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Good day, ladies and gentlemen, and welcome to the Sands Second Quarter 26 Earnings Call. At this time, participants have been placed on a listen-only mode. We will open the floor for your questions and comments following the presentation.
Is now my pleasure to turn the floor over to Mr. Daniel J. Briggs, Senior Vice President of Investor Relations at Sands. Sir, the floor is yours.
Thank you, Paul. Joining the call today are Patrick Dumont, Our Chairman and Chief Executive Officer; Dr. Wilfred Wong, Executive Vice Chairman of Sans China and Grant Chum, CEO and President of Sands China and EVP of Asia Operations. Today's conference call will contain forward looking statements.
We will be making those statements under the safe harbor provision of federal securities laws. The language on forward looking statements included in our press release also applies to our comments made on the call today. Company's actual results may differ materially from the results reflected in those forward looking statements.
In addition, we will discuss non GAAP measures. Reconciliations to the most comparable GAAP financial measure are included in our press release. We have posted an earnings presentation on our website.
We will refer to that presentation during the call. Finally, for the Q&A session, we ask those with interest to please post 1 question and 1 follow-up question so we might allow everyone with interest the opportunity to participate. This presentation is being recorded.
I will now turn the call over to Patrick Dumont.
Afternoon, everyone, and thank you for joining the call. I want to start off by saying our strategic priorities remain clear and consistent. We will continue to invest with discipline, with the fundamental objective of creating meaningful shareholder returns over the long term.
Turning to our current quarter, we again delivered strong financial results at Marina Bay Sands in Singapore. Generating EBITDA of $689 million for the quarter. If we had held as expected in a rolling play, our EBITDA would have been $37 million lower or $652 million performance was achieved despite the seasonally softer tourism demand that exists in both Singapore and Macau, the second quarter of each calendar year. there is another factor to note.
There was a decrease in visitation to both Marina Bay Sands and our Macau properties by our high value patrons during the World Cup football tournament. Was very noticeable in June given the trajectory of the businesses in both markets earlier in the quarter. Despite these headwinds, mass gaming revenues of Marina Bay Sands grew 5% for the quarter, compared to the second quarter of 25.
Which highlights the resilience and underlying strength of the business. Singapore remains an ideal market for high value tourism spending. And our focus on creating unique and memorable entertainment and hospitality experiences for our guests continues to generate outstanding financial performance.
Our results this quarter reinforce our view that Marina Bay Sands' structural earnings power has been elevated following our significant product investments, suite renovations, service enhancements, and the successful execution of our premium customer strategy. We remain confident that our market leading product, service, and focus on driving high value tourism will enable us to create unrivaled hospitality experiences for the world's most discerning customers and deliver additional growth at Marina Bay Sands in the years ahead. As I shared last quarter, the company's fundamental operating strategy relies on 3 critical pillars.
Our people, our product, and our service. When we get these 3 pillars optimized as we have in Marina Bay Sands, we are positioned to drive high value tourism to the market and to create outstanding financial and operating performance. We remain excited about the growth opportunity presented by the Marina Bay Sands expansion.
The expansion will meaningfully increase our premium suite capacity service and entertainment offerings, including the debut of a state of the art arena envisioned to be the finest in Asia. We remain on track with the development process and look forward to opening the expansion early 2031. Subject to the required government approvals.
Now let's turn to Macau. Our $430 million in EBITDA for the quarter was negatively impacted by the exceptionally low VIP rolling hold of 1.35% for the quarter. If we had held as expected in our rolling play, our EBITDA would have been $87 million higher or $517 million for the quarter.
The actions that we have taken to improve our service levels and the customer experience are clearly achieving some early success. We are encouraged by our progress during the second quarter. Franchise growth in gaming volumes meaningfully exceeded the growth in gaming volumes in the Macau market overall.
When compared to the second quarter of 25, we delivered strong growth in gaming volumes in all segments, Our rolling volume was up 73% year over year. Our non rolling drop was up 15% year over year. And our slot and ETG handle was up 30% year over year.
Sands China's mass gross gaming revenue grew 8% for the quarter, year over year, twice as fast as the overall market's 4% mass GGR growth for the quarter. Sands China total GGR grew by 4% for the quarter, compared to second quarter of 25, while the Macau market's total gross gaming revenue was flat for the quarter. If we had held as expected in our rolling play, Sands China's total GGR growth would have been 14% year over year.
Sands China's VIP rolling chip volume share reached a market leading 26% in the quarter. Turning to our reinvestment strategy. We have been optimizing reinvestment levels since the beginning of the year.
I wanted to highlight our approach to reinvestment has remained consistent over the last several quarters, Our approach has not changed. If you look at the metrics, reinvestment as a percentage of revenue did increase during this quarter. The increase as a percentage of revenue was driven by changes in business mix, and lower hold percentage on our non rolling play.
