United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 0-22088

MONARCH CASINO & RESORT, INC.

(Exact name of registrant as specified in its charter)


Nevada		88-0300760
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

3800 S. Virginia St.
Reno, Nevada		89502
(Address of Principal Executive Offices)		(ZIP Code)

Registrant’s telephone number, including area code: (775) 335-4600

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock, $0.01 par value per share	MCRI	The Nasdaq Stock Market LLC (Nasdaq-GS)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ⌧	Accelerated filer ◻	Non-accelerated filer ◻
Smaller reporting company ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 18,250,291 shares of common stock are outstanding as of October 23, 2025.

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TABLE OF CONTENTS

March 31
Item	Page Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income for the three and nine months ended September 30, 2025 and 2024 (unaudited)	3
Consolidated Balance Sheets at September 30, 2025 (unaudited) and December 31, 2024	4
Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024 (unaudited)	5
Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (unaudited)	6
Notes to Consolidated Financial Statements (unaudited)	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3. Quantitative and Qualitative Disclosures About Market Risk	23

Item 4. Controls and Procedures	24

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	24

Item 1A. Risk Factors	24

Item 2. Unregistered Sales of Equity Securities and use of Proceeds	24

Item 5. Other Information	25

Item 6. Exhibits	26

Signatures	26

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Revenues
Casino	$	80,130	$	76,307	$	232,614	$	216,720
Food and beverage		33,842		32,888		96,055		94,893
Hotel		22,494		21,642		58,312		58,147
Other		6,348		7,036		18,141		17,913
Net revenues		142,814		137,873		405,122		387,673

Operating expenses
Casino		28,688		27,676		84,654		80,801
Food and beverage		23,655		23,938		68,600		70,002
Hotel		7,070		7,306		19,922		19,891
Other		3,123		3,171		9,274		9,005
Selling, general and administrative		27,508		27,177		81,484		80,449
Depreciation and amortization		14,056		13,103		40,842		37,994
Other operating items, net		541		225		1,956		931
Total operating expenses		104,641		102,596		306,732		299,073
Income from operations		38,173		35,277		98,390		88,600

Other income (expense)
Interest income (expense), net		575		(145)		1,283		(349)

Income before income taxes		38,748		35,132		99,673		88,251
Provision for income taxes		(7,172)		(7,531)		(21,225)		(19,693)
Net income	$	31,576	$	27,601	$	78,448	$	68,558

Earnings per share of common stock
Net income
Basic	$	1.73	$	1.50	$	4.27	$	3.67
Diluted	$	1.69	$	1.47	$	4.18	$	3.60

Weighted average number of common shares and potential common shares outstanding
Basic		18,297		18,404		18,376		18,681
Diluted		18,736		18,746		18,752		19,039

The Notes to the Consolidated Financial Statements are an integral part of these statements.

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MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except shares)


	September 30, 2025		December 31, 2024
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	107,639	$	58,760
Receivables, net of provision for credit losses		8,950		10,257
Income taxes receivable		—		1,523
Inventories		8,479		9,296
Prepaid expenses and other		8,947		10,586
Total current assets		134,015		90,422
Property and equipment, net		564,242		575,287
Goodwill		25,111		25,111
Intangible assets, net		1,727		345
Other assets, net		289		418
Total assets	$	725,384	$	691,583
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	40,583	$	41,243
Construction accounts payable		47,642		51,101
Accrued expenses		50,945		53,198
Income taxes payable		52		—
Short-term lease liability		1,015		921
Total current liabilities		140,237		146,463
Deferred income taxes		13,348		13,348
Long-term lease liability		12,542		13,143
Other long-term liability		881		881
Total liabilities		167,008		173,835
Stockholders’ equity
Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued		—		—
Common stock, $.01 par value, 30,000,000 shares authorized; 19,529,846 shares issued and 18,250,291 outstanding at September 30, 2025; 19,364,531 shares issued and 18,436,540 outstanding at December 31, 2024		195		193
Additional paid-in capital		72,925		62,891
Treasury stock, 1,279,555 shares at September 30, 2025 and 927,991 shares at December 31, 2024		(95,006)		(63,686)
Retained earnings		580,262		518,350
Total stockholders’ equity		558,376		517,748
Total liabilities and stockholders’ equity	$	725,384	$	691,583

The Notes to the Consolidated Financial Statements are an integral part of these statements.

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MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except shares, Unaudited)


	Common Stock			Additional
	Shares			Paid-in		Retained		Treasury
	Outstanding	Amount		Capital		Earnings		Stock		Total
Balance, January 1, 2025	18,436,540	$	193	$	62,891	$	518,350	$	(63,686)	$	517,748
Exercise of stock options, net	29,866		1		1,433		—		—		1,434
Stock-based compensation expense	—		—		2,127		—		—		2,127
Dividend payment	—		—		—		(5,538)		—		(5,538)
Net income	—		—		—		19,864		—		19,864
Balance, March 31, 2025	18,466,406	$	194	$	66,451	$	532,676	$	(63,686)	$	535,635
Exercise of stock options, net	7,766		—		244		—		—		244
Stock-based compensation expense	—		—		1,875		—		—		1,875
Purchase of company common stock	(240,395)		—		—		—		(20,014)		(20,014)
Dividend payment	—		—		—		(5,501)		—		(5,501)
Net income	—		—		—		27,008		—		27,008
Balance, June 30, 2025	18,233,777	$	194	$	68,570	$	554,183	$	(83,700)	$	539,247
Exercise of stock options, net	127,683		1		2,277		—		—		2,278
Stock-based compensation expense	—		—		2,078		—		—		2,078
Purchase of company common stock	(111,169)		—		—		—		(11,306)		(11,306)
Dividend payment	—		—		—		(5,497)		—		(5,497)
Net income	—		—		—		31,576		—		31,576
Balance, September 30, 2025	18,250,291	$	195	$	72,925	$	580,262	$	(95,006)	$	558,376


	Common Stock			Additional
	Shares			Paid-in		Retained		Treasury
	Outstanding	Amount		Capital		Earnings		Stock		Total
Balance, January 1, 2024	19,091,497	$	191	$	48,821	$	467,846	$	(3,718)	$	513,140
Exercise of stock options, net	20,247		1		969		—		—		970
Stock-based compensation expense	—		—		1,778		—		—		1,778
Purchase of company common stock	(281,708)		—		—		—		(19,574)		(19,574)
Dividend payment	—		—		—		(5,676)		—		(5,676)
Net income	—		—		—		18,275		—		18,275
Balance, March 31, 2024	18,830,036	$	192	$	51,568	$	480,445	$	(23,292)	$	508,913
Exercise of stock options, net	32,099		—		1,333		—		—		1,333
Stock-based compensation expense	—		—		1,773		—		—		1,773
Purchase of company common stock	(452,464)		—		—		—		(30,781)		(30,781)
Dividend payment	—		—		—		(5,553)		—		(5,553)
Net income	—		—		—		22,682		—		22,682
Balance, June 30, 2024	18,409,671	$	192	$	54,674	$	497,574	$	(54,073)	$	498,367
Exercise of stock options, net	90,087		1		462		—		—		463
Stock-based compensation expense	—		—		2,038		—		—		2,038
Purchase of company common stock	(131,285)		—		—		—		(9,676)		(9,676)
Dividend payment	—		—		—		(5,513)		—		(5,513)
Net income	—		—		—		27,601		—		27,601
Balance, September 30, 2024	18,368,473	$	193	$	57,174	$	519,662	$	(63,749)	$	513,280

The Notes to the Consolidated Financial Statements are an integral part of these statements.

