Wynn Resorts' Q3 2025 Earnings Call: Key Contradictions Revealed on Las Vegas Performance, Macau Competition, and Group Booking Pacing Clash with Promotional Strategy Signals

Date of Call: None provided

Financials Results

• Revenue: $621.0M Wynn Las Vegas operating revenue; $211.8M Encore Boston Harbor revenue; $1.0B Macau operating revenue; Wynn Las Vegas hotel revenue flat at $187M in the quarter
• Operating Margin: Adjusted property EBITDA margins — Wynn Las Vegas 32.8%; Encore Boston Harbor 27.6%; Macau 30.8% (quarter)

Guidance:

• Group and convention business pacing ahead for 2026 in both room nights and rate.
• Expect $200M–$250M total CAPEX for 2025.
• Remaining equity contribution for Marjan (including Janui) estimated at $525M–$625M.
• Expect some minor disruption into year-end from Wynn Tower and Chairman’s Club projects; Encore Tower remodel will remove ~80,000 room nights in 2026.
• On track for Wynn Al Marjan Island opening; anticipate FCF inflection when it comes online (2027).

Business Commentary:

• Las Vegas Performance:
• Wynn Las Vegas saw casino revenues up 10% and EBITDA growth on a hold-adjusted basis of 3% to $211 million in Q3.

• The increase was driven by notable gaming market share gains, healthy demand in the casino, and solid increases in both drop and handle.

• Macau Market Strength:

• Macau operations delivered adjusted property EBITDA of $308.3 million in Q3, including $23 million of VIP hold benefits.

• The strong results were attributed to higher-than-normal VIP holds and a 15% year-on-year increase in mass volumes despite weather disruptions.

• UAE Development and Market Potential:

• Wynn Al Marjan Island is on track for its targeted opening date, with the final two floors being poured and expected to top out ahead of an analyst event in December.
• The company anticipates significant opportunities in the UAE, with its first development, the Janui Al Marjan Island by Aman Group, expected to be additive to Wynn Al Marjan Island, driven by high-quality customer draw and strong local demand.

Sentiment Analysis:

Overall Tone: Positive

• "Our future continues to be bright." Management highlighted strong quarterly results: Wynn Las Vegas EBITDA up (hold-adjusted) to $211M; Macau delivered $308M in EBITDA (including ~$23M VIP hold benefit); Encore Boston Harbor set slot records. Management repeatedly stated they are "positive on the outlook" and noted an upcoming FCF inflection from Wynn Al Marjan.

Q&A:

• Question from Dan Politzer (JPMorgan): First, Las Vegas, another strong quarter. Can you talk about what you’re seeing there versus a few months ago?... As you look out to 2026, what is your expectation there for growth, given that group is pacing higher? And then on the UAE: can you lay out the puts and takes between the base case and the upside scenarios and where you think you stand given limited competition?
  Response: Management: They shifted focus to ADR over occupancy, regained momentum versus summer, and are pacing ahead for 2026 in both group rate and room nights; for UAE the primary driver of upside is market GGR and share—absence of announced competitors likely makes prior base-case assumptions conservative, but they are not updating estimates yet.

• Question from John DeCree (CBRE): Have you seen any pushback on premium pricing given social media backlash? Also, as citywide visitation recovers, is there incremental upside for Wynn Las Vegas or are you marching to your own drum?
  Response: Management: No meaningful pushback—Wynn’s customers prioritize perceived value over low price; broader visitation recovery should benefit hotel ADR and mass gaming, while high-end gaming is driven by distinct host/customer dynamics.

• Question from Stephen Grambling (Morgan Stanley): Can you quantify disruption impact in Las Vegas from projects and how to think about the return on these projects—are they maintenance or EBITDA-accretive?
  Response: Management: Impact not yet quantified; Encore Tower remodel aims to recapture value via higher rates; many F&B and room projects are ROI-driven and expected to be EBITDA-accretive, though some spend is maintenance.

• Question from John DeCree (CBRE): In Macau, have you seen upticks in promotional activity and how should we think about margins going forward?
  Response: Management: Macau is competitive day-to-day but they have not observed a material promotional surge; margins are treated as an outcome of revenue growth, measured reinvestment, and cost control rather than a fixed target.

• Question from Robin Farley (UBS): What assumptions underpinned your original UAE base case (competition by 2029, market size)? Did you assume competition drives market size?
  Response: Management: Base case assumed two additional competitors and a $3B–$5B GGR market; market sizing was driven by airlift, local demand, and high GDP per capita—not dependent on competitors—so lack of announced entrants likely makes prior estimates conservative.

• Question from Grant Montour (Barclays): Is the RevPAR/RevPAR growth in Q4 from mix and group compression or leisure occupancy recovery? Also, when will you start mass marketing to build excitement for UAE?
  Response: Management: RevPAR gains are driven by mix and higher rates (group compression) plus solid leisure pickup; one-to-one marketing to priority customers is already underway and mass marketing will ramp closer to opening in 2026.

