Ladies and gentlemen, thank you for participating in the fourth quarter 2025 earnings conference call of Melco Resorts & Entertainment Limited. After the call, we will conduct a question and answer session. Today's conference is being recorded. I would now like to turn the call over to Jeanny Kim, Senior Vice President and Group Treasurer of Melco Resorts & Entertainment Limited. Please go ahead.

Thank you, Operator, and thank you all for joining us today for our fourth quarter 2025 earnings call. On the call are Lawrence Ho, Geoffrey Stuart Davis, Evan Andrew Winkler, and our property presidents in Macau, Manila, and Cyprus. Before we get started, please note that today's discussion may contain forward-looking statements made under the Safe Harbor provision of federal securities laws. Our actual results could differ from our anticipated results. In addition, we may discuss non-GAAP measures. A definition and reconciliation of each of these measures to the most comparable GAAP financial measures are included in the earnings release. Finally, please note that our supplementary earnings slides are posted on our investor website at investors.melco-resorts.com. With that, I will turn the call over to Lawrence Ho.

Thank you, Jeanny, and thank you all for joining us today. 2025 was a year of growth and recovery supported by disciplined cost management and margin expansion. We recorded $1.4 billion in group property EBITDA for the full year of 2025, growing by 17% compared to 2024. In Macau, our dedicated efforts to enhance the customer experience have proven to be a strategic focus, with fourth quarter Macau property EBITDA growing 24% year over year and full year Macau property EBITDA growing 25% compared to 2024. We have had a strong start to 2026 with Macau market GGR up by 24% year over year and our market share increasing so far in 2026. Chinese New Year looks strong, with higher-yielding cash ADRs compared to 2025. We have a pipeline of new initiatives that we are planning to implement in 2026 to further differentiate our offerings, with the largest project being the opening of the renovated Countdown Hotel. We are on track to progressively start opening in 2026. The completed hotel is expected to introduce a truly distinctive experience and set a new benchmark in Macau. We have also started on a revamp of the retail area at COD and have plans to upgrade our F&B offerings, continuing to further enhance our product quality. In the Philippines, competitive pressures and industry headwinds continued to impact our performance in 2025. However, we are encouraged by the positive developments in that market, including visa-free travel for Chinese nationals, upgrades to the Manila Airport to facilitate increasing international tourism, and rationalization of the online gaming market. We have also concluded our evaluation of the strategic alternatives for COD Manila. Although we considered various alternatives, we did not feel that any of those options would allow the value and potential of the property to be fully realized. We are confident that business will rebound and we may reevaluate the situation in the future. Moving on to Cyprus, City of Dreams Mediterranean and the satellite casinos in Cyprus achieved 78% year-over-year growth in property EBITDA to $21 million for 2025, despite seasonality typically being slower in these months. And finally, in Sri Lanka, we continue to focus our efforts to progressively ramp up operations and have seen promising green shoots so far in 2026.

Thank you, Lawrence. Our group-wide adjusted property EBITDA for 2025 grew 12% year over year to approximately $331 million. Adjusted for VIP hold, our property EBITDA was approximately $323 million. Favorable win rates at COD Macau and COD Manila had positive impacts on our property EBITDA by approximately $7 million and $3 million, respectively. We had guided in the prior quarterly call that OpEx in Macau increased in the fourth quarter compared to the prior quarter, primarily due to events including the China National Games, Studio City's tenth anniversary, and the Macau Grand Prix. Excluding these fourth quarter events as well as House of Dancing Water, Macau OpEx was approximately $3.1 million per day. EBITDA in 2025 was also impacted by additional bad debt provisions that were taken as a result of a settlement that we reached with one of the previous junket operators. Adjusting for these event-driven costs, Macau's property EBITDA margin for 2025 would have been over 27% on an actual basis. Looking forward to 2026, we expect Macau daily OpEx excluding House of Dancing Water to come in at approximately $3.2 million given increased marketing activity around Chinese New Year and new brand campaigns across our Macau properties. Turning to our balance sheet, our liquidity position remains robust. We had available liquidity of approximately $2.4 billion with consolidated cash on hand of approximately $1.2 billion as of 2025. Melco, excluding its operations at Studio City, the Philippines, Cyprus, and Sri Lanka, accounted for approximately $550 million of the consolidated cash on hand. In 2025, Melco redeemed the remaining $358 million of the senior notes due 2026. In addition, we repaid $210 million in debt at Melco and $32 million at Studio City. In total, the Melco Group paid down approximately $400 million of debt over the course of 2025, and we continue to reduce debt in 2026. Melco has repaid $35 million in debt in January and will repay a further $25 million this month. The group does not have any material amount of debt maturing in 2026. Before we move on to the non-operating line items, we thought it would be helpful to take a few minutes to provide information on the trademarks license agreement with Melco International. Melco International owns and manages certain trademarks utilized by Melco Resorts and its operations. The terms of the trademark license agreement were negotiated on an arm's length basis, factoring in the ranges of fees typically observed in the industry. The agreement has an initial term of ten years, which commenced on 01/01/2024, and thereafter is automatically renewed for consecutive periods of twelve months unless either party gives prior notice of nonrenewal. Under the agreement, the trademark license fee payable is up to 1.5% of the gross revenues of City of Dreams Macau, excluding Grand Hyatt, unless agreed otherwise by the parties to the agreement. The trademark license fee was 1% in 2025 and will increase to 1.5% from 2026. The agreement does not include an annual cap, but the total fees for the full year of 2025 amounted to approximately $33 million, dramatically lower than those of our peers. The trademarks owned by Melco International are integral to the long-term strategy and brand identity of Melco Resorts, and the formalized agreement facilitates a standard approach as we continue to grow and expand the portfolio. And finally, as we normally do, we will give you some guidance on non-operating line items for the upcoming 2026. Total depreciation and amortization expense is expected to be approximately $140 million to $145 million. Corporate expense is expected to come in at approximately $35 million. And consolidated net interest expense is expected to be approximately $115 million to $120 million. This includes finance liability interest of around $6 million relating to fees payable in relation to the Macau gaming concession and the Cyprus gaming license, and finance lease interest of approximately $5 million relating to City of Dreams Manila. That concludes our prepared remarks. Operator, back to you for the Q&A.

