Penn Entertainment Q4 Revenue Remains Stable despite Negative Factors

The company’s revenue for the quarter reached $1.59 billion, a modest 0.8% year-on-year increase. However, several notable metrics, like earnings per share, fell short of Wall Street’s estimates, while rising interest rates negatively impacted expenses. Despite the stagnating results, Penn Entertainment’s management remained optimistic for 2023, relying on its expansion efforts and strong momentum.

Management Remained Confident despite Mixed Metrics

Penn Entertainment’s overall results can be summed up as stable but unimpressive. The quarter’s $20.8 million net income was significantly lower than 2021’s $44.8 million for the same period. Adjusted EBITDA, on the other hand, scored substantially better, rising by 19% year-over-year to $438.3 million. Profits of 13 cents per share fell short of Wall Street’s forecasted $0.33 per share for an overall mixed result.

While the $1.59 billion in revenue is in line with projections, the Federal Reserve’s aggressive interest rate hikes added $60 million to Penn Entertainment’s quarterly interest expense, offsetting much of the company’s profits. The stagnation sharply contrasts Q3’s 8% revenue growth, but company officials insisted that matters were still well in hand.

2022 was a solid year for Penn despite ongoing macroeconomic headwinds.

Jay Snowden, Penn Entertainment CEO, and President

According to CEO Snowden, the company’s overall strategy remained sound and would lead to future dividends thanks to database growth and improved customer engagement. Penn’s interactive segment performed surprisingly well, recording a $5.2 million profit despite unfavorable factors. Such solid results can be just the bump in momentum the company needs heading into 2023.

The Company Has Gathered Significant Momentum

The quarter’s mixed results did not douse Penn’s optimism for the coming year. The operator had successful launches in several new markets, which are already paying dividends. According to Snowden, the company’s successes in Kansas and Maryland laid the groundwork for its stellar entry into Ohio.

Our deep customer database, retail footprint, and powerful Barstool Sports marketing engine contributed to a record number of first-time depositors at launch.

Jay Snowden, Penn Entertainment CEO, and President

The newly opened Ohio market is quickly proving to be a goldmine for operators, surpassing established markets like New York. As the initial rush to market settles down, Penn should be in a perfect position to leverage its Barstool brand and cement its substantial market share in the state. The company’s full-year revenue for 2022 should fall between $6.15 billion to $6.58 billion, providing a powerful launching-off point for future growth.