Studio City International Holdings Limited reported a strong first‑quarter 2026 performance, with total operating revenue rising to US$176.7 million from US$161.7 million a year earlier. Operating income climbed to US$28.0 million versus US$15.3 million in Q1 2025, and adjusted EBITDA reached US$80.0 million compared with US$69.9 million in the prior year. Net income attributable to Studio City turned positive at US$2.9 million (US$0.02 per ADS), a reversal from the US$16.0 million loss (US$0.08 per ADS) recorded in Q1 2025. The company’s debt level eased slightly to US$2.01 billion from US$2.02 billion at the end of 2025.
The revenue increase was largely driven by a stronger casino contract and improved non‑gaming performance. Studio City’s mass‑market casino operations delivered higher throughput, while the non‑gaming segment—comprising hotel, food and beverage, retail, and entertainment—also contributed to the top‑line lift. The mix shift toward higher‑margin non‑gaming services helped offset the higher operating costs associated with the expanded casino contract.
Operating income and adjusted EBITDA benefited from the revenue growth, but were partially offset by higher operating costs. The company’s cost structure includes significant labor and marketing expenses tied to casino operations, which rose in line with the larger contract. Despite these cost increases, the company maintained a healthy operating margin, reflecting disciplined cost management and efficient scaling of its integrated resort operations.
The turnaround in net income also translated into an earnings‑per‑share beat. Studio City reported US$0.02 per ADS, surpassing the consensus estimate of US$0.00 per ADS—a beat of US$0.02 or 200%. The positive earnings were driven by the combined effect of higher revenue, improved operating margins, and the absence of one‑time charges that had impacted the prior year’s loss.
While the earnings improvement is encouraging, the company’s financial leverage remains a concern. Debt stood at US$2.01 billion, and cash and bank balances fell to US$87.0 million from US$109.5 million, leaving the firm in a high‑leverage position. The Altman Z‑Score of –0.53 places Studio City in the distress zone, and market participants reacted with caution, reflected in a decline in the MSC stock price on the day of the release.
Strategically, Studio City has shifted its focus to the mass‑market segment, having discontinued VIP rolling‑chip operations in late 2024. The resort is majority‑owned by Melco Resorts & Entertainment Limited, which influences investor sentiment. The company’s ability to sustain profitability while managing its debt and liquidity will be closely watched in the coming quarters.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.