Our goal is to continue to remain consistent with our reinvestment strategy going forward and to achieve greater profitability as revenues grow in the future. With respect to operating expenses, we have elected over the last year to invest in additional table operating hours, increase sales, marketing and customer service personnel, and enhance levels of customer service. The increased investment in operating expenses related to our efforts should begin to level off in the second half of 26.
These investments are critical to the achievement of our long term objectives of being able to service our customers to the highest standards and to create unique and memorable hospitality experiences for our guests. We remain steadfast in our belief that success successful execution of our initiatives will support growth in both revenue and profitability over time. The growth in the Macau market remains primarily driven by the premium segment.
The competition in that segment remains intense. And luxurious suite product coupled with outstanding service levels are critical to success. We remain singularly focused today on matching that suite and room product with the service levels the most discerning and valuable customers in Macau increasingly demand.
We retain our goal of reaching $700 million in quarterly EBITDA, and beyond over time. As we fully implement our investment and operating strategies and as the Macau market grows in the future. I want to turn to the product pillar of Macao.
As I highlighted last quarter, we are focused on investing in the highest return projects over the next 3 years, in order to create the best opportunities to increase cash flow. Renovation of the Venetian rooms and suites commenced in March, and work is progressing. While we have some product coming back into inventory across the work period, our target is to have all 2.9 thousand rooms and suites completely refurbished and reintroduced by Chinese New Year 28.
We will also introduce new premium focused gaming salons and related amenities as a component of the Venetian investment program. The meaningful patron volume growth we have seen in The Londoner and Grand Suites at 4 Seasons provide support for these investments. it is important to note that the work at The Venetian will not create significant disruption throughout the portfolio. The scale of our portfolio will allow us to serve customers and other properties and elsewhere in each resort.
While work is in progress. Nothing we are doing as we invest in the portfolio over the next several years will hinder our ability to use our scale advantages to outperform in the non premium segment should spending in that segment accelerate in the future. We will use our scale advantage and product advantage together with service level improvements and targeted incentives, to effectively compete in every market.
We expect growth in EBITDA and EBITDA margins as revenues grow over time. Turning to our program to return capital to shareholders. We repurchased $787 million of LVS stock during the quarter.
We also paid our recurring quarterly dividend of $0.30 per share. We have now repurchased 16.3% of the company's outstanding shares over the last 11 quarters. Our Board of Directors recently increased our repurchase authorization to $6 billion.
We believe additional repurchases of LVS equity through our share repurchase program will be meaningfully accretive to the company and its shareholders over the long term. While we did not purchase any additional shares of SCL during this quarter, we do continue to see value in both the LVS and SCL names. The company's ownership of SCL remained at 74.8%, as of 6/30/2026.
We look forward to continuing to utilize the company's share repurchase program to increase returns to shareholders. Thanks again for joining the call today and for your interest in the company. Now let's take some questions.
Thank you. Ladies and gentlemen, the floor is now open for questions. If listening on speakerphone today, please pick up your handset to provide optimum sound quality.
Also, we ask each participant to limit yourself to 1 question and 1 follow-up. Please hold a minute while we poll for questions. And the first question today is coming from Elizabeth Dove from Goldman Sachs.
Lizzie, your line is live.
Hey, thanks for taking the question. I wanted to ask as it relates to performance, whether it be in or Singapore, kind of, I guess, hard to parse it out. But how much of it you think is kind of macro or consumer driven, you know, to the extent there was also maybe some Cup impact versus just execution or kind of missteps or investment needed in the property.
That was probably a lot to unpack there, but any kind of details on that would be helpful.
Yeah. Sure. First off, I just want to start out by saying this quarter does not represent the true earnings power of our properties at SCL.
Hold had an impact. World Cup had an impact. You mentioned investment for growth in the future.
If you look at some of the things we have invested in recently, Londoner Grand, Londoner Court, what we have done with Grand Suites at 4 Seasons. The customers are there, and the productivity is there if the product is right and the service is right. So we feel like our investment programs position us well for future growth.
This quarter was not what we wanted to say. But when you think about the $5.17 given the whole normalization, we feel pretty good about where we are headed. Given the growth in volumes across all segments.
To me, that is just a signal of the effect that the new service model is taking. That we are now able to service the highest level patrons at a higher level. And so while we did not get the hold that we wanted this quarter, the volumes were there.
The visitation was there, And even though World Cup had an impact, we felt like we are headed in the right direction. Got it. And then just 1-- oh, sorry.
Go on. The market was tracking very well. In Macau in April and May, and SCL's gaming volumes were very strong.
In fact, May was an all time high for us in SCL in terms of monthly mass GGR. June was clearly softer and there was some impact from World Cup. But as we look overall for the quarter, we see very strong underlying trends across all of our different gaming segments.
VIP rolling segment, we were gaining share significantly during the quarter. Up 73% year over year. Whilst the market was flattish In terms of our table games and non rolling, we were impacted somewhat by the lower whole percentage, especially in June.
