Welcome to the Wynn Resorts Second Quarter 2024 Earnings Call. All participants are on a listen-only mode until the question-and-answer session of today’s conference. [Operator Instructions] This call is being recorded. If you have any objections, you may disconnect at this time. I will now turn the line over to Julie Cameron-Doe, Chief Financial Officer. Please go ahead.

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 Linda Chen, Frederic Luvisutto, and Jenny Holaday. I want to remind you that we may make forward-looking statements under Safe Harbor federal securities laws and those statements may or may not come true. I will now turn the call over to Craig Billings.

Thanks, Julie. Good afternoon. As always, thank you for joining us today. I want to start by saying thank you to my nearly 28,000 colleagues here at Wynn Resorts for delivering yet another record quarter. In this case, the best second quarter EBITDA in the history of the company at $572 million. Record quarters like this one further strengthen our conviction when deploying capital, whether through CapEx or share repurchases like those we executed in the second quarter and into the third quarter. Wynn Las Vegas delivered $230 million of adjusted property EBITDAR, a second quarter record and up 3% year-on-year on yet another very difficult comp, taking trailing 12-month EBITDAR to nearly $970 million. The quarter was led by 16% growth in hotel revenue along with 8% growth in slot handle and healthy table drop in the casino. Wynn Las Vegas continues to have the top-performing team here in Vegas. More recently, demand has remained healthy in 3Q with RevPAR up and slot handle broadly in line year-on-year during July, despite this year having two fewer weekend days. Turning to Boston. Encore generated $62 million of EBITDAR during the quarter. Lower-than-normal table hold, masked what was actually a strong quarter across the property with record slot handle, strong table drop and record RevPAR in the hotel. More recently, demand has remained healthy through July with table drops, slot handle and RevPAR all up on a tough year-on-year comp. Turning to Macau. We generated $280 million of EBITDAR in the second quarter on slightly lower market share than we have experienced over the previous several quarters and slightly lower mass hold quarter-over-quarter. There has been a lot of chatter in the market about the elevated promotional environment in Macau with concessionaires jockey for market share. Of course, while we are…

Thank you, Craig. At Wynn Las Vegas, we generated $230.3 million in adjusted property EBITDA on $628.7 million of operating revenue during the quarter, delivering an EBITDA margin of 36.6%. Lower than normal table games hold negatively impacted EBITDA by around $5 million in Q2. OpEx, excluding gaming tax per day was $4.2 million in Q2 compared to $3.7 million in the prior year period. The increase was primarily due to union-related payroll increases, along with higher variable costs due to increased volumes across the business. Turning to Boston, we generated adjusted property EBITDA of $62.1 million on revenue of $212.6 million with an EBITDA margin of 29.2%. As Craig alluded to, our table game hold was below normal during the quarter. And if we normalize hold in both periods, EBITDA would have increased approximately 2% year-on-year. We've stayed very disciplined on the cost side with OpEx per day of $1.15 million, flat year-on-year and down sequentially. The team has done a great job mitigating union-related payroll increases with cost efficiencies in areas of the business that do not impact the guest experience. Our Macau operations delivered adjusted property EBITDA of $280.4 million in the quarter on $885.3 million of operating revenue, hold was a mixed bag in the quarter as higher than normal hold at Palace was more than offset by lower than normal hold at -- Wynn Macau, particularly in our mass table business. All in, we estimate hold negatively impacted EBITDA, the combined properties by around $3 million during the quarter. EBITDA margin was 31.7% in the quarter, an increase of 250 basis points, relative to Q2 2019. Our OpEx, excluding gaming tax was approximately $2.5 million per day in Q2, a decrease of 19% compared to $3.2 million in Q2 2019, and down 3% on a…

Thank you. [Operator Instructions] Our first question comes from Carlo Santarelli with Deutsche Bank. You may go ahead.

