CNTY — Q2 2026 Financial Report Analysis
Q2 · Fiscal year 2026 · Published by Pham Hop
Century Casinos' Q2 2026 revenue rose 0.8% to $152.0M as US Midwest, Nevada and Canada growth offset a 19% drop in Poland, but $25.9M of interest and lease costs against $17.2M of operating profit kept it at a $10.9M loss.
- Revenue
- $152M
- +0.8% YoY
- Net income
- -$11M
- +11.4% YoY
- Diluted EPS
- $-0.39
- +2.5% YoY
- Operating margin
- 11.3%
This period vs a year ago
- Same period last year
- This period
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
Century Casinos' revenue in the second quarter of 2026 (April–June) was almost unchanged at $152.0 million (+0.8%), but that total hides two very different businesses. The US Midwest, Nevada and Canadian casinos grew, while Poland fell sharply after its Warsaw Hilton casino closed in June 2025 when the license was not renewed. The company still lost money for shareholders, $10.9 million or $0.39 per share, compared with a $12.3 million loss ($0.40) a year earlier. The cause is its financing: interest on its borrowings and on the long-term lease of its casino buildings came to $25.9 million in the quarter, more than the $17.2 million the casinos earned from operations.
At a glance
- Revenue outside Poland rose 4.7% ($132.1M vs $126.1M). Poland's revenue fell 19.4% in dollars, which dragged the company total down to +0.8%.
- Adjusted EBITDAR rose 4.5% to $31.7M (20.8% of revenue vs 20.1%). This is the company's own profit measure: earnings before interest, tax, depreciation, rent and some one-off items. Cash rent to its landlord rose faster, to $17.4M from $14.4M.
- Operating profit covered only about two-thirds of interest costs ($17.2M vs $25.9M). This gap is why a company with growing casino profits still reports a net loss every quarter.
The quarter in numbers
| Metric | Q2 2026 | Q2 2025 | YoY Change |
|---|---|---|---|
| Net operating revenue | $152.0M | $150.8M | +0.8% |
| Gaming revenue | $109.4M | $111.1M | -1.5% |
| Earnings from operations | $17.2M | $16.6M | +3.7% |
| Operating margin | 11.3% | 11.0% | +0.3 pts |
| Adjusted EBITDAR (non-GAAP) | $31.7M | $30.3M | +4.5% |
| Interest expense | $25.9M | $26.2M | -1.0% |
| Pre-tax loss | -$8.7M | -$8.3M | Loss widened 4.3% |
| Net loss attributable to shareholders | -$10.9M | -$12.3M | Loss narrowed 11.4% |
| Diluted EPS | -$0.39 | -$0.40 | Loss narrowed 2.5% |
| Master Lease cash rent paid | $17.4M | $14.4M | +20.6% |
Source: Form 10-Q for the quarter ended June 30, 2026. For the first half of the year, revenue was $289.2M (+2.8%) and the net loss attributable to shareholders was $27.4M ($0.96 per share), compared with $32.9M ($1.08) in the first half of 2025.
Operating margin is the share of revenue left after running the casinos (staff, gaming taxes, marketing, depreciation) but before interest and income tax. Adjusted EBITDAR is a common measure in the casino industry. The "R" means it leaves out rent. That matters a lot here, because most of Century's casino buildings are owned by the real-estate company VICI Properties and leased back to Century under a single "Master Lease."
Region by region
| Segment (Q2) | Revenue | YoY | Adj. EBITDAR | YoY |
|---|---|---|---|---|
| US Midwest (Colorado, Missouri) | $44.7M | +8.0% | $16.7M | +8.0% |
| US East (West Virginia, Maryland) | $43.6M | -2.2% | $7.7M | -3.2% |
| US West (Nugget, Reno area) | $23.4M | +15.9% | $4.5M | +92.8% |
| Canada (Alberta) | $20.4M | +2.2% | $6.2M | +10.9% |
| Poland | $19.9M | -19.4% | $0.05M | -97.3% |
| Corporate and other | — | — | -$3.5M | cost up 17.9% |
- US Midwest was the largest contributor. The filing says revenue grew because of "increased casino revenue at all Missouri and Colorado properties." Cape Girardeau also had more hotel revenue and sports betting, which began in Missouri on December 1, 2025 through a partnership with BetMGM.
