{"id":2396663,"date":"2026-04-30T20:56:06","date_gmt":"2026-04-30T20:56:06","guid":{"rendered":"https:\/\/celebrity.land\/en\/?p=2396663"},"modified":"2026-04-30T20:56:06","modified_gmt":"2026-04-30T20:56:06","slug":"melco-resorts-entertainment-q1-earnings-call-highlights","status":"publish","type":"post","link":"https:\/\/celebrity.land\/en\/melco-resorts-entertainment-q1-earnings-call-highlights\/","title":{"rendered":"Melco Resorts & Entertainment Q1 Earnings Call Highlights"},"content":{"rendered":"

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Melco Resorts & Entertainment logo <\/figcaption><\/figure>\n

Melco Resorts & Entertainment (NASDAQ:MLCO) reported what management described as a \u201cstrong\u201d first quarter of 2026, with year-over-year growth in both group and Macau earnings and continued progress on several strategic initiatives, including a new luxury hotel opening at City of Dreams Macau and a planned retail refresh.<\/p>\n

Quarterly performance and Macau trends <\/h2>\n

Chairman and CEO Lawrence Ho said both group property EBITDA and Macau property EBITDA increased 12% year-over-year during the first quarter. Ho added that Melco\u2019s Macau gross gaming revenue (GGR) rose approximately 10% year-over-year, with \u201csolid growth across all segments.\u201d<\/p>\n

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Executive Director and CFO Geoff Davis reported group-wide adjusted property EBITDA of approximately $381 million for Q1 2026, up 12% year-over-year. Adjusted for VIP hold, Davis said property EBITDA was approximately $356 million. He noted that favorable win rates at City of Dreams Macau and City of Dreams Manila benefited property EBITDA by approximately $20 million and $5 million, respectively.<\/p>\n

On costs, Davis said daily operating expenses in Macau (excluding House of Dancing Water) were approximately $3.2 million per day, \u201cin line with our prior guidance.\u201d Including House of Dancing Water and residency concerts over the last four quarters, total daily OpEx \u201chas been relatively stable,\u201d according to Davis. He said Macau property EBITDA margin increased to approximately 28%, which he attributed in part to operating leverage, while emphasizing the company remains focused on cost management to improve flow-through and margins.<\/p>\n

REM hotel launch and City of Dreams retail refresh <\/h2>\n

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Ho highlighted the planned launch of REM, a new luxury hotel at City of Dreams Macau, which was officially announced in March. He said Melco remains on track to begin a phased opening early in the third quarter of 2026, describing REM as a \u201cmeaningful enhancement\u201d to the City of Dreams portfolio that aims \u201cto redefine contemporary luxury across Macau.\u201d<\/p>\n

Evan Winkler, President and Managing Director, provided additional detail, saying the opening will add 149 keys and that operating expenses associated with REM are expected to increase by roughly $30,000 to $40,000 per day as it begins operations. Winkler said the product is \u201chighly differentiated\u201d and is \u201cvery heavily weighted towards the one bedroom suite product,\u201d with flexibility to combine suites and rooms.<\/p>\n<\/p><\/div>\n

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Management also discussed a refresh of retail areas at City of Dreams Macau. Ho said the company has \u201ccommenced a refresh of the retail areas\u201d and plans to enhance food and beverage offerings. In response to a question about potential disruption, Winkler said work has already begun and will be phased \u201czone by zone\u201d over the next 10 to 12 months. While construction will take place in different areas throughout the period, he said Melco does not expect any timeframe where the property is \u201cmassively impacted,\u201d citing a phasing plan designed to minimize disruption.<\/p>\n

Philippines, Cyprus, and Sri Lanka updates <\/h2>\n

In the Philippines, Ho said City of Dreams Manila faced competitive pressures and broader industry headwinds, but still delivered year-over-year growth. Ho reported property EBITDA rose 24% year-over-year in Q1 2026 and GGR increased 9%. He said the company continues to \u201cpunch above our weight in the market\u201d and is expanding marketing initiatives across Southeast Asia.<\/p>\n

For City of Dreams Mediterranean and satellite casinos in Cyprus, Ho said results were affected by conflicts in the Middle East that escalated in late February. However, he added that April showed \u201csignificant improvements in occupancy, visitation, and play levels,\u201d and said the company remains \u201coperationally flexible\u201d in anticipation of further recovery in travel demand.<\/p>\n

Ho also noted that Melco\u2019s casino operations in Sri Lanka recorded positive EBITDA in Q1 2026, and said the company remains focused on a \u201cprogressive ramp\u201d of operations throughout the year.<\/p>\n

Trademark acquisition, liquidity, and share repurchases <\/h2>\n

A major corporate update on the call was Melco\u2019s purchase of trademarks previously licensed from Melco International. Ho said the company purchased the subsidiary of Melco International that owns the trademarks, calling them \u201cintegral\u201d to Melco\u2019s business and saying the acquisition provides \u201cfull control of the IP\u201d and flexibility to expand the brand \u201cwithout any incremental cost.\u201d<\/p>\n

Davis said the purchase price was $375 million, and that the transaction followed arm\u2019s length negotiations between independent audit committee members, with a professional valuation firm assisting the evaluation. He noted the trademark license fee in Q1 2026 was approximately $13.4 million, implying a purchase price of just under 7x the annualized first-quarter fee. Davis said the multiple was \u201cin line with Melco\u2019s current trading multiple\u201d and below those of Macau peers.<\/p>\n

Davis added that the deal results in an \u201cimmediate increase in EBITDA and cash flow\u201d and removes uncertainty around potential fee increases at the end of the prior royalty arrangements. Funding will come from a combination of a credit facility draw and internal funds, and Davis said the incremental debt is \u201cimmaterial\u201d to the company\u2019s credit profile. He said debt-to-EBITDA is expected to rise by less than half a turn after the transaction, and that management expects leverage to return to Q1 2026 levels before the end of 2026.<\/p>\n

On the balance sheet, Davis reported available liquidity of approximately $2.4 billion at the end of Q1 2026, including consolidated cash of roughly $1.1 billion. During the quarter, Melco repaid $60 million in debt at Melco Resorts and $10 million at Studio City, and Davis said the group has no material debt maturities in 2026.<\/p>\n

The company also highlighted capital returns. Davis said that as of April 29, 2026, Melco had repurchased approximately 2.5 million ADSs for total consideration of about $14 million year-to-date. He said the company expects to continue \u201copportunistic\u201d repurchases and characterized the share price as \u201cmeaningfully undervalued,\u201d noting that recent trading levels imply a free cash flow yield of over 20%.<\/p>\n

In addition, Davis said the board approved a new $500 million share repurchase program, which is incremental to the existing authorization and brings total repurchase authorization to $710 million. Davis said the company remains focused on reducing debt and leverage while evaluating capital allocation based on cash availability, market conditions, and the share price.<\/p>\n

Guidance items, holiday commentary, and dividend timing <\/h2>\n

For the second quarter of 2026, Davis provided guidance on non-operating items:<\/p>\n