Hey, thank you. Good afternoon, everybody. Craig, you spoke a little bit about Las Vegas, the comfort you're seeing, the trends in July, acknowledging obviously August booking window is short, September some group on the books, and fourth quarter probably very limited visibility at this point outside of the group bookings. How would you characterize kind of the back half of the year, and could you talk a little bit about kind of that group footprint that's already in place?

Sure, Carlo. I'll start, and then I'll ask Brian to talk a bit about group in Q3, Q4. I noticed subsequent to one of our peers reporting the other day that there were some thoughts around Q4, some concerns around Q4. As you said, actually, the booking window is relatively short other than for group and then certain special events F1 in particular and so you know we don't we're not seeing anything of concern per se with respect to Q4. F1, specifically which I know was mentioned extensively again on a Pierce call, F1, they're really top-notch operators, and unlike last year when they heavily marketed throughout the year, they just started their big marketing push for the race this month, August. So I'm sure the race will be well executed. Our experience during last year's F1, and more recently during the Super Bowl, tells us that we will be the place to see and be seen during the race, and so we're confident that we'll do just fine and get more than our fair share. Brian, group in Q3 and Q4, and any other thoughts on the back half of the year?

Sure. Thanks, Craig. Carlo, Q3 continues to pace very well. It's solid. August and September look even better than July. And when we look to Q4, pacing well for the year will be the best year we've ever had in group and convention. And 2025 seems to be pacing actually ahead of that, all with strong ADR growth. So the sales team has done a phenomenal job, and our yield management team and revenue management continues to yield because of that strong base, so it helps all segments. So I think we're in solid shape and we're encouraged by what we're seeing.

Great. Thanks, Brian. And then, Craig, if I could ask a follow-up. You guys have repurchased year-to-date as of 6.30 [ph], it looks like, about $80 million of stock. I think Julie said $68 million in the quarter in the release. When you look at kind of current valuation, looked at many different ways, but obviously just about any way you cut it, the embedded implied valuation for the domestic assets at the very least is seemingly compelling from a buyback perspective, acknowledging there is significant capital going out the door related to UAE. How do you think about kind of perhaps accelerating some of the buyback activity?

Thanks, Carlo. Well, as you know, you've followed the company for a long time. We're not programmatic buyers of the stock, and we tend to buy back more when it is particularly cheap. So you're right. To that end, we did purchase in the quarter and we continued to purchase into July and actually the first few days of August, actually. We still have some $365 million of capacity under the Board authorization. We're really balancing all of our liquidity needs between capital deployment for growth, the UAE, potentially other greenfield markets, delevering slightly and returning capital to shareholders through dividends and share repurchases. Fortunately, we're in a position to do all of that. And so as you rightly know, it's really a question of quantum, and we'll continue to be opportunistic about it.

Thanks, everybody.

Thank you. Our next question is from Joe Greff with JPMorgan. You may go ahead.

Hey Craig, earlier, you had mentioned that you saw a nice rebound in market share in July. That was more of a directional comment than one with any specific numbers associated with that. Would you say the share is back to the GGR share that you saw in the 1Q? Or is it really more approaching that level? And then related to that, Craig, are you seeing in July and August-to-date, as you're seeing GGR share improve, are you seeing an associated lift in the non-gaming revenues as well?

Thanks, Joe. Well, to your second question first, there's always a relationship given the way that GAAP requires you to book rooms revenue associated with the casino. There's always a relationship between casino volumes, quality of customers and room rates. With respect to retail -- the retail component of non-gaming, I think the situation with respect to luxury retail in China is hopefully well understood. I think you've seen a lot of the large luxury retailers come out and make commentary on the topic. And of course, Macau and Hong Kong are not immune. I think what we've experienced is pretty consistent with our peers who have comparable retail footprint. To the first question that you raised, we're not going to provide specific numbers, but we were pleased with the bounce back in July. And as you know, market share can bounce around here and there. over the course of any given year or any given quarter. And as I said in my prepared remarks, you can't take market share to the bank. So, what we don't want to do is completely blow out our reinvestment levels and pursue a market share doesn't drive meaningful flow-through. So, we are being disciplined with respect to reinvestment and being aggressive in terms of going out and getting business.