- US West (the Nugget Casino Resort) almost doubled its EBITDAR. Hotel revenue rose 21.0%, and "other" revenue rose 42.5% from ticket sales for "two larger concerts during the quarter," along with lower promotional allowances (free play and comps given to gamblers). Concert revenue depends on the event calendar, so not all of this will repeat every quarter.
- US East was the only US region that declined. Revenue fell at Mountaineer (West Virginia), where casino and hotel revenue dropped while racing revenue rose. At Rocky Gap (Maryland), management notes a new competitor, the Happy Valley Casino in Pennsylvania, which opened in late April 2026 about 112 miles away. The company says it saw "some decrease in customers traveling to Rocky Gap from some Pennsylvania markets" but expects the disruption to be "minimal."
- Canada grew revenue 2.2%, and the exchange rate was flat year on year, so this growth is real and not a currency effect. EBITDAR rose 10.9% as costs stayed roughly unchanged. In May 2026 a court review ruled that a competitor planning to move its casino to south Edmonton, about 11 miles from Century Mile, must reapply for approval. For now, that removes a threat to the Edmonton properties.
- Poland went from about break-even to essentially zero. Measured in zloty, revenue fell 21.6%. The filing gives three reasons: the Warsaw Hilton closure, partly offset by a new second casino in Wroclaw (opened February 2026), and table hold in June 2026 that "was unusually low." Hold is the share of table bets the casino keeps, and it moves with luck. A 2.7% stronger zloty made the dollar decline smaller than it would otherwise have been. Polish casino licenses last six years and cannot be renewed; the casino must win the license again in a fresh competition. That rule is what happened to the Hilton site.
Debt and the lease: the real story
Century carries two layers of obligations:
- Bank debt: $336.5M of principal, mostly a Goldman Sachs term loan of $331.6M. Its weighted interest rate was 9.83%, down from 10.49% a year earlier as base rates fell. The loan matures on April 1, 2029. Net debt (bank debt minus cash) was $276.3M, up from $252.5M a year earlier, mainly because cash fell.
- The VICI Master Lease: a $708.0M financing obligation on the balance sheet. Because the casinos were sold to VICI and leased back, accounting rules treat the lease like a loan. The rent shows up as interest expense ($16.9M this quarter), not as an operating cost. The lease runs through 2038, and rent rises each year by at least 1.25% or by inflation (CPI).
Together these produced $25.9M of interest expense in the quarter: $8.2M on bank loans, $16.9M on the VICI lease and $0.9M of fees and other items. Earnings from operations were $17.2M. Put simply, the casinos make money, but not yet enough to cover what they owe their lenders and landlord. The shareholders' share of equity on the balance sheet is now negative $125.7M (the company owes more than its assets are worth on paper), down from negative $97.7M in December.
The revolving credit line is undrawn, with $30.0M available. That means the leverage covenant (the maximum debt-to-earnings ratio the lenders allow) is not currently being tested. The small Polish bank loans (about $4.9M in total) were out of compliance with their financial covenants at June 30. The bank's remedy is a 0.5-point rate increase, not demanding early repayment.
What the headline numbers hide
- The smaller loss came from below the pre-tax line, not from the casinos. The pre-tax loss actually got slightly worse: $8.7M vs $8.3M. The loss attributable to shareholders narrowed by $1.4M because income tax was $0.6M lower and the share of profit belonging to minority partners (in Canada, Poland and the Nugget's property company) was $1.1M lower.
