Las Vegas Sands Corp. (LVS) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Sands Second Quarter 2026 Earnings Call. [Operator Instructions] It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at Sands. Sir, the floor is yours.

Thank you, Paul. Joining the call today are Patrick Dumont, our Chairman and Chief Executive Officer; Dr. Wilfred Wong, Executive Vice Chairman of Sands China; and Grant Chum, CEO and President of Sands China; and EVP of Asia Operations. Today's conference call will contain forward-looking statements. We will be making those statements under the safe harbor provision of federal securities laws. The language on forward-looking statements included in our press release also applies to our comments made on the call today. The company's actual results may differ materially from the results reflected in those forward-looking statements. In addition, we'll discuss non-GAAP measures. Reconciliations to the most comparable GAAP financial measure are included in our press release. We have posted an earnings presentation on our website. We will refer to that presentation during the call. Finally, for the Q&A session, we ask those with interest to please pose one question and one follow-up question so we might allow everyone with interest the opportunity to participate. This presentation is being recorded. I'll now turn the call over to Patrick.

Good afternoon, everyone, and thank you for joining the call. I just want to start off by saying our strategic priorities remain clear and consistent. We will continue to invest with discipline with the fundamental objective of creating meaningful shareholder returns over the long-term. Turning to our current quarter. We again delivered strong financial results at Marina Bay Sands in Singapore, generating EBITDA of $689 million for the quarter. If we had held as expected in our rolling play, our EBITDA would have been $37 million lower or $652 million. That performance was achieved despite the seasonally softer tourism demand that exists in both Singapore and Macau in the second quarter of each calendar year. There's another factor to note. It was a decrease in visitation to both Marina Bay Sands and our Macau properties by our high-value patrons during the World Cup football tournament. It was very noticeable in June given the trajectory of the businesses in both markets earlier in the quarter. Despite these headwinds, mass gaming revenues of Marina Bay Sands grew 5% for the quarter compared to the second quarter of 2025, which highlights the resilience and underlying strength of the business. Singapore remains an ideal market for high-value tourism spending, and our focus on creating unique and memorable entertainment and hospitality experiences for our guests continues to generate outstanding financial performance. Our results this quarter reinforce our view that Marina Bay Sands structural earnings power has been elevated following our significant product investments, suite renovations, service enhancements and the successful execution of our premium customer strategy. We remain confident that our market-leading product, service and focus on driving high-value tourism will enable us to create unrivaled hospitality experiences for the world's most discerning customers and deliver additional growth at Marina Bay Sands in the years ahead. As I shared last quarter, the company's fundamental operating strategy relies on 3 critical pillars: our people, our product and our service. When we get these 3 pillars optimized as we have at Marina Bay Sands, we are positioned to drive high-value tourism to the market and to create outstanding financial and operating performance. We remain excited about the growth opportunity presented by the Marina Bay Sands expansion. The expansion will meaningfully increase our premium suite capacity, service and entertainment offerings, including the debut of a state-of-the-art arena envisioned to be the finest in Asia. We remain on track with the development process and look forward to opening the expansion early in 2031, subject to the required government approvals. Now let's turn to Macau. Our $430 million in EBITDA for the quarter was negatively impacted by the exceptionally low VIP rolling hold of 1.35% for the quarter. If we had held as expected in our rolling play, our EBITDA would have been $87 million higher or $517 million for the quarter. The actions that we have taken to improve our service levels and the customer experience are clearly achieving some early success. We are encouraged by our progress during the second quarter. Sands China's growth in gaming volumes meaningfully exceeded the growth in gaming volumes in the Macau market overall. When compared to the second quarter of 2025, we delivered strong growth in gaming volumes in all segments. Our rolling volume was up 73% year-over-year. Our non-rolling drop was up 15% year-over-year, and our slot and ETG handle was up 30% year-over-year. Sands China's mass gross gaming revenue grew 8% for the quarter year-over-year, twice as fast as the overall market's 4% mass GGR growth for the quarter. Sands China's total GGR grew by 4% for the quarter compared to the second