Great. Thank you for that. And then with respect to your UAE project, I heard all of the things that you said, including the timeline for completing the debt financing when do you think we'll actually have specific regulations out there and specifically when you get a license? I know it's been a while now?

Sure. Thanks, Joe. Well, First of all, we were delighted with the public announcement of the GCGRA, the Federal regulatory body for gaming. If you -- for, I guess, you and everybody else on the call, if you haven't taking a look at their website, we encourage you to do that. The members of that body are some of the luminaries of the industry and very, very experienced regulators. The establishment of the GCGRA creates -- hopefully creates incremental clarity for investors and financing sources. It certainly has on the financing -- on the bank financing side. And then you'll also note that they recently awarded a lottery license for the UAE, and I think that, that hopefully again, gives folks comfort. I assume that they will be moving forward next -- to the next step in our licensure. I don't have a specific time line for you, but you can see all the momentum that's happening there.

Thank you.

Thank you. Our next question is from Shaun Kelley with Bank of America. You may go ahead.

Hi. Good afternoon, everyone. Thanks for taking my questions. Craig or Julie -- one thing we've been watching in the data is on the visitation front into Macau. In the second quarter, in particular, these are market-wide stats. It looks like it sort of fell a little bit below trend line and a little bit below the pace of recovery we have been seeing in prior quarters. I'm curious, do you see something similar in volumes to the property? Perhaps you probably see it maybe it would be a little bit more acute at the Peninsula appreciate base mass isn't really necessarily the pond that you swim in. But -- just kind of what are you seeing on that visitation front? And have some of those stresses or factors improved at all in July so far, early August or vice versa, it deteriorated at all? Thank you.

Thanks, Shaun. Yeah, I'm sure you saw the news flow with respect to -- it was nearly a single day, but with respect to the recent visitation record, your -- you're right, we don't really swim in that pond. It's not about the number of bodies, it's about the quality of the bodies. You're also correct that, if we had to pick up one of the two properties that was more exposed to that, it would be downtown, and I can't say that, that was a meaningful -- that had a meaningful impact rather during the second quarter, it was really about share. We have to fight for share every day. That's what we need to do. So I don't -- we don't really watch visitation numbers and think about the broader impact on our business because, again, for us, it's about who's there, not how many are there.

Great. And then just maybe as a follow-up, just on the -- on the spend per visit. Have you seen any changes in patterns again outside of maybe the luxury piece, which you called out earlier? Just anything sort of else of note behaviorally for the customers that did come and obviously, they're -- maybe they're looking for demanding a little bit more on the promotional reinvestment front, but just anything behaviorally or across different status levels, base mass versus premium massive note?

No. There's a lot of crosscurrents happening in the economy there. So we watch that very closely. And as we've seen in this cycle and in previous cycles, the gaming business has been pretty resilient. You'll note the comment that I made to the previous caller with respect to retail. And I think you see that in the retail revenue and the retail revenue trends, but with respect to gaming, we don't see that. What we see is a mere competitive environment for market share. And so we have to be competitive and get our fair share.

Thank you.

Thank you. Our next question is from Dan Politzer with Wells Fargo. You may go ahead.

Hey, good afternoon, everyone. Thanks for taking my question. First on Macau, up until this quarter, your share has been pretty stable. I mean, is your sense that as GGRs slowed in or decelerated in Macau the promotional environment has maybe stepped up a notch? And is it -- if so, is it multiple operators, a single operator or Cotai, Peninsula? Any additional color would be helpful.

Sure. Well, with the caveat that Macau has always been and always will be an extremely competitive market. I'm not going to comment on specific promotional activity by others in the market, but I can tell you that our reinvestment in any given quarter could move up or down 50 basis points, 75 basis points, something like that based on what we're trying to achieve, but the core of our competitive strength will always be product and service.

