MONARCH CASINO & RESORT, INC

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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 March 31, 2026

☐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: 17,749,516 shares of common stock are outstanding as of April 23, 2026.

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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
	March 31,
	2026			2025
Revenues
Casino	$	79,746		$	72,895
Food and beverage		31,701			30,022
Hotel		18,956			16,708
Other		6,147			5,769
Net revenues		136,550			125,394

Operating expenses
Casino		28,733			27,517
Food and beverage		23,044			22,309
Hotel		6,822			6,296
Other		3,199			3,078
Selling, general and administrative		27,754			27,190
Depreciation and amortization		10,467			13,215
Other operating items, net		1,585			471
Total operating expenses		101,604			100,076
Income from operations		34,946			25,318

Other income (expense)
Interest income (expense), net		598			316

Income before income taxes		35,544			25,634
Provision for income taxes		(7,952)			(5,770)
Net income	$	27,592		$	19,864

Earnings per share of common stock
Net income
Basic	$	1.55		$	1.08
Diluted	$	1.52		$	1.05

Weighted average number of common shares and potential common shares outstanding
Basic		17,843			18,451
Diluted		18,201			18,829

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)


		March 31, 2026			December 31, 2025
			(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	120,125		$	96,468
Receivables, net of provision for credit losses			9,703			11,067
Income taxes receivable			—			3,013
Inventories			8,337			9,089
Prepaid expenses and other			8,714			9,616
Total current assets			146,879			129,253
Property and equipment, net			551,512			556,668
Goodwill			25,111			25,111
Intangible and other assets, net			1,672			1,817
Total assets		$	725,174		$	712,849
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	45,406		$	44,924
Construction accounts payable			48,184			50,209
Accrued expenses			51,052			54,049
Income taxes payable			4,939			—
Short-term lease liability			986			1,019
Total current liabilities			150,567			150,201
Deferred income taxes			11,626			11,626
Long-term lease liability			12,059			12,279
Other long-term liability			1,073			1,073
Total liabilities			175,325			175,179
Stockholders’ equity
Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued			—			—
Common stock, $.01 par value, 30,000,000 shares authorized; 19,646,611 shares issued and 17,740,083 outstanding at March 31, 2026; 19,544,290 shares issued and 17,819,020 outstanding at December 31, 2025			196			195
Additional paid-in capital			83,717			76,038
Treasury stock, 1,906,528 shares at March 31, 2026 and 1,725,270 shares at December 31, 2025			(154,142)			(136,411)
Retained earnings			620,078			597,848
Total stockholders’ equity			549,849			537,670
Total liabilities and stockholders’ equity		$	725,174		$	712,849

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, 2026		17,819,020		$	195		$	76,038		$	597,848		$	(136,411)		$	537,670
Exercise of stock options, net		102,321			1			5,726			—			—			5,727
Stock-based compensation expense		—			—			1,953			—			—			1,953
Purchase of company common stock		(181,258)			—			—			—			(17,731)			(17,731)
Dividend payment		—			—			—			(5,362)			—			(5,362)
Net income		—			—			—			27,592			—			27,592
Balance, March 31, 2026		17,740,083		$	196		$	83,717		$	620,078		$	(154,142)		$	549,849


	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

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)


		Three Months Ended March 31,
		2026			2025
Cash flows from operating activities:
Net income		$	27,592		$	19,864
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			10,467			13,215
Amortization of deferred loan costs			32			64
Stock-based compensation - stock options			1,953			2,127
Provision for bad debts			48			9
Loss on disposition of assets			(79)			(4)
Non-cash operating lease expense			2			(2)
Changes in operating assets and liabilities:
Receivables			1,316			(1,776)
Income taxes receivable			7,952			5,770
Inventories			752			1,032
Prepaid expenses and other			992			1,332
Accounts payable			482			(2,440)
Accrued expenses			(2,997)			(2,729)
Net cash provided by operating activities			48,512			36,462
Cash flows from investing activities:
Proceeds from sale of assets			87			4
Change in construction accounts payable			(2,025)			3,787
Acquisition of property and equipment			(5,551)			(19,819)
Net cash used in investing activities			(7,489)			(16,028)
Cash flows from financing activities:
Proceeds from exercise of stock options			5,727			1,434
Payment of dividends			(5,362)			(5,538)
Purchase of company common stock			(17,731)			—
Net cash used in financing activities			(17,366)			(4,104)

Change in cash and cash equivalents			23,657			16,330
Cash and cash equivalents at beginning of period			96,468			58,760
Cash and cash equivalents at end of period		$	120,125		$	75,090

Supplemental disclosure of cash flow information:
Cash paid for interest		$	60		$	61

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 MARCH 31, 2026

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 months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

The balance sheet at December 31, 2025, 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, 2025.