quarter of 2025, while the Macau market's total gross gaming revenue was flat for the quarter. If we had held as expected in our rolling play, Sands China's total GGR growth would have been 14% year-over-year. Sands China's VIP rolling chip volume share reached a market-leading 26% in the quarter. Turning to our reinvestment strategy. We have been optimizing reinvestment levels since the beginning of the year. I wanted to highlight our approach to reinvestment has remained consistent over the last several quarters. Our approach has not changed. If you look at the metrics, reinvestment as a percentage of revenue did increase during this quarter. The increase as a percentage of revenue was driven by changes in business mix and lower hold percentage on our non-rolling play. Our goal is to continue to remain consistent with our reinvestment strategy going forward and to achieve greater profitability as revenues grow in the future. With respect to operating expenses, we have elected over the last year to invest in additional table operating hours, increased sales, marketing and customer service personnel and enhanced levels of customer service. The increased investment in operating expenses related to our efforts should begin to level off in the second half of 2026. These investments are critical to the achievement of our long-term objectives of being able to service our customers to the highest standards as we create unique and memorable hospitality experiences for our guests. We remain steadfast in our belief that successful execution of our initiatives will support growth in both revenue and profitability over time. The growth in the Macau market remains primarily driven by the premium segment. The competition in that segment remains intense and luxurious suite product, coupled with outstanding service levels are critical to success. We remain singularly focused today on matching that suite and room product with the service levels that the most discerning and valuable customers in Macau increasingly demand. We retain our goal of reaching $700 million in quarterly EBITDA and beyond over time as we fully implement our investment and operating strategies and as the Macau market grows in the future. I want to turn to the product pillar in Macau. As I highlighted last quarter, we are focused on investing in the highest return projects over the next 3 years in order to create the best opportunities to increase cash flow. Renovation of the Venetian rooms and suites commenced in March and work is progressing. While we have some product coming back into inventory across the work period, our target is to have all 2,900 rooms and suites completely refurbished and reintroduced by Chinese New Year 2028. We will also introduce new premium focused gaming salons and related amenities as a component of the Venetian investment program. The meaningful patron volume growth we have seen at the Londoner and Grand Suites at Four Seasons provide support for these investments. It's important to note that the work renovation division will not create significant disruption throughout the portfolio. The scale of our portfolio will allow us to serve customers in other properties and elsewhere in each resort, while work is in progress. Nothing we are doing as we invest in the portfolio over the next several years will hinder our ability to use our scale advantages to outperform in the non-premium segment should spending in that segment accelerate in the future. We will use our scale advantage and product advantage together with service level improvements and targeted incentives to effectively compete in every market. We expect growth in EBITDA and EBITDA margins as revenues grow over time. Turning to our program to return capital to shareholders. We repurchased $787 million of LVS stock during the quarter. We also paid our recurring quarterly dividend of $0.30 per share. We have now repurchased 16.3% of the company's outstanding shares over the last 11 quarters. Our Board of Directors recently increased our repurchase authorization to $6 billion. We believe additional repurchases of LVS equity through our share repurchase program will be meaningfully accretive to the company and its shareholders over the long-term. While we did not purchase any additional shares of SCL during this quarter, we do continue to see value in both the LVS and SCL names. The company's ownership of SCL remained at 74.8% as of June 30, 2026. We look forward to continuing to utilize the company's share repurchase program to increase returns to shareholders. Thanks again for joining the call today and for your interest in the company. Now let's take some questions.

[Operator Instructions] And the first question today is coming from Lizzie Dove from Goldman Sachs.

I wanted to ask as it relates to performance, whether it be in Macau or Singapore, kind of, I guess, hard to kind of parse it out, but how much of it you think is kind of macro or consumer-driven to the extent there was also maybe some World Cup impact versus just execution or kind of missteps or investment needed in the property. There's probably a lot to unpack there, but any kind of details on that would be helpful.

