National CineMedia, Inc. Q1 FY2025 earnings call

• Agreed to a five-year extension of the contract with AMC Theaters through the end of 2042, aligning payment structure with performance metrics and modernizing lobby video screens.
• Introduced Bullseye, a new NCMx product powered by AI for dynamic hyper-localized messaging. Launched Blueprint, using real-time renovation permit data to target high-intent consumers.
• Accelerated share repurchase program, with $14 million spent on repurchasing 2.3 million shares year-to-date through April.
• Box office in Q1 was $1.4 billion, an 11.6% decline y-o-y, but second quarter started strong with 'A Minecraft Movie' having the largest opening day of the year and year-to-date network attendance up 6% compared to the same period last year.

National CineMedia's first quarter 2025 total revenue was $34.9 million, within the guidance range of $34 million to $36 million, but down 7% from $37.4 million in the same period last year. National advertising revenue decreased to $27.4 million, while local and regional advertising revenue totaled $4.9 million. Adjusted OIBDA was negative $9 million, in line with guidance. NCM's network reached over 72 million individuals in the first quarter, with Gen Z and millennials accounting for 64% of viewership, and 36% of the total audience being Gen Z. Year-to-date, 14 new advertisers have come on board who haven't placed cinema campaigns since prior to the pandemic.

• Expect second quarter revenue to be between $56 million and $61 million.
• Expect adjusted OIBDA for the second quarter of 2025 to be between $2.5 million and $7.5 million.
• Optimistic about the remainder of 2025 with a strong and diverse film slate driving increased attendance and advertiser engagement.

• Tariff uncertainty leading to advertisers delaying ad spend decisions and fewer/smaller advertising campaigns.
• Government policy shifts resulting in overall reduction in government ad spend.
• Box office underperformance due to weaker-than-anticipated film slates and underperformance of high-profile titles.

Q: Has the strength of pacing seen in Q4 weakened from the pacing seen now in Q1?

A: Tom Lesinski said the pipeline is still active in Q2 but softened a bit, with scatter business doing extraordinarily well but uncertainty in tariff discussions causing hesitancy. Ronnie Ng added scatter business is up more than double vs same period last year but clarity on next two months is harder.

Q: How much flexibility in terms of shorter term campaigns and uncertain advertising volumes?

A: Tom Lesinski said new upfront negotiations have more flexibility in cancellation policy and pricing, but current upfront period holds to cancellation policies. More flexibility expected in next upfront with programmatic and self-serve enabling ads within 24 hours.

Q: How does NCMx help compete with other digital video platforms and feedback from advertisers?

A: Tom Lesinski said NCMx products like Bullseye and Blueprint help compete by providing data-driven, outcome-based results. Advertisers are seeing value in predictive and results-oriented metrics, allowing NCM to compete effectively with other digital media companies.

Q: How does the AMC partnership affect incremental revenue opportunity?

A: Tom Lesinski said unlocking new inventory with AMC is a huge opportunity, and Ronnie Ng added the new agreement enhances the ability to sell Platinum Spot and other inventory, with expectations of incremental revenue offsetting increased fees and supporting adjusted OIBDA growth.