Wynn Resorts Ltd (WYNN) — Q1 2026 Earnings Call Transcript

Thank you, operator, and good afternoon, everyone. On the call with me today are Craig Billings and Brian Gullbrants in Las Vegas. Also on the line are Jenny Holaday, Linda Chen and Frederic Luvisutto. Please note that we published a presentation to provide more color on the company and recent performance ahead of this call. You can find the presentation on our Investor Relations website. I want to remind you that we may make forward-looking statements under the safe harbor provisions of federal securities laws, and those statements may or may not come true. I will now turn the call over to Craig Billings.

Good afternoon. And as always, thank you for joining us. Before we get into the quarter, I'd like to take a moment to talk about Wynn Al Marjan in the UAE more broadly. First, I'd like to commend the Emiratis on their response during the initial weeks of the conflict. The country has shown an admirable ability to protect its people and its assets. At Wynn Al Marjan, construction has continued to progress with over 22,000 workers on site. The project team has been incredibly resilient. While we have faced logistical and shipping challenges in the region, deliveries have largely continued, and we are rerouting shipments and sourcing alternative materials where needed. Based on conditions today, these challenges are manageable, though we are realistic that the picture could shift as the situation evolves. We do expect a modest delay in our opening timeline, and I expect that we will quantify that in the coming months. That said, the project continues to move forward every day. Looking ahead, the UAE has world-class tourism infrastructure, unrivaled airport capacity and a strong policy framework. As the region stabilizes, we expect the country will find smart ways to accelerate tourism, and over the longer term, will continue to be one of the most attractive destinations in the world for high-net-worth residents and visitors. With that, I'll turn to the quarter starting in Las Vegas. We had an eventful first quarter here in Las Vegas with the debut of Zero Bond and Sartiano's Italian Steakhouse. Both venues opened to positive guest and member feedback, and I anticipate that they will further strengthen Wynn Las Vegas' position as the place to see and be seen here in Las Vegas. I want to thank all of those who were involved in making those openings such a huge success, and in particular, the team at Wynn Design & Development. The combination of those openings and the ongoing efforts of our team led to another period of strong results. Hold-adjusted EBITDAR grew 5% to $235 million, $232.5 million, inclusive of our best March in the history of the property. Casino revenues were up over 9%, driven by increases in both drop and handle. In the hotel, RevPAR was up nearly 10% year-on-year on a 12% increase in rate. That momentum has carried into the second quarter with drop and handle both up versus the prior year. We've also seen positive trends in the hotel with ADR up year-on-year in the month of April. We will begin the Encore Tower remodel in just a few weeks, a project that will ensure our rooms continue to set the standard in Las Vegas. Our group business remains on pace to grow both room nights and rate above 2025, and we continue to feel good about the business in Las Vegas for the remainder of 2026. Turning to Boston. Encore Boston Harbor generated $51 million of EBITDAR in the first quarter. Slot revenues grew 2% year-on-year despite some very challenging weather in the Northeast and continued gaming expansion in New Hampshire. The team once again tightly managed operating expenses, though wage pressures remain a real challenge at the property and something we are actively working to address. The second quarter is off to a steady start with drop and handle both running ahead of last year. Turning to Macau. The team delivered a strong quarter with VIP hold-adjusted EBITDAR of $296 million, $279.4 million. Lower-than-expected VIP hold impacted the quarter by $17 million. Mass drop was extremely strong, up 19% and handle was up 32% year-on-year. That momentum persisted into the second quarter with mass drop running ahead of last year. Premium demand continues to drive the Macau market, and we were pleased to open our newly expanded Chairman's Club during the quarter to strong customer reception. While it's early days for the facility, the space is truly spectacular and a meaningful addition to what we believe is the best gaming floor in the market. With Cotai continuing to be the primary driver of high-quality visitation in Macau, and with Wynn Palace regularly nearing 100% occupancy, I'm pleased to announce a significant new investment at the property. The Enclave at Wynn Palace, a 432 all-suite hotel, will sit directly adjacent to and connect into the east entrance of Wynn Palace. This is a $900 million to $950 million addition that will increase the existing Wynn Palace room count by 25% and our suite count by 50%, driving more foot traffic into gaming and our existing food and beverage outlets. The design is distinctly Wynn, an evolution of the design language that has defined our resorts from the beginning. You can find additional details on Enclave in our investor deck on Page 19. With that, I will now turn the call over to Craig for some additional details on the quarter.

