National CineMedia, Inc. Q2 FY2025 earnings call

• Acknowledged a challenging economic and advertising environment during the quarter, with caution among advertisers in key categories like government, CPG, and automotive. - Box office performance was driven by breakout hits but limited monetization due to a slower advertising period. - Actively taking steps to capitalize on box office momentum, including scaling programmatic and self-serve offerings. Programmatic distribution expanded through new partnerships, with programmatic advertiser volume up over 50% QoQ. Self-serve revenue up over 30% YoY. - Focused on enhancing local sales capability, onboarding new talent, and engaging high-value advertisers. Success of a national telecom brand's campaign using bull's eye product demonstrated cinema's performance as an advertising channel. - New AMC agreement standardized show format, improving ability to meet demand for Platinum and post-show ad inventory. - Confident in third quarter momentum with ad sales commitments pacing ahead of last year, and strong film slate for Q4 including tentpoles like Wicked for Good and Avatar: Fire & Ash.

National CineMedia's second quarter 2025 total revenue was $51.8 million. National advertising revenue was $41.2 million, accounting for approximately 79.5% of total revenue. Local and regional advertising revenue totaled $6.4 million, making up about 12.4% of total revenue. Programmatic advertiser volume grew by more than 50% quarter-over-quarter, with approximately 70% of second quarter programmatic advertisers new to NCM. Self-serve platform revenue was up more than 30% year-over-year.

• Third quarter revenue expected to be between $62 million and $67 million. - Adjusted OIBDA anticipated in the range of $7.5 million to $11.5 million, supported by higher utilization, disciplined expense management, and improving market dynamics. - Expect continued box office momentum in 2025, with Q4 driven by high-profile releases to reaccelerate box office attendance.

• Economic and advertising environment challenges, including caution among advertisers in key categories. - Tariff-related market uncertainty leading to hesitation and budget withdrawals. - Volatility in advertiser budgets, especially in sectors like automotive, CPG, and government, due to shifting economic signals and spending priorities.

Q: Eric Wold asked about Q3 guidance and strategic investing, with Chan Park and Ronnie Ng responding on Q3 pacing and expense management.

Q: Mike Hickey inquired about Q3 demand spillover and programmatic traction, with Thomas Lesinski discussing programmatic growth and Ronnie Ng on new business in Q3.

Q: Alicia Reese asked about Q3 guidance metrics, inventory forecasting, and local market expansion with Bullseye AI tech, with Thomas Lesinski and Ronnie Ng addressing these.

Q: Patrick Sholl questioned CTV impact, with Thomas Lesinski responding on programmatic efforts in the CTV space