紅石度假村 (RRR) 2026年第三季財報電話會議：營收上升，資本支出展望上調

重點摘要

• 紅岩度假村（Red Rock Resorts）在拉斯維加斯的業務創下第三季淨營收新高，達 4.791 億美元，年增 2.3%。調整後 EBITDA 下降 2.3% 至 2.046 億美元，利潤率下降 199 個基點至 42.7%。
• 合併淨營收成長 2.8% 至 4.887 億美元。調整後 EBITDA 下降 4.3% 至 1.826 億美元，其中包括與公司 50 週年相關的一筆 580 萬美元一次性費用。
• 營運自由現金流為 8,170 萬美元，或每股 0.77 美元，相當於調整後 EBITDA 的 45% 轉化率。今年迄今營運自由現金流達 2.884 億美元，或每股 2.75 美元。
• 管理層將 2026 年預期資本支出調高至 5.5 億至 5.7 億美元，反映了綠谷牧場（Green Valley Ranch）的成本超支、Durango North 擴建範圍擴大以及施工活動加速。
• Durango North 擴建預算從 3.85 億美元增加至約 4.3 億美元。管理層繼續以 20% 的長期投資報酬率為目標，並預計該項目將於 2027 年第三季開幕。
• North Fork 於 10 月 27 日開幕。這項價值約 7 億美元的物業在預算內完工，預計將透過管理費和 8,600 萬美元開發期票的現金支付，成為持續性的現金流貢獻來源。

核心財務業績

紅岩度假村本季投資了 1.991 億美元，其中包括 1.645 億美元的投資資本和 3,400 萬美元的維護資本。今年迄今的資本支出總計 4.561 億美元。

該公司今年透過股利發放和股票回購向股東回饋了約 2.525 億美元。在第三季，公司以平均每股 56.94 美元的價格回購了約 47 萬股 A 類股，並支付了每股 A 類股 0.26 美元的季度股利。

業務與營運表現

儘管受到施工和道路幹擾，Durango 的表現依然良好。該物業已為公司的資料庫增加了超過 16.8 萬名客戶。管理層還報告周邊市場每次造訪的會員卡消費額和淨理論獲利均有所提升。

Durango North 的擴建將增加超過 27.5 萬平方英呎，包含近 400 台角子機、賓果和基諾（Keno）設施、餐廳、娛樂場所、一個 36 道的保齡球館、豪華影院以及其他社交博弈設施。管理層表示，擴大後的營運規模支撐了上修至 4.3 億美元的投資額。

在地、區域和全國客戶群體的博弈趨勢保持穩定。每次造訪的會員卡消費額和淨理論獲利增加，同時新客戶註冊量也比去年同期上升。管理層表示，非會員卡的博弈消費創下了近期最強勁的同期季度成長之一。

在賓客數量和平均消費金額提升的支撐下，餐飲營收創下公司第三季歷史新高。儘管綠谷牧場（Green Valley Ranch）失去了超過 4,500 個可用房晚，但在整體物業組合平均每日房價上升的帶動下，飯店營收依然有所成長。

綠谷牧場的飯店和會議中心改建工程已竣工，總成本接近 2.5 億美元，而最初預算為 2 億美元。管理層指出，翻新後的客房上線時間晚於預期，主要在 9 月完工，相關效益更多地呈現在 10 月、11 月及未來的預訂中。

Sunset Station 約 8,700 萬美元的重新開發案仍符合預算。其餘設施預計將於 2027 年年中完工，其中包括頂級牛排館以及升級後的角子機與桌上博弈區。

North Fork 擁有超過 2,400 台角子機和 40 張博弈桌。紅岩度假村已收到 2,600 萬美元的第一期開發費，並預計將於 11 月下旬根據一項為期七年的合約收取第一筆管理費。

管理層展望

管理層表示，第四季的核心角子機、桌上博弈及客戶資料庫活動趨勢保持穩定。第四季典型的季增季節性效應為 10% 至 11%，管理層預計表現將接近該區間的高點，同時也坦言 Durango 仍面臨幹擾，且綠谷牧場翻新客房的延後開放亦有影響。

2026 全年資本支出預計為 5.5 億至 5.7 億美元。其中包括 4.25 億至 4.35 億美元的投資資本，以及 1.25 億至 1.35 億美元的維護資本。

管理層預計，隨著 Durango North 和 Sunset Station 的完工，2027 年將是資本支出較大的一年。公司還預計翻新後的綠谷牧場將帶來全年的貢獻，隨後 Durango North 和 Sunset Station 的效益將在 2027 年下半年顯現。

在利潤率規劃方面，管理層表示，2027 年營運費用和薪資成本可能增加約 2% 至 3%。在該架構下，營收需要成長約 3% 至 4% 才能維持利潤率持平。

紅岩度假村還在評估於 Durango 增設約 400 間客房、會議空間和水療中心（Spa）的可能性。該公司尚未承諾或正式宣佈該項目。

風險與關注焦點

Durango 和 Sunset Station 的施工，加上紅岩、綠谷牧場和 Durango 附近的 215 號環線公路工程，仍是近期交通和營運幹擾的來源。管理層預計道路工程將在接近年底時加劇，但認為新增的交通運能將帶來長期效益。

綠谷牧場在第三季受到約 150 萬美元的幹擾影響，低於先前討論的 300 萬美元預期額。該影響與無法供給的客房晚數以及相關的客房和餐飲營收損失有關。

拉斯維加斯的利潤率壓力包括與去年同期呆帳應收帳款回收的基期比較困難，約佔下降幅度的 102 個基點。此外，由於 6 月至 9 月季節性尖峰電價上漲，公用事業費用增加 120 萬美元，這也影響了銷售、一般及行政費用（SG&A）。

