Hello, and welcome, everyone, joining today's call, AMC Holdings Third Quarter 2025 Earnings Webcast. [Operator Instructions] Please note, this call is being recorded. [Operator Instructions]. It is now my pleasure to turn the meeting over to John Merriwether. Please go ahead.

Thank you, Sabrina. Good afternoon. I'd like to welcome everyone to AMC's Third Quarter 2025 Earnings Webcast. With me this afternoon 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 during this webcast 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 these 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. 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 afternoon. 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 amctheatres.com later today. With that, I'll turn the call over to Adam.

Thank you, John, and good afternoon, everyone. Thank you for joining us today. At AMC, we're especially pleased that with revenue of precisely $1.3 billion and adjusted EBITDA of $122 million, yet again for another quarter, AMC Entertainment comfortably beat Wall Street consensus assessments for both our revenue and adjusted EBITDA. As has often been the case in the recent past, AMC's leading market position and the skills demonstrated in the implementation of our numerous and important marketing, operations and cost containment strategies allowed us for yet another time to overperform the expectations of those who underestimate us. As we look at AMC's third quarter results and for that matter, the full year-to-date, calendar year 2025 is turning out exactly, and I mean exactly as we have long predicted. Due primarily to the timing of major studio film release dates, a weak first quarter was followed by a blazing hot second quarter, which then was followed by a softening third quarter. We continue to expect, however, that the year will culminate in what we hope will be quite a strong year-end in quarter 4. Hello Oz with WICKED: FOR GOOD, hello Disney's AVATAR: FIRE AND ASH, Indeed, a broad array of appealing movie titles will be coming out before year-end. Our prediction of a so-so third quarter industry box office turned out to be true as the North American box office declined some 11% following tough comparisons against last year's strong third quarter. But when evaluating AMC's performance in the context of the third quarter's challenging industry-wide environment, I see our company firing on all cylinders, marketing prowess, operational strength, financial discipline, all are direct evidence that AMC is very well positioned to capitalize on the box office growth that we believe lies just ahead. Remember that about 2/3 of…

Thanks, Adam, and thanks, everyone, for joining us today. As predicted, the third quarter was relatively soft compared to last year. Nonetheless, while the North American box office was down 11%, AMC's consolidated admissions revenue was down by only 3.9% and domestic admissions revenue was down by only 5%. This reflects the meaningful growth in our market share, thanks to the power of our premium large-format offerings, unrivaled loyalty programs, innovative marketing, promotions, and pricing. This afternoon, I'd like to focus my comments on several key third-quarter performance metrics that clearly demonstrate the underlying strength of our business. Our consolidated revenue increased by 7.5% versus last year and is now 47% above pre-pandemic Q3 2019. This remarkable growth is driven by a 60.5%, that's 60.5 6.5% increase in food and beverage revenue per patron and 33.8% increase in admissions revenue per patron, all relative to Q3 2019. These are impressive metrics yet, but even more important is the incremental profit that we generate with each additional moviegoer. Our measure of this is contribution margin per patron, and we define it as total revenue minus both film exhibition and food and beverage costs divided by total attendance. In the third quarter, we grew our consolidated contribution margin per patron by 9.2% compared to the prior year, and this metric is now approximately 54% higher than in 2019. From a segment perspective, our U.S. operations delivered a truly exceptional quarter. Consider the following: in Q3 2025, our domestic adjusted EBITDA reached $111 million. This is nearly $4 million more than in Q3 2019, despite us selling $18.9 million or 31% fewer tickets than we did in Q3 2019. This achievement was possible because domestic revenue per patron was 50% higher and domestic contribution margin per patron was 57.5% higher than in 2019.…

