United Parks & Resorts Inc. Q3 FY2024 earnings call

• Strong demand for parks during normalized conditions, with adjusted attendance up ~3% when excluding weather and calendar impacts. - Record in-park per capita spending for the quarter. - Strengthened balance sheet by increasing revolving credit facility size and reducing cost. - Repurchased ~4.9 million shares since end of June, year-to-date ~9.4 million shares. - Successful Halloween season with record-breaking Howl-O-Scream attendance (excluding Tampa). - Announced new rides and attractions for 2025 across parks, including immersive flying experience at SeaWorld Orlando, etc. - Progress on mobile app with over 12 million downloads, 35% increase in app food and beverage transaction value. - CRM program generating incremental revenue. - International projects in progress, real estate hotel plans and other monetization opportunities. - Cost savings initiatives with ~$6M remaining in Q4, $20M planned for 2025, and $7M full-year run rate impact expected from 2024 initiatives.

In the third quarter of 2024, total revenue was $545.9 million, a decrease of $2.3 million or 0.4% compared to Q3 2023. Attendance decreased by approximately 100,000 guests or 1.4% due to a negative calendar shift and adverse weather (Hurricanes Debby and Helene). However, total revenue per capita increased 1.0%, with admission per capita up 0.5% and in-park per capita spending up 1.6%. In-park per capita spending was a record for the quarter, representing growth in 17 of the last 18 quarters. Revenue contribution by product segment isn't explicitly broken down in detail, but the focus is on park operations and in-park revenue.

• 2024 record revenue and adjusted EBITDA off the table due to significant weather impacts. - Expect to recapture weather impact in 2025 and grow with new attractions, events, and other initiatives. - Confident in returning to record performance in 2025 by leveraging new rides, attractions, and operational strategies.

• Weather impacts (hurricanes, heat waves) affecting attendance and revenue. - Competition in the Orlando market potentially impacting market share. - Inflationary pressures and labor cost fluctuations affecting operating expenses.

Q: Steve Wieczynski asks about 2025 EBITDA compared to 2022 and competition in Orlando.

A: Marc Swanson states 2024 record revenue/EBITDA is off the table due to weather, but expects to recapture weather impact in 2025 with new attractions and growth initiatives. On competition, notes past ability to grow in Orlando market, differentiation via unique products, value proposition, and relaxed experience.

Q: Matthew Boss asks about attendance trends and cost efficiency.

A: Marc Swanson talks about attendance recovery post-Hurricane Milton driven by Halloween program extension. James Forrester mentions continued cost initiatives including technology-driven labor efficiencies and utility/spend reductions.

Q: Jamie Hardiman asks about revenue to EBITDA and cash flow walk.

A: Marc Swanson explains revenue down due to attendance headwinds but per capita growth, and EBITDA down due to cost pressures and learnings from Q3. Cash flow details in press release.

Q: James Hardiman asks about real estate monetization.

A: Marc Swanson clarifies discussions around monetizing land beyond hotels, recognizing valuable land holdings and potential other development opportunities.

Q: Lizzie Dove asks about capital allocation and hurricane impact on EBITDA.

A: Marc Swanson mentions Board considering capital allocation, and hurricane Milton had a ~$10M+ EBITDA impact.

Q: Ben Chaiken's analyst asks about cash costs and working capital.

A: James Forrester says no concerns on working capital, Marc Swanson notes cost pressures and learnings for Q4.

Q: Paul Golding asks about weather strategy and Discovery Cove.

A: Marc Swanson talks about indoor attractions, shade structures, and Discovery Cove bookings trending up, recognizing its higher-yielding nature.

Q: Eric Wold asks about pricing and app penetration.

A: Marc Swanson says opportunity to grow pricing, and app has ~35% higher food and beverage transaction value, with room to grow penetration.

Q: Thomas Yeh asks about forward bookings and season passes.

A: Marc Swanson mentions 2025 intended date tickets up double digits, season pass units flat but premium passes up, with premium being a growing portion of pass offerings.

Q: Chris Woronka asks about CapEx ROI and dynamic pricing.

A: James Forrester talks about CapEx ROI in food and beverage, retail, and technology efficiencies. Marc Swanson mentions ongoing efforts in dynamic pricing via app and ticketing.