Wynn Resorts CEO Craig Billings has stated that it is getting close to breaking even in EBITDA for its digital operations, but the company isn’t ready to give a date as to when that will happen.
Speaking on Wynn’s third-quarter earnings call, Billings added that the company’s goals in the interactive unit are to launch in Massachusetts, achieve break even, and then grow as the market does, particularly in igaming.
Wynn Interactive reported an improved EBITDA burn rate of $17.7m for Q3 against the $21m declared during the same period the previous year.
Julie Cameron-Doe, Chief Financial Officer at Wynn Resorts, noted that interactive’s improved EBITDA burn rate was “primarily driven by improved marketing efficiency and disciplined objects control”.
When asked later in the call exactly when Wynn’s digital operations would break even, Billings commented that the company can’t put an exact date on when it will happen, but they’re moving in that direction.
The CEO added that they think about their digital business in the long term and that they’re not willing to “burn billions of dollars” to achieve profitability.
Billings said: “If you look at our results for Q3 year-over-year, we had almost the same total handle in both Q3 2022 and Q3 2021 on a 90% reduction in marketing spend and an 80% reduction in burn because our initial customer cohorts continue to play with us, generating revenue, and we’re being very thoughtful with respect to user acquisition and problems.”
Billings added that he expects a “modest uptick” in user acquisition following the launch of sports betting in Massachusetts, but “nothing earth-shattering” as it already has a sizable database in the state.
“The goals at this point are to launch Massachusetts, achieve breakeven, and then grow as the market does, particularly in igaming where our brand has currency, and we can ultimately drive the best digital customers to Wynn Las Vegas and Encore Boston Harbour.
“We’re not calling the EBITDA breakeven point yet, but if you look at our numbers, we’re getting pretty close.”
Wynn Resorts Q3 financials
Elsewhere, Wynn noted that its Las Vegas and Boston properties have helped it mitigate losses elsewhere across its portfolio, as its Q3 revenues have fallen by over $100m YoY.
The company added that its Macau operations – Macau and Palace – were impacted during the quarter by COVID-19-related protocols, affecting its overall company line.
Wynn’s Q3 operating revenues were $889.7m, a $104.9m drop YoY (2021: $994.6m) with a net loss of $142.9m or $1.27 per diluted share (2021: net loss $166.2m or $1.45 per diluted share). Adjusted property EBITDA for the quarter stood at $173.5m (2021: $154.6m).
Per property, operating revenues improved by $68.4m in Las Vegas to $544.4m (2021: $476m) and by $19.6m at Encore Boston Harbor to $211.8m (2021: $192.2m).
However, revenues decreased by $106.1m at Wynn Palace to $75.2m (2021: $181.3m) and by $90.3m at Wynn Macau to $40.4m (2021: $130.7m).
“Our teams at Wynn Las Vegas and Encore Boston Harbor delivered a new third-quarter record for Adjusted Property EBITDA at our combined North American properties,” stated Billings.
“Their relentless focus on five-star hospitality, combined with our market-leading facilities, continue to elevate our properties above our peers as the destinations of choice for luxury guests in both Las Vegas and Massachusetts.
“In Macau, while COVID-related travel restrictions continue to negatively impact our results, we were pleased to experience encouraging pockets of demand during the recent October holiday period. We remain confident that the market will benefit from the return of visitation over time.”