Thank you, Sean. Before we take your questions on this webcast, I'd like to touch briefly on 5 different points. First, AMC Theaters distribution took another bold and new step forward in the third quarter of 2025 when we partnered again with the iconic one and only Taylor Swift to highlight the debut of the 12th studio album in her astonishing career. All the planning occurred within the third quarter for our theatrical release on October 3 to 5 of the 1 weekend screening of Taylor Swift: The Official Release Party of the Showgirl. This unique theatrical event was showcased on approximately 6,500 movie theater screens in the United States and across some 56 countries, generating some $50 million in box office receipts in a weekend, $34 million domestically, and another $16 million internationally. We're proud that Taylor Swift, the official release party with Show Girl, came in at #1 in the domestic box office for its opening weekend. We're also proud that it was graded an A+ on CinemaScore and in the high 90s on Rotten Tomatoes. And as a result, that we put so many smiles on the faces of millions of Taylor Swift fans globally. These impressive results speak to the strength of AMC's innovative distribution abilities, not only bolstering AMC's results but also contributing to the health of the overall industry. The numbers of the Taylor Swift project speak for themselves. To that end, here's a number for you, 7.5. 7.5 you ask, it is incredible to think, but from start to finish, from the time of our very first phone call about this potential project to generating from some 56 countries, fully $50 million in box office ticket sales receipts, plus, of course, food and beverage revenues in addition, AMC pulled all this off in…

[Operator Instructions] And we'll take our first question from Eric Wold with Texas Capital Securities.

A question a little bit on kind of the concessions and ticket prices. I know, obviously, you had some great success driving up the per patron spending over the past couple of years with a lot of the initiatives you've had within the theater. Just want to talk about kind of the baseline pricing kind of below the surface given the consumer environment we're in right now. Maybe talk a little bit about the pricing power, maybe the price increases that you've been kind of pushing through on both tickets and concessions. I guess starting with tickets, have you been pushing up baseline ticket prices kind of across the board? Or has the focus mostly been on the various premium pricing options, IMAX, and consumers kind of choose to pay the higher prices for the premium auctions versus raising prices across the board on all tickets? And then on concessions, kind of what are your thoughts on kind of price increases up and beyond the need to offset kind of inflationary headwinds right now, if you feel that's something that moviegoers would be accepting in this environment or if that's something that you think is kind of -- that maybe kind of need to wait a little bit as we get a little further into '26.

That's a question. Thank you, Eric. Nice to talk to you again, as always. I have to be very -- we're happy to talk to the point, but I got to be very careful because to talk about pricing thoughts on a going-forward basis because that could be interpreted to mean signaling to competitors. But I can comment on our pricing actions previously, and you can read into those whenever you want to read into those. If you look at our ticket pricing of $12.24 that was achieved in the third quarter, which is on a consolidated basis, it was the highest number we've ever had in our history. And if you look at our ticket pricing, it's risen pretty substantially over the past several years. It's moved in the past much faster than general consumer inflation. And I would especially point you not only to looking at our consolidated prices, but looking at our prices by geographic segment. Our prices have increased in Europe and our prices have increased in the United States as well. But I think what's really interesting is, yes, some of those price increases derive from our growing commitment to PLFs. But we've also not been shy in taking ticket pricing up. And in fact, if you go back to May of 2025, just 6 weeks before the third quarter began, knowing that we had some big movies coming in June and July, we did take across-the-board price increases, not at all of our theaters in the United States, but I would say most of our theaters in the United States. And those price increases vary theater by theater and market by market. But prices did go up. And they went up because we think -- again, I want to be careful only to talk…

Thanks, Adam. Clearly, food and beverage is a key focus area for us, as one would expect, right, because of the profitability of that segment. And when we look at our food and beverage business, the key drivers of our food and beverage per person are the percentage of people participating going to the concession stands and buy food and beverage, the number of units that they buy when they go to the concession stand, and the price they pay. And if you look at the increase in food and beverage per person versus pre-pandemic levels, all 3 of those factors, all 3 participation units per transaction, and price has been part of that significant increase in food and beverage. If you look just at Q3, then in Q3, the percentage participation and the price were the biggest drivers of our food and beverage increase. To drill down on the price aspect of that food and beverage per person in a little more detail, I think there's a couple of factors here. One is the price is impacted by mix, right? What are our guests buying. And as we've added collectible concession vehicles, we increasingly focused on movie-themed drinks and movie-themed cocktails, that's really helped to increase the price, even if actually the price for the regular item hasn't changed that you have that positive mix impact, and we see that still being very, very beneficial for our business. The other thing to say about price is we've been very analytical with the data that we have on pricing. So really looking at individual theaters, individual market locations, where can we take price, where should we reduce price. We're very focused on that. And then we're always offering opportunities in discounts, as we spoke about the discount days, if you look at the food and beverage, we have discount food and beverage offerings on those discount ticket days as well. So there's something available for the consumer in. But again, it's sort of food and beverage is really critical to our business and been a big part of why we've been so successful in our per-person metrics as we've gone through the recovery.

