CZR — Q2 2026 Financial Report Analysis

Caesars Entertainment grew second-quarter 2026 net revenue 3.0% to $2.99 billion, but the growth came almost entirely from its regional casinos (+$135 million, against +$86 million for the company as a whole), where the newly consolidated Caesars Windsor in Ontario and a tournament-driven bump in northern Nevada did the work. Las Vegas, its most profitable business, went the other way: revenue fell 3.5% and segment Adjusted EBITDA fell 12.6% on fewer leisure visitors, softer room rates and an unusually unlucky quarter at the tables. Operating income slipped 2.5% to $513 million, still not enough to cover $573 million of interest, and Caesars stayed loss-making at the bottom line (a $62 million net loss, or $0.30 a share). The quarter also arrived under a pending sale: on May 27, 2026 Caesars agreed to be taken private by Tilman Fertitta's Fertitta Gaming for $31.00 per share in cash, which shareholders approved on September 22.

At a glance

• $2,993 million revenue, +3.0% — growth was Regional (+$135 million); Las Vegas (-$37 million) and the hotel-management business (-$17 million, partly because Windsor moved out of it) shrank.
• $573 million of interest vs $513 million of operating income — the business still does not earn enough before financing costs to pay its lenders and landlords, which is why a profitable-looking casino operator reports a net loss.
• $31.00 cash per share — the Fertitta deal is approved by shareholders but now faces an FTC "Second Request" (an extended antitrust review), which typically adds months to the timetable.

The numbers

Adjusted EBITDA is the company's preferred profit measure: earnings before interest, taxes, depreciation and amortization, also excluding stock compensation, transaction costs and some other items. It is useful for comparing casino operators, but for Caesars it leaves out the single biggest cost — interest and lease-financing payments — so it flatters what is left for shareholders.

For the first half, revenue rose 2.8% to $5,863 million, operating income was flat at $1,013 million ($1,014 million a year earlier), Adjusted EBITDA fell 1.7% to $1,807 million, and the net loss attributable to Caesars narrowed to $160 million (-$0.78 per share) from $197 million (-$0.93).

Segment by segment

Prior-year margin in brackets.

Las Vegas: weaker visitation plus bad luck at the tables. The 10-Q attributes the decline "primarily" to "lower city-wide leisure customer visitation resulting in decreased non-gaming revenues, lower hotel occupancy and compressed hotel rates." Hotel revenue fell 9.0% to $315 million, occupancy slipped to 95.5% from 96.8%, and food and beverage fell 4.0%. On the casino floor, table games "drop" (the cash and chips customers bring to the tables) fell 4.6% to $706 million, and "hold" (the share of that the casino keeps) dropped to 16.6% from 21.1%. Hold swings with luck from quarter to quarter; by our arithmetic, at last year's 21.1% hold the same drop would have produced roughly $32 million more table revenue, so a meaningful slice of the $59 million EBITDA decline is variance rather than demand. Not all of it, though: slot handle rose 5.4%, but hotel and dining — the parts of a Las Vegas resort that track how many tourists show up — fell on their own.

Regional: growth, but largely bought and borrowed. Regional revenue rose $135 million (+9.4%) and Adjusted EBITDA $49 million (+11.2%). Management names three drivers: the consolidation of Caesars Windsor from March 3, 2026 (Caesars took over operating it under a 20-year agreement with Ontario's lottery corporation, paying about $54 million for its equipment and working capital and leasing the building for about $19 million a year), extra visitors in northern Nevada from "a national tournament throughout the second quarter," and returns on recent investments in Lake Tahoe and New Orleans. The filing does not split out Windsor's contribution, so the organic growth rate cannot be stated. Table hold also helped here (22.3% vs 20.8%). Margin barely moved (31.1% vs 30.6%) despite the higher revenue, which the 10-Q puts down to "increased labor costs and gaming taxes."

Caesars Digital: revenue up, profit down on taxes. Online sports betting and iGaming (online casino games) revenue rose just 2.3% to $351 million. Sports betting handle (total amount wagered) rose 2.9% to $2.57 billion and iGaming handle 2.7% to $4.83 billion, but sportsbook hold fell to 8.4% from 8.9%. Adjusted EBITDA fell 15.0% to $68 million, which management attributes "primarily" to "increased gaming tax rates on sports betting wagers and iGaming in certain states, combined with lower sports betting hold." Promotional incentives counted against digital revenue rose to $78 million from $72 million. The first half looks better — Digital EBITDA up 11.4% to $137 million on 11.0% iGaming handle growth — so the second quarter shows how quickly a state tax increase can absorb the segment's growth.

Managed and Branded revenue fell 23.0%, largely mechanical: reimbursable management revenue (payroll Caesars pays on behalf of managed properties and gets back dollar for dollar) fell to $37 million from $55 million after Windsor moved into the Regional segment.

