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Caesars Q4 2022 earnings report includes record adjusted EBITDA for the company’s major brick-and-mortar segments as well as improved financial results from its digital division.

Both Caesars’ Las Vegas and regional casino properties reported Q4 AEBITDA results Tuesday. The company’s Las Vegas properties also set a calendar year AEBITDA record.

Additionally, the company had continued to curtail losses for its online sports betting and casino division.

“Caesars Sportsbook delivered significantly improved operating results during the fourth quarter which sets the foundation for a strong 2023,” CEO Tom Reeg said in a statement announcing the company’s results. “Consumer demand remains strong in all of our verticals and we are optimistic for the year ahead.”

Topline numbers

For Q4 2022, Caesars reported GAAP net revenues of $2.8bn versus $2.6bn in Q4 2021. Caesars had a GAAP net loss of ($148m) compared to a net loss of ($434m) during that same time frame.

The company’s same-store AEBITDA was $957m compared to $581m for the comparable prior-year period.

For full year 2022, Caesars had GAAP net revenues of $10.8bn compared to $9.6bn for full year 2021. It trimmed net losses to ($899m) this past calendar year from ($1bn) in calendar year 2021.

Same-store AEBITDA increased year-over-year to $3.2bn compared to $3bn.

Las Vegas Strip property AEBITDA increased to $537m in Q4 2022 from $483m in Q4 2021. Regional property AEBITDA improved slightly to $443m from $430 during that same time.

Caesars also announced it had continued cutting losses in its sports betting and iCasino division after spending hundreds of millions of dollars on marketing, free bets, promotions and other player acquisition costs.

Caesars reported ($5m) in digital division AEBITDA losses for Q4 2022, compared to ($305m) in losses for Q4 2021. For the full year, Caesars still had increased AEBITDA losses from 2021, reporting ($666m) in calendar year 2022 compared to ($476m) in 2021.

Part of the company’s 2022 digital division losses can be attributed to massive spending in New York in January 2022. The company offered promotional “free” bets of up to $3,000 for new customers, an offer it didn’t replicate with Ohio’s January 2023 launch or seems like to do so with Massachusetts’ pending March launch.

News nugget

For the year, Caesars Las Vegas properties saw a significant year-over-year revenue jump. The Strip casinos nearly equaled all the company’s other properties.

Caesars Las Vegas Strip AEBITDA was $1.96bn for calendar year 2022, improving from $1.57bn in 2021. Regional property figures were roughly equal, not considering inflation, at $1.99bn in full-year 2022 against $1.98bn in 2021.

Reeg said during Wednesday’s earnings call that part of the regional results can be attributed to poor weather across the country, particularly in northern Nevada.

This reaffirms what Caesars and other gaming industry officials have said about the strong return of the Las Vegas strip. This comes thanks to domestic leisure visits, which have continued to improve since the depths of the pandemic, and even though international travel has still remained depressed since pre-pandemic levels.

Critically, Reeg said, group visits are improving from 2019, pre-pandemic levels.

Best quote

Caesars CEO Tom Reeg: “As we sit here today, the business feels fantastic.”

Best question

When asked during Wednesday’s call about the continued impressive Las Vegas tourism numbers, despite major economic concerns around inflation and a potential coming recession, Reeg said pandemic-related shifts could still be playing a big factor.

Reeg echoed other business leaders from a variety of tourism and entertainment industries that Americans are looking to spend dollars traveling after months coupled up at home. But he also said that remote work was sparking the ability to travel as well.

With more flexibility working remotely, and less time spent commuting to in-person offices, this could explain why more Americans than ever are coming to destination casinos in Las Vegas.

Current trading and outlook

The Q4 earnings report reaffirms what Caesars and other gaming companies have seen in the past few quarters as the country continues recovering from the forced shutdown of every commercial casino in the country; Las Vegas remains a major domestic tourist destination – and corporate money maker.

Meanwhile, Caesars is nearing profitability for its high-spending digital division after several years of massive losses. Caesars sportsbook may trail its three biggest rivals – FanDuel, DraftKings and BetMGM – in market share, but it does appear closer than ever to profitability.

Caesars stock was down slightly in after-hours trading following Wednesday’s earnings announcement then up as much as 1% following the ensuing earings call. The company stock was down just over 3% during regular trading.

Stock for Caesars is up slightly in the past month as well as three-month periods but is still down nearly 35% in the past 12 months.

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