公司 50 週年員工股票授予將產生約 7,900 萬美元的一次性薪酬費用，其中包括 7,200 萬美元的非現金股份基礎薪酬和約 700 萬美元的薪資稅。這些成本將影響 GAAP 營運業績，但已排除在調整後 EBITDA 之外。

分析師問答亮點

管理層將第三季的需求形容為穩定一致，在扣除日曆差異後，8 月份並無實質惡化。穩定的客戶趨勢一直延續至第四季。

在項目報酬率方面，管理層重申 Durango North 擴建規模預計將帶來回報，並維持 20% 的長期投資報酬率（ROI）目標。管理層還表示，完工後第一個完整年度獲得約 10% 回報率的歷史預期，依然適用於綠谷牧場和 Sunset Station 的投資。

區域及全國客戶約佔角子機業務與飯店細分市場的各 20%。管理層報告稱，該客戶群體在博弈和飯店業務方面均帶來了積極收益。

高層表示，North Fork 在營運首週展現強勁需求與良好的客戶回饋，不過該物業仍處於初始爬坡升溫期。

管理層預計 Durango North 開幕時會出現一些初始的客戶嘗鮮以及潛在跨物業轉移效應，但認為活動將在大約二至三個季度內穩定下來。該策略旨在透過新設施擴展在地市場，並把握 Durango 週邊住宅與商業的成長契機。

完整財報電話會議記錄

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完整財報電話會議逐字稿

管理層陳述

Operator

Good afternoon, and welcome to the Red Rock Resorts Third Quarter 2026 Conference Call. Please note, this conference is being recorded. I would now like to turn the conference over to Stephen Cootey, Executive Vice President, Chief Financial Officer and Treasurer of Red Rock Resorts. Please go ahead.

Stephen Cootey

Thank you, operator, and good afternoon, everyone. Thank you for joining us today for Red Rock Resorts Third Quarter 2026 Earnings Conference Call. Joining me on the call today are Frank and Lorenzo Fertitta, Scott Kreeger and our executive management team. I'd like to remind everyone that our call today will include forward-looking statements under the safe harbor provisions of the United States federal securities laws. Developments and results may differ from those projected.

During this call, we will also discuss non-GAAP financial measures. For definitions and complete reconciliation of these figures to GAAP, please refer to the financial tables in our earnings press release, Form 8-K and investor deck, which were filed this afternoon prior to the call. Also, please note that this call is being recorded. Let me begin by highlighting another strong quarter for the company across our key financial and operating metrics. Our Las Vegas operations delivered the highest third quarter net revenue and second highest third quarter adjusted EBITDA in our history while maintaining a near record adjusted EBITDA margin.

These results reflect the strength and resilience of our business we have built over the past 5 decades, the consistency of our operating model and our continued focus on operational excellence and disciplined capital allocation. Turning to our third quarter financial results. Our Las Vegas operations generated net revenue of $479.1 million, up 2.3% year-over-year. Adjusted EBITDA was $204.6 million, down 2.3%. Adjusted EBITDA margin was 42.7%, a decrease of 199 basis points from the prior year.

On a consolidated basis, net revenue, which includes $6.2 million from North Fork was $488.7 million, up 2.8% year-over-year. Adjusted EBITDA, which includes $5.1 million from North Fork as well as a onetime $5.8 million expense associated with our 50th anniversary was $182.6 million, down 4.3%. Consolidated adjusted EBITDA margin was 37.4%, a decrease of 277 basis points from the prior year. As part of our 50th anniversary celebration, we were especially proud to make every full-time and part-time team member an owner of our company through the grant of more than $72 million in Class A common stock.

This milestone reflects our appreciation for the people who help build Station Casinos for the past 5 decades and reinforces our belief that our team members should share directly in the company's future success. The stock grant will result in approximately $79 million in compensation expense, including noncash stock-based compensation and associated payroll taxes. These costs will be allocated to the respective departments in which our team members work, including approximately $26 million in casino operations, $26 million in food and beverage, $6 million in rooms, $1 million in other operations and $20 million in SG&A. These expenses will be reflected in our GAAP operating results, but excluded from adjusted EBITDA.

During the quarter, we converted 45% of adjusted EBITDA into operating free cash flow, generating $81.7 million or $0.77 per share. Year-to-date, we have generated $288.4 million of operating free cash flow or $2.75 per share. This consistent cash generation provides us with the flexibility to reinvest in our properties and development pipeline while returning meaningful capital to our shareholders through dividends and share repurchases. Turning to Durango. The property continues to deliver exceptional operating performance despite ongoing construction activity in and around the resort, reinforcing our confidence in the property and validating our broader development strategy.

The resort continues to expand the Las Vegas locals gaming market, driving incremental play from existing customers while attracting new guests to the Station Casinos brand. To date, the property has added more than 168,000 new customers to our database while generating increased spend per visit and higher net theoretical win among carded customers in the surrounding market during the quarter. The property's continued performance supported by strong residential growth in Southwest Las Vegas, only reinforces our confidence in the long-term opportunity at Durango.

Building on this success, construction of the Durango North expansion continues to advance with an anticipated opening in the third quarter of 2027. The project will add more than 275,000 square feet on the north side of the property, including nearly 400 additional slot machines and other gaming offerings, including a state-of-the-art bingo room and dedicated Keno lounge. The expanded podium will also add an exciting collection of new dining and beverage and entertainment venues, highlighted by a local Chinese favorite, an internationally acclaimed Italian restaurant and our partnership with Moonshine Flats, which will bring its signature Country Western bar and live music concept to Las Vegas for the first time.

