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DATE

Thursday, July 23, 2026 at 5:00 p.m. ET

CALL PARTICIPANTS

• Vice President of Corporate Communications - David Strow
• President and Chief Executive Officer - Keith E. Smith
• Executive Vice President and Chief Financial Officer - Josh Hirsberg

TAKEAWAYS

• Revenue -- $1.03 billion, which was in-line with the second quarter of 2025 as growth in regional segments offset softness in destination-driven markets.
• Net Income -- $131.2 million, or $1.75 per diluted share, compared to $151.5 million, or $1.84 per diluted share, in the prior-year period.
• Adjusted EBITDAR -- $350.5 million, reflecting a decrease from $357.9 million last year due to construction disruptions and softness in the destination business.
• Property Operating Margins -- 40%, consistent with levels delivered over the last several years despite inflationary pressures.
• Midwest and South Revenue -- $556.9 million, an increase of 3.1% year over year driven by gaming revenue growth and contributions from recent capital investments.
• Midwest and South EBITDAR -- $208.7 million, representing a 3.6% increase with property margins expanding to nearly 38%, the highest in almost two years.
• Las Vegas Locals Revenue -- $225.9 million, a decrease from $229.1 million last year due to softness at the Orleans and construction at the Suncoast.
• Las Vegas Locals Adjusted EBITDAR -- $106.4 million, which excludes a 3% growth in EBITDAR from segment properties other than the Orleans and Suncoast.
• Downtown Las Vegas Revenue -- $52.1 million, compared to $55.3 million in the year-ago period, reflecting lower pedestrian traffic in the area.
• Managed Business EBITDAR -- Increased 18.2% year over year to $30.7 million, driven by higher management fees following the first phase of the Sky River expansion.
• Online Segment Guidance -- Raised by $5 million to a range of $35 million to $40 million for the full year 2026, reflecting the performance of Boyd Interactive.
• Managed Business Guidance -- Increased by $3 million to a range of $113 million to $117 million for 2026, following the successful completion of Sky River Phase 1.
• Capital Expenditures -- $142 million in the quarter, bringing the year-to-date total to $297 million, with a full-year 2026 estimate of $650 million to $700 million.
• Share Repurchases -- $156 million, representing 1.9 million shares at an average price of $83.60 per share during the quarter.
• Shareholder Returns Guidance -- On track to return more than $650 million through dividends and repurchases in 2026, equivalent to approximately $9 per share.
• Debt and Leverage -- Total debt was $2.6 billion with a traditional leverage ratio of 2.2x and lease-adjusted leverage of 2.7x.
• Suncoast Construction Impact -- Estimated at $3 million in EBITDAR disruption during the quarter, with completion of the casino floor renovation expected by the end of the third quarter.
• Destination Business Impact -- $5 million EBITDAR headwind in the Las Vegas locals segment, a level management indicated has remained consistent for several quarters.
• Virginia Resort Development -- Remains on track for a late 2027 opening with $300 million in growth capital allocated for 2026 for the 65,000-square-foot casino facility.
• Louisiana Expansion -- Plans announced to convert the Amelia Belle property to a land-based facility, with construction expected to begin in late 2027.
• Share Count -- 73.1 million shares outstanding at quarter-end, representing a 35% reduction since the capital return program began in late 2021.

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RISKS

• Hirsberg stated, "Destination continued to be an impact. It was a similar level at around $5 million of EBITDAR... not realistic to really expect it to kind of pivot to flat to positive," regarding the ongoing softness in the Las Vegas locals segment.
• Hirsberg stated, "Suncoast construction disruption... we estimate that to be have been around $3 million for Q2. And we expect that to be a similar level in Q3," noting the short-term financial impact of facility modernization.

SUMMARY

Management reported that Boyd Gaming Corporation (BYD -0.11%) achieved stable performance through its diversified geographic footprint, as growth in the Midwest and South segments and managed operations offset localized construction impacts and broader softness in Las Vegas destination traffic. The company is executing a multiyear capital reinvestment program focused on hotel renovations and casino floor modernizations, while concurrently advancing major growth projects in Virginia and California. Management indicated that a strong balance sheet and consistent free cash flow support a continued commitment to returning approximately $150 million per quarter to shareholders through share repurchases, alongside a recurring quarterly dividend.

