Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”, “we”) today reported business results for the first quarter ended March 31, 2025.

Company Highlights

• First quarter 2025 financial results, as compared to the prior year quarter:
  • Record net revenue of $642.6 million, up $51.7 million or 9%
  • Net income attributable to CDI of $76.7 million, down $3.7 million or 5%
  • Record Adjusted EBITDA of $245.1 million, up $2.6 million or 1%
• We opened Owensboro Racing and Gaming in Western Kentucky in February 2025, with 600 historical racing machines, a retail sportsbook, simulcast wagering, and food and beverage offerings.
• We announced two new projects at Churchill Downs Racetrack that will enhance the 152^nd Kentucky Derby experience for our guests in the Finish Line Suites and The Mansion. We also announced that we are pausing The Skye, Conservatory, and Infield General Admission capital projects due to the current economic environment.
• In February 2025, we closed the seventh amendment of the Credit Agreement, which reduced the interest rate for Term Loan B-1 and eliminated the 0.10% credit spread adjustment.
• In March 2025, the Board of Directors approved a new $500 million share repurchase program.
• We ended the first quarter of 2025 with net bank leverage of 4.0x and returned $119.5 million of capital to our shareholders through share repurchases and dividends.
  • We repurchased $89.4 million of shares in the first quarter of 2025.
  • On January 3, 2025, we paid a $0.409 per share dividend to shareholders of record as of December 6, 2024, which represents the fourteenth consecutive year of an increased dividend per share.

The summaries below present revenue from external customers and intercompany revenue from each of our reportable segments. All comparisons are against the applicable prior year period unless otherwise noted.

Live and Historical Racing

First Quarter 2025

First quarter 2025 revenue increased $27.5 million due to an $18.2 million increase at our Virginia HRM venues, an $8.9 million increase from our Kentucky HRM venues, and a $0.4 million increase from our other Live and Historical Racing properties. The Virginia HRM increase of $18.2 million was primarily due to the November 2024 opening of The Rose Gaming Resort in Northern Virginia, partially offset by a decrease from our other Virginia HRM venues primarily due to lower unrated play from consumer softness and competition, the impact of weather, and one less day in the quarter due to the 2024 leap year. The Kentucky HRM increase of $8.9 million was primarily due to the February 2025 opening of Owensboro Racing and Gaming in Western Kentucky and growth from our Northern and Southwestern Kentucky properties, partially offset by a decrease at our Louisville properties due to the impact of weather and one less day in the quarter due to 2024 leap year.

First quarter 2025 Adjusted EBITDA increased $1.2 million due to a $3.1 million increase at our Kentucky HRM venues, partially offset by a $1.9 million decrease primarily from our Virginia HRM venues. Our Kentucky HRM venues increase was primarily due to the February 2025 opening of Owensboro Racing and Gaming in Western Kentucky and growth at our Northern and Southwestern Kentucky properties, partially offset by a decrease from our Louisville properties due to the impact of weather and one less day in the quarter due to the 2024 leap year. Our Virginia HRM venues decreased $2.0 million primarily due to lower unrated play from consumer softness and competition, the impact of weather, increased handle tax and racing-related expenses, and one less day in the quarter due to the 2024 leap year, partially offset by the November 2024 opening of The Rose Gaming Resort.

Wagering Services and Solutions

First Quarter 2025

First quarter 2025 revenue increased $1.7 million due to a $3.1 million increase from Exacta due to incremental HRMs in Virginia and New Hampshire and a $0.8 million increase in TwinSpires Horse Racing. These increases were partially offset by a $2.2 million decrease from our sports betting business.

First quarter 2025 Adjusted EBITDA increased $1.7 million due to a $3.8 million increase from Exacta due to a $2.7 million increase primarily from incremental HRMs in Virginia and New Hampshire and a $1.1 million decrease from lower compensation expense. These increases were partially offset by a $1.1 million decrease from our sports betting business and a $1.0 million decrease from TwinSpires Horse Racing due to increased legal expenses.

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Gaming

First Quarter 2025

First quarter 2025 revenue increased $24.0 million due to a $31.6 million increase from the April 2024 opening of the Terre Haute Casino Resort, partially offset by a $7.6 million decrease primarily due to regional gaming softness, increased competition, one less day in the quarter due to the 2024 leap year, and the impact of weather at certain properties.

First quarter 2025 Adjusted EBITDA increased $0.7 million due to an $11.5 million increase attributable to the opening of the Terre Haute Casino Resort in April 2024, partially offset by a $6.6 million decrease from our wholly owned gaming properties and a $4.2 million decrease from our equity investments primarily due to regional gaming softness, increased competition, higher labor and benefit expense, one less day in the quarter due to the 2024 leap year, and the impact of weather at certain properties.

