Churchill Downs Incorporated (CDI) is a leading U.S. entertainment enterprise focused on horse racing, online wagering, and general gaming activities. Its extensive ...
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Operator: Ladies and gentlemen, and welcome to the Churchill Downs Inc. 2026 Second Quarter Earnings Conference Call. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Sam Ullrich, Vice President, Investor Relations. Sam Ullrich: Thank you, Andrew. Good morning, and welcome to our second quarter 2026 earnings conference call. After the company's prepared remarks, we will open the call for your questions. The company's 2026 second quarter business results were released yesterday afternoon. A copy of this release announcing results and other financial and statistical information about the period to be presented in this conference call, including information required by Regulation G, is available at the section of the company's website titled News, located at churchilldownsincorporated.com as well as in the website's Investors section. Before we get started, I would like to remind you that some of the statements that we make today may include forward-looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and related announcements and the risk factors included in our filings with the SEC, specifically the most recent reports on Form 10-Q and Form 10-K. Any forward-looking statements that we make are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in yesterday's earnings press release. The press release and Form 10-Q are available on our website at churchilldownsincorporated.com. And now I'll turn the call over to our Chief Executive Officer, Mr. Bill Carstanjen. William C. Carstanjen: Thanks, Sam. Good morning, everyone. Joining me today are Bill Mudd, our President and Chief Operating Officer; Marcia Dall, our Chief Financial Officer; and Brad Blackwell, our General Counsel. I will begin with highlights from our record second quarter performance in Kentucky Derby. I will then provide an update on our major development projects and our strategic plans. Marcia will follow with more detail on our financial results and capital management strategy, and then we will take your questions. First, regarding our second quarter results. We delivered all-time record net revenue of $980 million and all-time record adjusted EBITDA of $477 million. This marks the sixth consecutive record second quarter for both metrics. At the end of April, we began a week-long celebration leading up to the 152nd running of the Kentucky Derby on Saturday, May 2. We made several enhancements that expanded the reach and value of our iconic event. We added Sunday Racing on April 26. With …
| Metric | Latest | YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength. | QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes. |
|---|---|---|---|
| The total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three). |
| Name | Title | Compensation | Gender | Year Born | Status |
|---|---|---|---|---|---|
William C. Carstanjen | Chief Executive Officer & Director | USD 7,729,459 | Male | 1968 | Active |
William E. Mudd | President & Chief Operating Officer |
| USD 3,394,742 |
| Male |
| 1971 |
| Active |
Marcia Ann Dall | Executive Vice President & Chief Financial Officer | USD 2,358,819 | Female | 1964 | Active |
Bradley K. Blackwell | Executive Vice President, General Counsel & Secretary | USD 1,784,991 | Male | 1972 | Active |
Michael W. Anderson | Senior Vice President & President of Churchill Downs Racetrack | USD 229,181 | Male | 1971 | Active |
Jason Sauer | Senior Vice President of Corporate Development | — | Male | — | Active |
Jon E. Rauch | Vice President & Chief Accounting Officer | — | Male | — | Active |
Nate Simon | Senior Vice President & Chief Technology Officer | — | Male | — | Active |
Katherine Armstrong | Senior Vice President of Human Resources | — | Female | — | Active |
Sam Ullrich | Vice President of Investor Relations | — | — | — | Active |
$0.44 per share
$0.44 per share
| $2.9B |
| +7.0% |
| +47.8% |
| Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day. | $379.7M | -11.0% | +197.5% |
| Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials. | +33.6% | -2.2% | +226.6% |
| Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on). | +25.2% | -2.9% | +67.7% |
| Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales. | +13.0% | -16.9% | +101.3% |
| Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock. | $309.6M | +37.2% | — |
| FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine. | +10.6% | +28.2% | — |
| Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe. | 514.7% | +13.5% | — |
| Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking. | 0.60x | +6.9% | — |
| Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground. | $7.5B | +2.9% | — |
| Metric | Annual (A vs E) | Annual Surprise | Quarter (A vs E) | Quarter Surprise |
|---|---|---|---|---|
| EPS Surprise | — | — | — | — |
| Revenue Surprise | — | — | — | — |
| Date | Executive | Title | Security | Side | Shares | Price |
|---|---|---|---|---|---|---|
| Jun 30, 2026 | GRISSOM DOUGLAS C | director | Common Stock | A | 383 | — |
| Apr 21, 2026 | Rankin Richard Alex | director | Common Stock | A | 2,257 | — |
| Apr 21, 2026 | HARRINGTON DANIEL P | director | Common Stock | A | 0 | — |
| Apr 21, 2026 | HARRINGTON DANIEL P | director | Common Stock | A | 2,257 | — |
| Apr 21, 2026 | GRISSOM DOUGLAS C | director | Common Stock | A | 2,257 | — |
