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Churchill: 2023 Adjusted Earnings Reach $1 Billion

Churchill Downs Inc. reports record revenue and adjusted earnings for 2023.

The twin spires at Churchill Downs racetrack

The twin spires at Churchill Downs racetrack

Coady Photo

Citing a successful Kentucky Derby week as one of the highlights of the year, Churchill Downs Inc. reported record adjusted earnings and record net revenue for 2023 in its report of business results for the full year released Feb. 21.

In the release posted after trading concluded Wednesday, CDI said adjusted EBITDA earnings reached a record $1 billion. The company said those earnings are up 34% compared with 2022. The company also reported record net revenue of $2.5 billion, up 36% compared with the prior year.

The company did report a 5% decline in net income, which reached $417 million for the year.

In its Wednesday filing, CDI reported that the record adjusted earnings and revenue were tied to its expansion of historical horse racing in Virginia, continued success and expansion of those games in Kentucky, as well as a strong Derby week performance. The company was negatively impacted by the shortened Churchill Downs spring meeting, which after some equine safety concerns at the Louisville, Ky., track was moved to Ellis Park for the final weeks.

The company reported: "Revenue for 2023 increased $438.2 million driven by a $313.9 million increase attributable to the Virginia properties acquired in the P2E (Peninsula Pacific Entertainment) Transaction, a $41.2 million increase in Northern Kentucky primarily due to the opening of Turfway Park in September 2022, a $36.4 million increase attributable to properties acquired in the Ellis Park and Chasers Transactions, a $20.7 million increase due to a record-breaking Derby week at Churchill Downs Racetrack, a $19.2 million increase due to growth from our Derby City Gaming property and the opening of Derby City Gaming Downtown in December 2023 in Louisville, Ky., and a $16.5 million increase from our Oak Grove property in Southwestern Kentucky. These increases were partially offset by a $9.7 million decrease for non-Derby-week racing operations primarily due to the decision to move a portion of the Churchill Downs Racetrack spring meet to Ellis Park."

CDI also reported a strong year for its TwinSpires segment that includes its advanced-deposit wagering operation of the same name. The company said the segment enjoyed a $19.1 million increase in revenue tied to the August purchase of Exacta Systems, a leading provider of HHR technology. The segment also saw a $5.3 million increase in business-to-business strategy associated with United Tote fees, and a $1.8 million increase in all other horse racing revenue primarily driven by increased handle from a higher-wagering volume customer base. But these gains were partially offset by lower retail horse racing handle due to industry race day cancellations and the previously referenced move of the final Churchill Downs weeks of the spring meet to Ellis.

The company also reported that fourth quarter revenue increased $54.4 million compared to the final quarter of 2022 and adjusted earnings increased $27.7 million from the year prior quarter. It attributed those gains primarily to the success of the Virginia and Kentucky HHR properties.