Melco Resorts & Entertainment (NASDAQ:MLCO) reported continued recovery and margin expansion in 2025, with management highlighting growth in Macau, ongoing competitive pressure in the Philippines, and improving results in Cyprus during the company’s fourth-quarter 2025 earnings call.
2025 results and early 2026 demand trends
Chairman and CEO Lawrence Ho said 2025 was “a year of growth and recovery,” supported by disciplined cost management and margin expansion. For the full year, the company generated $1.4 billion in group property EBITDA, up 17% from 2024.
Ho added that Melco entered 2026 with momentum, pointing to Macau market gross gaming revenue up 24% year-over-year and an increase in Melco’s market share so far in the first quarter of 2026. He also said Chinese New Year looked strong, with “higher yielding cash ADRs compared to 2025.”
Macau initiatives: Countdown Hotel, retail and food & beverage
Management outlined a pipeline of initiatives planned for 2026 to further differentiate the company’s Macau offerings. Ho said the largest project is the opening of the renovated Countdown Hotel, with progressive openings expected to begin in the third quarter of 2026. He described the finished hotel as intended to deliver a distinctive experience and “set a new benchmark in Macau.”
Ho also said the company has begun revamping the retail area at City of Dreams Macau and has plans to upgrade food and beverage offerings as part of ongoing product improvements.
During Q&A, management discussed the impact from the reopening of House of Dancing Water in May. Ho said the show has driven a “meaningful uptick in property visitation,” noting it runs about twice a day for five days a week and brings roughly 1,800 to 1,900 people per show. Management said they have seen strong non-gaming spending, especially food and beverage, but emphasized that attributing gaming revenue directly to the show is difficult. President and COO Evan Winkler said only a small percentage of attendees go directly from the show to gaming, but the attraction introduces thousands of new visitors to the property and may help generate repeat visits over time.
Philippines, Cyprus and Sri Lanka updates
In the Philippines, Ho said “competitive pressures and industry headwinds” continued to affect performance in the fourth quarter. However, he cited several encouraging developments, including:
- Visa-free travel for Chinese nationals
- Upgrades to Manila’s airport to support increasing international tourism
- Rationalization of the online gaming market
Ho also said the company concluded its evaluation of strategic alternatives for City of Dreams Manila, but decided not to proceed because the options considered would not allow the value and potential of the property to be fully realized. He said management remains confident the business will rebound and may reevaluate in the future.
In Cyprus, Ho said City of Dreams Mediterranean and the satellite casinos delivered 78% year-over-year growth in property EBITDA to $21 million in the fourth quarter, despite seasonally slower months. In Sri Lanka, Ho said the company is focused on ramping operations and has seen “promising green shoots” so far in 2026.
Margins, expenses, balance sheet and 2026 outlook items
Chief Financial Officer Geoffrey Davis said group-wide adjusted property EBITDA for the fourth quarter rose 12% year-over-year to approximately $331 million. Adjusted for VIP hold, property EBITDA was approximately $323 million. Davis said favorable win rates at City of Dreams Macau and City of Dreams Manila benefited property EBITDA by about $7 million and $3 million, respectively.
Macau operating expenses increased sequentially in the fourth quarter, which Davis attributed mainly to events including the China National Games, Studio City’s 10th anniversary, and the Macau Grand Prix. Excluding those events and House of Dancing Water, he said Macau OpEx was approximately $3.1 million per day. He also said results were impacted by additional bad debt provisions tied to a settlement with a previous junket operator; in Q&A, management quantified the additional bad debt at approximately $5 million for the quarter, with about $6 million related to the anniversary.
Looking ahead, Davis said the company expects first-quarter 2026 Macau daily OpEx (excluding House of Dancing Water) to be about $3.2 million, reflecting increased marketing around Chinese New Year and new brand campaigns. On competitive conditions, Ho and Winkler said competition in Macau remains intense but appears stable, with Melco continuing to emphasize discipline in reinvestment and promotional spending.
On liquidity and leverage, Davis said the company ended 2025 with approximately $2.4 billion of available liquidity and $1.2 billion of consolidated cash on hand. In the fourth quarter, the company redeemed the remaining $358 million of senior notes due 2026 and repaid $210 million of debt at Melco and $32 million at Studio City. Davis said the group paid down roughly $400 million of debt during 2025 and continued reductions in early 2026, including $35 million repaid in January and a further $25 million expected to be repaid in February. He added the group does not have a material amount of debt maturing in 2026.
The company also provided details on a trademarks license agreement with Melco International, which owns and manages certain trademarks used by Melco Resorts. Davis said the agreement commenced Jan. 1, 2024, has an initial 10-year term, and renews automatically for 12-month periods unless either party opts out. The fee is up to 1.5% of gross revenues of City of Dreams Macau (excluding Grand Hyatt), with the rate set at 1% in 2025 and increasing to 1.5% starting in the first quarter of 2026. Davis said total fees for full-year 2025 were approximately $33 million.
For non-operating items in the first quarter of 2026, Davis guided to the following:
- Depreciation and amortization: $140 million to $145 million
- Corporate expense: approximately $35 million
- Consolidated net interest expense: $115 million to $120 million (including finance liability interest of around $6 million and finance lease interest of approximately $5 million)
On capital spending, Davis said total 2026 capex is expected to be about $450 million, reflecting some spending pushed from 2025 into 2026. He said the Countdown Hotel renovation is expected to account for about $100 million of 2026 capex, with spending by jurisdiction of roughly $375 million in Macau, $35 million to $40 million in Manila, and $35 million to $40 million in Cyprus.
About Melco Resorts & Entertainment (NASDAQ:MLCO)
Melco Resorts & Entertainment Limited (NASDAQ: MLCO) is a developer, owner and operator of integrated resort destinations in Asia and Europe. The company’s portfolio spans casino gaming, hotel accommodations, retail, dining and entertainment facilities. Melco’s properties feature a mix of luxury hotels, award-winning restaurants, high-limit gaming salons and entertainment venues, catering to a broad range of leisure and business travelers.
In Macau, Melco owns and operates flagship properties including City of Dreams Macau, Altira Macau and Studio City.
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