The expansion will also feature a first-to-market entertainment center, combining premium recreational amenities designed to drive repeat visitation and create a vibrant social destination on the north side of the property. Highlights include a 36-lane bowling facility and diner, luxury movie theaters, a 3-course miniature golf destination and a collection of interactive entertainment experiences, including golf simulators, karaoke, arcade games and other social gaming offerings complemented by multiple food and beverage offerings. As a result of these enhancements to the project scope, we revised our total estimated investment to approximately $430 million.

While the estimated cost has increased, we remain confident in the project's underlying economics and our ability to achieve our targeted 20% return on investment over time. Turning to our broader operating performance. We continue to see healthy underlying trends across our gaming business during the quarter. Our core properties performed well, supported by increased carded spend per visit and higher net theoretical win across our local, regional and national customer segments. These trends contributed to the highest third quarter gaming revenue and second highest third quarter profitability in our company's history.

Our hotel, food and beverage divisions delivered solid results, reflecting healthy underlying demand across both businesses. Our hotel division generated revenue growth despite a reduction of more than 4,500 available room nights at Green Valley Ranch. This performance was supported by higher portfolio-wide average daily rates and guest demand for the newly renovated rooms at Green Valley. Not to be outdone, our Food and Beverage division delivered its highest third quarter revenue in the company's history, benefiting from increased guest volumes and higher average check sizes.

Looking ahead to the fourth quarter, we continue to see stable trends in our core slot and table business and within our core database. While ongoing construction at Durango and Sunset Station, along with the continued road work along the 215 Beltway creates some near-term disruption, we remain focused on minimizing these impacts as we complete investments designed to enhance the guest experience, strengthen our competitive position and generate attractive long-term returns. Now let's cover a few balance sheet and capital items. The company's cash and cash equivalents at the end of the third quarter was $128.3 million, and the total principal amount of debt outstanding was $3.7 billion, resulting in net debt of $3.6 billion.

As of the end of the quarter, the company's net debt-to-EBITDA ratio was 4.4x. During the quarter, we made a total distribution of approximately $29.2 million to the LLC unitholders of Station Holdco, including a distribution of approximately $17.3 million to Red Rock Resorts. The company used its portion of the distribution to fund its previously declared quarterly dividend of $0.26 per Class A common share and to fund a portion of the repurchase of approximately 470,000 Class A common shares at an average price of $56.94 per share under its previously announced $900 million share repurchase program.

When combined the dividends and the share repurchases made during the year, we have returned approximately $252.5 million to our shareholders. Last month, we also completed a $500 million add-on to the company's existing Term Loan B credit facility on the same terms as our original facility. The proceeds were used to repay the outstanding borrowings under our revolving credit facility, reducing its balance to 0, pay related fees and expenses and for general corporate purposes. This transaction further strengthens our liquidity position and enhances our financial flexibility.

Turning to capital expenditures. During the quarter, we invested $199.1 million, consisting of $164.5 million in investment capital and $34 million in maintenance capital. This brings our year-to-date capital expenditures to $456.1 million, including $346.1 million in investment capital and $110 million in maintenance capital. For the full year 2026, we now expect capital expenditures of approximately $550 million to $570 million, including $425 million to $435 million in investment capital and $125 million to $135 million in maintenance capital.

This increase from our previous guidance primarily reflects construction delays and cost overruns with the recently completed hotel and convention renovation at Green Valley Ranch, enhancements to the scope of the Durango North expansion and accelerated pace of construction activity and associated payments across all of our development projects. Despite these increases, we remain confident in the underlying economics of our investments and our ability to generate attractive long-term returns. In addition to our continued investment in Durango, we are making significant investments in our Sunset Station and Green Valley Ranch properties. At Sunset Station, we continue to make excellent progress on our comprehensive redevelopment program.

Both the newly renovated Gallery Bar and Stoney's Rockin' Country are now open and have been met with positive customer feedback, reinforcing our confidence in the investment and the underlying demand at the property. Looking ahead, we expect to open Leticia's Cocina & Cantina, Sunset bar and our new state-of-the-art bingo room later this quarter, further enhancing the property's dining and gaming offerings. We are also preparing to begin construction on the centerpiece of the Sunset redevelopment, a new premium steakhouse and island slot and table game areas. This final phase of the project leverages a proven strategy that has consistently generated strong returns across our portfolio. The project remains on budget at approximately $87 million with remaining amenities expected to be completed by mid-2027.

At Green Valley Ranch, we have completed the comprehensive renovation of our hotel guest room suites and convention spaces. While still early, customer feedback has been overwhelmingly positive and initial results have been encouraging, reinforcing our confidence in the investment. With the completion of this project, Green Valley Ranch now offers one of the finest hotel products in Las Vegas Valley, complementing our recently renovated high-limit slot and table game areas and further strengthening its position as one of Southern Nevada's premier integrated resorts. Turning to North Fork. We are extremely pleased to announce that the property is officially opened for business on October 27, marking a significant milestone for the tribe and our company.

The approximate $700 million development was completed on budget and features more than 2,400 slot machines, 40 table games and a comprehensive food and beverage offering, establishing a significant new gaming and entertainment destination in California Central Valley. Initial customer feedback has been overwhelmingly positive and demand has been strong as the property continues to ramp operations. Importantly, with the property now open, we are beginning to realize the financial benefits of this investment. Under our 7-year management agreement with the Tribe, we expect to receive our first management fee later this month. We have also received $26 million, representing the first installment of the development fee owed to us under the development agreement with the Tribe.

In addition, our outstanding development note, which has a balance of approximately $86 million, has transitioned to cash pay principal and interest, providing another source of recurring cash flow. As we look ahead, we remain confident in the strength and resilience of our business model and the long opportunities across our portfolio. Our recent capital investments continue to perform well, reinforcing our disciplined approach to reinvesting in our existing assets while advancing our development pipeline. The continued success at Durango validates our long-term growth strategy and highlights the embedded value of more than 450 acres of owned development land in some of the most attractive submarkets across the Las Vegas Valley.

