Penn Entertainment, Inc. (PENN) reported a mixed financial performance for the second quarter of 2025, with solid results from its retail properties but challenges in its Interactive division. The company achieved $1.4 billion in retail revenue for the quarter, which matched expectations and was a notable increase of 6% over the same period in 2024. This performance, however, was overshadowed by an adjusted EBITDA loss of $62 million from the Interactive segment, which includes sports betting and iCasino.

CEO Jay Snowden noted that the company had made significant strides with its omnichannel strategy, leveraging both retail and online offerings to deliver steady growth. The combination of online sports betting and iCasino generated record gaming revenue, supported by product enhancements and the expanding ESPN Bet ecosystem. This continued innovation is part of Penn’s long-term strategy to enhance its digital footprint and integrate sports betting into its broader platform, a crucial aspect of its future growth.

Retail Operations Continue to Perform Well

As stated in the company’s press release, Penn’s retail operations remained stable during the quarter, driven by solid consumer demand, especially in regions unaffected by new competition. The company’s adjusted EBITDAR for retail properties stood at $489.6 million, representing a margin of 33.8%. The company’s growth in these markets was highlighted by a 4% year-over-year revenue increase in areas not impacted by new supply. Moreover, Penn’s omnichannel engagement strategy continued to bear fruit, with an 8% year-over-year increase in online-to-retail player count and a 28% rise in theoretical revenue.

Notably, Penn’s retail casinos saw positive trends across all customer segments, with increased visitation and higher spend per visit. As part of its long-term strategy to strengthen its retail position, Penn is also expanding its footprint with the upcoming launch of the new Hollywood Casino in Joliet, Illinois, which will open ahead of schedule on August 11, 2025. This new development is expected to further solidify Penn’s standing in the competitive regional gaming market.

While retail operations showed resilience, the Interactive segment, which encompasses online sports betting and iCasino, faced hurdles during the quarter. The segment recorded $316.1 million in revenue, but adjusted EBITDA losses amounted to $62 million. This marks an improvement from last year’s larger losses, but still reflects ongoing challenges.

Penn has made considerable investments in its digital offerings, particularly in its ESPN Bet platform, which continues to expand its reach. The platform’s standalone Hollywood iCasino app, for example, has seen over 70% of its gaming revenue come from new, retail-native, or reactivated users. Additionally, the company has enhanced its ESPN Bet offering with features like Player Insights, aimed at providing a more engaging experience for bettors.

Despite these improvements, the company still faces significant obstacles in the competitive sports betting landscape. Penn’s interactive business is not yet profitable and remains in a transition phase, with additional work needed to turn it into a consistent revenue driver.

Share Repurchase Program and Financial Position

Penn Entertainment continues to focus on returning value to shareholders. In the second quarter of 2025, the company repurchased 5.8 million shares for $90.3 million, continuing its aggressive share buyback strategy. As of August 6, 2025, Penn had repurchased $115.3 million worth of shares and is on track to meet its goal of $350 million in repurchases for the year.

The company’s liquidity position remains robust, with total cash and cash equivalents of $671.6 million as of June 30, 2025. Penn’s net debt stands at $2.1 billion, and the company’s total liquidity, including cash, is $1.2 billion, providing a solid foundation for future investments and operational needs.

Looking ahead, Penn Entertainment is optimistic about its prospects despite the mixed results in Q2. The company remains committed to its interactive segment’s future growth, with a focus on further integrating ESPN Bet into the ESPN ecosystem. Penn’s partnership with ESPN continues to evolve, particularly with the upcoming launch of FanCenter, which allows bettors to wager on their favorite teams and players directly through the platform.

Furthermore, Penn’s strategic focus on its core retail properties, along with continued investment in new developments, is expected to drive future growth. The Hollywood Casino Joliet opening is just one example of the company’s commitment to expanding its physical presence in key regional markets.

Snowden also highlighted that macroeconomic factors, particularly employment levels, have a strong correlation with Penn’s performance. With strong employment and stable consumer confidence, Penn is positioned to continue benefiting from favorable economic conditions. Although some external factors, such as energy prices and consumer spending, can affect the business, Snowden remains confident that Penn’s diversified portfolio and strong retail presence will help the company weather any potential challenges.