Got it. And then in terms of Las Vegas, it seems like the Sphere calendar of events has really started to fill out nicely. To what extent are you seeing an uplift there from that customer base just given your proximity to that venue?

Well, I would say, anecdotally, it is impactful. I say anecdotally because we have so much going on, both in terms of internally generated events and programming that we're doing here and citywide events that are happening or events that are happening in other properties. So, I mentioned in my prepared remarks, we've done some $970 million in EBITDA out of in Las Vegas over the trailing 12 months. That's a real credit to the team here. So, every little bit counts. I can't isolate any particular event short of, of course, the major events like F1, Super Bowl, things like that. And as I said on the previous call, we're delighted to have the Sphere and their team as neighbors. We love innovators, we love people that do things at the cutting edge and drive high-quality visitation.

Great. Thanks so much.

Sure.

Thank you. Our next question is from Stephen Grambling with Morgan Stanley. You may go ahead.

Thank you. I guess sticking with Vegas, Craig, you've been in and around the industry for -- and seen multiple cycles. I guess with all the concerns mounting over the consumer, what are you on watch for in your business as perhaps a leading indicator? And how do you think about the operating leverage of the business now versus history in terms of being able to flex if the market changes?

Yes, good question. Thank you. What do you look for? High-end wine sales, club sales. I mean, we can go all day. I mean we can look at the -- we can get into the weeds and talk about individual metrics that you would be looking at, if you were on the inside of our business. We haven't seen that yet as we've been saying now for -- I think we've been answering questions around the impending performance of the business for over two years. So, we haven't seen that yet, but we're watching very, very closely to see how the consumer is behaving both in the moment and as they book to stay with us. What can we do to the extent that the consumer was to soften a little bit? And we've talked about this on calls previously as well. I mean we lived through a zero revenue environment for several months, and a seriously compressed revenue environment for many months after that as we went through COVID and the aftermath of COVID. That team is still here, still doing a tremendous job, and we have every playbook under the sun. We've learned how to run this business far differently than we were able to pre-COVID, which is part of the reason that we have been running such incredibly healthy margins, and we're able to fade things like the union increases, the way that we have. So, we have a playbook for every possible situation, but we haven't seen any of those situations emerge yet.

And perhaps as an unrelated follow-up. You mentioned the progress made in the UAE. There also looks like there's been some progress in Thailand. I guess, what are your latest thoughts on that market? Would that be something that you'd pursue? Or do you more likely to be pursued out of the Hong Kong entity? Thanks.

Yes, we would pursue it out of Wynn Resorts out of the U.S.-listed entity. It's still early days. You're right, there has been progress, and it's encouraging to see, and it seems as though the legislators in Thailand really want to get this moving, which is great. We need to see more details on the regulatory and licensing structures, but the market is an attractive market, and it's probably conducive to meaningful investment, pending, again, a deeper understanding of the regulatory and licensing structure, you have amazing tourism infrastructure, you have a really strong service culture and a favorable operating expense, structure available in that market. So we're continuing to monitor the process very, very closely and we're active on the ground there.

Great. Thank you.

Sure.

Thank you. The next question is from David Katz with Jefferies. You may go ahead.

Hi. Afternoon. Thanks for taking my question. I wanted to go back to the capital allocation discussion, specifically the buyback, if I may. Obviously, there's wide ranging views about how to execute those, but with you getting, your company getting to that four times leverage, do you think about a target leverage range, separate apart from projects, and if you could go just a little farther on the philosophy around opportunistic versus programmatic in terms of the buybacks for some insight, because I think the arguments are valid that your stock may be cheap at $100, right, or $76 or wherever it may be, just curious. Thanks.

