Churchill Downs Incorporated (NASDAQ:CHDN) Q2 2023 Earnings Conference Call July 27, 2023 9:00 AM ET

Company Participants

Phil Forbis - Vice President, Financial Planning & Analysis

Bill Carstanjen - Chief Executive Officer

Marcia Dall - EVP and Chief Financial Officer

Conference Call Participants

David Katz - Jefferies

Dan Politzer - Wells Fargo

Barry Jonas - Tru Securities

Joe Stauff - SIG

Chad Beynon - Macquarie

Jordan Bender - JMP Securities

Operator

Good day, ladies and gentlemen, and welcome to the Churchill Downs Inc. 2023 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we’ll conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Mr. Phil Forbis, Vice President, Financial Planning and Analysis.

Phil Forbis

Thank you, Andrew. Good morning, and welcome to our second quarter 2023 earnings conference call. After the company’s prepared remarks, we will open the call for your questions. The company’s 2023 second quarter business results were released yesterday afternoon. A copy of this release announcing results and other financial and statistical information about the period to be presented in this conference call, including information required by Regulation G, is available at the section of the company’s website titled News located at churchilldownsincorporated.com as well as in the website’s Investors section.

Before we get started, I would like to remind you that some of the statements that we make today may include forward-looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC. Specifically the most recent reports on Form 10-Q and Form 10-K. Any forward-looking statements that we make are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in yesterday’s earnings press release. The press release and Form 10-Q are available on our website at churchilldownsincorporated.com. And now I’ll turn the call over to our Chief Executive Officer, Mr. Bill Carstanjen.

Bill Carstanjen

Thanks, Phil. Good morning, everyone. With me today are several members of our team, including Bill Mudd, our President and Chief Operating Officer; Marcia Dall, our Chief Financial Officer; and Brad Blackwell, our General Counsel. I will share some high-level thoughts on several strategic topics, and then Marcia will provide insight on our financial results as well as an update on our capital management strategy. After she finishes, we will take your questions. We delivered all-time record net revenues of $769 million, an all-time record adjusted EBITDA of $364 million in the second quarter of this year. We were very pleased with the results for this year’s 149th Kentucky Derby, a crowd of over 150,000 fans watched Mage at 15 to one odd pull off an incredible victory. Strong growth in ticketing and sponsorship revenue, coupled with record wagering generated a sizable increase in adjusted EBITDA, setting a new all-time record for Derby Week. We were thrilled to debut on time and on budget our new first turn experience, which provided one-of-a-kind premium accommodations with exclusive views of the horses and the racetrack from the rail of the historic first term.