AMC Entertainment Holdings, Inc.

Hello and welcome everyone joining today's A&C Entertainment Holdings second quarter 2026 results call. 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. To register to ask a question at any time, please press star 1 on your telephone keypad. Please note this call is being recorded and we are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to John Merriwether, Vice President, Capital Markets and Investor Relations. Please go ahead.

Thank you, Angela. Good morning. I'd like to welcome everyone to AMC's second quarter 2026 earnings webcast. With me this morning is Adam Aron, 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 today during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks, uncertainties, and other factors may cause action 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 and free cash flow, among others. For full reconciliation, of our non-GAAP measures to GAAP results. Please see our earnings release posted in the investor relations section of our website early 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 later today. With that, I'll turn the call over to Adam.

Thank you, John. Good morning, everyone, and thank you for joining us to discuss AMC's record-breaking results for the second quarter of 2026. What a quarter, what a quarter, what a quarter. In AMC's entire 106-year history, there has never been a quarter like this one. Needless to say, I'm extremely pleased to report that AMC Entertainment achieved all-time record revenue and all-time record adjusted EBITDA for the period April to June 20, More than 71 million guests visited our theaters worldwide in the second quarter, 13.5% more than last year, drawn by one of the most powerful and diverse film slates that we've seen in years. Second quarter total revenues for AMC and Odeon increased 14.2% year-over-year to approximately $1.6 billion, while adjusted EBITDA surged 70% to $321.4 million, exceeding $300 billion and a quarter for the very first time ever. Let me say that again. so that the prognosticators of doom who have continued to vastly underestimate the will and the skill of AMC, despite our having risen to meet challenge after challenge after challenge during these difficult past six years, can hear me clearly AMC reported record adjusted EBITDA of $321.4 million in Q2 of 2026. That's up $132 million over the results of last year's second quarter. And you may recall that last year's second quarter itself was a strong one. both second quarter revenue and second quarter adjusted EBITDA exceeded Wall Street's expectations and established new all-time high points for our company. Equally important, we converted this outstanding performance into generating cash. Free cash flow for the quarter was $190.1 million. You all have known for some time The overall industry-wide domestic box office was showing strength in the quarter. At $2.99 billion, it was the highest second quarter in seven years. And perhaps of even greater note, of the 200 quarters in the past 50 years for which I have been able to personally scrutinize the statistics, This was the fifth best quarter ever in the past half century. Indeed, in the second quarter, six different film titles coming from Universal, Lionsgate, A24, and three from Disney had impressive domestic opening weekend grosses exceeding $75 million or more, in some cases, far more. but AMC did not just benefit from the rising box office tide, which as you know, saw an overall 10.7% bump domestically. We also increased AMC's market share as our domestic ticket revenues were up by even more, up by some 11.4%. Our European numbers also shined as evidenced by our European attendance in the second quarter, increasing by 18% year over year. And I might add, with our European second quarter adjusted EBITDA, more than quadrupling over the second quarter of a year ago. Globally in the quarter, we also successfully grew our food, beverage, and merchandise sales, which increased by 15.3%. as did our so-called, quote, other revenues, unquote, which increased by 16.1%. By now on this earnings webcast, you're probably hearing a common theme of one word being repeated over and over again, increasing, increasing, increasing. and doing so with increases of double-digit growth. But happily, we get to use a different but equally impressive qualifier when you all take a look at just how well AMC kept a tight lid on our costs. With so much zeal in cost management, our adjusted EBITDA margin jumped from 13.6% in last year's 2Q to 20.1% in the quarter just completed. This all demonstrates the inherent operating leverage in our business model, which is significant at a time of rising revenues. The power of AMC's market-leading position Stems from our size and scale, of course, but also from the compelling appeal of our theaters, the increasing numbers of our premium offerings, the prowess of our marketing programs, as well as our ability to keep our costs in check. Finally, After some admittedly tough years, as our industry recovered only slowly from the ravages of COVID-19 and its aftermath, the relentless focus of AMC on delighting our guests has seen AMC executing with all cylinders blazing so far throughout 2026. Combining both the first and second quarters of this year, AMC's revenues are up 16.9% year over year. And our adjusted EBITDA for the first six months of $359.7 million in the first half of 26 is considerably more than two and a half times the $131.8 million reported in the first half