Kentucky Derby week buoys Churchill's record earnings

A record Kentucky Derby 2025 helped Churchill Downs Inc. to a record second-quarter performance with earnings before interest, tax, depreciation and amortization totaling $450.9 million for the three months ending June 30, a 1.3% increase from last year’s high.

CEO Bill Carstanjen told investors on a Thursday morning conference call that five key areas of focus led to the growth despite concerns over soft ticket sales leading up to the event. They included ticketing revenue, broadcast rights, wagering, sponsorship and selective allocation of capital.

Kentucky Oaks 2026 will be run at night.

"Ticketing revenue Derby week continues to grow," Carstanjen said. "We had 370,000 attend the races Derby week. That’s like hosting five Super Bowls. We are shaping the Derby week experience to a range of experiences and price points culminating in the Derby itself. Our proven ability to design and segment customer experiences increases demand. This approach will continue to drive EBITDA."

Handle during Kentucky Derby week 2025 was $473.9 million, an increase of 6.1% over 2024, which marked the sesquicentennial of both the Kentucky Derby and Oaks. Wagering on the Derby race alone this year was $234.4 million.

"Churchill Downs continues to attract the best horses from around the world, and the Derby event itself has increasing cultural relevance," Carstanjen said. "This event also helps TwinSpires attract both new and serious players as it posted records in registrations, wagers made and handle."

Carstanjen noted that the Derby’s increased footprint internationally helped both sponsorship and licensing as well as driving capital projects. Most of the marketing toward international participation focuses on higher end experiences, he said.

Churchill and NBC are in the early part of a seven-year agreement for Kentucky Derby broadcast rights that Carstanjen said will contribute $10 million to EBITDA in 2026.

Also new for 2026 is a primetime Kentucky Oaks, which NBC will broadcast on its primary network instead of Bravo or USA.

The biggest negative on the earnings report related to Churchill’s gaming operations, which declined 9.5% in adjusted EBITDA. Churchill’s earnings statement noted a loss of historical-racing machine revenue in Louisiana, where it operates Fair Grounds. Churchill has agreed to operate a race meeting in 2025-26 in New Orleans, and Carstanjen said the company relocated 500 historical horse-racing machines to Kentucky and Virginia.

Handle on TwinSpires for the second quarter was up 1.9% to $665.9 million, though handle through the first six months of the year is down half a point to $1.066 billion.

While Churchill stock is still far off its record $150.21 price from the fall of 2024, it rebounded from its low of $85.58 in April ahead of this year's Derby. That was when Carstanjen told investors Churchill was pulling back on capital expenditures related to uncertainty in the market. 

"Our job is to drive shareholder value, and we take that very seriously. We work for you," Carstanjen said. "This is an exciting path we’re on. We’ll share more about our future plans in our third-quarter conference call, so stay tuned."