Melco Resorts & Entertainment (MLCO) Earnings Date & Reports

Key Takeaways

• Melco Resorts reported third quarter 2026 revenue of roughly $1.17 billion, down about 10% from $1.31 billion a year earlier and below consensus estimates.
• Net income attributable to Melco was essentially breakeven, compared with approximately $74.7 million in the prior-year quarter.
• Adjusted Property EBITDA (earnings before interest, taxes, depreciation, and amortization) came in at about $288 million, down from around $380 million a year ago.
• City of Dreams Macau drove most of the decline, partly due to unfavorable VIP (high-stakes) win rates in the rolling chip segment.
• The company redeemed $765 million of debt, eliminated 2027 maturities, and bought back about $236 million of shares year to date.
• Bright spots came from outside Macau, with City of Dreams Mediterranean posting a record quarter and Manila holding steady.
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Earnings Context and Why It Matters

Melco Resorts & Entertainment is one of Macau's largest casino and integrated resort operators, with flagship properties such as City of Dreams, Studio City, and Altira Macau alongside operations in the Philippines, Cyprus, and Sri Lanka. Because Macau remains the company's dominant earnings engine, its quarterly results serve as a closely watched barometer of Chinese consumer spending and regional gaming demand. This report arrives against a backdrop of softening Macau gross gaming revenue (GGR, the total amount wagered minus winnings paid), weak Chinese consumption, and intense competition among concessionaires. Investors were watching whether Melco's cost discipline, debt reduction, and share buybacks could offset a softer revenue environment and protect profitability.

Reported Results

For the third quarter ended September 30, 2026, Melco Resorts reported total operating revenue of approximately $1.17 billion, a decline of roughly 10% from $1.31 billion in the same period a year earlier and short of consensus expectations. Net income attributable to Melco was essentially breakeven at about $34,000, compared with approximately $74.7 million in the prior-year quarter.

Group-wide Adjusted Property EBITDA was about $288 million, or approximately $298 million after adjusting for VIP hold, down from around $380 million a year earlier. Unfavorable VIP win rates at City of Dreams Macau weighed on results by about $14 million. City of Dreams Macau saw revenue fall to roughly $566 million and Adjusted EBITDA decline to about $130 million. Studio City's Adjusted EBITDA slipped to about $91 million. Outside Macau, City of Dreams Mediterranean posted its highest quarterly EBITDA since opening, while City of Dreams Manila held steady at roughly $33 million.

On the balance sheet, Melco redeemed a combined $765 million of debt during the quarter, leaving no debt maturities scheduled for 2027. The company also continued buybacks, repurchasing roughly $236 million of its American Depositary Shares (ADS, U.S.-listed shares representing ownership in a foreign company) year to date. Management trimmed capital expenditure guidance to about $375 million for 2026 and $275 million for 2027.

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Market Reaction and Investor Sentiment

Shares showed a modestly positive initial response following the report, as investors weighed a weaker revenue line against better-than-guided cost control and aggressive capital returns. Sentiment remains cautious, however, given that the company posted a third consecutive quarterly decline in Adjusted EBITDA and management described the Macau demand environment as "challenging." Management cited a "perfect storm" of weak Chinese consumption, World Cup after-effects, and overseas tax issues, noting that October Macau GGR fell roughly 10% year over year. The stock has remained well below its 52-week high, reflecting persistent uncertainty around the pace of any demand recovery.

Forward Outlook and Key Factors to Monitor

Looking ahead, investors will focus on whether Melco's renewed sales force and disciplined reinvestment strategy can defend market share and margins in a softer Macau environment. Management said the company outperformed the broader Macau market in October, but acknowledged that broad-based softness across customer segments is tied to the wider Chinese economy rather than a single factor.

Several catalysts deserve attention. The newly branded REM hotel at City of Dreams Macau adds roughly 150 keys, while ongoing retail and food-and-beverage renovations are expected to roll out progressively from late 2026 through summer 2027. These upgrades are aimed at capturing evolving customer demand but may add modest operating costs.

Balance sheet management remains a central theme. With deleveraging described as the company's top priority for free cash flow, investors will monitor further debt reduction, share repurchases, and the potential resumption of a dividend, which management indicated could occur toward the end of 2027. Capital expenditure guidance has been lowered, which may support cash flow flexibility.

On the demand side, key indicators include monthly Macau GGR trends, Chinese consumer spending, and competitive reinvestment levels across concessionaires. Management has signaled it will avoid chasing share through excessive reinvestment, but the durability of that discipline depends on how rivals respond. Outside Macau, continued momentum in Cyprus and stability in Manila offer a partial offset to regional softness.

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