PENN Raises 2026 Retail Outlook After Record Q3 Revenue

PENN Entertainment raised its 2026 Retail segment revenue and adjusted EBITDAR guidance after record third-quarter revenue, broad-based property gains and contributions from recently completed development projects. The company now expects full-year Retail adjusted EBITDAR of $1.973 billion, an increase of $10 million from its previous forecast, while reaffirming its Interactive adjusted EBITDA guidance at a loss of $20 million.

For the three months ended September 30, Retail revenue rose 5.0% year over year to $1.49 billion, while segment adjusted EBITDAR increased 7.7% to $501.8 million. The adjusted EBITDAR margin expanded by 84 basis points to 33.7%, marking the third consecutive quarter of year-over-year margin improvement.

Excluding completed development projects, Retail revenue increased approximately 1% and adjusted EBITDAR grew about 5%. PENN said 10 properties across all four regions set third-quarter revenue records, supported by higher rated revenue, greater spending per visit across age groups, contributions from mid- and high-worth customers, and continued growth in unrated revenue.

The Midwest posted the strongest regional revenue growth, rising 14.6% to $341.9 million, with adjusted EBITDAR up 12.9% to $134.5 million. West revenue increased 6.7% to $147.5 million, although adjusted EBITDAR declined 0.4% to $50.9 million after approximately $2 million of unfavorable table-game hold at M Resort. Northeast revenue advanced 2.6%, while South revenue was nearly flat; adjusted EBITDAR grew 5.2% and 10.8% in those regions, respectively.

For the first nine months of 2026, Retail revenue increased 3.9% to $4.42 billion and adjusted EBITDAR rose 5.5% to $1.49 billion. The nine-month margin improved by 51 basis points to 33.8%.

Development projects support Retail growth

PENN attributed part of the quarter’s growth to its recently completed projects. The M Resort hotel tower, which opened in December 2025, helped drive an 18% year-over-year revenue increase and record gaming volumes at the property. Contracted group-business revenue for 2027 was 55% higher than the comparable 2026 figure as measured on November 1 of each respective prior year.

The Hollywood Columbus hotel tower opened in June 2026 and contributed to all-time quarterly records for property revenue, adjusted EBITDAR and gaming volumes. Hollywood Aurora, which also opened in June following its relocation, generated roughly twice the prior-year revenue and recorded strong growth in both gaming and non-gaming activity.

The company’s remaining pipeline includes planned land-based replacements for riverboat properties in Council Bluffs and New Orleans. Hollywood Council Bluffs is expected to open in 2028 with an estimated budget of $180 million to $200 million. Hollywood New Orleans is expected in 2029 at an estimated cost of approximately $195 million. Both projects remain subject to regulatory approvals.

Interactive loss narrows despite lower sportsbook revenue

Interactive adjusted revenue slipped 0.8% to $157.0 million in the third quarter. Online casino revenue increased 6.4% to $76.3 million, but online sportsbook revenue fell 12.7% to $50.3 million. Revenue from other Interactive activities rose 5.2% to $30.4 million.

The segment’s adjusted EBITDA loss narrowed to $18.3 million from $76.6 million a year earlier. PENN said strength in U.S. iCasino and Canada, together with operating discipline and improved unit economics, supported the year-over-year improvement. Excluding investment associated with the July 2026 Alberta launch, Interactive adjusted EBITDA improved sequentially in each quarter of 2026, according to the presentation.

Average monthly active users across PENN’s North American online sportsbook and iCasino products declined 20.3% to 407,000. However, average revenue per monthly active user increased 22.8% to $104. The sportsbook hold rate decreased by 70 basis points to 8.3%, while the iCasino hold rate rose by 40 basis points to 3.6%.

Management said Ontario revenue grew across both iCasino and online sports betting, while the standalone Hollywood iCasino app supported U.S. online casino growth through efficient customer acquisition and targeted reinvestment. The unchanged full-year Interactive adjusted EBITDA forecast includes a $20 million investment in Alberta.

Cash flow and leverage priorities

PENN expects 2026 to generate meaningful cash-flow growth, debt reduction and improved liquidity. It is targeting year-end lease-adjusted net leverage of approximately 5.3 times and traditional net leverage of about 2.1 times. As of September 30, the company reported $2.0 billion of total liquidity, consisting of $1.0 billion in balance-sheet cash and $1.0 billion of revolving-credit availability.

Full-year maintenance capital expenditure guidance remains $220 million. Project capital expenditure guidance was reduced to $170 million from $180 million. The company also expects approximately $1.0 billion of cash rent and $150 million of net cash interest expense in 2026. Its forecast for corporate overhead and racing was revised to a $122 million expense from $119 million, reflecting legal fees associated with a favorable tax ruling obtained during the quarter.

PENN’s outlook remains exposed to competition across retail and online gaming, customer adoption of its digital products, economic and market conditions, regulatory changes, project costs and approvals, and access to financing. The company also cautioned that planned development timelines and expected operating benefits may differ from current projections.