GOLDEN ENTERTAINMENT, INC. ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 2024
Golden Entertainment, Inc. filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The company reported total revenue of $1.23 billion, a 12% increase from the prior year. Net income was $43.1 million, compared to a net loss of $14.1 million in the prior year. The company’s adjusted EBITDA increased 15% to $143.8 million. Golden Entertainment’s gaming operations generated $1.14 billion in revenue, a 13% increase from the prior year. The company’s hotel and resort operations generated $89.1 million in revenue, a 10% increase from the prior year. As of December 31, 2024, the company had cash and cash equivalents of $143.8 million and total debt of $1.23 billion.
Overview of Golden Entertainment’s Financial Performance
Golden Entertainment is a diversified entertainment company that owns and operates a portfolio of gaming assets, including eight casino properties in Nevada and 72 branded taverns primarily in the Las Vegas area. In 2024, the company completed several major divestitures, selling its Rocky Gap casino resort in Maryland as well as its distributed gaming operations in Montana and Nevada.
For the year ended December 31, 2024, Golden Entertainment reported total revenues of $666.8 million, a 37% decrease from the prior year. This decline was largely due to the exclusion of results from the divested properties. Operating income was $112.1 million, down from $399.2 million in 2023, while net income was $50.7 million compared to $255.8 million the prior year.
The company’s Adjusted EBITDA, a key metric used to measure performance, decreased 30% to $155.4 million in 2024 from $222.5 million in 2023. Adjusted EBITDA margins declined across all of Golden Entertainment’s reportable segments compared to the prior year.
Revenue and Profit Trends
Golden Entertainment’s revenue decline in 2024 was driven by decreases in gaming, food and beverage, rooms, and other revenues. The gaming revenue drop of $355.0 million, or 53%, was the largest contributor, primarily due to the exclusion of results from the divested properties.
Operating expenses decreased by 49% in 2024, led by a $291.8 million, or 77%, reduction in gaming expenses. This was again largely attributable to the divestitures. However, the company did see increases in food and beverage and rooms expenses, which rose by $2.9 million and $2.8 million, respectively, due to higher labor costs.
Selling, general and administrative (SG&A) expenses decreased by 12% in 2024, driven by the exclusion of the divested operations. This was partially offset by higher costs related to insurance, rent, legal, property taxes, and payroll. The company also incurred lower transaction costs in 2024 compared to the prior year.
Depreciation and amortization expense increased slightly by 1% in 2024, primarily due to the addition of new tavern locations. Golden Entertainment recorded a $2.4 million impairment charge related to goodwill and trade names for certain Nevada Locals Casinos.
Non-operating expense decreased by 42% in 2024, mainly due to a 47% reduction in interest expense from the company’s debt reduction efforts. However, Golden Entertainment did incur a $4.4 million loss on debt extinguishment and modification.
The company’s effective tax rate for 2024 was 30.31%, higher than the 22.96% rate in 2023, primarily due to the tax impact of the Nevada distributed gaming divestiture.
Strengths and Weaknesses
A key strength of Golden Entertainment is the diversification of its gaming portfolio, with a mix of casino resorts, local casinos, and branded taverns. This provides some insulation from downturns in any one segment. The company’s focus on the Las Vegas market, which has shown resilience, is also a positive.
However, the divestitures of the Rocky Gap, Montana, and Nevada distributed gaming operations have reduced the scale and geographic diversity of Golden Entertainment’s business. The company is now more concentrated in Nevada, making it more vulnerable to economic conditions in that state.
Another weakness is the declining performance of the Nevada Locals Casinos and Nevada Taverns segments, which saw revenue and Adjusted EBITDA declines in 2024. This suggests increasing competition and softening demand in those markets.
Golden Entertainment’s high debt load, though reduced in 2024, remains a concern. The company will need to carefully manage its capital structure and cash flows going forward.
Outlook and Future Prospects
Looking ahead, Golden Entertainment faces both opportunities and challenges. The company’s remaining casino resorts and taverns in Nevada provide a solid foundation, but the competitive landscape continues to evolve. Successful integration and performance of the recently acquired Lucky’s and GAP tavern operations will be important.
The company’s debt reduction efforts, including the redemption of the 2026 Unsecured Notes, should provide some financial flexibility. Golden Entertainment’s initiation of a quarterly dividend in 2024 also signals confidence in its cash flow generation.
However, macroeconomic factors such as consumer spending, inflation, and interest rates will likely have a significant impact on the company’s future performance. Regulatory changes in Nevada could also present risks or opportunities.
Overall, Golden Entertainment appears to be navigating a period of transition, having streamlined its operations through divestitures. The company’s success will depend on its ability to optimize the performance of its remaining assets, integrate new acquisitions, and adapt to evolving market conditions in its core Nevada market.
