Wynn Resorts' Q3 2025: Contradictions Emerge on Las Vegas Market, UAE Assumptions, and Macau Rivalry

Date of Call: None provided

Financials Results

• Revenue: No consolidated revenue reported; property-level: Wynn Las Vegas operating revenue $621.0M (casino revenues +10% YOY; hotel revenue flat at $187M), Wynn Macau operating revenue $1.0B, Encore Boston Harbor operating revenue $211.8M.
• Operating Margin: Adjusted property EBITDA margins: Wynn Las Vegas 32.8%, Wynn Macau 30.8%, Encore Boston Harbor 27.6%; LTM adjusted property EBITDA ~ $2.3B; consolidated net leverage just over 4.3x.

Guidance:

• 2025 CapEx expected $200M–$250M total.
• Remaining Wynn Al Marjan equity estimate ~$525M–$625M; contributed $93.9M this quarter (total to date $835M).
• Quarterly cash dividend of $0.25/share payable Nov 26, 2025.
• 2026: group/convention pace strong but Encore Tower remodel will remove ~80,000 room nights (modest headwind).
• Strong liquidity: $4.6B global cash and revolver availability; LTM adjusted property EBITDA ~ $2.3B.

Business Commentary:

* Las Vegas Operations and Market Share Gain: - - Wynn Las Vegas reported EBITDA growth on a hold-adjusted basis of 3% to $211 million, despite a difficult prior-year comparison. - Demand in the casino showed solid increases in both drop and handle, leading to a 10% increase in casino revenues. - The increase in market share and strong demand were driven by the company's focus on delivering high-quality products and service.

• Macau Performance and Market Trends:
• Wynn Macau delivered EBITDAR of $308 million, including $23 million in VIP hold benefits.
• Mass volumes increased by 15% year-on-year.
• The strong performance was attributed to higher-than-normal VIP hold and sustained double-digit market-wide growth in GGR.

• UAE Development and Market Potential:

• Wynn Al Marjan Island is progressing rapidly, with the top-out of the tower expected to be completed ahead of the December analyst event.
• The projected opening date remains targeted for early 2026.

• The market potential is seen as significant, with no competing operations announced, and Wynn anticipates becoming the only integrated resort in the region.

• Balance Sheet Strength and Capital Allocation:

• The company maintained a robust global cash and revolver availability of $4.6 billion, with significant liquidity in Macau and the U.S.
• Strong free cash flow and liquidity position allowed for the distribution of $125 million in dividends in Q3.
• Capital allocation continues to focus on share repurchases and strategic investments in future growth opportunities.

Sentiment Analysis:

Overall Tone: Positive

• Management repeatedly cited strong momentum (Vegas market-share gains, record August EBITDA), robust Macau performance (double-digit GGR market growth) and a "bright" future driven by Wynn Al Marjan Island, alongside $4.6B liquidity and a recurring dividend.

Q&A:

• Question from Daniel Politzer (JPMorgan): First, in Las Vegas, another strong quarter. Can you talk about what you're seeing there versus a few months ago?... And then as you look out to '26, what is your expectation there for growth given that group is pacing higher?
  Response: Vegas prioritized rate over occupancy, gained gaming market share and drove hold-adjusted EBITDA growth; Q4 momentum and group bookings pace look strong for 2026 despite a planned 2026 room-night loss from the Encore remodel.

• Question from Daniel Politzer (JPMorgan): On the UAE: can you lay out the puts and takes between the base case and the high-end scenario and where you stand given little competition announced?
  Response: Outcomes hinge on market GGR size and Wynn's market share; early share should be high but management isn't updating Investor Day numbers now and is focused on opening the best product.

• Question from John DeCree (CBRE): Curious your views on the social media backlash on pricing and whether you've seen pushback on pricing at the luxury end?
  Response: No material pushback—Wynn customers seek perceived value rather than lowest price, and the property maintains premium rates without practices that erode perceived value.

• Question from John DeCree (CBRE): As visitation to Las Vegas recovers, should you expect uplift for Wynn or are you marching to your own drum?
  Response: Yes—mass gaming and ADR are levered to broader visitation and would benefit from citywide recovery; high-end gaming is driven more by customer relationships and equity markets.