Yes, sure. First off, I just want to start out by saying this quarter doesn't represent the true earnings power of our properties at SCL. Hold had an impact, World Cup had an impact. You mentioned investment for growth in the future. If you look at some of the things we've invested in recently, Londoner Grand, Londoner Court, what we've done at the Grand Suites at Four Seasons, the customers are there and the productivity is there, the product is right and the service is right. So we feel like our investment programs position us well for future growth. This quarter was not what we wanted to see. But when you think about the $517 million given the whole normalization, we feel pretty good about where we're headed given the growth in volumes across all segments. To me, that's just a signal of the effect that the new service model is taking that we're now able to service the highest level of patrons at a higher level. And so while we didn't get the hold that we wanted this quarter, the volumes were there, the visitation was there. And even the World Cup had an impact, we felt like we're headed in the right direction.

The market was tracking very well in Macau in April and May. And SCL, our gaming volumes were very strong. In fact, May was an all-time high for us in SCL in terms of monthly mass GGR. June was clearly softer, and there was some impact from World Cup. But as we look overall for the quarter, we see very strong underlying trends across all of our different gaming segments. VIP rolling segment, we were gaining share significantly during the quarter, up 73% year-over-year, whilst the market was flattish. In terms of our table games and non-rolling, we were impacted somewhat by the lower hold percentage, especially in June. And then in slot and ETG, we clearly outperformed the market with 21% revenue growth for the quarter. So overall, if you take account of the lower hold percentage in non-rolling and the business mix, we're able to achieve gains in every segment in the market share year-over-year and remain consistent in terms of market share sequentially with a very similar reinvestment levels once you adjust for those whole percentage factors in business mix sequentially.

And I do want to come back to MBS as well. I just want to highlight that this was an incredibly powerful quarter in several of our segments. But the key is we were impacted by World Cup there as well given the high-value nature of our patrons. And I think as we look to that asset in the future, we see a very strong market, very strong visitation. And for us, we're going to continue to invest there because we see the long-term potential of growth in Singapore, given what we see today.

Got it. And just a follow-up on that, and maybe just to stick with Macau for a second. I appreciate you said this is not where you want to be or could be. And I know in the past, you talked about $700 million in quarterly EBITDA. Last quarter, then $600 million came into the mix. And now I guess this is maybe a bit of a onetime quarter, but closer to $500 million on a hold adjusted basis. And so I know you don't give guidance, but is anything you're seeing in the market or on a company-specific basis changing how you think about what that right run rate is for Macau at least over the next kind of year or 2?

No. I think our target is still the $700 million. I think historically, what we've always seen is that 2Q has always been our softest quarter. And so we talked about that on our last earnings call that this quarter had some seasonality built into it. And so we saw that here. But I also think that if we held better, we'd be having a little bit of a different discussion in certain things. So I think for us, we look to the progress we're making in the market. If you sort of look at the growth that we've had year-over-year, if you look at the fact that we did this through the World Cup cycle, I think there's some positive things there that we look to. And I think our goal is still the $700 million. And I think we have some work to do to get there, but we feel like the process in place for us to keep working to head in that direction. We know what we need to do.

The next question will be from Dan Politzer from JPMorgan.

First, I want to touch on Singapore. Obviously, you talked a bit about World Cup and seasonality there. Given where the property is, and I think we're kind of anniversarying that first big quarter there, do you feel like you're at a place where the property maybe reverts back to historical seasonality? And broadly, just in terms of the seasonality discussion, can you just remind us of how you think about it for Macau as well while we're on the topic?

