is to be the world’s premier gaming entertainment company. Pursuing that vision is paying significant dividends as we generate revenues in multiple streams across the globe. You’re seeing the power of our portfolio diversity strategy on full display this quarter. We’ve accelerated digital growth, combined with record-setting results in China and in our regional properties, more than offset a choppy period in Las Vegas.

We recognize that the substantial share buybacks completed in recent years must be coupled with an active growth pipeline to fully unlock the company’s value. In 2Q, our diversity is proving to be the bridge uniting the benefits of a lower share count and growth. We are positioned to keep a kickoff of unleashed significant value with notable near-term catalysts in BetMGM and Las Vegas and mid to long-term catalysts in MGM Digital and our development projects, both domestic and international.

Our BetMGM North America venture reported their second-quarter results yesterday, raising full-year 2025 guidance for a second time since the previous earnings call, which implies an EBITDA turnaround of nearly $400 million compared to last year. In iGaming, there was a solid growth in average monthly actives and key engagement metrics such as active player days, while sports-betting continues to focus on the areas that drove first-quarter profitability, more targeted player acquisition, tighter management of lower-value players and retention of more valuable active players, all of which are benefiting from site components enhancements, including performance, discoverability and most importantly, speed.

With more efficient marketing spend, incremental revenue flow-through jumped to 66% year-to-date. This winning formula has given us greater conviction in our BetMGM North America’s ventures ability to generate $500 million of annual reported EBITDA in the coming years. Our Las Vegas resorts are also poised to drive results higher in the near-term, and I want to take this opportunity to emphasize that Las Vegas remains fundamentally solid.

We saw a record 2Q table games volume and record slot volumes at our ultra luxury properties. This quarter’s adjusted EBITDA decline was in fact isolated from two specific factors. One, the MGM grant accounted for over 80% of the decline, where results were impacted by uniquely disruptive room remodel and severely abnormal hold and midweek weakness at two of our value-oriented properties. On the groups and convention side, our bookings are pacing up double-digits, thanks to a robust 2026 convention calendar that includes the return of CON/AGG. The Las Vegas convention center is spending $1.6 billion to renovate its legacy campus and expand the West Hall, and remains on track to finish by the end of this year.

We will also benefit from Greater Las Vegas convention attendance, particularly with our expansive luxury offerings. Las Vegas also recently celebrated the groundbreaking of the new $1.8 billion MLB stadium at the former site of Tropicana, which is expected to bring 400,000 new visitors annually to Las Vegas. This puts the NFL, the NHL, and MLB home venues, which also host a significant number of other sports and entertainment events, all within one mile of each other.

The resulting golden triangle will surround — to be surrounded by MGM properties and, importantly, the dome stadium will bring meaningful game and entertainment inventory during the summer, midweek periods, which will increase the value of our rooms during that period. Our exclusive Marriott relationship also continued to drive performance with a higher-quality customer. We remain on budget to book 900,000 room nights through the strategic channel and saw 2Q room nights increase 31% this quarter versus last year. Marriott customers consistently spend about 150 per room night more than all other customers and year-to-date, we average over 20,000 room nights booked per year.

This week, we averaged over 20,000 nights booked this year per week. The pace has accelerated in July, and we had our best Marriott bookings week ever just two weeks ago. Our international presence brings us another near-term driver as we look to continue the momentum at MGM China, which absolutely shined in the second quarter with record adjusted EBITDAR and market share of 16.6%, representing the highest sequential gain amongst all concessionaires. What’s even more impressive was that our share increased every month of the quarter, ending June at 1.3 times our fair share of the market.

We now have all 28 villas and MGM Macau available as of this month. And while MGM Cotai has begun converting standard rooms into 63 new suites by 1Q of ’26, all of which will help us further uphold our complementary position of the properties, and MGM Macau is a leading player in the Peninsula and Cotai as preferred destination for premium mass players. We are also benefiting from the continued momentum of our domestic regional operations.

Their stability is highly valued during times of volatility, and we achieved our best second-quarter results in both net revenue and slot win. Three of our regional properties reported record-high ever net revenues, and we saw strong performance across the gaming, hotel, and food and beverage segments. Customers have responded positively to our focused capital improvements, and New Jersey is a great example.

A few years ago, we upgraded the former Water Club into what is now the MGM Tower at Borgata, which since May, has been complemented by an elevated Asian gaming and overall VIP experience, including a new bar and restaurant. The new 25,000 square-foot gaming space includes 51 tables, gaming salons, and a high-limit area. The customer response to thoughtful targeted capital spending has been encouraging, driving double-digit GTR growth and outperforming the market by a wide margin since its debut.

