**During the company’s fourth-quarter earnings call on Thursday (27 February), Penn’s CEO emphasized future prospects, suggesting a focus on progress rather than past achievements. Snowden mentioned Penn is noticing “green shoots” across various departments while highlighting the need for further efforts to fully realize the potential of their partnership with ESPN.**
**For digital gaming, the company reported revenue of $275 million for the fourth quarter. Although there was a $109.8 million adjusted EBITDA loss, this marked a $224 million improvement compared to the same quarter in 2023. However, these numbers impacted Penn’s overall performance and were below analyst expectations.**
**Penn exceeded Truist’s adjusted EBITDA forecast with $320.7 million, though it was 1% below general expectations. The company’s stock dropped from $20 at opening to $19.28 immediately after the call, closing at $20.39.**
**On the land-based side, $461.2 million of adjusted EBITDAR exceeded expectations, while digital losses of $110 million aligned with predictions. Net revenue presented a mixed scenario but remained within 1% of Truist and general projections.**
**Snowden announced that Penn plans to buy back “at least” $350 million in stock over the next year as a display of confidence.**
## **Growth slow and parlays not paying**
**Since ESPN Bet launched in November 2023, it has struggled to penetrate the top tier of sports betting platforms. FanDuel and DraftKings maintain dominant positions, with BetMGM trailing in third place. The initial aim when replacing Penn’s Barstool Sportsbook was to achieve a 20% market share by 2027, yet ESPN Bet currently holds under 5% — a figure executives aim to increase later this year.**
**ESPN Bet faces challenges in capitalizing on parlays, a significant issue beyond several favorable football months for bettors. Parlays, which are multi-leg bets, account for at least 50% of bets on DraftKings and FanDuel, but only 30% on ESPN Bet. This is crucial as parlays represent the most lucrative market for operators.**
## **Snowden: More improvements coming**
**Snowden assured more new integrations and cross-selling for ESPN Bet, introducing a personalized experience for individual bettors along with new livestreaming features last fall. The goal is to attract more consumers, banking on Penn’s omnichannel strategy.**
**Meanwhile, Penn’s demographic is growing younger with more retail locations opening. Hollywood Joliet (Illinois) is expected to open in the fourth quarter of 2025, with three additional land-based locations planned for 2026. Last year, the company also launched online casino products in Michigan and Pennsylvania.**
**Snowden acknowledged ESPN Bet is being run like a “scale player.” He stated that if Penn does not meet its targets for the platform by year’s end, operational adjustments could be made, specifically referencing significant marketing expenditures in its digital business.**
**”Our current cost structure is designed for scaling because that’s our expectation alongside ESPN,” Snowden stated. “But if our trajectory shifts, the business model will need to adapt accordingly.”**
## **What analysts are saying**
**Truist analyst Barry Jonas noted that if the platform does not reach a critical point soon, Penn’s remarks suggest a potential scaling down of marketing spending, cost structure optimization, and other adjustments. This aligns with the agreement’s three-year anniversary in 2026, where opt-outs for both parties are possible.**
**Carlos Santerelli of Deutsche Bank highlighted the “momentum” in online casino growth. He also observed a shift in the “tone” regarding the online segment, suggesting executives view the digital business as a valuable asset.**