Melco Resorts' 2025 Q2 Earnings Call: Unpacking Key Contradictions in Strategy and Performance

Player reinvestment strategy, asset-light strategy and investment focus, expansion and strategic review in Manila, house of dancing water contribution and expenses, and OpEx optimization and cost management are the key contradictions discussed in Melco Resorts & Entertainment Limited's latest 2025Q2 earnings call.



Macau Property Performance:
- Melco's Macau property EBITDA grew by 35% year-over-year and 13% quarter-over-quarter.
- The growth was driven by increased gaming volumes, particularly in mass table games, along with cost optimization and strong non-gaming revenue contributions from attractions like the House of Dancing Water.

Cost Management and Profitability:
- The company reduced OpEx to approximately $3 million per day for the entirety of the second quarter.
- This disciplined cost management led to a Macau property EBITDA margin reaching 29.2%, the second highest on record, contributing to increased profitability.

House of Dancing Water's Impact:
- Since its reopening in May, the House of Dancing Water has been a positive EBITDA contributor, attracting 40,000 property visitors daily, and contributing to increased non-gaming revenue.
- Its alignment with City of Dreams has enhanced visitation and visibility, supporting the overall property's success.

Philippines Market Challenges and Recovery:
- Melco implemented cost reduction initiatives, rationalizing patron reinvestment and marketing expenses, which led to improved profitability and July gaming revenue recovery.
- The improvement is attributed to market stabilization, transition in VIP business with new junkets, and optimizations in operating expenses.