AMC Entertainment Holdings, Inc. Class A Aktie

Hello, and welcome, everyone, joining today's AMC Entertainment Holdings First Quarter 2026 Results Call. [Operator Instructions] Please note this call is being recorded. It is now my pleasure to turn the meeting over to John Merriwether, Vice President, Capital Markets. Please go ahead.

Thank you, Leo. Good afternoon. I'd like to welcome everyone to AMC's First Quarter 2026 Earnings Webcast. With me this afternoon is Adam Aron, our Chairman and CEO; and Sean Goodman, our Chief Financial Officer.

Before I turn the webcast over to Adam, I'd like to remind everyone that some of the comments made by management during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those that might be expressed today. Many of these risks and uncertainties are discussed in our most recent public filings, including our most recently filed 10-K and 10-Q. Several of those factors that will determine the company's future results are beyond the ability of the company to control or predict. In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned against relying on these statements. The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events.

On this webcast, we may reference non-GAAP financial measures such as adjusted EBITDA and constant currency, among others. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the Investor Relations section of our website earlier this afternoon. After our prepared remarks, there will be a question-and-answer session. This afternoon's webcast is being recorded, and a replay will be available in the Investor Relations section of our website later today. With that, I'll turn the call over to Adam.

Thank you, John. Good afternoon, everybody, and thank you for joining us today. I am so very pleased to report that AMC achieved our best adjusted EBITDA first quarter result since 2019 pre-pandemic, an adjusted EBITDA improvement of some $96 million year-over-year during the quarter. It was driven not only by strong domestic performance, but also by vastly improved international results across our European footprint. These results are a clear testament to our disciplined operating execution in maximizing AMC's revenue growth while simultaneously containing our costs, combined with having an unwavering commitment to elevating the moviegoing experience.

Let me reiterate our Q1 results for all to hear clearly. the best first quarter adjusted EBITDA in 7 years for AMC, up a whopping $96 million year-over-year and far, far, far superior to consensus estimates. Our much improved results clearly demonstrate the operating leverage that is inherent in our business, AMC's ability to generate markedly improving results at a time when revenues are rising. Significantly rising revenues indeed are our continued expectation for full year 2026. Finally, after repeated flat years, primarily due to the crippling industry strikes of 2023, the box office is back and in a big and powerful way.

In the first quarter of 2026, the North American box office surged an impressive 22% compared to the prior year. The first quarter box office, the strongest since the pandemic closed theatres back in the first quarter of 2020, ended on a high note in late March with Amazon Studios Project Hil Mary rocketing to become the top grossing movie of the year to that point and Amazon Studios highest grossing film ever. But that was just the beginning. The Project Hil Mary box office result was a 2026 only 12 days because the industry momentum grew even further as the second quarter has started off with 3 more blockbuster hits in a row with Illuminations, the Super Mario Galaxy movie, Lionsgate and Universal's Michael and Disney's -- the Devil Wear Prada 2.

There are so many more superb movie titles being released throughout 2026. Rather than regale you with a long list of impressive movies that will be coming out in the remainder of this year, let me just say this. At AMC, we've actually seen footage from the remarkable movies that are set to release. We believe that Disney has hits coming. Universal has hits coming. Warner Bros has hits coming. Sony has hits coming. Paramount has hits coming. Lionsgate has hits coming. Amazon has hits coming, so do A24 and Neon and Baker Street and Angel Studios.

This is a year where in our theaters, movie after movie after movie after movie after movie after movie will delight both our guests and our shareholders. They are both franchise movies and new IP. They are big movie titles in our immediate future, but also medium and smaller titles that also look to have real consumer appeal. We could not be more optimistic about the entire 2026 film slate, especially in the second half of 2026, which we believe will see more continued robust growth, adding up to a record post-pandemic box office for full year 2026.

The domestic industry box office so far in '26 is already up about $300 million year-over-year. And as we look ahead, we think it's easy to forecast that the full year number for 2026 could be somewhere between $500 million and $1.2 billion bigger than that of 2025. If that's not enough, foreign language films in Europe are also doing particularly well and AMC's improving international performance in Europe so far in 2026 is particularly encouraging.