Thank you. At Wynn Las Vegas, we generated $232.5 million in adjusted property EBITDAR on $661.9 million of operating revenue during the quarter, delivering an EBITDAR margin of 35.1%. Unfavorable hold negatively impacted EBITDAR in the quarter by just over $2 million. OpEx per day, excluding gaming tax, was $4.55 million in the quarter, up 6.8% compared to the prior year due to a combination of higher business volumes, contractual wage increases and incremental staffing for new outlets, including the newly opened Zero Bond and Sartiano's as well as PISCES, which opened in May of 2025. Turning to Boston. We generated adjusted property EBITDAR of $50.5 million on revenue of $205.7 million with an EBITDAR margin of 24.6%. We maintained discipline on the cost side with OpEx per day of $1.22 million, up 3.9% compared to the first quarter of 2025 despite continued labor pressures in that market. The team in Boston continues to do a great job of mitigating union-related payroll increases with identified cost efficiencies that do not impact the guest experience. Our Macau operations delivered adjusted property EBITDAR of $279.4 million in the quarter on $989.2 million of operating revenue, resulting in an EBITDAR margin of 28.2%. Lower-than-normal VIP hold negatively impacted EBITDAR by just over $17 million in the quarter. OpEx, excluding gaming tax, was approximately $2.9 million per day in Q1, up 9.9% year-on-year, with the increase driven primarily by higher business volumes, the opening of the Gourmet Pavilion in Q2 of 2025 and the expansion of the new Chairman's Club this quarter, along with normal course cost of living adjustments. In terms of CapEx in Macau, Craig mentioned the new Enclave Hotel tower at Wynn Palace. Final government approvals are starting to come together, and we look forward to commencing construction on our larger CapEx projects soon. Spend on the Enclave Tower in 2026 will be limited to some piling and early development works. We continue to expect the initial work on Enclave, together with our other CapEx projects, to result in a 2026 expansionary CapEx range of $400 million to $450 million. Moving over to the balance sheet. Our liquidity position remains very strong with global cash and revolver availability of $4.4 billion as of March 31. This was comprised of $2.8 billion and $1.6 billion of total cash and available liquidity in Macau and the U.S., respectively. The combination of strong performance in each of our markets globally with our properties generating just under $2.3 billion of LTM adjusted EBITDAR, together with our robust cash position, creates a very healthy consolidated net leverage ratio of just over 4.4x. Our strong free cash flow and liquidity profile also allow us to continue returning capital to shareholders in both Macau and the U.S. To that end, the Wynn Macau Board recently announced it has recommended to shareholders an increase in the final dividend for 2025 to $150 million, up from $125 million in the previous period, subject to shareholders' approval at the upcoming Annual General Meeting on May 28. In addition, the Wynn Resorts Board has approved a cash dividend of $0.25 per share, payable on May 29, 2026, to stockholders of record as of May 18, 2026. During the quarter, we also repurchased 528,000 shares for approximately $53.8 million and an additional $30.6 million so far in the second quarter. These share buybacks, together with our recurring dividend, highlight both our confidence in operations and our ongoing commitment to prudently returning capital to shareholders. In terms of CapEx, we spent approximately $179.1 million in the quarter, primarily related to Zero Bond, Sartiano's and the Cliff House Grill in Las Vegas, the new Chairman's Club expansion at Wynn Palace and the hotel refurbishments at Wynn Macau as well as normal course maintenance CapEx across the business. In addition to that figure, we contributed $100.1 million of equity to the Wynn Al Marjan Island project during the quarter, bringing our total equity contribution to date to $1.01 billion. We also continue to draw on the Marjan construction loan with a drawn amount to date of $962.3 million. We estimate our remaining share of the required equity including the new Janu project is approximately $350 million to $450 million. With that, we will now open the call to Q&A.

