CDI reports record net revenue during Q1 2025, but net income falls 5%

Churchill Downs Incorporated (CDI) has reported its financial results throughout the first quarter of 2025, including a record net revenue of $642.6m despite the company’s net income having decreased by 5% year-over-year. 

The reported all-time high in net revenue represented an increase of 9% from the prior year period, while adjusted EBITDA was also able to generate growth year-over-year, increasing by 1% to report a record $245.1m. Net income was reported to be $76.7m throughout Q1 2025, over $3m lower than the total reported during the first quarter of 2024. 

Net revenue was primarily driven by the Live and Historical Racing and Gaming segments, which generated $272.5m and $263.2 of revenue throughout Q1 2025, respectively, representing increases of 11.2% and 10% year-over-year. Wagering Services and Solutions accounted for the remaining $106.9m produced during the first quarter of 2025, equating to an increase of approximately $300k when compared to the prior year period. 

The decrease in net income may be attributed to a rise in operating expenses, with the total having grown to $508m during Q1 2025, over $40m higher than operating expenses reported throughout the first quarter of 2024. However, operating income managed to increase by 6.6% year-over-year for a total of $134.6m for Q1 2025. 

CDI launched its Owensboro Racing and Gaming property in Western Kentucky during February 2025, including 600 historical racing machines, a retail sportsbook and simulcast wagering. In March 2025, the CDI Board of Directors approved a new $500m share repurchase program, leading to the repurchasing of $89.4m worth of shares throughout the first quarter of 2025. 

The company stated increases in revenue for its Live and Historical Racing segment could be attributed to an $18.2m increase at Virginia HRM venues, an $8.9m increase from Kentucky HRM venues and a $0.4m increase from other Live and Historical Racing properties. The Virginia HRM increase of $18.2m was primarily due to the November 2024 opening of The Rose Gaming Resort in northern Virginia. 

Good to know: Churchill Downs Racetrack officially agreed to a multi-year partnership renewal with Ford Motor Company on March 19 to continue serving as the exclusive automotive partner of the Kentucky Derby through 2029

For the company’s Gaming segment, the rise in Q1 2025 revenue was due to a $31.6m increase from the April 2024 opening of the Terre Haute Casino Resort, partially offset by a $7.6m decrease caused by regional gaming softness, increased competition, one less day in the quarter due to the 2024 leap year and the impact of weather at certain properties.

Live and Historical Racing represented $102m of CDI’s total adjusted EBITDA throughout the first quarter of 2025, while Gaming and Wagering Services and Solutions contributed another $123.5m and $41.3m, respectively. 

Across the Live and Historical Racing segment, historical racing accounted for the vast majority of revenue reported for Q1 2025 by generating $212.1m throughout the period, while Live and Simulcast Racing represented $79.8m of Wagering Services and Solutions’ total revenue during the period. 

According to CDI, the fall in net income could also be attributed to a $6.7m after-tax decrease in other recoveries, a $3m after-tax decrease in equity income from its unconsolidated affiliates and a $2m increase in interest expense.

Kirk Geller

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