Churchill Downs (CHDN) stock surged 5.36% in after-hours trading on Wednesday, following the release of its third-quarter earnings report that exceeded analyst expectations and the announcement of a significant new capital investment project.

The Kentucky-based racing, online wagering, and gaming company reported third-quarter adjusted earnings per share of $1.09, surpassing the $1.02 estimate from analysts polled by FactSet. Revenue for the quarter came in at $683 million, also beating the Street's forecast of $671.2 million. The company's net income for the quarter stood at $38.1 million.

Adding to the positive sentiment, Churchill Downs unveiled plans for a new "Victory Run" capital investment project at its flagship Churchill Downs Racetrack. The company intends to invest between $280 million and $300 million in this initiative, with construction set to begin after the 2026 Kentucky Derby. This significant investment underscores the company's commitment to enhancing its core racing business and potentially driving future growth.

In a move that further pleased investors, Churchill Downs announced a 7% increase in its annual dividend. The new dividend of $0.438 per share will be payable on January 6, 2026, to shareholders of record as of December 5, 2025. This increase demonstrates the company's strong financial position and confidence in its future prospects.