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MONARCH CASINO & RESORT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, Unaudited)


	Nine Months Ended September 30,
	2025		2024
Cash flows from operating activities:
Net income	$	78,448	$	68,558
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		40,842		37,994
Amortization of deferred loan costs		130		—
Stock-based compensation - stock options		6,080		5,589
Provision for bad debts		30		234
Loss on disposition of assets		23		268
Non-cash operating lease expense		(15)		23
Changes in operating assets and liabilities:
Receivables		1,277		(136)
Income taxes receivable		1,575		957
Inventories		817		(45)
Prepaid expenses and other		318		1,641
Accounts payable		(660)		(9,774)
Accrued expenses		(2,253)		(2,399)
Net cash provided by operating activities		126,612		102,910
Cash flows from investing activities:
Proceeds from sale of assets		25		73
Change in construction accounts payable		(3,459)		1,417
Acquisition of property and equipment		(30,399)		(35,872)
Net cash used in investing activities		(33,833)		(34,382)
Cash flows from financing activities:
Payroll taxes from net exercise of stock options		(2,303)		(2,013)
Proceeds from exercise of stock options		6,259		4,777
Line-of-credit borrowings		—		45,500
Line-of-credit payments		—		(44,000)
Payment of dividends		(16,536)		(16,742)
Purchase of company common stock		(31,320)		(60,031)
Net cash used in financing activities		(43,900)		(72,509)

Change in cash and cash equivalents		48,879		(3,981)
Cash and cash equivalents at beginning of period		58,760		43,361
Cash and cash equivalents at end of period	$	107,639	$	39,380

Supplemental disclosure of cash flow information:
Cash paid for interest	$	186	$	583
Cash paid for income taxes	$	19,650	$	18,740

The Notes to the Consolidated Financial Statements are an integral part of these statements.

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MONARCH CASINO & RESORT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

QUARTERLY PERIOD ENDED SEPTEMBER 30, 2025

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation:

Monarch Casino & Resort, Inc. was incorporated in 1993. Unless otherwise indicated, “Monarch,” “us,” “we,” and the “Company” refers to Monarch Casino & Resort, Inc. and its subsidiaries. Monarch owns and operates the Atlantis Casino Resort Spa, a hotel and casino in Reno, Nevada (the “Atlantis”) and Monarch Casino Resort Spa Black Hawk, a hotel and casino in Black Hawk, Colorado (the “Monarch Black Hawk”). In addition, Monarch owns separate parcels of land located next to the Atlantis and a parcel of land with an industrial warehouse located between Denver, Colorado and Monarch Black Hawk. Monarch also owns Chicago Dogs Eatery, Inc. and Monarch Promotional Association, both of which were formed in relation to licensure requirements for extended hours of liquor operation in Black Hawk, Colorado.

The accompanying unaudited consolidated financial statements include the accounts of Monarch and its subsidiaries (the “Consolidated Financial Statements”). Intercompany balances and transactions are eliminated.

Interim Financial Statements:

The Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the management of the Company, all adjustments considered necessary for a fair presentation, consisting of normal recurring accruals, are reflected in the interim financial statements. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

The balance sheet at December 31, 2024, has been derived from the audited consolidated financial statements of the Company at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2024.

Segment Reporting:

The accounting guidance for disclosures about segments of an enterprise and related information requires separate financial information to be disclosed for all reporting segments of a business. The Company determined that the Company’s two operating segments, Atlantis and Monarch Black Hawk, meet all of the aggregation criteria stipulated by ASC 280-10-50-11. The Company views each property as an operating segment and the two operating segments have been aggregated into one reporting segment.

The Company’s Chief Operating Decision Maker (CODM) is our Chief Executive Officer. The CODM assesses performance for our properties and decides how to allocate resources based on net income as reported on our Consolidated Statements of Income. The measure of segment assets is reported on our Consolidated Balance Sheets as total assets.

Our operating revenues are recognized with the delivery of products or when services are performed at either of our operating segments. Our significant segment expenses as monitored by the CODM are shown in the table below. This breakout of expenses is used by the CODM to monitor and assess the financial performance by comparing actual results to prior years and plans (in thousands).

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	Nine Months Ended September 30,
		2025		2024
Net revenues	$	405,122	$	387,673
Operating Expenses
Labor expense		117,708		118,083
Cost of sales		33,167		33,233
Tax and license expense [a]		60,078		56,631
Other operating expense [b]		52,981		52,201
Depreciation and amortization		40,842		37,994
Other operating items, net [c]		1,956		931
Interest income, net		(1,283)		349
Income tax expense		21,225		19,693
Total expenses	$	326,674	$	319,115

Net income	$	78,448	$	68,558

[a] Tax and license includes gaming taxes and licenses, commerce taxes, use taxes and property taxes.

[b] Operating expenses includes expenses for casino, food and beverage, hotel, other, selling general and administrative expenses labor expense, cost of sales, tax and license expense.

[c] Other operating items, net includes construction litigation expenses, lobbying expenses, and (gain) loss on disposition of assets.

Concentrations of Credit Risk and Credit Losses:

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of bank deposits and trade receivables.

The Company accounts for credit losses in accordance with Accounting Standards Update (“ASU”) 2016-13 using a forward-looking expected loss model.

The Company maintains its surplus cash in bank accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

The Company extends short-term credit to its gaming customers. Such credit is non-interest bearing and is due on demand. In addition, the Company also has receivables due from hotel guests and convention groups and events, which are primarily secured with a credit card. An allowance for current expected credit losses is determined to reduce the Company’s receivables to their carrying value, which approximates fair value. The allowance is estimated based on historical collection experience, specific review of individual customer accounts, current economic and business conditions and management’s expectations of future economic and business conditions. The allowance is applied even when the risk of credit loss is remote. When a situation warrants, the Company may create a specific identification reserve for high collection risk receivables. The Company writes off its uncollectible receivables once all efforts have been made to collect such receivables. Recoveries of accounts previously written off are recorded when received. Concentrations of credit risk with respect to gaming and non-gaming receivables are limited due to the large number of customers comprising the Company’s customer base. Historically, the Company has not incurred any significant credit-related losses.

As of September 30, 2025, the Company has recorded a reserve of $0.2 million for gaming and non-gaming receivables.

The Company believes it is not exposed to any significant credit risk on cash and accounts receivable.

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Inventories:

Inventories, consisting primarily of food, beverages, and retail merchandise, are stated at the lower of cost and net realizable value. Cost is determined by the weighted average and specific identification methods. Net realizable value is defined by the Financial Accounting Standards Board (“FASB”) as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

Property and Equipment, net:

Property and equipment, net consists of the following (in thousands):


	September 30, 2025		December 31, 2024
Land	$	34,688	$	34,688
Land improvements		11,470		11,263
Buildings		474,462		474,469
Building improvements		139,541		122,059
Furniture and equipment		265,217		251,605
Construction in progress		11,831		17,722
Right of use assets		13,504		13,995
Leasehold improvements		4,498		4,498
		955,211		930,299
Less accumulated depreciation and amortization		(390,969)		(355,012)
Property and equipment, net	$	564,242	$	575,287

Property and equipment are stated at cost, less accumulated depreciation and amortization. Property and equipment is depreciated principally on a straight-line basis over its estimated useful lives as follows:


Land improvements	15	-	40	years
Buildings	30	-	40	years
Building improvements	5	-	40	years
Leasehold improvements	5	-	40	years
Furniture	5	-	10	years
Equipment	3	-	20	years

The Company evaluates property and equipment and other long-lived assets for impairment in accordance with the guidance for accounting for the impairment or disposal of long-lived assets.