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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		Three Months Ended March 31,
		2026		2025
Net revenues	$	136,550	$	125,394
Operating Expenses
Labor expense		40,535		39,929
Cost of sales		10,761		10,513
Tax and license expense [a]		20,524		19,016
Other operating expense [b]		17,732		16,932
Depreciation and amortization		10,467		13,215
Other operating items, net [c]		1,585		471
Interest (income) expense, net		(598)		(316)
Income tax expense		7,952		5,770
Total expenses	$	108,958	$	105,530

Net income	$	27,592	$	19,864

[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 March 31, 2026, the Company has recorded a reserve of $0.1 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):


	March 31, 2026		December 31, 2025
Land	$	34,688	$	34,688
Land improvements		11,636		11,636
Buildings		474,462		474,462
Building improvements		142,231		141,919
Furniture and equipment		269,424		267,924
Construction in progress		13,515		11,526
Right of use assets		13,000		13,255
Leasehold improvements		4,498		4,498
Property and equipment		963,454		959,908
Less accumulated depreciation and amortization		(411,942)		(403,240)
Property and equipment, net	$	551,512	$	556,668

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 three-month periods ended March 31, 2026 and 2025, 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 March 31, 2026, 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 March 31, 2026 and 2025 compared to December 31, 2025 and 2024, respectively:


	March 31,		December 31,		Increase (Decrease)		March 31,		December 31,		Increase (Decrease)
	2026		2025				2025		2024
Contractual Liability
Players Club Liability	$	7,444	$	7,543	$	(99)	$	7,957	$	8,097	$	(140)
Outstanding Chip Liability		1,652		1,945		(293)		1,675		2,298		(623)
Customer Advances and Other		6,760		7,345		(585)		6,290		6,378		(88)
Total Contractual Liability	$	15,856	$	16,833	$	(977)	$	15,922	$	16,773	$	(851)

Other operating items, net:

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

For the three months ended March 31, 2026, Other operating items, net, was $1.6 million and primarily represents professional service fees relating to our construction litigation and other legal expenses and accruals. For the three months ended March 31, 2025, Other operating items, net, was $0.5 million and primarily represents professional service fees relating to our construction litigation.

Impact of Recently Adopted Accounting Standards:

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.

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In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) the new guidance amends the existing standard to remove references to various stages of a software development project to better align with current software development methods such as agile programming. The types of costs required to be capitalized has not significantly changed. In addition, the new standard requires the capitalization of costs when (1) management has authorized and committed to funding the project and (2) it is probable that the project will be completed and the software will be used to perform its intended function. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.

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.

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 March 31, 2026, 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 March 31, 2026, was 4.35%. There were no new leases entered into in the first quarter of 2026.

The weighted-average remaining lease term of the leases presented in the lease liability as of March 31, 2026, was 15.62 years.

Cash paid related to the operating leases presented in the lease liability for each of the three months ended March 31, 2026 and 2025, was $0.4 million.

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
		March 31,
		2026			2025
Casino		$	146		$	175
Food and beverage			23			79
Hotel			58			79
Selling, general and administrative			1,726			1,794
Total stock-based compensation, before taxes			1,953			2,127
Tax benefit			(410)			(447)
Total stock-based compensation, net of tax		$	1,543		$	1,680

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 March 31,
		2026			2025
				Per Share				Per Share
		Shares		Amount	Shares			Amount
Basic		17,843	$	1.55	18,451		$	1.08
Effect of dilutive stock options		358		(0.03)	378			(0.03)
Diluted		18,201	$	1.52	18,829		$	1.05

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 March 31, 2026 and 2025, options for approximately 501 thousand and 837 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 the three-month periods ended March 31, 2026 and 2025, the Company paid $298 thousand and $187 thousand in rent, respectively, plus $9 thousand and $17 thousand, respectively, in operating expenses relating to this lease. The right of use asset and lease liability balances as of March 31, 2026, recognized in the Consolidated Balance Sheet, was $9.2 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 each of the three-month periods ended March 31, 2026 and 2025, the Company paid $124 thousand in rent, plus $12 thousand and $16 thousand, respectively, in operating expenses relating to this lease. The right of use asset and lease liability balances as of March 31, 2026, recognized in the Consolidated Balance Sheet, was $2.7 million.