Beyond our numerous near-term catalysts, we have mid and long-term drivers that are making meaningful progress with each passing quarter, one of which is MGM Digital, our consolidated international digital business that does not include the BetMGM North America venture. The segment showed solid improvement, notably a near-breakeven performance when excluding our investment in Brazil. Our BetMGM Brazil venture partner, Grupo Global, continues to provide us with beneficial flexibility in terms of marketing and investment, and our launch is making great strides as we are seeking all key measures, seeing all key measures increasing, including strengthening player fundamentals, and our bullish long-term view of the Brazilian market remains unchanged. Stateside, towards the end-of-the second-quarter, we launched MGM’s live studio from the gaming floor at the MGM Grant.

Content from our live dealer studio, which is currently available in seven countries provided internally to our international operations and is also monetized to other online operators. Earlier this month, we launched our own sports product in the second market, made possible by our acquisition of Tipico’s US technology platform, as the integration into our in-house tech stack continues as planned. On the development front, in Japan, the first pylon was poured earlier this month.

When MGM Osaka opens in 2030, we will be the sole licensing operator, which is notable in a country where robust tourism, an appetite for gaming, and a population of over 120 million people. Considering these factors and how similar metrics drive other Asian destination gaming markets, we believe MGM Osaka has the potential to generate multi-billion of dollars annually for MGM. Progress in Dubai has also started to gather steam with an expected opening date of the second half of 2028. And in New York, we submitted our application in June and are hopeful to be awarded one of the three gaming licenses that will be issued in December.

Few companies can take on any of these projects on an individual basis, but our unmatched scope, scale, and international experience allow us to manage all of these simultaneously while maintaining ample liquidity and a solid balance sheet. Reporting record-high-ever consolidated net revenues is not possible without the tremendous contribution from some of our — all of our employees across all business segments, and it’s worth highlighting that we have had another record gold NPS score in the second quarter despite the ongoing room remodel disruptions at the MGM Grand.

As you can see, it’s an incredibly exciting time here at Resorts. And I will now hand this over to Jonathan to provide some additional color on our performance. Jonathan?

Jonathan Halkyard — Chief Financial Officer

Thanks very much, Bill. I’d like to also express my appreciation to all of our employees for their hard work and commitment to excellence. Whether on the front lines delivering exceptional service or behind the scenes, innovating new solutions, their collective contributions continue to raise the bar every quarter.

We’re very fortunate here at MGM to have a diverse portfolio of assets that constitute such a deep growth pipeline. The BetMGM North America venture continued its momentum into the second quarter with revenue from operations up 36%, resulting in second-quarter EBITDA of $86 million. iGaming grew 29% in the second quarter despite no new state launches, driven by strong player acquisition at attractive payback economics and healthy engagement activity.

Sports-betting top-line grew 56% in the quarter, benefiting from the repositioning toward the premium mass customer as well as targeted marketing and refined player segmentation efforts. Omnichannel efforts also continue to gain momentum. Our March Madness activations fueled a record number of Nevada first-time depositors, while the single app single wallet feature helped drive 30% growth in Nevada monthly actives. And as mentioned on yesterday’s call from BetMGM, 2025 guidance was raised to at least $2.7 billion of net revenue and at least $150 million Of EBITDA. I’m also happy to announce that BetMGM reporting will be aligned with MGM reporting beginning in the upcoming third quarter, thus no longer reporting one month in arrears going forward. We can queue the applause on the call. Here in Las Vegas, the market remains fundamentally sound. During the second quarter and now into July, performance on the weekends has been solid as we’ve been operating near capacity in our hotels across the spectrum. Our luxury offerings in Vegas maintained rate integrity with flat and table volume increasing about 4% and several properties reporting second-quarter records for net revenue.

The year-over-year adjusted EBITDAR decline in Las Vegas of $72 million was primarily confined to the MGM Grand and to a much lesser degree, midweek performance at the Luxor and Excalibur. The MGM Grand represented $60 million of the difference with the vast majority due to impacts from the room remodel and hold. When you exclude the impact of the MGM Grand property on our results, Las Vegas adjusted EBITDA decreased about 2% in the second quarter.

The lower midway — mid-week visitation in our more value-oriented properties has continued in July, but we’re taking advantage of this dynamic by pulling forward the MGM Grand room remodel timeline. Based on this accelerated timeline, we now expect the remodel to be completed by the end of October, which will allow us to capitalize on these refreshed rooms in November in time for F1’s return to Las Vegas and for the holiday season.

When you also consider, we’ve seen positive bookings in three of the last four weeks and solid bookings of groups and conventions that are in place for later in the year, we’re optimistic about restoring a growth trajectory in Las Vegas during the fourth quarter that will carry on into 2026. In Macau, adjusted EBITDA rose by 3%, resulting in a record quarter as visitation, player counts, and premium player counts rose at both properties.

The focus on premium players is a simple strategy, but difficult to execute. Yet our team continues to capitalize on all opportunities. In July, we soft-opened the Alpha Club at MGM Macau, an ultra-high-end offering that opened with 20 tables. We continue to fine-tune the offering and add amenities with an official opening scheduled ahead of the October Golden Week. The regional properties had a particularly solid performance in the second quarter with record 2Q net revenue and a 7% increase in adjusted EBITDAR.