And if I can add, Eric, sort of I think getting to the thrust of your question as opposed to the factual answers, I think you were trying to inquire, do we think with angst in the general economy, and like are we somehow constrained by consumer sentiment that somehow our pricing actions will be limited. And again, I don't want to make any kind of speculative comment about what we will do in the future. But I would like to point out this fact. I don't feel -- I think we have to be -- I always say you want to be prudent in not taking prices up too quickly. But I don't feel any price limitation from our clientele. The fact that our premium screens sell out first tells us something. The fact that we introduced 151 XL screens that already were screens that already existed in our theaters. They are bigger than the other screens in our theaters, and we just slot the XL logo on the door to remind people it was a bigger screen and that we're able to command almost a 10% price premium from those XL screens. But here's one other little factoid that shows you that I believe that our consumer is willing to pay for what we offer. Our merchandise business was literally nonexistent 3 years ago. nonexistent. I mean, like $0 in revenue for merchandise. This year, 2025, globally, U.S. and Europe combined, it's going to be over $65 million. And if you look at the price points of some of these merchandise items that we're selling at the concession stand, it's not hard to find items that are priced at $15.99, $19.99, $29.99, more than $30 a pop. And like literally, one of our biggest problems is that we're selling out too quickly. We are often sold out. We're sometimes ordering 50,000, 100,000 of these units in the United States alone, and we're selling out on the first night or 2. It's a high-class problem. And you do have to order this stuff 9 months in advance and get it shipped in economically. But I mean, it's just another example. Consumers are willing to reach into their pockets to pay us for the experience that we offer, provided that we do a good job of it. And that's why we work so hard to keep our theaters in good shape. That's why we work so hard to keep our film crew staff motivated and treating our guests well. And just look at the results. highest ticket prices in our history, second best food, and revenues per patron -- I guess it's ticket prices per patron in our history, second highest food and beverage revenues per patron in our history achieved in this third quarter. With that, operator, I think we're going to turn to some shareholder questions. Sean, what's the first question from our shareholder base?

Yes. There's been a lot in the press about the Warner Bros situation, and people are interested in what our comments on that are.

So it's a little premature to speculate about what's going to happen at Warner Bros. There are some obviously who believe that Warner Bros will stay independent. There are others who obviously are aware of Paramount's repeated offers. There are other potential suitors for Warner who seem to be emerging. Let me just say this because it's not a reality yet, and so there's no real need to speculate too much. I would like to comment that AMC is thrilled beyond thrilled that David Ellison and his organization, led by Jeff Shell, have bought Paramount. We think they're going to do a spectacular job, and they have committed to greatly increasing the movie count that Paramount will be releasing going forward. Paramount was down to 7 movies a year. We think that Paramount is on record as saying they want to more than double that movie count as quickly as they can under the ownership of David Ellison. Similarly, Warner Bros has told us that they also -- I think they were down to 11 movies in 2025. And they also would like to be and are committed to increasing the release of more movies in 2026 and beyond. That also is very good for AMC. So I guess with respect to any potential studio consolidation, our attention will be laser-focused on one issue and one issue only. And that is the count of movie releases that's coming up from studios. Clearly, if it's more movies, that's good for AMC. And if it's less movies, that's not as good for AMC. So we're watching closely. And what we're watching more than anything else is will the number of movies being issued going forward go up or not. Next question.

We've had -- and we were just talking about it a few moments ago, we've had a couple of quarter-after-quarter of really, really strong performance metrics for the business. And kind of related to the question we just discussed as well is people are asking how sustainable is that? Can we continue to keep these key performance metrics at this high level as the industry box office continues to recover?

