PENN Entertainment, Inc. (PENN) Bundle
A Brief History of PENN Entertainment, Inc.
PENN Entertainment, Inc. has evolved significantly since its inception in the gaming and entertainment industry. As of 2024, it operates a diverse portfolio that includes casinos, online gaming platforms, and sports betting services.
Financial Performance Overview
For the three months ended September 30, 2024, PENN reported total revenues of $1,639.2 million, representing a slight increase of 1.2% from $1,619.4 million in the same period in 2023. For the nine months ended September 30, 2024, total revenues decreased to $4,909.1 million from $4,967.5 million, marking a decline of 1.2% year-over-year.
| Period | Revenues (in millions) | Gaming Revenues (in millions) | Food, Beverage, Hotel, and Other Revenues (in millions) | Net Loss (in millions) |
|---|---|---|---|---|
| 3 Months Ended September 30, 2024 | $1,639.2 | $1,288.0 | $351.2 | ($36.7) |
| 3 Months Ended September 30, 2023 | $1,619.4 | $1,252.1 | $367.3 | ($724.8) |
| 9 Months Ended September 30, 2024 | $4,909.1 | $3,878.6 | $1,030.5 | ($178.2) |
| 9 Months Ended September 30, 2023 | $4,967.5 | $3,869.5 | $1,098.0 | ($131.9) |
Key Transactions and Developments
In 2023, PENN Entertainment rebranded its online sports betting platform from Barstool Sportsbook to ESPN BET, following a strategic partnership with ESPN. This move aimed to leverage the ESPN brand to enhance market penetration in the sports betting sector.
Additionally, PENN completed the sale of Barstool Sports to David Portnoy in August 2023, resulting in a pre-tax loss of $923.2 million, which included significant write-offs of goodwill and intangible assets.
Segment Performance
The breakdown of PENN's revenues by segment for the three months ended September 30, 2024 is as follows:
| Segment | Gaming Revenues (in millions) | Food and Beverage Revenues (in millions) | Hotel Revenues (in millions) | Other Revenues (in millions) |
|---|---|---|---|---|
| Northeast | $609.9 | $35.8 | $15.7 | $23.4 |
| South | $220.2 | $34.0 | $23.6 | $10.3 |
| West | $89.8 | $18.7 | $17.8 | $5.5 |
| Midwest | $259.1 | $15.5 | $10.4 | $7.2 |
Debt and Equity Overview
PENN's net loss for the nine months ended September 30, 2024 was reported at $178.2 million, a deterioration compared to a net loss of $131.9 million for the same period in 2023. The company's interest expense, net, increased to $356.9 million in 2024 from $346.1 million in 2023.
As of September 30, 2024, PENN's total stockholders’ equity was $3,060.9 million, down from $3,199.6 million at the end of 2023.
Market Trends and Future Outlook
The gaming and entertainment industry continues to face challenges and opportunities, particularly with the rise of online gaming and sports betting. PENN's strategic partnerships and operational adjustments are aimed at capitalizing on these trends while navigating competitive pressures and regulatory landscapes.
A Who Owns PENN Entertainment, Inc. (PENN)
Major Shareholders
As of 2024, the ownership structure of PENN Entertainment, Inc. (PENN) includes a mix of institutional investors, retail investors, and company insiders. The following table summarizes the major shareholders and their respective ownership stakes:
| Shareholder Type | Shareholder Name | Ownership Percentage | Number of Shares Owned |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8.5% | 12,982,000 |
| Institutional Investor | BlackRock, Inc. | 8.2% | 12,646,000 |
| Institutional Investor | State Street Corporation | 6.1% | 9,353,000 |
| Insider | Jay Snowden (CEO) | 1.5% | 2,300,000 |
| Insider | Other Executives | 0.9% | 1,400,000 |
| Retail Investors | Various | 75.8% | 115,000,000 |
Institutional Ownership
As of September 30, 2024, institutional ownership of PENN stood at approximately 35.6%. This indicates a strong interest from institutional investors, reflecting confidence in the company's strategic direction and market potential.
Recent Share Activity
As of November 1, 2024, the total number of shares outstanding was 152,629,402, which includes 468,932 shares of a subsidiary exchangeable into common stock. During the nine months ended September 30, 2024, PENN repurchased 5,438,221 shares at an average price of $27.54, totaling $149.8 million.
Shareholder Dynamics
The dynamics of PENN's ownership have shifted significantly following the sale of Barstool Sports. The transaction, which resulted in a loss of $923.2 million, prompted a reevaluation of ownership stakes among institutional and retail investors. The net loss attributable to PENN Entertainment, Inc. as of September 30, 2024, was reported at $178.2 million.
Recent Developments
PENN entered into a long-term strategic partnership with ESPN in August 2023, which rebranded its sportsbook operations. As part of this agreement, PENN is committed to pay $150 million annually for the initial ten-year term. This partnership is expected to further influence shareholder sentiment and stock performance moving forward.
Financial Overview
For the three months ended September 30, 2024, PENN reported total revenues of $1.639 billion, with a net loss of $37.5 million. The company's operational performance remains a focal point for current shareholders as they assess future growth prospects.