MGM Digital, our consolidated international digital business that does not include the BetMGM North America venture, grew its top-line by 14% as the BetMGM brand extension has been driving improved results in existing markets, including the UK, Netherlands, and Sweden. Marketing and bonus optimization, combined with OpEx management, have been strong drivers of our cost management efforts. The brands we’re investing in are beginning to achieve meaningful scale, and BetMGM brands are achieving all-time highs as they grow.

Our full-year 2025 adjusted EBITDAR expectations remain consistent with last year at MGM Digital. We’re on track to achieve over $100 million — $150 million in EBITDA enhancements in 2025, the majority in Las Vegas, with continued focus on automation and other initiatives in response to customer preferences. We’ve identified other opportunities to keep us on track as we champion a continuous improvement mindset across the business.

During the quarter, we repurchased 8 million shares for $217 million, all of which took place in April. The pace of our repurchases has slowed as we focus our capital deployment on our development projects. Our share count is nearly 45% lower than it was when we began this buying program, and we’ve received Board approval for the ability to repurchase another $2 billion of shares.

Finally, we continue to see meaningful value in the current share price. When you strip out the value of MGM China at-market and assign a consensus value to the BetMGM North-America venture, which we still view as a very conservative given the current trajectory, you end-up with an implied multiple of 3.4 times trailing month — 12 months adjusted EBITDA to say nothing of the value of MGM Digital, the business that’s capable of $1 billion in run-rate top-line with double-digit EBITDA margins.

Said differently, there is an active, accelerating growth pipeline that when paired with a nearly halved share count together will unlock meaningful value that’s not reflected in our current valuation.

I’ll turn it back to Bill.

William J. Hornbuckle — Chief Executive Officer and President

Thanks, Jonathan. Before we get to questions, operator, I’d like to take maybe a step back and refocus more holistically on what we’re up to in the strategy. For us, it’s to win the greatest share of the world’s growing gaming market. MGM Resorts is the only global operator with the ability to converge gaming and hospitality with entertainment and sports, whether physical or digital, and deliver accelerated, diversified growth at scale, and we are uniquely positioned to develop synergies across all of those businesses.

Our operational focus and calculate investments are paying off. Everywhere we operate, we’re winning, particularly in premium and luxury. In Macau, we have been and continue to be and earn more than our fair share, and that continues in the month of July. In digital, we’ve turned the corner on both the product and cash generation fronts with huge upside to capture. And in Las Vegas, with the admin of the A’s Stadium, we’re seated in the middle of the golden triangle ensuring MGM is uniquely advantaged by major events, especially sports. And internationally, we have the sole licensee in Japan with 120 million-plus people with a proven propensity to gain.

The point is, we have the size and scale to see meaningful gaming opportunities anywhere in the world and we look at the — as we look into the future, we remain very excited about that. Obviously, there’s been a great deal of talk and focus on Las Vegas and again, I want to look and take a step back and think of this holistically.

Over the last 30 years, the CAGR in Las Vegas and GGR has been close to 5%. We host many of the world’s largest events and conventions in a city that is not readily, if ever, duplicatable. This fall alone, you’ll see Canelo Crawford fight in Allegiant Stadium, one of the biggest fights Las Vegas has seen in the last 10 years. In September, Paul McCartney will be — excuse me, in October, and the F1 in November, with pre-sales better than they’ve ever been will be hosted here again in our community.

Long-term college football championships come our way in January of ’27 and the Final Four in 2028. Las Vegas is as solid as ever, and MGM couldn’t be better-positioned to benefit by all of it.

With that, operator, let’s go to the questions.

Questions and Answers:

Operator

Thank you. Thank you. We will now begin the question-and-answer session. [Operator Instructions]

And our first question will come from Barry Jonas with Truist. Please go ahead.

Barry Jonas

Hi guys. I wanted to start with the MGM Grand. Is $65 million still the right number to think about impact for the disruption? If it is, how much of that has been a hit so far in Q1, Q2? Thank you.

Jonathan Halkyard

Sure, Barry, yes, that is still a good number. The only difference is now we’ll be experiencing it really through just the nine months of this year as opposed to the full year. And just on the second part of that question, I would say through the first six months, by our accounting, it’s been about $40 million. And so we would expect that full remaining amount through the conclusion of the project in October.

Barry Jonas

Got it. Got it. That’s really helpful. Bill, it sounds like you somewhat addressed this, but clearly, we’ve heard concerns about pricing and value impacting Vegas and MGM. Maybe just spend a minute kind of address that a little bit more in detail, please?

William J. Hornbuckle

Yeah. Look, I think if you think about our luxury products and our offerings, you’d see like ADR up in Bellagio, Corey helped me 4% for the quarter, something like that?

Corey Sanders

Yeah.

