National CineMedia, Inc. Q4 FY2025 earnings call

• Full year revenue driven by national advertising growth but CPMs adjusted. Local/regional ad revenue affected by early year trade pullback but offset by some category growth. Beverage revenue up due to increased attendance at ESA party exhibitors. - Total operating expenses down, but adjusted operating expenses up. - Balance sheet had $37.6 million of cash, etc. at end of 4th quarter, $12 million total debt due to acquisition of Spotlight. - Returned approximately $33.6 million to shareholders in 2025, including dividend program reinstatement and share repurchase. - 2026 Q1 has factors affecting comparability like calendar shift, reduced beverage revenue, and Winter Olympics impact, but advertising momentum intact with January revenue in line with prior year.

NCM's full year 2025 total revenue was $243.2 million, up 1% from $240.8 million in 2024. National advertising revenue increased 3.5% to $194.5 million, driven by a 21% increase in national impressions sold per attendee and 3% increase in attendance (partly due to an additional week in fiscal 2025), but national advertising CPMs were strategically decreased by 18% year over year. Local and regional advertising revenue was $34.6 million, down from $39.1 million in 2024, mainly due to trade-related pullback in some categories earlier in the year but offset by increase in contract activity in other categories. Full year beverage revenue increased 2.9% to $14.1 million. Total operating expenses were $257.1 million, down from prior year, but adjusted operating expenses were $204.2 million, up from prior year. Full-year adjusted EBITDA was $39.1 million, down from $45.7 million in the prior year.

• For Q1 2026, considering calendar shift (no 53rd week benefit), reduced beverage revenue due to contractual adjustments and exhibitor change, and tougher comparison due to Winter Olympics. - Expect revenue between $32.5 million and $36.5 million for Q1, adjusted EBITDA between negative $13 million and negative $10 million. - Believe investments in 2025 position NCM to capture growth from strong 2026 film slate including Super Mario Galaxy movie, etc.

• First quarter 2026 comparability affected by calendar shift (no 53rd week benefit). - Reduced beverage revenue due to contractual adjustments and exhibitor change. - Tougher comparison in February due to Winter Olympics.

Q: Eric Wold asked about forward bookings and benefit from AMC on average revenue per impression.

A: Upfront bookings up correlated to box office slate, scatter showing good signs now, AMC inventory is more expensive and beneficial.

Q: Patrick Scholl asked about 4Q softer than expected and make goods.

A: Higher ADUs as box office lower in 4Q, make goods to be fulfilled over next 2-3 quarters.

Q: Mike Hickey asked about correlation of ad business to box office growth, buyback, and political advertising.

A: Ad business correlated, buyback reviewed based on free cash flow, political advertising has upside potential.

Q: Alicia Reese asked about national to local advertising opportunity and political advertising change.

A: National advertisers looking at regional, not cannibalistic, political advertising has interest from select exhibitors with approval process needed and upside in key markets.