Century Casinos' Q3 2025: Contradictions Emerge on Missouri Revenue Strategy, Buyback vs. Debt Paydown, and Alberta Gaming Outlook

Date of Call: November 11, 2025

Financials Results

• Revenue: $154.0 million net operating revenue; driven by strength in East and Midwest and Canada, offset by weakness in West and Poland (no YOY revenue percentage provided)

Guidance:

• Company expects a clear path to higher EBITDAR and cash flow in 2026 and beyond.
• Preliminary October EBITDAR was up well over 20% year-over-year; positive customer trends continued into October.
• Poland: current licenses valid through 2028, operations expected to normalize and company is pursuing divestment.
• Balance sheet: no debt maturities until 2029 and limited near-term CapEx (total $18M this year; $15M spent).
• Strategic review ongoing; no decisions or material capital-return actions expected until Board approves a course of action (likely after Q1).

Business Commentary:

* Regional Performance and EBITDAR Trends: - Century Casinos reported EBITDAR for Q3 2025, with a decline in September 2024 due to one-time effects in Colorado and Poland. - The decline was attributed to the closure of a casino in Poland and the reversal of bonus accruals in Colorado.

• Canadian Operations Growth:
• Century Casinos' Canadian operations saw slot coining increase by 5.8% and EBITDA grow by 11.1% in Alberta, with Century Downs leading the growth.

• The growth was driven by disciplined cost management and benefits from facade upgrades, particularly at St. Albert.

• Convention and Entertainment Strategy:

• The Nugget Casino Resort in Reno Sparks experienced both strong and challenging quarters, with record August EBITDAR and weaker July and September.

• The strategy includes marketing enhancements, new entertainment programming, and ongoing conventions and group business improvements to attract more visits and gaming revenues.

• Shareholder Value and Capital Allocation:

• Century Casinos spent $1.5 million on a share buyback program and had a cash balance of $78 million at the end of Q3.

• The company is analyzing stock buyback versus debt repayment decisions for 2026, with no significant moves anticipated until after the strategic review process.

• Investment and Expansion Focus:

• Century Casinos is focusing on converting unused space into convention space at the Nugget and considering facade upgrades for two Canadian properties.
• The investments aim to enhance customer experience and attract more visitors, with ongoing strategic review considerations for future growth opportunities.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management: "we are very confident in our business prospects" and sees a "clear path forward to higher EBITDAR and cash flow for 2026 and beyond." Management highlighted positive operational momentum: adjusted Q3 EBITDAR would have increased ~5% excluding one-time September/Poland items, and "preliminary results for October show EBITDAR up well over 20% compared to last year."

Q&A:

• Question from Daryl Young (Stifel): Starting off on the strong results in your Canada portfolio. Can you expand on what's driving that broad-based growth? And as you continue to evaluate the broader portfolio, do you view these as more noncore with the increasing U.S. exposure? Or do you see real synergies with the broader portfolio?
  Response: Canada properties are largely standalone with only incremental synergies; growth driven by local initiatives (e.g., St. Albert facade), motivated management and disciplined cost control, with some macro tailwind in Canada vs. the U.S.

• Question from Daryl Young (Stifel): On the Nugget: timing for the group and convention business to normalize, how many more room nights can this add, and how are you underwriting new entertainment programming and its expected uplift to visits and gaming revenues?
  Response: Expect normalization into 2026 with group business likely same or better in 2026; concerts are being re‑focused toward fewer, higher‑quality acts to improve profitability and drive overflow to hotel, F&B and gaming; room‑night uplift not precisely quantified.

• Question from Jordan Bender (Citizens JMP Securities): You're seeing success from ETGs in Colorado. Is this a strategy you'd implement across other U.S. assets given the margin benefits?
  Response: ETGs will be used selectively: replaced tables in smaller Colorado operations where obvious, but in larger casinos ETGs will run alongside live table games rather than fully replace them.

• Question from Jordan Bender (Citizens JMP Securities): You repurchased shares in the quarter — where does the balance sheet sit today and how are you weighing buybacks versus paying down debt into '26?
  Response: The company is evaluating buyback versus debt paydown but has made no decisions yet.

• Question from Ryan Sigdahl (Craig‑Hallum Capital Group): October EBITDAR was >20%—is that broad‑based across the portfolio, and are there any unusual comps to be aware of in Nov/Dec that would affect continuity?
  Response: October strength appears broad‑based; management sees no unusual fourth‑quarter comps except Caruthersville (new land‑based opened first week of Nov last year) which will affect YoY comps there; continuation depends on consumer sentiment.

• Question from Ryan Sigdahl (Craig‑Hallum Capital Group): For the Nugget, why were July and September weaker—any cancellations or convention timing issues?
  Response: July/September weakness was driven by the absence of prior‑year large concepts/events (e.g., big shows, a large bingo event) and fewer conferences versus 2024.

• Question from Chad Beynon (Macquarie Research): Caruthersville — are you still on track to hit the returns originally targeted from construction CapEx, and where will growth come from (further‑out customers or closer catchment)?
  Response: Yes, Caruthersville remains on track for expected returns; growth expected from both nearer and farther customers with outsized potential from the 75+ mile market.

• Question from Chad Beynon (Macquarie Research): The retail customer weakness appears to have abated based on October — any evidence this will remain stable and reasons why it fell off earlier (weather, CPI, unemployment)?
  Response: Retail weakness likely tied to consumer insecurity (tariff concerns) concentrated in lower‑income catchments; management is cautiously optimistic but cannot definitively predict permanence.