I'm completely convinced that we can keep these metrics strong, that they are, in fact, not flukes but sustainable and that we can grow them. And what gives me that confidence is we've been growing them now for 6 years, since 2019, or really in the last 3 years since the box office sort of got semi-respectable post-COVID. And we apply as a company so much attention and brainpower, mental acuity to getting those metrics up. They didn't happen by accident. And we'll apply that same emphasis on keeping those metrics strong and growing, looking ahead. There are 2 numbers that kind of fed my head more than anything else about how AMC survived the last 5 years, because look, I mean the industry box office is still 20% down from pre-pandemic levels. That's a problem. Some people don't want to admit that's a problem, but that's a problem. It would be much easier for us if we can see the box office grow to what we hope will be a much larger pace in 2026 than it's been in the last 3 years. And as I said in my prepared remarks, if you look at the 9-month period from April 1 to December 31, 2025, the industry has not been on the $9 billion pace that it will probably be on for 2025 calendar year, but a $10 billion pace. And it sure be nice if that's the pace that we have going forward. In a rising box office environment, AMC does very well because 2/3 of our incremental revenue drops the EBITDA line. It's not a linear relationship between rising box office and rising EBITDA. It's an exponential relationship between rising box office and EBITDA. So the same attention that we're paying to keeping these metrics strong comes…

Do you want to comment a little bit about the M&A environment? We recently noticed Connapolis' acquisition of Imagin Entertainment, and any thoughts on the M&A environment in this industry for us?

Sure. So we ended the third quarter with $363 million of cash on hand. Every dollar of that cash is earmarked. So now is not a great time for us to be diverting cash to other strategies other than running our company well and strengthening our balance sheet. Similarly, we are out of shares. So it's not like under the current situation, we could use share equity capital as a currency for M&A activity. Having said that, over time, our cash reserves will grow from whatever means. And when I look at the M&A environment, it looks quite attractive to us right now. Cinnapolis, a high-quality operator in Europe, bought 14 movie theaters in the United States at 5x trailing EBITDA, 5x. Now it's only 14 theaters. Like you couldn't buy AMC for 5x EBITDA because we're 900 theaters, not 14. But it does tell you that there are plenty of movie theater circuits out there who have less than 1% market share, less than 2% market share, where we, AMC, if we had cash to deploy for M&A purposes, could pick them up at levels at bargain levels and then arbitrage them into being worth much more if they were part of the AMC network. And not only much more merely because we trade at higher multiples than what you might pick up some of these circuits for the cheap, but also because if those theaters were run by AMC, we believe they would do better. We have better marketing strategies. We have better purchasing power. And I think our ability to deliver the numbers bottom line beat a lot of the smaller operators who are still around, and what is still a quite fragmented industry, 40% of the industry is still coming from very small operators. So I think the M&A market is ripe for us to move if we have the resources to move. Today, we don't have those resources. But I can tell you that we are paying a lot of attention to M&A activity. We're still analyzing a lot of potential combinations, small ones, not necessarily big ones. It appears to us there are -- there is opportunity out there for us at hand when it's the right time for us to move intelligently, and that is as we can do it without compromising either our cash reserves or our absolute commitment to strengthening the balance sheet.

Final question here regarding the loyalty programs. We provided a lot of additional benefits to our loyalty members recently. And so people are just asking for an update about that. How is that going with things like discount Wednesdays? So we did just add a significant benefit by adding discount Wednesdays to the mix of discount Tuesdays.

Remember, one of our tiers of AMC Stubs is AMC Stubs A-List. Back in May, we enhanced the benefits of A-List. A-List was quite successful for us before. You used to be able to see 3 movies a week, now you can see 4 movies a week. We made it much easier to use the A-List program because you no longer need to fish for a state ID, a driver's license to get in, you're using A-List just as a flash your phone because we added a picture ID to your profile within our A-List within the app, within AMC app for A-List. So like that's all we did, add a lot of benefit. But the results are just great. A-List started out right after COVID when we reopened theaters in 2020, having only about 500,000 members. It's up to close to 1 million. So that's doubled over the last 5 years. We also introduced a new tier of Stubs, our loyalty program on January 1 called Premier Go, which gives people double the points generosity that a so-called insider, a member of our free tier, gets and gives them other benefits. It's a path to getting from insider to Premier. Premier, you got there by paying $15 a year, now $18 a year, speaking of price increases. Now $18 a year. I guess my marketing department would assist. I say it's $17.99. So it's not quite $18, right? In the consumer head, we only raised it by $2, not $3. But with Premier Go, you get this increased generosity level. It's not all the way to the generosity level of Premier because Premier is a 5x level of discount. But you earn Premier Go not by paying us a $17.99 purchase price, but you earn it basically by seeing…

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.