Craig F, looking forward to working together. I guess this one is more for Craig B. I recognize you're in a very tough position as it relates to navigating the path to getting Wynn Al Marjan open. But can you talk about what you have been doing differently over the past few months to ensure the project stays on track to the extent that it's within your control? And then can you talk about supply chain constraints on getting materials to the region, and how do you think about impacts to the surrounding area supply chain as surrounding-area hotel supply comes online in the coming years?

Sure. First of all, early on, our focus was on team safety. Life carried on relatively normally in the UAE. That was more about mental health than physical health, and the Emiratis did an incredible job of defending the country. The team is back in Ras Al Khaimah, both on the design and development side and on the operations side, fully functioning. We're in the building, snagging the building. Construction actually continued throughout the entire series of events. We're carrying on. The logistics challenge is the only real challenge, which is why I called it out in my prepared remarks. It's not tragic. Supply chains have an ability to become flexible and to find additional routes to market, and we've seen that. There are certainly things that are not as easy to get as they would have been before the conflict, but we're more than making do. We're actually advancing the project and moving ahead. So I mentioned that we expect a modest delay, and I use the word modest intentionally because that's what we believe it will be. We don't want to size that until we have a clearer view on stability. Construction continues. We're making do and we will carry on.

Got it. And then just turning to Macau, the new project Enclave at Wynn Palace — why now? Will this have a gaming element? How do you think about disruption or potential returns on that $900 million to $950 million investment?

Sure. Wynn Palace runs at essentially full occupancy every night. When you're at 99% occupancy, you're not making a speculative bet by adding rooms. You're clearly capturing demand that already exists and that you're currently turning away. Adding 25% in total room capacity and increasing the suite product by 50% in a market that's heavily driven by the premium segment makes sense. I think it's reasonable to assume — you can be conservative here — USD 2,500 theoretical per room night, which is incremental roughly $400 million of GGR. There aren't many non-EBITDA-generating amenities that come with the tower. It does not have a gaming element. It has very modest food and beverage because it's directly attached to the existing Wynn Palace facility. Flow-through should be high. That GGR is probably $150 million to $175 million in EBITDA for us. So to us, it felt like a real no-brainer. In terms of disruption, there may be some, but it's not significant because it's a relatively constrained portion of our plot where we'll be doing the construction, at the east entrance where the existing bus entrance is. Our north and south porte cocheres will remain open and functional as will the promenades that run around and into the casino.

And welcome, Craig, look forward to getting to work with you a little bit more closely. So whoever wants to take it, and Craig Billings, I'm sorry if I missed this, I dialed in a moment late. But obviously, I think the comment was a modest delay around where we're at with Al Marjan. Just curious on maybe strategically how you're thinking about it a little bit more. There's seasonality in the market — is there an optimal time before the summer? Is it something that given the seasonality we might want to be sensitive to opening during the summer? Or could that give you a little bit more flexibility as you're re-ramping into the market? I know there's a lot more unknowns, but any way you're thinking about it might be useful.

Sure. There are pros and cons to both. Seasonality impacts gaming resorts, but not nearly the impact it has on pure hotels. Vegas is a good example: it gets incredibly hot here in the summer, and seasonality has a lot to do with group and convention more than anything else, but it's not wild swings. I think the same will be true in the UAE. When you can fill your rooms with gaming customers, you don't have the same level of seasonality you might see in a pure hotel. The timing of the first-year opening really depends on the final resolution of our opening date and the options available to us. For now, stay tuned. We are forging ahead with the project every day, and we look forward to opening in 2027.

Perfect. And then as a follow-up, let's pivot to Las Vegas. The Q1 operating performance looks super strong. RevPAR up 10% is nicely above the market. Could you help us level-set how we should think about Q2 and Q3 — seasonality and the easier comps ahead? How should we think about the upcoming periods from Wynn's perspective?

Sure. First, remember we had an incredibly strong 2025, unlike the market in general. We produced over $900 million in EBITDA in Vegas in 2025. We had a record second quarter monthly EBITDA record in August, and we set quarterly records for ADR in both 2Q and 3Q of last year. So we really didn't have a trough. That strong performance has knock-on implications. We will continue to be up against relatively difficult comps, and so the margin expansion you might normally see coming off a trough quarter isn't available to us. But Las Vegas is performing incredibly well by historical standards. You can see it in the numbers. There are many things to be proud of in Q1 results. Everything we can see looking further into the year based on Q1 makes me feel good about 2026. But I want to distinguish us from the market in general because we didn't see a slowdown in 2025.