And then in slot and ETG, we clearly outperformed the market with 21% revenue growth for the quarter. So overall, if you take account of the lower whole percentage and non rolling and the business mix, we are able to achieve gains in every segment in the market share year over year and remain consistent in terms of market share sequentially with a very similar reinvestment levels once you adjust for those whole percentage factors and business mix sequentially. And I do wanna come back to MBS as well.
I just wanna highlight that this was an incredibly powerful quarter. In several of our segments. But the key is we were impacted by World Cup there as well given the high value nature of our patrons.
And I think as we look to that asset in the future, we see a very strong market, very strong visitation. And, you know, for us, we are going to continue to invest there because we see the long term potential of growth in Singapore. Given what we see today.
Got it. And just to follow-up on that and maybe just to stick with Macau for a second. You know, appreciate you said this is not what you want to be or could be.
And I know in the past, you have talked about $700 million in quarterly EBITDA. Last quarter, $600 million came into the mix. Now, I guess, this is maybe a bit of a onetime quarter, but closer to $500 million on a hold adjusted basis.
And so, I know you do not give guidance, but is there anything you are seeing in the market or in a company-specific, you know, basis changing how you think about what that right run rate is for Macau at least over the next kind of year or 2?
No. I think our target is still $700 million. I think, historically, what we have always seen is that February has always been our softest quarter.
And so we talked about that on our last earnings call. This quarter Had some seasonality built into it, and so we saw that here But I also think that if we held better, we would be having a little bit of a different discussion in certain things. I think for us, we look to the progress we are making in the market If you sort of look at the growth that we have had year over year, if you look at the fact that we did this through the World Cup cycle, I think there is some positive things there that we look to.
And I think our goal is to reach $700 million. And I think we have some work to get there. But we feel like the process in place for us to keep working to head in that direction.
We know what we need to do. Thank you.
Thank you. The next question will be from Daniel Politzer from JPMorgan. Daniel, your line is live.
Good afternoon, and thanks for the question. First, I wanted to touch on Singapore. Obviously, you talked a bit about World Cup and seasonality there.
Given where the property is, and I think we are kind of anniversarying that first big quarter there, do you feel like you are at a place where you know, the property maybe reverts back to historical seasonality? And broadly, just as in terms of the season seasonality discussion, could you just remind us of how you think about it from Macau as well while we are on the topic?
Yeah. Sure. I think what we said before is big step function growth in Singapore was the switch from the suite product from the room product.
So we went from a 135 suites to 770. And so that was the step function in terms of our product pillar to be able to accommodate the substantial growth that you saw in run rate. We also added a significant service component So credit to the team there for revamping our service model adding food and beverage, and, of course, very importantly, the service levels on the casino floor as well as some of the novel games as well as just the overall presentation.
So all those things came to bear that allowed us to have the growth that you saw. Now the growth is gonna be based on yielding and more incremental growth we continue to invest in the property that is there. So there are still things that we are doing that we think will create growth over time, particularly in patron types that are higher value.
But I think for us, looking forward in Singapore, it is going to be about continuing to serve with these customers. We have a very strong base there. And, you know, visitation matters for the highest end customers.
Particularly the highest end it is concentrated. We have talked about that before. And whether it is World Cup or other things, some of those people were not in the building this quarter.
And when they show up, we do incredibly well. And when we play favorably, our margins look like, extraordinary. And when some of those people do not show up in scale, they do not play in high volume, we do not hold very well, our margins can look less.
So but we are heading in the right direction. I do not know that there is a gaming business that grows forward in a straight line. And I would like to believe that this business is heading in the right direction.
And to be fair, we are also seeing the benefit of a lot of wealth creation in Southeast Asia. So we feel very good about the long term prospect of both our investment and the trajectory of the business there.
Got it. And then I suppose on Macau, just talking a little bit more about that $700 million quarterly EBITDA run rate and the path to getting there. Can you maybe give a sense of the capital or the time frame, the capital that you have to still commit or the time frame you think is reasonable to get to that level?
Obviously, this quarter was not ideal, but how should we think about kind of the path forward towards that $700 million?
So I think first off, this quarter was impacted with seasonality. We talked about that You know, we see it. There was the World Cup impact that we just mentioned.
But I also think for us, as we continue to invest, and get higher value patron fulfilling inventory, we will be able to grow our market share and grow our revenues. And so for us, this is this is what we talked about. Talked about a multiyear investment strategy.
As we updated our portfolio there. And invested for the highest value premium mass segments we do really well in. that is a very deep part of our database. And so nothing's changed from our strategy, from our approach, and from the timelines that we talked about before.
Grant, I do not know if there is anything else that you wanna add.
I think there are some capital projects. We have still long way to go in terms of ramping up Londoner. it is done very well so far. As you can see, both The Londoner and 4 Seasons, we are even for this quarter, we are above where we were in 2019 on a normalized basis.
