Gaming and hospitality company Boyd Gaming (NYSE: BYD) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 4.5% year on year to $1.00 billion. Its non-GAAP profit of $1.72 per share was 5.8% above analysts’ consensus estimates.

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Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "During the third quarter, our Company continued to achieve revenue and Adjusted EBITDAR growth after adjusting for our recent FanDuel transaction. These results were driven by year-over-year growth in play from our core customers, improving trends in play from our retail customers, our efficient operations, and our ongoing capital investment program. As a result, we saw healthy growth in gaming revenues across all three property operating segments during the quarter. At the same time, we continued our balanced approach to capital allocation, returning $175 million to shareholders during the quarter while maintaining the strongest balance sheet in our Company's history. In all, we are encouraged by the strength of our business and remain well-positioned to continue creating long-term value for our shareholders."

Company Overview

Run by the Boyd family, Boyd Gaming (NYSE: BYD) is a diversified operator of gaming entertainment properties across the United States, offering casino games, hotel accommodations, and dining.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Boyd Gaming grew its sales at a 11.4% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Boyd Gaming’s recent performance shows its demand has slowed as its annualized revenue growth of 4.8% over the last two years was below its five-year trend. Note that COVID hurt Boyd Gaming’s business in 2020 and part of 2021, and it bounced back in a big way thereafter.

We can better understand the company’s revenue dynamics by analyzing its most important segments, Gaming and Non-Gaming, which are 65.5% and 16.5% of revenue. Over the last two years, Boyd Gaming’s Gaming revenue (casino games) was flat while its Non-Gaming revenue (hotel, food, beverage) averaged 8.5% year-on-year growth.

This quarter, Boyd Gaming reported modest year-on-year revenue growth of 4.5% but beat Wall Street’s estimates by 15.7%.

Looking ahead, sell-side analysts expect revenue to decline by 12.6% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and implies its products and services will see some demand headwinds.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Boyd Gaming’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 21% over the last two years. This profitability was top-notch for a consumer discretionary business, showing it’s an well-run company with an efficient cost structure.

In Q3, Boyd Gaming generated an operating margin profit margin of 13.9%, down 9 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Boyd Gaming’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q3, Boyd Gaming reported adjusted EPS of $1.72, up from $1.52 in the same quarter last year. This print beat analysts’ estimates by 5.8%. Over the next 12 months, Wall Street expects Boyd Gaming’s full-year EPS of $7.17 to grow 9.1%.

Key Takeaways from Boyd Gaming’s Q3 Results

We were impressed by how significantly Boyd Gaming blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock remained flattish immediately following the results.

So should you invest in Boyd Gaming right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.