Moody’s Sees Melco Resorts Revenue at $5.4B, EBITDA $1.3B

Kyle Kevin

iGaming Writer

Fact Checked

Moody’s expects Melco Resorts revenue to hit $5.4 billion in 2026. The rating agency also forecasts $1.3 billion in EBITDA and a debt-to-EBITDA ratio falling to 5.5 times.

Moody’s forecasts Melco Resorts revenue will hit $5.4 billion in 2026. That is a 4.5% increase from the $5.2 billion recorded in the 12 months to June 30. The rating agency expects 2027 revenue to rise another 4% to $5.6 billion. Adjusted EBITDA should reach $1.3 billion this year, up from $1.25 billion in 2025. The margin will improve modestly to 24–25%. Moody’s expects Macau’s industry-wide GGR to grow 6% in 2026, then 4–5% in 2027. That growth rests on continued mainland Chinese visitor arrivals. Melco’s market share should hold steady at roughly 15%. The agency cites “large-scale entertainment offerings” as a key support. Residency shows, concerts and major sporting events will drive visitation and spending. The REM Hotel at City of Dreams is already opening in phases. Moody’s also expects Melco to resume dividends in early 2027 and complete $590 million in authorised share repurchases between 2026 and 2028. The leverage trajectory underpins the Ba3 corporate family rating. Debt-to-EBITDA should fall to 5.5 times in 2026 from 5.9 times at June 30, then to 5.0 times in 2027. Adjusted debt is forecast at $7.2 billion by year-end, down from $7.3 billion in June and well below the $8.7 billion peak at year-end 2022.

Moody’s 2026 Forecast: Revenue, EBITDA and Margin

Moody’s published its credit opinion on Melco Resorts Finance Ltd on Wednesday. The subsidiary is a wholly-owned financing vehicle for Melco Resorts & Entertainment. The opinion covers the group’s consolidated performance. Revenue of $5.4 billion in 2026 represents 4.5% growth over the trailing 12-month figure of $5.2 billion. The 2027 forecast of $5.6 billion implies another 4% gain. Those numbers align with Moody’s Macau market assumptions. The agency expects industry-wide GGR to rise 6% in 2026, then 4–5% in 2027. That is a measured recovery. Pre-pandemic Macau GGR hit $36.5 billion in 2019. The market is still rebuilding. Melco’s 15% market share is solid but not dominant. Sands China and Galaxy Entertainment hold larger slices. Melco competes on experience rather than scale. Adjusted EBITDA of $1.3 billion in 2026 would mark a $50 million improvement over 2025. The margin of 24–25% reflects “operational efficiency initiatives” rather than revenue acceleration. Moody’s is essentially saying Melco will earn more by spending less. The margin expansion is modest. It is also necessary. Melco’s debt load remains heavy. Every percentage point of margin helps. AGBrief tracks credit ratings and earnings forecasts for Asia-Pacific gaming operators.

Why H1 2026 EBITDA Fell 2.5%

The Moody’s forecast looks past a weak first half. Melco’s adjusted EBITDA was $612 million in H1 2026, down 2.5% from $627 million a year earlier. The margin slipped to 23.4% from 24.5%. Q2 was the problem. Adjusted Property EBITDA fell to $303.8 million from $377.7 million in Q2 2025. That is a 19.6% drop. Moody’s blamed three factors: softer rolling chip and mass-market table performance, a decline in non-gaming operations, and higher marketing costs. The rolling chip segment — VIP gaming — has been volatile across Macau. Junket operators have shrunk dramatically since regulatory crackdowns. Melco has shifted toward direct VIP relationships, but that transition costs money and takes time. Mass-market tables also softened. That is the core profit engine. Any weakness there hits the bottom line disproportionately. Non-gaming revenue at City of Dreams Mediterranean and Other fell to $24.4 million in Q2 from $25.4 million a year earlier. The Cyprus property has struggled to attract the tourism volumes originally projected. Marketing costs rose as Melco fought for share in a competitive market. The company spent heavily on entertainment programming to differentiate its properties. Those investments should pay off in H2, Moody’s believes. Chairman Lawrence Ho has bet heavily on the entertainment strategy. The House of Dancing Water at City of Dreams set the template. Residency shows and concerts now anchor the marketing. The REM Hotel opening adds room inventory to capture that demand.

Debt Reduction and the Leverage Outlook

Debt is the central story in Moody’s analysis. Melco’s adjusted debt stood at approximately $7.3 billion at June 30. That is down from $8.7 billion at year-end 2022. Moody’s expects further reduction to $7.2 billion by year-end 2026 and $6.9 billion by year-end 2027. The leverage trajectory is what matters for the rating. Debt-to-EBITDA was 5.9 times for the 12 months to June 30. Moody’s forecasts 5.5 times for full-year 2026 and 5.0 times for 2027. The 5.0 threshold is significant. It represents the boundary between “highly leveraged” and “moderately leveraged” in Moody’s framework. Crossing it would improve Melco’s credit profile and potentially open the door to a rating upgrade. The path depends on EBITDA growth, not just debt paydown. If revenue hits $5.4 billion and EBITDA reaches $1.3 billion, the math works. If Macau GGR stalls or Melco loses share, the leverage improvement disappears. Moody’s acknowledges the risk. The Ba3 rating is three notches below investment grade. It reflects “high credit risk” but not imminent default concern. The stable outlook means no change is expected in the next 12–18 months. Melco has been prioritising debt reduction over shareholder returns. The company has not paid dividends since the pandemic. Moody’s expects a resumption in early 2027. The $590 million share repurchase authorisation, spread over 2026–2028, suggests management is confident in cash flow generation. However, those returns will only happen if leverage continues falling. The rating agency is clear: debt reduction comes first.

Growth Drivers: Entertainment, Hotels and Expansion

Moody’s identified several specific growth levers. Entertainment is the headline. “Large-scale entertainment offerings — including residency shows, concerts and major sporting events — will continue to support visitation and spending,” the agency stated. Melco has invested heavily in programming. The company hosts regular concerts at its Macau properties. It has signed residency deals with major artists. Sporting events, including martial arts and e-sports tournaments, draw younger demographics. The REM Hotel at City of Dreams is the physical growth driver. The property is progressively opening, adding room inventory to an already large resort. More rooms mean more gaming revenue, more food and beverage spend, and more retail traffic. The hotel also supports convention business, which feeds midweek occupancy. Expansion beyond Macau is the third pillar. Melco operates City of Dreams Manila in the Philippines. It runs casinos in Cyprus under the City of Dreams Mediterranean brand. It opened City of Dreams Sri Lanka in Colombo in August 2025. Those markets are smaller than Macau but provide diversification. The Philippines property has been stable. Cyprus has disappointed. Sri Lanka is too new to judge. Moody’s forecasts do not rely heavily on these satellite operations. The Macau assumptions drive the numbers. Mainland Chinese visitor growth is the key variable. China’s economy is slowing. Consumer confidence is fragile. The yuan has weakened against the US dollar. Those headwinds could suppress the recovery Moody’s expects. Melco’s 15% market share is a double-edged sword. It is large enough to matter. It is not large enough to dictate market pricing. The company must follow the market’s direction rather than set it. Moody’s believes the direction is up. Melco’s H1 results suggest the climb may be steeper than the forecast implies.

Frequently Asked Questions

This article has been thoroughly researched and reviewed by the CasinoBait editorial team to ensure accuracy and relevance for Asian casino players.