William J. Hornbuckle

And so you would see $250,000 play and above across the first six months of the year, up 25%. You’d see slot revenue up for the year, particularly at the premium levels. And so when it comes to that, I don’t think that’s a real issue. I think when it gets to our value-oriented properties, properties that focus on all that’s going on in the global economy/US economy, there is impact. But given the scale and scope of what we do and how we offer it, it’s — while real and we particularly experienced it in the summer, are excited by fourth quarter and particularly what happens into 2026.

Barry Jonas

Great. Thank you very much.

Operator

The next question will come from David Katz with Jefferies. Please go ahead.

David Katz

Hi, good afternoon, everybody. Thanks for taking my question. I wanted to just go back to digital, and I appreciate the update that we had just a few days ago in your opening remarks about it. But I would love to get just some another layer of insight into sort of how much cross benefit there is, and I think in the past, you’ve given us digital sign-ups for the loyalty program, et cetera. How is all of that evolving, given the strength?

William J. Hornbuckle

Gary?

Gary Fritz

Sure. Well, look, I think one of the things that Bill touched on certainly is the progress we’re seeing in Nevada. It’s probably one of the big highlights of the omnichannel advantages that we’re seeing, where we’ve seen about 30% growth in Nevada, monthly actives, and 4x increase in the number of Nevada actives who continue to play with BetMGM once they go home. So the power of our Vegas funnel, if you will, and turning that into real customers for BetMGM is really a hallmark part of the omnichannel program.

We also are aggressively investing in activating players during tentpole events here in Las Vegas. Jonathan alluded to what we did during March Madness as an example. And then on the content side, we’re also seeing the ability to leverage things like our MGM Live Studio and being able to begin to provision exclusive and proprietary content for players out of that as another advantage of what we uniquely can do as an omnichannel operator.

David Katz

Understood. And if I can, in another direction, in the past, you’ve made some comments around the arrangement you have with Bonvoy and its benefits. Any update there we could talk about sharing?

William J. Hornbuckle

No, look, I think, David, the update is it’s — despite all that’s going on, it’s on track and we’ll go over 900,000 room nights this year. And so the quarterly performance has been great. I think I mentioned in my opening comments, a couple of weeks ago, we had an all-time week of 25,000 bookings in a week. Those customers continue to spend more than the average, almost $150 RevPAR, and so all is positive.

They’ve jumped into the convention space with us in a meaningful way now. And while we have 13 GSOs, global sales office representatives, they have 1,300 literally. And so we’re very positive and bullish on where it brings us down the road. And about 30% to 40% of those customers are redeemers. So they basically are here with a free room for lack of a pet of word, and they’re retiring it with their points. And so it just presents us with a great leisure customer.

David Katz

Understood. It’s never free. Thanks very much.

Operator

Your next question will come from Brandt Montour with Barclays. Please go ahead.

Brandt Montour

Great. Thanks for the question. I do want to ask again about Vegas. The visitation numbers for the strip came out today, as you’re sure you saw, and they were quite bad for June. And it seems like leisure-heavy summer fit customer, it seems like you’re gaining share from Bonvoy and some of the other things you’re doing. But maybe, Bill, if you could just take a step-back and talk about the strip as a whole and talk about what you’re seeing maybe near-term in that fit customer in the sort of the next 4 to 12 weeks booking trends and what gives you confidence that when convention and group comes back and the sort of summer heat abates, that fit customer will come back-in the fall?

William J. Hornbuckle

Well, I think referencing my earlier comments, history gives us confidence. I think, though, what we have seen, we saw starting in May about a nine-week decline in bookings and now over the last month, those bookings have increased. And so for the last four weeks in a row, we’ve seen an increase three of the last four weeks in a row, we’ve seen an increase in bookings. And so that gives us confidence as we think about August, September, and into October.

Remembering that the bookings cycle here is short. I mean, 50% of our bookings come within 30-odd days. And so it’s pretty particularly in the summer reactionary. I think July will replicate June in a meaningful way. But we have between programming conventions and just again back to the Bonvoy program and our Marriott relationship, we have great confidence in fourth quarter and beyond.

Corey Sanders

And what I would add, June and July this year, we had some pretty big groups cycle out-of-the city, and we know that they will be back on in the future years. You also have the convention center under construction, a few of our competitors had some of their space under construction. So I think it was just a unique summer when it comes to the convention business on that we haven’t seen in the past.

Brandt Montour

Okay. Thanks for that. And then maybe for Jonathan, the $150 million of cost-savings and synergy savings targets this year, what do you — what can you tell us about what you’ve realized in the second-quarter, what you realized in the first-half, and sort of how to think about the second-half.

Jonathan Halkyard

Yeah, the first-half total is about $80 million. So it’s — about similar for the first-half and the second-half of the year. I mean, these are coming from a lot of different areas. They include some of the benefit that we’ve gotten from digital check-in from our AI-driven chatbot has helped. Of course, we have — we made some moves in some other revenue areas as well. So we’re doing more in our quick-service restaurants with ordering using barcodes and the rest.

