PENN Entertainment’s third quarter results were met with a significant negative market reaction, as the company missed Wall Street’s revenue and profit expectations. Management attributed the underperformance to challenges in its digital operations, particularly lower-than-anticipated online sports betting volumes and customer-friendly game outcomes. CEO Jay Snowden acknowledged that despite meaningful progress in product and cross-sell efforts, PENN was unable to establish ESPN Bet as a major player, prompting an early termination of the ESPN partnership. Snowden stated, “It is the right time to realign our interactive focus and enhance connectivity across our ecosystem.”
Is now the time to buy PENN? Find out in our full research report (it’s free for active Edge members).
PENN Entertainment (PENN) Q3 CY2025 Highlights:
- Revenue: $1.72 billion vs analyst estimates of $1.73 billion (4.8% year-on-year growth, 0.6% miss)
- Adjusted EPS: -$0.22 vs analyst estimates of -$0.03 (significant miss)
- Adjusted EBITDA: $194.9 million vs analyst estimates of $385.2 million (11.3% margin, 49.4% miss)
- Operating Margin: 2.9%, down from 4.1% in the same quarter last year
- Market Capitalization: $2.04 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From PENN Entertainment’s Q3 Earnings Call
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Barry Jonas (Truist Securities) asked about profitability after the ESPN exit. CEO Jay Snowden explained the shift would allow PENN to redeploy marketing to higher-return segments, focusing on Canada and iCasino states, and expects improved digital margins in 2026.
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Brandt Montour (Barclays) questioned the impact of reduced marketing spend post-ESPN. Snowden confirmed most savings would flow to the bottom line, with targeted reinvestment in high-value markets, while monitoring retention closely after the rebrand.
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Joe Stauff (Susquehanna) inquired about theScore Bet’s user base and cross-border potential. Snowden detailed a 4 million monthly active user base across North America, with two-thirds in the U.S., and highlighted opportunities to leverage this for growth.
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Jordan Bender (Citizens Capital Markets) asked about potential acquisition of Canadian retail properties for deeper cross-sell. Snowden said it remains on the radar but is not an immediate priority due to limited opportunities.
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John DeCree (CBRE) sought clarity on customer retention strategies during the transition. Snowden and Chief Technology Officer Aaron LaBerge noted the app experience will remain unchanged for users, with enhanced CRM and product features to support retention.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the effectiveness of theScore Bet rebranding and customer retention strategies, (2) the impact of reduced fixed marketing costs and more targeted digital investment, and (3) performance trends at new and existing casino properties, including cross-sell between digital and retail. Execution on digital profitability targets and regulatory developments in iCasino markets will also be key factors shaping future results.
PENN Entertainment currently trades at $15.22, down from $16.37 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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