Churchill Downs Incorporated

What they do

CDI manages three reportable segments: Live and Historical Racing, Wagering Services and Solutions, and Gaming, with other businesses and corporate operations in All Other. Live and Historical Racing includes Churchill Downs Racetrack in Louisville, Kentucky and historical racing properties in Kentucky, Virginia, and New Hampshire. The company has operated thoroughbred racing at Churchill Downs Racetrack since 1875 and the Kentucky Derby is described as the longest continuously held annual sporting event in the U.S.

Revenue drivers

• Live and Historical Racing — Earns commissions from pari-mutuel wagering on live and historical races, simulcast fees, admissions and seat licenses, sponsorships, television rights, food and beverage, and other event services. In Q2 2026 this segment generated $575 million of revenue and $318 million of Adjusted EBITDA.
• Kentucky HRM venues — Historical racing machine venues in Kentucky produced a $12 million revenue increase and a $6 million Adjusted EBITDA increase in Q2 2026, driven by Southwestern, Northern, and Western Kentucky venues.
• Virginia HRM venues — Virginia historical racing venues contributed a $1 million revenue increase in Q2 2026, with Northern Virginia gains partly offset by a $4 million decline in Central Virginia tied to increased competition.
• Churchill Downs Racetrack / Derby Week — The 152nd Kentucky Derby drove a $21 million revenue increase and $16 million Adjusted EBITDA increase at the racetrack in Q2 2026, from NBC broadcast revenue, ticketing, sponsorship and licensing, and wagering.

Recent performance

Second quarter 2026 net revenue was an all-time record $980 million, up $46 million or 5% versus the prior year quarter. Net income attributable to CDI was $241 million, up $24 million or 11%, and Adjusted EBITDA was an all-time record $477 million, up $26 million or 6%. Diluted EPS attributable to CDI was $3.42 versus $2.99 a year earlier, and Adjusted Diluted EPS was $3.45 versus $3.10. The quarter included the 152nd Kentucky Derby, which set an all-time record Derby Week contribution to Adjusted EBITDA and all-time record all-sources wagering for Derby Week. The company ended Q2 2026 with net bank leverage of 3.7x.

Strategy

CDI has expanded through acquisition, development, and operation of live and historical racing entertainment venues, online wagering businesses, and regional casino gaming properties. Since 2021 it completed major multi-year capital investments at Churchill Downs Racetrack, including the Homestretch Club, First Turn Club, Jockey Club Suites renovation, Paddock Project, and the Starting Gate Pavilion and Courtyard, which was completed for the 151st Kentucky Derby. In the second quarter of 2026, the company cited construction of the Rockingham Grand Casino venue in New Hampshire and the planned closure of the temporary Casino Salem venue during that construction. Management also references a strategic alternative review process in its forward-looking disclosure.

Risks

• Extraordinary events and attendance — Terrorism, public health threats, civil unrest, or inclement weather can reduce attendance at Churchill Downs Racetrack and other venues or expose the company to liability.
• Economic sensitivity — Inflation and negative economic conditions can reduce consumers' discretionary spending on entertainment and leisure, affecting demand at CDI properties.
• Regulatory and public opinion — Negative shifts in public opinion about gambling or changes in tax and gaming regulation could increase restrictions or taxes on the industry.
• Competition — Q2 2026 Central Virginia HRM revenue fell $4 million primarily from increased competition, and the company expects competition levels to increase.

Outlook

Management reported Q2 2026 net bank leverage of 3.7x and cited a record Derby Week and all-time record Adjusted EBITDA. The company is proceeding with construction of the Rockingham Grand Casino venue in New Hampshire while operating a temporary Casino Salem venue that is planned to close during construction. Forward-looking disclosure notes a strategic alternative review process whose objective, terms, timing, and consummation are uncertain. CDI says it is evaluating new venue development and expansion of existing facilities, subject to cost, integration, and timing risks.