So that is a very positive evidence of how these product upgrades can drive the revenue growth and market share gains. Secondly, we are very focused on the upcoming completion of the Venetian renovation, which would take us all the way as Patrick referenced, to early 28. But we should start to see the benefits of those new suites as we progressively get more critical mass of these suites through throughout 2027.
And, certainly, by the end of that, we are going to have a completely new hotel in, I think, what is still an amazing property for people to visit, but with an entirely upgraded refreshed product both in hotel and also in parts of the premium gaming sections.
Thank you so much. Thanks, Daniel.
Thank you. The next question will be from Shaun Kelley from Bank of America. Shaun, your line is live.
Hi, good afternoon, everyone. Thank you for taking my question. Patrick or Grant, maybe just a comment on sort of the nature of the growth in the premium segment you are seeing in Macau.
This is pretty significant hold volatility we are seeing at some of the properties. And just kind of curious if this is going to be the nature of the market a little bit moving forward. Given concentration in a smaller and smaller set of customers or if there is a little bit of an outlier and really want to chalk it up a little bit more to that just in terms of activity and maybe the concentration of what you saw driving, you know, this kind of hold volatility because we tend to think for LVS in particular, sort of averages out across a much bigger base of business.
Clearly, we did not see that this quarter. So I think what is really important is we have product and service now that allows us to attract the most important patrons of both markets. that is a big step. The good news is sometimes we get that play at Singapore, Sometimes we get that play in Macau.
Sometimes we get it in both. Sometimes we have a lot of it. Sometimes we have less of it.
Sometimes when we have less of it, the volatility works against us given the number of decisions and the bet size and the volatility. During the quarter of measurement, The good news is we take this business and over time, it really works in our favor.
This is the largest hold adjustment we have ever had in the history of Macau. And the good news is it happened after the pandemic at a time when a lot of people thought high level VIP play would not show up in Macau. And now we are earning it.
So over time, we believe that things will there is an old expression. Right? The gate of luck swings both ways.
And we would like to believe that over time, by taking this play, by providing the right service and keeping these patrons playing with us over time, that we will be more successful. And so the play is very concentrated. The other thing is for some of these patrons, we tend to think about it across both of our properties.
Right? Do we have the right amount of offsetting play across our entire portfolio of properties? So for us, I think important thing is the most discerning patrons wanna stay with us and play high volumes with us.
Bad thing is we got beat really bad this quarter, and we actually got beat on the mass side too. there is a belief in gaming that goes back a long time that when customers play Lucky, they continue to strengthen their bonds and relationship with you. Because over time, they will eventually lose. And so I think for us, customers winning is an investment in future marketing.
Gives us the ability to retain high value customers over time. This quarter did not work in our favor. Hopefully, in the future, it will.
Just to add to that. Sorry. Think Yeah, Grant.
I think the fact has shown if you look at both VIP rolling and the premium mass segment, we have gained significant amount of market share at that very top end. Given all of the strategies we have deployed since May of last year.
So, yep, there is no secret. We have done a huge gains in VIP segment against a flat market this quarter. Would come from a position where we were #4 in the rolling segment a year ago, and now we are #1 with 26% volume share.
And part of that share gain is coming from the super VIP segment we are also very been very successful in the Marina Bay Sands property. So that is the VIP segment. And then in terms of the premium mass, all keep saying that the Macau growth is driven by the premium segment in the current environment.
And within that, yes, there is some very high end premium mass play which is available to capture and we have been capturing more than a fair share of that in the last 6 months. And unfortunately, this quarter, the luck just did not play our way. We are gaining the customers, we are gaining the volume, and they will be back and the luck will even out in the end.
Perfect. Thank you both. And then my follow-up, maybe just a quick high level 1 on sort of Patrick, I think you mentioned the run rate and the investments being made on operating expense side of Macau.
Just a quick thought on Singapore. Is this a general good run rate as we are expecting to see a little bit more of incremental gains on the top line? Will that be matched relatively closely with sort of investments on the bottom line?
Or just how is the operating run rate operating expense looking there?
So first off, we are really happy with the 50% EBITDA at Marina Bay Sands. And we have a fixed cost base there that is really focused on providing the highest levels of service. We can do really, really well with more visitation from high value patrons and their play.
We can also see higher margins we have higher volumes from those patrons and things happen to go our way on the gaming table. So in quarters past, we have seen higher margins because we had a lot of great play. And that play was favorable.
Look. In the long run, we are really happy to make these investments to attract and keep our highest levels of patrons. We are gonna continue to invest in things necessary to support great experiences for our patrons, really at the highest levels and look.
Sometimes from time to time, some of these customers require provisions. Sometimes they require some promo. But as a practical matter, we are this is a great business.
And we believe in the margin structure over time. And just broadly, we believe that we have a significant opportunity to continue to invest and optimize and grow as we have given the strong customer interest that we have and just the growing amount of patrons that we see coming out of Southeast Asia that are high value tourists that wanna go to Singapore. We are gonna continue investing behind this thesis for the long term.
