Key Highlights

● Net Revenue hit $696 million and Earnings Per Share reached $1.15 in the third quarter.

● Adjusted EBITDA reached a record $264 million.

● The Dividend rose to $0.469 a share, a 16th consecutive annual increase.

● A new $750 million share repurchase authorisation was announced alongside the results.

Churchill Downs (NASDAQ:CHDN), the home of the Kentucky Derby, delivered record quarterly results, raised its dividend for a 16th straight year and unveiled a $750 million buyback, sending its shares sharply higher.

Records across the board

Churchill Downs, the Louisville company behind the Kentucky Derby as well as a network of casinos, historical racing machine venues and online wagering, reported a third quarter full of records. Net revenue came in at $696 million. Earnings per share reached $1.15, more than double the 54 cents it earned a year earlier. Adjusted EBITDA hit a record $264 million, according to market data.

The stock jumped on Thursday, October 29, trading at $89.37 and ranking among the strongest gainers in the S&P MidCap 400.

Cash comes back to shareholders

The Capital return package was arguably as important as the results. Churchill Downs raised its dividend to $0.469 a share, marking its 16th consecutive annual increase. It also announced a new $750 million share repurchase authorisation.

Taken together, the moves signal a company comfortable with its cash flow. A long streak of dividend increases tends to attract income-oriented investors, while a large buyback gives the company the flexibility to shrink its share count when it sees value in its own stock.

A rebound from analyst caution

The rally carried added weight given recent analyst caution. One analyst had earlier cut his price target on the stock to $125 from $157, while keeping an Outperform rating, according to market data. Even after Thursday's jump, the shares traded well below that reduced target.

A record quarter offers a counterweight to that caution. When a company posts its best-ever figures and pairs them with a sizeable buyback, it can reset the debate around whether earlier concerns were overdone.

Riding the rotation

Churchill Downs' gain was part of a broad move into companies outside the technology complex. While the Nasdaq Composite slid 365.13 points to 26,184.72 and the S&P 500 slipped 23.59 points to 7,720.39, the Russell 2000 rose 28.71 points to 2,859.22. More than 400 of the S&P 500's members closed higher, a split that underscored how concentrated the day's losses were in a few mega-cap names, led by Alphabet (NASDAQ:GOOGL)'s historic drop.

One market strategist put it simply: "Money is rotating within the market rather than leaving it." Health care, financials and real estate were among the main beneficiaries, according to market commentary.

The macro picture was mixed. Third-quarter GDP accelerated from the second quarter and beat forecasts, a supportive sign for discretionary spending such as racing, gaming and entertainment. But September PCE Inflation ran hot, and markets continued to price a December rate hike after the Federal Reserve held steady on Wednesday with two officials dissenting in favour of an increase.

Why records matter for a gaming company

Gaming and wagering revenue can be sensitive to consumer confidence. A record quarter suggests customers kept spending even as inflation stayed elevated, and record EBITDA can point to operating leverage, where profit grows faster than costs. For investors, that combination is exactly what supports both a rising dividend and a larger buyback.

What to watch

Investors will monitor how quickly Churchill Downs deploys its new $750 million authorisation and whether it leans on repurchases while the shares trade below the analyst's reduced target.

The fourth quarter and the run-up to the 2027 Kentucky Derby will test whether the record pace can be sustained. Consumer spending trends, rate expectations ahead of the Fed's December 8–9 meeting, and any analyst revisions following the report will all help determine whether Thursday's jump holds.