Melco Resorts Q3 EBITDA Falls 24% as Macau Results Weaken

Melco Resorts & Entertainment Limited (NASDAQ: MLCO) reported a sharp decline in third-quarter profitability as weaker results at its major Macau properties outweighed growth in Cyprus. Revenue fell 10.4% from a year earlier to $1.17 billion, while adjusted property EBITDA decreased 24.4% to $288 million. The casino operator posted a net loss of $9 million, compared with net income of $62 million in the prior-year quarter.

Gaming revenue declined 11.5% to $939 million for the three months ended September 2026, while non-gaming revenue fell 5.5% to $234 million. Operating costs and expenses decreased 4.6% to $1.07 billion, but the reduction was not enough to offset the revenue contraction. Operating income dropped 45.7% to $100 million, and adjusted EBITDA fell 24.8% to $265 million.

The company said hold-adjusted property EBITDA, which assumes a normalized 3% VIP win rate, was an estimated $298 million. The corresponding hold-adjusted property EBITDA margin was 25%, compared with 28.1% a year earlier. The measure is illustrative and adjusts only for VIP win rates.

Macau properties lead the decline

City of Dreams Macau recorded adjusted EBITDA of $130 million, down 37% year over year, as revenue decreased 16% to $566 million. Total gross gaming revenue fell 14% to $633 million. VIP gross gaming revenue declined 44%, reflecting a 17% reduction in rolling-chip volume and a VIP win rate of 2.49%, down 119 basis points. Mass-market gross gaming revenue decreased 3%, while slot revenue rose 12%.

The property’s adjusted EBITDA margin narrowed to 23% from 30.8% in the third quarter of 2025. On a hold-adjusted basis, City of Dreams Macau generated $145 million of EBITDA.

Studio City reported adjusted EBITDA of $91 million, down 13% from a year earlier, on an 8% decline in revenue to $346 million. Mass-table drop decreased 10%, and total gross gaming revenue fell 7% to $321 million. Its adjusted EBITDA margin was 26.2%, compared with 27.9% a year earlier, though it increased from 25.7% in the second quarter.

Altira generated revenue of $31 million, up 22% year over year, while total gross gaming revenue rose 40% to $36 million. However, the property recorded a small adjusted EBITDA loss of $0.3 million, compared with a $2 million profit in the preceding quarter.

Melco continued to add and refresh offerings in Macau. REM, formerly known as The Countdown, began a phased opening in August and held its grand opening on October 20. The property has 149 suites. The company also identified a revamp of the retail area at City of Dreams Macau as an upcoming project.

Cyprus offsets part of the weakness

City of Dreams Manila produced adjusted EBITDA of $33 million, down 20% from the prior-year period despite a 6% sequential increase. Revenue declined 11% year over year to $99 million, and total gross gaming revenue decreased 9% to $114 million. The property’s adjusted EBITDA margin was 33.3%, versus 37.3% a year earlier.

City of Dreams Mediterranean and Other was the strongest-performing reported segment. Adjusted EBITDA increased 11% year over year and 29% sequentially to $26 million. Revenue rose 13% from a year earlier to $97 million, supported by a 21% increase in mass gross gaming revenue and a 5% rise in slot revenue. Total gross gaming revenue advanced 13% to $88 million, while the adjusted EBITDA margin was 26.5%.

Other Operations, which includes Melco’s Sri Lanka casino operations and hotel management services, contributed $4 million of adjusted property EBITDA, compared with a $1 million loss a year earlier. City of Dreams Sri Lanka opened in 2025 and has approximately 800 hotel rooms, including 113 rooms managed by Melco under the Nüwa brand.

Fourth-quarter cost outlook and liquidity

For the fourth quarter of 2026, management expects depreciation and amortization of approximately $140 million to $145 million and corporate expenses of about $20 million to $25 million. Consolidated net interest expense is projected at $115 million to $120 million, including roughly $6 million related to fees payable under the Macau gaming concession and Cyprus gaming license and about $5 million of finance-lease interest related to City of Dreams Manila.

Melco reported group cash and cash equivalents of $887 million as of September 30, along with $1.07 billion available under credit facilities. Total liquidity stood at approximately $1.95 billion. The company said it remains focused on reducing leverage and prioritizing performance and profitability.

Melco repurchased $236 million of shares in 2026 through November 3. Since 2016, it has returned approximately $4.3 billion to shareholders through dividends and repurchases, including about $969 million of share repurchases since 2020. The presentation indicated that approximately $487 million remained under its current repurchase authorization.

The company cautioned that its outlook remains exposed to changes in gaming demand and visitation across Macau, the Philippines, Cyprus and Sri Lanka, as well as local and global economic conditions, capital-market volatility and regulatory approvals. It also identified risks related to implementation of Macau’s amended gaming law, execution of growth projects and future operating and financial performance.