Thank you. The next question will be from Stephen Grambling from Morgan Stanley. Stephen, your line is live.
Thanks. I just wanna go back to that to make sure I understood it correctly. So I think that your promo was down sequentially, still up year over year, Is it down sequentially predominantly because of the World Cup and maybe those customers not showing up, and they tend to require higher reinvestments.
So we have not quite seen a change in the promotional environment yet, or has it even potentially ratchet up? Just curious if there is any kind of, you know, way to dig into that and what you are seeing in the competitive environment.
Steven, just to clarify, in Macau, our reinvestment level sequentially remained flat. So second quarter versus first quarter, when we adjust for the whole percentage and the difference in business mix. Year over year, we see obviously a higher level of reinvestment because we only started to adopt a more aggressive reinvestment strategy to adjust to the market in the second half of last year.
Right. But you had the World Cup in there, which I imagine if you are not having some people that require higher reinvestment, maybe that would suggest that perhaps it is even ticking up sequentially just as we think about the underlying. So are you seeing any change in the competitive dynamic that you kind of pull back the onion a bit?
there is no change in either of approach or the reinvestment levels. When you look at it sequentially. And as we have been doing since the start of the year, we are looking to optimize the level of reinvestment into all of these customer ADT segments.
And what we are finding is we were successful in first quarter is that we are able to adjust some of those reinvestment levels and still achieve the market share gain. So as we look into the second half, we will continue that process of optimization and we aim to achieve a higher level of gross margin from this high level of revenues.
Okay, fair enough. I will jump back in the queue.
Thank you.
Thanks, Steven.
Thank you. The next question will be from Robin Farley from UBS. Robin, your line is live.
Great, thanks. I want to go back to a comment that you made during the call. Where you said that reinvestment would level off in the second half.
And just wanted to make sure that I am understanding that correctly. Leveling off, meaning, if it will be flat year over year or that the rate of increase in the second half would be about the same rate of increase year over year that we saw in the first half and not a higher rate of increase.
Just to clarify, Robin, there are 2 different topics here. 1 is the reinvestment, and the other is the operating expenses. So for reinvestment, what we are looking to do is to continue to optimize the reinvestment percentage as a proportion of actual revenue. And that process has started since the beginning of the year We have had some success in this and we will continue that into the second half.
In terms of Patrick's comments on operating expenses, we have had some OpEx growth, during the first half of 26, but we do expect the rate of OpEx growth to moderate into the second half We have been investing in the table operating hours in the sales network distribution and also in the service elevation. But the big step change in those investments have largely happened and what we expect into the second half into 2027 is a more moderate rate of OpEx growth and we should therefore be able to achieve some operating leverage on the EBITDA margin as revenues grow.
And is that saying that the second half rate of increase in OpEx will be similar to the first half. Slower. I mean, this will be slower.
Thank you. I just wanted to clarify what, you know, leveling off just to make sure I understood. And then can you talk a little bit about I mean, do not wanna get too focused on, like, the very immediate term, but obviously, the World Cup you have talked about that impacting visitation.
Are you seeing a bounce back, pent up demand? Or is it just back to normal levels? In other words, are you seeing a clear sign that was just during the World Cup and how things look now versus that period?
Thanks.
I do wanna point out the final was on Sunday. So I am not-- I am not really sure yet how we think about it. I will tell you that this was quite an unbelievable sporting event.
The level of success, the World Cup in The U.S. is really remarkable. I think the earnings that they generated were a record. The attendance might have been record.
I think the involvement with the broader field really captured a global phenomenon. And it was something that I think a lot of people went to. And, unfortunately, a lot of our high value patrons are followers or a lot of the players and a lot of the teams with representation at a World Cup or had you know, are from countries that participated.
And it just drove a lot of tourism away from our 2 core markets, our 2 markets. And so, you know, we are obviously very optimistic about the long term, but also we think, you know, we think our patrons wanna come back to doing what they are doing. So we look forward to seeing them back in our properties Looking forward to seeing them back in our markets, and we will go from there.
But it is a little early to tell you about any snapback. Given that everything ended only a few days ago.
Thanks very much.
Thanks, Robin.
Thank you. The next question will be from Brandt Montour from Barclays. Brandt, your line is live.
Grant. Thanks, everybody. The, math drop stat that you guys gave, 15% in the quarter, would you be willing to break that out by month?
The quarter? I am sorry. I could not hear the question.
Could you say that again, please?
Sorry about that. So math table drop. The quarter was up 15%.
You highlighted that, Patrick, in your prepared remarks. You like to break that out by month just so we can get a sense of how your performance was trending, sans, sorry-- ex-hold before World Cup start?
Yeah. I would just say we typically do not do that just directionally, we were impacted in June. Okay.
And then in your slides, you have a slide about the Macau Airport. Passenger volume. It took a big step back in the second quarter.