What the headline numbers hide

• The narrower loss is a tax swing, not better operations. Pre-tax loss was essentially unchanged at $53 million vs $52 million. The $20 million improvement in the loss attributable to Caesars came from an income tax benefit of $12 million versus a $13 million charge a year ago, partly offset by $4 million more profit going to minority partners ($21 million vs $17 million).
• Interest still eats the whole operating profit. Net interest expense was $573 million against $513 million of operating income. That interest covers both conventional debt ($11.8 billion face value at June 30) and $13.2 billion of "long-term financing obligations" — mostly leases on casinos Caesars sold to VICI and GLPI and rents back, which are accounted for like debt. Interest fell only 1.0% year on year, "primarily due to a reduction in outstanding debt and lower variable rate interest expense," partly offset by higher lease-related interest. About 51% of long-term debt is floating-rate (weighted average 5.87%; fixed-rate debt averages 6.18%).
• The GAAP-to-adjusted gap is about $1.0 billion a quarter. Going from the $62 million net loss to $920 million of Adjusted EBITDA adds back $573 million of interest, $355 million of depreciation, $29 million of transaction and other costs, $23 million of stock compensation and the $21 million minority-interest share, net of the $12 million tax benefit and $7 million of other income. The interest and depreciation add-backs are real, recurring costs for this business.
• One-offs cut both ways. "Transaction and other costs" fell to $16 million from $34 million, because last year included non-recurring litigation reserves; this year includes $10 million of costs tied to the pending merger.
• Cash conversion is fine. First-half operating cash flow was $675 million (vs $680 million) against a $124 million net loss, because depreciation ($702 million) is a non-cash charge. Capital spending fell to $335 million from $453 million, leaving roughly $340 million of cash after capex by our arithmetic, plus $98 million spent on asset acquisitions. Debt repayments exceeded new borrowing by $98 million.
• Per-share figures got help from last year's buybacks. Diluted shares averaged 204 million vs 209 million, after Caesars repurchased about 4.2 million shares for $100 million in Q2 2025. There were no buybacks in 2026 and, because of the merger, "no share repurchases are expected at this time."
• Corporate costs are rising. Corporate and Other Adjusted EBITDA was -$62 million vs -$50 million; General and administrative expense rose 9.2%, which the filing ties to Windsor and "higher property taxes resulting from the expiration of certain property tax credits."

The Fertitta deal and what shareholders get

Under the merger agreement, each Caesars share converts into $31.00 in cash, plus a "ticking fee" of $0.00715 per share per day if the deal has not closed by June 26, 2027 (counted from the first day of the following month). The Carano family's Recreational Enterprises, which owns about 5% of the stock, is rolling part of its stake into the buyer. At the September 22 special meeting, 133.3 million shares voted for the deal — about 65.4% of the 203.8 million shares outstanding at the record date.

What remains is regulatory: the HSR antitrust waiting period and state gaming approvals. On September 14 the FTC issued a Second Request, which extends the waiting period until 30 days after both companies substantially comply. The agreement's initial outside date is May 27, 2027, automatically extended to August 27, 2027 and then November 27, 2027 if only regulatory approvals are outstanding. If the deal fails on antitrust or gaming-law grounds, or runs out the clock with only regulatory approvals missing, Fertitta owes Caesars a $450 million reverse termination fee; Caesars would owe $200 million if it later took a competing offer under certain conditions. Separately, Icahn Group's two board designees, Jesse Lynn and Ted Papapostolou, resigned on September 16.

Takeaway: Caesars' operating business earned $513 million in the quarter and paid $573 million to lenders and landlords, so shareholders' payoff now depends far more on the Fertitta deal closing at $31.00 than on any single quarter's casino results. The open question is regulatory: the FTC's Second Request means a closing well into 2027 is plausible.

Outlook

Caesars gave no earnings guidance in the 10-Q. Its stated priorities for the rest of 2026 are servicing debt (about $425 million of principal and interest for the remainder of the year) and rent to VICI and GLPI (about $687 million), with remaining 2026 capital spending of $310–390 million. Liquidity stood at $2.93 billion (cash plus available revolver capacity), and Caesars was in compliance with its loan covenants.

Our read: the Regional segment should keep showing growth through the third quarter, because Windsor was consolidated only from March 3, 2026 and is not yet in the year-ago figures. Las Vegas is the swing factor. Hold should revert toward normal, but the 10-Q's explanation — fewer leisure visitors, lower occupancy and room rates — is a demand problem that luck at the tables won't fix. In Digital, the second quarter showed that state tax increases can wipe out handle growth; watch whether its margin recovers toward the first half's 18.9%. The Q3 2026 10-Q is due around late October (Q1 and Q2 were both filed on the 28th of the month after quarter-end). For the stock, though, the FTC review timeline will likely matter more than the quarter itself.