Cinemark Holdings Inc.

Greetings and welcome to Cinemark Holding, Inc.' 's third quarter 2024 earnings call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chanda Bashir, Senior Vice President, Investor Relations. Thank you. You may begin.

Good morning, everyone. I would like to welcome you to Cinemark Holding Inc.' 's third quarter 2024 earnings release conference call hosted by Sean Gamble, President and Chief Executive Officer, and Melissa Thomas, Chief Financial Officer. Before we begin, I would like to remind everyone that statements or comments made on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, Financial projections are other statements of the company's plans, objectives, expectations, or intentions. These matters involve certain risks and uncertainties. The company's actual results may materially differ from forward-looking projections due to a variety of factors. Information concerning the factors that could cause results to differ materially is contained in the company's most recently filed 10-K. Also, today's call may include non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the company's most recently filed earnings release, 10Q, and on the company's website at ir.cinemark.com. With that, I would like to turn the call over to Sean Gamble.

Thank you, Chanda, and good morning, everyone. We appreciate you joining us this Halloween morning to discuss our third quarter 2024 results. Strong, sustained consumer enthusiasm for shared, larger-than-life theatrical experiences was once again on full display in 3Q, as box office results far outpaced expectations for the third quarter in a row this year. North American industry box office reached $2.7 billion and was up 1% year-over-year, which is remarkable considering the high bar that was set by last year's Barbenheimer phenomenon. These results also represented the highest grossing quarter since the pandemic and climbed to within 4% of 3Q19. Propelled by one breakout hit after the next, as a steadier cadence of compelling films were released into theaters, the third quarter's results clearly underscore that moviegoing begets moviegoing and further illustrate the heightened level of impact a theatrical release provides all categories of content. Take, for example, the lengthy playthrough of Inside Out 2, which grew to become the highest grossing animated film in history during the quarter, generating more than $650 million of domestic box office and nearly $1.7 billion worldwide over its full theatrical run. And then there was Deadpool and Wolverine, which slashed up screens to become the highest grossing R-rated film in history, with over $635 million domestically, and an astounding $1.3 billion worldwide, up 70% from Deadpool 2. Enthusiastic, must-see-on-the-big-screen momentum also drove magnificent results for Despicable Me 4, with domestic box office of more than $360 million that was up 36% above DM3, as well as adventure thrill-ride Twisters and comedic fantasy Beetlejuice Beetlejuice, both of which captured more than $250 million domestically in the third quarter alone. Strong word of mouth and high anticipation also lifted romantic drama It Ends With Us to nearly $350 million worldwide, and elevated suspense thriller A Quiet Place Day One, as well as sci-fi adventure Alien Romulus, which was up more than 45% from 2017's Alien Covenant. Additionally, Positive response boosted crime thriller Long Legs to nearly $75 million of domestic box office, which became the highest-grossing domestic release of all time for independent studio Neon. Third Quarter's film results continue to demonstrate how a theatrical release stimulates increased conversation, creates bigger cultural events, and amplifies the relevance of content, strengthening its recallability and staying power all of which deliver significantly enhanced value to studios, filmmakers, and audiences. These are the films, like their theatrical predecessors, that have longevity and that people will be talking about and remember for many years to come. Just consider the fact that the original installment of Alien was released into theaters 45 years ago, Beetlejuice more than 35 years ago, Twister almost 30 years ago, and Inside Out nearly a decade ago. Furthermore, theatrical franchises like the Marvel Cinematic Universe and Despicable Me have grown to massive heights via the big screen. These two franchises alone are recent examples from the third quarter that have been delighting audiences with sequels, spin-offs, consumer products, games, and theme park rides for approximately 15 years now. And then there's repertory content like Coraline, a film that first hit theaters in 2009, which continues to generate meaningful theatrical proceeds every year and grossed close to $35 million of domestic box office this quarter. These are all examples of the deep and lasting impact that a theatrical release generates through the unparalleled level of emotional connection it creates with stories, characters, and memory-making moments. At Cinemark, we certainly understand how impactful experiencing stories in a theatrical setting is to the hundreds of millions of moviegoers we serve every year as we strive to consistently deliver unmatched entertainment and service that delights our guests and keeps them coming back for more. To that end, we were thrilled to see how well the third quarter's film lineup captivated audiences, and I'd like to commend our studio partners for their outstanding work producing and releasing such compelling content, that will clearly leave an imprint on moviegoers for many years to follow. I'd also like to equally commend our sensational Cinemark team for helping to drive the quarter's tremendous box office results through all of their tactical actions to strategically program our screens, stimulate increased moviegoing demand, and deliver an unforgettable cinematic experience that can't be found anywhere else. Driven by our team's diligent execution and coupled with the continued benefits we are deriving from our strategic initiatives, as well as a film mix that resonated particularly well across our US circuit, Cinemark once again outperformed the industry in the third quarter and delivered exceptional financial results. Domestically, we exceeded year-over-year North American industry box office growth by over 600 basis points. and generated our highest-grossing August and September box office proceeds of all