PENN Entertainment reports $1.4  billion in Q1 revenue, rebounding from prior-year loss

Penn Entertainment on Thursday reported first-quarter revenue of $1.4 billion, falling short of Wall Street’s $1.7 billion expectation, as winter weather disruptions and lagging sports betting results weighed on performance. However, the company emphasized improvements in its digital segment, driven by ESPN BET and online casino platforms.

The gaming and entertainment firm posted an adjusted EBITDAR of $457 million and a net loss of $0.25 per share, narrower than analysts’ projections of a $0.29 per share loss and significantly improved from a $0.79 loss a year earlier.

“Portfolio-wide weather events in January and February negatively impacted Adjusted EBITDAR by at least $10 million,” said CEO Jay Snowden.

The company’s interactive segment, which includes its digital sports betting and online casino businesses, generated $290.1 million in revenue (inclusive of $128.2 million in tax gross-up), and an adjusted EBITDA loss of $89 million, an improvement of $106 million from the prior year.

“Our Interactive segment generated significant top and bottom-line year-over-year growth, highlighting the improved flow through we are seeing in the business,” Snowden said.

“Our digital business continues to evolve, supported by our well-known brand-differentiated IP, a fully owned technology stack and newly recruited, industry-leading talent. We are nearing an inflection point.”

Despite ESPN BET’s modest 2.7% market share in March—ranking sixth nationally—the platform has become a key growth driver for Penn’s online casino operations, now live in New Jersey and Ontario. The company is also experimenting with innovations like fantasy-integrated prop betting.

“One feature that ESPN BET has not unveiled yet is a differentiated offering that allows users to wager on props involving players from their fantasy lineups,” Snowden added.

Penn launched Mint Club, a new rewards program for ESPN BET users, during the quarter. According to CTO Aaron LaBerge, members of the loyalty program log in 2.7 times more often and have 60% higher weekly betting volume than general users. 
“[Streaming] can provide an ‘accelerant’ for Penn in delivering on its guidance,” LaBerge said, referencing upcoming integration opportunities with Disney’s ESPN direct-to-consumer streaming platform expected to launch later this year.

Snowden reaffirmed Penn’s long-term goal of achieving 20% sports betting market share by 2027, despite current figures.

“We did not complete the deal to be ‘4% or 5% market share players’,” he had previously stated.

Penn also disclosed share repurchases totaling $35 million through May 7, with $714.6 million remaining under its December 2022 authorization. The company aims to repurchase at least $350 million in 2025.

“We have repurchased $35 million of shares and remain committed to our previously stated goal to repurchase at least $350 million of shares this year,” Snowden said.

While Penn declined to address its ongoing proxy battle with hedge fund HG Vora Capital on the call, tensions remain high. The fund recently sued over a board seat reduction, calling the move a “self-serving action with no legitimate corporate purpose” and accusing Penn of undermining shareholder democracy.

Looking ahead, the company forecast second-quarter digital revenue of $280 million to $320 million and an adjusted EBITDA loss of $50 million to $70 million, with a target of achieving digital segment profitability by Q4.

“If the operator does not hit several performance targets in 2027, each side will have to act in their ‘best interests’,” Snowden said regarding Penn’s opt-out clause with ESPN.