More in line with last second quarter. Right? This is we know this a seasonally weak quarter, but the first quarter this year had a big step up.
Unlike last, you know, prior years. And so it almost would seem like that capacity had taken a structural a structurally higher step up since COVID. You know, just curious if when you talk to your partners or your contacts in the transportation division, Is that temporary?
Is that seasonal? Do you expect it to sort of rebound? Is there something that you think drove that?
So I just wanted to clarify. You are referring to slide 39. Where we talk about the Macau Airport monthly passenger volume? that is right.
39.
Yeah, look, I think if you look at it, if you look at it, it is not too much different from the second quarter of 25. Just sort of highlight the fact that there is seasonality in visitation to Macau. that is kind of what my takeaway from that would be. Grant, I do not know if you have any anything else you would like to add.
Yeah. I think you can see clearly second quarter is seasonally softer. And in the second half, we had the much higher levels.
Of passenger volume it is fair to say international visitation during the quarter, but especially June, did slow down.
For a number of reasons, but also affected by the World Cup in June. So I think it would not it is not a surprise to see that the airport passenger volume is not as strong as the second half of last year. And this is just 1 airport too.
Obviously, there is the Hong Kong Airport, which is not reflected here. there is the Zhuhai Airport, which is not reflected here. These carriers are trying to make money. Obviously, and a lot more money to be made when people are traveling than when you have those very soft periods, April and June, So part of this is just supply and demand with respect to what those people are doing.
Grant. Thanks for the question.
Thank you. The next question will be from Chad Beynon from Macquarie. Chad, your line is live.
Afternoon. Thanks for taking my questions. First on capital allocation, your buybacks were again at a elevated pace for the second quarter in a row.
Can you talk about availability or appetite to stay at this pace versus, reverting to maybe where you were in 2025?
Next.
So first off, we see meaningful value in both LVS and SCL equity. And we are gonna continue to act with this belief. And so you see that on display this quarter.
I think for us, share repurchases are a great way to return capital. They shrink the share count. You know, they are accretive for EPS.
And we have a very strong view about repurchases. Given where the equity is today. And, you know, if you look at the board and the board has been very supportive, we are very appreciative they just approved the $6 billion authorization and our goal is to use it.
So, you know, I think for us, we see a lot of long term value in the investments we are making. We feel very strongly about the markets that we are in. And so we are gonna continue to be aggressive in the way that we think about the value of our equity and how we repurchase stock.
Thank you very much.
Appreciate it.
Yeah.
Thank you. The next question will be from George Choi from Citigroup. George, your line is live.
Thank you very much for taking my questions. If I remember correctly, you guys started optimizing your reinvestment in June of last year. Are you comfortable with the way it is going now versus your competitors?
And I guess, more importantly, do you believe you can get back to the EBITDA share that you used to attain without changing your current reinvestment strategies?
Thanks, George, for the question. On reinvestment, yes, we started to make a step change in our reinvestment levels in the second half of last year. And as we have gone through the last 4 quarters, we have been able to be more efficient in the way we reinvest especially at some of those higher end customer segments.
And I think the first half of this year we have seen that we have been able to continue to gain share but whilst staying at a lower level of reinvestment versus fourth quarter of last year. So we are happy that how it is working out. But we will stay alert to how the market environment adjusts and we will stay close to the market But the goal is most definitely to continue to optimize into the second half and to earn a higher gross margin from this higher level of revenue.
You know, and I appreciate the question. Our goal is to get back to our EBITDA market share. And that is why we are investing.
But in order for us to do it, we need to see some market growth We need to continue with our reinvestment program. And the approach that we are taking today. And we need to see the high value product come online in the way that we have seen with The Londoner Grand, The Londoner Court, and the Grand Suites at the 4 Seasons.
So as we continue the Venetian renovation, as we work through the rest of the property that we have the rest of the property that we are planning on investing in. As we get that higher value product. As Grant mentioned earlier, as we continue to have the highest level of service we will have the opportunity to grow back to that level of EBITDA. that is what our goal is.
Thank you very much. And as a follow-up, we noticed that you have a very strong lineup of events and concerts in the next several months, which is very encouraging. Just wondering how would you describe the current level of competition on getting top tier artist to perform at your Venetian and Londoner Arenas from other venues in Macau.
Thanks, George, for that question. The competition in entertainment content is fairly intense across the region. So it will be acts that are stopping in Asia where Macau is the destination is competing for against the other cities in the region.
That has not really changed versus the last 2 years. Within Macau, there is obviously more entertainment acts going on, and therefore, is competition for similar acts However, as you just highlighted, we have a very strong lineup into the second half and we feel very good about our event calendar and are able to drive all segments of the business. And we have seen some positive impact from these events.
The first 6 months of the year. But the second half looks very strong for us. Especially as we build into August, September, and then obviously culminating in the NBA games in October.
Thank you very much for the color.
