Melco Resorts & Entertainment Ltd. has reported solid financial results for the first quarter of 2025, with the company’s total operating revenues increasing by 10.8% year-on-year, reaching US$1.23 billion. The strong performance was primarily driven by an improvement in both gaming and non-gaming operations across its properties.

Macau market drives significant growth:

The operator of casinos in Macau, the Philippines, Cyprus, and soon Sri Lanka, also saw its net income rise to US$32.5 million, compared to US$15.2 million in the same period of 2024. Melco’s adjusted EBITDA for the quarter grew by 14.1% to US$341 million, a reflection of the company’s ongoing momentum, especially in its Macau operations.

A key highlight of Melco Resorts’ Q1 2025 results was the continued strength in Macau, where the company’s property EBITDA surged by 32% compared to the previous quarter. Melco’s Chairman and CEO, Lawrence Ho, attributed the growth to a robust performance in the mass market segment. “Mass drop increased each month during the quarter, and we recorded our highest daily mass drop ever,” Ho stated, underscoring the business’s upward trajectory.

At City of Dreams in Macau, the company saw a significant year-on-year increase in operating revenues, which grew to US$658.1 million from US$550.9 million. This growth was fueled by higher rolling chip volumes, which increased to US$6.05 billion, and a higher win rate of 3.74%. Additionally, mass market table games also showed strong growth, with drop numbers rising to US$1.59 billion from US$1.48 billion.

This marked a strong performance in comparison to the previous year, with adjusted EBITDA rising to US$195.9 million from US$153.6 million. Slot gaming, another critical revenue stream, saw modest growth, with GGR up by 3% year-on-year.

Studio City and other Macau properties post strong results:

Studio City also demonstrated solid growth, with its total operating revenues climbing by 6% year-on-year, reaching US$336 million. The property saw a notable rise in its mass market segment, with GGR from mass gaming up by 11% to US$303 million. Slot revenues at the property also increased by 23%, bringing in US$33 million for the quarter. Adjusted EBITDA for Studio City improved by 11%, reaching US$97 million, marking a significant recovery from previous periods.

In contrast, Altira Macau, another Melco property in Macau, faced a challenging quarter. Its operating revenues dropped by 24% year-on-year to US$28 million, and the property recorded a negative adjusted EBITDA of US$0.7 million. The decline was primarily attributed to weaker performance in mass market table games, as the drop in table game volume decreased to US$108.8 million from US$140.7 million in Q1 2024.

While Macau delivered strong results, Melco Resorts faced mixed performance across its other global properties. As stated in the company’s press release, City of Dreams Manila in the Philippines was hit by increased competition, leading to a 13% decline in operating revenues, which fell to US$101.6 million. Adjusted EBITDA for the property dropped by 21% to US$30.1 million. The property also experienced a 17% decrease in mass table revenue, reflecting softer market conditions.

However, Melco’s satellite casinos in Cyprus, as well as its City of Dreams Mediterranean complex, showed solid year-on-year growth. In Cyprus, GGR increased by 10% to US$58.5 million, and non-gaming revenues saw a notable rise of 59% year-on-year to US$18.8 million. In particular, the mass market table games drop grew by 34% in the region, reaching US$145 million. Additionally, adjusted EBITDA increased by 10% year-on-year to US$12 million.

Expansion plans and strategic adjustments:

Looking ahead, Melco Resorts is focusing on strategic expansion. The company is making significant progress on its new casino project at City of Dreams Sri Lanka, with plans to begin operations in Q3 2025. Melco’s investment in the resort complex is part of its strategy to diversify and grow in emerging markets. Melco has committed to investing US$125 million in the Sri Lankan venture, which is set to be a major player in the region.

At the same time, the company is reassessing its involvement in City of Dreams Manila, considering potential strategic alternatives for its stake in the property. Melco has been in discussions with “potential buyers,” and CFO Geoff Davis mentioned that a shortlist for the bidding process will soon be formed.

One of Melco Resorts’ key priorities moving forward is improving operational efficiency. During Q1 2025, the company reduced its operating expenses to US$3.1 million per day, down from US$3.2 million in the previous quarter. This figure excludes costs related to the House of Dancing Water show and Studio City’s concerts, which are significant parts of Melco’s entertainment offering.

Additionally, Melco’s share repurchase program has been progressing, with approximately 32.3 million ADSs repurchased at a total cost of US$165 million. The company has a remaining US$223 million available under its US$500 million share buyback program, reinforcing its commitment to returning value to shareholders.