• CEO Smith attributed the strength in regional markets to guests "spending their dollars closer to home," noting that Midwest and South properties are currently outperforming the Las Vegas portfolio.
• By early 2027, the company expects to have renovated over 70% of its Las Vegas hotel room inventory and introduced 17 new food and beverage concepts across the valley.
• CEO Smith noted that Southern Nevada employment is increasing at the fastest rate of any major metro area in the country, adding "more than 200,000 jobs outside of the hospitality sector over the last 10 years."
• Management stated that the Cadence Crossing property, which opened in late March, has seen strong initial visitation and is expected to contribute to EBITDAR starting in the third quarter.
• The Sky River expansion in Northern California will enter Phase 2, adding a 300-room hotel, a spa, and an entertainment center with an expected completion date in early 2028.
• CFO Hirsberg confirmed the company intends to refinance its December 2027 debt maturity either later this year or in the first half of 2027.
• The company expects to complete the previously announced sale of its Shreveport property by the end of July.

INDUSTRY GLOSSARY

• Adjusted EBITDAR: Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs; a common metric used to value gaming companies with significant lease obligations.
• Cadence Crossing: A new gaming property recently opened by Boyd Gaming in the Las Vegas locals market.
• Core and Retail Customers: Frequent, local gamblers and casual visitors, as opposed to high-rolling "VIP" or long-distance destination travelers.
• Destination Business: Revenue derived from tourists traveling from outside the local market, typically involving hotel stays and higher non-gaming spend.
• Managed Business: Properties operated by the company for a fee on behalf of third-party owners, such as tribal governments.
• Market Access Agreements: Contracts allowing third-party online gaming operators to utilize a physical casino's license to offer digital betting services.

Full Conference Call Transcript

Operator: Good afternoon. And welcome to the Boyd Gaming Second Quarter 26 Earnings Conference Call.

David Strow: This is David Strow, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today's call, which we are hosting on Thursday, 07/23/2026. At this time, all lines are in listen only mode. Following our remarks, we will conduct a question-and-answer session. If at any time during this call, you require immediate assistance please press *0 for the operator. Our speakers for today's call are Keith E. Smith, President and Chief Executive Officer and Josh Hirsberg, Chief Financial Officer. Our comments today will include statements that are forward looking statements within the meaning of the Private Securities Litigation Reform Act. All forward looking statements in our comments are as of today's date.

And we undertake no obligation to update or revise the forward looking statements. Actual results may differ materially from those projected in any forward looking statement. There are certain risks and uncertainties, including those disclosed in our filings with the SEC that may impact our results. During our call today, we will make reference to non GAAP financial measures. A complete reconciliation of historical non GAAP to GAAP financial measures please refer to our earnings press release and our Form 8-Ks furnished to the SEC today both of which are available at investors.boygaming.com. We do not provide a reconciliation of forward looking non GAAP financial measures due to our inability to project special charges and certain expenses.

Today's call is being webcast live at boydgaming.com. Will be available for replay in the Investor Relations section of our website shortly after the completion of this call. So with that, I would now like to turn the call over to Keith E. Smith. Keith?

Keith E. Smith: Thanks, David. Good afternoon, everyone. Our second quarter results reflect the continued benefits our diversified business model, the success of our ongoing capital investment program, and broad based growth in play across our customer segments. A company wide basis, revenues increased 3% and EBITDA grew 2% for the quarter, adjusting for the impact of last year's FanDuel transaction and the tax pass through amounts related to our market access agreement. This performance was led by strong growth across our Midwest and South segment, solid contributions from Boyd Interactive and increased management fees from Sky River. We also maintain operating efficiencies throughout the business delivering property operating margins of 40%. Consistent with the last several years.

Strong performances of our Midwest and South online and managed segments in the quarter partially offset by continued softness in destination business in Las Vegas primarily at the Orleans and ongoing construction disruption at the Sun Coast. Excluding the Orleans and Suncoast, the balance of our Las Vegas local segment delivered revenue and EBITDAR growth strong margins during the quarter reflecting the continued strength of our local customer. And while we are only 3 weeks into the third quarter, the overall trends of the second quarter are continuing into July. Now looking at our results by segment, First, our Midwest and South segment delivered a strong performance on top of last year's solid results.

Revenues grew 3% in the quarter, by growth in gaming revenues, while EBITDA grew 4% with property margin expanding to nearly 38%. This was the segment's strongest margin in almost 2 years, demonstrating our continued ability to drive operating efficiencies throughout our business. These results were supported by growth in play for both our core and retail customers Our guests continue to stay and spend closer to home. We are also benefiting from our property investments throughout the segment our recent hotel renovations and new food and beverage offerings contributing to our strong performance across the Midwest and South.