For assets to be disposed of, the Company recognizes the asset to be sold at the lower of carrying value or fair value less costs of disposal. Fair value for assets to be disposed of is generally estimated based on comparable asset sales, solicited offers or a discounted cash flow model.

For assets to be held and used, the Company reviews fixed assets for impairment indicators at the end of the fiscal year and whenever indicators of impairment exist. If an indicator of impairment exists, we compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, the impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model or market comparable, when available. For the nine-month periods ended September 30, 2025 and 2024, respectively, there were no impairment charges.

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Goodwill:

The Company accounts for goodwill in accordance with ASC Topic 350, Intangibles-Goodwill and Other (“ASC Topic 350”). ASC Topic 350 gives companies the option to perform a qualitative assessment that may allow them to skip the quantitative test as appropriate. The Company tests its goodwill for impairment annually during the fourth quarter, or whenever events or circumstances make it more likely than not that impairment may have occurred. Impairment testing for goodwill is performed at the reporting unit level, and each of the Company’s casino properties is considered to be a reporting unit.

As of September 30, 2025, we had goodwill totaling $25.1 million related to the purchase of Monarch Black Hawk, Inc.

ASC Topic 350 requires that goodwill be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We performed an assessment to determine whether events or circumstances such as those described in ASC 350-20-35-3C existed and we determined that they did not exist during the interim period; therefore, an interim impairment test was not performed.

Revenue Recognition:

The majority of the Company’s revenue is recognized when products are delivered or services are performed. For certain revenue transactions (when a patron uses a club loyalty card), in accordance with ASU No. 2014-09 (“ASC 606”), a portion of the revenue is deferred until the points earned by the patron are redeemed or expire.

Casino revenue: Casino revenues represent the net win from gaming activity, which is the difference between the amounts won and lost, which represents the transaction price. Jackpots, other than the incremental amount of progressive jackpots, are recognized at the time they are won by customers. Funds deposited by customers in advance and outstanding chips and slot tickets in the customers’ possession are recognized as a liability until such amounts are redeemed or used in gaming play by the customer. Additionally, net win is reduced by the performance obligations for the players’ club program, progressive jackpots and any pre-arranged marker discounts. Progressive jackpot provisions are recognized in two components: 1) as wagers are made for the share of players’ wagers that are contributed to the progressive jackpot award, and 2) as jackpots are won for the portion of the progressive jackpot award contributed by the Company. Cash discounts and other cash incentives to guests related to gaming play are recorded as a reduction to gaming revenue.

Players’ Club Program: The Company operates a players’ club program under which as players perform gaming activities they earn and accumulate points, which may be redeemed for a variety of goods and services. Given the significance of the players’ club program and the ability for members to bank such points based on their past play, the Company has determined that players’ club program points granted in conjunction with gaming activity constitute a material right and, as such, represent a performance obligation associated with the gaming contracts. At the time points are earned, the Company recognizes deferred revenue at the standalone selling prices (“SSP”) of the goods and services that the points are expected to be redeemed for, with a corresponding decrease in gaming revenue. The points estimated SSP is computed as the cash redemption value of the points expected to be redeemed, which is determined through an analysis of all redemption activity over the preceding twelve-month period.

Food and Beverage, Hotel and Other (retail) Revenues: Food and Beverage, Hotel and Other Revenues in general are recognized when products are delivered or services are performed. The Company recognizes revenue related to the products and services associated with the players points’ redemptions at the time products are delivered or services are performed, with corresponding reduction in the deferred revenue, at SSP. Other complimentaries in conjunction with the gaming and other business are also valued at SSP. Hotel revenue is presented net of non-third-party rebates and commissions. The cost of providing these complimentary goods and services are included as expenses within their respective categories.

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Other Revenues: Other revenues (excluding retail) primarily consist of commissions received on ATM transactions and cash advances, which are recorded on a net basis as the Company represents the agent in its relationship with the third-party service providers, and commissions and fees received in connection with pari-mutuel wagering, which are also recorded on a net basis.

Sales and other taxes: Sales taxes and other taxes collected from customers on behalf of governmental authorities are accounted for on a net basis and are not included in revenues or operating expenses. In addition, tips and other gratuities, excluding service charges, collected from customers on behalf of the Company’s employees are also accounted for on a net basis and are not included in revenues or operating expenses.

Outstanding chip liability: Outstanding chip liability represents the amounts owed in exchange for gaming chips held by a customer, that can be redeemed by the customers at any time.

Customer advances and other: Customer advances and other primarily consist of funds deposited by customers before gaming play occurs and advance payments on goods and services yet to be provided, such as advance gift cards sales and deposits on rooms and convention space or for unpaid wagers. These liabilities are generally expected to be recognized as revenue within one year of being purchased, earned, or deposited and are recorded within “Accrued expenses” on the consolidated balance sheets.

The following table summarizes the activity related to contract and contract-related liabilities as of September 30, 2025 and 2024 compared to December 31, 2024 and 2023, respectively:


	September 30,		December 31,		Increase (Decrease)		September 30,		December 31,		Decrease
	2025		2024				2024		2023
Contractual Liability
Players Club Liability	$	7,746	$	8,097	$	(351)	$	8,475	$	8,849	$	(374)
Outstanding Chip Liability		1,740		2,298		(558)		2,107		2,382		(275)
Customer Advances and Other		6,505		6,378		127		5,877		6,232		(355)
Total Contractual Liability	$	15,991	$	16,773	$	(782)	$	16,459	$	17,463	$	(1,004)

Other operating items, net:

Other operating items, net, in general consist of miscellaneous operating charges or proceeds.

For the three months ended September 30, 2025, Other operating items, net, was $0.5 million and consisted primarily of professional service fees relating to our construction litigation. For the three months ended September 30, 2024, Other operating items, net, was $0.2 million and consisted primarily of loss on disposal of assets.

For the nine months ended September 30, 2025, Other operating items, net, was $1.9 million and consisted primarily of professional service fees relating to our construction litigation. For the nine months ended September 30, 2024, Other operating items, net, was $0.9 million and consisted of $0.6 million professional service fees relating to our construction litigation and $0.3 million loss on disposal of assets.

Impact of Recently Adopted Accounting Standards:

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires business entities to expand their annual disclosures of the effective rate reconciliation and income taxes paid. The ASU is effective for fiscal years beginning after December 15, 2024, may be adopted on a prospective or retrospective basis, and early adoption is permitted. The adoption of this standard is not expected to have a material impact on our Consolidated Financial Statements.

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In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Entities are permitted to apply either the prospective or retrospective transition methods. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.

In September 2025, the Financial Accounting Standards Board issued updated guidance on accounting for internal-use software, effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments modernize guidance to consider different methods of software development, updating the requirements for capitalization of software costs. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.

A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, the implementation of any such proposed or revised standards would have on the Company’s Consolidated Financial Statements.

NOTE 2. ACCOUNTING FOR LEASES

For operating leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of the lease payments over the lease term. Certain of the Company’s leases include rental escalation clauses, renewal options and/or termination options that are factored into its determination of lease payments when appropriate. As permitted by ASC 842, the Company elected not to separate non-lease components from their related lease components.

As of September 30, 2025, the Company’s right of use assets consisted of the Parking Lot Lease, the Driveway Lease (each as defined and discussed in NOTE 5. RELATED PARTY TRANSACTIONS), as well as certain billboard leases.

The weighted-average incremental borrowing rate of the leases presented in the lease liability as of September 30, 2025, was 4.35%. There were no new leases entered into in the third quarter of 2025.

The weighted-average remaining lease term of the leases presented in the lease liability as of September 30, 2025, was 15.86 years.

