Nasdaq:CHDN
Churchill Downs Inc
A leading US horse racing and gaming company leveraging iconic live events like the Kentucky Derby alongside high-margin online sports betting operations.
Key Metrics
Investment Thesis
Bull Case
Investors may find value in CHDN due to its exposure to the rapidly expanding legal sports betting market, which offers high-margin opportunities beyond traditional horse racing revenue. The company's strong cash flow from operations of $769.8M provides ample liquidity to support dividend payments and strategic capital expenditures without relying solely on equity dilution. Its diversified business model mitigates risk by balancing the volatility of live sporting events with the consistent, recurring revenue stream from online gaming platforms.
Bear Case
Concerns regarding a potential decline in net income to $385.5M compared to previous years could signal margin pressure from rising operating costs or increased competition in the sports betting sector. The substantial current liabilities of $733.3M against total assets of $7.48B indicates a high leverage profile, which could be vulnerable if interest rates remain elevated or regulatory headwinds emerge. Additionally, the company's reliance on specific geographic locations for its flagship events creates concentration risk that could impact overall revenue stability.
About Churchill Downs Inc
Churchill Downs Inc. is a premier global leader in horse racing, gaming, and live entertainment operations, serving markets across the United States through its flagship properties at Churchill Downs in Louisville and Saratoga Race Course in New York. The company generates revenue primarily through wagering, hospitality services, and sponsorship partnerships within the sports betting and traditional casino gaming sectors. As a Nasdaq-listed entity (CHDN), it combines heritage sporting events with modern digital gaming platforms to capture growth in the legal online sports betting market.
Analysis
Management Discussion
Financial performance for 2025 shows revenue growth to $2.93B compared to $2.73B in 2024, driven by expanding digital wagering participation and strong event attendance despite a slight contraction in reported net income to $385.5M from $429.1M the prior year. The significant cash outflow for investing activities of $471.5M and financing activities of $262.5M suggests active capital allocation, potentially including debt issuance of $1.10B to fund growth initiatives or refinancing obligations. Operating expenses rose to $2.24B while maintaining a healthy operating profit margin reflected in the $683.8M operating profit.
Industry Overview
The US horse racing and gaming industry is undergoing a significant transformation with the legalization of sports betting in most states, creating new opportunities for operators to integrate digital wagering into their traditional models. Major corporations are increasingly entering the space, driving competition but also providing a larger, more accessible customer base for established brands like Churchill Downs. The sector is evolving from a niche hobbyist market into a mainstream entertainment and gambling category with substantial media and sponsorship value.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $1.81B | $2.46B | $2.73B | $2.93B |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $1.81B | $2.46B | $2.73B | $2.93B |
| Operating Expenses | $1.49B | $1.90B | $2.03B | $2.24B |
| Operating Income | $321.8M | $564.0M | $709.0M | $683.8M |
| G&A | $164.2M | $202.3M | $237.7M | $246.2M |
| Stock-Based Comp | $31.8M | $32.9M | $36.1M | $30.2M |
| D&A | $113.7M | $169.0M | $199.1M | $233.1M |
| Depreciation | $109.0M | $161.8M | $188.0M | $222.8M |
| Amortization | $4.7M | $7.2M | $11.1M | $10.3M |
| Other OpEx | $1.32B | $1.70B | $1.79B | $2.00B |
| Non-Operating Income | $287.0M | $-2.2M | $-135.8M | $-151.4M |
| Interest Expense | $147.3M | $268.4M | — | — |
| Pre-Tax Income | $608.8M | $561.8M | $573.2M | $532.4M |
| Income Tax | $169.4M | $144.5M | $144.1M | $146.9M |
