Melco Resorts & Entertainment Limited

What they do

Melco operates integrated casino resorts, including City of Dreams, Studio City, and Altira Macau in Macau, City of Dreams Manila in the Philippines, and City of Dreams Mediterranean in Cyprus. The company derives revenue from casino operations, hotel rooms, food and beverage, entertainment, and retail. It also provides management services and small charter flights, which are insignificant to total revenue.

Revenue drivers

• City of Dreams Macau — The largest segment, contributing the majority of revenue, includes a casino, hotel towers, and MICE space.
• Studio City — A major integrated resort on Cotai, with hotel, casino, and an operating agreement for a private medical imaging facility.
• City of Dreams Manila and City of Dreams Mediterranean — International properties that add diversification beyond Macau, with the Mediterranean property in Cyprus.

Recent performance

Revenue grew from $3.78B in 2023 to $4.64B in 2024 and $5.16B in 2025. Net income turned positive in 2024 at $43.5M and rose to $185.0M in 2025. Operating cash flow increased steadily from $622.7M in 2023 to $818.1M in 2025, reflecting improved cash generation.

Strategy

Management focuses on Macau's mass-market and premium mass segments, reinvesting in existing properties and developing new attractions. The company is expanding non-gaming offerings, such as the medical imaging hospital at Studio City. It also maintains liquidity through revolver facilities and manages a significant debt load, as indicated by long-term debt of $6.75B and negative equity.

Risks

• Debt and negative equity — Total liabilities exceed assets, with long-term debt of $6.75B against total equity of -$1.25B, increasing financial risk.
• Regulatory dependence on Macau concession — The casino concession requires a bank guarantee and compliance with local regulations; termination or non-renewal would severely impact operations.
• Interest rate exposure — The company uses interest rate swaps to hedge cash flow variability, and fair value losses could affect earnings.
• Related-party concentrations — The CEO, Lawrence Ho, and affiliated entities have operating agreements and trademark arrangements that may present governance or pricing risks.

Outlook

Management expects continued growth in Macau's gaming market and is investing in non-gaming amenities to attract broader tourism. The company will focus on deleveraging, as interest coverage and debt service remain key. No specific forward guidance was provided in the excerpts.