In addition, we continue to deliver growth in properties where we have made larger or strategic investments such as treasure chests and Maristar St. Charles. Moving to our Las Vegas local segment. While our Las Vegas locals business continues to be impacted, by the softer destination business and ongoing construction activity at the Sun Coast, overall gaming revenues for the segment were even with prior year with stable play from our core and retail customers. Excluding the Orleans and Suncoast, remainder of our Las Vegas Local segment achieved solid results for the second quarter. Revenues from these properties increased 4% in the quarter driven by increases in gaming revenues. While EBITDAR grew 3% and margins once again exceeded 50%.

The growth in gaming revenues driven by increased play record and retail guests demonstrating the underlying strength of our Locals customer. And while results of the Suncoast for both our first and second quarter were impacted by construction activity, we expect to finalize our renovations of the casino floor and other public areas by the end of Q3. Once this work is complete, we will have modernized all public spaces in the building including the entire casino floor, the sports book, bingo room, and the high limit room. And we will significantly enhance our food and beverage offerings expanded and refreshed the property's meeting space. As a result, we expect to deliver improved performance of the Suncoast starting in Q4.

We are also finalizing plans for a refresh of the Orleans casino floor of public spaces. We expect to begin this work at the Orleans in first half of 2027. At Cadence Crossing, visitation and revenues have been strong since its debut in late March, and we remain confident we will achieve our long term return on this investment. Beyond these projects, we continue to invest in our properties throughout the Las Vegas Valley. We recently opened new restaurants in Gold Coast, Sam's Town, and Sun Coast. And plan to introduce others throughout the Las Vegas Valley in the coming months.

We have hotel renovations underway at the Orleans and Suncoast both of which are expected to be complete by year end. And we are updating our sportsbook in Sam's Town and Aliante both opening in time for the upcoming football season. In all, by early 2027, will have renovated over 70% of our Las Vegas hotel room inventory introduced 17 new food and beverage concepts, and significantly enhanced our Southern Nevada presence with our new Cadence Crossing property and the investments we are making at the Suncoast. Together, these investments are elevating the competitiveness and the appeal of our Las Vegas locals portfolio and positioning this segment for long term growth.

Our confidence in our Locals business is also supported by the growth of the Southern Nevada economy. Southern Nevada employment is increasing at the fastest rate of any major metro area in the country. Job growth is occurring across most major employment sectors, further diversifies diversifying the local economy has added more than 200 thousand jobs outside of the hospitality sector over the last 10 years. Employment growth is also driving further gains in local incomes. Weekly wages are increasing at more than 2x the rate of the national average. And Las Vegas remains an attractive destination for relocation. Offering 1 of the most competitive cost of living environments in the Western United States.

In all, Southern Nevada's continued growth in population employment, and personal income support our confidence in our long term prospects for our Las Vegas locals business. Next, in our Downtown Las Vegas segment, trends in the business were consistent with recent quarters. While play from both core and Hawaiian guest was stable, our downtown business was impacted by lower pedestrian traffic throughout the downtown area reflecting continued softness in destination business. Next, our online segment achieved revenue and EBITDAR growth on a comparable basis. These results reflected strong growth from Boyd Interactive as well as contributions from our market access agreements that were consistent with the last several quarters. Finally, our managed business grew EBITDAR by 18% year over year.

This outstanding performance was driven by the recent completion of the first phase of the Sky River expansion project significantly increased the casino floor and added a new multilevel parking structure. With Phase 1 off to a strong start, we will now begin the work on Phase 2, which will add a 300-room motel, 3 new food and beverage outlets, full service spa, and a new entertainment and event center. Once complete in early 2028, we are confident this expansion will further strengthen Sky River's position as 1 of Northern California's most successful popular gaming destinations.

So in all, our second quarter performance is driven by our diversified business model, broad based growth in play from our core and retail customers, and the success of our recent capital investments. While we are investing in our properties across the country, we also continue to build development pipeline to drive long term growth. In Virginia, our resort development on the Norfolk Waterfront remains on time and on budget for a late 2027 opening. Once complete, this upscale resort will be a true market leader. 65 thousand-square-foot casino, a 100-room hotel, 8 food and beverage outlets, live entertainment, and an outdoor amenity deck.

We will also offer the most convenient gaming destination for many of the 1.8 million residents of the Hampton Roads region as well as the 15 million tourists who visit nearby Virginia Beach each year. Next, in Illinois, our modernization of the Par-A-Dice Casino is in the design phase. Once complete, this project will transform Par-A-Dice into a single level entertainment facility with a modern casino floor enhanced amenities. Positioning this property for growth well into the future. With Par-A-Dice in the design process we are gearing up for our next growth projects. 1 such project is in Louisiana. At our Amelia Belle property.