- One-offs in both years. Q2 2026 includes $1.25M of termination costs for two executives at the Austrian office, recorded in general and administrative expenses. Without it, operating profit would have been about $18.4M. Q2 2025 had a $1.0M "cost recovery" gain at the Century Downs racetrack that did not recur this year. It is part of why non-operating items swung from a $1.0M gain to essentially zero.
- Rent rose faster than profit. Cash rent paid under the Master Lease rose to $17.4M from $14.4M. That includes $1.4M of rent deferred from the Caruthersville project, which the company finished paying back in May 2026. Adjusted EBITDAR minus that cash rent was about $14.3M, down from $15.9M a year earlier. EBITDAR excludes rent by definition, so it looks better than the cash the company actually keeps after paying its landlord. With the catch-up payments finished, rent should settle at about $16M a quarter (the filing estimates $31.7M for the rest of 2026).
- Cash conversion is thin. For the first half, operating cash flow was $7.3M against capital spending of $5.8M, leaving about $1.5M of free cash flow. The company then paid $4.0M to minority partners and $0.9M for buybacks. Operating cash flow was also helped by a $4.7M non-cash add-back for prepaid insurance, while $3.3M of insurance-financing repayments appear under financing instead. Cash fell to $60.2M from $68.9M in December, and working capital (short-term assets minus short-term bills) fell to $15.0M from $35.1M a year earlier. About $25.4M of that cash is held abroad, mostly in Canada.
- Buybacks hurt per-share results. The weighted share count fell 7.8% to 28.2M. When a company is losing money, fewer shares means a larger loss per share. That is why the total loss narrowed 11.4% but the per-share loss narrowed only 2.5%. Buybacks at about $1.49 a share totaled $0.9M in the first half, and no repurchase plan is currently active.
- Controls flag. Management again concluded that disclosure controls were not effective because of a material weakness found at year-end 2025, which concerns the review of assumptions used in impairment testing (checks on whether assets are worth what the books say). A fix is still being designed.
Takeaway: Outside Poland, the casinos are doing better: revenue +4.7% and segment EBITDAR up about 12% ($35.1M vs $31.3M). But Century's problem is how it is financed, not how its casinos are run. With about $26M a quarter of interest and lease costs against $17M of operating profit, small operating gains do not turn into profit for shareholders. What happens to the $332M term loan before it matures in 2029 matters more to the stock than any one region.
Outlook
The 10-Q gives no revenue or profit guidance. What it does lay out:
- A strategic review is under way (started August 2025). It covers a possible sale of the company, mergers, asset sales "including our Poland casinos," and changes to the capital structure. No timetable has been set.
- There is a path to buy back debt at a discount. Under an April 2026 side letter, the debt investor Brigade Capital agreed that if Century holds a "Dutch auction" for its term loan (asking lenders to name the discount at which they would sell their loans back), Brigade will tender up to $50M of principal at a set discount to face value. Brigade also gained a board seat and agreed to a nine-month standstill (a promise not to seek control). A $100M shelf registration, which lets the company sell new shares or debt quickly, became effective in June 2026.
- Alberta opened online sports betting and casino gaming on July 13, 2026. Century plans to offer retail sports betting at its Alberta casinos. The open online market is also new competition for its racetracks and casinos, and its effect will first appear in Q3. Separately, Alberta extended casinos' higher share of slot revenue (17% instead of 15%) through March 2029.
- Remaining 2026 capital spending is about $9.7M, and remaining Master Lease cash rent is about $31.7M.
Our read: the US Midwest and Canada are steadily improving, and the Nugget's gains are real but partly depend on its concert calendar. Poland is now a break-even business that the company has openly said it may sell. For the equity to be worth more, the strategic review needs to produce a transaction that cuts the 9.8%-rate term loan. Strong operating quarters alone will not close a gap of about $35M a year between operating profit and interest at the current run-rate. In the Q3 report (due around early-to-mid November), watch three things: Rocky Gap after a full quarter against Happy Valley, the first effect of Alberta's online launch on Canada, and any news on a term-loan auction or asset sale.