Mohegan reports $418.8M in Q2 revenue; digital unit, Mohegan Sun drive growth

Mohegan Tribal Gaming Authority reported second-quarter net revenues of $418.8 million, driven by year-over-year gains at Mohegan Sun and its digital business, while overall Adjusted EBITDA declined due to one-time items and unfavorable currency effects.

Revenue from Mohegan Sun rose 4.1% from a year earlier, and Mohegan Digital posted a 32.7% increase in Adjusted EBITDA to $26.9 million. Net revenues from Mohegan Digital also climbed 45.9% to $56.6 million, supported by strong performance in Connecticut, Pennsylvania, and Canada.

Total net revenues from domestic resorts came in at $298.0 million, down $2.4 million, as higher non-gaming revenues were offset by a 5.0% drop in gaming revenue. Domestic non-gaming revenue increased by $8.0 million, or 8.9%, due to stronger performance in food & beverage, hotel, and entertainment.

"During the quarter we completed a holistic refinancing of our capital structure, which was among the most significant in our history," said Chief Executive Officer Raymond Pineault. The refinancing followed a restructuring of Mohegan’s digital operations into a commercial legal entity, which the company said helped unlock value.

"This important advancement was made possible through reconstituting our Digital business into a commercial legal entity, which enabled us to unlock value for the company and investors, along with direct support from the Tribe," Pineault added.

Net revenues and Adjusted EBITDA were both down year-over-year, due to the absence of one-time benefits seen in the prior-year period, including ilani management fees and non-cash license revenue at Mohegan Pennsylvania. Foreign exchange headwinds also impacted the company's Canada operations.

"Adjusted EBITDA was down $24.2 million or 22.4% compared with the prior-year," said Chief Financial Officer Ari Glazer. “However, after normalizing for ilani management fees and one-time adjustments, Adjusted EBITDA would have been nearly flat on a same-store basis.”

Niagara Resorts reported net revenues of $67.1 million, a $5.1 million decline, and Adjusted EBITDA dropped 63.9% to $2.7 million due to weaker exchange rates and regulatory fee changes.

The company recorded a $595.2 million loss from discontinued operations related to its transition out of Korea.

As of March 31, Mohegan reported $128.4 million in cash and cash equivalents. It had $194.7 million in borrowing availability under its credit facilities, while Niagara Resorts had $34.9 million in borrowing capacity.

“The culmination of these strategic initiatives has enabled us to build substantial runway and financial stability for the business which will allow us to remain hyper focused on our core business,” Pineault said.