Golden Nugget Online Gaming, Inc.

Revenue for Q1 2021 was $26.7 million, up 54% from $17.3 million in Q1 2020. Net income was $69.6 million, but that included non-cash gains of $81.1 million from warrant derivatives and $1.3 million from a tax receivable agreement liability, partly offset by $2.2 million of debt extinguishment costs, including $0.6 million of non-cash interest expense tied to accelerated amortization. Management did not give next-quarter or full-year revenue/EPS guidance on the call. Instead, it highlighted state expansion momentum, saying it had added Colorado and Iowa access and expected to announce more states in the coming weeks and months; Tilman Fertitta also said Michigan could reach positive EBITDA in roughly 24 months and referenced profitability in the latter part of 2022, though no formal company guidance was issued.

Tilman Fertitta struck an upbeat tone, saying the quarter increased confidence in what the company can become as it expands geographically and scales. He emphasized that the business has the right assets, people, and execution, and said the Golden Nugget brand gives it a strategic advantage because customers already know the name in new markets. He also repeatedly framed the strategy around eventual profitability and EBITDA generation, especially in Michigan.

Mike Harwell focused on the reported financials and the accounting items behind the bottom line. He said Q1 revenue was $26.7 million versus $17.3 million a year earlier, and net income was $69.6 million due largely to non-cash gains on warrant derivatives ($81.1 million) and a tax receivable agreement liability ($1.3 million). He also noted $2.2 million of debt extinguishment costs, including $0.6 million of non-cash interest expense from accelerated amortization related to repayment of $10.6 million of term loan debt.

Analysts focused on state rollout economics, asking whether new markets were proving as competitive and expensive as expected. Thomas Winter said Michigan had no major surprises, that revenue ramped faster than expected, churn was lower than New Jersey, and customer acquisition cost was lower than in New Jersey despite fast market growth. On incremental state access, he said iGaming states should deliver similar ROI to New Jersey, with tax rate the main difference, and on the live dealer studio he said the company is nearing capacity, will expand from 18 to 33 tables, and already has six brands using the studio with 10 to 12 of the new tables likely pre-booked.