What's crucial about all this industry growth is the operating leverage inherent in AMC. Combining the commercial appeal and outsized performance of so many AMC theaters across the U.S. and Odeon cinemas in Europe, our commanding industry lead in offering premium screens with almost a maniacal focus on reining in our costs. We have repeatedly demonstrated in prior quarters that where there has been significant industry growth with industry revenues rising, then AMC's adjusted EBITDA correspondingly can soar.

Turning from our income statement to our balance sheet. Ever so importantly, AMC has been actively working to strengthen our balance sheet by enhancing liquidity and improving financial flexibility. As you know, we recently refinanced $400 million of debt that was due in 2027, now extending that maturity by 4 full years to 2031, while simultaneously reducing our annual cash interest expense in the process. We are also currently converting some $155 million of our debt into equity as we speak.

To bolster cash reserves, we raised approximately $72 million of gross proceeds in the first quarter through our at-the-market equity program. And also during the first quarter, we also opportunistically sold a portion of our holdings in Hycroft Mining at an average price of $42.40 per share, realizing approximately $30 million in cash proceeds. When combined with our prior sale of Hycroft shares and warrants in the fourth quarter of 2025, AMC has now generated approximately $54 million of cash from the sale of Hycroft shares and warrants, well north of our initial total of $27.9 million invested in Hycroft.

In addition, AMC continues to retain approximately 129,500 Hycroft shares to participate in potential future upside at Hycroft. Taking all these actions together from balance sheet item after balance sheet item after balance sheet item, AMC obviously has been vigorous in addressing the need to further right our balance sheet. With that, I'll turn the call over to Sean Goodman, our CFO, who will walk you through our financial results in Q1 in more detail. I'll then return afterwards to provide some additional, and I might add, very important updates. Sean?

Thank you, Adam, and good afternoon, everyone. The first quarter box office was indeed the strongest start to year in 7 years as we welcomed 47.6 million guests to our theaters across the globe. This represented a 13.6% increase over last year. The operating leverage in our business when coupled with growth in our per patron performance metrics and operating efficiency resulted in first quarter adjusted EBITDA growth of $96 million and the achievement of a post-pandemic first quarter adjusted EBITDA record of $38.3 million.

In Q1, we set per patron records in admissions revenue, food and beverage revenue and total revenue in both our domestic and international businesses. and we exceeded $1 billion in consolidated Q1 revenue for the first time since 2019. Our consolidated contribution margin per patron, which is representative of the profit generated per incremental guest grew 6% over last year to a record of $15.19. This measure is now 57% higher than the first quarter of pre-pandemic 2019, underscoring the meaningful improvements in the business over the last few years. This is why the box office does not need to fully recover to pre-pandemic levels for us to be able to achieve pre-pandemic levels of adjusted EBITDA.

Domestic total revenue per patron is now up 53% versus Q1 of pre-pandemic 2019 and domestic contribution margin per patron is up 67% compared to Q1 of pre-pandemic 2019. When reviewing our international operations, you should note that Q1 2026 results were impacted by a year-over-year increase in foreign currency exchange rates of approximately 10.8%. International revenue per patron is now up 34.5% or 31.4% in constant currency versus Q1 of pre-pandemic 2019. And international contribution margin per patron is up 38.6% or 35.4% in constant currency compared to Q1 of pre-pandemic 2019.

Our results for the quarter reflect the box office growth combined with the impact of strong performance from our innovative loyalty programs, success with our pricing strategies, leadership in premium large formats, continued enhancements to our food and beverage offerings, disciplined operating efficiency and ongoing optimization of our theater portfolio. We continue to actively reshape our theater footprint by investing in facility upgrades, proactively securing improved lease terms closing underperforming locations and selectively adding theaters to meaningfully strengthen the overall quality and profitability of our circuit.

