Churchill Downs Incorporated reported first‑quarter 2026 results that surpassed consensus expectations, with revenue of $663 million and net income of $83 million. GAAP diluted earnings per share were $1.16, while adjusted diluted EPS reached $1.21, both exceeding the consensus estimate of $1.03 and the revenue forecast of $659.32 million.
The Live and Historical Racing segment drove the growth, reporting revenue of $301 million—up $24 million from the prior year—and adjusted EBITDA of $113 million, an increase of $11 million or 11%. Kentucky, Virginia, and New Hampshire HRM venues were the primary contributors, with Kentucky HRMs adding more than $9 million (17%) and Virginia adding $3 million (6%) to adjusted EBITDA.
Compared with Q1 2025, net income fell 6% to $77 million, but adjusted EPS rose 18.6% to $1.21 from $1.02. The company’s GAAP EPS of $1.16 also beat the prior‑year figure of $1.02, reflecting stronger pricing power and cost control in the racing portfolio.
Management highlighted the results in a statement: "We delivered a strong start to the year with record first quarter net revenues of $663 million and record adjusted EBITDA of $257 million. These results reflect strong execution across our portfolio and continued momentum with our growth strategy." CEO William C. Carstanjen also noted the successful opening of the Marshall Yards venue in Calvert City, Kentucky, and the acquisition of the Preakness Stakes intellectual property rights. CFO Marcia Dall added that the quarter generated $276 million or $3.94 per share of free cash flow, ending at a bank covenant net leverage of 3.9x.
Margin analysis shows the adjusted EBITDA margin expanded to 38.8% from 38.1% in Q1 2025, driven by the high‑margin HRM mix and operational efficiencies. The company’s focus on expanding its HRM footprint and launching new gaming products, such as roulette electronic table games based on historical races, supports continued margin growth.
Headwinds include competitive pressures in the gaming segment and weather‑related disruptions, while tailwinds are the strong performance of HRM venues, the strategic acquisition of the Preakness Stakes IP, and planned investment of $180‑$200 million in the Rockingham Grand Casino, positioning Churchill Downs for sustained growth.
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