Shares of Canterbury Park Holding Corporation (CPHC Quick QuoteCPHC - Free Report) have gained 1.2% since reporting results for the first quarter of 2025. This compares with the S&P 500 index’s 3.9% growth over the same time frame. Over the past month, the stock has gained 1.3% compared with the S&P 500’s 11.4% rally.

Financial Performance Deteriorates Y/Y

For the three months ended March 31, 2025, Canterbury Park posted total net revenues of $13.1 million, marking a 6.8% decline from $14.1 million in the same period in 2024. This revenue contraction reflected broad-based softness across key business segments. Most notably, Casino revenues, the company’s primary income driver, dropped 8.6% to $9.2 million.

Pari-mutuel revenues decreased 8.2% year over year to $1.08 million, and food and beverage revenues slipped 5.9% to $1.62 million. These declines were partially offset by a 9.3% increase in other revenues, which reached $1.25 million and were driven by higher admission revenues from large-scale special events.

Net income fell to a loss of $299,000, or 6 cents per diluted share, from a profit of $998,000, or 20 cents per diluted share, in the prior-year period. Adjusted EBITDA, a non-GAAP metric that excludes certain items such as stock-based compensation and equity investment impacts, fell 39.6% to $1.94 million from $3.21 million a year earlier.

Canterbury Park Holding Corporation Price, Consensus and EPS Surprise

 

Canterbury Park Holding Corporation price-consensus-eps-surprise-chart | Canterbury Park Holding Corporation Quote

Other Key Business Metrics

Canterbury Park’s EBITDA, excluding interest, tax, depreciation and amortization, fell sharply to just $8,000 from more than $1.76 million in the prior-year quarter, illustrating the margin pressure the company is experiencing. The adjusted EBITDA margin narrowed to 14.8% of net revenues, down from 22.8% in the same period in 2024.

Operating expenses increased 1.3% year over year to $12.5 million, driven by higher payroll expenses from annual wage increases and state-mandated minimum wage hikes. Additionally, property taxes and marketing expenses rose, the latter tied to new Casino promotional campaigns. These cost pressures exacerbated the decline in earnings despite some efficiency gains in other areas.

Management Commentary

CEO Randy Sampson acknowledged the adverse impacts of increased competition in the Casino segment, which he said was the primary factor behind the revenue decline. In response, Canterbury Park is bolstering its marketing strategy to retain and grow its player base. These efforts include hiring Jennifer Lauerman as the new vice president of marketing and entertainment, unifying marketing and event operations under her leadership. Sampson noted that several record-attendance events had already taken place in 2025, and the company plans to expand its mid- and large-scale event offerings further.

Sampson emphasized that while short-term earnings suffered, the company continues to generate a solid annual cash flow and maintains a strong balance sheet with no debt. He also highlighted Canterbury Park’s ongoing investment in long-term projects like the Canterbury Commons development, which is expected to drive economic value.

Factors Influencing Headline Numbers

The decline in Casino revenues was attributed to both a reduction in wagering activity (referred to as "drop") and a lower average collection rate, reflecting heightened competitive pressures in the regional gaming market. Although revenues from table games declined, the company did see increases in its progressive jackpot income and poker rake, thanks to a new maximum rake policy instituted in May 2024.

Pari-mutuel revenues moved down due to fewer race days at other tracks, impacting simulcast betting volume. Food and beverage revenues dropped in tandem with Casino visitation. However, the uptick in other revenues came from admissions and space rentals tied to large-scale events, providing a partial buffer against broader weakness.

On the cost side, increased salaries and wages, marketing spend, and depreciation tied to the barn redevelopment project contributed to the higher operating expenses. Additionally, the company's equity investments continued to post losses, particularly from the Doran Canterbury II joint venture, which became operational in 2024 and added depreciation and interest expense burdens.

Guidance

Management expressed confidence that its combination of event-driven revenue expansion, operational efficiencies and ongoing real estate development will contribute positively to future performance. The company expects further benefits from tax increment financing receivables and the completion of its barn relocation initiative by mid-2025.

Other Developments

Canterbury Commons, the company's flagship real estate development initiative, continued to advance. Phase II of the Triple Crown Residences is now 95% leased, while Phase I reached 22% occupancy following repairs and certification.

In the commercial space, several new restaurants and fitness facilities opened, and the construction of a 28,000-square-foot office building is underway, with half the space already leased. A new 16,000-square-foot entertainment venue developed by Trackside Holdings is on track for a June 2025 opening. The company also continued its development partnership with Pulte Homes for a second phase of residential units.

Completion of a road near the Swervo-operated amphitheater will unlock an additional 25 acres of development land, bringing the total available for future projects to 50 acres.