Churchill Downs Q1: Higher Revenues Offset by Cost Headwinds

Churchill Downs Incorporated (CDI) released its Q1 2025 financial report last week. The report showed record quarterly revenues of $642.6 million, representing a 9% surge year over year from 2024.

While revenues climbed, predominantly driven by growth in its gaming and historical racing machine (HRM) venues, net income fell 5% to $76.7 million. This was attributed to multi-venue operators’ higher expenses and lower insurance recoveries, which impacted the company’s bottom line.

Gaming and HRM Segments Drive Churchill Downs Q1 Growth

In contrast to the operator’s overall net decline, CDI’s gaming revenues rose by over 9.9% to $267.2 million. Analysts say this was fueled by the company’s opening of the Terre Haute Casino Resort in Indiana in April last year and its ongoing expansion of its Virginia HRM properties.

Nevertheless, the organizations’ Live and Historical Racing segment attributed stronger growth results, increasing revenues to $276.4 million, equating to a rise of 11%,

Churchill Downs’ adjusted EBITDA subsequently edged up 1% to $245.1 million, which accounted for the modest operational gains witnessed across its operational portfolio. Its Gaming segment EBITDA rose slightly to $123.5 million, while Live and Historical Racing and Wagering Services delivered $102 million and $41.3 million, respectively.

TwinSpires – CDI’s sportsbook platform – held firm after posting $115.8 million despite declaring a $2.2 million decline in sports betting revenues. As a result, Churchill Downs formally exited Kentucky’s competitive sportsbook market earlier this year, citing its continued underperformance in its on-site operations.

However, the firm’s newest properties helped offset the regional problems faced, with its Terre Haute Casino Resort in Indiana alone injecting $31.6 million in revenue following its first full year of operations. Similarly, the Rose Gaming Resort in Virginia added a further $18.2 million, having launched in November 2024.

Yet, despite the additional revenue from these successful expansion venues, Churchill Downs ultimately missed Wall Street analysts’ expectations. Overall, CDI’s revenues fell short of the $647 million consensus by 0.68%, while its Earnings Per Share came in at $1.07 versus an expected $1.08.

Share Repurchase Program and Dividend Update

In a bid to recalibrate its capital strategy, particularly amid its broader income uncertainty, CDI has had to pause several high-profile development projects at its Churchill Downs Racetrack.

These have included delaying the completion of the Skye and Conservatory enhancements. However, the planned upgrades of its Finish Line Suites and The Mansion remain on schedule ahead of the upcoming 152nd Kentucky Derby next month.

Among other headlines following CDI’s Q1 results was the confirmation of a new $500 million share repurchase program previously approved in March. In Q1 alone, Churchill Downs successfully repurchased nearly 800,000 shares, an expenditure calculated at $89.4 million, and paid out its 14th consecutive annual dividend increase.

Financially, Churchill Downs Incorporated has demonstrated stable liquidity, reporting that after an amended credit agreement to reduce borrowing costs, its net debt is four times its annual EBITDA. Nevertheless, investors have seen the CDI share price fall by 8.9% in the last month, a notable decline given the S&P 500’s 6.6% overall decline.

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 Churchill Downs Incorporated (CDI) released its Q1 2025 financial report last week. The report showed record quarterly revenues of $642.6 million, representing a 9% surge year over year from 2024. While revenues climbed, predominantly driven by growth in its gaming and historical racing machine (HRM) venues, net income fell 5% to $76.7 million. This was
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