Melco Resorts & Entertainment ((MLCO)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Melco Resorts & Entertainment’s recent earnings call painted a picture of robust performance, particularly in Macau, where the company achieved record market share and hosted successful events that significantly boosted visitation. Despite facing challenges in the Philippines and high-end retail sectors, the company remains optimistic, supported by disciplined cost management and strategic share buybacks.
Record Market Share Growth in Macau
Melco Resorts reported a notable increase in its market share in Macau, climbing from 14.7% in the fourth quarter of 2024 to 15.7% in the first quarter of 2025. This growth is attributed to record highs in mass drop at key properties like City of Dreams and Studio City, underscoring the company’s strong foothold in the region.
Strong Visitation and Event Success
The company experienced a 30% year-on-year increase in property visitation during the May Golden Week, driven by successful events such as the relaunch of the House of Dancing Water. These initiatives are expected to continue attracting visitors and enhancing the company’s market position.
Improved EBITDA and Cost Management
Melco Resorts demonstrated effective cost management, with Studio City property EBITDA rising by 20% quarter-to-quarter. The group-wide adjusted property EBITDA reached approximately $341 million, while daily operating expenses were reduced to $3.1 million, showcasing the company’s operational efficiency.
Successful Share Buyback
In 2025, Melco Resorts capitalized on low market valuations by repurchasing approximately $165 million in MLCO ADSs. This strategic move reflects confidence in the company’s value and commitment to enhancing shareholder returns.
Philippines Competitive Environment
The competitive landscape in the Philippines posed challenges for Melco Resorts in the first quarter of 2025, prompting the company to adjust its cost structure and marketing strategies to better navigate this environment.
Luxury Retail Challenges
Melco Resorts continues to face difficulties in the high-end luxury retail segment at City of Dreams, which has impacted non-gaming revenue. The company is exploring strategies to address these challenges and bolster this segment.
Upcoming Debt Maturities
The company is well-prepared for upcoming bond maturities in June and July 2025, with both already covered through existing credit facilities and cash reserves, ensuring financial stability.
Forward-Looking Guidance
Looking ahead, Melco Resorts anticipates continued growth, with a targeted reduction in daily operating expenses to $3.0 million by the end of the second quarter of 2025. The company also maintains strong liquidity with $3.3 billion available, supporting its balanced capital allocation strategy. Additionally, City of Dreams Mediterranean and Cyprus reported a 10% year-over-year growth in property EBITDA, further highlighting the company’s growth prospects.
In summary, Melco Resorts & Entertainment’s earnings call reflects a positive outlook, driven by record market share growth in Macau and strategic initiatives that enhance visitation and financial performance. While challenges persist in certain segments, the company’s proactive measures and strong liquidity position it well for future success.