Penn Entertainment, Inc. (NASDAQ: PENN) recently sent a letter to its shareholders, highlighting its commitment to creating value for all stakeholders. The company emphasized its efforts to drive growth, enhance profitability, generate robust free cash flow, and return capital to shareholders. Penn's omni-channel growth strategy aims to capture opportunities in the evolving digital environment while nurturing its market-leading retail footprint.
The company's omni-channel strategy has already shown promising results. As of December 31, 2024, Penn's loyal customer base, Penn Play Loyalty member base, increased by 10% year-over-year to over 32 million. Additionally, the average age of its customers decreased from 53 to 44 since 2019. Notably, 34% of their new digitally acquired customers are located within 50 miles of a property, demonstrating the company's ability to capture additional market share through cross-selling efforts.
Penn's retail business has also demonstrated strong performance, with 14 of 17 regional markets not impacted by new supply delivering year-over-year market share growth in Q1 2025. Moreover, in 2024, the company achieved approximately 65% tax-adjusted EBITDAR margins, far outperforming its peers.
The company's interactive segment, particularly driven by sports betting, has experienced robust growth, with the digital database growing by over 2 million members since ESPN Bet's launch in November 2023. In Q1 2025, the interactive segment generated $162 million of adjusted revenue, marking a substantial 78% year-over-year increase. Furthermore, Penn's digital segment has seen a significant increase in adjusted EBITDA, with approximately 150% year-over-year adjusted EBITDA flow-through on incremental revenue in Q1 2025.
Looking ahead, Penn Entertainment is focused on reducing leverage and accelerating capital return to shareholders. The company ended the first quarter of 2025 with $1.5 billion in liquidity and aims to repurchase at least $350 million of common stock in calendar 2025, signaling its commitment to returning capital to shareholders.
Penn's letter also addressed its engagement with HG Vora Capital Management, LLC, highlighting the efforts made to reach a mutually agreeable and reasonable resolution. The company outlined a series of interactions and negotiations with HG Vora, emphasizing its commitment to ongoing board refreshment and engagement with shareholders.
Penn Entertainment's letter to shareholders provides a comprehensive overview of its strategic priorities, financial performance, and efforts to create value for its stakeholders. The company's focus on driving sustainable long-term value and its commitment to engaging with shareholders underscore its dedication to delivering positive outcomes for investors. The market has reacted to these announcements by moving the company's shares 0.12% to a price of $16.18. For the full picture, make sure to review PENN Entertainment's 8-K report.
