MGM Resorts International is currently assessing an $18 billion acquisition proposal from People Incorporated, while also reporting moderate revenue growth and a significant increase in profits for the second quarter. This growth is attributed to the success of its digital operations and Las Vegas ventures.
In the second quarter, MGM's consolidated revenue climbed by 1% year-over-year to reach $4.5 billion. The net profit attributable to MGM saw a staggering increase of 497%, amounting to $292.4 million. Operating profit also rose by 24% to $503.6 million, although adjusted EBITDA fell by 6% to $610 million.
This financial update coincides with MGM's review of a cash offer from People Incorporated, previously known as IAC, which seeks to purchase the remaining shares at $48.30 each, valuing the company at approximately $18 billion. People Incorporated currently holds 26.1% of MGM's common stock.
Bill Hornbuckle, MGM's President and CEO, confirmed that a special committee of independent directors is actively evaluating the acquisition proposal. “The committee is working closely with independent advisors to assess the proposed transaction,” Hornbuckle stated. “I am confident that our board will choose the best path for the company and our shareholders.”
MGM Digital was a key driver of revenue growth, with a 20% increase to $196 million, despite the segment's adjusted EBITDAR loss widening to $31 million from $26 million the previous year. Meanwhile, MGM's Las Vegas Strip Resorts, its largest segment, reported a 3% revenue increase to $2.2 billion, buoyed by higher hotel occupancy rates and improved casino and entertainment performance.
Conversely, revenue from Regional Operations fell by 4% to $924 million as casino revenues declined, although this was somewhat balanced by increased non-gaming revenue. MGM China reported flat revenue at $1.1 billion, with adjusted EBITDAR decreasing by 15% to $257 million.
Overall, casino revenue across the group rose by 2% to $2.38 billion, while food and beverage revenue increased by 3% to $802.3 million. Revenue from rooms dipped by 1% to $849.1 million, and revenue from entertainment, retail, and other sources decreased by 5% to $416.3 million.
Pre-tax profits surged more than threefold to $413.5 million due to a drop in non-operating expenses, and first-half revenue rose by 3% to $8.91 billion. However, adjusted EBITDA for the first half of the year fell by 7% to $1.19 billion.
Hornbuckle emphasized that these results highlight the robustness of MGM's diversified operations. “MGM has once again proven the strength of our diverse portfolio, achieving record consolidated revenue in Q2, supported by consecutive year-over-year revenue growth for Las Vegas Strip Resorts, record same-store quarterly revenue for Regional Operations, and a 20% year-over-year increase in MGM Digital revenue,” he remarked.
The company also confirmed that construction of its integrated resort in Osaka is proceeding on schedule for a 2030 opening. “The underground work is progressing well, with over 60% of the foundation piles completed,” Hornbuckle noted, adding that the project remains “on time and on budget.”
During the earnings call, management acknowledged that Las Vegas is experiencing a decline in international visitors and reduced traffic from California, with annual visitor numbers down by approximately 3.5 million. Nevertheless, executives noted that major live events continue to drive demand. “We have become a major event marketplace,” Hornbuckle stated. “When significant events occur, such as a UFC fight featuring Conor McGregor or a BTS concert, the market reacts with considerable interest.”
The company has also introduced promotional all-inclusive packages since March, which have resulted in over 30,000 room nights booked, with nearly half of the guests being first-time visitors. Chief Operating Officer Ayesha Molina remarked that demand for these packages has been particularly strong on weekends. “We have observed significant interest from customers, especially during weekends,” Molina said. “They are purchasing the packages at slightly higher rates, which has been beneficial for us.”