PENN Posts Record Retail Q2 as Digital Losses Narrow to $9.5 Million

PENN Entertainment (PENN) delivered its best quarter since the collapse of its ESPN Bet partnership, pairing a record retail casino performance with the narrowest digital loss since it entered online sports betting at scale.

The Wyomissing, Pennsylvania-based operator posted adjusted earnings of 44 cents a share for Q2, against a Zacks Investment Research consensus of 35 cents. It swung to net income of $32.6m, or 24 cents per diluted share, from a loss of $18.3m, or 12 cents per diluted share, a year earlier.

Total revenue rose 5.2% to $1.857bn. That landed on top of the Street — Zacks put the revenue surprise at 0.06% — so characterizations of a revenue miss circulating after Thursday’s release do not survive contact with the published estimates.

The more meaningful number was the consolidated adjusted EBITDA of $312.6m, up 32.4% ($76.5 million). Just over two-thirds of that improvement, $52.5m, came from one line: the Interactive segment’s adjusted EBITDA loss shrinking to $9.5m from $62.0m.

Shares closed at $20.13 on Aug. 6, up 2.6%. The stock has gained about 36% in 2026 but remains roughly 10% below its 52-week high of $22.36.

PENN Entertainment Second-Quarter 2026 Results vs. Consensus

Metric	Q2 2025 actual	Q2 2026 actual	YoY change	Q2 2026 consensus	Beat/miss
Total revenue	$1,765.0M	$1,857.4M	+5.2%	~$1,856.3M (Zacks)	In line (+0.06%)
Adjusted EPS	$0.10	$0.44	+340.0%	$0.35 (Zacks)	Beat (+25.7%)
GAAP diluted EPS	$(0.12)	$0.24	Swung to profit	Not tracked	—
Net income (loss)	$(18.3)M	$32.6M	+$50.9M	Not tracked	—
Consolidated adj. EBITDA	$236.1M	$312.6M	+32.4%	Not consistently published	—
Total segment adj. EBITDAR	$392.1M	$475.9M	+21.4%	$454.6M (StockStory)	Beat (+4.7%)
Operating income	$77.5M	$131.7M	+69.9%	Not tracked	—

Sources: PENN Entertainment second-quarter 2026 earnings release and Form 8-K, Exhibit 99.1, filed Aug. 6, 2026; Zacks Investment Research; StockStory. Consensus EPS varied widely by provider: Zacks 35 cents, MarketBeat 37 cents, Investing.com 27 cents, StockStory 26 cents, stockanalysis.com 42 cents. The Zacks revenue consensus is not published as a dollar figure; $1,856.3m is derived from the stated 0.06% surprise. StockStory’s $454.6m estimate is on a pre-rent EBITDAR basis and is therefore compared here with segment-adjusted EBITDAR, not with consolidated adjusted EBITDA, which is reported after rent.

Nine Property Records and a Cost Line That Barely Moved

PENN’s four regional divisions combined for $1.506bn in revenue, a segment record and up 3.9%. Segment adjusted EBITDAR — earnings before interest, taxes, depreciation, amortization, and rent — rose 5.6% to $517.2m, lifting the retail margin about 55 basis points to 34.4%.

PENN’s geographically diverse Retail segment delivered portfolio-wide strength, with nine properties setting second-quarter records for revenues and Adjusted EBITDAR,” Jay Snowden, chief executive officer, said in the earnings release, citing growth in theoretical revenue and “meaningful contributions from mid- and high-worth customer segments.”

The operating leverage beneath that was the real story. 

Total operating expenses rose just 2.3% against 5.2% revenue growth, and operating income expanded 69.9% to $131.7m, pushing the consolidated operating margin to 7.1% from 4.4%.

The West grew fastest at 10.0%, helped by the opening of the hotel tower at M Resort near Las Vegas last December, though offsetting one-time accounting entries in 2025 and 2026 obscure its margin; adjusting for them, Snowden said, “the margins in the West were actually up 10 basis points.” 