Sure. The second portion of your question first, we don't target, we don't have target leverage levels, because we will lever in place EBITDA to develop new projects. But we feel very good with where we are now. There's a WACC minimization question that needs to be answered, and we'll probably in that zone, at the leverage level that we're at today. With respect to buybacks, it's a little bit like capital deployment. We think about these things in five and 10-year increments, and over five or 10 years there's going to be times when the stock is expensive. There's going to be times when the stock is fairly priced and there's going to be times when the stock is cheap. And so what we need to do is continuously decapitalize in an appropriate manner, and of course, we will consider whatever the implied valuation is in the equity at any given point in time. And we will, act accordingly. But if we're growing the company by putting capital in the ground, we're returning capital to shareholders through the dividend. And we are decapitalizing the business and we're doing the right thing for those who have a long-term view on our business. And those are the people that we care about.

That's perfect. Thank you very much.

Sure.

Thank you. Our next question is from Robin Farley with UBS. You may go ahead.

Great. Thanks. Macao question and a Vegas question. For Macau, it seems like the use of smart tables has impacted market share in Macau pretty meaningfully. If you could kind of remind us where you are with implementing those and maybe a time frame for if there's kind of a learning curve for a several quarters or something, and kind of where you are with that, and then I have a Vegas question. Thanks.

Sure, sure. Robin. Yes, smart tables have a few. They've been around for a long time, but they've really just now reached a point from a technical soundness perspective and capability perspective where they could be really impactful. So, of course, they have positive implications on game security. They have some implications on OpEx. But the important aspect of them is in fact, the data and the ability to ingest and act on the data, which can drive better reinvestment decisions, which I think is at the core of what you mentioned when you say that it impacts market share. We've had a test bank of smart tables for a while now, and we're now moving to full rollout. We've made a ton of investments in the areas of analytics and data science over the course of the past several years. And I think we'll be in a position relatively quickly to both ingest and interpret and act on that data subsequent to roll out

Okay. Great. Thank you. And then just on Vegas. You talked about some of the expenses of wage hikes have kind of hurt some of the EBITDAR flow through. If you could just remind us when that will sort of be fully anniversaried. And then I don't know if there's anything you'd call out about comping the Super Bowl in Q1. Anything you'd call out there? Thanks.

Sure. We lacked the union increases a couple of days ago. So July was the last month that we were still dealing with difficult year-over-year comparables on those. And with respect to Q1, I don't have a view for you yet to be perfectly honest. I mean, we agree how we operate. We aggressively manage revenue and we aggressively manage expenses, and we'll do that throughout Q1. But what the impact of not having the Super Bowl this year will be – and what that will mean to the numbers, I don't have any guidance for you yet.

Okay. Thank you very much. Thanks. A – Craig Billings: Sure.

Thank you. Our next question is from Brandt Montour with Barclays. You may go ahead.

Thank you for the question. Good afternoon, good evening, everybody. So first one on UAE. I know it's a little early maybe to start talking about or flushing out a go-to-market strategy. I'm curious, just given that the location of the property, I know that your database, I'm sure, is global in nature. But I'm assuming that Europe would probably be the largest source market where you're the least exposed from a physical footprint standpoint. Maybe you could just flesh out where you think your customers are going to come from mainly out of the gate and where you plan to market the most out of the gate? A – Craig Billings: Sure. Trying to figure out how to condense and hours or the content into a response. But so the way I think about it is like this. There is not a proper integrated resort on really that half of the planet, okay? So the closest is going to be in Asia, right, Singapore or Macau. So we have this unique asset. We have a very, very robust population that is within a eight-hour flight of that asset. This is a part of the world where people are accustomed to flying longer distances in order to holiday and to visit. You have 86 million airlifts coming into the Dubai Airport, we're about 55 minutes via one of three six-lane highways from the Dubai airport. In fact, because of traffic, it's shorter to get to us than it is to get to the major areas within Dubai. And then you have 10 million people locally, 9 million of whom are not Emirati and therefore, are able to play. So -- and if you compare that to Boston, if you compare that to New York City, you can see that, that's a pretty favorable number. So we have a very robust go-to-market plan. We're not going to talk about it publicly, but we will be ready when the door is open. And I would say to your comment on Europe, yes, Europe is an important market for the UAE in general. But don't forget India. India is a huge market for this part of the world. There's a lot of folks there. There's a lot of wealth in India, and that's going to be an important market. There are other parts of Asia that are big markets for the UAE as well. So it's an exciting project. I think the catchment area is probably larger than any other project that we have done, maybe akin to Vegas if you take into account the fact that Europe's population is pretty substantial and the international airlift is incredibly strong.