Together, our portfolio of best-in-class assets and unmatched development pipeline position us to capitalize on the very favorable demographic trends and high barriers to entry that define the Las Vegas locals gaming market, creating substantial opportunities for long-term growth and shareholder value. Before we wrap up, I'd like to sincerely thank all of our team members for their continued hard work, dedication and commitment to delivering exceptional guest experiences every day. They are the foundation of the company's success and the driving force behind the results we continue to achieve.

Finally, we want to extend our heartfelt gratitude to our loyal guests and the communities we proudly serve. Their continued trust and support are fundamental to our success. As we look ahead, we remain committed to investing in our team members, our properties and our communities while delivering exceptional experiences for our guests and creating lasting value to our shareholders. And with that, operator, we would be happy to turn the line over to questions.

Operator

The first question today comes from Lizzie Dove with Goldman Sachs.

分析師問答

Elizabeth Dove

Apologies if I missed this, I joined the call a little bit late. But could you maybe just talk through to the extent you have the kind of cadence of the quarter? Obviously, we heard from other operators that there have been some potential softness in August. So curious what you've been seeing as you move through the quarter and any more detail you have as you moved into October and November?

Stephen Cootey

I mean I think the overall cadence for the third quarter was pretty steady. I mean there was some differences between August and September, but most of that's due to date fluctuations. So overall, we thought the quarter was pretty consistent. And that kind of led into some of the discussion I had on this -- in the remarks, Q4 is steady as she goes.

Elizabeth Dove

Great. And then I guess, bigger picture as you look to 2027, Obviously, you have a lot of these ROI projects coming back online starting to contribute, disruption starting to go away. How do you think about that and kind of sizing that and the cadence of that ramp as you move through to 2027 on top of what I'm sure you think is going to be a solid year kind of underlying as well.

Stephen Cootey

I mean right now, we're very encouraged on the business position. And as you mentioned, we're going to benefit in 2027 from a full year of operations from the newly renovated Green Valley Ranch. And then in the second half of the year, we expect to benefit from adding 275,000 square feet of new capacity to the Las Vegas market with the opening of Durango North as well as the completion of kind of the centerpiece of the Sunset Station investments, the premium steakhouse and high limit slots and table rooms. We do anticipate next year to be a heavier CapEx year as we're finishing up Durango North and Sunset Station. But as you mentioned, the cadence of disruption, particularly with the properties, maybe with the exception of the construction in and around the 215 Beltway should begin to dissipate, allowing us to kind of reap the rewards from our investment.

Operator

The next question comes from David Katz with Jefferies.

David Katz

I just wanted to talk about the increases in CapEx. And I think the delays and overruns may have been the words you used. Correct me if it's not. But should we look at these as a kind of onetime movement in the budget? Or could -- do you think there's potential that we could see more of this? And your does it necessarily linearly eat into the return opportunity? Or can we look at these as an expansion of scope that grows the EBITDA output at the end?

Stephen Cootey

Yes, there's a bit to unpack there, but I'll start with saying that these -- David, these are onetime in nature. As I kind of mentioned in our remarks, while there were some increases, particularly to the Durango North, that was all related to scope, we expect to get a return, and we're very comfortable with achieving that 20% return over time.

Frank Fertitta

In relation to GVR.

Stephen Cootey

And the GVR was a onetime cost overrun. The project started out to be -- the initial budget we gave was $200 million, ended up being close to $250 million.

Operator

The next question comes from Dan Politzer with JPMorgan.

Daniel Politzer

Obviously, there's a lot of construction underway and a lot of noise that impacts the kind of core fundamentals of the business. But do you think you could break out any disruption impact versus the core? And just remind us of any seasonality as we think about kind of going forward?

Stephen Cootey

Sure. From a disruption standpoint, maybe there's probably a couple of numbers we'll call out. One is disruption and one is related to the 50th year anniversary expenses. So on disruption, if you recall, the last call, we called out $3 million of disruption to GVR. The team did a fantastic job managing that disruption. So we actually only realized about $1.5 million. All of it was related to the 4,500 room nights that we lost and associated room and room and food and beverage revenues that we lost.

Frank Fertitta

I do think just to add on to what Steve said, we are watching closely the traffic disruption that's in front of our properties. So you have in the investor deck some detailed information around interchange improvements on 215 at Red Rock, Green Valley Ranch and Durango. While so far, we've been happy with the way they've managed things, it will intensify in project scope as we get into the end of the year.

Stephen Cootey

And then to round out the question on the 50th year anniversary, if you recall last call, we called that there would be approximately an $8 million hit to EBITDA. And as you heard in the remarks, that was managed down to $5.8 million, the majority of which was the marketing campaign associated with the 50th.

Frank Fertitta

And we look at the 215 construction, which runs all the way from Red Rock to Durango to GVR, it's short-term pain, but it's long-term gain because -- the reason they're expanding the beltway and everything on the 215 is because that's where all the growth is happening in Las Vegas. So we think we'll be the beneficiary of this ability to put increased traffic through and past the locations that we have. So short-term pain, long-term gain. And then the other thing I think Steve might want to mention to you guys, over the summer, there was an increase in the rate that we paid for electricity.

Stephen Cootey

Yes. And we'll probably -- I know somewhere down the line, someone is going to ask a margin question, so I might as well preempt it and kind of walk you through it. So -- and apologize, Dan, I know you didn't ask this, but I'm sure the next person will. So as you can see, Las Vegas operations, we lost about 199 basis points, the majority of which can be explained in 2 areas: one, the casino -- we had a bad debt receivable recovery last year, which made the year-over-year comparison quite difficult. That was about 102 basis points of it.

