Boyd Gaming Beats Q2 Estimates, Boosts Buybacks After $1.75B FanDuel Stake Sale

Boyd Gaming (NYSE: BYD) was trading higher in Thursday’s premarket after delivering a Q2 earnings beat and strong forward guidance, bolstered by rising core revenue and a major $1.75 billion FanDuel stake sale.

Boyd reported revenues of $1.03 billion in the second quarter, up 6.9% from the corresponding quarter last year. The results exceeded the $981 million that analysts had expected. Its EBITDAR rose nearly 4% year-over-year to $357.9 million.

The company also beat expectations on the bottom line. Adjusted EPS landed at $1.87, well ahead of the $1.67 that analysts were modeling.

Boyd’s earnings came a day after Las Vegas Sands reported blowout earnings that saw its stock rise 4.3% yesterday.

Boyd Reports Strong Numbers for Q2

On a property level basis, Boyd reported the most substantial yearly growth in revenues and EBITDAR in over three years.

Boyd Gaming CEO Keith Smith said during the earnings call:

“These results were driven by broad-based growth across our operating segments, including both online and managed, demonstrating the value of our diversified business model.”

He added that both core customers and retail customers saw strength in the quarter.

Boyd Won’t Offer Deeply Discounted Rooms

Commenting on the outlook, Smith said that while the “Las Vegas Strip has recently seen softer demand trends, there are signs of continued strength in the local economy.”

He specifically pointed to the strong employment trends in Southern Nevada. Additionally, construction activity worth nearly $11 billion is underway in the Las Vegas Valley.

The company, meanwhile, ruled out joining the “room rate war” in Las Vegas, where some companies are offering rooms at a deep discount.

Boyd noted that this year’s summer room rates are lower than those of last year. Still, Smith stressed that it is “not going to offer $19 hotel rooms.”

While Boyd warned that things could change as the quarter progresses, CFO Josh Hirschberg said that the “trends that we saw in Q2 are continuing into Q3.” He added that the company is seeing continued strength in both its core customers and unrated plays in retail.

Boyd Sold FanDuel Stake

Earlier this month, Boyd sold its 5% stake in FanDuel to Flutter Entertainment for $1.75 billion in cash. The company expects to receive the proceeds over the next few weeks. It would initially use the funds to repay the outstanding debt under its credit facility.

Commenting on that deal, Smith said:

“As a result of this transaction, our company is in an even stronger financial position to continue executing our strategy of investing in our properties, pursuing attractive growth opportunities, returning capital to shareholders, and maintaining a strong balance sheet, consistent with our focus over the last several years.”

Boyd’s leverage ratio would fall below the 2.5x target it aims for following the deal, but management stressed that it still aspires to a ratio of 2.5x over the long term.

Responding to a question over capital allocation (including M&A activity), Smith said that the company would be “disciplined.” Hirschberg added that while the low leverage gives it a lot of flexibility, it does not mean “we’re going to go out and try to do something that doesn’t make sense.”

The company spent $105 million on share buybacks in Q2 and another $15 million on dividends. Thanks to the FanDuel stake sale, the company has raised its quarterly buyback target from $100 million to $150 million. That will take effect at the start of the current quarter.

Other Key Takeaways from BYD’s Earnings Call

Boyd also faced questions over its online gaming strategy, mainly after it sold its stake in FanDuel.

Boyd clarified that, despite selling its stake in FanDuel, it remains committed to online gaming. The company intends to expand its digital presence in states where it already has a physical footprint, once online casino regulations allow.

Management also addressed potential impacts from former President Trump’s proposed “One Big Beautiful Bill Act.”

While the legislation raises the tax burden for gamblers by capping the loss deduction at 90%, Boyd sees offsetting benefits in some areas. That includes higher senior deductions, tip write-offs, and a broader standard deduction—all of which are beneficial to its predominantly older customer base, 40% of whom are over the age of 65.

Meanwhile, with Thursday’s rise, BYD looks set to add to its year-to-date gains. They stood at 13.5% as of the close yesterday.

The stock has outperformed the broad-based S&P 500 Index this year. However, its return lags behind that of the Roundhill Sports Betting & iGaming ETF. That index is more representative of its industry.

Still, with solid Q2 results, a significant liquidity boost from the FanDuel sale, and continued momentum heading into Q3, Boyd is positioning itself for disciplined growth.

Investors will be watching how it deploys capital in the coming quarters. Key areas to watch include potential mergers and acquisitions, online expansion, and shareholder returns.