Penn swings to Q2 profit, leaves door open for Las Vegas Strip entry

Penn Entertainment returned to profitability in the second quarter, posting net income of $32.6 million, or 24 cents per share, versus a year-earlier net loss of $18.3 million, or 12 cents per share. Revenue increased 5.7% to $1.86 billion from $1.76 billion. The regional casino operator, which runs 42 properties in the U.S. and Canada, also flagged a possible move into the Las Vegas Strip if conditions align.

Las Vegas Strip outlook

Chief Executive Jay Snowden told investors that Penn would “love to be on the Las Vegas Strip at the right time,” but any deal would need to come at “the right price, the right asset.” He ruled out acquiring an asset with significant deferred maintenance, saying: “We're certainly not interested in acquiring an asset that's going to require another $400 to $700 million (capital expense) investment because it's got deferred maintenance.” A potential target, he added, would have to “check a lot of boxes.”

Regional performance

The company has been investing in its regional base, including a $360 million redevelopment of Hollywood Casino Aurora, the relocation of Hollywood Casino Joliet from a riverboat to a land-based venue, and a $100 million hotel tower that opened at Hollywood Casino Columbus in June.

Regional casino operations posted revenue of $1.5 billion, adjusted EBITDAR of $517.4 million and a 34.4% margin. Retail beat consensus estimates in three of the company's four regions, prompting Penn to raise the midpoint of its full-year 2026 retail adjusted EBITDAR guidance by $31 million. The West Segment, which includes M Resort in Henderson, Nevada, grew revenue 10%, helped by a $206 million hotel expansion that opened in December and added 375 rooms, bringing capacity to 765.

Jefferies analyst David Katz said “the results are better than expected,” citing the regional beats and the size of the guidance raise. He added that Interactive also showed continued operational progress, and that the impact on shares should be “neutral to modestly positive.”

Interactive progress

Penn's Interactive unit delivered $349.4 million in revenue and an adjusted EBITDA loss of $9.4 million, a narrower deficit than analysts had projected. After early difficulties in sports betting, the company has shifted its digital strategy toward iGaming. Snowden said the segment posted “another quarter of meaningful year-over-year Adjusted EBITDA improvement,” and that standalone Hollywood iCasino achieved record quarterly revenue in the U.S.

The online sportsbook, rebranded from ESPN Bet to ScoreBet, saw increased engagement during the World Cup. Snowden said roughly 70 sportsbook users placed a World Cup wager, and around 45 of those bettors made their first soccer wager. He added that the Score brand has shown strong loyalty among U.S. users and that Penn plans to “grow through the end of the year” on the sportsbook side.

Investors are also weighing Penn's launch in Alberta, its capital investment plans and the potential for industry consolidation. Stifel analyst Jeffrey Stantial cited iCasino execution and the pace of margin improvement as possible concerns, but highlighted recent market-share gains and Penn's product and omnichannel advantages as potential drivers of further growth.