VICI posts revenue up 20% to $904 million in M&A-heavy Q3

Casino landlord VICI Properties has revealed the revenue results for this year’s third quarter, which ended on September 30th. The company’s revenue for Q3 was $904.3 million, growing by 20.3% year-on-year. The company had recorded $751.4 million in the third quarter of 2022. 

Q3 also marked a period of heavy M&A activity for the casino landlord. VICI Properties completed the acquisition of four casinos in Alberta, Canada from Century Casinos during the quarter for CA$221.7m (US$162.6m).

Announced back in May, the acquisition involved VICI taking over Century Casino & Hotel Edmonton, Century Casino St Albert, Century Mile Racetrack, and Casino and Century Downs.

During the three-month period, VICI also completed its $203 million acquisition of Rocky Gap Casino Resort, Maryland in conjunction with Century. 

VICI CEO Edward Pitoniak said the quarter exemplified the company's most critical strategic initiatives, which focused on M&A and steady expansion.

"Vici’s third quarter financial performance reflects our sustained, sustainable commitment to accretive growth and capital deployment through acquisitions and strategic financing activity, exemplified by approximately 20% revenue growth and nearly 11% growth in AFFO per share year-over-year," said Pitoniak.

Adjusted funds from operations (AFFO) attributed to common stockholders was $547.6 million, up by 16.3% yearly. It increased by 10.7% on a per-share basis. 

Sales-type leases drive Q3 performance

The real estate investment trust's biggest source of income, at $500.2 million, was sales-type leases. Caesar's regional master lease and the Joliet lease contributed the most, totaling $132.9 million. Caesars' master lease in Las Vegas accounted for $113.6 million, while The Venetian Resort Las Vegas' contract was worth $64.3 million.

The revenue from lease financing receivables, loans, and securities was $378.5 million, while other revenue was $18.1 million. Golf revenues accounted for $7.4 million of the total.

In Q3, operating expenses decreased considerably. They totaled $139.5 million, a 48.4% drop. The main source of expense was the change in allowance for credit losses, which cost $95.9 million. Other expenses totaled $18.1 million, with general and administrative expenses totaling $14.4 million.

Additional interest-related charges, such as interest expense of $204.9 million, brought the profits before taxes to $566.1 million. After deducting income taxes, net income for the quarter was $565.4 million, up 67.8% year on year. The adjusted EBITDA for the quarter was $726.4 million, a 13.7% increase.

Year-to-date revenue up 46.3%

According to VICI, the revenue for the first nine months of the year stood at $2.68 billion, marking an annual increase of 46.3%. The income from sales-type leases has generated the most revenue for VICI at 1.47 billion.

Operating expenses for the first nine months fell by 70.3% to $290.4 million. The disparity was attributed to a decrease in the change in allowance for credit losses.

Year on year, interest expense for Q1-Q3 rose by 65.3% to $612.8 million. However, the net income for the first nine months of 2023 totaled $1.79 billion, more than two and a half times the $521.4 million reported in 2022.