Cash paid related to the operating leases presented in the lease liability for each of the nine months ended September 30, 2025 and 2024, was $0.8 million and $1.1 million, respectively.

NOTE 3. STOCK-BASED COMPENSATION

In accordance with ASC 718, the Company records any excess tax benefits or deficiencies from its equity awards in its Consolidated Statements of Income in the reporting periods in which vesting occurs. As a result, the Company’s income tax expense and associated effective tax rate are impacted by fluctuations in stock price between the grant dates and vesting dates of equity awards.

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Reported stock-based compensation expense was classified as follows (in thousands):


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Casino	$	115	$	135	$	315	$	394
Food and beverage		62		60		202		101
Hotel		84		88		118		219
Selling, general and administrative		1,817		1,755		5,445		4,875
Total stock-based compensation, before taxes		2,078		2,038		6,080		5,589
Tax benefit		(436)		(428)		(1,277)		(1,173)
Total stock-based compensation, net of tax	$	1,642	$	1,610	$	4,803	$	4,416

NOTE 4. EARNINGS PER SHARE

Basic earnings per share is computed by dividing reported net earnings by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect the additional dilution for all potentially dilutive securities such as stock options. The following is a reconciliation of the number of shares (denominator) used in the basic and diluted earnings per share computations (shares in thousands):


	Three months ended September 30,
	2025			2024
			Per Share			Per Share
	Shares		Amount	Shares		Amount
Basic	18,297	$	1.73	18,404	$	1.50
Effect of dilutive stock options	439		(0.04)	342		(0.03)
Diluted	18,736	$	1.69	18,746	$	1.47


	Nine months ended September 30,
	2025			2024
			Per Share			Per Share
	Shares		Amount	Shares		Amount
Basic	18,376	$	4.27	18,681	$	3.67
Effect of dilutive stock options	376		(0.09)	358		(0.07)
Diluted	18,752	$	4.18	19,039	$	3.60

Excluded from the computation of diluted earnings per share are options where the exercise prices are greater than the weighted assumed proceeds per share as their effects would be anti-dilutive in the computation of diluted earnings per share. For the three months ended September 30, 2025 and 2024, options for approximately 359 thousand and 905 thousand shares, respectively, were excluded from the computation. For the nine months ended September 30, 2025 and 2024, options for approximately 637 thousand and 910 thousand shares, respectively, were excluded from the computation.

NOTE 5. RELATED PARTY TRANSACTIONS

The shopping center adjacent to the Atlantis (the “Shopping Center”) is owned by Biggest Little Investments, L.P. (“BLI”). John Farahi and Bob Farahi, Co-Chairmen of the Board and executive officers of the Company, and Ben Farahi have significant holdings (the “Farahi Family Stockholders”) in Monarch and each also beneficially owns limited partnership interests in BLI. Maxum LLC is the sole general partner of BLI, and Ben Farahi is the sole managing member of Maxum LLC. Neither John Farahi nor Bob Farahi has any management or operational control over BLI or the Shopping Center. Until May 2006, Ben Farahi held the positions of Co-Chairman of the Board, Secretary, Treasurer and Chief Financial Officer of the Company.

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On August 28, 2015, Monarch, through its subsidiary Golden Road Motor Inn, Inc., entered into a 20-year lease agreement with BLI for a portion of the Shopping Center (the “Parking Lot Lease”). This lease gives the Atlantis the right to use a parcel, approximately 4.2 acres, adjacent to the Atlantis. The primary purpose of the Parking Lot Lease is to provide additional, convenient, Atlantis surface parking. The minimum annual rent under the Parking Lot Lease is $695 thousand commencing on November 17, 2015. The minimum annual rent is subject to a cost of living adjustment increase on each five-year anniversary. In addition, the Company is responsible for the payment of property taxes, utilities and maintenance expenses related to the leased property. The Company has an option to renew the Parking Lot Lease for an additional ten-year term. If the Company elects not to exercise its renewal option, the Company will be obligated to pay BLI $1.6 million. For each of the three-month periods ended September 30, 2025 and 2024, the Company paid $187 thousand in rent, plus $9 thousand and $17 thousand, respectively, in operating expenses relating to this lease. For each of the nine-month periods ended September 30, 2025 and 2024, the Company paid $561 thousand in rent, plus $26 thousand in operating expenses relating to this lease. The right of use asset and lease liability balances as of September 30, 2025, recognized in the Consolidated Balance Sheet, was $9.3 million.

In addition, the Atlantis shares a driveway with the Shopping Center and leases approximately 37,400 square feet from BLI (the “Driveway Lease”) for an initial lease term of 15 years, which commenced on September 30, 2004, at an original annual rent of $300 thousand plus common area expenses. The annual rent is subject to a cost of living adjustment increase on each five-year anniversary of the Driveway Lease. Effective August 28, 2015, in connection with the Company entering into the Parking Lot Lease, the Driveway Lease was amended to: (i) make the Company solely responsible for the operation and maintenance costs of the shared driveway (including the fountains thereon); (ii) eliminate the Company’s obligation to reimburse the Shopping Center for its proportionate share of common area expenses; and (iii) exercise the three successive five-year renewal terms beyond the initial 15-year term in the existing Driveway Lease. At the end of the renewal terms, the Company has the option to purchase the leased driveway section of the Shopping Center. For the three-month periods ended September 30, 2025 and 2024, the Company paid $124 thousand and $101 thousand in rent, respectively, plus $12 thousand and $16 thousand, respectively, in operating expenses relating to this lease. For the nine-month periods ended September 30, 2025 and 2024, the Company paid $372 thousand and $303 thousand, respectively, in rent plus $38 thousand and $40 thousand, respectively, in operating expenses relating to this lease. The right of use asset and lease liability balances as of September 30, 2025, recognized in the Consolidated Balance Sheet, was $2.8 million.

The Company occasionally leases billboard advertising, storage space and parking lot space from affiliates controlled by the Farahi Family Stockholders, and paid $123 thousand and $118 thousand, respectively, for the three-month periods ended September 30, 2025 and 2024, $393 thousand and $375 thousand, respectively, for the nine-month periods ended September 30, 2025 and 2024, for such leases.

NOTE 6. LONG-TERM DEBT

On December 31, 2024, the Company entered into the Sixth Amended and Restated Credit Agreement (the “Amended Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent. The Amended Credit Facility amends and restates the Company’s $100.0 million credit facility, dated as of February 1, 2023 (the “Prior Facility”).

The Amended Credit Facility extends the maturity date to January 1, 2028 and removes the lien on real property under the Prior Facility. Additionally, the interest rate under the Amended Credit Facility is either SOFR (the Secured Overnight Financing Rate) plus a margin of 1.25% or the Base Rate (as defined in the Amended Credit Facility) plus a margin of 0.25%. The Commitment Fee Percentage (as defined in the Amended Credit Facility) was revised to be 0.25% per annum.

In addition to other customary covenants for a facility of this nature, as of September 30, 2025, the Company is required to maintain a Total Leverage Ratio (as defined in the Amended Credit Facility) of no more than 1.5:1.0 and Fixed Charge Coverage Ratio (as defined in the Amended Credit Facility) of at least 1.1:1.0. As of September 30, 2025, the Company’s Total Leverage Ratio and Fixed Charge Coverage Ratio were 0.0:1.0 and 112.3:1.0, respectively.

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On February 24, 2025, Wells Fargo Bank agreed to waive its right to declaring an event of default under the Amended Credit Facility arising out of the February 14, 2025 judgment on the litigation between Monarch and PCL, so long as we strictly comply with each and every other provision of the Amended Credit Facility. We believe that we are in full compliance.

