Gaming and Leisure Properties, Inc. (GLPI) Earnings & Analysis

Latest quarter

GLPI reported third-quarter revenue of $435.4 million, up from $397.6 million a year earlier. For the consensus comparison, revenue was counted at $435.5 million, below the $436.1 million estimate. Adjusted EPS was $1.04, above the consensus estimate of $1.02.

The company’s filing attributed the increase in real estate income primarily to acquisitions, with lease escalations also contributing. It said unfavorable straight-line rent adjustments and lower percentage rents partly offset those gains.

GLPI’s operating margin fell to 71.2% from 84.8%. The filing attributed higher operating expenses primarily to an increased provision for credit losses, which it linked to lower projected commercial real estate price growth and higher long-term interest rates. Diluted EPS declined to $0.73 from $0.85 a year earlier.

GLPI reported free cash flow of $114.9 million, compared with $217.0 million a year earlier. Its filing said acquisitions and lease escalations increased cash receipts from customers during the first nine months of the year.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Peter Carlino said tenant operations remained stable despite volatility in debt and equity markets. He attributed GLPI’s growth to transactions and development funding. CFO Desiree Burke said acquisitions and lease escalations increased cash income, while noncash revenue adjustments reduced the year-over-year gain.

Carlino said GLPI acquired the land for Cordish Live Virginia earlier in the year and began funding the project in the third quarter. He said the performance of its temporary facility supported GLPI’s underwriting and that the company would fund $467.0 million toward the development.

Asked about Bally’s Chicago, President and COO Brandon Moore said slower hotel construction could delay the opening of the full complement of rooms. Moore said the change did not alter GLPI’s view of the market or the property’s eventual performance. Carlo Santarelli, senior vice president of corporate strategy and investor relations, said GLPI’s funding schedule was unchanged and the casino remained on schedule to open in the first half of 2027. Burke said GLPI’s underwriting had accounted for the possibility of video lottery terminals in Chicago.

Chief Development Officer Steve Ladany said GLPI’s cost of capital had risen relative to the capitalization rates it could negotiate, but that the company could structure deals to achieve economic accretion. He said GLPI was considering features such as tenant relationships, location, geographic diversification and property attributes when assessing transactions.

On the Joliet venture with Prologis, Moore said GLPI was using land it already owned at the former Hollywood Joliet site. He said the company had excess land at several properties, though much of it was leased to tenants. Asked about the opening of the Chicago hotel, Moore said GLPI expected the minimum number of rooms required under the agreement but had not discussed opening-day details.

Guidance

In its updated outlook, GLPI incorporated additional development funding, bringing expected development spending for FY2026 to $800.0 million. CFO Desiree Burke said the guidance excludes the impact of future transactions.