0000921738-26-000008
SEC filingRevenue grew 5.8% to $6.96B driven by Interactive, but net loss widened to $845M on $945M impairment charges.
PENN Entertainment, Inc. describes itself as a company operating in 28 jurisdictions throughout North America with a broadly diversified portfolio of casinos, racetracks, and online sports betting and iCasino offerings. The Company’s focus is on organic cross-sell opportunities, reinforced by its market-leading retail casinos, sports media assets and technology, including a proprietary state-of-the-art, fully integrated digital sports betting and iCasino platform, and an in-house iCasino content studio. The portfolio is further bolstered by the PENN Play customer loyalty program, which has over 33 million members.
PENN has five reportable segments: Northeast, South, West, Midwest, and Interactive. The first four are retail segments that primarily generate revenue from gaming operations (slot machines and table games), food and beverage offerings, and hotel visitation. The Interactive segment includes all OSB, online casino/iCasino, and social gaming operations, management of retail sports betting, media, and the operating results of Barstool Sports prior to its divestiture on August 8, 2023. As of December 31, 2025, the Company owned, managed, or had ownership interests in 42 gaming and racing properties in 19 states, and offered live sports betting at its properties in 14 states.
PENN Interactive operates theScore Bet (online sportsbook in select U.S. jurisdictions and Ontario, Canada), theScore Casino (stand-alone iCasino in Ontario), Hollywood Casino (iCasino in select U.S. jurisdictions), and PENN Game Studios (in-house iCasino and social gaming content studio). The Company also operates theScore media app, which has approximately 4 million monthly active users across North America. Previously, the Company operated Barstool Sportsbook and ESPN BET, but both brands have been discontinued. On December 1, 2025, the U.S. OSB offering was rebranded to theScore Bet.
PENN’s go-to-market strategy includes a multi-channel approach: retail casinos and racetracks, online sports betting and iCasino platforms, a digital sports media business (theScore), and market access partnerships with other sports betting operators in six states. The Company also provides retail sportsbook management services to select casino operators outside its own portfolio. No customer concentration was disclosed in the Business section.
The gaming, media, and entertainment industries are characterized by an increasingly high degree of competition among a large number of participants. PENN competes with casinos and hotel casinos, state and province-sponsored internet lotteries, sweepstakes (including sweepstakes-based OSB and online casino), charitable gaming, video gaming terminals at bars and restaurants, illegal slot machines and skill games, fantasy sports, historical horse racing gaming terminals, prediction markets, and third-party internet or mobile-based gaming platforms (both legal and illegal). More generally, both retail and interactive gaming operations face competition from all manner of leisure and entertainment activities.
PENN’s strategic priorities include leveraging organic cross-sell opportunities between its retail casinos and digital offerings, utilizing its proprietary digital sports betting and iCasino platform, and focusing on the strength of its U.S. iCasino and Canadian operations following the termination of the ESPN agreement. The Company aims to use OSB to acquire customers with significant lifetime value and create cross-sell opportunities across its retail and digital assets, leveraging connectivity with theScore media app and the PENN Play loyalty program.
As of December 31, 2025, PENN had approximately 23,441 full-time and part-time employees. The Company had 35 collective bargaining agreements covering approximately 4,286 active union employees, of which 15 are scheduled to expire in 2026. Key human capital initiatives include talent development and succession planning, leadership and skills development, mentoring and inclusion programs, engagement and recognition platforms, service excellence training, and veteran pathways through a SkillBridge program.
For fiscal year 2025, PENN Entertainment reported total revenue of $6.96 billion, a 5.8% increase compared to $6.58 billion in 2024. The growth was primarily driven by the Interactive segment, which saw revenue surge 35.7% to $1.30 billion, fueled by iCasino growth, improved slot mix, and lower promotional expense. Food, beverage, hotel, and other revenue also increased 14.4% to $1.61 billion, largely due to higher gaming tax reimbursement amounts from third-party online partners. However, net loss widened to $845.3 million from a loss of $313.3 million in the prior year, mainly due to $945.3 million in impairment losses, including an $825 million goodwill write-down in the Interactive segment following the early termination of the ESPN BET sportsbook agreement. Operating income turned to a loss of $673.6 million compared to income of $72.5 million in 2024. Consolidated Adjusted EBITDA, a key non-GAAP metric, improved to $830.1 million from $672.2 million, reflecting better performance in the Interactive segment and retail operations.
Northeast: Revenue inched up 0.5% to $2.77 billion despite weather events. Adjusted EBITDAR declined 0.7% to $795.0 million, with margin compressing 40 basis points to 28.7% due to higher gaming taxes and G&A.
South: Revenue fell 0.2% to $1.17 billion as increased competition pressured gaming revenue, partially offset by non-gaming strength from completed room renovations. Adjusted EBITDAR dropped 7.3% to $401.6 million, with margin down 270 bps to 34.4%.
West: Revenue grew 3.4% to $543.2 million, benefiting from the opening of the second hotel tower at M Resort in December 2025. Adjusted EBITDAR rose 5.4% to $197.6 million, with margin expanding 70 bps to 36.4%.
Midwest: Revenue increased 0.8% to $1.18 billion, driven by the relocation of Joliet to a land-based facility in August 2025. Adjusted EBITDAR fell 2.5% to $474.6 million, with margin down 130 bps to 40.2%, due to higher labor costs and G&A, plus severe weather.
Interactive: Revenue surged 35.7% to $1.30 billion, led by iCasino growth and higher slot hold. Adjusted EBITDA improved to -$267.5 million from -$499.5 million, with margin rising from -52.0% to -20.5%, as marketing expenses decreased.