Subject to regulatory approval, we are planning to convert this property to a land based facility a modern casino floor and enhanced food and beverage offerings. Once design work is complete, expect to begin construction on this project in late 2027. As we invest in future growth of our business, we continue to balance our capital investments with our commitment to returning significant capital to our shareholders. To that end, we returned over $170 million to our shareholders during the second quarter through a combination of share repurchases and dividends. Going forward, we intend to continue repurchases at a $150 million per quarter pace. Supplemented by our quarterly dividend. In summary, this was another successful quarter for our company.

On a company wide basis, we grew both revenues and EBITDA on a comparable basis with strong performances for our Midwest and South operations, our online segment, our managed business much of our Las Vegas locals portfolio. We continue to drive growth in play from our core and retail on a company wide basis. The capital investments we have made at our properties supported growth during the quarter. And position our properties for future success. In addition, we continue to build our development pipeline to drive long term growth. And we continued our commitment to returning capital to our shareholders. Repurchasing nearly 1.9 million shares in Q2 alone.

Supported by a strong balance sheet, efficient operating model and robust free cash flow, our company is well positioned for the future. And to continue creating long term shareholder value. I would like to thank the entire Boyd team for their contributions to our continued success. Their hard work and dedication helped create memorable experiences for our guests. And we are grateful for all they do for our company. Thank you for your time today, and I would now like to turn the call over to Josh.

Josh Hirsberg: Thanks, Keith. During the quarter, our Midwest and South segment delivered another strong performance. giving us revenue and EBITDAR growth As well as achieving margins that were their highest in nearly 2 years. And in our online and managed segments, we also produced strong results on a comparable basis. And in Las Vegas, excluding Orleans and Suncoast, Las Vegas local segment generated revenue and EBITDAR growth continuing to deliver margins over 50%. As a result of Boyd Interactive's strong performance, we are raising full year guidance for our online segment by $5 million to $35 million to $40 million full-year 2026.

And given the positive response to Sky River's recent expansion, we are raising our guidance by $3 million for our managed business to $113 million to $117 million for the full year. During the quarter, we invested $142 million in capital expenditures, bringing year to date CapEx to $297 million. We remain on track to spend between $650 million to $700 million for the full year. Full year capital expenditure estimate includes about $250 million of maintenance capital, $75 million in incremental hotel capital associated with our Orleans hotel remodel.

Which is on track to be completed by the end of this year. $50 million in growth capital primarily related to completing cadence and the design and preconstruction efforts related to our Par-A-Dice project. Finally, $300 million for our casino resort development. In terms of our capital return program, during the second quarter we paid $15 million in dividends repurchased $156 million 1.9 million shares at an average price of $83.60 per share. Our actual share count at the end of the second quarter was 73.1 million shares.

We plan to continue repurchasing approximately $150 million in shares per quarter putting us on track inclusive of dividends to return more than $650 million to shareholders this year representing approximately $9 a share in value for our shareholders. Since we began our capital return program in late 21, we have returned over $3 billion to our shareholders reducing our share count by 35%. Even with our capital investments capital return program, Our balance sheet remains strong. We finished the quarter with traditional leverage of 2.2x lease adjusted leverage of 2.7x.

We have ample capacity available under our credit facility, and our next debt maturity is in December 2027, which we intend to refinance later this year or in the first half of 2027. Debt balances at June 30th, reflected $267 million in tax credit payments made during the second quarter that were related to last year's FanDuel transaction. And finally, as a reminder, we previously announced we had entered into an agreement to sell our Shreveport property. Expect to complete the sale of this property by the end of July.

So in conclusion, our second quarter results reflected the benefits of our diversified business model, our ongoing capital investment program, broad based growth in play from our core and retail customers. Our strong balance sheet, consistent operating performance and robust free cash flow all position us well to continue creating long term value for our shareholders. David, this concludes our remarks and we are now ready to take any questions.

Operator: Thank you, Josh. We will now begin our question-and-answer session. If you would like to ask a question. With our prompt, that your hand has been raised. Should you wish to withdraw your request, please *2. If you are using a speakerphone, please use your handset when asking your questions. We will pause for a moment while we compile our list of questioners. Our first question comes from Barry Jonas Truist Securities. Barry, please go ahead.

Barry Jonas: Great. Hey, guys. Keith, you mentioned guests staying closer to home in the opening remarks. Can you talk a little bit more about what may be driving growth in the Midwest and South? And maybe help us sensitively think that outlook is all the macro volatility we are seeing.