Just on the UAE, obviously a lot of recent softness understandably that's out of your control and hopefully temporary. But I'm curious how you think about the longer term — does this influence the ramp profile or have any of the targets or moving pieces around the targets you put out in December changed?

Sure. I'll start at the strategic level. Step back and look at the UAE's track record. This is a country that has navigated multiple regional conflicts over the past two decades and has consistently come out stronger. They've done that by investing in infrastructure, diversifying their economy, positioning themselves as a neutral hub for commerce and tourism, and that playbook hasn't changed. The UAE's response to this conflict has reinforced their credibility on the security front; their defense infrastructure performed exceptionally well. There are risks and logistical challenges today, and depending upon how the situation evolves, there could be more. But when we underwrote this project, we did not underwrite a region with zero geopolitical risk. We underwrote a country with a demonstrated ability to manage through it and to emerge in a better competitive position on the other side. The long-term tourism fundamentals in the UAE haven't changed: airport capacity, the visa framework, quality of life — those are durable assets. The UAE's ambition to grow tourism is a national priority backed by capital and policy. We think Wynn Al Marjan is positioned to be a meaningful beneficiary and contributor to that trajectory. Our conviction in the project hasn't changed. How that translates into EBITDA estimates is too early to tell. We are certainly not revisiting any of the numbers we previously presented, and we remain convicted in the project.

Perfect. That's super helpful. And then going back to Vegas, there's been talk in lodging about the C-shaped consumer and the lower end getting better. But with what you've printed, it looks like luxury is firing on all cylinders and you're outperforming on the hotel side. Could you put a finer point on what you're seeing on the luxury consumer and how you're outperforming in Vegas? Anything you see in business versus leisure would be helpful.

I'll start and then I'll ask Brian for his thoughts. The Q1 numbers tell it all. Some of that is the luxury consumer and some is our specific strategies deployed over the past several years. There are three big operating leverage levers in our business: gaming market share, RevPAR and retail sales, and all of them did extremely well in Q1 and continue to do well into Q2. Part of that is a read on us and part is a read on the consumer — split that as you see fit. That's my view on where we are.

Yes, Craig said it well. The barometer for us as we look forward is market share, group pace and luxury retail sales. We've taken share in January, February and March. Group pace shows what Corporate America is planning over the coming 18 to 24 months, and we're on pace to exceed our 2025 room and rate numbers. Our luxury retail boutiques show year-over-year growth from very high prior-year watermarks. Those are positive indicators of our customer base and where they're headed. Bookings continue and ADR growth indicates limited resistance to price at this point. So we feel good about our position.

I wanted to turn back to Macau. Would love to hear any response and impact you're starting to see from recent CapEx projects there, particularly the Chairman's Club.

We've had two major initiatives over the past year: the Gourmet Pavilion and the second level of the Chairman's Club. The Gourmet Pavilion has been open for some time and has driven incremental foot traffic into the building and helped retain customers longer because it provides more accessible options alongside our haute cuisine. The Chairman's Club early signs are quite good. We put the Chairman's Club in to take incremental share of that customer and to keep people around longer, which has positive implications on hold, and we are beginning to see that. When we put the Enclave into place, the incremental rooms will push new customers through our pre-existing facilities, and that will benefit both the Gourmet Pavilion and Chairman's Club.

That's helpful. Going back to Vegas, you had mentioned the Encore refresh — can you remind us of the cadence and whether anything has changed in timing?

Nothing has changed in timing. It will commence shortly and we will do it in pockets over the remainder of 2026 and into very early 2027, working around peak occupancy points.

Craig, I know you've provided background on the UAE, but maybe one more question. Could you comment on any changes in ancillary items like pre-opening brand awareness, hiring, the pace of hiring, marketing programs and similar items? Has anything changed in strategy or pacing on those fronts?

No. Preopening branding and awareness activity continues as normal. In terms of mass hiring, when we quantify our modest delay we will slightly delay mass hiring to avoid burning unnecessary cash — you bring people on just ahead of opening and then aggressively train them. We haven't seen any slowdown in interest in working in the building. Substantially all of our operations leadership team is already in place, so senior talent is largely secured. While we watch the news coverage closely, day-to-day in the UAE has largely carried on and things are getting done. Other than potentially moving some things back a small amount of time, I don't see a significant change in preopening activities.