So it’s really probably 70 or 80 different initiatives which have come together to drive this improvement for us?

Brandt Montour

Great. Thanks, everyone.

Operator

The next question will come from John DeCree with CBRE. Please go ahead.,

John DeCree

Thanks for taking my questions. Maybe one to shift gears on Macau, another solid quarter for MGM China. So maybe the first question is kind of high-level on the market. We’ve seen gaming revenue accelerate in May and really in June. So curious if you have opinions on what’s driving that acceleration market-wide, if it’s some economic improvements, if it’s just the event schedule and calendar, and how sustainable might this GGR acceleration be for the market.

William J. Hornbuckle

Kenny or Hubert, why don’t you grab that?

Kenneth Xiaofeng Feng

Yeah, this is Kenny, I think we are happy to see a growing market or driven by premier mass. Macau is not only an event-driven like a customers become of coming for concerts, but we are seeing more and more customers are come for like refreshing our experiences and quality products and services. So if we come to like MGM China or we continue to see a very strong trend in July, our performance is pretty robust.

We see like our strong volumes across our — across nearly all business segments and solid market share and margin. In general, I would see like in the entire market, I think us like we are seeing — we are expecting a promising summer?

John DeCree

Got it. That’s helpful. I appreciate the color. Maybe big-picture, maybe, Jonathan, for you. Can you update us on the dividend policy at MGM China? Certainly, GGR EBITDA ramping, and sounds like MGM China is continuing to gain a little bit of share. It’s a great performance and how are you thinking about maybe the balance sheet in MGM China and dividend policy as it relates to MGM?

Jonathan Halkyard

I was with you until the last as it relates to MGM. I’ll make a comment on the dividend policy at MGM China, and then I’ll invite Hubert or Kenny to speak to the balance sheet there. The Board just approved it was in March or May a dividend policy of up to — of 50% of distributable net income. And that’s of course, very important to MGM Resorts as such a large shareholder, and that dividend income approaches $150 million to $200 million a year. It’s a substantial source of cash flow for the company, and I think an appropriate level for MGM China. Hubert and/or Kenny, do you want to, I guess, address the general question around the balance sheet?

Hubert Zhi Qi

Yeah. In terms of dividend earlier this year, we have changed our dividend policy to a regular dividend of up to 50% payout plus special dividend, if any. So I think the Board will review our cash-flow position from time to time and make appropriate decisions, taking into account potential development projects in the pipeline. So that’s what I have for the answer.

John DeCree

That’s great. Thank you, guys. Thank you.

Operator

The next question will come from Shaun Kelley with Bank of America. Please go ahead.

Shaun Kelley

Hi, good afternoon, everyone, and thank you for taking my questions. Maybe a high-level one for everyone wants to take it. Curious on MGM’s view on the big beautiful bill, just the impact here on sort of the gambling community as it relates to kind of what’s going on here. Obviously, the tax deduction limitation is impactful. In particular, we think about it impacting, I think VIP players and some of the professional players who you may kind of bounce around a variety of properties.

So just how do you think about it? And to the extent you’re able, maybe you can talk about some of the political angles MGM is working to maybe make any changes there.

William J. Hornbuckle

Yeah, Shaun, let me start off, and then I’ll turn it over to Jonathan to talk about the tax impacts on the deductions, et cetera. So last week we had an opportunity to meet with the House Committee chair here on appropriations, myself, Tom Reeg and Craig Billings met with him. And we were focused specifically on the 90% issue of losses.

He has a willing and he subsequently had a hearing here to go over the big beautiful bill with the community. He brought that up as something that he’s going to help us work on as well with Congressman Dina Titus to get that corrected because we don’t think that’s a fair deal. Our — the way it lays out, you could win 1,000, lose 1,000, and still end-up paying a 10% tax on 10% of losses and 10% on terms of losses.

So we’re very focused on that as a starting point. I think some of the other things raising up the slot win from 1,200 to 2,000 is helpful. And so some of it was productive. And then on the greater picture, Jonathan, why don’t you speak to the couple of 100?

Jonathan Halkyard

Yeah. Just a couple of other items that we, of course, have been watching the one, no tax on tips, no tax on overtime. But we believe that’s basically neutral to the company and won’t really have any impact on our cost structure. The bonus depreciation, however, is quite a large deal for us. We’re a company, of course, that invests a lot in our properties to — and the MGM Grand renovation is the latest example, and this is one of the reasons why we’ve updated our tax forecast from a liability of approximately $100 million this year to actually a positive refund of $100 million in 2025.

So it’s a pretty meaningful change, not only because of this, but in large part because of this bill, this law.

Shaun Kelley

That’s great. And then, Jonathan, as my follow-up, maybe you could just walk us through kind of where we sit on the buyback strategy. Obviously, you indicated in the prepared remarks, most of the buyback was done in April, and the pace has slowed a lot, still a very large authorization, and the shares remain valued. But there’s also this obviously very big growth pipeline. New York is coming up, Japan checks are being written.

