Churchill Downs posts record first quarter, Preakness rights loom over outlook

Churchill Downs Incorporated opened 2026 with record first-quarter revenue, profit and adjusted earnings, but the bigger story inside the numbers was where the money came from: gaming and historical horse racing, not pari-mutuel racing alone.

The company reported net revenue of $663 million, net income attributable to CDI of $83 million and adjusted EBITDA of $257 million. Revenue rose 3% from a year earlier, net income climbed 8% and adjusted EBITDA increased 5%, a strong quarter by any measure. Yet CDI’s stock was still down more than 20% year to date, a reminder that investors are looking past headline growth and toward the durability of the company’s next moves.

The clearest proof of CDI’s changing economic center was in live and historical racing. That segment generated $301 million in the first quarter, up 8.7% year over year, as the company leaned on its Kentucky and Virginia venues. The results underscored how Churchill Downs has become a business built as much on gaming floor traffic and historical horse racing machines as on the races run under the Twin Spires.

That shift matters because Churchill Downs Racetrack remains the company’s signature asset, but it is no longer the only engine. In February, management said 375,000 guests attended Derby week in 2025 from the Saturday before Derby Day through race day, and CFO Marcia Dall said Derby week 2026 is expected to generate $15 million to $20 million in incremental adjusted EBITDA. The racetrack still carries the brand, but the earnings profile increasingly comes from the broader portfolio around it.

CDI also kept expanding that portfolio. Roseshire Gaming Parlor opened in Henrico County, Virginia, on Sept. 29, 2025, and Marshall Yards Racing & Gaming opened in southwestern Kentucky on Feb. 25, 2026. The company has also put $180 million to $200 million toward Rockingham Grand Casino in Salem, New Hampshire, a project announced Jan. 12 with a planned mid-2027 opening. CDI finished the quarter with net bank leverage of 3.8x and returned $31 million to shareholders, including a $0.438 per-share dividend paid Jan. 6.

The other headline hanging over the company is the Preakness. On April 21, CDI agreed to pay $85 million for the intellectual property rights to the Preakness Stakes and the George E. Mitchell Black-Eyed Susan Stakes from 1/ST Maryland LLC. The deal is expected to close after the 2026 Preakness, and CDI said it will license the rights back to Maryland so the races can continue to be run there. Beginning in 2027, the move gives CDI control of the first two legs of the Triple Crown in brand terms, a signal that the company’s reach in racing is now as much about ownership of premier properties as it is about the races themselves. The first-quarter call scheduled for April 23 at 9 a.m. ET is set to show how far management wants to push that model.