The Company occasionally leases billboard advertising, storage space and parking lot space from affiliates controlled by the Farahi Family Stockholders, and paid $163 thousand and $146 thousand, respectively, for the three-month periods ended March 31, 2026 and 2025, 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 March 31, 2026, 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 March 31, 2026, the Company’s Total Leverage Ratio and Fixed Charge Coverage Ratio were 0.0:1.0 and 144.9:1.0, respectively.

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 March 31, 2026, 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.

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NOTE 7. TAXES

For the three months ended March 31, 2026 and 2025, the Company’s effective tax rate was 22.4% and 22.5%, respectively.

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

As of March 31, 2026, we have recognized an uncertain tax position, inclusive of accrued interest, of $739 thousand, which is included in other long-term liabilities. The total amount of the unrecognized tax benefits that, if recognized, would affect the effective tax rate is $10 thousand. The uncertain tax position results from depreciation taken on property and equipment relating to the ongoing litigation with PCL Construction Services, Inc. No uncertain tax positions were recorded as of March 31, 2025.

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 first quarter of 2026, under its existing Repurchase Plan, the Company purchased 181,258 shares of its common stock on the open market for an aggregate purchase cost of $17.6 million. As of March 31, 2026, the Company has an authorization to purchase up to 971,503 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 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.

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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 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.

On November 24, 2025, Monarch filed its Opening Appeal Brief. On January 29, 2026, PCL filed a combined Answer in Opposition to Monarch’s Opening Brief and Opening Cross-Appeal Brief (PCL’s “Opening-Answer”). Because PCL’s Opening-Answer exceeded the word limits permitted under the Court’s rules, PCL filed a motion for leave to file its Opening-Answer in excess of the word limit. On February 10, 2026, the Court of Appeals denied PCL’s Motion, ordered that PCL’s oversized Opening-Answer Brief be stricken, and ordered PCL to file an amended Opening-Answer that is within the word limit by February 24, 2026. PCL filed its Opening-Answer on February 24, 2026, and Monarch filed is Answer-Reply Brief on March 30, 2026. PCL’s Reply in Support of PCL’s Cross-Appeal will be due on May 4, 2026. On March 25, 2026, PCL filed a Notice of Cross Appeal of the District Court’s denial of PCL’s Motions for Attorneys’ Fees and Bill of Costs.

As of March 31, 2026, the Company has $78.5 million in liability related to the PCL litigation, which are presented in balance sheet as following: $47.0 million in Construction accounts payable and $31.5 million in Accounts payable.

The Company recognized $0.3 million and 0.4 million in construction litigation expense relating to these lawsuits for the three months ended March 31, 2026 and 2025, respectively, which is included in Other operating items, net on the Consolidated Statements of Income.

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).

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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, 2025, 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, 2025, 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 March 31, 2026 and 2025

For the three months ended March 31, 2026, our net income totaled $27.6 million, or $1.52 per diluted share, compared to net income of $19.9 million, or $1.05 per diluted share, for the same period in 2025, reflecting a 38.9% and 44.8% increase in net income and diluted earnings per share, respectively. Net revenues in the three months ended March 31, 2026, totaled $136.6 million, an increase of $11.2 million, or 8.9%, compared to the three months ended March 31, 2025. Income from operations for the three months ended March 31, 2026, totaled $34.9 million compared to income from operations of $25.3 million for the same period in 2025.

Casino revenue increased 9.4% in the first quarter of 2026 compared to the first quarter of 2025. 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 36.0% for the three months ended March 31, 2026, compared to 37.7% for the three months ended March 31, 2025, primarily due to better labor management and operational efficiency.

Food and beverage revenue for the first quarter of 2026 increased 5.6% compared to the first quarter of 2025 due to 4.5% increase in food and beverage revenue per cover, combined with an increase in food and beverage covers of 1.1%. Food and beverage operating expense as a percentage of food and beverage revenue in the first quarter of 2026 decreased to 72.7% compared to 74.3% in the first quarter of 2025 due primarily to an increase in revenue per cover.

Hotel revenue increased 13.5% in the first quarter of 2026 compared to the same quarter of 2025 primarily as a result of an increase in available rooms. ADR decreased by $7.49 ($184.83 in the first quarter of 2026 and $192.32 in the first quarter of 2025). Hotel occupancy percentage decreased to 79.6% during the first quarter of 2026 compared to 80.9% during the first quarter of 2025. Hotel RevPAR was $158.01 and $167.67 for the three months ended March 31, 2026 and 2025, respectively. Hotel operating expense as a percentage of hotel revenue decreased to 36.0% in the first quarter of 2026 compared to 37.7% for the comparable prior year period primarily due to lower expenses per occupied room.