Yes, sure. I think what we said before is the big step function in growth in Singapore was the switch from the suite product from the room product. So we went from 135 suites to 770. And so that was the step function in terms of our product pillar to be able to accommodate the substantial growth that you saw in run rate. We also added a significant service component. So credit to the team there for revamping our service model, adding food and beverage. And of course, very importantly, the service levels on the casino floor as well as some of the novel games as well as just the overall presentation. So all those things came to bear that allowed us to have the growth that you saw. Now the growth is going to be based on yielding and more incremental growth as we continue to invest in the property that's there. So there are still things that we're doing that we think will create growth over time, particularly in patron types that are higher value. But I think for us, looking forward in Singapore, it's going to be about continuing to serve these customers. We have a very strong base there. And visitation matters for the highest end customers, particularly at the highest end it is concentrated. We've talked about that before. And whether it's World Cup or other things, some of those people weren't in the building this quarter. And when they show up, we do incredibly well. And when we play favorably, we -- our margins look like extraordinary. And when some of those people don't show up in scale and they don't play in high volume and don't hold very well, our margins can look less. So -- but we're heading in the right direction. I don't know that there's a gaming business that grows forward in the straight line. And I'd like to believe that this business is heading in the right direction. And to be fair, we're also seeing the benefit of a lot of wealth creation in Southeast Asia. So we feel very good about the long-term prospects of both our investment and the trajectory of the business there.

Got it. And then I suppose on Macau, just talking a little bit more about that $500 million quarterly EBITDA run rate and kind of the path to getting there. Can you maybe give a sense of the capital or the time frame, the capital that you have to still commit or the time frame that you think is reasonable to kind of to get to that level? Obviously, this quarter wasn't ideal, but how should we think about kind of the path forward towards that $700 million?

So I think first off, this quarter was impacted with seasonality. We talked about that. We see it. There was the World Cup impact that we just mentioned. But I also think for us, as we continue to invest and get higher-value patron fulfilling inventory, we'll be able to grow our market share and grow our revenues. And so for us, this is what we talked about. We talked about a multiyear investment strategy as we updated our portfolio there and invested for the highest value premium mass segments that we do really well in. That's a very deep part of our database. And so nothing's changed from our strategy, from our approach and from the time lines that we talked about before. Grant, I don't know if there's anything else you want to add.

I think in terms of capital projects, we have still a long way to go in terms of ramping up Londoner. It's done very well so far. As you can see, both Londoner and Four Seasons, we are -- even for this quarter, we're above where we were in 2019 on a normalized basis. So that's a very positive evidence of how these product upgrades can drive the revenue growth and market share gains. Secondly, we are very focused on the upcoming completion of the Venetian renovation, which would take us all the way, as Patrick referenced, to early 2028, but we should start to see the benefits of those new suites as we progressively get more critical mass of new suites throughout 2027. And certainly, by the end of that, we're going to have a completely new hotel in I think what is still an amazing property for people to visit, but with an entirely upgraded refreshed product, both in hotel and also in parts of the premium gaming sections.

The next question will be from Shaun Kelley from Bank of America.

Patrick or Grant, maybe just a comment on sort of the nature of the growth in the premium segment you're seeing in Macau. This is pretty significant hold volatility we're seeing at some of the properties. And just kind of curious if this is going to be the nature of the market a little bit moving forward, just given concentration in a smaller and smaller set of customers or if there's a little bit of an outlier and really want to chalk it up a little bit more to that just in terms of activity and maybe the concentration of what you saw driving this kind of hold volatility because we tend to think for LVS in particular, sort of averages out across a much bigger base of business. Clearly, we didn't see that this quarter.