As of September 30, 2025, the Company had no outstanding principal balance under the Amended Credit Facility, a $0.6 million standby letter of credit and $99.4 million remained available for borrowing.

NOTE 7. TAXES

For the nine months ended September 30, 2025 and 2024, the Company’s effective tax rate was 21.3% and 22.3%, respectively.

Deferred tax assets were evaluated by considering historical levels of income, estimates of future taxable income and the impact of tax planning strategies.

No uncertain tax positions were recorded as of September 30, 2025 and 2024.

On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted into law, making permanent certain key elements of the Tax Cuts and Jobs Act that are applicable to the Company, including 100% bonus depreciation. The Company is in the process of evaluating the impact of the Act to the Consolidated Financial Statements.

NOTE 8. STOCK REPURCHASE PLAN

On October 22, 2014, the board of directors of Monarch authorized a stock repurchase plan (the “Repurchase Plan”). Under the Repurchase Plan, the board of directors authorized a program to repurchase up to 3,000,000 shares of the Company’s common stock in the open market or in privately negotiated transactions from time to time, in compliance with Rule 10b-18 of the Securities and Exchange Act of 1934, as amended, subject to market conditions, applicable legal requirements and other factors. The Repurchase Plan does not obligate the Company to acquire any particular amount of common stock and the plan may be suspended at any time at the Company’s discretion, and it will continue until exhausted. The actual timing, number and value of shares repurchased under the repurchase program will be determined by management at its discretion and will depend on a number of factors, including the market price of the Company’s stock, general market economic conditions and applicable legal requirements.

In the third quarter of 2025, under its existing Repurchase Plan, the Company purchased 111,169 shares of its common stock on the open market for an aggregate purchase cost of $11.3 million. As of September 30, 2025, the Company has an authorization to purchase up to 1,598,476 shares under the Repurchase Plan.

NOTE 9. LEGAL MATTERS

On August 30, 2019, PCL Construction Services, Inc. (“PCL”) filed a complaint in District Court, City and County of Denver, Colorado, against the Company and its Colorado subsidiaries, in connection with the Company’s now completed expansion of the Monarch Casino Resort Spa Black Hawk (the “Project”). The case is captioned PCL Construction Services, Inc. v. Monarch Growth Inc., et al., Case No. 2019CV33368 (the “First Denver Lawsuit”). On December 5, 2019, the Company filed its answer and counterclaim, which alleges, among other items, that PCL breached the construction contract, duties of good faith and fair dealing, and implied and express warranties, made fraudulent or negligent misrepresentations on which the Company and its Colorado subsidiaries relied, and included claims for monetary damages as well as equitable and declaratory relief.

On March 26, 2021, PCL filed a mechanics’ lien foreclosure action in the District Court, County of Gilpin, Colorado, against the Company and its Colorado subsidiaries, in connection with the Company’s now completed expansion of the Monarch Casino Resort Spa Black Hawk. The case is captioned PCL Construction Services, Inc., v. Monarch Growth Inc., et al., Case No. 2021CV30006 (the “Gilpin Lawsuit”). The complaint essentially mirrors the claims and allegations made by PCL in the First Denver Lawsuit. The Gilpin Lawsuit includes an additional claim, however, for foreclosure of PCL’s purported mechanics’ lien against the property on which the Monarch Casino Resort Spa Black Hawk is situated (the “Property”). PCL also joined additional parties who may claim a

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purported lien against the Property, as defendants. Many of the Company’s co-defendants have filed cross claims against Monarch for foreclosure of mechanics’ liens and related claims, including unjust enrichment.

Monarch filed its answer and counterclaims to PCL’s second amended complaint in the Gilpin Lawsuit on July 15, 2021, but a trial of the matter has not been set. The case remains stayed, however, pending the outcome of the First Denver Lawsuit, Case No. 2019CV33368. We are currently unable to determine the probability of the outcome or reasonably estimate the loss or gain, if any.

On February 9, 2023, Monarch Growth, Inc., Monarch Casino & Resort, Inc. and Monarch Black Hawk, Inc. filed a complaint in District Court, City and County of Denver, Colorado, against PCL, in connection with the Company’s now completed expansion of the Monarch Casino Resort Spa Black Hawk. The case is captioned Monarch Growth Inc., et al., v. PCL Construction Services, Inc., Case No. 2023CV30458 (the “Second Denver Lawsuit”). The complaint alleges, among other things, that PCL breached the construction contract, duties of good faith and fair dealing, and implied and express warranties based on defective and/or nonconforming construction work at the project, and includes claims for monetary damages as well as equitable and declaratory relief.

On February 14, 2025, the Court issued its Findings of Fact, Conclusions of Law and Order of Judgment in the First Denver Lawsuit. The Court awarded damages in favor of PCL of $74,772,551 for its claims of breach of contract, breach of implied warranty, and breach of the duty of good faith and fair dealing and $144,894 to the Company for its negligence and gross negligence counterclaims against PCL. The Court entered a single judgment in the amount of the net difference between the cross-judgment and awarded PCL a principal judgment amount of $74,627,657 (the “Judgment”).

On February 28, 2025, PCL filed with the court a Motion to Amend the Judgment to Add Prejudgment Interest, which the Court denied on May 23, 2025. On March 13, 2025, PCL also filed a bill of costs and a motion for attorneys’ fees. Monarch has filed an opposition, challenging PCL’s entitlement to such fees and costs, as well as the computation and amount of the fees and costs PCL seeks. The Court has yet to rule on PCL’s Bill of Costs and Motion for Attorneys’ Fees.

On March 21, 2025, Monarch filed a Motion for a New Trial pursuant to C.R.C.P. 59(a)(1), which Judge Luxen denied on May 21, 2025. On March 21, 20025, Monarch also filed a Motion to Amend the Judgment under C.R.C.P. 59(a)(4) to (a) to include additional $161,660 setoff for Monarch’s sanctions award, and (b) set a 6% per annum post-judgment interest rate on the revised $54,660,298 awarded to PCL and a 0% post-judgment interest rate on the $19,835,540 awarded to subcontractors as pass-through claims, which Judge Luxen partially granted and partially denied on May 21, 2025. Specifically, in his May 21, 2025 Order, Judge Luxen (a) revised the total amount of damages due to PCL to $74,465,839 to correct certain mathematical errors in the Order and to offset PCL’s damages award by an additional $161,660 to account for the award granted in the Court’s November 28, 2023 order entering sanctions against PCL for its discovery violations, (b) set a 6% per annum post-judgment interest rate on the on the damages awarded to PCL, and (c) declined to amend its judgment to set a 0% post-judgment interest on the subcontractor pass-through claims.

On May 30, 2025, Monarch filed a Notice of Appeal with the Colorado Court of Appeals of the District Court’s February 14, 2025 Judgment and the District Court’s post-trial orders. On June 13, 2025, PCL filed a Notice of Cross Appeal of the District Court’s denial of PCL’s Motion for Prejudgment Interest. Monarch has posted a bond to stay enforcement of the Judgment pending such appeal.

As of September 30, 2025, the Company has $76.5 million in liability related to the PCL litigation, which are presented in balance sheet as following: $48.9 million in Construction accounts payable and $27.6 million in Accounts payable.

The Company recognized $1.9 million and 0.6 million in construction litigation expense relating to these lawsuits for the nine months ended September 30, 2025 and 2024, respectively, which is included in Other operating items, net on the Consolidated Statements of Income.

