Churchill Downs Inc. has achieved unprecedented revenue and profits, largely driven by the excitement surrounding the 152nd Kentucky Derby. In a filing on the same day, the company revealed it is considering the sale of eight regional gaming properties.
On Wednesday, Churchill Downs Incorporated (CHDN) announced it had its most profitable quarter in its 150-year history, with the Kentucky Derby contributing significantly to record revenue and adjusted EBITDA.
However, the more significant news came from a Form 8-K filed that day, indicating that the company is contemplating selling eight wholly owned regional casinos. This move could lead to a strategic shift, allowing Churchill Downs Inc. to focus more on live racing and historical racing machines.
During the 9 am ET earnings call, analysts will be keen to determine whether management views the review of these eight properties as a way to streamline their portfolio or as a potential exit from regional gaming altogether. They will also look for any insights regarding expected valuations or how the proceeds might be utilized.
Attention will also be given to comments regarding the stakes in Rivers Des Plaines and Miami Valley Gaming, which together contributed $50 million to the Gaming segment’s adjusted EBITDA of $133 million and are not on the list for sale. Analysts will be curious whether these properties are considered essential or if there are signs of a possible divestment.
In a note following the earnings report, Citizens’ analyst Jordan Bender expressed optimism about the proposed sale of regional casinos, seeing it as a positive move that aligns with management’s strategy to focus on higher-margin, high-growth assets. Although no timeline for a sale was provided, this strategy could help address debt maturities and facilitate share repurchases.
For the quarter ending June 30, 2026, Churchill Downs Inc. reported net revenues of $980 million, reflecting a $46 million or 5% increase compared to the previous year’s $934.4 million. Adjusted EBITDA rose by $26 million, or 6%, to a record $477 million.
Net income attributable to CDI reached $241 million, an increase of $24 million or 11%. The diluted earnings per share (EPS) was $3.42, up from $2.99 in Q2 2025, while adjusted diluted EPS was $3.45, marking an 11% rise from $3.10.
While the record quarter was anticipated, it still exceeded expectations, with consensus estimates at $979.1 million for revenue and $3.43 for adjusted EPS, and adjusted EBITDA projected around $473 million. Media coverage characterized the results as meeting expectations.
The quarter was notably influenced by Kentucky Derby Week, during which Churchill Downs Inc. reported record wagering across all sources. NBC’s broadcast attracted peak viewership of 24.4 million, a 12% increase year-on-year, with an average viewership record of 19.6 million, up 11%.
Additionally, the company moved the Kentucky Oaks to primetime for the first time, drawing 2.4 million viewers and setting a record for all-sources wagering on the Oaks card. This scheduling change raises questions about the future value of media rights.
In terms of segment performance, Live and Historical Racing revenue increased by $34 million to $575 million, with adjusted EBITDA rising by $21 million to $318 million. The Churchill Downs racetrack alone contributed a $21 million revenue boost through broadcast rights, ticket sales, sponsorships, and wagering.
The historical racing machine (HRM) venues in Kentucky’s Northern, Southwestern, Western, and Louisville areas collectively added $12 million in revenue. Virginia saw a net increase of $1 million, with Northern Virginia contributing $5 million, while Central Virginia experienced a decline.