The Midwest grew 7.9%, carried by Hollywood Casino Joliet, which opened in August 2025 and has recently been running “75%–80% year-over-year,” he said. The South was flat, with revenue down 0.1%.

Two openings landed inside the quarter: a hotel tower at Hollywood Columbus on June 12 and the relocated Hollywood Casino Aurora on June 24. 

Pre-opening expense jumped to $23.0m from $4.4m, accounting for most of the gap between the reported 24-cent EPS and the adjusted 44-cent figure. 

Snowden said Columbus set an all-time net revenue record in July, and Aurora has been “approximately doubling admissions, slot volumes, table volumes, and non-gaming revenues versus prior year levels.”

Segment Detail, Three Months Ended June 30

Segment	Revenue Q2 2026	Revenue Q2 2025	Rev. change	Adj. EBITDAR Q2 2026	Adj. EBITDAR Q2 2025	EBITDAR change
Northeast	$731.6M	$711.6M	+2.8%	$220.2M	$209.5M	+5.1%
South	$301.9M	$302.2M	(0.1)%	$109.0M	$104.8M	+4.0%
West	$151.5M	$137.7M	+10.0%	$55.0M	$53.5M	+2.8%
Midwest	$320.6M	$297.0M	+7.9%	$133.0M	$121.8M	+9.2%
Retail subtotal	$1,505.6M	$1,448.5M	+3.9%	$517.2M	$489.6M	+5.6%
Interactive (as reported)	$349.4M	$316.1M	+10.5%	$(9.5)M	$(62.0)M	+$52.5M
Interactive, ex-tax gross-up	$163.9M	$178.2M	(8.0)%	—	—	—
Other	$5.6M	$5.7M	(1.8)%	$(31.8)M	$(35.5)M	+$3.7M
Total segment adj. EBITDAR	—	—	—	$475.9M	$392.1M	+21.4%
Less: rent, triple-net leases	—	—	—	$(163.3)M	$(156.0)M	+4.7%
Consolidated adj. EBITDA	—	—	—	$312.6M	$236.1M	+32.4%

Source: PENN Entertainment second-quarter 2026 earnings release. Segment revenues sum to slightly more than consolidated revenue because of intersegment eliminations. Interactive revenue excluding the tax gross-up is calculated from disclosed gross-up amounts of $185.5m in the 2026 quarter and $137.9m in the 2025 quarter.

PENN’s Interactive Swing Is Real, The Revenue Line Is Not

Interactive revenue of $349.4m was up 10.5%, and that figure has been widely reported without qualification. It should not be. It includes a skin tax gross-up — a non-cash grossing-up of revenue for taxes remitted on behalf of PENN’s market-access partners — of $185.5m, against $137.9m a year earlier.

Strip it out, and Interactive revenue fell 8.0%, to $163.9m from $178.2m. The segment’s economics improved sharply; its underlying scale did not.

Management did not dispute the direction. Asked by Barclays analyst Brandt Montour about sportsbook hold, Snowden quantified it:

The quick math, easy math on that is it’s roughly $3 million impact hold for the quarter. We would’ve been closer to a $6.5 million loss had we come in flat year-over-year on hold.”

The rest is cross-sell. “The somewhat softness there is related to the play from our sportsbook app, where people are cross-selling into casino,” he said. 

June was unusually customer-friendly across the NBA Finals and the World Cup. However, the soccer tournament drove engagement: Snowden said roughly 70% of PENN’s sportsbook users placed a World Cup wager, and about 45% of those bet on soccer for the first time.

What worked was casino. The standalone Hollywood iCasino app set a quarterly revenue record, and Ontario — which Snowden called “by a good margin our number one market for OSB” — continued to build. 

Aaron LaBerge, chief operating officer of Interactive, framed the shift bluntly: “Casino, in general, has very attractive CACs, customer acquisition costs, so we’re exploiting that currently.”

Guidance: Retail Up, Digital Revenue Down, Loss Unchanged

PENN does not publish guidance in its earnings release; the figures come from the call and investor deck.

Felicia Hendrix, chief financial officer, raised the retail outlook to a full-year revenue midpoint of $5.87bn and adjusted EBITDAR of $1.963bn, implying 50 basis points of margin improvement in the second half. 

