Melco beats revenue forecasts in Q1 2026, misses EPS

Melco Resorts & Entertainment Ltd (NASDAQ: MLCO) recently reported its first quarter 2026 results, posting revenue that exceeded analyst expectations while earnings per share (EPS) fell short.

The company generated USD1.37 billion in total operating revenues, up about 11% year over year, representing a modest beat over the wider consensus estimate of roughly $1.3 billion. The increase in total operating revenues was primarily attributable to improved performance in mass market operations.

Operating income for the first quarter of 2026 was $179 million, compared with $145 million in the first quarter of 2025. Melco Resorts’ Adjusted Property EBITDA was $381 million in the first quarter of 2026, compared with $341 million in the first quarter of 2025.

However, EPS came in at $0.08 per ADS, below the consensus projection of $0.10.

Despite the EPS shortfall, Melco demonstrated operational strength driven by favorable win rates and robust performance across its Macau and Manila properties. CEO Lawrence Ho emphasized during the earnings call last week that the company delivered “a strong first quarter with both group property EBITDA and Macau property EBITDA growing by 12% year-over-year.”

Year-over-year, Macau property EBITDA rose 12% to $334 million.

City of Dreams Macau was Melco Resorts’ top-performing property in the first quarter of 2026, posting Adjusted EBITDA of $214 million, up 9.4% year-over-year. The property delivered $813 million in Gross Gaming Revenue (GGR), with the mass market segment driving the majority of activity: Mass GGR totaled $540 million, while VIP GGR contributed $223 million, roughly 27% of the property’s total gaming revenue.

Studio City followed as the second-best performer, recording Adjusted EBITDA of $112 million, up 14.8% year-over-year. Total operating revenues at the venue came in at $392 million, compared with $354.5 million in the first quarter of 2025.

REM hotel and retail revamp

The Macau concessionaire anticipates increased operating expenses in Q3 2026 due to the phased opening of REM, its new luxury suite hotel offering at City of Dreams.

The 149-key property is expected to add $30,000–$40,000 in daily operating expenses but should deliver significant revenue uplift.

“We expect REM to represent a meaningful enhancement to the CoD product portfolio and to redefine contemporary luxury across Macau,” Ho said.

Evan Winkler, Melco Resorts’ president and board director, added, “The biggest jump up is going to be in Q3 as we start to open REM.”

Noting that the new hotel will be “highly differentiated in the market,” Chief Financial Officer Geoffrey Davis remarked on the earnings call that the company invested significant time ensuring the right room mix.

“It’s very heavily weighted toward the one-bedroom suite product, with some flexibility in terms of combining suites and combining rooms with lock-off rooms,” Davis said.

Davis added that Melco feels confident about “hitting the market with a very good product here going into Q3.” While the opening will bring “some slight expense,” he expects the property to deliver “a pretty big revenue uplift as that ramps.”

Simultaneously, Melco is revamping – and overhauling – City of Dreams’ retail spaces over the next 10 to 12 months, shifting from its former DFS partnership to direct relationships with brand partners.

Ho said, “If anything, we’ve always felt that with our partnership with DFS ending, that was always an area of weakness. So, I think from a product offering standpoint, starting next year, we’re going to have some exciting new brands that we’re dealing directly with, where we think we’ll really complement the luxury proposition of City of Dreams.”

Capital expenditures for the first quarter of 2026 totaled $73.6 million, primarily reflecting costs related to enhancement projects at City of Dreams in Macau.

As of March 31, 2026, the group reported available liquidity of approximately $2.36 billion, including cash and undrawn revolving credit facilities.

Melco Resorts secures $375M trademark ownership deal

Melco Resorts & Entertainment Ltd has acquired full ownership of its brand trademarks in a $375 million cash transaction, consolidating key intellectual property under the operating company. The deal, announced via a Hong Kong Stock Exchange filing on April 30, 2026, involves the purchase of MI IP Licensing Services 1 Limited from parent company Melco International Development Ltd.

The acquired assets include a comprehensive portfolio of trademarks, service marks, logos, trade names, and domain names used across Macau, the Philippines, Cyprus, and other territories. Key brand assets include “Melco,” “,” “Morpheus,” and “堣稂睟”.

This strategic acquisition eliminates Melco’s reliance on third-party licensing agreements. The move also follows industry trends, as evidenced by MGM Resorts International’s recent increase in trademark licensing fees charged to its Macau subsidiary from 1.75% to 3.5% of revenue.

“The trademarks are integral to Melco’s business,” CEO Lawrence Ho said on the earnings call. “This purchase gives us full control of the IP and allows us flexibility to expand our brand without any incremental cost.”

“The purchase of the trademarks provides MLCO with full ownership and control… and eliminates any uncertainty with respect to potential increases in fees,” CFO Geoffrey Davis stated on the earnings call.

Davis noted the transaction resulted from arm’s-length negotiations, with the Q1 2026 trademark license fee of approximately $13.4 million implying a purchase price of just under 7x the annualized fee.

The deal closes on May 8, 2026, with $300 million paid upon signing and $75 million at completion.

By securing permanent ownership, Melco removes uncertainty around potential fee increases and positions its brand for unrestricted global expansion.

The move also came one day after MGM Resorts International disclosed it earned an additional $23 million in licensing fees from MGM China in Q1 2026.