So I think what's really important is we have product at service now that allows us to attract the most important patrons in both markets. That's a big step. The good news is sometimes we get that play in Singapore, sometimes we get that play in Macau. Sometimes we get it in both. Sometimes we have a lot of it. Sometimes we have less of it. Sometimes when we have less of it, the volatility works against us given the number of decisions and the bet size and the volatility during the quarter of measurement. The good news is we take this business and over time, it really works in our favor. This is the largest hold adjustment we've ever had in the history of Macau. And the good news is it happened after the pandemic at a time when a lot of people thought high-level VIP play wouldn't show up in Macau, and now we're earning it. So over time, we believe that things will -- there's an old expression, right? The gate of luck swings both ways. And we like to believe that over time, by taking this play and providing the right service and keeping these patrons playing with us over time, that we'll be more successful. And so the play is very concentrated. The other thing is for some of these patrons, we tend to think about it across both of our properties, right? Do we have the right amount of offsetting play across our entire portfolio of properties. So for us, I think the important thing is the most discerning patrons want to stay with us and play high volumes with us. Bad thing is we got beat really bad this quarter. And we actually got beat on the mass side, too. There's a belief in gaming that goes back a long time that when customers play lucky, they continue to strengthen their bond and relationship with you because over time, they'll eventually lose. And so I think for us, customers winning is an investment in future marketing and gives us the ability to retain high-value customers over time. This quarter didn't work in our favor. Hopefully, in the future, it will.

Want to add to that. I think the fact, Shaun, if you look at both VIP rolling and the premium mass segment, we have gained significant amount of market share at that very top end given all of the strategies we've deployed since May of last year. So yes, there's no secret. We have done huge gains in VIP segment against a flat market this quarter. We've come from a position where we were #4 in the rolling segment a year ago, and now we're #1 with 26% volume share. And part of that share gain is coming from the super VIP segment, where we've also been very successful in the Marina Bay Sands property. So that's the VIP segment. And then in terms of the premium mass, we all keep saying that the Macau growth is driven by the premium segment in the current environment. And within that, yes, there is some very high-end premium mass play, which is available to capture, and we've been capturing more than a fair share of that in the last 6 months. And unfortunately, for this quarter, the luck just didn't play our way, but we are gaining the customers. We're gaining the volume, and they will be back, and we'll -- the luck will even out in the end.

Perfect. And then as my follow-up, maybe just a quick high-level one on sort of -- Patrick, I think you mentioned the run rate and the investments being made on the operating expense side in Macau. Just a quick thought on Singapore. Is this a general good run rate as we're expecting to see a little bit more of an incremental gains on the top line? Will that be matched relatively closely with sort of investments on the bottom line? Or just how is the operating run rate -- operating expense looking there?

So first off, we're really happy with the 50% EBITDA margin at Marina Bay Sands. And we have a fixed cost base there that's really focused on providing the highest levels of service. We can do really, really well with more visitation from high-value patrons and their play. We can also see higher margins when we have higher volumes from those patrons and things happen to go our way on the gaming tables. So in quarters past, we've seen higher margins because we had a lot of great play, and that play was favorable. Look, in the long run, we're really happy to make these investments to attract and keep our highest levels of patrons. We're going to continue to invest in things necessary to support great experiences for our patrons really at the highest levels. And look, sometimes from time to time, some of these customers require provisions, sometimes they require some promo. But as a practical matter, we -- this is a great business, and we believe in the margin structure over time. And just broadly, we believe that we have a significant opportunity to continue to invest and optimize and grow as we have given the strong customer interest that we have and just the growing amount of patrons that we see coming out of Southeast Asia that are high-value tourists that want to go to Singapore. So we're going to continue investing behind this thesis for the long-term.

The next question will be from Stephen Grambling from Morgan Stanley.

I just want to go back to that to make sure I understood it correctly. So I think that your promo was down sequentially, still up year-over-year. Is it down sequentially predominantly because of the World Cup and maybe those customers not showing up and they tend to require higher reinvestment. So we haven't quite seen a change in the promotional environment yet? Or has it even potentially ratcheted up? Just curious if there's any kind of way to dig into that and what you're seeing in the competitive environment.

Stephen, just to clarify, in Macau, our reinvestment level sequentially remained flat. So second quarter versus first quarter when we adjust for the hold percentage and the difference in business mix. Year-over-year, we see obviously a higher level of reinvestment because we only started to adopt a more aggressive reinvestment strategy to adjust to the market in the second half of last year.

Right. But you have the World Cup in there, which I imagine if you're not having some people that require higher reinvestment, maybe that would suggest that perhaps it's even ticking up sequentially just as we think about the underlying. So are you seeing any change in the competitive dynamic if you kind of pull back the onion a bit?

