Cinemark Holdings, Inc. Q1 FY2025 earnings call

• Industry headwinds from Hollywood strikes in 2023 affected Q1 2025 box office, but Cinemark outperformed with 160bps higher North American box office and 60bps higher Latin American benchmark. - Market share gains continued, with ~100bps structural improvement vs pre-pandemic. - Recent releases like Minecraft movie had record-breaking results, and the second quarter started strong. - CinemaCon showcased strong upcoming film slate including family, action, horror, comedy, superhero, and sci-fi fantasy films. - Paid first quarterly dividend since pandemic and executed $200M share repurchase in March.

In the first quarter, Cinemark had worldwide revenue of $540.7 million. The US operations hosted 20.6 million guests, with admissions revenue at $207.6 million, an average ticket price of $10.08 (up 3% YOY), and concession revenue of $164.4 million, achieving a new concession per cap high of $7.98 (up 5% YOY). The US segment had adjusted EBITDA of $20 million with a 4.8% margin. International operations welcomed 16 million guests, generated $123.6 million in revenue, and had an adjusted EBITDA of $16.4 million with a 13.3% margin. Worldwide, 36.6 million patrons were welcomed, and adjusted EBITDA was $36.4 million with a 6.7% margin.

• Intend to repay $460M principal of convertible notes using cash on hand in August. - $200M share buyback program fully executed in Q1. - Full year 2025 capital expenditures expected to be $225M, with half for maintaining high-quality circuit and laser projector installations, remainder for ROI-generating opportunities. - Goal to return excess capital to shareholders via dividends and/or stock buybacks within net leverage target range of 2-3 times.

• Lingering impacts of Hollywood strikes on box office performance. - Macro-economic uncertainties affecting consumer spending and moviegoing habits. - Potential box office cannibalization due to flexible studio windows. - FX dynamics impacting international operations, and inflationary cost pressures on concessions.

Q: Eric Handler asked about share buyback plans and convertible note settlement.

A: Sean Gamble and Melissa Thomas discussed share buyback flexibility within net leverage range and convertible note mechanics, including exposure above principal amount and share repurchase mitigating dilution.

Q: Ben Swinburne inquired about Amazon, Apple, and market share.

A: Sean Gamble commented on Amazon's commitment to theatrical releases, Apple's F1 film, and market share considerations with family and horror films in Q2.

Q: Chad Beynon asked about film windowing and concession per cap.

A: Sean Gamble discussed windowing debate and optimal window length, while Melissa Thomas expected moderate growth in domestic concession per cap.

Q: Patrick Sholl asked about market share impacts and capital expenditures.

A: Sean Gamble talked about operating hours and recliner seating investments, considering profitability and demand.

Q: Omar Mejias asked about consumer weakness and cost side.

A: Sean Gamble noted no early signs of consumer weakness, and Melissa Thomas explained concession cost drivers and expected run rate.

Q: Robert Fishman asked about box office cannibalization and margin target.

A: Sean Gamble discussed box office cannibalization evaluation and Melissa Thomas outlined margin expectations with box office recovery.

Q: David Karnovsky asked about Minecraft trend and other revenue.

A: Sean Gamble talked about engaging with fan trends, and Melissa Thomas explained other revenue drivers.

Q: Mike Hickey asked about premium formats and slate.

A: Sean Gamble discussed premium formats as a tailwind for pricing and slate.

Q: David Karnovsky asked about tariff war and China.

A: Sean Gamble noted no current impact on Hollywood films in China.

Q: Stephen Laszczyk asked about industry consolidation and utilities expense.

A: Sean Gamble commented on industry consolidation interest, and Melissa Thomas explained utilities expense drivers.

Q: Alicia Reese asked about concession costs and Latin American merchandising.

A: Melissa Thomas and Sean Gamble discussed concession cost mix drivers and Latin American merchandising expansion plans