AMC Entertainment Holdings, Inc.

Good day, everyone, and welcome to the AMC Entertainment Holdings Incorporated Second Quarter Earnings Webcast. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star 2. I'll be standing by if you should need any assistance. It is now my pleasure to turn the program over to John Merriweather, Vice President, Capital Markets.

Thank you, Leo. Good afternoon. I'd like to welcome everyone to AMC's second quarter 2025 earnings webcast. With me this afternoon is Adam Aaron, our Chairman and CEO, and Sean Goodman, our Chief Financial Officer. Before I turn the webcast over to Adam, I'd like to remind everyone that some of the comments made by management during this webcast are may contain forward-looking statements that are based on management's current expectations. Numerous risks, uncertainties, and other factors may cause actual results to differ materially from those that might be expressed today. Many of those risks and uncertainties are discussed in our most recent public filings, including our most recently filed 10-K and 10-Q. Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned against relying on these statements. The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events. On this webcast, we may reference non-GAAP financial measures, such as adjusted EBITDA, free cash flow, and constant currency, among others. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the investor relations section of our website earlier this morning. After our prepared remarks, there will be a question and answer session. This afternoon's webcast is being recorded, and a replay will be available in the investor relations section of our website at amctheaters.com later today. With that, I'll turn the call over to Adam.

Thank you, John. Good afternoon, everyone, and thank you for joining us today. It is earnings day at AMC, and what a day it is. In this second quarter of 2025, AMC showcased the impressive operating leverage that is inherent in our business. Importantly, in Q2, movies from just about every single major and minor studio alike crushed it at the box office in spectacular fashion. with the second quarter domestic industry box office surpassing that of the first quarter of 2025 by a stunning 85%. At AMC, we are particularly pleased that on many of these second quarter movies, our market share way overperformed. That came in part because of our network of especially productive theaters, AMC and Odeon having more premium large format screens than any other exhibitor on the planet, and the effectiveness of our compelling marketing programs. In this year's second quarter, AMC and Odeon rolled out the red carpet for nearly 63 million guests worldwide, a 25.6% increase over the same period last year. Beyond merely attaining that attendance growth, AMC's revenue growth was actually 35.6% above last year's second quarter. Adding in our very tight control of our costs, AMC drove an adjusted EBITDA increase of 391.4% to a highly gratifying $189.2 million. That's a good formula, revenues way up combined with quite a tight management of costs. And it generated $150.7 million more adjusted EBITDA in this year's second quarter than was posted in last year's second quarter. It is a simple reality, and hopefully a harbinger of things to come, that as AMC's revenues grow, Our EBITDA can soar. This exercise will increase an adjusted EBITDA from $38 million in change last year to $189 million in change this year. Our net cash provided by AMC's operating timings of the quarter surged to a positive $138.4 million. Such a dramatic turnaround from last year's net cash used in second quarter operating activities of 34.6 million dollars that's a total favorable swing of 173 million dollar improvement quarter over quarter i would like to repeat those numbers so that all of you on this call and all of you on this webcast hear them very clearly in the second quarter of 2025 amc entertainment delivered a 25.6% increase in global attendance above that of Q2 of 2024. Consolidated revenue growth of 35.6% versus Q2 of 2024. Consolidated adjusted EBITDA growth of 391.4% versus Q2 of 2024. AMC's $189.2 million of adjusted EBITDA in Q2 2025 was just a hair under five times the adjusted EBITDA of Q2 2024. Cash generated from our operating activities of a positive $138.4 million showed a favorable swing of $173 million in this year's Q2 versus Q2 of 24. Needless to say, it's all smiles at AMC today. Our second quarter results are a combination of a recovering energy-wide box office and the undeniable fact that both AMC and Odeon are executing so well in so many different ways. Indeed, we shattered all time revenue records across nearly every per patron metric. As for the strengthening energy-wide box office, we firmly believe that this was not a short-lived spike but rather the beginning of a sustained and powerful resurgence for our entire industry so that expectations are set correctly the box office in the current third quarter will only be so so given some seasonal but not alarming softness but hold on to your hats for the size of the box office in the fourth quarter of 2025. Hello, Disney's Avatar Fire and Ash, Tron Ares, and Zootopia 2. Hello, Universal's Wicked for Good and Five Nights at Freddy's 2. Hello, Glenn Powell in Paramount's The Running Man. And hello to so many other wonderful films that will be hitting the big screens in theaters from so many of our studio partners in the fourth quarter of this year. In total, it sure looks like 2025 is shaping up to be the biggest post-pandemic box office year yet. and one which we believe will be some $500 million to $900 million more than that of full year 2024. Even more compelling is the currently envisioned 12-month run rate for theatrical moviegoings after taking out the weak Q1 of 2025 and replacing it with the much stronger Q1 that we anticipate for 2026. Perhaps with an occasional blip here or there, we expect the 2026 box office will radiate with great strength and resonate with theatrical moviegoers pretty much all year long. Of particular note, this year, in 2025, the first quarter was terribly weak. In 2026's first quarter, by contrast, we'll see the spillover benefits from Avatar Fire and Ashes December 2025 opening, which in our view should greatly help to boost the Q1 2026 box office back up to a much healthier level. That should start the year 2026 off right, and we are highly encouraged by the extraordinary slate of films being released throughout the full year. It's our view, And we're far from alone with this optimism for 2026, that the 2026 box office will be considerably larger than that of 2025. Turning back to the performance of AMC and Odeon specifically in the just completed quarter, we've set record after record in this year's second quarter. For the first time ever, AMC's consolidated admissions revenue per patron topped $12, coming in at $12.14. Our consolidated food and beverage revenue per guest jumped to a record of $7.95. And our total consolidated revenue per patron at AMC and ODEON hit an unprecedented $22.26 for us. We believe that these new records powerfully validate the rationale behind our various strategic initiatives and the fact that consumers view movie-going at AMC and Odeon to be highly attractive, out-of-home entertainment experiences. In addition to setting new operational records during the quarter and delivering a powerful earnings report as a result, just as important we continue to fortify our balance sheet. As you know, in July, we just closed a series of transformative transactions, including receiving more than $240 million in cash from new debt issuance and the equitization of at least $143 million in debt, with the potential to equitize even more, up to a total of $337 million. we have now addressed all of our 2026 debt maturities, pushing them out to 2029. That's four years from now. In so doing, we've put in place a solid foundation to capitalize on what we believe will be our industry's continued growth momentum and our company's continued growth momentum, which should be especially evident in the fourth quarter of 2025 and continuing deeply into 2026. If I had to pick out just one set of words to characterize AMC's strong performance in the second quarter of 2025, and our optimism and our confidence about AMC's expected performance for 2026, it would be these. And I quote myself, impressive operating leverage as amc's revenues grow our ebitda at amc can soar i'll now pass this call and webcast over to sean goodman our cfo to provide more detail on the financial results after which i'll return to write an update on the amc go plan and others of our strategic initiatives sean thanks adam and thank you everyone for joining us this afternoon