And the remaining of it, as Frank mentioned, was a $1.2 million increase of utilities, which hit our SG&A line. And that to me is more seasonal. NV Energy raised our -- what we call our seasonal peak demand rate. So that is a rate that, that increase will only be seen from, let's call it, June 1 to September 30. And to round out the consolidated margin, which was down 277 basis points. The big delta there is the $5.8 million of expense related to the 50th that I mentioned previously.

Daniel Politzer

Got it. That's helpful. And then just for my follow-up, since you preempted the margin question, I'll ask just a clarifying question on the CapEx -- can you maybe bridge between the -- I think you raised project capital expenditures or investment CapEx about $150 million and maybe the maintenance CapEx, $15 million to $20 million. Can you just kind of parse out that increase? I think you threw out a couple of kind of factors, but just to clarify, that would be helpful.

Stephen Cootey

Yes. No, absolutely. I mean the big ones, right, is GVR went from -- you have about $50 million in GVR. And then Durango North, you went from $385 million to $430 million. Those are the 2 big ones. Sunset, as I mentioned earlier, is on track, on budget. And then from a maintenance capital, it's a variety of things. Our IT expenses as we were able to capitalize some IT expenses went up about $11 million. We also upgraded the UPS systems, which are really the electrical backup for all our entire properties. As you know, slots was 65% of our business and core to our operations. So we felt that this was prudent just given some of the kind of the irregularities that were happening in the electrical grid over the year, and that was really the remaining piece. Those are the big bridges.

Operator

The next question comes from Joe Stauff with Susquehanna.

Joseph Stauff

I wanted to ask, I think historically, you provided a number of roughly 10% return, say, the following full year once a project is implemented and completed. I was wondering does that number still make sense as we think about the incremental contribution from GVR and Sunset once those are completed? I know Durango won't be until third quarter of '27.

Stephen Cootey

Yes. I mean I think that holds true. I think David was asking something very similar a couple of questions ago.

Joseph Stauff

Okay. And the disruption, the traffic disruption that you had described at Durango, is that -- like how much visibility do you have on that? Scott, I believe you mentioned it will get heavier in the fourth quarter. Maybe that's a function of kind of where the project is? Or is that also a function of kind of what the state dictates in terms of the traffic disruption?

Scott Kreeger

It's a little bit of both. We actually have pretty good visibility. They have a construction plan with the milestone time lines, and we meet with them to help mitigate anything we can on our side, and we're in close contact with the county on progress. It is construction. It is live. You never know if something gets delayed or if they run into a problem, but we do have pretty...

Frank Fertitta

And it's actually 3 things. It's what's going on in the 215 Beltway, which, again, we think long term is going to be positive for us. It's what we're doing at Durango to the north of the property. At the end of the year, we'll have all of the steel erected. So I think we'll be in a better place once the disruption of like all the erection of the steel and all that is going on. Yes, the -- the third one, which we don't talk too much about is they're building 2 very large apartment developments right behind our property, which is also creating a little bit of disruption. But again, once those apartments come online, they're literally a walking distance to the casino. So another positive.

Scott Kreeger

I think it's all manageable and stuff that we either have influence on or visibility on.

Frank Fertitta

Durango has continued to perform extremely well.

Scott Kreeger

That's right.

Lorenzo Fertitta

Look, we feel like we're in a really good spot with GVR, the hotel rooms done there. We're already seeing positive trends out of the hotel and the impact that it's having on the business. As Steve said, Sunset is nearly finished. I think by the middle of next year, we'll hopefully be wrapping up most of the podium enhancements that we made. And then sometime in Q3, the expansion in Durango should open. So we'll open with additional amenities too, to drive more traffic to the property. Significant amenities, what Steve outlined. So we're feeling like we're in a pretty good spot going forward.

Operator

The next question comes from John DeCree with CBRE.

John DeCree

I guess, first, congratulations on the North Fork opening to you and your partners, the tribe. I think that one has been in the works for quite a long time. So congratulations there. And then on the same topic, I know it's only been less than a week, but you've done this a couple of times. So curious if you could share some thoughts from the opening, maybe some kind of brief comparisons to some of your other development projects in California and kind of how you're expecting the ramp from here and kind of based on what you've seen only though it's been a few days.

Lorenzo Fertitta

Look, as expected, when you open a new casino in a supply-restricted market, you open and your -- the early days, you're essentially at capacity and you're just trying to manage the crowds and keep the place clean at that point. I would say that it's a very similar pattern to what we saw when we opened Thunder Valley, gosh, now almost 20 years ago. Graton Rancheria 2013. And now we'll see where the business settles in. I think the more we learn about it and kind of what we're seeing on a daily, hourly basis, we're continuing to be extremely positive on that market and what the potential is. Scott, I don't know.

Scott Kreeger

Yes. I think I would echo what you said. I would like to take a second to shout out to the executive team for a wonderful opening, both the home office in Las Vegas and the team on the ground there. The first week of opening operations went great. The customer feedback has been phenomenal. And as Lorenzo said, the early first week outlook looks really good.

Stephen Cootey

And John, to kind of put a cap on that, just from a financial perspective, North Fork is now transitioning to a recurring cash flow contributor to Red Rock.

Frank Fertitta

Yes. And look, the good news is we received the initial payment on the development fee. I think there's a little bit more to be coming in the near future. But the good news is we've been investing in this project for over 20 years. We've seen it through. We appreciate and tried working with us for as long as they have and believing in us. But now the money that we forwarded to get this project done has turned from PIK interest to cash pay. And so we feel really good about the $86 million note that we have as a receivable back to the company.

John DeCree

All great color, guys. Very helpful. Maybe a quick follow-up, shifting gears on the scope of Durango North. And I know you kind of underwrite returns to kind of net impact across the portfolio. But how should we think about any incremental kind of cannibalization at Red Rock as you roll out the Durango North expansion next year and enhanced scope? Do you think you're kind of still recovering or backfilling in Red Rock? Or does the Durango expansion have any impact on potential cannibalization there?