Management provided 2026 guidance for capital expenditures: approximately $220 million in maintenance and $225 million in project capital, primarily for the Aurora and Columbus developments expected to open late in the second quarter of 2026. The company completed the Joliet and M Resort projects in 2025 and entered into a new master lease with VICI. Share repurchases totaled $354.4 million in 2025, and a new $750 million authorization began in January 2026. The company expects to remain in compliance with debt covenants and anticipates adequate liquidity from operations and credit facilities.
As of December 31, 2025, PENN Entertainment held $686.6M in cash and cash equivalents, a slight decrease from $706.6M at year-end 2024. Total debt (including current maturities, financing obligations, and finance leases) stood at $2,887.1M, up from $2,770.7M in 2024, primarily due to $570.0M drawn on the Amended Revolving Credit Facility (none drawn in 2024). Shareholders' equity dropped sharply to $1,827.5M from $2,858.4M, driven by a $843.1M net loss and $354.4M in share repurchases. Deferred revenue was $34.1M, mostly long-term.
Total purchase obligations were $473.4M as of December 31, 2025, down from $1.0B a year earlier, reflecting the termination of the ESPN Sportsbook Agreement and completion of major development projects. Of this, $268.5M is due within one year. The Company also has capital expenditure commitments under its Triple Net Leases requiring minimum maintenance spending of 1% of annual net revenues per lease. Additionally, the Company has an indemnification liability of $39.5M related to the Barstool sale, with the maximum potential future payment not estimable.
In 2025, PENN repurchased 20,090,831 shares for $354.4M, with no remaining authorization disclosed. No dividends were paid. The Company issued $877.5M in debt (revolver draw) and repaid $307.5M, resulting in a net debt increase of $116.4M. Capital expenditures totaled $647.7M (9.3% of sales), including $408.4M in project capital, partially funded by $280.0M from GLPI for development projects. The Company also repurchased $223.8M of its 2.75% Convertible Notes, recording an $11.8M loss on early extinguishment.
Revenue disaggregation by segment shows Interactive as the fastest-growing segment (+35.7% YoY to $1,302.6M), driven by OSB/iCasino and third-party market access fees. Retail segments were relatively flat: Northeast $2,769.2M (+0.5%), South $1,167.1M (-0.2%), West $543.2M (+3.4%), and Midwest $1,181.4M (+0.8%). Gaming revenue remains the dominant revenue stream across retail segments, while Interactive's 'other' revenue includes $588.3M in gaming tax reimbursements. Segment operating income was not disclosed in the Notes.
PENN faces intense competition from traditional casinos, iCasino/OSB operators, and new entrants like prediction markets. Prediction markets pose a unique threat as they offer alternative betting on sports and other events, potentially diverting customers. The termination of the ESPN partnership and rebranding to theScore Bet increases competitive risk, as the loss of the ESPN brand may hinder user acquisition and retention. The company also competes with well-funded rivals that have economies of scale.
PENN's business is sensitive to discretionary consumer spending, which is vulnerable to economic downturns, inflation, and tariffs. Recent US tariff changes and retaliatory measures create uncertainty. Seasonality in sports betting and retail operations (e.g., sporting events, weather) causes fluctuations. High leverage ($2.9B debt) and annual rent ($967.8M) amplify financial risk, especially if cash flow declines.
Revenue concentration in four states (OH, LA, MO, PA) exposes PENN to regional economic, regulatory, or competitive shocks. The company relies on third-party providers for geolocation, payment processing, and sports data; failure could disrupt operations and lead to regulatory violations. The success of OSB/iCasino depends on attracting users, which may require significant marketing investments. Fraud, theft, and cheating risks are inherent in gaming operations.
PENN is subject to extensive gaming regulation, which can change unpredictably. The emergence of prediction markets introduces regulatory uncertainty. Shareholder activism (e.g., HG Vora) has caused disruption and may recur. Compliance with evolving privacy laws (e.g., CCPA, GDPR) and anti-money laundering regulations is costly. Potential tax increases in gaming jurisdictions could reduce profitability.
Cybersecurity threats are a major risk, with past attempts to access user accounts. Use of AI introduces new legal and reputational risks, including potential IP infringement and inaccurate outputs. Reliance on third-party cloud infrastructure and mobile app stores (Apple, Google) creates dependency; service interruptions could harm user experience and revenue.
In FY2025, PENN Entertainment generated $508.2M in operating cash flow, a significant improvement from $359.3M in FY2024, despite a net loss of $845.3M. The divergence between net income and operating cash flow is primarily due to large non-cash charges: $945.3M in impairment losses, $446.9M in depreciation and amortization, and $372.4M in noncash operating lease expense. These items more than offset the net loss, resulting in positive cash generation.
Capital expenditures intensified to $647.7M in 2025, up from $482.7M in 2024, reflecting continued investment in properties and development projects. The company also received $280.0M in proceeds from sale-and-leaseback transactions, partially offsetting the high capex. Free cash flow (operating cash flow minus capex) was negative $139.5M, indicating that internal cash generation did not fully cover capital spending.
Capital returns to shareholders consisted solely of $354.4M in share repurchases; no dividends were paid. The company also drew $877.5M from its revolving credit facility and repaid $307.5M, alongside $223.8M in convertible debt repurchases. Working capital changes were modest, with a $1.6M increase in accounts receivable and a $2.4M decrease in accounts payable. Overall, the cash flow statement reflects a company investing heavily in its asset base while relying on non-cash adjustments and external financing to support operations and shareholder returns.