So you just help us balance that out? Is there a leverage kind of target or ceiling that you’re managing to? What are kind of the puts and takes around being able to be a little bit more active in the stock for the balance of the year?

Jonathan Halkyard

We entered the year 2025 with a more cautious stance towards share repurchases because of the development pipeline that we — that we’re fortunate to have. But then we saw a real dislocation in the price during the first quarter, and we were compelled just by the value to be aggressive. And as you probably recall, I think we did about $700 million or so in the first quarter that continued into April.

So we were — we were more aggressive than I — well, we did more than I expected we would coming into the year, but that was purely because of the price. We don’t have a — in terms of leverage, it’s — we are well within our leverage targets of about 4.5 times lease-adjusted debt — debt-to-EBITDA. I think this company even with our development pipeline, we still have the ability to repurchase shares, which is why we saw the increase in the authorization. I mean, you just look at a quarter like this, $750 million in consolidated adjusted EBITDA to roughly $250 million in CapEx, $100 million in interest expense or thereabouts.

This is $400 million in a quarter roughly of cash flow that we can use for share repurchases or development CapEx. So, well over $1 billion annually, and even against the development projects that we have, that still leaves room to return some capital to shareholders. But for the time being, we’re — we are in a more cautious stance, and it’s primarily because of that development pipeline.

Shaun Kelley

Thank you very much.

Operator

Your next question will come from Chad Beynon with Macquarie. Please go ahead.

Chad Beynon

Good afternoon. Thanks for taking my question. Great updates this week from Adam and Gary on the JV, BetMGM side. So I wanted to ask about the digital business. I know you guys have talked about investing, particularly in the first half of this year, good growth on the revenue side. Can you just broadly talk about where we are with the investment side of this, whether it’s Brazil or other markets, and how you kind of see the setup for the back-half of the year and getting to that inflection point in ’26? Thanks.

Gary Fritz

Yeah, sure. Thanks for the question. It’s Gary. Yeah. So I think Jonathan said in the prepared remarks, and I’d underscore it that in the absence of the investments we’re making in Brazil, we’re basically beginning to achieve breakeven in the rest of the MGM digital portfolio. The bulk of the growth in that portfolio, we are seeing growth in sort of our core LeoVegas business, but the bulk of the growth is coming from the BetMGM branded business internationally, which we’ve invested over the course of the past year and a half quite heavily in.

So we are definitely seeing returns from that and don’t see anything between now and the end-of-the year that would suggest that those trends would be interrupted, and we would continue to operate with that level of profitability. So really, the investment is concentrated in Brazil, and we really took flight with respect to our investments in Brazil in Q2. We got the product in good shape in Q1. Q2, we turned on the marketing with a reasonable level of aggression, and we’re very happy about what we’re seeing. Player values are strong down there. We see nothing to give us any concern about the TAM and the long-term health in the market in Brazil.

And our relationship with Globo couldn’t be better, and that relationship affords us a tremendous amount of operating flexibility that our competitors do not have. We can have access to inventory very quickly. We can make decisions about changing marketing mix very quickly because of our relationship with Globo. So that dig will continue through the end-of-the year. But we’ll reiterate again, this year in ’25, the total performance on the bottom-line in MGM Digital should mimic what it looked like last year, and we’ll move into ’26 optimistically.

Chad Beynon

Great. Thank you. And then going back to Macau, the margins in the back-half of ’24 were around that 25% range. And I think on the past couple of calls, we’ve talked about being grounded around that 25% margin range. First half of this year, you’re almost at 28%, and obviously driven by higher market share in good premium mass. But can you talk about if maybe we should be thinking about a slightly higher margin or maybe ask differently, if you’re able to hold market-share above that 15% range we had been thinking about before.

Could the margins be higher than what we had spoken about? Thanks.

William J. Hornbuckle

Kenny or Hubert, do you want to grab that? I’m going to have a — go-ahead.

Kenneth Xiaofeng Feng

Yeah. I think like — this is Kenny. I think like a — we are pretty — we feel pretty confident that we can continue to maintain such market-share, which we have guided for the past few years, it’s around mid-teens. And while maintaining the EBITDA margin in mid-20s to high 20s. So we will — I think based on our — even our current performance as just indicated in our July performance, we see very solid market-share and the margin in such range.

Hubert Zhi Qi

Yeah, I agree. I think that — this Hubert, I think that our focus on premium mass is not going to change. Our strategy remain consistent and we have product to support that strategy in the near future. And I think that lends to itself that we expect our margin to be stable at the high-20s range.

Kenneth Xiaofeng Feng

Yeah. As to like — Kenny, this is — yeah, as to the competition, like the people right now, we are talking in this market to take place like competition is nothing new in Macau. And then we are very — we are focusing on — we are competing on spending our customers and focusing on continuously to refresh our products and the services. We just want to make sure every investment we are making — are effective and to reflect what the latest — what the customers want, the trend, the latest trends.

