Melco Resorts & Entertainment delivered a decisive beat in first quarter 2026, with property EBITDA significantly outpacing analyst expectations. The outperformance came courtesy of meaningful market share gains in Macau and robust earnings growth at City of Dreams Manila, according to Seaport Research.

Macau Momentum and Market Share

The standout story for the quarter was Melco’s ability to expand its Macau footprint despite a crowded competitive landscape. Market share climbed to 15.2%, up more than 110 basis points quarter-on-quarter, driven by improved utilization of electronic gaming machine inventory and focused player acquisition tactics.

The gain matters because it shows pricing power and operational discipline in a market where aggressive competition typically erodes margins. That said, Seaport’s analysis suggests the competitive pressure remains real. Rising player reinvestment indicates sustained margin headwinds, and the analyst doesn’t expect meaningful relief in the near term, even as underlying market growth continues.

Manila Delivers Strong VIP Performance

City of Dreams Manila proved equally impressive, with property EBITDA jumping 24.4% year-on-year and 13.1% sequentially. The driver was exceptional VIP segment performance, where volumes surged more than 30% annually and gross gaming revenues benefited from elevated hold rates.

This matters because it shows the Philippines operation has successfully cultivated high-value player relationships despite regional competition intensifying. VIP-led growth also provides greater earnings stability than mass market play, frankly.

Headwinds on the Horizon

The optimism comes with caveats. Seaport flagged potential second quarter headwinds across multiple geographies. Energy cost inflation linked to Middle Eastern tensions poses a particular risk to Philippine profitability, while Cyprus faces ongoing geopolitical uncertainty. Manila’s competitive environment also remains formidable.

Yet despite those concerns, the analyst maintained a Buy rating on Melco stock, citing attractive valuation and favorable risk-reward dynamics. The company’s demonstrated ability to gain share in Macau whilst growing earnings in Manila suggests management can navigate near-term challenges without surrendering its recent momentum.

What the team thinks

Carl Mitchell says:

Melco’s Q1 performance is genuinely impressive, and Ashworth rightly highlights their Manila operation as a growth engine that’s finally delivering on its promise, but what I’d push back on is the narrative that Macau’s competitive landscape is some kind of barrier they’ve overcome, when really it’s just consolidated further around the established players like themselves. The real story for UK punters watching Asian gaming operators is whether this kind of sustained profitability and market share growth translates to better player value back home through their online offerings, which frankly, I haven’t seen reflected much in their RTP structures or promotional spending compared to purely digital competitors. If Melco wants to leverage this Macau success into a stronger iGaming position globally, they’ll need to prove they’re willing to compete on player experience, not just ride operational momentum.