Melco Resorts & Entertainment Ltd. Q4 FY2024 earnings call

• 2024 was a year of transition in Macau with investments to enhance customer experience and build growth foundation. Market share in 4Q 2024 grew month-to-month, ending 2024 with ~15.6% market share in December and property visitation exceeding pre-pandemic levels.
• 2025 started strong with growing market share YTD, solid Chinese New Year (total GGR excluding junkets outpaced 2024 and 2019, property visitation up 17% vs last year). House of Dancing Water to reopen in May 2025, expected to drive further visitation, revenue, and EBITDA.
• In Macau, focus on increasing visibility and accessibility: Studio City nearing completion of high limit area revamp; City of Dreams renovating main casino entrance area; all baccarat tables in Macau to be smart tables by end of March.
• Cyprus: City of Dreams, Mediterranean and satellite casinos had solid Q4 2024 results; Sri Lanka casino fit-out on track for 3Q 2025 opening.
• Philippines: City of Dreams, Manila had solid performance, but exploring strategic alternatives for COD, Manila as part of asset-light strategy.

Macau

• In Q4 2024, Melco's market share grew month-to-month, ending the year with ~15.6% market share in December and property visitation exceeding pre-pandemic levels. In 2025, market share year-to-date continued to grow, with strong Chinese New Year performance (total GGR excluding junkets outpaced 2024 and 2019, property visitation up 17% vs last year). Investments in Macau properties include revamping high limit areas at Studio City, renovating City of Dreams' main casino entrance area, and all baccarat tables in Macau to be smart tables by end of March.

Cyprus

• City of Dreams, Mediterranean and satellite casinos achieved solid results in Q4 2024 despite regional challenges. Fit-out of the casino at City of Dreams, Sri Lanka is progressing well and on track to open in 3Q 2025.

Philippines

• City of Dreams, Manila continued solid performance with growth in EBITDA and market share quarter-to-quarter, but Melco is exploring strategic alternatives for COD, Manila as part of asset-light strategy to enhance financial flexibility and support long-term growth initiatives

• For Q1 2025, total depreciation and amortization expense expected to be ~$135 million to $140 million; corporate expense expected ~$25 million to $30 million; consolidated net interest expense expected ~$100 million to $125 million.
• 2025 total CapEx anticipated at ~$415 million, with ~$80 million for Sri Lanka, ~$290 million for Macau (approx $70 million for Studio City), and remainder for Manila and Cyprus.
• Expect operating leverage to enhance margins, with House of Dancing Water reopening expected to drive further growth in visitation, revenue, and EBITDA.

Q: GGR has been choppy early this year, views on market GGR growth prospects for 2025 and implications on Studio City from asset-light strategy for COD, Manila.

A: Lawrence Ho noted Melco had an amazing January, February has been very strong with weekends and weekdays stronger than prior year. Evan Winkler discussed improvements at COD and Studio City's performance despite challenges.

Q: Insights into capital allocation strategy with potential proceeds from asset disposition, including debt reduction and share buybacks.

A: Geoff Davis stated paying down debt is primary objective, but also looking at share buybacks given undervalued shares.

Q: Interpretation of Golden Week trends and post-Golden Week business volumes.

A: Lawrence Ho said February has been very strong, weekends and weekdays stronger than prior year, setting up a great year.

Q: Detailed CapEx guidance for different parts of the business.

A: Geoff Davis said 2025 total CapEx ~$415 million, ~$80 million for Sri Lanka, $290 million for Macau ($70 million for Studio City).

Q: OpEx decline start of year, sustainability, and drivers.

A: Evan Winkler discussed factors in Q4 OpEx overage and steps taken to reduce OpEx, confident in bringing costs down.

Q: Tactical decision behind Q4 OpEx overage and whether it paid off.

A: Geoff Davis explained deliberate spending on activations, promotions, entertainment in Macau properties to drive momentum, saw benefits in bringing more people to properties.

Q: Headcount and tweaks needed in Macau operations.

A: Geoff Davis said generally good about team, looking for exceptional talent, and will adjust headcount based on product and service needs.

Q: Trademark license fees and asset-light strategy implications for Cyprus and Thailand.

A: Geoff Davis said trademark fees are reflected in corporate expense at lower percentage of revenue than competitors; asset-light strategy applicable to Cyprus and Thailand, with Thailand being a generational opportunity in early stages.