Q2 2026 Red Rock Resorts Inc Earnings Call Transcript
Key Points
- Red Rock Resorts Inc (RRR) delivered the second-highest second-quarter net revenue and adjusted EBITDA in its history, demonstrating strong operational resilience despite tough year-over-year comparisons.
- The Durango property continues to perform exceptionally well, validating the company's strategy of investing in best-in-class integrated resorts to expand the Las Vegas locals market.
- The company maintains a strong balance sheet with a net debt-to-EBITDA ratio of 4.21 times and generated $100 million in operating free cash flow during the quarter, supporting shareholder returns.
- Red Rock Resorts Inc (RRR) is executing a robust development pipeline, including the Durango North expansion, Sunset Station and Green Valley Ranch renovations, and the North Fork project, all on schedule and on budget.
- The company is seeing stable trends in its core slot and table business, with growth in carded spend per visit and higher net theoretical win across customer segments, indicating healthy demand.
- Management is actively working on multiple new greenfield projects and a master plan expansion at Durango, positioning the company for future growth opportunities.
- The 50th anniversary brand campaign is expected to generate long-term goodwill and positive top-line effects, with early feedback being encouraging.
- Red Rock Resorts Inc (RRR) experienced a 2% decline in Las Vegas net revenue and a 5% decline in adjusted EBITDA year-over-year, impacted by construction disruptions and a strong prior-year comparison.
- The Green Valley Ranch hotel renovation reduced available room nights by over 21,000, causing approximately $7 million in temporary disruption to revenue and profitability.
- Ongoing construction at Durango, Sunset Station, and Green Valley Ranch, along with offsite infrastructure projects, is expected to continue causing operational disruption, with Durango alone guiding for $2.5 million in Q3 impacts.
- The company anticipates a seasonal decline of approximately 10% from Q2 to Q3, which is typically one of its softer quarters.
- The promotional environment in the Las Vegas locals market remains irrational, with competitors engaging in aggressive promotional activity, though Red Rock Resorts Inc (RRR) maintains its strategy.
- The company incurred $8 million in one-time anniversary and brand marketing expenses in Q3, which will negatively impact corporate expenses for the quarter.
- Utilities, particularly electricity, continue to be a drag on operating expenses, and this is expected to persist for the remainder of the year.
Good afternoon, and welcome to Red Rock Resorts' second quarter 2026 conference call.
All participants will be in a listen-only mode.
Please note, this conference is being recorded.
I would now like to turn the conference over to Stephen Cootie, Executive Vice President, Chief Financial Officer and Treasurer of Red Rock Resorts. Please go ahead.
Thank you, operator, and good afternoon, everyone.
Thank you for joining us today for Red Rock Resorts' second quarter 2026 earnings conference call.
Joining me on the call today are Frank and Lorenzo Fertitta, Scott Krieger and our executive management team. I'd like to remind everyone that our call today will include forward-looking statements under the safe harbor provisions of the United States federal securities laws.
Developments and results may differ from those projected.
During the call, we will also discuss non-GAAP financial measures.
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