Six Flags Entertainment Corporation/NEW Q1 FY2025 earnings call

Merger Integration and Performance

• Making progress in tapping the full potential of the merger, with stronger market response to new rides, improving guest satisfaction, and executing cost savings. The operating loss in Q1 is typical for a seasonal business, but consistent with the operating plan. Confidence in 2025 plan due to positive momentum in season pass sales, school and group bookings, and new rides.

Cost Synergies and Restructuring

• On track to achieve $120 million in merger cost synergies by end of 2025, 6 months earlier than originally planned. Current year operating costs are expected to be more than 3% lower than 2024 actuals for both legacy companies. Engaged in corporate restructuring to flatten the organizational structure, streamline decision-making, and reduce full-time headcount by over 10%.

Tariff and Portfolio

• Exposure to tariffs is relatively limited due to labor being over 50% of operating costs; working with suppliers to mitigate impacts. Plan to close Six Flags Park in Maryland after 2025 season, with proceeds to support debt reduction and cash flow accretion; evaluating other portfolio assets for value maximization.

Capital Spending

• Expect to spend $475 million to $500 million in 2025 on capital expenditures, similar in 2026. Can adjust CapEx based on macroeconomic conditions, with 30% of CapEx being discretionary infrastructure projects.

No specific breakdown of product segments by revenue contribution was provided in the transcript.

Financial Guidance

• Maintained full year 2025 adjusted EBITDA guidance of $1.08 billion to $1.12 billion. Current year operating costs are expected to be more than 3% lower than 2024 actuals. On track to achieve $120 million in merger cost synergies by end of 2025. Expect incremental $60 million of cost savings above the original synergy target by end of 2026.

Risks

• Weather disruptions can impact attendance and revenue. Macroeconomic uncertainties may affect consumer spending. Tariff developments could potentially impact costs, though exposure is relatively limited.

Q: I believe the 36 additional operating days works out to about 2% growth in operating days in the second quarter. How do you expect the tender and sales growth in that quarter to compare to that number?

A: We believe second and third quarters are where the opportunity lies as higher-margin days, with strong demand expected heading into these quarters.

Q: So Brian, I just want to clarify something. I think you mentioned -- I'm pretty sure you mentioned in your prepared remarks that you're expecting the first quarter attendance to represent I think you said about 5.5% for the full year and then first quarter revenues to be about 6% for the full year. And that's different than what I think it was in your release, I think your release says that it should be about 7% for both. I assume that's more historical versus anything else. And just want to clarify that I heard you right there because I think there's a lot of folks and investors out there that are kind of a little bit panicked about what was in the release.

A: The 7% would be more historical or normal course. Currently, first quarter attendance is tracking at about 5.5% of full year attendance and revenues at about 6%, which is inside normal historical pacing, and the first quarter is not material to full year potential.

Q: So Brian, Richard, I entirely hear you on the Easter shift and even kind of moving out of Q1 into Q2. But then we have sort of April that's tracking a bit softer than what would have been implied by kind of the Easter shift? And I understand you talked about sort of weather impact. I guess my question is, what gives you confidence to keep the guidance here? It sounded like you haven't really seen much impact from kind of the weakening consumer in your business. Is there anything else you're watching closely -- but I guess the key question is, what are those early signs that you're seeing that gives you the confidence to keep the guidance unchanged here?

A: We remain confident due to long lead indicators like season pass sales, strong demand in less-than-ideal weather (e.g., Cedar Point opening with 18,000 people), e-commerce trends (up 1% in unit volume and mid-single digits in price year-to-date), and F&B improvements with renovated locations showing strong per capita spending.

Q: I wanted to ask about progress on unifying your season pass selling strategy. I think you've been implementing a more consistent pricing on the legacy Six Flags footprint than was historically used. So any more color you can provide on how you've seen behavior shift on the Six Flag side, maybe both in terms of the blended pricing to date and the pace of adoption you expect and how much do you think that contributed to the gains that you saw in the last like 4 or 5-week period?

A: Harmonizing ticketing, season pass sales trends with mid-single-digit unit sales growth over 5 weeks, multiple opportunities in the sales cycle (May-June and beyond), and progress in harmonizing the ticketing platform with plans for later launches.