Galaxy reports strong Y-o-Y revenue growth in Q3 amidst expansion efforts

Galaxy Entertainment Group (GEG) posted an 11% year-on-year increase in net revenue, totaling HK$10.7 billion (US$1.38 billion), although results showed a 2% dip from the previous quarter. Despite a resilient revenue performance, the company reported a decline in its quarterly earnings before interest, taxes, depreciation, and amortization (EBITDA), primarily due to “unlucky” gaming outcomes.

For Q3, Galaxy's adjusted EBITDA rose 6% compared to the same period last year, reaching HK$2.9 billion ($373 million). However, the figure represented a 7% decline from Q2 2024, as a low win rate in the rolling business dampened earnings.

Mass gaming revenue continued its upward trend, increasing by 13% year-on-year, and exceeding pre-pandemic levels with 115% of 2019’s gross gaming revenue (GGR) achieved. The company's strong liquidity position remained intact, with cash and liquid investments totaling HK$28.6 billion at the end of September, providing a solid foundation for future investments.

Galaxy’s Phase 4 development at Galaxy Macau is progressing, with the company investing HK$43 billion ($5.5 billion) in new facilities. The expansion includes luxury hotel additions, a 4,000-seat theater, a water resort deck, and a new casino. The Capella Hotel at Galaxy Macau is set to open in 2025, marking a key milestone in the project. Capital expenditure for the quarter totaled $1.1 billion, including $600 million spent on advancing Phase 3 and 4 developments.

Looking ahead, Galaxy remains optimistic about its prospects, bolstered by strong visitation during China’s Golden Week. Macau welcomed 993,117 visitors over the holiday period, with hotel occupancy reaching 95%. This robust demand sets the stage for a strong fourth quarter, the company said.

Galaxy is also betting on its Galaxy Arena, which can host up to 16,000 spectators, to drive future growth. The venue has already attracted major performances, helping the operator stand out in the competitive Macau market. The company is further diversifying its global footprint, with the opening of an overseas business development office in Bangkok, joining existing offices in Tokyo and Seoul to foster international growth.

Vitaly Umansky, an analyst at Seaport Research Partners, commented on Galaxy's market positioning, highlighting the company’s advantage in entertainment and service. He said: “With a re-focused marketing effort and smart digital tables up and running before Chinese New Year, we expect share gains to continue at Galaxy Macau.”

Galaxy demonstrated a commitment to shareholder returns, declaring an interim dividend of HK$0.50 per share in October. The company emphasized its strategy of reinvesting profits into growth initiatives while maintaining healthy cash reserves, underscoring its long-term vision for expansion and competitiveness.

Despite the positive overall results, Galaxy faced a series of challenges in Q3, including a typhoon that impacted visitor traffic to Macau in September. Additionally, operational expenses rose 1.7% from the previous quarter, reflecting increased competition and higher commission costs.