MGM outlines $1B per year Osaka funding plan for 2027-2028 amid $1.4B remaining buyback capacity

Earnings Call Insights: MGM Resorts International (MGM) Q3 2026

Management View

• "Earlier today, we announced an amendment to the existing voting agreement with People, which restricts them from purchasing additional shares once their ownership reaches 29.9% and confirms that they will vote with the Board in connection with the change of control transaction." (President, CEO & Director William Hornbuckle)

• "Ultimately, our success is driven by our frontline execution and the teams throughout our diverse business segments drove steady performance of consolidated revenues in the third quarter, a notable achievement considering the macro environment." (President, CEO & Director Hornbuckle)

• "During the third quarter, our Las Vegas operations exhibited year-over-year growth in casino revenues of 8% driven by record 3Q slot win." (President, CEO & Director Hornbuckle)

• "The macro headwinds we faced during the third quarter affected our leisure and transient customers across the Board... our 3Q performance achieved flat occupancy, but at lower room rates." (President, CEO & Director Hornbuckle)

• "At MGM China, we've achieved record quarterly revenues. Our market share in September was 19.2% and ended the quarter with a record 3Q market share of 17.1%." (President, CEO & Director Hornbuckle)

• "MGM Osaka remains on time and on budget for a 2030 opening." (President, CEO & Director Hornbuckle)

• "In Las Vegas, the decline in third quarter segment adjusted EBITDA was driven primarily by lower room revenues, which offset benefits from stronger casino revenues." (CFO & Treasurer Jonathan Halkyard)

• "During the quarter, BetMGM distributions and branding license fees to MGM Resorts totaled $34 million." (CFO & Treasurer Halkyard)

Outlook

• "October is starting off the fourth quarter on the right foot, with solid group and convention activity and the busy city-wide event calendar." (President, CEO & Director Hornbuckle)

• "In Japan... remain on track to deploy approximately JPY 150 billion to JPY 160 billion or about USD 1 billion in each of 2027 and 2028, which will fully complete our funding commitments." (CFO & Treasurer Halkyard)

• "We do plan to allocate capital to repurchase stock." (CFO & Treasurer Halkyard)

Financial Results

• "Same-store slot drop and win both increased by 4%, though were slightly offset by lower table games win." (CFO & Treasurer Halkyard)

• "At MGM China, revenue grew 5% year-over-year, while reported EBITDAR was down $20 million, but the brand feed MGM Resorts increased by $22 million compared to last year's third quarter." (CFO & Treasurer Halkyard)

• "MGM Digital... was able to convert that into a $19 million improvement in EBITDAR, narrowing the loss to $4 million this quarter." (CFO & Treasurer Halkyard)

• "We have very manageable upcoming debt maturities with only 1 tranche of domestic debt, a $675 million issue of senior notes maturing within the next 12 months, and our revolving credit facility is undrawn." (CFO & Treasurer Halkyard)

• "We have approximately $1.4 billion in remaining authorized capacity under our current share repurchase program." (CFO & Treasurer Halkyard)

Q&A

• Brandt Montour, Barclays Bank PLC: "just give us a sense if you feel like leisure demand found a bottom"; President, CEO & Director Hornbuckle: "in terms of the miss in Vegas, it was mostly all about ADR."

• Brandt Montour, Barclays Bank PLC: "did you continue to see that bifurcation"; Chief Operating Officer Ayesha Molino: "we are seeing some stabilization in that, some improvement in that and sort of return to that bifurcation in October."

• David Katz, Jefferies: "walk us across that range" (capital deployment); CFO & Treasurer Halkyard: "it's going to be Japan, it's going to be share repurchases, and we think that those are the 2 most important and remunerative ways to use our capital."

• David Katz, Jefferies: "a new competitor entering right in the middle of the strip"; President, CEO & Director Hornbuckle: "First and foremost, we welcome it." Chief Operating Officer Molino: "we continue to invest in our high-end assets."

• Robin Farley, UBS: "the highest end players globally just kind of didn't show up"; President, CEO & Director Hornbuckle: "we've taken on some of the biggest customers in our history, actually."

• Robin Farley, UBS: "your guidance for cash taxes came down a lot"; CFO & Treasurer Halkyard: "That guidance came down a fair amount for this year."

• Shaun Kelley, BofA Securities: "flow-through of revenues to EBITDA" and "Where are we on the cost side"; President, CEO & Director Hornbuckle: "we've gone from 20% casino marketing mix to a little over 30%." Chief Operating Officer Molino: "our FTEs for the quarter were effectively flat year-over-year with 54,000 additional occupied room nights."