Keith E. Smith: Sure. Look, I think we have seen guests or believe that guests are staying closer to home and spending their dollars closer to home for the last several quarters. you know, whether that is a result of just everything going on in the world or higher airfares, It just appears that our Midwest and South portfolio is, you know, outperforming our Las Vegas portfolio. And so that is what all that is driven by or how that comes together there is a lot going on with the consumer these days. For the higher-end consumer, if they are in the stock market, they are doing quite well. you know, there are you know, tax credits from 1 big beautiful bill.

There are, you know, larger tax refunds this year. Those are all offset by things like higher gas prices and higher inflation. So all that nets out as we can report it, we are seeing good growth Our core customers, good growth from our retail customers, in the Midwest and South. But importantly, we also see that here in Las Vegas in our locals region. Know, the locals region for Boyd anyways is really impacted by declines in the destination side of the Orleans. But when it comes to the Las Vegas locals customer, we see good growth there also.

Barry Jonas: Great. And that may be goes into my follow-up. I wanted to ask about the destination business and the locals. Was the negative say, year over year EBITDA impact in this quarter about similar to what you guys saw last quarter? And maybe just walk us through how that shifts as we go into Q3 when I believe we lapped comparisons. Thank you.

Josh Hirsberg: Yes. So Barry, this is Josh. I will try to take that. So I would say that in the Las Vegas locals market or segment for us, Destination continued to be an impact. It was a similar level at around $5 million of EBITDAR. that is a level we have seen really very consistently since Q3 of 2025. Think when we anniversary it in Q3 of 2026, it is not realistic to really expect it to kind of pivot to flat to positive. Just do not see any indication that those trends are changing. I think our expectation is things to just to be less bad.

I think we put a number out there around $3 million as kind of our best estimate for Q3. Think a similar amount probably for Q4, maybe a little bit not as bad as Q3 but similar level. So destination for us has been very consistent. Do not expect it to flip just because we had not really seen any indication it is changing, of getting worse or getting better, but I just do not think it is realistic to expect it to all of a sudden start to improve once we anniversary it. So it is kind of a less bad scenario for us. Think similarly, with another impact during the quarter was Suncoast construction disruption, Keith mentioned it.

It was the first quarter that we saw a full impact of construction disruption. And we estimate that to be have been around $3 million for Q2. And we expect that to be a similar level in Q3 before Suncoast comes online and starts to contribute in Q4. And then obviously the last piece of the Las Vegas local, and you really did not ask about this, but I will just volunteer it, is Cadence, which has had a good start in terms of revenue growth and we are kind of adjusting the expense side of things as we move through time. We expect Cadence to start contributing later in Q3 and then continue to ramp into Q4 and after.

So those I think are the moving pieces that is going on within the Las Vegas market. And I think the last point I would make is that the truly local customer remains pretty healthy for us. And that is what is on the gaming revenue side mitigating the impacts that we are seeing from destination customers and some of that construction disruption.

Barry Jonas: Great. that is really helpful. Thank you.

Operator: Our next question comes from Steven Wieczynski of Stifel. Steven, please go ahead.

Steve Wieczynski: Yes. Hey, guys. Good afternoon. So Keith or Josh, wondering if you could go through the cadence of the second quarter in the Las Vegas locals market. Just trying to get a sense for maybe what you saw across the different months in the quarter and if they were if they were pretty similar or they were dramatically different. And then, Keith, you noted the first 3 weeks so far in the third quarter in July were similar to the second quarter. I just want to be sure that, that means outside of Orleans and Suncoast, the rest of the portfolio is performing in line with recent trends. I wanna make sure I heard that right.

Keith E. Smith: So with respect to your last question, you heard it right. Is that outside of Suncoast and the Orleans, the rest of the portfolio here locally as well as throughout the Midwest, is performing the same as we saw in Q2. Once again, I note it is only 3 weeks, and we certainly expect it to continue. But it is only 3 weeks into the quarter. With respect to kind of the cadence of the second quarter, look, every month is different, and so we look at the quarter in the aggregate. June was probably a little softer. May was a little stronger.

Know, April was fine. you know, when you combine them all in the quarter was pretty much what we expected, I would not take anything away from whether the fact May was a little stronger, June was a little weaker. I do not read any trends into that at all.

Josh Hirsberg: And, Steven, this is Josh. I would just add, you know, what Keith comments around locals outside of Orleans and Suncoast, Midwest and South are obviously correct. I think reality is even Suncoast and Orleans are performing generally in line with what we expect, but we really had not seen a change to an inflection in either directional destination, and we had a construction disruption that we expect to occur in Q2 happened at level that we expected as well. So, I would say the business in general, big picture is performing just in line with what we expected coming into the quarter.