time. Similarly, internationally, we surpassed our comparable Latin American industry admissions benchmark by more than 100 basis points. We also set another new domestic concession per cap record of $7.97 which combined with our industry leading box office growth yielded worldwide total revenue of $922 million, our highest third quarter revenue of all time. These strong top line achievements were complemented by comparably robust bottom line results that were further enhanced by disciplined operating agility and expense management. During the quarter, despite a marginal decline in attendance versus last year, our worldwide adjusted EBITDA grew 12% to $221 million, which is our highest third quarter adjusted EBITDA in the history of our company. Furthermore, we expanded our adjusted EBITDA margin 140 basis points year over year to nearly 24% and generated $64 million of free cash flow. As we've highlighted on previous calls, Our solid results, including our consistent track record of industry outperformance, are the byproduct of years of disciplined capital deployment, a highly skilled and resourceful global team that is second to none, careful navigation of our industry's recovery from the pandemic, and the active pursuit of strategic initiatives to build audiences, grow new sources of revenue, and advance and optimize our operating capabilities. These ongoing areas of focus, combined with a solid overall foundational framework that has been established over the past four decades, continue to uniquely position Cinemark with a wide range of distinctive advantages. For example, we continue to benefit from our years of strategic investments to maintain and enhance our circuit that has yielded the largest array of high quality assets in our markets, including nearly 70% penetration of reclined seats domestically, the largest volume of exhibitor-branded premium large format auditoriums in the world, the highest rollout of D-Box motion seats globally, and the leading site, sound, and presentation quality in the business. In this regard, it's worth noting that during the third quarter, we generated our highest quarterly D-Box revenue ever, which grew nearly 70% versus 3Q23, and we generated our second highest quarterly XD premium large format revenue of all time. We've been able to make and sustain these investments on account of our solid financial position and compelling free cash flow profile that we have long viewed as a strategic asset for our company. I'm very pleased with the great strides our team has made in re-fortifying that position over the past two years as we've continued to invest in our future, and Melissa will provide a deeper dive into those financials in a moment. Beyond the quality of our assets and our financial strength, We also have developed a highly loyal customer base and an extensive marketing reach. Over 21 million members now participate in our global loyalty programs, and we consistently derive approximately 25% of our domestic box office from our paid Movie Club subscription members. Furthermore, we have an addressable reach to over 30 million customers across our global circuit with whom we can actively communicate to spread awareness of upcoming events, deliver unique and personalized offers, and drive increased movie-going frequency. The scale and extent of our loyal and addressable consumer base is something that has taken years to establish through a concentrated focus on developing, honing, and continuously improving our industry-leading operating capabilities. From service levels achieved through field training and protocols that consistently earn high satisfaction ratings from approximately 95% of our guests, to technology measures that yield the best and brightest projection imagery with close to 100% uptime. We've developed sophisticated digital, social, and omnichannel marketing platform capabilities that drive billions of impressions a year to scale audiences, as well as data-driven pricing analytics at an individual feeder level that maximize volume, revenue, and margin. Our advanced capabilities also extend to the methodical curation of food, beverage, and merchandise offerings that provide a broad array of appealing, high-quality selections with efficient purchase ease, as well as the utilization of enhanced tools and processes that help us optimize our show times and labor management. We have consistently invested for years in enhancing the way we run our business to drive growth and deliver exceptional levels of service as efficiently as possible. Collectively, we expect that the many distinctive advantages we possess today, as well as the ongoing actions we are pursuing to further grow and strengthen our company, will continue to provide us with an outsized ability to capitalize on future market opportunities and drive incremental value creation as we move forward. One such area of opportunity is the continued rebound of new release volume in 2025 and beyond, as film production further recovers following the delays it incurred during the pandemic that were then compounded by last year's strikes in Hollywood. We are highly optimistic about a strong close to 2024, with fourth quarter releases like Wicked, Gladiator 2, Moana 2, Mufasa, and Sonic the Hedgehog 3 on the horizon, as well as the continued momentum they will carry into what is shaping up to be a blockbuster 2025 film slate. Much like the storyline of an inspirational movie, the resiliency of our industry and its ability to persevere and grow through change and adversity has been proven time and again. Despite a global health crisis and varied experiments with new release models, the past three years have clearly demonstrated that consumer enthusiasm for theatrical movie-going entertainment is as strong as ever. Moreover, theatrical exhibition remains an important and stable component of a studio's financial value creation formula, and our content partners are fully leaning into our channel as a way to elevate the awareness, relevance, and impact of their films like only a theatrical release can. And within that setting, which is poised for further recovery and growth, we remain acutely focused on delivering unforgettable experiences for our audiences and long-term value for our shareholders and we believe that Cinemark is well-situated to thrive in the years to come. I will now turn the call over to Melissa, who will share more information about this quarter's results. Melissa?