• Daniel Politzer, JPMorgan: "Strip RevPAR for you guys has declined... 8 consecutive quarters"; President, CEO & Director Hornbuckle: "air prices are up literally 45%."

• Daniel Politzer, JPMorgan: "have you been locked out of the market" (buybacks); CFO & Treasurer Halkyard: "We chose not to repurchase shares in the third quarter because of just the circumstances surrounding the company."

• John DeCree, CBRE: "How are you thinking of funding" Osaka commitments; CFO & Treasurer Halkyard: "we'll be funding these out of our cash on hand and our free cash flow over the next couple of years."

• John DeCree, CBRE: "Brazil kind of shutting down"; President, CEO & Director Hornbuckle: "I'll turn this to Gary"; Chief Commercial Officer & President of MGM Digital Gary Fritz: "we certainly began the contingency plan in Brazil."

• Barry Jonas, Truist: "month-to-month cadence"; CFO & Treasurer Halkyard: "August was down about mid-single digits and September was down high-single digits for us just broadly in terms of ADR."

• Barry Jonas, Truist: "is this the year iGaming moves in the Mid-Atlantic"; President, CEO & Director Hornbuckle: "Virginia came very close."

• Chad Beynon, Macquarie: "regional gaming same-store margins"; Chief Operating Officer Molino: "we had a bit of a hold impact at a couple of our properties."

• Chad Beynon, Macquarie: "International business"; President, CEO & Director Hornbuckle: "Mexico continues to come up and is now the #1 import market."

• Steven Wieczynski, Stifel: "Macau... promotional environment"; CEO, President & Executive Director Xiaofeng Feng: "we are at about 26.9%."

• Steven Wieczynski, Stifel: "whatever you can say" (People); President, CEO & Director Hornbuckle: "Look, we are done."

Sentiment Analysis

• "I'm trying to better understand" and "How should we reconcile" were recurring analyst framing around Las Vegas demand, room-rate pressure, and visibility, with repeated focus on cadence, flow-through, and competition. (Analysts’ tone: slightly negative)

• "we feel positive about it" and "We will make a decision" reflected management’s emphasis on stabilization in Las Vegas and active decision-making on Brazil, alongside explicit acknowledgment of macro pressure. (Management tone: slightly positive)

• In the prior quarter, management said "our future has never looked brighter" and described "record second quarter consolidated net revenue," while the current quarter leaned more on "macro headwinds" and "lower room rates" as core explanations. (Quarter-over-quarter tone: less upbeat in prepared remarks)

Quarter-over-Quarter Comparison

• In Q2, President, CEO & Director Hornbuckle said, "Jonathan and I are not able to answer any questions during the Q&A on this topic" (People offer), while in Q3 he said, "People was unable to assemble a syndicate... and they withdrew their offer" and "The discussion between MGM and People ends there."

• In Q2, CFO & Treasurer Halkyard said, "During the quarter, we bought back about 4.3 million shares for $164 million"; in Q3 he said, "We chose not to repurchase shares in the third quarter because of just the circumstances surrounding the company."

• In Q2, management highlighted MGM Digital "reported segment adjusted EBITDAR losses of $31 million"; in Q3, CFO & Treasurer Halkyard said MGM Digital "narrowing the loss to $4 million this quarter."

Risks and Concerns

• "Jet fuel prices hit a record high in September" and "Gas prices also remain high" were cited as demand and rate headwinds for Las Vegas, with President, CEO & Director Hornbuckle adding, "we're going to need relief on fuel, gas and airline pricing."

• "In Brazil, the market is shut down" remained an uncertainty, with Chief Commercial Officer & President of MGM Digital Fritz saying, "we feel blessed to have our partner down there" and "we're planning for a variety of different scenarios."

• "There is minimal near-term refinancing risk" was management’s mitigation framing, supported by CFO & Treasurer Halkyard citing "a $675 million issue of senior notes maturing within the next 12 months" and an undrawn revolver.

Final Takeaway

Management emphasized that the People Incorporated situation is concluded, highlighting an amended voting agreement with a 29.9% ownership cap, while attributing Las Vegas EBITDAR pressure primarily to ADR softness amid higher airfare and energy costs despite stronger casino trends. The company pointed to record MGM China revenue and market share, a sharply improved MGM Digital loss profile, and reiterated the Osaka timeline and funding plan—about $1 billion per year in 2027 and 2028—while maintaining focus on capital returns with $1.4 billion of remaining repurchase authorization and framing the balance sheet as having limited near-term refinancing risk.

Read the full Earnings Call Transcript

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