Frank Fertitta

I think we've been backfilling at Red Rock as we thought that we would on a good trend line. But I do think, look, when we open what we're opening at Durango, we're going to draw from all over the Las Vegas Valley for people coming to see what we're building there. I don't think anyone has done anything like this to the magnitude of all the amenities and offerings that we're going to have. And so I would imagine in the short term, just like probably every other locals casino, we're going to be getting a lot of trial. I would imagine that would settle back in over 2 or 3 quarters.

Lorenzo Fertitta

Yes. The idea is to expand the market with the amenities that we're adding. And that's a dynamic market there. There's a ton of commercial activity. Stephen mentioned all the new units, the apartments, houses being built in that area. It's the fastest growing area for...

Frank Fertitta

Right...

Lorenzo Fertitta

In Las Vegas, there's no question. And like I say, the commercial activity in the area is very strong as well. So look, it will settle in, as Frank said.

Stephen Cootey

Red Rock will check it out.

Frank Fertitta

We're talking about the growth around Durango, but I can tell you, which we've always seen gosh, we opened Red Rock 20 years ago here in the heart of Summerlin. And I can tell you that Summerlin West is going extremely well with new residences popping up and the plan they have for Downtown Summerlin, which is right where Red Rock is located is like amazing stuff that will be going vertical with real density here, both from a residential and a commercial point of view around Red Rock, which is going to be super positive for this property as well. So I think, look, the good news story for where our properties are located in the valley is where all the growth is taking place on the beltways in the suburbs. And we feel really positive over the mid- to long term about everything that's going to be filling in around -- to Durango and Red Rock.

Operator

The next question comes from Steve Wieczynski with Stifel.

Steven Wieczynski

So Steve or Scott, I'm not sure who wants to take this. But Steve, you mentioned a couple of times that your core customer is use word stable and your rated card players continue to frequent your property. So wondering, am I reading too much in this or wondering what that means then for your -- for the unrated customer? Just trying to understand if that customer base has slowed? Are you seeing any slowdown in your database growth around that? Any color there would be helpful.

Scott Kreeger

Steve, it's Scott. I'll start and maybe Steve can jump in. Just echoing his opening remarks, very stable, very consistent positive performance year-over-year in the database, win up, spend per visit up, net theo up. We also increased year-over-year our new sign-ups. And then getting to your question directly, we saw probably one of the strongest year-over-year quarterly increases in uncarded play that we've had in a while. And that's attributed to the amenities that we're bringing online, new restaurants, new products and having a pretty fulsome entertainment schedule over the summer to drive non-carded customers to the property. So we're very happy with customer trends right now. And actually, if you take a peek into Q4, that is continuing.

Frank Fertitta

I think we're very pleased with the resilience of the -- our core business is slot machines, right? And with the headwinds on fuel prices and grocery prices and all these things, our customers on the slot continued to be extremely resilient and our spot business has been very pleasing.

Steven Wieczynski

Okay. Got you. And then Scott, kind of sticking with you, can you maybe just give a quick update on what you're seeing right now from a group perspective and maybe how that's kind of booking out right now into the first half of '27?

Scott Kreeger

Yes. I'm going to jump in front of it a little bit and talk about hotel in general because it's a bigger catchment. We saw a really strong performance in hotel year-over-year, both in overall revenue and ADR. With GVR coming online through the quarter, we knew that group sales was going to be a little bumpy with GVR coming online, and we kind of forecasted that in previous calls. So when we look at the fourth quarter in group sales, very strong, positive year-over-year growth and into next year as well. And then catering follows that as well as you go into the fourth quarter and the beginning of the year. So we're super optimistic about groups filling into GVR as we brought those rooms online floor by floor.

Operator

The next question comes from Brandt Montour with Barclays.

Brandt Montour

So first question would be on just what's going on with the Strip. I know that you guys don't have any direct exposure to the Las Vegas Strip. There was a tailwind at some point over the last 18 months that you had called out about taking away certain VIPs and getting a nice little stream of VIP business coming to your properties instead of the strip because they like the experience better. What sort of quantum is that business for you? And have you seen any sort of change in behavior from those folks with what's going on with the Strip?

Scott Kreeger

Yes. There are a couple of probably responses I can take out of that. And I'll hit the last one directly. It's about 20% of our overall slot business and coincidentally about 20% of our segmentation in hotels. So it is a meaningful group. as we have said quarter after quarter after quarter, it is one of our most dynamic groups. So from an overall regional and national basis, we're seeing very positive gains in that area, both in slots and in overall hotel.

Brandt Montour

Great. And then just following up on an earlier question because I think it got a little bit lost. Just thinking about typical seasonality fourth quarter, third quarter and fourth quarter, any reason not to think that, that season -- again, adjusting for disruption, adjusting for the onetime stuff in the third quarter, any reason to think that, that wouldn't look like the last handful of years from just a quarter-over-quarter perspective?

Stephen Cootey

No, Brandt, I think -- and I apologize, you're absolutely correct. I missed it. That was part 2 of a prior question. We talked about 10% to 11% typically in Q4. I think this will be on the higher end of that, but consistent with past quarters.

Operator

The next question comes from Steven Pizzella with Deutsche Bank.

Steven Pizzella

Steve, I just wanted to clarify on the $79 million of share-based compensation expense. Did that impact the 3Q adjusted EBITDA? Is this a onetime expense? Or how should we think about any incremental compensation expense from these awards going forward?