Appreciate the additional color. Quick follow-up on Las Vegas: citywide events that fill the city, like CONEXPO — does that help you push rate or is your business focus different?

It's definitely beneficial. We draw a lot of business off citywides, often housing executives and VP-level attendees. Anything that creates compression in the city broadly is inherently beneficial for us.

Compression is key. When the city fills and the top customers want to stay here, we're able to accelerate ADR and yield, and our team does an exceptional job of that. In Q1 the team executed remarkably well.

Going back to Al Marjan, not so much about your resort specifically or when it might open, but do you have thoughts on the broader regional market? We can see current occupancy rates are depressed. What are your expectations for the timing of recovery in the market independently of when you open?

It's a little early to forecast recovery pace. That said, Dubai has incredible airlift and serves as a transit hub. The government is committed to tourism and has strong amenities and hospitality. When things stabilize, policy prescriptions and marketing efforts will likely accelerate recovery. Certain demographics would be comfortable returning today, others may be more cautious. History shows traveler demand is flexible: there are examples of travel declines after events but recoveries tend to happen. I won't make a forecasting call now, but I don't underestimate traveler flexibility or the likelihood that UAE authorities will act to stimulate tourism promptly.

Two-parter for Las Vegas. You came in at OpEx per day slightly higher than the $4.3 million to $4.5 million target range you laid out last quarter. One peer called out elevated levels of claims and liabilities related to labor that sounded market-wide. Are you seeing any of that creep in your labor pool? And separately, on the new Enclave tower in Macau, when you underwrite that do you assume a promotional environment similar to today in premium mass or something lighter by the time you open? Also, is the suite product tiered above your current suite product or similar?

No, we are not seeing that creep. The OpEx increase reflects two main items: the wage increases we've signaled for several quarters, many of which are contractual, and some pressure in COGS in food and beverage due to food price volatility. We avoid adjusting portion sizes or taking other actions that could have brand impacts for transitory input cost moves; if we need to adjust price we will. Regarding Enclave underwriting, the investment thesis is straightforward: same product, more customers. We're adding room supply in an efficient manner and driving customers to our existing amenities. We've been disciplined with reinvestment and underwrote the project based on our historical reinvestment profile. The base rooms will be slightly larger than the Wynn Palace base rooms; they are all suites with separate living and sleeping chambers. Aesthetically, the product will be complementary to our existing product — not identical and not a radical departure.

Craig F, welcome. Regarding Al Marjan, you talked about alternative supplies. How comfortable are you today with the budget and costs? Might you build more cushion as you go forward?

Good question. Two points: shipping rates have gone up — not dramatically, but they will likely be a rounding error on the total budget. Second, we have a team on the ground now and we will carry their cost for slightly longer, which will be incremental preopening expense. I don't think either changes the investment thesis or should concern investors, but we will clarify these points as we quantify any delay.

Understood. And any thought about expansion in Las Vegas given available land? I ask periodically.

Never too often to ask. We're always thinking about expansion opportunities. There's a time and place to expand based on market conditions and other priorities. Recent openings in the market did not necessarily grow overall visitation, so new projects often have to be share takers. We also do our own design, development and construction management, so there's a limit to how much we can run in parallel while maintaining our quality standards. We will expand in Las Vegas eventually; timing will depend on those factors.

Craig, on Enclave's design and development, years ago there were drawings for slightly more rooms. Why is 25% the right number given your share? And that land parcel — you have two parcels, one 7 acres and one 5 acres. Do you still have the remaining parcel if you wanted to build more?

This is a relatively small tuck-in parcel on the east side of the property. The two larger parcels most people think of remain available and are not being consumed by this development. The constrained land on the east side dictated the room count. The plans for a tower have been around, and we're bringing those plans back to life with updates to aesthetics and technology. So 25% is the right number for this parcel and this execution.

Thanks. My second question: the strong table drop number in Vegas — was that broad-based across games or driven by a specific event like Chinese New Year or Super Bowl? Was it breadth over the quarter?