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From time to time, we may be subject to other legal proceedings and claims in the ordinary course of business. Management believes that the amount of any reasonably possible or probable loss for such other known matters would not have a material adverse impact on our financial conditions, cash flows or results of operations; however, the outcome of these actions is inherently difficult to predict.

NOTE 10. DIVIDENDS

On February 7, 2023, the Company announced that the Company’s Board of Directors approved the initiation of an Annual Dividend policy for the payment of an annual dividend in the amount of $1.20 per outstanding share of Common Stock, commencing in the second quarter of 2023. These dividends are paid quarterly on the 15th day of the third month of the applicable calendar quarter (or, if such date is not a trading day, then the first trading day immediately thereafter such date) to those stockholders of record on the 1st day of the third month of the applicable calendar quarter (or, if such date is not a trading day, then the first trading day immediately thereafter such date).

On September 15, 2025, the Company paid a cash dividend of $0.30 per share of its outstanding common stock, to stockholders of record on September 1, 2025. For the nine months ended September 30, 2025, the Company paid total of $0.90 per share cash dividend. The cash dividend was part of the previously announced annual cash dividend of $1.20 per share payable in quarterly payments.

On October 21, 2025, the Company announced a cash dividend of $0.30 per share of its outstanding common stock, payable on December 15, 2025, to stockholders of record on December 1, 2025. This cash dividend is part of the previously announced annual cash dividend of $1.20 per share payable in quarterly payments.

The Company’s declaration of each cash dividend amount shall be subject to the Board’s review of the then-current financial statements of the Company, available acquisition opportunities and other prudent uses of the Company’s cash resources. As such, the Board of Directors may suspend the dividend program at any time and no assurances can be given that a quarterly dividend will be paid.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise indicated, “Monarch,” “Company,” “we,” “our,” and “us” refer to Monarch Casino & Resort, Inc. and its subsidiaries.

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “believes,” “expects,” “anticipates,” “estimates,” “plans,” “intends,” “objectives,” “goals,” “aims,” “projects,” “forecasts,” “possible,” “seeks,” “may,” “will,” “could,” “should,” “might,” “likely,” “enable,” or similar words or expressions, as well as statements containing phrases such as “in our view,” or “we cannot assure you,” “although no assurance can be given.” Examples of forward-looking statements include, among others, statements we make regarding: (i) our belief regarding the exposure of our cash and accounts receivable to credit risk; (ii) our expectations regarding the litigation and any appeal relating to the construction of the Monarch Black Hawk expansion and related liens recorded by the general contractor and certain subcontractors against the Monarch Black Hawk; (iii) our expectations regarding our business prospects, strategies, estimates and outlook; (iv) our expectations regarding the positioning of our properties to benefit from future macro and local economic growth; (v) our expectations regarding future capital requirements; (vi) our anticipated sources of funds and adequacy of such funds to meet our debt obligations and capital requirements; and (vii) our expectations regarding legal and other matters.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the impact of the events occurring in the Middle East and the conflict taking place in Israel, as well as those risks discussed in Part I, Item 1A-Risk Factors and throughout Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of our Annual Report on Form 10-K for the year ended December 31, 2024, and in Part II, Item 1A-Risk Factors and elsewhere of this Form 10-Q. In addition, you should consult other disclosures made by us (such as in our other filings with the Securities and Exchange Commission (“SEC”) or in Company press releases) for other factors that may cause actual results to differ materially from those projected by us. You should read this Form 10-Q, and the documents that we reference in this Form 10-Q and have filed with the SEC, and our Annual Report on Form 10-K for the year ended December 31, 2024, with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

Any forward-looking statement made by us in this Form 10-Q is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update or revise any forward-looking statements as a result of future developments, events or conditions, except as required by law. New risks emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ significantly from those forecast in any forward-looking statements.

OVERVIEW

Monarch was incorporated in the state of Nevada in 1993. We own and operate the Atlantis Casino Resort Spa, a hotel and casino in Reno, Nevada (the “Atlantis”) and Monarch Casino Resort Spa Black Hawk (the “Monarch Black Hawk”), a casino in Black Hawk, Colorado. In addition, we own separate parcels of land located next to the Atlantis and a parcel of land with an industrial warehouse located between Denver, Colorado and Monarch Black Hawk.

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We earn revenues, operating income and cash flow from Atlantis and Monarch Black Hawk, primarily through our casino, food and beverage, and hotel operations. We focus on delivering exceptional service and value to our guests. Our hands-on management style focuses on customer services and cost efficiencies.

Atlantis: We continuously upgrade our property. With quality gaming, hotel and dining products, we believe the Atlantis is well positioned to benefit from future macro and local economic growth. Reno remains a healthy local-oriented market, but at the same time a very competitive market. The market’s employment growth is broad based, and we expect this positive indicator will support the continued strength of our business at Atlantis. At the same time, the tight employment environment has created labor challenges, including wage inflation, which we continue to actively manage. In addition, we are facing increased competition from the continued growth of California tribal gaming and an extremely competitive promotional environment in Northern Nevada. The inflationary pressures, combined with continued aggressive marketing programs by our competitors, may disrupt Atlantis’ revenue growth, operating costs management and profit margins improvement.

Monarch Black Hawk: Monarch Black Hawk is the first property encountered by visitors arriving from Denver and other major population centers via Colorado State Highway 119. The Denver metro economy remains strong with higher than the national average per capita personal income. At the beginning of 2022, we completed the master planned renovation and expansion, transforming the property into a world-class resort. Monarch Black Hawk is positioned to leverage the expanded operation, the elimination of betting limits and new game types in Black Hawk, Colorado, as well as to benefit from the growing state-wide online and retail sports betting. Monarch Black Hawk also is experiencing labor challenges, resulting from the distance to the staffing filter markets of Golden, Colorado and the Denver Metro area. We continue to attract high-value players from Denver and Boulder metro areas, who had previously traveled to other markets, such as Las Vegas, for a high-end casino entertainment experience. We believe that the quality of our product and exceptional guest service will meet the demand of the high-end segment of the market and will grow revenue and accelerate market share.

KEY PERFORMANCE INDICATORS

We use the following Key Performance Indicators (“KPI”) to manage our operation and measure our performance:

Gaming revenue KPI: Our management reviews on a consistent basis the volume metrics and hold percentage metrics for each gaming area. The main volume measurements are slot coin-in, table games drop, sportsbook write and keno write. Slot coin-in represents the dollar amount wagered in slot machines, including free promotional wagers. Table games drop represents the total amount of cash and net markers deposited in the table drop box. Keno write and sportsbook write represents the dollar amount wagered at our counters, along with sportsbook write made through our mobile wagering system. Volume metrics are important in managing the business, as our gaming win is affected by actual hold percentage, which in general varies from the expected hold percentage and historical hold percentage. Gaming win represents the amount of wagers retained by us. Hold percentage represents win as a percentage of slot coin-in, table game drop, sportsbook write, or keno write. Our win and hold percentages are calculated before discounts, commissions, deferring revenue associated with our loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis.

Food and Beverage revenue KPI: The main KPIs in managing our food and beverage (“F&B”) operations are covers and average revenue per cover. A cover represents the number of guests served and is an indicator of volume. Average revenue per cover represents the average amount spent per food and beverage outlets’ served guests. Changes in the average revenue per cover might be an indicator for changes in menu offerings, changes in menu prices or may indicate changes in our guests’ preferences and purchasing habits.