Thanks for that. That was a lot of information in a short amount of time. I appreciate that. And then my second question is just on Macau, and apologies for the short-term question, but when your comments on July bouncing back and market share is that -- do you think that's more because the competitive environment may have stabilized a little bit sequentially? Or is it just more related to the July visitation coming back and allowing sort of everything to cool off a little bit from the competitive standpoint?

No. Well, first of all, a market share can bounce in, three people can come in and change your market share on any given day. That's the nature of the business, right, particularly when you're operating at the high end. So market share can bounce around. I think we are in a constant process of evaluating and re-evaluating not just the quantum of reinvestment that we will provide, but the form of that reinvestment, and we are targeting that reinvestment at very specific segments and sub-segments of the market. And so we recognized what we needed to tweak from Q2 and from June in particular, and we corrected it, and we went to market with it, and we, like I said, we bounced back in July, which was good to see.

Perfect. Thanks, everyone.

Thank you, Brent. And operator, the next question will be our last. Thank you.

Thank you. The last question is from Chad Beynon with Macquarie. You may go ahead.

Afternoon. Thanks for taking my question. Craig, you highlighted just kind of the overall strength in Vegas, the $970 million. You guys are always out punching your weight in that market, and you still have additional space to expand the property or build something differently. So, kind of going back to the capital allocation question, how are you thinking about Vegas long-term as a market to grow your footprint and the returns in that market versus some of the other things that you've talked about on this call. Thanks.

Sure. We will grow in Vegas. It's really a question of when, not if, and we will take advantage of the land bank that we have in Las Vegas. In terms of relative returns, I think the highest relative return that we can quantify now is absolutely in the UAE on Al Marjan Island. And as I mentioned, we just took down a land bank there as well. You can look at the history of gaming markets, Macau in particular, and you can see the power of a land bank and the power of using that land bank and going to market relatively quickly. So that's top of mind for us. The other development opportunities that we have, most notably the potential in New York and the potential in Thailand, it's too early to say what the returns will be because we don't know what the tax rate will be. And obviously that heavily inversely correlates to what the return on the project will be. And we won't do projects, vanity projects, if those vanity projects don't deliver appropriate returns relative to everything else that we have on our plate.

Thanks. And then secondly, just in terms in terms of the different customers in your database, focusing on the US, I guess, mainly still in Vegas. Are you seeing any change in trends with your, I guess, your high end versus your ultra high end anything you're able to talk about? I know retail, you talked about in Macau is kind of moving with the market, but anything that you're seeing differently in the US with the different levels of upper end customers in your database?

Sure. Not really. So I talked about this a little bit on the last call. There is a bright side to the fact that purchasing power -- the purchasing environment dollar today is the same as about $0.80 in June of 2019. We repriced our rooms every day. Our gaming customer's bank roles are in current dollars. Of course, our invested capital and our debt is in yesterday's dollars, which is a great setup. If you look at that $970 million of EBITDA on our invested capital here. It's a very, very healthy return. That being said, we don't see it, and I wouldn't say that there's wide differentiation across the customer database. So again, and you referenced this, we focus on a very specific customer. Brian, anything you would add there?

Yes. I would say at the highest end of the market continues to grow for us on the non-gaming side, and the team has done a phenomenal job in capturing that business and it's perfect for our brand, and that's where we sit and operate and do a great job. So it continues to grow.

Good. Thank you very much.

Sure.

Well, thank you, Chad, and thank you, everyone. We'll now close the call. Thank you for your interest in Wynn Resorts, and we look forward to updating you again next quarter.

Thanks, everybody.

Thank you. That does conclude today's conference. You may disconnect at this time.