Red Rock Resorts Q4 Earnings Call Highlights

Red Rock Resorts (NASDAQ:RRR) reported what executives described as another record-setting period in the fourth quarter and full year 2025, highlighting continued strength across its Las Vegas locals portfolio and outlining a series of expansion and renovation projects expected to extend into 2027.

Record results in Las Vegas operations

Chief Financial Officer Stephen Cootey said the company’s Las Vegas operations set new fourth-quarter records for net revenue and adjusted EBITDA while maintaining a near-record adjusted EBITDA margin. The quarter marked the ninth consecutive record quarter for both net revenue and adjusted EBITDA in Las Vegas operations, he said.

For the fourth quarter, Las Vegas operations net revenue was $505 million, up 2.5% year over year, while adjusted EBITDA was $231 million, up 3.2%. Adjusted EBITDA margin for the segment was 45.8%, up 32 basis points.

On a consolidated basis, fourth-quarter net revenue was $511.8 million, which included $3.7 million from the North Fork project, and adjusted EBITDA was $213 million (also including $3.7 million from North Fork). Consolidated adjusted EBITDA margin was 41.7%, up 84 basis points from the prior year.

For the full year, Cootey said Las Vegas operations delivered the company’s strongest performance on record, including more than $900 million in adjusted EBITDA for the first time in its history. Las Vegas operations net revenue was just under $2.0 billion, up 2.9%, while adjusted EBITDA totaled $915.9 million, up 4.2%. The segment’s adjusted EBITDA margin was 46.2%, up 56 basis points.

On a consolidated basis for 2025, net revenue was $2.0 billion including $17.6 million from North Fork, up 3.7%, and adjusted EBITDA was $848.6 million, up 6.6%, with a margin of 42.2% (up 114 basis points).

Durango expansion plans and near-term disruption

Management pointed to Durango Casino Resort as a meaningful growth driver and said the property continues to expand the locals market and drive incremental play from existing customers. Cootey said the company completed an expansion at Durango on Dec. 15, adding more than 25,000 square feet of new casino space, including what management called a premier high-limit slot area, along with a covered parking garage with nearly 2,000 additional spaces.

On Jan. 5, the company broke ground on the next phase of Durango’s master plan. Management said the project is supported by development in the surrounding area, including more than 6,000 new households expected within a three-mile radius over the next few years. The next phase will expand the podium on the north side by more than 275,000 square feet and add nearly 400 additional slot machines and ancillary gaming, along with new amenities.

Those amenities include a 36-lane bowling facility, luxury movie theaters, new restaurant concepts, and entertainment venues, including a partnership with Moonshine Flats to bring its country-western bar and live music concept to Las Vegas for the first time. Construction is expected to take about 18 months and cost approximately $385 million.

Executives cautioned that construction across Durango and other properties will create near-term disruption, though they emphasized the longer-term return profile. In response to analyst questions, management said disruption is most pronounced when parking is affected or rooms are taken offline, and noted additional traffic-related construction near Durango tied to adjacent development and county roadway improvements.

Property reinvestment: Sunset Station and Green Valley Ranch

Alongside Durango, the company detailed renovation and refresh projects at Sunset Station and Green Valley Ranch (GVR). At Sunset Station, management said it is making progress on a $53 million podium refresh that includes an all-new country-western bar and nightclub, a new Mexican restaurant, a new center bar, and a fully renovated casino floor. Executives said customer feedback and initial performance from completed portions have been “overwhelmingly positive,” and remaining amenities are expected to come online throughout the first half of 2026.

The company also announced a next phase at Sunset Station with an estimated cost of approximately $87 million. Plans include further casino refresh work, expansion and enhancement of the movie theaters, and relocating a temporary bingo area to a permanent space. After the bingo move, the former buffet space is slated to be converted into a high-end steakhouse and a high-limit table games room. Work is expected to begin in the second quarter, with additional work in the back half of 2026 extending into early 2027.

At GVR, the company is refreshing guest rooms, suites, and convention spaces. Management said renovations to the West Tower are complete and that the tower has reopened, with early customer reviews and financial performance described as encouraging despite disruption. Renovations to the East Tower and convention spaces begin during the fourth quarter, with convention spaces expected back in service late in the first quarter and East Tower renovations expected to extend into summer 2026. A further phase—including a fully refreshed casino floor and upgraded food, beverage, and entertainment offerings—has begun and is expected to extend into 2027, with estimated costs of about $56 million.

Cash flow, leverage, and shareholder returns

Cootey said the company converted 62% of fourth-quarter adjusted EBITDA to operating free cash flow, generating $131.5 million, or $1.25 per share. For 2025, the company converted 55% of adjusted EBITDA to operating cash flow, generating $466.3 million, or $4.44 per share. He said free cash flow supported growth projects while also funding debt reduction, dividends, and share repurchases.

At year-end, cash and cash equivalents were $142.5 million, total debt outstanding was $3.4 billion, and net debt was $3.3 billion. Net debt-to-EBITDA was 3.87x, which management said represented the seventh consecutive quarter of deleveraging.

During the fourth quarter, Station Holdco made distributions of approximately $72.3 million to LLC unitholders, including $42.4 million to Red Rock Resorts. The company used its portion to fund a quarterly dividend of $0.26 per Class A share and repurchased nearly 880,000 Class A shares at an average price of $54.67 under its $900 million share repurchase program, reducing total shares outstanding to approximately 104.9 million. Management said dividends and buybacks totaled approximately $296.9 million returned to shareholders in 2025.

The board declared a special cash dividend of $1.00 per Class A share payable Feb. 27 to shareholders of record Feb. 20, and declared its regular $0.26 dividend payable March 31 to shareholders of record March 16.

North Fork project update and operating commentary

On the North Fork project, management said construction continues to progress well and the opening remains on track for an early fourth quarter 2026 debut. Total all-in project costs remain approximately $750 million and are “fully financed,” the company said. As of quarter-end, Red Rock’s outstanding note balance due to the tribe was approximately $77.9 million. Executives also addressed a December California court ruling tied to the tribe’s “single remaining legal matter,” saying they do not believe it will interfere with North Fork’s right or ability to conduct gaming on federally trusted land.

Operationally, management said the fourth quarter saw strength in both rated and non-rated play, with particular momentum in the VIP segment and growth among younger guests. Executives said the promotional environment in the locals market has been stable, and noted strong performance in non-gaming operations, with food and beverage posting record revenue in the quarter and hotel results described as near-record despite room inventory being offline at GVR for renovations.

Looking ahead, management said it continues to see stability in core slot business to start the first quarter, while acknowledging disruption from ongoing projects. Executives also said they expect labor costs to run mid-single digits higher in a competitive market, while describing other cost categories as being managed.

About Red Rock Resorts (NASDAQ:RRR)

Red Rock Resorts, Inc (NASDAQ: RRR) is a publicly traded gaming and hospitality company headquartered in Summerlin, Nevada. The company owns and operates a diversified portfolio of full-service casino resorts and neighborhood gaming properties in the Las Vegas valley. Its core business activities include resort hotel accommodations, casino gaming, food and beverage operations, entertainment and convention services designed to meet the needs of both leisure and business travelers.

The company’s flagship resort, Red Rock Casino Resort & Spa, features a full range of table games, slot machines, a luxury spa, convention space, multiple signature restaurants and live entertainment venues.