• Question from Stephen Grambling (Morgan Stanley): How should we think about disruption from the Encore Tower remodel and the ROI of projects beyond 2026—maintenance vs incremental EBITDA?
  Response: Impact from the remodel hasn't been quantified yet; some CapEx is maintenance to preserve ADR while many food-and-beverage and room renovations are ROI-driven and EBITDA-accretive.

• Question from Stephen Grambling (Morgan Stanley): In Macau, are you seeing more promotional activity and what does that imply for margins going forward?
  Response: No notable uptick in promotion; management monitors reinvestment versus revenue closely and treats margin as an outcome of profitably driving revenues while managing costs.

• Question from Robin Farley (UBS): What did you factor into your base case for the UAE (competition assumptions and market size)?
  Response: Base case assumed two additional competitors and a $3B–$5B GGR market with Wynn operating at a fair-share premium; absence of announced competitors suggests base-case conservatism.

• Question from Robin Farley (UBS): Did you assume the market size depended on those competitors or would market size be similar without them?
  Response: They did not assume incremental competitors would drive market size; market assessment focused on airlift, robust locals, and high GDP per capita.

• Question from Robin Farley (UBS): Can you give a sense of group pace after Q1 for 2026?
  Response: Management does not break down group forecasts by quarter on public calls but stated they feel good about group pace.

• Question from Brandt Montour (Barclays): Is the REVPAR growth in Q4 from mix and group compression or is leisure occupancy recovering?
  Response: REVPAR improvement is a function of overall health with group compression helping materially; teams are yielding rates over peak demand and pacing looks positive.

• Question from Brandt Montour (Barclays): When will you start mass marketing/excitement for the UAE and what have you learned from Mayfair/London acquisition?
  Response: One-to-one marketing and player engagement are already underway; mass marketing will ramp closer to opening in 2026; Mayfair/London taught them about game preferences and reinvestment expectations in the region.

• Question from David Katz (Jefferies): What's driving Macau's recent growth and share gains—mainland fundamentals or other factors?
  Response: Macau dynamics are multifactorial—changing Chinese consumer behavior, premium-segment strength and evolving economic pockets of wealth; management is long-term bullish and attributes growth to multiple demand drivers.

• Question from David Katz (Jefferies): Is the US-style bifurcation (high-end outperforming low-end) visible in China/Macau?
  Response: Yes—Macau is premium/mass-led and the premium segment is outperforming, which benefits Wynn's focus on the high end.

• Question from Chad Beynon (Macquarie): How do you explain slot/table drop growth versus lower occupancy—are premium guests spending more or are others using properties as dormitories?
  Response: Growth is driven disproportionately by premium/hosted customers; investments in service, amenities and targeted marketing have captured higher-value play.

• Question from Chad Beynon (Macquarie): Update on buybacks and capital allocation strategy from current levels?
  Response: Buybacks are opportunistic and not programmatic; management retains flexibility to buy when share price is unusually cheap while also returning capital via a recurring dividend and evaluating UAE investments.

• Question from Steven Wieczynski (Stifel): What drove the unusual Golden Week cadence in Macau and will it repeat?
  Response: Causes appear multifactorial (including weather); tail volumes recovered late in the period but one instance doesn't establish a trend; they will adapt hosting/booking strategies for future holidays.

• Question from Steven Wieczynski (Stifel): On Boston, was margin deceleration driven by promotions?
  Response: No—Boston remains stable; margin movements reflect the tradeoff between growing the database/concentric reach and rising labor costs, not promotion-driven pressure.

• Question from Steven Pizzella (Deutsche Bank): How should we think about uses of free cash flow in 2027?
  Response: Likely a mix: continued returns to shareholders (dividend/buybacks) and potential incremental CapEx for UAE land/development once market sizing is confirmed.

• Question from Steven Pizzella (Deutsche Bank): Would you be interested in a reported single online gaming license in the Emirate?
  Response: Not really—management won't comment on press speculation and will defer to regulator decisions on new gaming forms.

Contradiction Point 1

Las Vegas Market Conditions and Group Business Outlook

It involves differing perspectives on the state of the Las Vegas market and expectations for the group business, which are key indicators of Wynn Resorts' performance and growth strategy.