And all that continues to play out in a similar fashion so far in the first couple of weeks of July.

Steve Wieczynski: Okay. Gotcha. Thanks for that, guys. And then second question, would be around reinvesting in your portfolio. And I guess my question is, I mean, you have seen strong returns from the properties that you have reinvested in. So just wondering if that makes you guys think about getting a little bit more aggressive with other assets, whether that is in the regional portfolio, whether that is in the Las Vegas locals market, but any color there, I think, would be helpful.

Keith E. Smith: I would say that we are probably at a pace of reinvesting that we can comfortably handle right now. there is only so many things that you can do and do them in a high quality fashion. So the team is fully engaged. We have a list of projects when we are done with these that we will continue to engage on. But I would not expect that pace or the amount of money we spend is going to pick up. It will continue but it will not pick up. I think we are pretty comfortable with the cadence of and the trajectory we are on right now of these cap capital projects.

Steve Wieczynski: Okay. Great. Thanks, guys. Appreciate it. Yep.

Operator: Our next question comes from David Katz of Jefferies. David, please go ahead.

David Katz: Evening, everyone. Afternoon, everybody. you know, 2 things. you know, 1, the internal investment on Emilia Bell. Obviously, it presents a return opportunity. I am Frankly, I am just curious how the decision to focus on that 1, you know, versus, you know, say, some of the larger properties in the portfolio? Was it or was this really just the next best opportunity?

Keith E. Smith: Well, there is, you know, there is a number of factors that go into how we prioritize projects, not appropriate to kind of go into those details. At this point. it is the appropriate time to tackle Amelia Belle. it is not a 1-off project. We can do multiple things at a time, and we are Once again, there is a number of other projects that we will continue to process, and we will update you on as we get ready to start them. So you know, Amelia Belle does not postpone or take the place of anything else. It just happens to be next in line for us.

David Katz: Understood. And you know, I think we all have talked about your boundaries. Know, for external M&A, and I think we probably have a pretty good sense of where some of the more obvious opportunities are. But I would love to get a sense for you know, what your you know, seeing out there, what your appetite is, and, you know, whether we might see some external you know, property level M&A in the near term from you all.

Keith E. Smith: The risk of being, you know, repetitive or sound something like a broken record, you know, we have had the same view on M&A We have the same view on M&A today that we have had for quite a while. We are interested. We are always looking. it is got to be strategic. it is got to be right asset in the right market at the right price. They have to be higher quality assets. We have got, you know, the business is performing at a very high level. We are returning significant dollars to our shareholders. We have a strong balance sheet. And so we do not need to do M&A.

But if the right opportunity comes along, we certainly have our eyes open. We are not afraid to execute. But once again, it, as it always has, has to tick those boxes. So think it is any different than, unfortunately, the answer I have provided in previous years, and it remains the same today. Nothing's changed for us. Just because we have a strong balance sheet and robust free cash flow does not cause us to be more or less aggressive. I was repetitive. First. Thanks. Nope. Quite alright.

Operator: Our next question comes from Shaun Kelley of Bank of America. Shaun, please go ahead.

Shaun Kelley: Yes. Hi. Good afternoon, everybody, and thanks for taking my question. Josh or Keith, just I wanted to go back to Locals for a second. And think you had mentioned a bit about an ongoing or an additional renovation project at the Orleans starting in 2027, if I caught that correctly. Obviously, I think you are working on the rooms now. So could you just talk about scope and scale there, if I caught that right or correct me if I did not?

And then secondarily and probably more importantly, just help us think on net what is construction disruption going to look like in 2027 versus 2026 for the segment? you know, obviously, Suncoast and the Orleans rooms should be largely done by then. So on net, should we see a little less disruption next year than what we saw this So a couple of comments.

Keith E. Smith: 1, you heard correctly that we are in the design process for a refresh of the Orleans. The casino space as well as public spaces. It is 1 of our you know, premier top properties and great proximity to the strip. And so we are in the process of going through that. Do not have scale and scope to announce at this point. That will come at a later date. As you think about construction disruption, 1, we would expect it to largely conclude at the Suncoast, we would expect it to largely conclude at the end of Q3. And therefore, in Q4, we expect Suncoast to start producing better performance.

It relates to the Orleans, and I think I indicated in my prepared remarks that we would be probably starting that project, you know, sometime in 2027. The initial part of that will be behind walls off space right now. I think as we phase, we will. we will. Therefore, there will be no construction disruption at the Orleans in 2027 There will be no construction disruption at Suncoast in 2027. So as you think of the locals portfolio, it basically should be absent construction disruption. Perfect.

