Key Highlights

  • Third-quarter net revenue rose 2.4% to a record $146.3 million, from $142.8 million a year earlier.
  • Diluted EPS was $1.76, up 4.1% from $1.69, and basic EPS was $1.80, up 4.0% from $1.73.
  • Adjusted EBITDA rose 2.1% to $56.0 million, a 38.3% margin, which management described as near record levels.
  • The company repurchased 300,859 shares for $37 million in the quarter, with 670,644 shares left under the authorization.
  • Cash was $137.4 million at September 30 with no borrowings, and the next quarterly dividend is $0.30 per share.

Monarch Earnings: Did a Record Quarter Hide Slower Profit Growth?

Monarch Casino & Resort (NASDAQ:MCRI) reported third-quarter 2026 results after the close on Tuesday, October 27, with record net revenue of $146.3 million, up 2.4%, and record adjusted EBITDA of $56.0 million, up 2.1%. Net income rose only 1.4% to $32.0 million, so profit grew far more slowly than the nine-month pace.

Diluted EPS was $1.76 against $1.69 a year earlier, a gain of 4.1%, while basic EPS was $1.80 against $1.73. The earnings screen showed EPS of $1.82 against an estimate of $1.80, a 1.29% surprise as screened, but the company's own diluted figure was $1.76. No numerical guidance was issued.

Atlantis and Black Hawk: Which Revenue Lines Drove the Gain?

Monarch owns Atlantis Casino Resort Spa in Reno, Nevada, and Monarch Casino Resort Spa Black Hawk in Colorado.

Casino revenue rose 3.4% to $82.8 million and led the quarter. Food and beverage revenue rose 1.3% to $34.3 million, hotel revenue rose 0.9% to $22.7 million, and other revenue was $6.5 million. Hotel growth slowed sharply from the 13.0% gain in the second quarter.

Margins and Tax: Why Did Net Income Lag Revenue?

Casino expense held at 35.8% of casino revenue, food and beverage expense improved to 69.6% from 69.9%, and hotel expense eased to 31.3% from 31.4%. Selling, general and administrative expense rose to $29.0 million, or 19.8% of revenue versus 19.3%, on legal and employee costs.

Income from operations rose to $41.3 million from $38.2 million, about 8.1% calculated, helped by depreciation and amortization of $10.8 million versus $14.1 million. Pre-tax income rose about 8.7%, calculated, but the tax provision climbed to $10.1 million from $7.2 million, an implied rate near 24.0% versus 18.5%. That tax step-up explains why net income grew 1.4%.

Adjusted EBITDA margin was 38.3% versus about 38.4% a year earlier, calculated.

Buybacks, Cash and the PCL Judgment: How Strong Is the Balance Sheet?

Cash was $137.4 million at September 30, versus $96.5 million at year-end 2025, with no borrowings on the credit facility.

Capital expenditure was $9.7 million, covering maintenance, gaming equipment and land adjacent to Atlantis, funded from operating cash flow. The company repurchased 300,859 shares for $37 million, an average near $123 per share calculated, leaving 670,644 shares of a 3,000,000 share authorization.

The board declared a $0.30 dividend payable December 15 to holders of record on December 1, part of a $1.20 annual rate. A Colorado court entered a $74.6 million judgment for PCL Construction Services, which Monarch is appealing, and the release notes a possible need to post bonds or other surety.

What to Watch Next: Tax Rate, Legal Costs and Possible M&A?

The company says its balance sheet and free cash flow position it to keep investing, repurchasing shares and paying dividends, and that it continues to evaluate potential M&A. Investors will watch the tax rate, legal costs within selling, general and administrative expense, hotel revenue after slowing to 0.9%, and the PCL appeal.