Studio City Sees Stronger Revenues as Mass Market Strategy Drives Growth
Studio City International Holdings Limited (NYSE:MSC), majority owned by Melco Resorts & Entertainment (NASDAQ:MLCO), reported higher third-quarter 2025 revenues, thanks to its pivot toward premium mass and mass market operations in Macau. Total operating revenues for the quarter rose to $182.51 million from $174.63 million a year ago, while Adjusted EBITDA improved by nearly 15%.
Strategic Repositioning Delivers Results, Even as Net Losses Persist
After transferring VIP operations out of Studio City in late 2024, the company has concentrated on attracting the mass gaming market. This shift paid off: casino contract revenues jumped over 14%, and adjusted EBITDA hit $78.09 million versus $68.17 million in the prior year period. However, total net losses remain, albeit narrower, reflecting high operating and finance costs. Operating income was $23.92 million for Q3 2025, up from $15.98 million in Q3 2024.
| Key Metric | Q3 2025 | Q3 2024 | % Change |
|---|---|---|---|
| Total Operating Revenues | $182.51M | $174.63M | +4.5% |
| Casino Contract Revenue | $77.27M | $67.31M | +14.8% |
| Adjusted EBITDA | $78.09M | $68.17M | +14.5% |
| Operating Income | $23.92M | $15.98M | +49.7% |
| Net Loss (attributable) | $(18.57M) | $(20.97M) | Narrowed |
Operational Highlights Show Rising Mass Market Momentum
Casino performance metrics confirm that the shift is resonating. Mass market table games saw an increased drop to $942.5 million, with hold rates up to 33.1% from 30.7% last year. The gaming machine handle climbed to $873.3 million, with win rates improving from 3.3% to 3.7%. Notably, 90 new gaming machines were added in September, reinforcing Studio City's focus on scale in mass and slots gaming.
| Q3 Gaming Metric | 2025 | 2024 |
|---|---|---|
| Mass Market Table Drop | $942.5M | $912.9M |
| Table Hold % | 33.1% | 30.7% |
| Gaming Machine Handle | $873.3M | $853.0M |
| Gaming Machine Win Rate | 3.7% | 3.3% |
Balance Sheet Highlights: Cash Lower, Debt Down as Repayments Accelerate
Cash and equivalents at September 30, 2025, stood at $99.45 million, down from $127.63 million at 2024's year-end, reflecting debt repayments and operating needs. Notably, total debt net of financing costs fell to $2.06 billion—a reduction of more than $109 million since June. These reductions stemmed from maturing senior notes and principal repayments using credit facilities and cash on hand. Capital expenditures remained moderate at $9.7 million for the quarter.
| Key Balance Sheet Item | Q3 2025 | Q4 2024 |
|---|---|---|
| Cash & Equivalents | $99.45M | $127.63M |
| Total Debt (net) | $2.06B | $2.16B |
| Shareholders' Equity | $543.86M | $590.74M |
Risks Remain: High Non-Operating Expenses and Net Losses
Despite top-line growth and improving operational profits, non-operating expenses, including $30.89 million in interest and $10.1 million in forex losses, weighed heavily. Depreciation and amortization totaled $54 million, keeping net losses in negative territory, though improved compared to 2024.
Room and Gaming Operations Benefit from Market Pivot
Studio City's hospitality business continued its steady run, with 97% occupancy and average daily rates rising to $178 per room. Both table games and slot machines delivered stronger daily win figures. With average daily win per gaming machine at $484, and win per table at $13,572, the property is extracting greater value from its reallocated assets.
| Operational KPI | Q3 2025 | Q3 2024 |
|---|---|---|
| Hotel Occupancy | 97% | 96% |
| Avg Daily Room Rate | $178 | $171 |
| Table Win per Unit/Day | $13,572 | $13,212 |
| Slot Win per Unit/Day | $484 | $418 |
Key Takeaways: Growth Hinges on Mass Market and Cost Controls
Studio City is reaping the rewards of its strategic focus on mass and premium mass segments, boosting revenues and operational efficiency. Nevertheless, high debt and finance costs remain hurdles to returning to profitability. As Studio City heads into the final quarter of 2025, investors will watch for continued operational gains and progress in cost control—especially with broader market risks and new Macau gaming regulations still in play.
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