Melco Surpasses Estimates as Macau and Manila Propel 1Q26 Results
Melco Resorts & Entertainment had a stronger-than-expected performance in its first quarter of 2026, which was attributed to its market share gain in Macau and the good performance in the Philippines. In addition, Seaport Research noted that the company exceeded expectations and even its own forecast and the consensus.
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Strong Quarterly Beat
Seaport senior analyst Vitaly Umansky said the company posted a solid beat in the quarter, with property EBITDA coming in above expectations. He said the result was driven mainly by contributions from Macau operations and City of Dreams Manila.
The report noted that Melco’s performance was supported by strength in specific assets, especially Studio City and the Philippines. That combination helped the group exceed forecasts despite a competitive environment in its core markets.
The quarter also showed that Melco was able to generate stronger earnings even as the operating backdrop remained mixed. The results suggest the company benefited from a better mix of business across its portfolio.
Macau Share Gain
In Macau, Melco’s market share rose to approximately 15.2%, an increase of more than 110 basis points quarter-on-quarter. Seaport said the gain was linked to improved utilization of electronic gaming machine inventory and targeted player acquisition strategies.
The analyst also pointed to a still-competitive market in Macau, where rising player reinvestment suggests continued pressure on margins. While management expects conditions to stabilize, Seaport said it does not expect meaningful easing of competition in the near term.
That leaves Melco in a market that is still growing, but one where operators continue to compete aggressively for players. The company’s share gain shows that it was able to improve its position during the quarter, even as margin pressure remains part of the picture.
Manila Performance
City of Dreams Manila also exceeded expectations. Property EBITDA increased by 24.4% year-on-year and 13.1% quarter-on-quarter due to excellent performance from the VIP segment.
In accordance with the report, VIP volumes have increased by more than 30% year-on-year, whereas gross gaming revenues generated from the VIP segment have surged owing to higher hold. Those results gave the Philippines operation a stronger quarter than expected and added to Melco’s overall performance.
Nevertheless, the analyst highlighted that there might be certain challenges in the Philippine business in the next quarter. The increasing prices of energy and rising inflation rates associated with the situation in the Middle East may negatively impact the business, along with stiff competition from Manila.
Second-Quarter Risks
Seaport said further headwinds may emerge in the second quarter, not only in the Philippines but also in Cyprus, where geopolitical impacts remain a concern. The firm pointed to rising energy costs as a possible drag on the Philippines business and noted that competition in Manila is still an issue.
Even with those risks, Seaport maintained its Buy rating on Melco. The stock has an attractive valuation and a good risk-reward ratio.
The current quarter demonstrates the positive results Melco has achieved owing to the efficient management in Macau and Manila. With competition still intense and some external pressures building, the company will need to hold recent gains to keep that momentum going.
Source: Asia Gaming Brief
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