Jefferies analyst David Katz calculated the EBITDAR raise at roughly $31m at the midpoint, about $18m more than the quarter’s own beat — a genuine forward increase rather than a pass-through.

Snowden mapped the second half onto the second quarter:

We beat on revenues 4%, EBITDAR 6% in the second quarter. That’s exactly what we’re guiding to do in the second half of the year as well.”

Interactive went the other way. Hendrix cut full-year Interactive revenue guidance to $1.57bn from $1.60bn, including a gross-up of roughly $830m, up from $820m — so the underlying cut is larger than the headline $30m.

The loss guidance did not move:

We continue to expect an adjusted EBITDA loss of $20 million,” she said, attributing the absorption to labor, technology, and marketing savings.

Her phasing of that loss was the most consequential line on the call: “The third quarter is expected to be the largest quarterly loss of the year given our investment in Alberta, and we expect the fourth quarter Interactive segment adjusted EBITDA to be positive.”

It gets worse before it turns. The full-year $20m loss is roughly the size of the Alberta investment, implying the rest of the digital business is at or near breakeven. 

Snowden capped it with the number the market took away: “We’re on track to deliver more than 20% year-over-year adjusted EBITDA growth this year.”

Capital spending was trimmed, with 2026 project capex cut to $180m from $200m and maintenance held at $220m. Second-quarter capex was $97.5m, down from $159.4m.

Leverage Cut by Nearly a Full Turn

The balance sheet did more work in the first half than the income statement. PENN ended the quarter with $887.2m in cash and total liquidity of $1.9bn. 

Traditional net debt fell to $1.928bn from $2.218bn at year’s end. Lease-adjusted net leverage dropped to 5.9x from 6.8x; traditional net leverage to 2.9x from 4.5x.

In April, PENN refinanced its undrawn $1.0 billion revolver and $446.9 million term loan A to 2031; in May, it extended its term loan B to 2033 and repaid the remaining $106.7m of its 2.75% convertible notes, eliminating about 4.6 million potentially dilutive shares.

PENN Balance Sheet and Leverage

Metric	June 30, 2026	Dec. 31, 2025	Change
Cash and cash equivalents	$887.2M	$686.6M	+$200.6M
Total traditional debt	$2,814.7M	$2,904.1M	−$89.4M
Traditional net debt	$1,927.5M	$2,217.5M	−$290.0M
Lease-adjusted net leverage	5.9x	6.8x	−0.9x
Traditional net leverage	2.9x	4.5x	−1.6x
Total liquidity	$1.9B	—	—

Source: PENN Entertainment second-quarter 2026 earnings release, Selected Financial Information. PENN calculates lease-adjusted net leverage using cash rent payments to REIT landlords capitalized at eight times, added to traditional net debt, over trailing-12-month consolidated adjusted EBITDA plus triple-net rent expense.

Rent expense on triple-net leases was $163.3m, while cash rent paid to REIT landlords was $247.1m.

Snowden set out where the deleveraging goes and made an unusually direct case for the shares. “Share repurchases continue to sound and look very good,” he said. 

“Our free cash flow yield on 2027 consensus is still sitting pretty close to 20%. That doesn’t make sense to me.” No repurchases were disclosed in the quarter.

Alberta, Football, and a Marketing’ Arms Race’

PENN launched theScore Bet alongside standalone theScore Casino and Hollywood iCasino apps in Alberta on July 13, its second Canadian province, at a cost Hendrix put at “approximately $20 million for the year.”

“We’re going into a competitive market, but we’re spending aggressively relative to what we did in Ontario,” LaBerge said. “We hope to have the same and similar market shares to what we enjoy in Ontario.”

The more market-moving commentary concerned football season, when PENN expects prediction-market operators to, for the first time, chase U.S. sports bettors at scale. 

“We anticipated football season being quite the arms race this year,” Snowden said. “We already assumed it was going to be a very aggressive, irrational, marketing spend, advertising, and new customer acquisition approach.” 