Thank you. The next question will be from Trey Bowers from Wells Fargo. Trey, your line is live.
Hi, it is Zach Silverberg on behalf of Trey. Thank you for taking our questions. The first 1 on MBS, theoretical VIP hold in slide 11 ticked up quarter over quarter despite a change in mix on visitation as you called out in June.
Can you unpack that a little bit? What drove the theoretical hold to tick up quarter over quarter despite these changes?
Well, first off, Zach, welcome to the LBS earnings call. Alright. Thank you.
So in terms of the-- in terms of the 4.2%, as we talked about last quarter, who shows up in the building and how they play really matters for our theoretical hold percentage. And we talked about last quarter with our $18 billion worth of rolling volume which is, as you mentioned, is on page 11 of our earnings slides. You can see that we held 3.6 That was actually a barbell where we had many of our many of our patrons who play into a higher level of hold.
Theoretically, and then a few patrons were very concentrated who played to a high volume at a lower theoretical hold. In this case, you can look at our volumes of $9.3 billion, which were exceptional in any consideration for a Q2, but note that the players who are in the building played on more of the side bets, played more of the higher value bets with more volatility. And that is what generated the 4.2% theoretical hold for the quarter.
Thanks. And for my follow-up, just following up on Robin's question earlier on Macau OpEx. How do you guys know how to strike the right balance between OpEx and the rolling volume share gains you have seen?
Guess, in other words, is there an opportunity to lean in more on the service levels if you are still taking this high end share? You have to divide between the different components of the additional headcount that we have invested in.
First of all, the biggest headcount increases come from our investment in additional operating hours in table games. And that actually feeds all segments of the market. And that obviously leverages our scale advantage our 1.68 thousand tables So first off, that is a multi segment investment.
In terms of the sales distribution, and the service elevation, those are more targeted at the premium segments but not only to rolling segment, also into the premium mass table games. And all 3 components has started to benefit our revenue capture but certainly position us much, much better for the future as we bring on some of these product upgrades in the portfolio as they progressively complete over the next 2 years. So we are we are very happy that we have made the step changes in the investments in table hours, sales, and service elevation.
The bulk of those additional investments have already been made. But we will continue to tweak and add as needed in accordance with the market growth opportunities.
Thank you.
Thanks, Zach.
Thank you. The next question will be from Joseph Stauff from SIG. Joe, your line is live.
Thank you. Patrick, I was wondering if you could-- sorry, 1 follow-up on World Cup. I was wondering if you could possibly size the World Cup impact in July relative to what you saw in June.
Sorry. I cannot. We just had a lot of people who were not there.
Like, it is it really captivated the whole world. And if you if you sort of follow Southeast Asia and the Asian region, European football is the most popular sport. That and basketball are the 2 most popular sports.
And so I think, you know, just-- you know, anecdotally, it we had a lot of people not around. Understood. Last Sunday and then on Sunday.
So, you know, let's talk again in 92 days, and we will let you know what happened.
Fair enough. And then on at MBS, you know, like, Daniel was asking earlier, you know, we are a year into the launch of the new renovations. Is there any is there any way or measure you can give us in terms of, like, the new customer development, where you are in that in terms of, you know, again, kind of like the, maybe, the highest-end number of population set that you have.
You know, where are you in that development? Are you early? Are you-- you know, if there is any sense you can give us in terms of that. it is been a year, so you probably should see some patterns, but just wondering how much is left.
So I think it is early days yet. In the market for high value tourism in Southeast Asia. If you look at the population size, if you look at the economies in the countries in our catchment area, where our tourists come from, and where the tourists that come to Singapore come from.
There is a huge amount of foreign direct investment. There is a huge amount of wealth creation. And there are a lot of young people becoming very successful as entrepreneurs.
And many of those people wanna come to Singapore. So we are the beneficiary of Singapore's status in Southeast Asia and Asia in general, as an incredibly desirable tourism destination for high value tourists. The most successful people in Asia are coming to Singapore.
And they keep growing. And their wealth keeps compounding. So you have the benefit of our patrons creating more wealth over time for themselves growing within the MBS ecosystem.
And then you have a lot of new patrons who we have never seen before who are very successful in our catchment area showing up because they want to experience the great things that MBS has on offer. Entertainment, hospitality, food and beverage, and most importantly, retail. that is a huge component of our customer activity of course, gaming. And all of these things come together and create a very unique high level experience.
We also have a lot of customers who are very successful who are also mice customers. You know, where we are located and Singapore's focus on MICE tourism and facilitating trade and business, creates a lot of opportunities for very high net worth people to have mice interactions on our property and then return again and be leisure patrons or do both So we think we are in very, very early innings of the Marina Bay Sands story. And to be fair, of the story of Singapore's success, as a center of trade and business.
So we are very excited about the long term opportunity there, about the investments we are making, and about the patron profile that we have. And how so many of them are young. And how they are creating wealth and how, the economies are developing in and around Singapore all throughout Southeast Asia.