Thank you. If you wish to ask a question, please press 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press 2. If you are on a speakerphone, please pick up the handset to ask your questions. We do ask that you please limit yourself to one question. We will now open for questions. Today's first question comes from Joseph Robert Stauff at Susquehanna. Please go ahead.

Thank you. Good morning. I wanted to ask about the additional traffic obviously being generated by House of Dancing Water and where you are with respect to being able to convert that additional daily visitation into both gaming and, obviously, other parts of your business. What is the opportunity from here as we think about that?

Hi, Joe. It is Lawrence. Since we reopened House of Dancing Water in May, we have seen meaningful uptick in property visitation. The show is open pretty much twice a day for five days of the week, and during those shows, 1,800 to 1,900 people attend. So that drives additional headcount into the property. I think we are seeing meaningfully good spend across non-gaming during and after the show. And even on our mass drop, from pre-May to post-May, we have seen a decent uptick. As with any non-gaming entertainment, concerts, attractions in Macau, how can we directly track that scientifically? I do not think we have an answer for that. I will maybe let Evan talk about it. But I think overall, we see it driving traffic and energy into the building and it is a little more, as Lawrence has pointed out, a little more difficult from a direct drive standpoint.

It is very helpful in activating the property. We do see a big uptick, obviously, in food and beverage spending on property during the show. Generally, when people are coming from outside the property to the show for that initial event, sometimes they are coming with family and friends, so a very small percentage go from that directly to gaming. The benefit we have is it does introduce thousands of more people with each show to the property and to COD, to our product, to food and beverage. And so I think over time, it is generating repeat visits back to the property, but it is hard to go from who exited the show that day to who comes back later on. So I think we drive, but we do not have a direct formula that we can give you. Because if you look at the individual people coming out of the show on the night that they go to see the show, that is not a high number. But overall, we are seeing uplift in the business.

Okay. Understand. Thanks, Lawrence. Evan, thank you.

Our next question today comes from Timothy Chao at Citigroup. Please go ahead.

Hi, management.

Excuse me. Can I listen? Can you hear me clearly, please?

Yes, we can hear you. Alright. Hi. Sorry. So question for me. What is your view on the competitive intensity in Macau? And more specifically, what are your expectations on your EBITDA margins, particularly in Macau this year, please? Thank you.

Hey, Timothy. It is Lawrence. Maybe I will start, and then I will hand it over to Evan and Geoff. I think the competition is still very intense in Macau, but that can be expected. I would say that we anticipate this level of competition to be what we will expect for the rest of the year. In terms of mass, it is still growing, so we are comfortable with our margin. We have been very disciplined throughout 2025 in terms of our reinvestment. We have seen some of our competitors ratchet it up throughout the year. I think we are, unless there is anything more to supplement other than—

From where we are sitting coming out of Q4 and into this quarter, we are not seeing a ratchet up in terms of levels of spend directly on gaming programs from where we are now. Competition remains, as Lawrence said, intense within the marketplace. We are not looking at any catalyst that would immediately bring that down. The hope that we always have is, as people look at things, that you have easing up among players. As Lawrence has said and I have said in the past, we do not ever drive up in the marketplace. We tend to be very disciplined. We will make strategic moves at times when we need to look at market share or move around with individual segments. But we certainly would never lead the market up. Based on what we are seeing now, I think we are stable. I do not see anything that will bring us down in the near term, but I also do not see anything that will ratchet it up.

On margin, we have done a pretty good job in terms of managing our operating costs throughout 2025. That is part of the company philosophy as well. You will see that ongoing throughout 2026.

Thank you so much. Thank you for the color.

Thank you. Our next question today comes from D.S. Kim at JPMorgan. Please go ahead.

Hi, everyone. Good evening, and Happy New Year. My first question is regarding the operating expense. As Geoff mentioned earlier, I think we had quite a bit of nonrecurring items this quarter—ten-year anniversary, National Games, and even junket-related bad debt. Can you help quantifying each of these in dollar terms for us, if it is possible? And can I confirm the spending related to National Games and Grand Prix were included in OpEx—operating expense—above EBITDA line and not in the corporate expense?

Those expenses are in our property margins. The additional bad debt was approximately $5 million for the quarter, and we expect that to come back down to more normal levels going forward. And then we had about $6 million for the anniversary.

Thank you.

Our next question today comes from John G. DeCree at CBRE. Please go ahead.

Maybe just one on CapEx. Geoff, I apologize if I missed it. Could you give us the CapEx number for the year? And could you break it out for major projects—maybe by COD or Studio City—at the property level, what we should expect?

Sure. Our total CapEx for this year, which reflects a little bit of carry forward from money we anticipated spending in 2025 that has pushed into 2026, is $450 million. The only material one that I would call out would be the Countdown Hotel, which is approximately $100 million for 2026. Broken out by jurisdiction, the total CapEx in Macau is roughly $375 million, $35 million to $40 million in Manila, and $35 million to $40 million in Cyprus.

Perfect.

You are welcome.

Thank you. That concludes the question and answer session. I would like to turn the conference back over to Jeanny Kim for any closing remarks.

Thank you, Operator, and thank you all for joining. We will see you next quarter.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.