During the first quarter, we closed 5 locations and opened 1. And since 2020, we have now closed 218 locations and opened 66 for a net reduction of 152 theaters for approximately 15% of our portfolio.

Looking at the balance sheet. We ended the first quarter with $339 million of cash, excluding $42 million of restricted cash. And as previously noted, our working capital cycle follows box office seasonality. So typically, we generate cash in the second and fourth quarters, and we use cash in the first and third quarters, with the largest outflow occurring in the first quarter. This pattern held true for the first quarter of 2026, contributing to our cash burn.

Balance sheet strength continues to be a priority with a focus on maintaining liquidity, extending maturities, lowering borrowing costs and reducing debt and leverage, while still continuing to invest in our core business to enhance the moviegoing experience. To that end, as Adam noted, this quarter, we successfully raised approximately $101 million through our at-the-market equity offering plus the sale of Hycroft shares. The capital raised is being used to both strengthen the balance sheet and invest in initiatives that elevate and differentiate the guest experience.

Following the successful refinancing of $400 million of 12.75% debt maturing in 2027 with a new $425 million first lien term loan at 10.5% that is due in 2031, our sole remaining debt maturity prior to 2029 is $125.5 million of 6.25% unsecured notes, which mature in 2027. And of course, our balance sheet is further strengthened by the announcement earlier today that approximately $155.8 million of senior secured exchangeable notes due in 2030 are converting into equity, yet another step along our path to reduce debt and improve financial -- from a capital expenditure standpoint, CapEx net of lease incentives was $28.4 million in the quarter, and our 2026 CapEx guidance remains the same, between $175 million and $225 million net of lease incentives.

So in summary, the first quarter reflects a very strong start to the year with growth in attendance, coupled with record per patron revenue and per patron profit driving significant improvement in adjusted EBITDA. All of this positions us very well as we move into what we expect to be an increasingly robust box office environment as we progress through 2026. And with that, I'll turn the call back over to Adam.

Thank you, Sean. Before we go to your questions, I want to briefly address 5 key topics that are important indicators of the progress being made at AMC. First, the 2026 film slate is bigger, bolder, deeper and more visually spectacular than what we've seen in many years. These are exactly the kinds of films that demand to be seen on the big screen in premium large-format auditoriums, such as AMC's 225 IMAX at AMC auditoriums, our 181 Dolby Cinema at AMC screens, our screen ex at AMC and 240x at AMC screens, along with our house brand, 47 primate AMC screens in the U.S. and 83 iSense auditoriums at Odeon across Europe.

They all join our 3,543 laser at AMC equipped screens and our 168 XL screens across the world. I'm giving you these numbers to remind you of the salient fact that no one has more premium screens than AMC. And with the AMC Go plan, we are not standing still on these quantities. We are yet again still significantly expanding the number of our premium offerings and adding even more laser projection technology. We also will be looking to increase the number of theaters, especially in the United States that offer our far more comfortable branded AMC Club Rocker seats, which have been the secret of our success at 3 notable theaters, Empire Lincoln Square in Manhattan and Burbank in the Los Angeles market, which continually rank week after week as being among the absolute highest grossing theaters in the entire country. We think they own much of their success to the Club Rocker seats and we will be taking these club Rockers to many more of our high-potential theaters.

Second, speaking of our commitment to innovation. Since 2023, with AMC's sensational partnership with Taylor Swift, AMC has gotten more and more involved in bringing musical artists in some shape or form to theaters. Taylor & Beyonce, Usher and Billy Eilish and Nicole Scherzinger are just some of the musical grace who have graced AMC screens either with concert films or album release celebrations.

Today, I am especially excited to unveil something that is brand new to you all that AMC will be taking music to a whole new level. We are announcing today a wholly new product line, Arena 1 at AMC. Starting this June, right around the corner, AMC Theaters will offer a truly groundbreaking shared live concert experience from day 1 across more than 300 AMC theater locations in 89 markets nationwide. Arena 1 at AMC will deliver exclusive real-time interactive live concerts where our artists will perform live from a purpose-built stage and grade and engage directly with audiences inside our theaters across the country. This is a highly immersive commuter experience, combining the energy of a live concert with the scale, comfort, accessibility and affordability unique to AMC. We believe that this innovation can open an entirely new chapter in live entertainment while driving incremental attendance and revenue across our circuit.

