Melco Resorts & Entertainment reported lower second-quarter 2026 revenue and adjusted property earnings as softer performance in Macau outweighed stronger results in Cyprus. Total operating revenue fell approximately 6% year over year to $1.25 billion, while adjusted property EBITDA declined about 20% from $377.7 million to $303.8 million.
Net income attributable to Melco nevertheless increased from $17.2 million to $22.7 million. The quarter showed a clear geographic and product contrast: major Macau resorts recorded weaker revenue and table activity, gaming-machine handle increased, and the Cyprus operation delivered a 60% rise in adjusted EBITDA.
Macau Properties Drove the Revenue Decline
City of Dreams remained Melco’s largest property, but its operating revenue fell to $632.2 million from $710.5 million in the comparable quarter. Adjusted EBITDA dropped to $147.8 million from $225.6 million, a much sharper decline than the movement in revenue.
The property also recorded lower rolling-chip volume, which fell to $5.16 billion. Rolling play can be volatile because results depend on both betting volume and the hold percentage. Even so, the lower volume supports the wider picture of weaker premium-table activity during the quarter.
Gaming-machine handle at City of Dreams moved in the opposite direction, rising from $945 million to $1.20 billion. That increase does not mean machine revenue rose by the same amount, because handle measures the value wagered rather than the amount retained. It does show stronger activity in a segment that differs from rolling-chip and mass-table play.
Studio City Also Faced Softer Table Performance
Studio City reported operating revenue of $371.5 million. The property experienced lower mass-market table drop, while gaming-machine handle increased to $1.04 billion. The combination reinforces the quarter’s broader shift between table and electronic activity.
Table drop and machine handle are useful volume measures, but neither is equivalent to gaming revenue. Actual revenue also depends on hold, customer mix and the timing of play. Property EBITDA then reflects labor, marketing, utilities and other resort costs in addition to the gaming result.
For that reason, the most important signal is the combined direction of revenue, volume and earnings. Weaker table activity and lower property EBITDA suggest that the Macau resorts faced pressure beyond a single headline metric.
Gaming Machines Were a Relative Bright Spot
Rising machine handle at both City of Dreams and Studio City stands out against the softer table figures. Electronic gaming can serve a wider mass-market audience and provides a different operating profile from staffed tables and rolling-chip rooms.
The movement is consistent with the need to examine Macau performance by segment rather than treating casino demand as one uniform market. Premium mass, general mass, rolling play and electronic gaming can move differently within the same quarter.
Melco’s result does not by itself establish a permanent structural shift. One period can be influenced by event calendars, customer mix and comparison effects. Continued growth in machine activity over several quarters would provide stronger evidence of a durable change.
Cyprus Delivered the Strongest International Improvement
City of Dreams Mediterranean and Melco’s three Cyprus satellite casinos generated $82 million in operating revenue. Adjusted EBITDA reached $19.9 million, an increase of approximately 60% from the prior-year quarter.
The improvement makes Cyprus the clearest positive feature in the international portfolio. A 60% EBITDA increase is stronger than the revenue movement and suggests better operating leverage as the resort and satellite network developed.
Cyprus remains smaller than Melco’s Macau business, so the absolute contribution could not offset the decline at City of Dreams and other Macau operations. However, the result demonstrates the diversification value of having properties exposed to different tourism patterns and customer markets.
Manila Was Comparatively Stable
City of Dreams Manila reported operating revenue of $97.3 million, close to its level in the prior-year quarter. Adjusted EBITDA improved from $28.4 million to $30.9 million.
The Manila result provided a middle ground between weaker Macau and faster-growing Cyprus. Relatively stable revenue combined with higher EBITDA indicates improved conversion during the quarter, although the property remained a smaller contributor than Melco’s core Macau resorts.
Local competition, tourism flows and regulatory conditions make Manila distinct from Macau. Its performance should therefore be evaluated on its own operating drivers rather than used as a direct proxy for demand elsewhere in Asia.
Sri Lanka Entered the Reported Portfolio
Melco reported $16.9 million of second-quarter revenue under Other Operations, a category that includes City of Dreams Sri Lanka. The disclosure gives the market an early view of the newer operation without providing the same property-level detail available for the group’s established resorts.
New integrated resort operations often require time to build awareness, customer databases and operating efficiency. Early revenue should be treated as a starting point. Future reports may provide clearer evidence about ramp-up, cost structure and the property’s contribution to group earnings.
Sri Lanka also adds another jurisdiction to a portfolio already spanning Macau, the Philippines and Cyprus. That diversification can create new growth options, but it also increases execution, regulatory and capital-allocation complexity.
Why Net Income Rose as Property EBITDA Fell
Melco’s net income attributable to shareholders increased even though adjusted property EBITDA declined. The two measures capture different parts of the financial statement. Property EBITDA focuses on resort operating performance, while net income includes interest, depreciation, taxes, non-operating items and the effects of ownership interests.
A movement in financing costs, tax, foreign exchange or another below-EBITDA item can therefore change net income in a different direction from property earnings. Investors should not use the higher net-income figure to dismiss the weaker operating trend, nor assume the EBITDA decline automatically requires a lower net result.
The most complete reading places both measures together. The resort portfolio generated less operating earnings, but the final amount attributable to Melco shareholders benefited from items elsewhere in the income statement.
The Macau Mix Is the Main Strategic Question
Macau remains the central earnings driver, making customer and product mix crucial to Melco’s outlook. Lower rolling-chip volume and mass-table drop can affect room demand, food and beverage spending and other non-gaming activity across an integrated resort.
At the same time, higher gaming-machine handle provides evidence that electronic play remained active. The strategic question is whether Melco can convert that activity into enough revenue and profit to compensate for pressure in more valuable table segments.
That challenge is shared across the Macau casino market, where operators are investing in entertainment and non-gaming attractions while competing for mass and premium customers. Property-level results reveal how effectively each resort turns visitation into earnings.
What to Watch in the Second Half
The first item is Macau table volume. A recovery in rolling and mass-table activity would support revenue at City of Dreams and Studio City, but hold percentages can still make quarterly comparisons uneven.
The second is whether machine handle remains strong and translates into gaming revenue. Continued growth would strengthen the argument that electronic gaming is becoming a more important part of the mix.
Internationally, Cyprus needs to show that its EBITDA improvement can continue beyond one favorable comparison. Manila’s stable revenue and higher earnings offer a useful base, while Sri Lanka will be judged on the pace of its early development.
Bottom Line
Melco’s second-quarter 2026 results were defined by weaker Macau operating performance and stronger international contributions. Revenue fell to $1.25 billion and adjusted property EBITDA declined to $303.8 million as City of Dreams and Studio City faced softer table activity.
Cyprus was the clear bright spot, with adjusted EBITDA up 60% to $19.9 million, while Manila produced modest earnings growth and Sri Lanka added early revenue. The next question is whether rising machine activity and the international portfolio can offset pressure in Macau’s higher-value table segments.