• Question from Chad Beynon (Macquarie Research): If lower‑end customer volatility persists, are there initiatives or cost improvements you could make?
  Response: Yes — further cost tightening is possible and management would pursue savings if necessary, but they will avoid excessive cuts that could harm operations.

• Question from Connor Parks (CBRE Securities): Regarding capital allocation and reinvestment, any projects outside the Nugget you’re weighing or low‑hanging fruit in Missouri?
  Response: Potential modest reinvestments under consideration (facade upgrades at two Canadian properties, some F&B at the Nugget, routine slot refreshes); no significant buybacks or debt paydown until strategic review concludes.

• Question from Connor Parks (CBRE Securities): You’ve mentioned expected uplift from upcoming tax season — can you quantify benefits around customer bases or spending habits by region?
  Response: Management cannot quantify the tax‑season benefit; notes that lower‑segment customers (~15–25% of database in some properties) are most impacted and the company is shifting marketing toward mid/upper tiers to reduce exposure.

Contradiction Point 1

Revenue Growth Strategy in Missouri

It involves differing strategies for revenue growth in Missouri, which could impact investment decisions and financial performance.

Are you on track for Caruthersville's expected returns from construction CapEx? - Chad Beynon(Macquarie)

2025Q3: We are focusing on all the regions, close and distant. It's just for sure from the start that they will have a better opportunity in the distant area than in the closer. - Erwin Haitzmann(CEO)

Is the focus on revenue growth or maintaining current EBITDAR levels? Are you expanding to serve customers beyond 75 miles and increasing marketing efforts to grow the business, or prioritizing short-term profitability? - Chad Beynon(Macquarie)

2025Q1: Definitely both. We proactively and aggressively want to push the revenue up. And as you correctly said, an interesting segment is the 75-plus mile customer base. We think we've got more opportunity there. - Erwin Haitzmann(CEO)

Contradiction Point 2

Stock Buyback and Debt Paydown Strategy

It involves strategic decisions about capital allocation, specifically regarding stock buybacks and debt paydown, which directly impact shareholder value and financial health.

How do you prioritize buybacks versus debt paydown in 2026? - Jordan Bender (Citizens JMP Securities)

2025Q3: No final decisions made. Analyzing stock buyback versus debt paydown for 2026. - Margaret Stapleton(CFO)

How is the company allocating capital? - Jeffrey Stantial (Stifel)

2024Q4: We're a bit more cautious in how we allocate capital. First and foremost, we would like to try to refi or reprice our term loan, and then obviously opportunistically, we can look at the stock as well. - Peter Hoetzinger(CEO)

Contradiction Point 3

Expectations for Online Gaming and Sports Betting in Alberta

It involves strategic planning and expectations regarding the launch of online gaming and sports betting in Alberta, which could impact revenue growth and market position.

Can you quantify the potential benefits to the customer base from the upcoming tax season? - Connor Parks (CBRE Securities)

2025Q3: We don't expect any meaningful negative impact, maybe 0.5% to 1%, but it really is not meaningful. Our product mix is pretty fresh, and in the next 1, 2, 3 years, we don't see anything that would be of a meaningful impact. - Erwin Haitzmann(CEO)

Given the 2025 goal, could it shift to 2026 if the economy stabilizes due to needing more time for projects to ramp and for consumers to navigate market uncertainty? - Chad Beynon (Macquarie Group)

2024Q4: The short answer for Canada is we just don't know what will be happening. We cannot really make any decisions. If it comes, it is very unlikely that we do it ourselves. We very likely would take a third party like we've done in the past. - Erwin Haitzmann(CEO)

Contradiction Point 4

Impact of Marketing and Product Offerings

It involves differing explanations for the impact of marketing strategies and product offerings on revenue, which could affect strategic planning and investor expectations.

When will group and convention business normalize at the Nugget? How will new entertainment programming affect gaming revenues? - Daryl Young(Stifel)

2025Q3: Focus is on both casino and non-casino gaming revenue streams. Concert programming is being refined to improve returns. - Erwin Haitzmann(CEO)

Can you explain Rocky Gap's strong margin performance despite significant weather disruptions and typical high-flow-through negative margin impact? - Jeffrey Stantial(Stifel)

2025Q2: We see a comeback of lower-end customers, contributing to improved margin performance. Additionally, a more granular marketing strategy is enhancing product appeal, leading to higher slot and hotel revenues. - Erwin Haitzmann(CEO)

Contradiction Point 5

Caruthersville Project Outlook

It involves differing expectations for the Caruthersville project, impacting potential capital allocation and strategic planning.

Is the project still on track for Caruthersville's expected returns on construction CapEx? - Chad Beynon(Macquarie Research)

2025Q3: Yes, on track. Growth expected from both closer and distant regions with more potential for distant areas. - Erwin Haitzmann(CEO)

Is the $150 million EBITDAR target still reasonable considering recent Missouri CapEx returns? - Connor Parks(CBRE)

2025Q2: Well, obviously, the expense side, will go down in terms of depreciation and amortization. But I'm suggesting that in terms of the revenue side, that's where we will see some improvement. And that's why we're anticipating that we will be able to get to that $150 million, as I said before. - Peter Hoetzinger(CEO)