0001747079-25-000116
SEC filingBally's Q2 2025 revenue rose 6% YoY to $657.5M driven by the Queen acquisition, while a $185.4M income tax provision drove a net loss of $228.4M.
Bally's Corporation reported total revenue of $657.5 million for the second quarter of 2025, a 6% increase compared to $621.7 million in the prior-year period. This growth was primarily attributable to the February 2025 merger with Queen, which contributed $61.3 million in revenue during the quarter. For the combined six-month period (Predecessor from January 1 to February 7, 2025, and Successor from February 8 to June 30, 2025), total revenue reached $1.25 billion, a modest 1% increase from $1.24 billion in the first half of 2024.
Despite the revenue growth, the company reported a loss from operations of $2.4 million, compared to income of $5.6 million in Q2 2024. This deterioration was driven by an 18.1% increase in general and administrative expenses to $298.2 million, which included $49.5 million in costs from the newly added Queen properties and $4.5 million in Merger Agreement costs. The net loss widened significantly to $228.4 million from $60.2 million a year earlier, largely due to a $185.4 million provision for income taxes. This tax provision was driven by a valuation allowance on interest in the US and tax on international pre-tax income, resulting in an effective tax rate of -83.69% for the Successor period. Partially offsetting these headwinds was a $60.7 million non-cash gain related to the fair value of the company's investment in Intralot.
The Casinos & Resorts segment was the primary growth engine, with revenue increasing 14.7% to $393.3 million. The Queen properties were the main driver, though competitive pressures in markets like Shreveport, Evansville, and Dover provided a partial offset. Segment Adjusted EBITDAR improved to $106.0 million from $99.8 million in Q2 2024.
International Interactive revenue declined 10.2% to $206.1 million, primarily due to the sale of Asian operations in the fourth quarter of 2024. However, segment profitability improved, with Adjusted EBITDAR rising to $82.2 million from $81.3 million, reflecting a new Asia royalty business and continued focus on cost efficiencies.
North America Interactive demonstrated strong momentum, with revenue up 21.5% to $56.5 million. The segment achieved positive Adjusted EBITDAR of $2.5 million, a significant turnaround from a loss of $2.2 million in the prior-year quarter, driven by the inclusion of Queen's sports business and strong top-line growth in iGaming and online sports betting.
Management's strategic focus is centered on the transformative Transaction Agreement with Intralot, announced in July 2025. Under the agreement, Bally's will sell its International Interactive business for total consideration valued at approximately €2.7 billion, consisting of €1.5 billion in cash and 873.7 million Intralot shares. The transaction is expected to close in Q4 2025, with a substantial portion of the cash proceeds targeted to pay down revolver drawings and other secured debt, significantly reducing 2028 secured debt and enhancing liquidity.
On the development front, the company finalized the Chicago Development Agreement with GLPI in July 2025, securing up to $940 million in construction funding for the permanent Bally's Chicago casino resort, which is expected to open in 2026. Capital expenditures for the combined 2025 period were $95.8 million, with the Chicago project being the most significant investment. Management believes existing cash balances, operating cash flows, and availability under the Revolving Credit Facility will be sufficient to meet near-term funding needs.
As of June 30, 2025, Bally's total assets stood at $7.79B, a significant increase from $5.86B at year-end 2024, primarily due to push-down accounting from the Queen merger. This transaction inflated intangible assets to $1.94B and goodwill to $1.72B. Cash and restricted cash totaled $240.9M. The company's liquidity is supported by a $620M Revolving Credit Facility, of which $250M was drawn. Total long-term debt, net of discounts and a $511.3M fair value adjustment, was $3.58B. The fair value adjustment on existing debt is a non-cash item being amortized over the life of the instruments. Stockholders' equity improved to $642.4M from $30.9M, driven by the merger's equity issuance and a reduction in accumulated deficit, though a $416.2M share repurchase partially offset this.
The company's most significant commitment is the Bally's Chicago development, with $965.7M remaining of a required $1.34B minimum spend. A new master lease agreement with GLPI, signed after quarter-end, will provide up to $940M in construction financing for this project. Other material commitments include $114.3M in sports league sponsorship agreements through 2036, $42.0M in remaining Rhode Island property investments, and $37.6M in minimum guarantees for interactive technology and market access partners. The company also has a contingent liability to pay a reconciliation fee to the Illinois Gaming Board based on future Chicago casino revenues.
During the Successor period, the company deployed significant capital. It issued $893M in new debt, including a $500M 11% Senior Secured Note, and drew $250M on its revolver, while repaying $347.5M. A total of $416.2M was used to repurchase 22.8M shares at $18.25 per share in connection with the merger. Capital expenditures were $79.4M, heavily weighted toward the Chicago project. The Board has authorized a $700M capital return program, with $95.5M remaining. No cash dividends were paid.
The Casinos & Resorts segment generated $393.3M in revenue for the quarter, with an Adjusted EBITDAR of $106.0M. International Interactive, primarily driven by UK operations, contributed $206.1M in revenue and $82.2M in Adjusted EBITDAR. North America Interactive revenue was $56.5M with a slim $2.5M Adjusted EBITDAR. The UK represented approximately 28% of total company revenue for the Successor period.
Bally's Corporation presents its cash flows under a Successor/Predecessor structure following the February 7, 2025 merger, making direct year-over-year comparisons complex. For the combined six-month period, the company reported a substantial net loss of $244.9M, yet Successor operating cash flow was a positive $58.8M. This divergence is primarily driven by significant non-cash add-backs, including $141.6M in depreciation and amortization, $35.5M in non-cash debt amortization, and a large $66.3M non-cash gain from changes in fair value of option assets. The Predecessor period saw an $80.2M operating cash outflow, heavily impacted by a $62.6M negative change in operating assets and liabilities.
Cash generation was insufficient to cover the company's investment and financing activities. Combined capital expenditures and capitalized software totaled $118.7M, far exceeding the combined operating cash flow. The most significant cash outflow was $416.2M in share repurchases during the Successor period, funded by net debt issuance. The company issued $893.0M in long-term debt while repaying $347.5M, resulting in net debt proceeds that, along with other financing items, covered the massive buyback. This indicates an aggressive capital return strategy financed by leverage rather than organic cash flow.
The $83.7M cash payment for 'The Star Investment' is a notable one-time investing outflow. Additionally, the $66.3M non-cash fair value gain significantly inflates operating cash flow relative to net income, warranting scrutiny of its sustainability. The large swing in working capital, a $79.1M source of cash for the Successor versus a $62.6M use for the Predecessor, also represents a significant period-specific anomaly.