Stephen Cootey

Yes. The breakdown is the $79 million is a onetime stock comp expense and associated payroll tax. So there's $72 million of noncash stock expense related to the grants we gave our employees as part of the 50th year 50th anniversary celebration. There's about $7 million of cash taxes related to those grants. And that's what is spread among the departments. The casino is roughly $26 million of those expense, F&B $26 million, room 6, others and then SG&A approximately $20 million. That's all -- that does not affect EBITDA, and it is onetime in nature.

Steven Pizzella

Okay. That's helpful. And then I think you noted a bad debt expense last year in the 3Q and utilities increase this year impacted the year-over-year margin expansion. Can you help us think about how normalized operating expenses are trending on a year-over-year basis and how we should think about margins moving forward?

Stephen Cootey

Yes. I think if you go to the casino, it was a bad debt receivable that we collected. So it just made the comp hard. And so what you're seeing really in kind of -- in the casino in Q3, you're seeing pretty consistent margins in the casino. That's kind of normal course operation. Maybe there's some slight adjustment for hold, but that's going to vary quarter-to-quarter. From an F&B perspective, what you're seeing there, once you take out all the onetime expenses, I think Scott mentioned that you're seeing catering didn't have its best quarter. And so any margin degradation to the catering.

The F&B was related to catering, which, as Scott mentioned, Q4 and that order looking good. So I anticipate pretty stable margins in F&B. And you're seeing what we're doing from a COGS perspective, it's effectively flat. Payroll has been -- payroll and related costs have been effectively flat. In SG&A, SG&A, the main driver was that $1.2 million in electric. And then there's some outside services related to the entertainment programs that fall in that bucket that Scott mentioned previously.

Operator

The next question comes from Barry Jonas with Truist Securities.

Barry Jonas

Any updated thoughts around your next big development project? I know we've talked about Inspirada or Cactus. And I guess with that, once you're done with Durango North, are you done there? Or would you still evaluate any further expansions there?

Frank Fertitta

I'll take the last part first. And Durango North, I think the final thing that we have the capability of doing, but haven't made the decision is we have the ability to add more rooms and meeting space and a spa at Durango. But I'll let Lorenzo.

Lorenzo Fertitta

Yes, in which we're currently working on design for that. We're working with a general contractor on some preconstruction work there, just trying to get pricing back and to see...

Frank Fertitta

Plus or minus 400 rooms possibility there. We have space to go along with it and a spa.

Lorenzo Fertitta

And given how the Durango hotel has performed, I mean, it's performed probably better than we originally expected when we built the property. We've really kind of carved out a segment there where people like the property a lot. They like the product a lot. And given its proximity to the strip, it's off the strip, but it's still fairly close. So the hotel business there has been good. And I think with the addition of -- with additional rooms there, it would allow us to even further kind of yield better because we'd be able to handle more growth more upper end, higher-end customers, more suites. That's kind of where we see we're a bit deficient there.

So on that front, while we haven't committed or announced anything, that's an obvious kind of next step for Durango. Beyond that, as you know, we think of ourselves as a development company. We've built the value in this company by building new properties in Las Vegas, and we have multiple pieces of property for development. no -- obviously, no announcement today. We're continuing to work on multiple new projects at the same time and same thing, working with general contractors, getting pricing feedback and just trying to push the ball forward while at the same time, going to focus on finishing out the Durango North project, get that open and Yes, our intent is to be announcing the next development fairly soon. We just want to make sure that we have everything tied up. We have our budgets tied up, scope, everything tied up. These things take time to get right. So we're just in the process of continuing to work on that.

Barry Jonas

That's great. And just as a follow-up, just curious if any update on your land strategy. You obviously have many parcels. Curious if any open sales processes and on the flip side, you're evaluating maybe increasing your land holdings in any -- in Vegas, Reno or any other market?

Lorenzo Fertitta

Look, we're always looking. I mean we're -- I think we probably know the real estate market here as well as anybody. We're very tight in. And any time a site becomes potentially available, historically, we've been in the front of that and not afraid to make the investment and hold the property for a number of years or even decades for that matter on the divestment side.

Frank Fertitta

I think we control -- and this was with foresight from quite a long time ago, but -- when you look at the Las Vegas Valley now, you look at the Beltway, it didn't exist. This is where in the Northwest, we have a Skye Canyon out there. We're liking what's going on up there. BLM released a bunch of property. There's a great master plan development going on up there. The rooftops up there are unbelievable. We have the only site with nonrestricted gaming capabilities up there. We're bullish on that.

Lorenzo Fertitta

We're bullish on...

Frank Fertitta

Skye Canyon, I'm sorry. And the one on Losee Road and the Beltway as well. We're super excited about that one. And of course, you guys are all well familiar with the Cactus site, which is the first thing you see coming in towards the Las Vegas Strip on I-15, the ability -- Cactus Avenue, which runs east to west, captures a tremendous catchment of the local market as well as the visibility from the driving tourist market Inspirada, which is in a wonderful neighborhood in Henderson. We feel really good about our land holdings. And like I say, we expect to finish out what we're doing at Durango North, and we'll be coming back with what our next development is. That's how we got to where we are. As just said, we've been a development company. We're going to keep doing that.

Operator

The next question comes from Jordan Bender with Citizens JMP.

Jordan Bender

A couple of years into the tavern business, I guess, any update on the strategy and the returns you're seeing there? And then maybe just to follow up for the fourth quarter. F1, we're a couple of years into that. I guess, is there any expectations we should have there? Or is it just kind of another event, another year for you guys?

Lorenzo Fertitta

I'll take the F1. You can take the tavern, Scott. On the F1 side, other than the fact that we're fans here and we like it, really, we're just talking about it today. We really don't see any impact on our business, good, bad or indifferent. It doesn't really affect us in any way that we can tell.

