Wynn Sees 9% Revenue Growth in 2024, Plans UAE Expansion
Wynn releases Q4 and end of year 2024 financial statements.
Wynn reports 9% higher revenue in 2024. © Scott Webb, Unsplash
Key Points:
- Wynn grows revenue 9.1% YOY
- Q4 revenue for the company is flat
- Las Vegas is flat YOY, while Macau saw signs of modest growth
- Revenue at Encore Boston declines slightly
Wynn has announced another year of record earnings. Company revenue for 2024 was $7.1 billion, up over 9% from 2023. But the news wasn’t all good; net income fell 31% to $501 million. And profit margins declined from 11% in 2023 to 7% in 2024 due to increasing costs.
In Las Vegas, 2024 revenue came in at $3 billion, a 1% increase for the year, and EBITDAR also rose by about $90 million in 2024. Fourth quarter numbers were impacted by a much less robust turnout for the Las Vegas Grand Prix, with the company stating that lower REVPAR or revenue per available room dropped earnings by about $20 million.
Macau had a much more impressive year of revenue growth, with Wynn Palace up $331 million and Wynn Macau up $251 million in operating revenue.
Encore in Boston actually saw a revenue decline of about $9 million. Much of the company’s 31% decline in revenues was attributable to an income tax benefit on a property valuation that the company received in 2023 but not in 2024.
Wynn was an aggressive purchaser of its own shares last year, spending $386 million to buy back 4.3 million shares due to what the company called a share price that “inappropriately values our assets.”
They spent an additional $99 million in Q4 on their new United Arab Emirates destination resort, Wynn Al Marjan, which put their total spending on this latest flagship development over $631 million so far.
As we discussed at our Investor Day in October, we believe the UAE will be a $3 billion to $5 billion gaming market over time and certainly the most exciting new market for our industry in decades.– Craig Billings, CEO, Wynn, Q4 Earnings Call
Future So Bright, You Need to Wear Shades
Wynn and several stock analysts feel that the company’s stock price doesn’t seem to reflect any value for this new project slated to open in 2027. Wynn announced earlier in February that it had completed the $2.4 billion in financing it needed to finish the massive $5 billion resort.
It will not only feature more than 1500 hotel rooms, 21 restaurants, and 140,000 square feet of luxury shopping, but also the first casino in the Gulf States in the Middle East. Their 220,000 square feet of casino space will be within a four-hour flight of about a third of the world’s population.
Wynn is a 40% owner of the project and will manage the property once it’s opened. With an expected boost of $500 million to $800 million a year in earnings, or about what the Wynn earns now from all four of its properties put together, it’s not hard to see where they might feel that buybacks are a good use of capital when looking at future multiples.
They also referenced their expressed interest but declining prospects for one of the New York licenses likely to be awarded this year, as well as a continued interest in the Thailand market as full-blown, legal, integrated resort casinos edge closer to reality with the Thai Cabinet passing a draft law in early January.
Conclusion
While revenues were up almost double digits, tough comparables and a tax filing made earnings dim, though by no means did the company miss by the top line number of 31%. Though just property-wide, EBITDAR was down at all four properties in single digits except at Wynn Macau, which fell 14%.
Cost-cutting measures should help Wynn restore profit margins closer to double digits in 2025. While Q1 2025 may see some distortion from the 2024 Super Bowl held in Las Vegas, easier year-over-year comparisons should help drive stronger performance in the latter half of the year.
Looking further out both Macau and Las Vegas comparables should be easier to beat after the first quarter, and the malaise in Boston may be attributable to only a 20.7% hold number in table games. Compare that with the 30.9% held by Wynn Las Vegas in Q4.
In the much longer run, most analysts estimate the total market in the UAE to be between 3 billion and 5 billion, with Wynn most likely first to market. Expect renewed investment interest when the Wynn AL Marjan tops out later this year.