Other revenue increased 6.6% in the first quarter of 2026 compared to the same prior year period primarily due to an increases in spa and commission revenues.

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SG&A expense increased to $27.8 million in the first quarter of 2026 from $27.2 million in the first quarter of 2025. As a percentage of net revenue, SG&A expense decreased to 20.3% in the first quarter of 2026 compared to 21.7% in the same period in 2025.

Depreciation and amortization expense decreased to $10.5 million for the three months ended March 31, 2026, compared to $13.2 million for the same prior year period, due to assets placed into service in the fourth quarter of 2020, with the opening of the hotel tower at Monarch Black Hawk, becoming fully depreciated by the fourth quarter of 2025.

We recognized $0.3 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively, in professional service fees relating to our construction litigation. In the first quarter of 2026, we accrued $1.1 million in interest on the PCL judgment that we are disputing.

In the first quarter of 2026 and 2025, we recognized $0.6 million and $0.3 million, respectively, of interest income, net of interest expense.

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 three-month periods ended March 31, 2026 and 2025 totaled $7.5 million and $16.0 million, respectively. During each of the three-month periods ended March 31, 2026 and 2025, our capital expenditures related primarily to the acquisition of gaming, and other equipment to upgrade and replace existing equipment at Atlantis and Monarch Black Hawk and property upgrades capital projects.

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 three months ended March 31, 2026, net cash provided by operating activities totaled $48.5 million, compared to net cash provided by operating activities of $36.5 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 due to normal business fluctuations in Account receivable, Income tax receivable and Accrued expenses.

Net cash used in investing activities totaled $7.5 million and $16.0 million during each of the three months ended March 31, 2026 and 2025, respectively and consisted primarily of cash used for the acquisition of gaming and other equipment and ongoing maintenance capital expenditures at both properties.

Net cash used in financing activities in the first three months of 2026 totaled $17.4 million and consisted of $17.7 million cash used for the repurchase of Company stock under the Repurchase Plan and $5.4 million used for payment of dividends, partially offset by $5.7 million of net proceeds from stock options exercise. Net cash used in financing activities in the first three months of 2025 totaled $4.1 million and consisted of $5.5 million used for payment of dividends, partially offset by $1.4 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”).

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 March 31, 2026, 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.

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In addition to other customary covenants for a facility of this nature, as of March 31, 2026, 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 March 31, 2026, our Total Leverage Ratio and Fixed Charge Coverage Ratio were 0.0:1.0 and 144.9:1.0, 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 March 31, 2026 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 Part II Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 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 2025 Form 10-K filed with the SEC on February 24, 2026.

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 March 31, 2026, 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” in Item 2 above 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 March 31, 2026 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 March 31, 2026, the Company implemented Workday for the human resources and payroll functions. The changes did not materially affect or are reasonably not 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 2025 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 2025 Form 10-K, as well as those contained in Part II, Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” – (Cautionary Notes on Forward-Looking Statements) thereof, as revised or supplemented by our Quarterly Reports filed with the SEC since the filing of the 2025 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 March 31, 2026:


	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)
January 1, 2026 - January 31, 2026	—	$	—	1,847,239	1,152,761
February 1, 2026 - February 28, 2026	38,061		94.23	1,885,300	1,114,700
March 1, 2026 - March 31, 2026	143,197		98.19	2,028,497	971,503
Total	181,258	$	97.36	2,028,497	971,503

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

(2)

In the first quarter of 2026, under the authority of the Repurchase Plan, the Company purchased 181,258 shares at average price between $93.74 and $100.00 per share on the open market.

ITEM 5. OTHER INFORMATION

During the quarter ended March 31, 2026, 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).

Table of Contents

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: April 30, 2026	By:	/s/ EDWIN S. KOENIG
	Edwin S. Koenig, Chief Accounting Officer
	(Principal Financial and Accounting Officer and Duly Authorized Officer)

March 31
Item	Page Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income for the three months ended March 31, 2026 and 2025 (unaudited)	3
Consolidated Balance Sheets at March 31, 2026 (unaudited) and December 31, 2025	4
Consolidated Statements of Stockholders’ Equity for the three and ended March 31, 2026 and 2025 (unaudited)	5
Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (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	22

Item 4. Controls and Procedures	23

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	23

Item 1A. Risk Factors	23

Item 2. Unregistered Sales of Equity Securities and use of Proceeds	23

Item 5. Other Information	23

Item 6. Exhibits	24

Signatures	24