Churchill Downs records unprecedented earnings of $93.4 million during the second quarter
Churchill Downs Incorporated, the renowned racing and gaming company, reported record earnings in the second quarter of 2025. The strong performance was primarily due to the success of the 151st Kentucky Derby and the company's diverse business lines: live and historical racing, wagering services and solutions, and gaming[1][2][5].
The Kentucky Derby, held on May 7, 2025, set a record all-sources handle of $349 million on the day of the race, attracting an average viewership of 17.7 million, with a peak of 21.8 million viewers[1]. This marked an 8% increase in peak viewership compared to the previous year. The event also generated robust wagering and sponsorship revenue[1].
However, Derby Week ticketing revenue was lower than the previous year due to rainy conditions. Despite this, overall revenue from Churchill Downs Racetrack still increased by $4.9 million year-over-year, thanks to growth in wagering and sponsorship[1]. This underscores the company's diversified revenue streams and effective management strategies.
The company's success extended beyond the Kentucky Derby. In July, Churchill Downs agreed to acquire 90% of Casino Salem in New Hampshire for $180 million[4]. This move is expected to bolster the company's gaming portfolio.
In addition to the Kentucky Derby and the acquisition, the increase in revenue from Virginia HRM venues played a significant role. The revenue increase was primarily because of a $24.4 million net increase from Churchill's Northern Virginia venues and a $3.4 million increase from the May expansion at its Richmond venue[2]. Adjusted EBITDA from Virginia HRM venues also increased $3 million.
The Kentucky HRM increase was primarily because of a $5.2 million net increase from Louisville venues, a $4.3 million net increase from Northern Kentucky venues, and a $2.2 million net increase from the Southwestern venue[2]. The company also saw a $3.6 million net increase from Western Kentucky venues and a $1.8 million increase from the May expansion at Churchill's Richmond venue in Virginia[2].
Churchill Downs' strategic initiatives extended beyond its racing and gaming operations. In July, the company's board approved a $500 million share repurchase program[3]. This move demonstrates the company's commitment to returning value to shareholders, as Churchill Downs returned $250.4 million of capital to shareholders through share repurchases in the second quarter.
The strong performance translated into impressive financial results. Churchill Downs generated a record net revenue of $934.4 million in the second quarter, up 5% year-over-year[1]. Net income attributable to Churchill Downs was $216.9 million, up 4% compared to the second quarter of 2024[1]. Adjusted EBITDA was a record $450.9 million, up 1%[1].
While the revenue slightly missed analyst estimates, earnings per share (EPS) were ahead of expectations, which helped maintain investor confidence[3]. The company ended the quarter with net bank leverage of 4.2x[1].
In conclusion, Churchill Downs Incorporated's strong performance in the second quarter of 2025 was driven by the success of the Kentucky Derby and the company's strategic initiatives in live and historical racing, wagering services and solutions, and gaming. The company's acquisition of Casino Salem and share repurchase program underscore its commitment to growth and value creation for shareholders.
[1] Churchill Downs Incorporated Q2 2025 Earnings Release (https://ir.churchilldownsinc.com/news-releases/news-release-details/churchill-downs-incorporated-reports-record-second-quarter) [2] Churchill Downs Q2 2025 Earnings Call Transcript (https://seekingalpha.com/transcript/7739292-churchill-downs-inc-cdw-q2-2025-earnings-call-transcript) [3] Churchill Downs Incorporated Q2 2025 Earnings Call Presentation (https://ir.churchilldownsinc.com/static-files/35187b2e-59e0-4d06-a89a-2832a5f0f43b) [4] Churchill Downs to Acquire 90% of Casino Salem in New Hampshire (https://ir.churchilldownsinc.com/news-releases/news-release-details/churchill-downs-to-acquire-90-of-casino-salem-in-new) [5] Kentucky Derby 2025 Sets Record All-Sources Handle, Viewership (https://www.bloodhorse.com/horse-racing/articles/287448/kentucky-derby-2025-sets-record-all-sources-handle-viewership)
- Churchill Downs Incorporated's record earnings in the second quarter of 2025, stemming from the Kentucky Derby and diverse business lines, underscore the company's potential for growth in industries such as finance, investing, and banking-and-insurance as they delve into acquisition and share repurchase programs.
- The robust revenue generated from the Kentucky Derby, as well as growth from Churchill Downs Racetrack and Virginia HRM venues, highlights the potential for real-estate investments within the hospitality and gaming sectors, given Churchill Downs' effectiveness in managing such properties.
- The strategic acquisitions by Churchill Downs, such as Casino Salem in New Hampshire, demonstrate an ongoing commitment to expanding its business in various sectors, particularly the gaming industry, which could attract further investments from finance and banking-and-insurance entities.
