Churchill Downs Posts Record Revenue as Growth Cools
Churchill Downs (CHDN) reported record net revenue of $980 million for the second quarter, up 5% from a year earlier as growth decelerated from the double-digit pace seen in late 2025.
Churchill Downs (CDI) reported second-quarter net revenue of $980 million, an all-time high, up $46 million or 5% from a year earlier. The racetrack and gaming operator's top line has cooled steadily since a 9% YoY gain in the third quarter of 2024 and 7% in the fourth, landing this quarter roughly in line with the 3% growth posted in the first quarter of 2025.
Net income attributable to CDI climbed 11% to $241 million, extending a recovery from a stretch of one-time charges that had depressed results in late 2024. Net income fell 28% in the fourth quarter of 2024 and 42% in the third, both due to impairment and other one-time items, before rebounding 8% in the first quarter of 2025 and 11% this quarter. Diluted earnings per share attributable to CDI rose to $3.42 from $2.99 a year earlier, up from $1.16 in the first quarter and far above the $0.54 and $0.71 prints of the prior two quarters. Adjusted EBITDA reached a record $477 million, up 6% or $26 million, a slower pace than the 11% gain in the third quarter of 2024 or the 5% gain in the first quarter of 2025.
The earnings recovery drew support from outside the racetrack. Interest expense, net fell to $70 million from $75 million, a $4 million after-tax benefit that drove the quarter's earnings growth, the first such breakout in this set of quarters. Equity income from unconsolidated affiliates rose to $41 million from $37 million, adding another $4 million after tax, with strong performance at Rivers Des Plaines in Illinois and Miami Valley Gaming in Ohio.
Live and Historical Racing, the company's largest segment, grew revenue $34 million or 6% to $575 million, powered by a record-breaking Kentucky Derby Week at Churchill Downs Racetrack that added $21 million on its own. Kentucky HRM venues contributed another $12 million, while Virginia HRM added just $1 million, a marked slowdown from the $5 million gain in the first quarter of 2025, $16.1 million in the fourth quarter of 2024 and $30.1 million in the third. The Virginia result masked diverging dynamics within the state: a $5 million gain in Northern Virginia was offset by a $4 million decline in Central Virginia due to rising competition.
The Gaming segment grew revenue just $4 million, or 1.5%, to $270 million, a reversal from the $5 million YoY decline posted in the first quarter but still restrained by the cessation of Louisiana HRM operations, a headwind that has now appeared in three straight quarterly releases. Wagering Services and Solutions fared better, with revenue up $10 million or 6% to $178 million, accelerating from a $2 million increase in the first quarter, as record Derby Week wagering contributed $9 million of the gain versus retail sports betting driving the prior quarter's growth. The All Other segment's Adjusted EBITDA loss widened to $26 million from $21 million due to reduced corporate legal-fee credits and captive-insurance claim development. New Hampshire operations also weighed on results, with Adjusted EBITDA down $2 million as the company closed its temporary Casino Salem venue during construction tied to its $180 million-to-$200 million Rockingham Grand Casino investment, a reversal from the $1 million net increase reported in the first quarter.
Kentucky Derby Week set viewership records, with peak audience of 24.4 million, up 12% from a year earlier, and average viewership of 19.6 million, up 11%. The Kentucky Oaks aired in primetime for the first time, drawing 2.4 million viewers alongside record all-sources wagering.
Net bank leverage improved to 3.7 times at quarter's end, down from 3.8 times at the close of the first quarter and 4.1 times at the end of both the third and fourth quarters of 2024. Churchill Downs made no share repurchases during the quarter, continuing the pause from the first quarter after buying back $341 million in stock during all of 2024, including $53.5 million in the third quarter alone. The company's April 21 agreement to acquire the Preakness Stakes and Black-Eyed Susan Stakes intellectual property for $85 million from 1/ST Maryland, disclosed in the first-quarter release, went unmentioned in this quarter's highlights.