All Other

First Quarter 2025

First quarter 2025 revenue increased $2.0 million increased due to intercompany revenue related to the captive insurance company that was established in April 2024. All captive revenue is eliminated in consolidation.

First quarter 2025 Adjusted EBITDA decreased $1.0 million driven primarily by increased corporate compensation-related expenses and other corporate administrative expenses as a result of enterprise growth.

Share Repurchase Program

On March 12, 2025, the Board of Directors of the Company approved a common stock repurchase program of up to $500 million (“2025 Stock Repurchase Program”). The 2025 Stock Repurchase Program includes and is not in addition to the $125.6 million remaining under the prior 2021 Stock Repurchase Program authorization.

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The Company repurchased 798,250 shares of its common stock at a total cost of $89.4 million in the first quarter of 2025. We had approximately $434.6 million of repurchase authority remaining under the 2025 Stock Repurchase Program as of March 31, 2025.

First Quarter 2025 Results

The Company’s first quarter 2025 net income attributable to CDI was $76.7 million compared to $80.4 million in the prior year quarter.

The following factors impacted the comparability of the Company’s first quarter 2025 net income to the prior year quarter:

• a $6.7 million after-tax decrease in other recoveries, net primarily driven by insurance claim proceeds recorded in the prior year quarter.

This was partially offset by:

• a $5.6 million after-tax decrease in transaction, pre-opening, and other expenses.

Excluding the items above, first quarter 2025 adjusted net income attributable to CDI decreased $4.8 million primarily due to the following:

• a $3.0 million after-tax decrease in equity income from our unconsolidated affiliates;
• a $2.0 million after-tax increase in interest expense associated with lower capitalization of interest related to capital projects in the current year, partially offset by lower interest rates; and
• a $0.5 million after-tax decrease due a portion of United Tote’s income being recognized as noncontrolling interest.

This was partially offset by:

• a $0.7 million after-tax increase primarily driven by the results of our operations.

Conference Call

A conference call regarding this news release is scheduled for Thursday, April 24, 2025 at 9 a.m. ET. Investors and other interested parties may listen to the teleconference by accessing the online, real-time webcast and broadcast of the call at http://ir.churchilldownsincorporated.com/events.cfm, or by registering in advance via teleconference here. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are encouraged to dial-in 15 minutes prior to the start time. An online replay will be available by noon ET on Thursday, April 24, 2025. A copy of the Company’s news release announcing quarterly results and relevant financial and statistical information about the period will be accessible at www.churchilldownsincorporated.com.

Use of Non-GAAP Measures

In addition to the results provided in accordance with GAAP, the Company also uses non-GAAP measures, including adjusted net income, adjusted diluted EPS, EBITDA (earnings before interest, taxes, depreciation and amortization), and Adjusted EBITDA.

The Company uses non-GAAP measures as a key performance measure of the results of operations for purposes of evaluating performance internally. These measures facilitate comparison of operating performance between periods and help investors to better understand the operating results of the Company by excluding certain items that may not be indicative of the Company’s core business or operating results. The Company believes the use of these measures enables management and investors to evaluate and compare, from period to period, the Company’s operating performance in a meaningful and consistent manner. The non-GAAP measures are a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP, and should not be considered as an alternative to, or more meaningful than, net income or diluted EPS (as determined in accordance with GAAP) as a measure of our operating results.

We use Adjusted EBITDA to evaluate segment performance, develop strategy, and allocate resources. We utilize the Adjusted EBITDA metric to provide a more accurate measure of our core operating results and enable management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner. Adjusted EBITDA should not be considered as an alternative to operating income as an indicator of performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure provided in accordance with GAAP. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited.

Adjusted net income and adjusted diluted EPS exclude discontinued operations net income or loss; net income or loss attributable to noncontrolling interest; transaction expense, which includes acquisition and disposition related charges, as well as legal, accounting, and other deal-related expense; pre-opening expense; and certain other gains, charges, recoveries, and expenses.

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Adjusted EBITDA includes our portion of EBITDA from our equity investments and the portion of EBITDA attributable to noncontrolling interest.

Adjusted EBITDA excludes, as applicable in each period:

• Transaction expense, net which includes:
  • Acquisition, disposition, and property sale related charges;
  • Other transaction expense, including legal, accounting, and other deal-related expense;
• Stock-based compensation expense;
• Rivers Des Plaines’ impact on our investments in unconsolidated affiliates from legal reserves and transaction costs;
• Asset impairments;
• Gain on property sales;
• Legal reserves;
• Pre-opening expense; and
• Other charges, recoveries, and expenses.

For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the Consolidated Statements of Comprehensive Income. See the Reconciliation of Comprehensive Income to Adjusted EBITDA included herewith for additional information.