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Hotel revenue KPI: The main KPIs used in managing our hotel operation are the occupancy rate (a volume indicator), which is the average percentage of available hotel rooms occupied during a period, and the average daily rate (“ADR”, a price indicator), which is the average price per sold room. Available rooms exclude those rooms unavailable for occupancy during the period due to renovation, development, or other requirements. Sold rooms include rooms where the guests do not show up for their stay and lose their deposit. The calculations of the occupancy rate and ADR include the impact of rooms provided on a complimentary basis. Revenue per available room ("RevPAR") represents total hotel revenue per available room and is a representation of the occupancy rate, ADR and miscellaneous hotel sales.

Operating margins: Our management is consistently focused on controlling expenses and finding cost savings, without affecting the quality of the product we offer and our guests’ services and experience. We measure our performance using expense margin, which is a percentage of direct expenses, including labor, cost of product and any other operating expenses related to the gaming, food and beverage, or hotel operation to the net gaming, food and beverage, or hotel revenues. Selling, general and administrative (“SG&A”) margin represents SG&A expenses for a period as a percentage of total net revenue for a period. In managing the food and beverage operation, we use Cost Of Goods Sold (“COGS”) percentage, which represents a percentage of product cost to the food and beverage revenue and is a measurement of commodity prices and menu sales prices.

Our management evaluates the KPI as compared to prior periods, our peer group, or market, as well as for any trends.

RESULTS OF OPERATIONS

Comparison of Operating Results for the Three-Month Periods Ended September 30, 2025 and 2024

For the three months ended September 30, 2025, our net income totaled $31.6 million, or $1.69 per diluted share, compared to net income of $27.6 million, or $1.47 per diluted share, for the same period in 2024, reflecting a 14.4% and 15.0% increase in net income and diluted earnings per share, respectively. Net revenues in the three months ended September 30, 2025, totaled $142.8 million, an increase of $4.9 million, or 3.6%, compared to the three months ended September 30, 2024. Income from operations for the three months ended September 30, 2025, totaled $38.2 million compared to income from operations of $35.3 million for the same period in 2024.

Casino revenue increased 5.0% in the third quarter of 2025 compared to the third quarter of 2024. The increase in casino revenue was driven primarily by the continued increase in market share at our properties. Casino operating expense as a percentage of casino revenue decreased to 35.8% for the three months ended September 30, 2025, compared to 36.3% for the three months ended September 30, 2024, primarily due to better labor management and operational efficiency.

Food and beverage revenue for the third quarter of 2025 increased 2.9% compared to the third quarter of 2024 due to 4.3% increase in food and beverage revenue per cover, partially offset by a decrease in food and beverage covers of 2.8%. Food and beverage operating expense as a percentage of food and beverage revenue in the third quarter of 2025 decreased to 69.9% compared to 72.8% in the third quarter of 2024 due primarily to a decrease in labor expense and an increase in revenue per cover.

Hotel revenue increased 3.9% in the third quarter of 2025 compared to the same quarter of 2024 primarily as a result of an increase in ADR of $11.39 ($192.09 in the third quarter of 2025 and $180.70 in the third quarter of 2024). Hotel occupancy percentage slightly decreased to 89.0% during the third quarter of 2025 compared to 89.7% during the third quarter of 2024. Hotel RevPAR was $183.42 and $176.47 for the three months ended September 30, 2025 and 2024, respectively. Hotel operating expense as a percentage of hotel revenue decreased to 31.4% in the third quarter of 2025 compared to 33.8% for the comparable prior year period primarily due to higher ADR.

Other revenue decreased 9.8% in the third quarter of 2025 compared to the same prior year period primarily due to proceeds from finalization of Employee Retention Credit review by IRS in 2024, partially offset by increases in spa and retail revenues.

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SG&A expense increased to $27.5 million in the third quarter of 2025 from $27.2 million in the third quarter of 2024. As a percentage of net revenue, SG&A expense decreased to 19.3% in the third quarter of 2025 compared to 19.7% in the same period in 2024.

Depreciation and amortization expense increased to $14.1 million for the three months ended September 30, 2025, compared to $13.1 million for the same prior year period, due to new assets placed into service with the ongoing renovation at Atlantis.

We recognized $0.5 million and $0.02 million for the three months ended September 30, 2025 and 2024, respectively, in professional service fees relating to our construction litigation.

In the third quarter of 2025, we recognized $0.6 million of interest income, net of interest expense. In the third quarter of 2024, we recognized $0.2 million of interest expense, net of interest income. See further discussion of our Amended Credit Facility in the LIQUIDITY AND CAPITAL RESOURCES section below.

Comparison of Operating Results for the Nine-Month Periods Ended September 30, 2025 and 2024

For the nine months ended September 30, 2025, we had a net income of $78.4 million, or $4.18 per diluted share, compared to net income of $68.6 million, or $3.60 per diluted share for the same period in 2024, reflecting a 14.4% and 16.1% increase in net income and diluted earnings per share, respectively. Net revenues in the nine months ended September 30, 2025, totaled $405.1 million, an increase of 4.5%, compared to the nine months ended September 30, 2024. Income from operations for the nine months ended September 30, 2025 totaled $98.4 million compared to $88.6 million income from operations for the same period in 2024.

Casino revenue increased 7.3% in the first nine months of 2025 compared to the first nine months of 2024 and was driven by an increase in market share at both properties. Casino operating expense as a percentage of casino revenue decreased to 36.4% for the nine months ended September 30, 2025 compared to 37.3% for the nine months ended September 30, 2024 primarily as a result of decrease in labor and other operating expenses as a percentage of revenue.

Food and beverage revenue for the first nine months of 2025 increased 1.2% compared to the 2024 same period due to a 2.9% increase in food and beverage revenue per cover, partially offset by a decrease of food and beverage covers by 1.6%. Food and beverage operating expense as a percentage of food and beverage revenue decreased in the first nine months of 2025 to 71.4% from 73.8% for the same period in 2024 primarily as a result of operational improvements and efficiencies.

Hotel revenue increased 0.3% in the first nine months of 2025 compared to the first nine months of 2024 primarily due to an increase in ADR by $8.79, from $182.48 in the first nine months of 2024 to $191.27 in the first nine months of 2025. Hotel occupancy decreased from 84.8% during the first nine months of 2024 to 83.4% during the same period of 2025. RevPAR was $171.59 for the first nine months of 2025 and $167.74 for the first nine months of 2024. Hotel operating expense as a percentage of hotel was flat at 34.2% in each of the first nine months of 2025 and 2024.

Other revenue increased 1.3% in the first nine months of 2025 compared to the same prior year period.

SG&A expense increased to $81.5 million in the first nine months of 2025 from $80.4 million in the first nine months of 2024 primarily due to: $0.8 million increase in repair and maintenance expense; $0.6 million increase in taxes and $0.6 million increase in stock options expense, partially offset by $0.6 million decrease in advertising and marketing expense and $0.3 million decrease in utility expense. As a percentage of net revenue, SG&A expense decreased to 20.1% in the first nine months of 2025 compared to 20.8% in the same period in 2024.

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Depreciation and amortization expense increased to $40.8 million for the nine months ended September 30, 2025 compared to $38.0 million for the same prior year period, due to new assets placed into service with the ongoing renovation at Atlantis.

During the first nine months of 2025 we recognized $1.9 million in professional services fees relating to our construction litigation. During the first nine months of 2024, we recognized $0.6 million in professional services fees relating to our construction litigation and $0.3 million in loss on disposal of assets.

During the first nine months of 2025, we recognized $1.3 million of interest income, net of interest expense. During the first nine months of 2024, we recognized $0.3 million of interest expense, net of interest income. See further discussion of our Amended Credit Facility in the LIQUIDITY AND CAPITAL RESOURCES section below.

CAPITAL SPENDING AND DEVELOPMENT

We seek to continually upgrade and maintain our facilities in order to present a fresh, high quality product to our guests.