Shaun Kelley: Thank you very much.

Operator: The next question comes from Benjamin Chaiken of Mizuho. Benjamin, please go ahead.

Benjamin Chaiken: Thanks for taking my question. If I am not mistaken, I think you said Ex Orleans and Suncoast revenue EBITDA were higher year over year. I think when you gave I think you gave a similar update a quarter ago, and it was closer to flat. Am I reading too much into that? Or did trends sequentially accelerate?

Keith E. Smith: you heard right. Absent Orleans and Suncoast, we did see growth in revenues and growth in EBIT EBITDAR the remaining Las Vegas locals properties. I will have to see if Josh has the numbers. I do not have the numbers handy in terms of did it accelerate In Q2 versus Q1.

Josh Hirsberg: Yeah. Q1, I think, Benjamin, you are right from memory. It was flat more flattish in Q1, and then we saw better performance from that group of properties in Q2. And I would say that it was, you know, it was contributions from a broader set of properties as we End the Q2. And we started to see obviously, 1 difference is cadence. From an EBITDA perspective. That was not contributing, so it was just a mix of properties changed and contribution from revenue versus EBITDA. changed based on the mix, the change in the mix of properties.

Benjamin Chaiken: Understood. that is helpful. And then just 1 quick 1 on downtown. Did airfares impact the Hawaiian play at all? And is that something you are watching for Q3? Thanks.

Keith E. Smith: Airplays is something we have been watching for years, and we take a look at every day and every week. Monitor for Q2. Did not have any material impact on the visitation. They will play from our Hawaiian guests was relatively stable during the quarter. It materially impacted by airfares or anything else, but it was something we do pay attention to all the time because it has the potential to impact travel from Hawaii.

Josh Hirsberg: Yeah. Then that is, you know, from the perspective of downtown, to date, it is been really all about a similar impact. Or a similar topic we have seen in the locals, so that is been destination. So it was just not getting the walker in the kind of the retail traffic downtown that we typically strip when they have a vacation. So just destination in general is affecting downtown. As well.

Benjamin Chaiken: Understood. Thank you. Welcome.

Operator: Our next question comes from Steven Pizzella of Deutsche Bank. Steve, please go ahead.

Steven Pizzella: Hey, good afternoon, thanks for taking my question. Think you mentioned by early 2027, you will have renovated over 70% of Las Vegas' hotel rooms inventory. Plus the new F&B concepts and you have, of course, Cadence Crossing. Do you expect that to lead to gaining market share in the Locals region?

Josh Hirsberg: We certainly expect to continue to grow here, yes. I think that reality is if you look at our Las Vegas locals market share without Orleans and Suncoast, which is what we have talked about quite a bit have been impacted for different reasons. But without those 2 properties, we have actually grown market share in the Las Vegas locals market. So with Suncoast coming back online, fully renovated, with Cadence you know, gaining its sea legs, so to speak. it is only been open for barely 4 months at this point, but as it continues to grow, yes, we would expect to continue to grow our market share there.

Steven Pizzella: Okay. Thank you. Then just a quick follow-up. Wanted to see if we could get an update on the current promotional environment in locals in the Midwest and South.

Keith E. Smith: Stable. Not much has changed. As I have said for a couple of quarters, those folks that have been aggressive over the last several quarters or last year or so remain aggressive. Those that have remained stable have remained stable. that is true both here in Las Vegas. As well as around the country. We have not, you know, in our markets anyways, have not noted any you know, considerable pickup in how aggressive people are being.

Steven Pizzella: Great. Thank you.

Operator: Our next question comes from Brandt Montour of Barclays. Brandt, please go ahead.

Brandt Montour: Great. Thanks for the question. So I wanted to circle back to the managed or sorry. The, yeah, the managed business Josh, you gave a an updated look at how the full year you expect the full year to come in. The implied back half in that full year target would seem to sort of step back from the second quarter levels. And I just wanna understand, you know, what is driving that. there is a reason for maybe sort of post you know, expansion, cool down? I do not I do not know what you are seeing, but let me let us whatever you can say to help us. Understand that would be helpful.

Josh Hirsberg: Yeah. It is a little bit of a slowdown from what the business we saw in Q2, only anticipating that you open something, you got a lot of demand. And it will settle in at a at a at a level. But that is kinda what went into the expectation. There is still an expectation that it will grow and that is why we increased guidance overall. By $3 million. So 5. No. it is 3. So you know, that will just get spread evenly over the 2 quarters.

