The Short Take:
- Total company-wide revenue at MGM increased year-over-year by 7% in the third quarter
- The Casino revenue segment jumped by over 14%, the largest percentage increase of any of MGM’s five operating segments
- The 14% increase in Casino revenue represents an additional $182 million in Casino revenue compared to the third quarter of 2017
When MGM Resorts reported third quarter earnings on October 30, we saw that total net revenues came in at $3 billion, a year-over-year increase of 7%. In this article we’ll dig deeper into the revenue segments that make up MGM’s total revenue.
Before we continue, we should note that MGM Springfield opened its doors during the third quarter. Springfield’s revenue (totaling $42.5 million) is included in the third quarter of 2018 but not in comparable data for the third quarter of 2017.
MGM has five revenue segments, and each represents a core operating function within the company. The five MGM revenue segments are Casino, Rooms, Food & Beverage, Entertainment & Retail and Reimbursed Costs.
By far, the largest revenue segment is Casino. This segment’s third quarter revenue totaled $1.465 billion. The Casino segment represents 48.4% of the company’s total revenue.
The second largest revenue segment for MGM is Rooms. Their hotel room business generated $566 million in the quarter, equating to 18.7% of total revenues.
Food & Beverage generated $520 million in revenue, or 17.2% of total revenue. Entertainment & Retail contributed 12.2% of revenues with $370 million in sales for the quarter. Finally, the Reimbursed Costs segment accounted for 3.5% of revenue with $106 million.
The two charts below detail the five revenue segments. The first chart shows the revenue per segment and the second chart shows the contribution of each segment to MGM’s total revenue.
Earlier, we mentioned that MGM’s total net revenue increased by 7%, or $199 million, for the third quarter compared to the same quarter in 2017. The Casino segment more than doubled that pace. Casino revenue increased 14.2%in the quarter relative to the third quarter of 2017. That growth rate is by far the highest among MGM’s five revenue segments. The Casino segment’s 14.2% growth was fueled by an increase of $182 million in casino revenues which is the bulk of the bulk of the $199 million increase in the company’s total revenue.
Food & Beverage revenue had decent growth as well, relatively speaking. Food and Beverage revenue increased 3.4%, or $17 million, in the quarter. Entertainment & Retail had a marginal growth rate of 1.1% with an increase in sales of $4 million compared to Q3 2017.
The Rooms segment was the only operating segment to post a year-over-year decrease. The $566.3 million in room revenue in the third quarter was about $6.7 million less than the same quarter in 2017. This equates to a 1.2% drop.
Here’s a look at the year-over-year growth rates for MGM’s five operating revenue segments:
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