So we are really seeing like a sustainable market share and the margin, as we said.

Chad Beynon

Thank you very much.

Operator

The next question will come from Dan Politzer with JPMorgan. Please go ahead.

Dan Politzer

Hey, good afternoon, everyone. Thanks for taking my questions. First, I want to go back to the strip, Bill, Jonathan, Corey, whoever wants to take it. You guys have all been doing this a very long time. Strip visitation it’s been declining pretty much all year. And to your credit, you’ve managed through this impressively, especially given the disruption in MGM Grand. I guess, is there anything you can kind of pinpoint and what’s driving this decline in visitation? Is it international inbound? Is it a different type of customer, less flying? And then to what extent do you have levers to kind of adapt further in this environment where it seems like visitation continues to be under pressure.

William J. Hornbuckle

I’ll start. Look, I think international visitation has been an issue, not only for Las Vegas, but a lot of destinations. But particularly earlier in the year with Canada, we host a lot of hockey games by way of example, and we saw hesitation down, and I think it’s — I don’t think I know, it’s still down. We’ve seen some of our carriers, and I think inbound air seats is down 6% now.

By the way, mostly driven by spirit with the challenges with their engines. I think Southern California this summer has laid quiet more than it historically has. And so I think that’s a consideration that we all need to think about going forward as it relates to value-oriented customers and how to attract them and what to do. We do feel solid about our ability to attract premium customers and again, looking at the higher-end of our spectrum in luxury with Cosmo, Aria, and Bellagio. Of note, we continue to drive above occupancy and yield from those customers. But we do need to keep an eye on value. We’ve followed the headlines that I think many have in terms of the value equation, the value stories, and what is being said about Las Vegas, and we did need to enhance upon that. Las Vegas is still an amazing value.

Some of the rates out there this next midweek are comparable to things I’ve seen 20 years ago. And so to say Las Vegas is not a value, which I know has taken some headline, is just not a complete reality. And so but we all need to focus on that. We all need to change the narrative and continue to keep it positive. And obviously, as it relates to our particular offerings, Luxor, Excalibur, potentially New York — New York and somewhat MGM, keeping a focus on that for us as we think about winter season and ultimately next summer is going to be really important.

Corey Sanders

And I think our main levers, our casino database, continues to be extremely strong, especially on the regional side and what we’re doing with BetMGM. Are the Marriott relationship, obviously is an advantage in this time frame. And then the other area that I think we look a lot at is business travel. And when it’s not there, the airlines cut back, as I think you’ll see in the fourth quarter, they’re going to start adding into the city again, which I think will be to the benefit of the city.

Dan Politzer

Got it. That’s helpful. And then just in terms of the third quarter, there’s a lot of moving pieces there, and obviously, kind of the backdrop you guys just kind of addressed. But if I think about the $25 million from MGM Grand disruption and then you’re lapping a $37 million impact from insurance, it’s just kind of any orders of magnitude through which to think about the third-quarter in Las Vegas and kind of before that bounce-back in the fourth-quarter?

William J. Hornbuckle

Yeah. I think it’s — what we’re seeing certainly in July and looking into August is pretty similar to what we experienced in June in terms of the localization of some of the impacts, so midweek during — for the value-oriented properties and then the MGM Grand impact, which we’ve talked about. So that — and I’m glad that you called out the insurance — the cyber insurance proceeds we realized in the third quarter of last year of $37 million.

And then, of course, we’ll continue these EBITDA enhancement activities, which I mentioned, which came up earlier, we continue to see the benefit of that through the third-quarter but so it’s going to be kind of the a similar situation and some of it we’re taking on intentionally so we can position the company really well for the fourth-quarter, particularly with respect to the MGM Grand.

Dan Politzer

Okay. Got it. Thanks so much.

Operator

Your next question will come from Steve with Stifel. Please go ahead.

Steve Wieczynski

Hey guys, good afternoon. So Bill, whoever wants to take this, I want to go back and ask another question on that biggest FIT cohort. And Bill, you obviously mentioned a couple of times here that FIT cohort has shown some stability recently. And just — and I guess my question here is just wondering if you guys have done anything to kind of stimulate that FIT improvement. We’ve seen some of your peers out there doing some pretty aggressive promotional work, cutting resort fees and stuff like that.

Just wondering where you guys stand, and that kind of leads me into my second question, which is, Jonathan, maybe how you’re thinking about the flow-through in Vegas over the next couple of quarters, given the shift in the customer mix that’s coming into that market. Thanks, guys.

William J. Hornbuckle

So let me start with the FIT. Look, I think based on some of our group activity that will pick up later part of the quarter, I think again with Marriott at play, we don’t see — we’re aggressive and we’re priced accordingly and we continue to follow. I can assure you what the market is doing. But we also want to make sure we’re market leaders in many respects. And so we continue to drive-in buildings like the one we’re all sitting in, Bellagio Price, and we think that’s important. I think occupancy is down 3 or 4 points for the quarter.

