Abstract

Churchill Downs will release its fourth-quarter 2025 results on February 25, 2026, Post Market, with investors watching top-line resilience and margin stabilization amid mixed expectations.

Market Forecast

Consensus and internal projections indicate Churchill Downs’ fourth-quarter 2025 revenue near $658.47 million, implying approximately 6.19% year-over-year growth, with estimated EBIT around $126.68 million and adjusted EPS about $1.03, which points to forecast year-over-year growth of 8.76%. Forecast EBIT implies a year-over-year decline of 9.08%. Net margin guidance implies stabilization with adjusted EPS growth, while gross profit margin directionally hinges on segment mix. The company’s core properties and gaming operations remain the backbone of revenue, with demand supported by steady racing calendars and resilient online wagering activity. The segment with the largest upside appears to be Churchill Downs’ namesake racing venue and related operations, representing $300.00 million last quarter and providing the clearest visibility into attendance and event-led monetization with favorable year-over-year momentum.

Last Quarter Review

Churchill Downs reported fourth-quarter results featuring total revenue of $683.00 million, a gross profit margin of 29.91%, net profit attributable to the parent company of $38.10 million, a net profit margin of 5.58%, and adjusted EPS of $1.09, with revenue growing 8.67% year over year and EPS up 12.37% year over year. Net profit declined quarter over quarter by 82.43%, reflecting seasonality and event timing effects, while the company’s operating leverage supported EPS outperformance versus estimates. The primary business highlight was consistent top-line delivery across core racing and gaming, with the Churchill Downs venue contributing $300.00 million, gaming at $265.00 million, and betting services and solutions at $118.00 million, with positive year-over-year growth led by the racing property’s stable attendance and event mix.

Current Quarter Outlook

Main Business: Core Racing and Gaming

Revenue concentration across the Churchill Downs racing property and casinos sets the tone for the quarter. The calendar supports steady premium race days, while casino floors and regional properties benefit from stable local demand. Gross margin performance will be sensitive to promotional intensity and labor costs, but with last quarter’s gross profit margin at 29.91%, the company has demonstrated discipline in pricing and cost control that can underpin consistent margins through the quarter. Net profit margin at 5.58% last quarter provides a baseline for profitability; if promotional spend moderates and customer mix skews toward higher-yield events, incremental margin expansion is possible. Adjusted EPS guidance of $1.03, up 8.76% year over year, carries the implication that operating costs will remain contained despite lower forecast EBIT, suggesting a careful balance of depreciation, interest, and corporate overhead.

Most Promising Segment: Churchill Downs Racetrack and Related Operations

The Churchill Downs venue, at $300.00 million last quarter, remains the standout for visibility and potential upside. Event-led revenue, sponsorships, and hospitality packages are structurally aligned to drive high incremental margins when attendance and on-site spending rise. Year-over-year revenue growth for the quarter is projected at 6.19%, and this segment should capture a meaningful share given its pricing power and cross-sell opportunities across wagering and experiences. Risks center on weather, event timing overlaps, and discretionary spending trends, but pent-up demand for live experiences and solid partner activation can support mid-single-digit revenue growth while protecting gross margin. The trajectory of adjusted EPS and revenue suggests that the racetrack’s efficiency initiatives and yield management remain intact, improving throughput without aggressive discounting.

Stock Price Drivers: Mix, Margin, and Forecast Credibility

Investors will likely key in on the interplay between segment mix and margin, as the forecast calls for revenue growth but EBIT contraction. A shift toward higher promotional activity in casinos or increased customer acquisition costs in online wagering can compress EBIT even with healthy top-line expansion. Conversely, if the racetrack-led mix proves stronger, the company can defend gross margin given the higher contribution margins of event-driven revenues. The credibility of EPS guidance will hinge on how depreciation and interest expense trend relative to EBIT; steady financing costs and disciplined capex can sustain EPS growth even when operating earnings soften. The market will also watch attendance data and wager volumes as leading indicators, with any sign of weakness likely to be extrapolated quickly into full-year margin assumptions.

Analyst Opinions

Across recent institutional commentary, the majority view is cautiously constructive, highlighting resilient revenue growth and disciplined cost controls while noting a softer EBIT outlook. Analysts emphasize the balance between top-line expansion and margin preservation, arguing that adjusted EPS growth near 8.76% year over year is achievable if the company maintains operating efficiency despite promotional competition. Some views warn of near-term volatility around event schedules and normalization in online wagering spend, but the prevailing stance expects mid-single-digit revenue growth to continue, helped by stable demand in core racing and gaming and early-year event momentum. The tone of coverage frames Churchill Downs as positioned to deliver in-line to modestly above expectations on the top line, with focus on whether management’s guidance for margin stabilization can hold through the quarter.