AMC ENTERTAINMENT HOLDINGS, INC. Q1 FY2025 earnings call

Adam noted that the first quarter of 2025 was not indicative of the current and future strength of the movie theater industry. The industry-wide domestic box office in Q1 2025 was very low, but April 2025 and May 2025 box office were double that of the previous year. AMC surpassed Wall Street expectations in Q1 2025, with US admissions revenue per patron achieving an all-time Q1 record. Sean mentioned that consolidated revenue per patron on a constant currency basis was up 1.6% year-over-year and 40% compared to 2019, fueled by food and beverage and admissions revenue per patron growth. AMC has been strategically managing its theatre portfolio, closing underperforming locations and opening new ones.

In the US operations, admissions revenue per patron achieved an all-time Q1 record of $12.31. Compared to pre-pandemic 2019, domestic revenue per patron is now up more than 45%, and domestic contribution margin per patron is up by a remarkable 59%. For international markets, total revenue per patron is up 32% and contribution margin per patron is up approximately 39% on a constant currency basis when compared to pre-pandemic 2019.

Adam believes the full year 2025 industry-wide domestic box office will come in at the high end of the previously forecasted range of being $500 million to $1 billion ahead of 2024. He also thinks 2026 box office will be considerably larger than 2025. Sean expects to be free cash flow positive for the nine months ending December 31, 2025, provided the box office performs in line with expectations.

There are numerous risks and uncertainties, such as factors beyond the company's control that may cause actual results to differ materially from forward-looking statements, including movie market uncertainties, potential box office performance不及预期, and risks related to theatre operations and lease management.

Q: What are your thoughts about the current discussions around tariffs in Hollywood?

A: Well, obviously this is a new topic. It is our understanding that there are no final specific plans as to what may transpire and that there's going to be ample opportunity for discussion between the government and industry on this topic. We'll be paying very close attention to developments in this area.

Q: What proportion of AMC locations do you think ultimately could include a premium format auditorium?

A: As I said in my prepared remarks, we have more than 600 PLF and XLF screens. That number should grow to around something over 1000. In what percentage of our theaters will we find that? In the plans we have now probably we will hit three quarters of our theaters worldwide. But that's just the plans we have now. Depends what the guest response is.

Q: At what point do you expect the business to be in a position to generate positive free cash flow?

A: That's a nice question to get because the answer is right now, the first quarter, so bleak and yet was anyone drawing any kind of negative conclusions from the first quarter? It's just going to be wrong because the second quarter, third quarter, fourth quarter 2025 are going to perform so radically different than did the first quarter of 2025. It wasn't wholly unexpected. We predicted last year that the industry would start very slowly in Q1 because we knew what titles were coming out. But we also know what titles are coming out for the balance of the year. And if we hit our internal forecasts of what's going to happen for the balance of 2025, then this company will be free cash flow positive for the nine month period, April to December 2025.

Q: Are there plans to enhance and expand the food and beverage offerings to our guests?

A: Sure there are. We're so proud of what we've done to drive the revenues of this company and cut the cost of this company such that our contribution per patron is up more than 50% above where it was pre-pandemic levels. We pay a lot of attention to innovation in the food and beverage area. Examples include having more MacGuffins Bars, serving liquor across Europe, rolling out Dippin' Dots which doubled ice cream sales, and having a pilot for new drink equipment that might be rolled out broadly if successful.