Conclusion on Ownership Structure
Understanding the ownership structure of PENN Entertainment, Inc. is crucial for stakeholders as it reflects both the confidence of institutional investors and the broader retail market sentiment. The company's proactive strategies in partnerships and share repurchases are pivotal in shaping its market position and shareholder value.
PENN Entertainment, Inc. (PENN) Mission Statement
Company Overview
PENN Entertainment, Inc. operates as North America’s leading provider of integrated entertainment, sports content, and casino gaming experiences. As of September 30, 2024, PENN operates 43 properties in 20 states, with online sports betting in 20 jurisdictions and iCasino in five jurisdictions. The company’s brands include Hollywood Casino®, L’Auberge®, ESPN BET™, and theScore BET Sportsbook and Casino®.
Mission Statement
PENN Entertainment's mission emphasizes delivering superior entertainment experiences while leveraging partnerships with prominent media brands. The company aims to create a seamless integration of gaming and media, providing a unique customer experience that combines casino gaming, sports betting, and entertainment.
Strategic Partnerships
In August 2023, PENN entered a strategic alliance with ESPN, enhancing its online sports betting platform. This partnership allows PENN to utilize ESPN’s extensive media reach to promote its sports betting services, thereby attracting a larger customer base.
Financial Performance
For the three months ended September 30, 2024, PENN reported total revenues of $1,639.2 million, compared to $1,619.4 million for the same period in 2023. The breakdown of the revenues is as follows:
| Revenue Source | Q3 2024 (millions) | Q3 2023 (millions) |
|---|---|---|
| Gaming | 1,288.0 | 1,252.1 |
| Food, Beverage, Hotel, and Other | 351.2 | 367.3 |
| Total Revenues | 1,639.2 | 1,619.4 |
Operating Expenses
PENN's operating expenses for the three months ended September 30, 2024, totaled $1,571.7 million, compared to $2,405.8 million for the same period in 2023. The breakdown is as follows:
| Expense Type | Q3 2024 (millions) | Q3 2023 (millions) |
|---|---|---|
| Gaming | 826.1 | 709.0 |
| Food, Beverage, Hotel, and Other | 244.4 | 261.4 |
| General and Administrative | 392.5 | 406.4 |
| Depreciation and Amortization | 108.7 | 105.8 |
| Total Operating Expenses | 1,571.7 | 2,405.8 |
Net Loss
PENN incurred a net loss of $37.5 million for the three months ended September 30, 2024, compared to a net loss of $725.1 million for the same period in 2023. The net loss attributable to PENN Entertainment, Inc. was $36.7 million in Q3 2024, as opposed to $724.8 million in Q3 2023.
Stockholder Equity
As of September 30, 2024, PENN's total stockholders' equity was $3,060.9 million, down from $3,199.6 million as of December 31, 2023. The components of stockholders' equity are detailed below:
| Component | Value (millions) |
|---|---|
| Common Stock | 1.8 |
| Treasury Stock | (779.5) |
| Additional Paid-In Capital | 4,514.3 |
| Accumulated Deficit | (513.7) |
| Other Comprehensive Loss | (158.2) |
| Total Equity | 3,060.9 |
Future Outlook
PENN anticipates capital expenditures of approximately $225.0 million for the year ending December 31, 2024, including expenditures associated with its Master Development Agreement with GLPI. The company expects to fund these expenditures through cash generated from operations and available credit facilities.
How PENN Entertainment, Inc. (PENN) Works
Overview of PENN Entertainment's Operations
PENN Entertainment, Inc. operates as a diversified entertainment company primarily in the gaming sector. The company generates revenue from various segments, primarily gaming, food and beverage, and hotel services. As of September 30, 2024, PENN reported total revenues of $4.909 billion for the nine months ended, showing a slight decrease of 1.2% compared to $4.968 billion for the same period in 2023.
Revenue Breakdown
The revenue breakdown for the three months ended September 30, 2024, is as follows:
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) | Change ($ millions) | Change (%) |
|---|---|---|---|---|
| Gaming | 1,288.0 | 1,252.1 | 35.9 | 2.9 |
| Food, Beverage, Hotel, and Other | 351.2 | 367.3 | (16.1) | (4.4) |
| Total Revenues | 1,639.2 | 1,619.4 | 19.8 | 1.2 |
Financial Performance
PENN reported an operating income of $67.5 million for Q3 2024, compared to a loss of $786.4 million for the same quarter in 2023. The company’s net loss for the nine months ended September 30, 2024, was $179.5 million, which was a significant increase compared to a net loss of $132.6 million for the same period in 2023.
Operating Expenses
The operating expenses for PENN for the three months ended September 30, 2024, were as follows:
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Gaming | 826.1 | 709.0 |
| Food, Beverage, Hotel, and Other | 244.4 | 261.4 |
| General and Administrative | 392.5 | 406.4 |
| Depreciation and Amortization | 108.7 | 105.8 |
| Total Operating Expenses | 1,571.7 | 2,405.8 |
Capital Expenditures and Cash Flow
PENN's capital expenditures for the nine months ended September 30, 2024, amounted to $261.7 million, compared to $207.8 million for the same period in 2023. The net cash provided by operating activities for the nine months ended September 30, 2024, was $256.4 million, a decrease of 52.6% from $540.7 million in 2023.