There's no change in either our approach or the reinvestment levels when you look at it sequentially. And as we have been doing since the start of the year, we're looking to optimize the level of reinvestment into all of these customer ADT segments -- and what we're finding as we were successful in the first quarter is that we're able to adjust some of those reinvestment levels and still achieve the market share gain. So as we look into the second half, we'll continue that process of optimization, and we aim to achieve a higher level of gross margin from this higher level of revenues.

The next question will be from Robin Farley from UBS.

I want to go back to a comment that you made during the call where you said that reinvestment would level off in the second half. And just wanted to make sure that I'm understanding that correctly, leveling off, meaning it will be flat year-over-year or that the rate of increase in the second half would be about the same rate of increase year-over-year we saw in the first half and not a higher rate of increase.

Just to clarify, Robin, there are 2 different topics here. One is the reinvestment and the other is the operating expenses. So for reinvestment, -- what we're looking to do is to continue to optimize the reinvestment percentage as a proportion of actual revenue, and that process has started since the beginning of the year. We've had some success in this, and we'll continue that into the second half. In terms of Patrick's comments on operating expenses, we have had some OpEx growth during the first half of 2026, but we do expect the rate of OpEx growth to moderate into the second half. We've been investing in the table operating hours in the sales network distribution and also in the service elevation. But the big step change in those investments has largely happened and what we expect into the second half into 2027 is a more moderate rate of OpEx growth, and we should, therefore, be able to achieve some operating leverage on the EBITDA margin as revenues grow.

And is that saying that the second half rate of increase in OpEx will be similar to the first half?

I mean it will be lower.

I just wanted to clarify what leveling off, just to make sure I understood. And then can you talk a little bit about -- I mean, I don't want to get too focused on like the very immediate term, but obviously, the World Cup, you've talked about that impacting visitation. Are you seeing bounce back pent-up demand? Or is it just back to normal levels? In other words, are you seeing a clear sign that, that was just during the World Cup and how things look now versus that period?

I do want to point out the final was on Sunday. So I'm not really sure yet how we think about it. I will tell you that this was quite an unbelievable sporting event. The level of success of the World Cup in the U.S. is really, really remarkable. I think the earnings that they generated were a record. I think the attendance might have been record. I think the involvement with the broader field really captured a global phenomenon. And it was something that I think a lot of people went to. And unfortunately, a lot of our high-value patrons are followers or a lot of the players and a lot of the teams with representation in the World Cup had -- are from countries that participated, and it just drove a lot of tourism away from our 2 core markets, our 2 markets. And so we're obviously very optimistic about the long-term, but also we think our patrons want to come back to doing what they're doing. So we look forward to seeing them back in our properties, looking forward to seeing them back in our markets, and we'll go from there. But it's a little early to tell you about any snapback given that everything ended only a few days ago.

The next question will be from Brandt Montour from Barclays.

The mass drop stat that you guys gave 15% in the quarter, would you be willing to break that out by month in the quarter?

I'm sorry, I couldn't hear the question. Could you say that again, please?

Sorry about that. So mass table drop in the quarter was up 15%. You highlighted that, Patrick, in your prepared remarks. Would you be willing to break that out by month just so we can get a sense of how your performance was trending Sands -- sorry, ex hold before World Cup started?

Yes. I would just say we typically don't do that. But just directionally, we were impacted in June.

Okay. And then in your slides, you have a slide about the Macau Airport passenger volume. It took a big step back in the second quarter, more in line with last second quarter, right? This is -- we know it's a seasonally weak quarter. But the first quarter this year had a big step-up unlike prior years. And so it almost would seem like that capacity had taken a structurally higher step-up since COVID. Just curious if -- when you talk to your partners or your contacts in the Transportation division, is that temporary? Is that seasonal? Do you expect it to sort of rebound? Is there something that you think drove that?