Cash paid for capital expenditures for the nine-month periods ended September 30, 2025 and 2024 totaled $33.8 million and $34.4 million, respectively. During each of the nine-month periods ended September 30, 2025 and 2024, our capital expenditures related primarily to the redesign and upgrade of hotel rooms in the third tower at Atlantis, and the acquisition of gaming, and other equipment to upgrade and replace existing equipment at Atlantis and Monarch Black Hawk.

LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of liquidity have been cash provided by operations and, for capital expansion projects, borrowings available under our Amended Credit Facility.

For the nine months ended September 30, 2025, net cash provided by operating activities totaled $126.6 million, compared to net cash provided by operating activities of $102.9 million in the same prior year period. This increase was primarily a result of an increase in net income, as well as change in working capital.

Net cash used in investing activities totaled $33.8 million and $34.4 million during each of the nine months ended September 30, 2025 and 2024, respectively. Net cash used in investing activities during each of the first nine months of 2025 and 2024 consisted primarily of cash used for the redesign and upgrade of hotel rooms in the third tower at Atlantis and the acquisition of gaming and other equipment at both properties.

Net cash used in financing activities in the first nine months of 2025 totaled $43.9 million and consisted of $31.3 million cash used for purchase of Company stock under the Repurchase Plan and $16.5 million used for payment of dividends, partially offset by $3.9 million of net proceeds from stock options exercise. Net cash used in financing activities in the first nine months of 2024 totaled $72.5 million and consisted of $60.0 million cash used for purchase of Company stock under the Repurchase Plan and $16.7 million used for payment of dividends, partially offset by $1.5 million of borrowings under the Amended Credit Facility, net of the payments to the lender under the Amended Credit Facility, and $2.7 million of net proceeds from stock options exercise.

Sixth Amended Credit Facility

On December 31, 2024, the Company entered into the Amended and Restated Credit Agreement (the “Amended Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent. The Amended Credit Facility amends and restates the Company’s $100.0 million credit facility, dated as of February 1, 2023 (the “Prior Facility”).

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The Amended Credit Facility extends the maturity date to January 1, 2028 and removes the lien on real property under the Prior Facility. As of September 30, 2025, the Company had no outstanding principal balance under the Amended Credit Facility, a $0.6 million standby letter of credit and $99.4 million remained available for borrowing.

In addition to other customary covenants for a facility of this nature, as of September 30, 2025, we were required to maintain a Total Leverage Ratio (as defined in the Amended Credit Facility) of no more than 1.5:1 and Fixed Charge Coverage Ratio (as defined in the Amended Credit Facility) of at least 1.1:1.0. As of September 30, 2025, our Total Leverage Ratio and Fixed Charge Coverage Ratio were 0.0:1.0 and 112.3:1.0, respectively.

The interest rate under the Amended Credit Facility is either SOFR (the Secured Overnight Financing Rate) plus a margin of 1.25%, or a base rate (as defined in the Amended Credit Facility) plus a margin ranging of 0.25% per annum. The Commitment Fee Percentage (as defined in the Amended Credit Facility) was revised to be 0.25% per annum.

On February 24, 2025, Wells Fargo Bank agreed to waive its right to declaring an event of default under the Amended Credit Facility arising out of the February 14, 2025 judgment on the litigation between Monarch and PCL, as described above in Part I, Item 1, NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), Note 9 “Legal Matters” of this Form 10-Q, so long as we strictly comply with each and every other provision of the Amended Credit Facility. We believe that we are in full compliance.

We believe that our anticipated operating cash flows will be sufficient to sustain operations for the twelve months from the filing of this Form 10-Q for the quarter ended September 30, 2025 and fulfill our capital expenditure plans and authorized dividend distributions. However financial, economic, competitive, regulatory, and other factors, many of which are beyond our control, could negatively impact our operations. If we are unable to generate sufficient cash flow in the upcoming months or if our cash needs exceed our borrowing capacity under the Amended Credit Facility, we could be required to adopt one or more alternatives, such as reducing, delaying or eliminating planned capital expenditures, selling assets, restructuring debt or issuing additional equity.

For a discussion regarding our material commitments for capital expenditures, see the CAPITAL SPENDING AND DEVELOPMENT section above.

CRITICAL ACCOUNTING POLICIES

A description of our critical accounting policies and estimates can be found in Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Form 10-K. For a more extensive discussion of our accounting policies, see Note 1, “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements in our 2024 Form 10-K filed with the SEC on March 3, 2025.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in interest rates, foreign currency exchange rates and commodity prices.

As of September 30, 2025, we had no outstanding balance under our Amended Credit Facility. Our current primary market risk exposure, when we incur and have outstanding debt, is interest rate risk relating to the impact of interest rate movements under our Amended Credit Facility.

See “Liquidity and Capital Resources” for further discussion of our Amended Credit Facility and capital structure.

We have not entered into derivative financial instruments for trading or speculative purposes.

We do not have any cash or cash equivalents as of September 30, 2025 that are subject to market risk.

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ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”), an evaluation was carried out by our management, with the participation of our Chief Executive Officer and our Chief Accounting Officer, of the effectiveness of our disclosure controls and procedures (as defined by Rule 13a-15(e) under the Exchange Act). Based upon the evaluation, our Chief Executive Officer and Chief Accounting Officer concluded that our disclosure controls and procedures were effective as of the Evaluation Date. During the quarter ended September 30, 2025, there were no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 9 “Legal Matters” to our consolidated financial statements in Part I, Item 1, NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) of this Form 10-Q is incorporated by reference herein.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors we previously disclosed in Item 1A of our 2024 Form 10-K.

We encourage investors to review the risks and uncertainties relating to our business disclosed under the heading Risk Factors or otherwise in the 2024 Form 10-K, as well as those contained in Part I - Forward-Looking Statements thereof, as revised or supplemented by our Quarterly Reports filed with the SEC since the filing of the 2024 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents the number and average price of shares purchased in each fiscal month of the quarter ended September 30, 2025:


	Total number of shares purchased (1)	Average price paid per share (2)		Total number of shares purchased as part of publicly announced plans or programs (1) (2)	Maximum number of shares that may yet be purchased under the plans or programs (2)
July 1, 2025 - July 31, 2025	—	$	—	1,290,355	1,709,645
August 1, 2025 - August 31, 2025	37,615		100.95	1,327,970	1,672,030
September 1, 2025 - September 30, 2025	73,554		102.35	1,401,524	1,598,476
Total	111,169	$	101.88	1,401,524	1,598,476

(1)

This amount represents a repurchase pursuant to our Repurchase Plan, see Note 8. STOCK REPURCHASE PLAN.

(2)

In the third quarter of 2025, under the authority of the Repurchase Plan, the Company purchased 111,169 shares at average price between $100.90 and $103.94 per share on the open market.

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ITEM 5. OTHER INFORMATION

During the quarter ended September 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).

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ITEM 6. EXHIBITS



Exhibit No		Description


31.1*		Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Principal Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Principal Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*		Inline XBRL Taxonomy Extension Schema
101.CAL*		Inline XBRL Taxonomy Extension Calculation
101.DEF*		Inline XBRL Taxonomy Extension Definition
101.LAB*		Inline XBRL Taxonomy Extension Labels
101.PRE* 104		Inline XBRL Taxonomy Extension Presentation Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

* Filed herewith.

** Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	MONARCH CASINO & RESORT, INC.
	(Registrant)


Date: October 28, 2025	By:	/s/ EDWIN S. KOENIG
	Edwin S. Koenig, Chief Accounting Officer
	(Principal Financial and Accounting Officer and Duly Authorized Officer)