How does your view of Las Vegas compare to a few months ago? What are your growth expectations as the group's pace increases? - Daniel Politzer (JPMorgan Chase & Co, Research Division)

20251107-2025 Q3: The summer business in Las Vegas was challenging, but we reacted by focusing on rate rather than occupancy. For 2026, the growth is expected from the group business, which is pacing well for both rate and room nights. - Craig Billings(CEO)

How has the Las Vegas market changed compared to a few months ago, and what are your growth expectations with the group's accelerated pace? - Daniel Politzer (JPMorgan Chase & Co, Research Division)

2025Q3: The summer activity was as expected, and the business improved as planned. The group is pacing well for 2026. In Las Vegas, Wynn achieved gaming market share gains, and hotel revenue was flat while maintaining ADR and maximizing EBITDA. - Craig Billings(CEO & Director)

Contradiction Point 2

UAE Market Size and Share Assumptions

It highlights differing assumptions about the market size and share for the UAE, which are crucial for estimating the potential revenue and profitability of the Wynn Resorts' upcoming project.

Can you outline the trade-offs between the base and high case EBITDAR scenarios for the UAE? - Daniel Politzer (JPMorgan Chase & Co, Research Division)

20251107-2025 Q3: The key variable is GGR, and the market is expected to be driven by the absence of competition initially. The base case assumes market sizes of $3-5 billion, but no announced competition leads to some conservatism in assumptions. - Craig Billings(CEO)

What factors did you consider for the UAE base case in your scenarios? - Robin Farley (UBS Investment Bank, Research Division)

2025Q3: Assumptions involved two competitors and a $3 billion to $5 billion GGR market. The base case could be conservative given no announced competition. Market size assumptions were based on airlift, GDP per capita, and travel infrastructure. - Craig Billings(CEO & Director)

Contradiction Point 3

Las Vegas Market Conditions and Strategy

It involves the company's strategic approach to the Las Vegas market, including its focus on high-end customers and the impact of midweek performance on pricing strategies.

How does pricing backlash on social media affect Las Vegas visitation, particularly in the luxury segment? - John DeCree (CBRE)

20251107-2025 Q3: Our customer is not highly sensitive to cost due to the perceived value we offer. We have not seen pushback on pricing, and our customer continues to pay a premium for our services. - Craig Billings(CEO)

Can you share insights into consumer trends in Vegas, comparing domestic and international visitors and their spending patterns? - Elizabeth Dove (Goldman Sachs)

2025Q2: We positioned ourselves to be a high-end barometer for this particular Las Vegas segment. Casino volumes have been strong, indicating high-end customer spending is stable. Average check in fine dining has been stable, although we'll monitor macroeconomic impacts. - Craig Scott Billings(CEO)

Contradiction Point 4

Competitive Environment in Macau

It highlights differing views on the competitive landscape in Macau, which affects strategic positioning and market share.

Are competitive dynamics in Macau intensifying, particularly around promotions, and how do you manage margins? - Stephen Grambling(Morgan Stanley)

20251107-2025 Q3: We view margin as an outcome of profitable revenue growth, not a specific margin target. - Craig Billings(CEO)

How is Wynn responding to the competitive environment in Macau? - David Katz(Jefferies)

2025Q1: Craig Billings: Competition is fierce, especially in the premium mass market. The promotional environment has stabilized. - Craig Billings(CEO)

Contradiction Point 5

Macau Market Trends and Customer Demographics

It involves the company's assessment of market trends and customer demographics in Macau, which could impact growth strategies and investment decisions.

What is driving growth in Macau, and are mainland fundamentals impacting it? - David Katz (Jefferies)

20251107-2025 Q3: Macau's growth is driven by evolving consumer preferences and advanced gaming preferences. The market is diverse in terms of consumer tastes and demand, and we view it positively. - Craig Billings(CEO)

Can you provide more details on Macau's customer demographics and market trends? - Stephen Grambling (Morgan Stanley)

2025Q2: There's been a large influx of new customers post-COVID, with a consistent premium mass play mix. The market trends are positive with strong results in July. - Craig Scott Billings(CEO)