I think you might see the same in the next quarter, but not at the expense of ADR and certainly not at the expense of some of the programs we put in play over the years when you talk about resort fees, parking fees, et cetera. And so we’re not — we’re not panicked, and nor will our programs indicate that. I do think we need to get the value-creation right at the other end-of-the spectrum with Excalibur and Luxor. It is a highly competitive market and remains that. But at the end-of-the day, while they are generating cash flow and they make this money, it’s not the whole ball game.

And so we will look at those independently a little bit differently. And we will lean into, as we have for the better part of the summer, our casino database. One of the reasons our slot win is up is because of our casino database. I mean, we continue to drive into that, and it’s been fruitful for us.

Jonathan Halkyard

On the flow-through question, I think I a generally safe assumption is that we can — we can bring 50% of the revenue increase to the bottom line if we’re talking about Las Vegas. And strive as we might if we have — if we do have revenue declines, again, it depends on where it’s coming from, but a general rule of thumb is that — we can fade 50% of that through cost management, but maybe 50% of it would hit the bottom-line.

Steve Wieczynski

Okay, got you. Thanks, Bill. Thanks, Jonathan. Appreciate it.

Operator

And the next question will come from Stephen Grambling with Morgan Stanley. Please go ahead.

Stephen Grambling

Thanks. I saw in the deck that the overall capex moved a little bit lower for the year, which was maybe surprising in the context of some of the benefits from the big beautiful bill. I guess what’s driving the reduction? And remind us of the timing of some of the major projects that are on the horizon? And I know it’s still early, but could the accelerated depreciation change or approach to ROI investments as we look out to 2026?

Jonathan Halkyard

Yeah, the reduction was really a function of just as we get into the year and look at what we’re spending and the ongoing just refinement of the capital plan that occurs during the course of the year, we looked at that and said it’s unlikely that we’re going to be actually spending the amount that we had put out there. There are no notable projects that we’ve — we’ve stopped or decided not to do. This always happens, sometimes it’s a little bit of an increase. Most often it’s a reduction and so we wanted to make that clear.

Well, I was just going to get into some of the major projects if you want. So really, the only a significant project, the likes of say an MGM Grand renovation would be the renovation of the Aria rooms, which presently we’re looking to begin in the late second, kind of early third-quarter of 2026.

William J. Hornbuckle

And then, Steven, one of the things that slowed down this year is we have done an Opera Cloud migration, our front-end hotel system into the cloud. Given the challenges up and down the street in the community, we want to be cautious that we took a relook at that. It cost us a couple of months in time, but we just launched Park last week, seamlessly was up and down in 12 hours. And now we’re going to head to the Cosmopolitan and the rest of the strip. And so that had some capital tied to it that we simply delayed because we wanted to make sure we got it right. And I’m feeling great. The team did a great job with it. So I’m excited about moving forward finally, with that ideal.

Jonathan Halkyard

And well — just while we’re talking about, I consult my list of projects, which I won’t spend time going through, but when I look at the number of exciting projects that we have coming online in the late third-quarter and early fourth-quarter, it’s pretty — it’s pretty dramatic. There’s not a property here in Las Vegas and a few in the regional markets that don’t have some really exciting projects coming online.

Stephen Grambling

That’s helpful. Thanks. Maybe one unrelated follow-up, but looking at Vegas, I think it was this quarter last year that you called out Formula 1 kind of proactively. Anything that you’re seeing at this point looking out to Formula 1 relative to last year? Thank you.

William J. Hornbuckle

Yes, I feel much better about it. This is Bill. Pricing was taken into a whole new ball game and a whole new consideration. And so we think and believe, and I think ticket sales, both ours as well as Formula 1s, would indicate we got it right. I think they’ve sold over 65% of the tickets to date, or some number like that we’re in that zone and so we feel good about it generally, as well as obviously what we do internally with rooms and particularly the Fountain Club that we put up here at Bellagio is a massively unique experience.

The race this year is going to have two events versus just the F1 cars, which will be more content. They’re going to do some other special things with us around the Fountain, which I think will be exciting for not only Bellagio and MGM, but Las Vegas in terms of eyeballs and camera time. And so we’re pretty excited by what’s happened and where it’s all going.

Jonathan Halkyard

We just had a $1 million sale at Fountain Club yesterday.

William J. Hornbuckle

Yeah, that’s great.

Stephen Grambling

Got it. I’ll take that as a call to action. Thank you.

William J. Hornbuckle

Yeah, we like it. We like it.

Operator

Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Mr. Bill Hornbuckle for any closing remarks. Please go ahead.

William J. Hornbuckle

Well, again, thank you all for joining us today. I know it’s getting late. Just as a reference, I’ll be in New York at the Bank of America Conference in September. So I hope to see many of you there. Otherwise, we look forward to discussing our 3Q results with you all in a few months. So have a great end-of-the summer, and thank you all for your attendance today.

Operator

[Operator Closing Remarks]