Thanks, Patrick.
Thank you. The next question will be from David Katz from Jefferies. David, your line is live.
Hi, everyone. Thanks for including me. Appreciate it.
Wanted to just get a, you know, long-term perspective on capital spending in Macau. I am looking at your slide 21, and I see you have $600 million next year and the year after. What should we think about being included in there And as we look out longer term, is that a rate that you expect you can continue to maintain and work your way across the portfolio, you know, in Cotai as you have been doing?
So the reason why we show that CapEx on top of the maintenance is to invest for growth. So as we talked about before and I said in the prepared remarks, we have looked for the highest returning, highest cash flow generating projects that we can undertake in the near term to begin to grow the business and head towards as George described, as our previous levels of EBITDA. And our previous EBITDA share.
We are very focused on growing this business. And the way we have to grow this business is through investment in the 3 pillars we talked about. And 1 of those pillars is great product.
And we have shown success, and we have shown meaningful returns on the capital we have deployed and high end product to address our high value premium mass super premium mass segments. And on the rolling on the rolling segment at the v I at the higher VIP level, which you see in our volumes in Macau. And so we intend to invest to create the opportunity to grow the business.
And that is why you see that number there. So we will continue for a bit. We will keep going.
But we are going to see returns from this CapEx or we would not be doing it.
Okay. Fair enough. And just 1 detail.
Apologies if you have already mentioned it. I can go back and look it up. Did you tell us how many rooms are out at the Venetian and we should expect out per quarter.
Just so we can get our model set up the right way?
Yeah, David. it is approximately 400 keys out of inventory on average for the second quarter. And you can assume that figure will fluctuate between 400 to 500 every quarter between now and into 2027.
That will work. Thank you very much.
Thank you. The next question will be from The next question will be from Steven Wieczynski from Stifel. Steven, your line is live.
Yes. Hey, guys. Good afternoon.
Just 1 question for me. So, Patrick, you talked a lot about so far about the reinvestment rate in the Macau market for yourselves. But wondering if you could comment on your peer group as well in terms of maybe what you are seeing there across the entire market and how you guys are thinking about the rate of reinvestment for you know, the whole market.
Or, you know, maybe a better way to ask that is, you know, when could the entire maybe start to slow that reinvestment rate? Down?
So I think, first off, I think, you know, our approach is not changing. As I mentioned before in the prepared remarks, as Grant said earlier, we are gonna continue to approach this the same way. And I think what we are seeing in the market now is some stability, some movement.
But I think in the long run, as the market grows, there will be less pressure. And people have the opportunity to make more money. But, Grant, if there is anything else you wanna add.
I think that is exactly right. As revenues grow in the market, there will be some kind of decompression on the need to continuously elevate the reinvestment levels. The competitive environment has not really changed for the past several quarters.
And as we have continuously said on this call, our approach has been very consistent especially since the start of the year. And we will continue to look to optimize that reinvestment But we are cognizant of any changes in the market as well So we will be adjusting in accordance with that. But at this stage, we do not see any significant change in the competitive landscape as far as reinvestment is concerned.
Okay, great. Thanks, guys. Appreciate it.
Thanks, Steven.
Thank you. And the next question will be from Stephen from Deutsche Bank. Steven, your line is live.
Hey, good afternoon, everyone, and thanks for the question. Just 1 from us following up on the World Cup 1 more time. As you look back at historical World Cups versus this 1, is there any reason that this year would have had a higher impact versus past World Cups?
Could it be what is driving the market this year or the location in the U.S.? Or any thoughts on that? Thank you.
Yeah. Thank you. Really appreciate the question.
A couple of thoughts. So first off, this World Cup had a larger number of teams participating. So that was maybe 1 factor.
Being in The US, given the infrastructure and tourism infrastructure here, including airports, hotel rooms, and the ability to you know, attract tourists from all over the world was another benefit. For the World Cup, maybe not for visitation to Macau in Singapore. Definitely for the World Cup.
I think just the increase in viewership of European football globally over the years probably has not hurt, and the star power of some of the players that were participating There are some players there that are really of note and generational talents and this might be maybe their last World Cup or their first World Cup. There was a lot of interest. And I think most importantly, the last World Cup was really during the pandemic.
You know, it was 2022. Visitation to both Macau and Singapore was very different. Transit around Asia was very different.
And so it is very hard for us to have a comp to look at and understand what the impact could be on a run rate basis. So I think you had 2 things here. You had an extraordinary sporting event that captivated the world.
And that was 1 part of it. And then the other part is we did not really know what would happen because we have not seen a World Cup in more than 8 years. in a normal run rate environment. And there is prediction markets that were not there 4 years ago too.
Grant, thank you.
Appreciate it.
Thank you. And that does conclude our Q and A session for today. Thank you, ladies and gentlemen.
This also concludes today's conference call. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation.
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