If You Invested in Studio City International Holdings (MSC)

Studio City International Holdings Limited (NYSE: MSC) is the holding company for Studio City, a world-class integrated resort located in Cotai, Macau. The company’s American depositary shares represent interests in its Class A ordinary shares. Studio City combines a casino operated under a gaming contract, hotel accommodation, food and beverage outlets, entertainment offerings, and related services within a single destination resort.

According to company disclosures, Studio City’s business model is centered on operating an integrated resort that generates revenue from both gaming and non-gaming activities. Operating revenues are reported across categories such as revenue from casino contract, rooms, food and beverage, entertainment, services fee, mall, and retail and other. The casino operations at Studio City are conducted under a casino contract with Melco Resorts (Macau) Limited, which acts as the gaming operator of the Studio City Casino. Revenue from casino contract is reported net of gaming taxes and the costs incurred in connection with the ongoing operation of the casino that are deducted by the gaming operator.

Studio City has stated that it has strategically repositioned its gaming focus toward the premium mass and mass market segments. VIP rolling chip operations at Studio City were transferred to City of Dreams in late October 2024, as described in the company’s earnings releases. The resort’s performance is influenced by mass market table games drop, gaming machine handle, and related hold or win percentages, which the company discloses in its quarterly earnings materials.

Non-gaming activities form an important component of Studio City’s operations. The company reports non-gaming revenues that include rooms, food and beverage, entertainment, mall, and retail and other categories. These activities reflect the integrated resort nature of the property, where hotel stays, dining, entertainment, and retail offerings complement the casino business. Studio City’s financial statements show that it incurs operating costs and expenses associated with each of these revenue lines, as well as general and administrative expenses, depreciation and amortization, and other items.

The company regularly reports operating income, net loss attributable to Studio City International Holdings Limited, and non-GAAP measures such as Adjusted EBITDA and adjusted net income/loss. Management presents Adjusted EBITDA as a supplemental measure that excludes interest, taxes, depreciation, amortization, pre-opening costs, property charges and other, and other non-operating income and expenses. The company states that some investors use Adjusted EBITDA to assess the ability to incur and service debt, fund capital expenditures, and meet working capital requirements, while recognizing that this measure has limitations and should be considered together with U.S. GAAP metrics.

Studio City International Holdings Limited is majority owned by Melco Resorts & Entertainment Limited, whose American depositary shares are listed on the Nasdaq Global Select Market. Filings with the U.S. Securities and Exchange Commission indicate that Studio City files annual reports on Form 20-F and periodic current reports on Form 6-K as a foreign private issuer. The company has also disclosed the use of senior secured credit facilities and senior notes as part of its capital structure, and it reports total debt, net of unamortized deferred financing costs and original issue premiums, as part of its financial position.

From a sector classification perspective, Studio City is associated with the travel and leisure space through its integrated resort operations, and is categorized under travel-related and administrative support activities. Its operations are concentrated in Macau, and company communications highlight the role of inbound tourism and the broader Macau gaming market in influencing performance. The company’s results are sensitive to factors such as gaming market conditions, visitation levels, regulatory developments in Macau, and capital and credit market conditions, as outlined in its forward-looking statements and risk factor discussions.

Investors analyzing MSC stock typically review trends in total operating revenues, the balance between gaming and non-gaming revenues, operating income, net loss, and Adjusted EBITDA. They may also consider Studio City’s capital expenditures, debt profile, and the impact of strategic decisions such as the focus on premium mass and mass segments. As an integrated resort issuer majority owned by a larger gaming group, Studio City’s disclosures also reference intercompany charges and relationships with subsidiaries of Melco Resorts & Entertainment Limited, which can affect reported Adjusted EBITDA when compared with figures presented in Melco’s own earnings releases.

Business Segments and Revenue Categories

Studio City’s condensed consolidated statements of operations break down operating revenues into several recurring categories:

• Revenue from casino contract – net of gaming taxes and operating costs deducted by the gaming operator.
• Rooms – revenue from hotel accommodation at the integrated resort.
• Food and beverage – revenue from dining and related services at the property.
• Entertainment – revenue from entertainment offerings at Studio City.
• Services fee – revenue from service-related arrangements disclosed in the financial statements.
• Mall – revenue associated with mall operations at the resort.
• Retail and other – additional revenue streams classified under retail and other.

On the cost side, the company reports costs related to the casino contract, rooms, food and beverage, entertainment, mall, retail and other, general and administrative expenses, pre-opening costs, amortization of land use right, depreciation and amortization, and property charges and other. These line items illustrate how Studio City’s integrated resort model combines gaming operations with hospitality and entertainment services, each carrying its own cost structure.

Financial Reporting and Non-GAAP Measures

Studio City emphasizes that Adjusted EBITDA and adjusted net income/loss are non-GAAP financial measures used as supplemental disclosures. The company explains that Adjusted EBITDA is widely used in the gaming industry to measure performance and as a basis for valuation, but it does not reflect all cash requirements, including capital expenditures, interest payments, debt principal repayments, taxes, and other recurring or nonrecurring charges. Adjusted net income/loss is defined in company materials as net income/loss before specified items such as pre-opening costs, property charges and other, and loss on extinguishment of debt, net of participation interest and taxes.

The company notes that its calculation of these non-GAAP measures may differ from methods used by other companies, which can limit comparability. It therefore encourages investors to review reconciliations of these measures to the most directly comparable U.S. GAAP financial measures, which are provided following the financial statements in its earnings releases and filings.

Ownership and Regulatory Context

Studio City International Holdings Limited is described in its press releases as a world-class integrated resort located in Cotai, Macau, with American depositary shares listed on the New York Stock Exchange under the symbol MSC. The company is majority owned by Melco Resorts & Entertainment Limited, which is listed on the Nasdaq Global Select Market. SEC filings indicate that Studio City files annual reports on Form 20-F and current reports on Form 6-K, and that certain 6-K filings append announcements from Melco International Development Limited regarding transactions involving subsidiaries of Studio City.

Company disclosures highlight that Studio City operates within the regulatory framework of Macau’s gaming laws and that risks include changes in the gaming market and visitation in Macau, local and global economic conditions, capital and credit market volatility, implementation of amended Macau gaming law, and requirements for gaming authority and other governmental approvals. These factors are cited in the company’s safe harbor statements and risk discussions as potential drivers of variability in operating results.