Fascinatingly with our Arena 1 at AMC experience, it is a 2-way experience between the artist in a live stage remotely and the concert goers all across the country in our various Arena One and AMC Equipped auditoriums. We are also excited to say that for the immediate future, this is an exclusive AMC offering. Arena One will only be available at AMC. Only available that is until we launch in the United States in June because shortly thereafter, we will be taking Arena One and AMC also to some 260 Odeon theaters in 9 countries in Europe as well. This new live concert experience is an initiative that represents a major announcement by AMC Entertainment.

The third topic for today, I also want to address the rapid developments of late as to exclusive theatrical windows. The momentum in the industry is palpable with renewed commitments by our studio partners to both increase the number of theatrical movie releases and to extend theatrical windows to at least 45 days. Joining Disney, which has been constant and respecting an exclusive theatrical window heretofore, -- we are particularly pleased by the recent announcements by Universal and Paramount to do the same. We are appreciative of the public commentary by Sony and Lionsgate that a new industry standard is both needed and is emerging.

Recognizing Paramount's commitment in this area, for example, this is one of the key reasons why we at AMC embraced Paramount's bid to move forward transaction. This is such good news for the movie theater industry, and we are pleased that AMC has played a central role in pushing this entire initiative of respecting longer theatrical windows forward. But the real heroes here supporting our industry, especially on this windows topic are the people who have really stepped up. Alan Bergman at Disney, Donna Langley at Universal, Tom Rothman at Sony, David Ellison at Paramount now and eventually on behalf of Warner and Adam Folson at Lionsgate, all deserve credit for having a long-term view of restoring the health of our entire theatrical ecosystem.

The fourth topic for today, the significance cannot be lost by anyone of Netflix's announcement that in February of 2027, just 9 months from now, we will be giving Greta Gerwig Narnia a global theatrical release with a 49-day window. This is the biggest opportunity our industry has ever had to embrace Netflix as a theatrical content provider. Since our announcement at AMC in October 2025 that AMC and Netflix would be working cooperatively and collaboratively, we've had several joint projects, which have been immensely successful for both companies. Netflix is well aware that AMC is solidly in their corner. We are all in with respect to Narnia, and we enthusiast more opportunity for our 2 great companies to work together in the future.

And finally, fifth, it is so encouraging to to remind you all that in just the past few weeks, film producers have reached multiyear labor agreements with both SAG AFTRA and the Writer's Guild, assuring us all of labor peace for several years ahead. This means that the self-inflicted wounds of 2023 are not being repeated. To be sure, as we have said so often before, at AMC, we're not entirely out of the woods yet. Challenges remain, but the indicators that we are seeing today point to a stronger and improving 2026. Indeed, it seems to us that so much has been breaking our way of late.

And remember, above all else, two words: operating leverage. As revenues grow, which we believe they will, there is a very significant impact on AMC's bottom line financial performance. With that, let's turn the call over to our operator to poll for questions, both from equity research analysts, and Sean will also give me some of the questions that have been submitted by our retail shareholders.

[Operator Instructions] Our first question is with Eric Wold with Texas Capital.

A couple of questions. I guess, first off, on Arena 1, I'm not sure how much more you can share about kind of briefly about the economics behind this and technology spend required. Is this -- the purpose-built stage something that you will own and be responsible for? Is this something that eventually will go more widespread? And is this geared towards artists currently on tour, looking to reach markets where they're not going physically? Or is this something that's kind of more for artists kind of doing this as one-off performances?

Thank you, Eric. I'm happy to comment. There is a separate press release going out about Arena 1 sort of concurrent with this call, so you'll get more detail. We really are blown away by the technology where the artists performing in this purpose-built stage can actually interact with our audiences all around the country and eventually in Europe.