He pointed to Michigan, where private operators have recently launched, as evidence that PENN can hold share.

Skill Games and the 2027 Setup

Two regulatory developments sit outside guidance. Snowden said Pennsylvania’s Supreme Court ruling that unregulated skill games are illegal gave the legislature 120 days to write enabling legislation, with a decision due around October; PENN, which has four casinos in the state, has built no benefit into its numbers. 

In Missouri, where the attorney general has been shutting down the machines, he said it is “not by coincidence that our Missouri properties have been performing very well.”

On supply, he made a claim that matters for 2027 and 2028: “We’re not seeing new supply projects that are being built or have even been announced that would likely impact us over the next couple of years.” 

PENN is evaluating three further projects, staged behind Council Bluffs, Iowa, which opens in 2028.

The quarter fits a pattern building since the ESPN Bet write-off in the third quarter of 2025, when PENN took an $825.0m impairment against the Interactive segment.

What the Market Did

The reaction was orderly rather than dramatic. The stock was effectively unchanged in the minutes after the release, then rose through the session. 

Stifel analyst Jeffrey Stantial wrote that “uncertainty on iCasino execution & margin ramp may remain an overhang,” while pointing to PENN’s market share momentum. 

No firm published a price-target change in the 24 hours after the print.

In the round, retail is compounding at roughly 4% revenue and 6% EBITDAR growth, funding everything else.

Interactive is close to self-sustaining, although it may be set to get worse in the third quarter before it turns, and its underlying revenue is still shrinking. 

PENN has bought itself the thing it lacked for three years: the option to be patient.

PENN Entertainment Quarterly Results vs. Consensus, Q1 2025 to Q2 2026

Quarter	Metric	Actual	Consensus	Beat/miss	YoY change
Q2 2026	Net revenue	$1,857.4M	~$1,856.3M (Zacks)	In line (+0.06%)	+5.2%
	Adjusted EPS	$0.44	$0.35 (Zacks)	Beat (+25.7%)	+340.0%
	Adjusted EBITDA	$312.6M	Not consistently published	—	+32.4%
Q1 2026	Net revenue	$1,779.1M	~$1.74–1.75B	Beat (~+2%)	+6.4%
	Adjusted EPS	$0.11	$0.05 (Zacks)	Beat (+120.0%)	Turned positive
	Adjusted EBITDA	$265.8M	Not consistently published	—	+53.4%
Q4 2025	Net revenue	$1,806.2M	~$1.76B	Beat (~+2.6%)	+8.2%
	Adjusted EPS	$0.07	$(0.07) Investing.com; $(0.23) MarketBeat	Beat	Turned positive
	Adjusted EBITDA	$225.8M	Not consistently published	—	—
Q3 2025	Net revenue	$1,717.3M	~$1.73B	Miss (~−0.7%)	+4.8%
	Adjusted EPS	$(0.22)	$(0.05) Investing.com; $(0.10) MarketBeat	Miss	Loss widened
	Adjusted EBITDA	$194.9M	Not consistently published	—	—
Q2 2025	Net revenue	$1,765.0M	~$1.73B	Beat (+1.7%)	+6.1%
	Adjusted EPS	$0.10	$(0.02) Investing.com; $(0.04) MarketBeat	Beat	Turned positive
	Adjusted EBITDA	$236.1M	Not consistently published	—	—
Q1 2025	Net revenue	$1,672.5M	~$1.71B	Miss (~−2.2%)	—
	Adjusted EPS	$(0.25)	$(0.19) Investing.com; $(0.29) MarketBeat	Mixed	—
	Adjusted EBITDA	$173.3M	Not consistently published	—	—

Sources: PENN Entertainment Form 8-K, Exhibit 99.1 filings for each quarter; Zacks Investment Research; MarketBeat; Investing.com. Actuals are adjusted, non-GAAP figures. Consensus EPS estimates diverge materially between providers, so both are shown where they conflict; a single “consensus” figure should not be cited without naming its source. Consolidated adjusted EBITDA is not covered by a consistently published sell-side consensus, so no comparison is offered.