Brandt Montour: Okay. that is helpful. And then online, similar question. A little bit different. Yeah. you did guide up does not seem like that you are looking for a step back per se. Or at least it is not as obvious in the online back half. But maybe you just break out PALA or sorry. Boyd Interactive the eye gaming piece, you know, what is the sort of you know, cadence of momentum there. you know, this is obviously an asset that gets overlooked, but you it feels like you have some, you know, impressive growth under the hood. What can what else can you tell us about the path there?

Josh Hirsberg: So, I mean, if you think about online, just think about it as 2 big buckets. 1 is just the market agreements. Obviously, they got renegotiated and changed with the FanDuel transaction last year. This year, they are in system with what we said before, that is about $1 million a month. So about $12 million a year for market access. Then the rest is really Boyd Interactive. And the growth inherent in that little business. So, hopefully, that is that is that gives you a sense.

Brandt Montour: Sure. that is helpful. Thanks very much.

Operator: Our next question comes from John DeCree of CBRE. John, please go ahead.

John DeCree: Hi, Keith. Josh. Good afternoon. Wanted to go back to an earlier comment I think I heard in the prepared remarks about operating efficiency specific to Midwest and South, obviously, something you all have been focused on in perpetuity. But we have noticed in Q1, really, that flow through in the Midwest and South kinda stepped back up into the you know, 40%-plus range. We saw the same in Q2, and last year, we were getting some revenue growth. But really not the flow through. And so Josh, I am curious if you could kinda tell us if you have made any changes or tweaks in the Midwest and South segment, you know, anything specific on the operating structure?

Any cost cuts or, you know, if it is just kind of mostly blocking and tackle. I am not sure if you can kinda say how you got that flow through back up to you know, the forties and if that is sustainable from here.

Josh Hirsberg: Yeah. Thanks, John. I think that the flow through is really a reflection we had a little bit of trouble in the second half of last year where we had revenue growth but limited more limited flow through. you know, as we dug into it more and more, it really became obvious that was really largely kind of a benefits related issue. There were some other moving pieces, but so we reset some of our programs to try to address that. I think we have gotten it under control now. We will we will see as we move through the year.

Obviously, the will depend on usage of the plans and things of that nature as we move through the rest of the year. But for right now, we outside of benefits, when we look at expenses just more broadly, I think we feel like they are very manageable at this stage, and that is what you are seeing not only in the flow-through in the Midwest and South and the margins there, but also outside of Orleans and Suncoast, we are seeing good margin maintaining good margins in the rest of the portfolio.

As those were over 50% as well, not only reflecting the strength of the local customer here in Las Vegas, but also kinda being able to manage our expense structure So, John, you said this.

Keith E. Smith: I mean, the management teams are focused on this every single day and every single week in terms of managing expenses, finding ways to continue to mitigate lower cost. And so it is something that is a huge focus all the time, the team is always working on and you know, some quarters are more successful than others. Understood, Keith.

John DeCree: Thank you. Josh, thanks. I will I will leave it there. that is all for me. Appreciate it, guys. Yep.

Operator: Have time for 1 last question from Daniel Politzer of JPMorgan. Daniel, please go ahead.

Daniel Politzer: Hey, good afternoon, and thanks for taking the question. It sounds like on the Locals business, you are kind of getting through that destination softness. Suncoast, I think the disruption ends in the third quarter. Then you are going to have Cadence starting to contribute. When can we start penciling in top line growth again in this segment? Is it fair that we could see it begin in the third quarter? Or is it something we will have to wait for 2027 for?

Josh Hirsberg: Yes. So Daniel, ultimately, I think at least from an EBITDAR perspective, expect to start to see maybe flat to growth in Q4 I am not sure if you will. I think you will continue to see could see some revenue growth in Q3. That will just depend on how quickly we finish out Suncoast, but I am not Like, the plans right now are for it to, like, go late into Q3. So I am not sure we will really get the benefit of top line growth in from the segment in Q3. I think it is really all about Q4.

Daniel Politzer: Got it. Thanks. And just a quick follow-up. Virginia, that is not something we hear a lot I get it is not opening, you know, until late next year. I guess, can you just remind us how you think about the cash-on-cash returns for that $750 million to spend Yeah.

Josh Hirsberg: So the general targets are kind of a 15% cash on cash return for a project like that. And that is generally what we would expect it to ramp up to Maybe not necessarily in the first year, but certainly as it transitions from the first to second year.

Daniel Politzer: Got it. Thanks so much, everyone. Welcome. Sure.

Operator: This concludes our question-and-answer session. I would now like to turn the call over to Josh for concluding remarks.

Josh Hirsberg: Thanks, David, and thanks for everyone joining the call. If there is any follow-up just feel free to reach out to the company.