It was broad-based. Baccarat did grow more than non-Baccarat, but it was broad-based and a culmination of our work over the past several years. We control our share of the market through hosting capabilities, offer development leveraging machine learning, service levels, and the continual additions of new amenities from Wynn Design & Development. Gaming market share, RevPAR and retail sales are our primary operating leverage levers, and everything we do supports improving those metrics.

Craig, on Enclave and Wynn Macau: what does Enclave do or not do to Wynn Macau? With additional rooms, might you need additional gaming capacity, or is there cannibalization risk between properties?

No, there's no cannibalization risk. We manage table allocation continuously. On peak days we fill our table count, but beyond peak events we have plenty of table capacity at Wynn Palace. We expanded the Chairman's Club to satisfy our best customers, so I wouldn't view Enclave as cannibalizing Wynn Macau.

Second, we just had a major holiday period in Macau with healthy visitation. Any color on how that translated into GGR from your perspective?

It was good. We're not levered to visitation in terms of mass because we play at the very top end — it's about who, not how many, for our business. Drop was up year-over-year and we felt good about the holiday.

Going back to Al Marjan, at Analyst Day you noted the pace of other hotel development in Ras Al Khaimah could be a gating factor. How are you thinking about other projects' pacing given current events? Are they keeping pace or slowing? Will you rely more on your own capacity in the near term?

I'll answer from two perspectives. We're starting piling on the Janu in a couple of weeks ourselves, so construction has continued. I don't monitor every external construction project weekly, but I don't think you should underestimate the ability of folks in that market to build quickly. If incremental room capacity intended for 2027–29 slides to 2028–30, it's not critical — we're thinking over a 10- to 20-year period and about the long arc of the property. We're not overthinking it.

Follow-up: could this situation affect approvals for additional gaming sites in the UAE and maybe extend your period as the only project of scale?

I don't know yet. It's a great question and one we ask internally, but I don't have a definitive answer at this point.

It looks like promotional intensity in Macau was down year-over-year in Q1. Could you talk about what you're seeing in terms of promotional competition and expectations through the year?

Overall, we remain disciplined on the promotional environment. It's day-to-day combat in terms of share and how that oscillates across the market. We understand precisely what our reinvestment needs look like and what GGR is needed to justify incremental reinvestment. As shown in our numbers, we've stayed disciplined over many quarters and will continue to do so, making the right reinvestment decisions for our properties.

A second question: many might not have expected Macau to be the next multi-hundred-million-dollar project location. As you think about the Enclave, does this reflect increased confidence in the market TAM over time, or are you creating the Wynn-level TAM because you're capacity constrained and need these rooms to match demand?

We have always believed in the market. We have substantial land bank there but we're not pursuing a full new resort; this is an incremental tower attached to Wynn Palace. Given we run at 99% occupancy, we're not TAM constrained — we can fill these rooms with existing demand. It's a straightforward underwrite.

In Las Vegas, occupancy was down slightly in the quarter. Do you want occupancy to grow, or are you happy with ADR gains while visitation remains challenged? And as you start the Encore remodel, any early reads on whether you'll be able to push rate on the remaining rooms and limit disruption?

We manage rate and occupancy to maximize EBITDA, not ADR for ADR's sake. If maximizing EBITDA occurs at lower occupancy, which allows us to modulate operations like restaurant hours, we'll do that. It's about bottom-line results rather than pursuing occupancy or rate alone.

Rates are holding. We start Encore Tower work in another week; it's a 12-month project affecting six floors. We'll see the impact as we progress. We feel we'll be able to increase weekend rates at compressed peak periods, but we'll have a clearer view shortly.

And on UAE marketing, has your approach changed? Will you need to do incremental marketing?

Not at all. The tourism authorities in the UAE, particularly Dubai, are very sophisticated marketers and I expect them to act quickly once the situation stabilizes. Awareness is not the primary issue. For our business, the gaming proposition remains unique in scale on that side of the planet and that hasn't changed. On the non-gaming side, we always expected to heavily market into and after opening. Nothing has changed in our approach.

All right. Thank you for joining the Wynn Resorts Q1 earnings call. We appreciate your interest in the company and look forward to talking with you all again next quarter.

Thank you.