Scott Kreeger

And I'll jump into taverns. So we just opened up the seventh of our 8 taverns. The eighth tavern will come online at the beginning of next year. We've built a great brand, resonates well with customers. It is a unique customer demo, one that we targeted. And now that we're up and operating, it is a younger skewed sports demo. And the interesting thing, because of where we've placed these, they're in areas where we don't have as much penetration. So we're able to kind of test the market in these areas. And one of the things that is interesting is about 60% of the people that are frequenting the taverns were previously not Boarding Pass members. So we've been able to kind of reach out into those areas. ingratiate the brand with the customers out there. And then we are seeing that crossover come from the to rooms to the big box operations. So, so far, so good.

Operator

The next question comes from Ben Chaiken with Mizuho.

Benjamin Chaiken

Maybe on the 50th anniversary, fully acknowledging this was intended to give back to the community and the employees. But I guess I would have also assumed there may have been a slight improvement in revenue as well, even if not the main intention. Is this fair? Do you feel like that came through? Or was it really unrelated? And then one follow-up.

Frank Fertitta

I don't think we ever intended this to be any immediate improvement in revenue based on this. This is literally long-term thinking for the most important asset that we have, which is our team members. And we're in a business where we have to earn our customers' business every single day, right? There's a casino in every corner in Las Vegas. And the business that we're in is repeat customers that keep coming back to our places. And so we wanted to recognize where we started in 1976 with 5,000 square feet and 90 team members and where we are today with 10,000-plus team members strong that have helped us get to where we are. And the amazing thing is many of these team members that have been there for 20-plus years. I mean they're the reason that our customers choose to come to our places.

Lorenzo Fertitta

Look, around the actual -- specifically the 50th anniversary, it was not a promotion-driven model, like we didn't run promotions. We didn't give away anything. It was more -- we did run advertising, we did run commercials. So I guess you could say maybe it was a bit of a brand play per se to let remind customers about that we've been in the community here for 50 years and the services that we provide. And should we get some benefit out of that in the months and years to come, I think so. I think there's value to that for sure, for what we spent. But it wasn't like an immediate impact, like Frank says, we did not run promotions around that.

Frank Fertitta

The positive feedback throughout the entire community has been...

Benjamin Chaiken

That's great. That's great. Appreciate it. And then maybe just switching kind of more near term. Last quarter, I believe you talked about a kind of a negative 10% seasonality for 3Q, if I'm not mistaken, with GVR expected to be slightly a less drag sequentially, which it seems like even came in even better than you thought. A few million drag from Durango, I think, was the expectation. So the question is, I think overall, the quarter came in close to slightly beneath, especially considering the GVR bucket got better if I caught you correctly. So was this the hair slower top line? Was it higher expenses? Was Durango a bigger disruption? You also talked about some traffic. I think we've touched the bits and pieces, but to the extent you could help clarify, that would be helpful. Or maybe this was right what you expected.

Lorenzo Fertitta

Specifically GVR, I'll let you answer the question, Steve, in depth. But GVR really didn't come online until September.

Scott Kreeger

Yes. And then we buffered. So we didn't just immediately pick a date and put groups and customers in those rooms. We had some buffer so that we didn't have to lock people or we didn't have to cancel on a group. I mean it was fluid.

Lorenzo Fertitta

So that's relative to the quarter. So we're talking about -- we're seeing the fruits of the GVR room remodel. It's really -- it's in October and November going forward and what we're seeing in forward bookings.

Frank Fertitta

Yes. And unfortunately, the Green Valley rooms came on later than what we expected them to come on. But good news is they're online and they're being well received. now. So we're positive going forward on the feedback that we're getting from the room experience.

Operator

The next question comes from Trey Bowers with Wells Fargo.

Raymond Bowers

Sorry to keep kind of beating on the same question here. But I think what a lot of people would like to get a better understanding of is just you guys -- the revenue in the quarter came in better than most of us thought, but the EBITDA came in a little worse. So is there like a top line growth level you need to kind of reachieve to start seeing incremental margins flowing through? And then part 2 of that, if I heard you right, Steve, you said EBITDA would be up 10% to 11% at the higher end of the range in the fourth quarter, but that would imply EBITDA is down in the locals market again in Q4. So again, is that kind of -- you're just not seeing that top line level that covers all these new expenses? Or is it more onetime items that we're not thinking about?

Stephen Cootey

Yes. No problem. On the top line, I mean, there's a lot of moving pieces to that question, Trey, as you know, and all the matters of where the revenue comes from and where the expenses come from. But if you kind of think of if expenses are up 2% to 3%, and let's call it, payroll is up 2% to 3% because that's usually a good measure and kind of how we're thinking about payroll going forward in 2027. You'd need about 3% to 4% revenue growth to kind of really stick it and keep margins flat.

Frank Fertitta

Yes. And you have a onetime seasonally adjusted -- they put an increase for peak demand on power, which ran through...

Stephen Cootey

We didn't anticipate that.

Frank Fertitta

Ran through September. And as Steve told you guys, last year, we had a good guide on bad debt collection.

Stephen Cootey

Yes that's right.

Frank Fertitta

And disruption.

Stephen Cootey

And in terms of, I guess, the guidance or guidance going into Q4, I think your question -- I'm thinking the EBITDA was roughly flat as I was trying to get to the -- I didn't think it was down when I was giving you the seasonality, as I said, it was going to be the high end. But maybe I think dig in.

Raymond Bowers

Yes, sorry, I meant the year-over-year number would be down as the quarter-over-quarter number was up at 11%.

Stephen Cootey

No, that is right. You still do have disruption from Durango. And as I think Frank and Lorenzo mentioned in the previous question, GVR came in a little bit late. And I think you're looking for the $5 million disruption that we're trying to make up. I don't know if we're going to quite get there just given the delays of the GVR project.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Stephen Cootey for any closing remarks.

Stephen Cootey

Well, thank you, everyone, and look forward to talking in about 90 days. Take care.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.