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Record wagering and strategic expansion power a standout quarter for CDI.
Churchill Downs Incorporated (CDI) posted a solid 5% year-on-year increase in net revenue, reaching $934.4 million in Q2 2025. Net income rose 4% to $216.9 million, while adjusted EBITDA climbed 1% to $450.9 million, a strong showing driven by growth in racing, wagering, and live events.
Live and historical racing leads the way
Racing operations break records and broaden reach.
The Live and Historical Racing (HRM) segment once again spearheaded the quarter’s success, generating $540.9 million in revenue, up 10.3% year-over-year. This surge was supported by several key developments:
- The November 2024 launch of The Rose facility in Northern Virginia.
- Expanded operations at CDI’s HRM venues in Kentucky.
- Continued momentum from Churchill Downs Racetrack, highlighted by record wagering and licensing during Derby Week, even as ticket sales dipped.
Derby Week proved pivotal. Media coverage for the 151st Kentucky Derby averaged 17.7 million viewers (a 6% increase), peaking at 21.8 million (up 8%), underscoring the event’s growing cultural reach.
Wagering services see steady growth
TwinSpires and betting operations boost segment performance.
Wagering Services revenue rose 5.3% to $168.4 million, reflecting strong engagement from TwinSpires and new historical racing machine (HRM) installations in Virginia and New Hampshire. Segment EBITDA also increased by $1.8 million to $48.0 million, showing consistent demand and operational efficiency.
Gaming segment faces challenges
Casino operations decline but remain stable.
The Gaming segment posted a 3% revenue decline to $266.3 million, largely due to the closure of HRM operations in Louisiana and lower contributions from Terre Haute Casino Resort. Adjusted EBITDA dropped 9.5% to $127.3 million, pointing to softer demand in specific markets.
Worth noting: Louisiana recently passed a fixed‑odds horse racing bill, a move tied to regional regulation of CDI assets—including those recently closed. Read more about this shift in Louisiana approves fixed‑odds horse racing bill as Churchill Downs threatens exit.
Share buybacks highlight capital discipline
Quarterly repurchases and leverage goals shape strategy.
CDI repurchased over 2.5 million shares during Q2, returning $250.4 million to shareholders. On 22 July, the board approved a new $500 million buyback program, further emphasising capital allocation discipline. The company ended the quarter with net bank leverage of 4.2x, balancing return strategies with financial prudence.
Strategic expansion: casino salem acquisition
New acquisition boosts Northeast charitable gaming presence.
Churchill Downs is expanding its footprint through a $180 million agreement to acquire 90% of Casino Salem in New Hampshire. This move strengthens its presence in the Northeast charitable gaming sector and aligns with its regional growth strategy.
Tax law tailwinds enhance profitability
Depreciation rules provide improved cash flow.
Recent U.S. tax legislation reinstating 100% bonus depreciation is set to reduce CDI’s cash tax obligations for the year. This policy shift supports enhanced free cash flow, which can potentially fund future growth or additional shareholder returns.
What’s next for CDI?
Looking ahead to operational growth and financial returns.
- Facility expansions: Projects like The Rose and New England installations are expected to yield further HRM revenue in H2.
- Casino Salem integration: Completion and performance tracking of the acquisition will be key in the coming months.
- Shareholder returns vs growth investment: The company’s approach to balancing capex with its new $500 million buyback program will be a focus.
- Derby Week 2026: Media and wagering performance next year will be a key measure of CDI’s reach and engagement.
Churchill Downs delivered a diversified and resilient quarter, anchored by record wagering and media success during Derby Week, solid HRM growth, and disciplined financial strategy. With impactful expansions and balanced returns to shareholders, CDI appears well-positioned as it heads into the back half of 2025.
Source: Gambling Insider