| Continuing Ops | $439.4M | $417.3M | $429.1M | $385.5M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $439.4M | $417.3M | $429.1M | $385.5M |
| Minority Interest | $0 | $0 | $2.3M | $2.5M |
| Net to Common | $439.4M | $417.3M | $426.8M | $383.0M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $344.5M | $400.8M | $412.3M | $443.2M |
| Cash & Equivalents | $129.8M | $144.5M | $175.5M | $200.6M |
| Accounts Receivable | $81.5M | $106.9M | $98.7M | $93.5M |
| Inventory | — | — | $11.6M | $11.9M |
| Other Current Assets | $133.2M | $149.4M | $126.5M | $137.2M |
| Long-Term Assets | $5.86B | $6.55B | $6.86B | $7.04B |
| PP&E (Net) | $1.95B | $2.54B | $2.85B | $2.88B |
| Intangibles | $2.39B | $2.42B | $2.41B | $2.52B |
| Goodwill | $723.8M | $899.9M | $900.2M | $900.2M |
| Operating Leases | $31.9M | $22.8M | $23.0M | $37.3M |
| Other LT Assets | $768.4M | $675.2M | $679.5M | $707.2M |
| Total Assets | $6.21B | $6.96B | $7.28B | $7.48B |
| Current Liabilities | $621.6M | $755.8M | $729.3M | $733.3M |
| Accounts Payable | — | $158.5M | $180.3M | $184.3M |
| Current Debt | $47.0M | $68.0M | $63.1M | $63.1M |
| Current Leases | $7.0M | $5.4M | $5.6M | $5.7M |
| Deferred Revenue | $39.0M | $73.2M | $52.9M | $54.7M |
| Other Current Liab | $501.6M | $421.4M | $396.4M | $394.8M |
| Long-Term Liabilities | $5.03B | $5.31B | $5.44B | $5.70B |
| Long-Term Debt | $4.56B | $4.77B | $4.84B | $5.07B |
| LT Operating Leases | $26.0M | $17.9M | $17.9M | $33.3M |
| Other LT Liab | $437.2M | $508.1M | $561.3M | $579.6M |
| Total Liabilities | $5.66B | $6.06B | $6.17B | $6.43B |
| Shareholders' Equity | $551.5M | $893.6M | $1.10B | $1.06B |
| Retained Earnings | $552.4M | $894.5M | $1.08B | $1.01B |
| Total L&E | $6.21B | $6.96B | $7.28B | $7.48B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $439.4M | $417.3M | $429.1M | $385.5M |
| Non-Cash Adjustments | $103.0M | $130.0M | $471.2M | $478.6M |
| Working Capital Changes | $-5.6M | $58.5M | $-127.6M | $-94.3M |
| Cash from Operations | $536.8M | $605.8M | $772.7M | $769.8M |
| Cash from Investing | $-3.10B | $-718.0M | $-545.2M | $-471.5M |
| Debt Issuances | $2.86B | $1.77B | $965.5M | $1.10B |
| Share Buybacks | $174.9M | $55.9M | $186.0M | $427.8M |
| Dividends Paid | $26.0M | $27.1M | $29.2M | $30.8M |
| Cash from Financing | $2.42B | $129.3M | $-196.6M | $-262.5M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-150.9M | $17.1M | $30.9M | $35.8M |
| Beginning Cash | $355.6M | $204.7M | $221.8M | $252.7M |
| Ending Cash | $204.7M | $221.8M | $252.7M | $288.5M |
Frequently Asked Questions
How does Churchill Downs Inc make money?
The company's revenue is driven by three core pillars: wagering (including both traditional on-site betting and digital/mobile sports betting), hospitality services encompassing food, beverage, and lodging at its race tracks, and sponsorship revenues derived from partnerships with major brands for its live racing events and media rights.
What are the main risks for CHDN?
Regulatory changes at the federal or state levels could impact the expansion of online sports betting markets, which currently drive significant growth. The company faces exposure to economic downturns that may reduce discretionary spending on hospitality services and wagering among its customer base. Operational risks include potential injuries to horses or athletes leading to event cancellations, as well as increased competition from new market entrants in the legal sports betting space.
What is CHDN's competitive advantage?
Ownership of Churchill Downs in Louisville provides an unreplicable moat as the historic home of the Kentucky Derby, attracting massive global media attention and visitor traffic. The company benefits from a diversified revenue mix that combines high-margin digital sports betting growth with stable on-site hospitality and sponsorship income. Its established presence in both horse racing and casino gaming sectors offers resilience against seasonal fluctuations in any single segment.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.