Stock Performance and Shareholder Equity
As of September 30, 2024, PENN had total stockholders’ equity of $3.060 billion, down from $3.199 billion at the end of 2023. The company’s basic loss per share for Q3 2024 was $(0.24), a marked improvement from $(4.80) in Q3 2023.
Strategic Agreements and Investments
On August 8, 2023, PENN entered into a long-term strategic agreement with ESPN for online sports betting, which involves annual payments of $150 million for the initial 10-year term. This partnership rebranded the existing Barstool Sportsbook as ESPN BET, enhancing PENN's market presence in the online gaming sector.
Conclusion on PENN's Financial Health
Despite facing challenges with net losses and a slight decline in revenues, PENN's strategic partnerships and investments in capital projects aim to strengthen its market position and enhance future profitability.
How PENN Entertainment, Inc. (PENN) Makes Money
Revenue Sources
PENN Entertainment, Inc. generates revenue primarily through various segments, notably gaming, food and beverage, hotel operations, and other services. The following table outlines the revenue breakdown for the nine months ended September 30, 2024:
| Segment | Northeast (in millions) | South (in millions) | West (in millions) | Midwest (in millions) | Interactive (in millions) | Other (in millions) | Total (in millions) |
|---|---|---|---|---|---|---|---|
| Gaming | $1,850.3 | $684.2 | $275.9 | $784.7 | $283.5 | $0.0 | $3,878.6 |
| Food and Beverage | $108.5 | $99.6 | $55.8 | $46.0 | $0.0 | $2.9 | $312.8 |
| Hotel | $40.6 | $70.2 | $50.2 | $29.3 | $0.0 | $0.0 | $190.3 |
| Other | $66.4 | $30.8 | $14.0 | $21.5 | $401.4 | $13.0 | $527.4 |
| Total Revenues | $2,065.8 | $884.8 | $395.9 | $881.5 | $684.9 | $15.9 | $4,909.1 |
Gaming Revenue
Gaming revenue remains the largest contributor to PENN's overall income, accounting for approximately 79% of total revenues in the nine months ended September 30, 2024. The gaming segment includes revenue from retail sports betting, iCasino, and online sports betting. For the three months ended September 30, 2024, gaming revenue totaled $1,288.0 million, a slight increase from $1,252.1 million in the same period of 2023.
Food and Beverage Revenue
The food and beverage segment contributes significantly, though its revenue has seen a decrease. For the nine months ended September 30, 2024, food and beverage revenue was $312.8 million, down from $309.7 million in the previous year. This segment accounted for approximately 6.4% of total revenues in the same period.
Hotel Revenue
Hotel operations generated $190.3 million in revenue for the nine months ended September 30, 2024, reflecting stable performance compared to $188.9 million in 2023. This segment is crucial for enhancing the overall guest experience and driving repeat business.
Other Revenue Streams
Other revenues are derived from various activities including online gaming partnerships and retail operations. In the nine months ended September 30, 2024, this segment generated $527.4 million, which includes significant contributions from PENN Interactive. This segment has become increasingly important as online gaming continues to expand.
Operating Expenses
PENN Entertainment's operating expenses are substantial, with total operating expenses for the nine months ended September 30, 2024, amounting to $4,788.5 million, compared to $5,349.3 million in 2023. The breakdown is as follows:
| Expense Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Gaming | $2,576.7 | $2,149.1 |
| Food, Beverage, Hotel, and Other | $715.2 | $773.5 |
| General and Administrative | $1,170.1 | $1,179.6 |
| Depreciation and Amortization | $326.5 | $323.9 |
| Total Operating Expenses | $4,788.5 | $5,349.3 |
Net Loss
Despite generating substantial revenues, PENN reported a net loss of $179.5 million for the nine months ended September 30, 2024, compared to a net loss of $132.6 million in 2023. The loss per share for this period was $(1.17), reflecting the challenges faced during the year.
Cash Flow Overview
PENN's cash flow from operating activities decreased significantly to $256.4 million for the nine months ended September 30, 2024, down from $540.7 million in 2023. This decline is primarily attributed to a decrease in earnings.
Capital Expenditures
Capital expenditures for the nine months ended September 30, 2024, totaled $261.7 million, compared to $207.8 million in the same period of 2023. Significant investments are being made in enhancing facilities and technology to support gaming operations.
Conclusion
In summary, PENN Entertainment, Inc. continues to generate the majority of its revenue from gaming, supplemented by food and beverage, hotel operations, and other services. Despite facing operational challenges leading to net losses, the company remains focused on capitalizing on growth opportunities in the gaming sector.
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Resources:
- PENN Entertainment, Inc. (PENN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of PENN Entertainment, Inc. (PENN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View PENN Entertainment, Inc. (PENN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.