Monarch Casino: 21% EPS Jump in Q2
Key Points
- Revenue and earnings per share (GAAP) exceeded analyst expectations for Q2 2025, with EPS at $1.44 (estimate: $1.20) and revenue at $136.9 million (estimate: $129.8 million).
- Casino revenue grew 12.1%, while hotel revenue declined 3.1% due to reduced convention business.
- Adjusted EBITDA margin expanded by 320 basis points to 37.5%, reflecting improved efficiencies and cost controls.
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Monarch Casino & Resort (NASDAQ:MCRI), a leading regional casino operator with properties in Reno, Nevada and Black Hawk, Colorado, reported its financial results for the second quarter of fiscal 2025 on July 16, 2025. The company delivered record revenue and earnings for the quarter, surpassing analyst estimates with GAAP EPS reaching $1.44 compared to a $1.20 forecast, and revenue (GAAP) climbing to $136.9 million against an expected $129.8 million. These results reflect solid operational momentum, especially in the gaming segment. For the period, the company demonstrated positive trends in profitability and market share growth, though softer hotel revenues and pending legal matters remain on the radar for the months ahead.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Diluted) | $1.44 | $1.20 | $1.19 | 21.0% |
| Revenue | $136.9 million | $129.8 million | $128.1 million | 6.8% |
| Adjusted EBITDA | $51.3 million | $43.9 million | 16.8% | |
| Net Income | $27.0 million | $22.7 million | 18.9% |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Key Success Factors
Monarch Casino & Resort owns and operates two casino resorts: Atlantis Casino Resort Spa in Reno and Monarch Casino Resort Spa Black Hawk in Colorado. The company is known for its focus on premium guest experiences, offering gaming, dining, spa amenities, and accommodations designed to appeal to both leisure and business travelers.
Its success rests on strategic property locations in growing gaming markets, quality and variety of amenities, and compliance with stringent gaming regulations. The company’s approach to recent business has centered around reinvestment in property upgrades, effective cost management, and marketing to high-value gaming and convention customers. Steady capital spending and operational innovation support its market positioning.
Highlights From the Quarter: Financial and Operational Developments
During the quarter, Monarch Casino & Resort set new records in both revenue and profit (GAAP), solidly surpassing forecasts. The company’s gaming operations performed especially well, with casino revenue rising 12.1% (GAAP) compared to the prior-year period, supported by improved labor management and technology investments. Casino operating expenses as a percentage of casino revenue declined to 35.7% from 37.7% in Q2 2024, indicating greater efficiency in its core business. The company’s gains were not limited to gaming, as food and beverage revenue also edged higher, and operating expense as a percentage of that revenue improved by 2.0 percentage points, reflecting labor and service efficiency.
However, the hotel segment saw a decline. Hotel revenue fell 3.1% as convention group business did not match the prior year’s volume. Hotel operating expense as a percentage of revenue rose to 34.3%.
Monarch Casino & Resort completed a multiyear, $100 million guest-room renovation at its Atlantis property. This investment contributed to market share gains and earned the hotel recognition as the top-rated facility in Reno by U.S. News & World Report. Both company properties also received awards for excellence in dining, underpinning the drive toward quality experiences and premium customer segments.
On the cost side, Selling, general, and administrative expense, which covers non-operating costs like marketing and management, rose only modestly and declined as a percentage of revenue. As a result, company-wide adjusted EBITDA margin expanded by 320 basis points over the prior year's quarter (non-GAAP), reflecting successful efforts in cost control and technology-driven efficiencies. The company also returned $19.8 million to shareholders through share buybacks and paid a $0.30-per-share quarterly dividend, maintaining its annualized $1.20 per share payout.
Outlook and What to Watch
For the coming quarter and the remainder of fiscal 2025, management did not provide formal financial guidance. It reiterated the quarterly dividend of $0.30 per share.
The company drew attention to a $74.6 million legal judgment relating to past construction litigation, which remains unresolved and could have a future impact on capital allocation, depending on the outcome of appeals. As of June 30, 2025, the company's liquidity remains solid, with $71.6 million in cash and no borrowings on its credit facility.
MCRI currently pays a quarterly dividend of $0.30 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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