• Question from David Katz/Chad Beynon/Steve Wieczynski/Steve Pazella (Jefferies/Macquarie/Stifel/Deutsche Bank): What's driving Macau's growth—mainland demand or other fundamentals—and is there a premium/low-end bifurcation similar to the U.S.?
  Response: Management: Multiple cross-currents in China—not attributable to a single factor; the market is premium-led and that premium-bifurcation benefits Wynn given its focus on high-end customers; management is long-term bullish.

• Question from Chad Beynon (Macquarie): How do you reconcile lower occupancy with higher slot and table drop—are more people spending more per trip? Also, update on buybacks and capital allocation.
  Response: Management: The higher drop despite lower occupancy reflects disproportionate growth in premium/hosted players from targeted investments and marketing; capital allocation remains flexible—recurring dividend plus opportunistic, price-grid-based buybacks when stock is cheap, with a 2027 FCF inflection expected.

• Question from Steve Wieczynski (Stifel): Golden Week cadence was unusual—what caused the pattern and will it repeat? And on Boston, were margins pressured by promotions?
  Response: Management: Golden Week oddity likely due to multiple factors (weather, timing); too early to call a trend but they will adapt booking/hosting strategy; Boston margin moves were not promotion-driven but reflect hold/volume and the balancing of database growth against rising labor costs.

• Question from Steve Pazella (Deutsche Bank): With a free cash flow inflection expected as UAE opens and CapEx tapers, how should we think about uses of FCF in 2027? Also, would you be interested in online gaming licenses reported in the press?
  Response: Management: Likely a mix—continue returning capital (dividend/buybacks) while evaluating incremental UAE investment once market is proven; on online gaming license press speculation, they declined interest/comment and will defer to regulators.

Contradiction Point 1

Las Vegas Performance and Market Share

It highlights differing perspectives on the key drivers of Wynn Resorts' performance in Las Vegas, which could impact investor understanding of the company's competitive positioning and growth strategies.

Is the RevPAR growth in Las Vegas driven by group business mix and pricing compression, or by a recovery in leisure occupancy? - Grant Montour (Barclays)

2025Q3: The growth is disproportionately from premium hosted customers, not mass gaming. - Craig Billings(CEO)

How much of the Las Vegas outperformance is due to high-end market positioning versus operational adjustments? - Daniel Brian Politzer (JPMorgan Chase & Co, Research Division)

2025Q2: It's a bit of a river of nickels, if you will. We're at the luxury end of the market, which helps, but we've spent the past three years making sure the building is in tiptop shape. - Craig Billings(CEO)

Contradiction Point 2

Group Bookings Pacing for 2026

It involves differing statements on the pace of group bookings for 2026, which impacts revenue expectations and business strategy.

Can you provide an update on group pace for 2026 following Q1? - Robin Farley(UBS)

2025Q3: We feel good about the pace of group business for 2026. - Craig Billings(CEO)

What are your thoughts on the rate outlook and the forward calendar, particularly around Memorial Day? - Sean Kelley(Bank of America)

2025Q1: Group pacing for '26 is better than expected. - Craig Billings(CEO), Brian Gullbrants(COO, North America)

Contradiction Point 3

Macau Market Dynamics and Competition

It addresses varying assessments of the competitive landscape and promotional activities in the Macau market, which could influence strategic decision-making and financial forecasting.

What are you seeing in Macau regarding competitive dynamics and promotional activities? - Stephen Grambling (Morgan Stanley)

2025Q3: We monitor promotional activity closely, but have not seen a notable increase. - Craig Billings(CEO)

What's the current status of promotions and credit in Macau, and how do you assess entertainment's role as a growth driver? - David Brian Katz (Jefferies LLC, Research Division)

2025Q2: Promotions are daily hand-to-hand combat, but our reinvestment is stable. - Craig Scott Billings(CEO)

Contradiction Point 4

Promotional Environment in Las Vegas

It involves differing perspectives on the promotional environment in Las Vegas, which directly impacts the company's pricing strategy and EBITDA.

Have you seen pushback on pricing in Las Vegas given your focus on the luxury market? - John DeCree(CBRE)

2025Q3: We haven’t seen pushback on pricing. - Craig Billings(CEO)

Does your view on Las Vegas promotions and discounts differ from management's, and is the difference due to a change in strategy or Super Bowl comparisons? - Carlo Santarelli(Deutsche Bank)

2025Q1: The numbers are closely linked to ADR due to significant investment in rooms. - Craig Billings(CEO)

Contradiction Point 5

Competitive Environment in Macau

It involves differing descriptions of the competitive environment in Macau, which affects strategic positioning and market share.

What are you seeing in Macau regarding competitive dynamics and promotional activities? - Stephen Grambling(Morgan Stanley)

2025Q3: We monitor promotional activity closely, but have not seen a notable increase. - Craig Billings(CEO)

Can you discuss the competitiveness in Macau and your response to it? - David Katz(Jefferies)

2025Q1: The market is competitive with a stable promotional environment. - Craig Billings(CEO)