The business proposition is so appealing. As you know, we've done a lot of things with -- even as we shave down our capital expenditure program, and we were able to get Arena One implemented with essentially no upfront spending by AMC. The economics are this is a rev share model where AMC will retain a significant percentage of the admissions revenue and the food and beverage revenue that occurs in our theaters. And Arena 1 will also get a significant percentage of the ticket revenue that we generate.

For concerts, these things will be cheap. -- but they're not going to be priced at movie theater levels. The prices will vary by artists and by market, but I wouldn't surprise -- be surprised if we see ticket prices in the $40 to $75 range. As I said, that's very inexpensive when you look at what it costs to actually attend a live concert in an arena or a sports stadium. Another benefit of the Arena 1 experience, unlike when you see a live concert in a large 20,000-seat arena or a 70,000-foot stadium, it feels to you like you're sitting in the front row because like the artist is right in front of you.

So the product is great for consumers. The economics are favorable, both for Arena 1 and for us. And in terms of the artists who do it, we think we'll see whole sets of artists who will come to our studio. There's a massive complex in Eastern Pennsylvania who will perform the Arena 1 audience. We're creating in the neighborhood of 0.25 million seats available to Arena 1 concert ticket buyers if you add in our U.S. and European theaters. This is a very exciting initiative and that we got this done as an exclusive for the foreseeable future, that makes it just that much better for us.

Perfect. And then just my follow-up question, kind of going back to the contribution margin per patron and kind of the growth you've experienced since pre-pandemic. To get the numbers right, 57% in the U.S. and 39% international, that was ex FX or not. But maybe talk about your thoughts on closing that gap overseas, the opportunity to do that, maybe what's been holding back the growth there? Or maybe said a different way, what's been driving the stronger growth here versus overseas? And where are you with various ticketing and concession strategies overseas that could kind of help to close that gap in the coming years?

Well, both Sean and I will take this question. Historically, our guests in our European theaters spend less on non-ticket type purchases in the buildings. So it's not surprising to me that our U.S. performance would be higher than our European performance. But we think that both numbers are great. The fact that we were able to drive up per patron contribution by so much in the U.S. and so much in Europe, we think they're both items of success. Do you want to add anything?

Yes. I think the U.S. has benefited from two areas that are a little bit different to the international business. The first is the U.S. business has benefited from the renegotiation of our screen advertising contract with National CineMedia. So that has helped our other revenue per patient. You don't see that sort of impact in the international business. The second is when you look at food and beverage, which is obviously a huge driver of this area, the U.S. is a little more ahead in terms of merchandising food and beverage revenue with the popcorn and collectible concessions. Europe is catching up in that area.

And I think you saw this last quarter, Q1, look at the European growth rate. It's quite phenomenal actually, like in excess of 6%, and that's in constant currency, I think over 18% outside of constant currency. So you're seeing some catch-up in Europe, which is pretty exciting. And then I think there's an opportunity from an average ticket price point of view, we have had more competition on ticket pricing in Europe, but that is starting to normalize. So we're seeing some benefits there. And you're going to see more variable type of pricing in Europe where it is more accepted than in the U.S. market. And I think that gives us opportunities in Europe as well.

And while we're talking about Europe, Eric, I just want to say that the first 4 months of the year, the first quarter that's reported and what we've seen with the successful movies in April, Europe has been gangbusters successful for AMC this year. Like we've been blowing through our budgets in Europe. week after week, month after month, we're so encouraged by our strong performance across our European network.

We'll take our next question from Mike Hickey with StoneX.

John, great quarter, guys. Congratulations. First quarter -- first question from us, Adam, a lot of wins for you, a lot of progress from you and your team here. Looking at the window situation, I guess that's a win for the whole industry, strong box office. Your debt situation has improved dramatically. A lot of work on your guys' part. You've optimized your network. You've been innovative with Arena One and you stay disciplined on CapEx. So Adam, I guess the question is, if you can sort of give us an update on your path to free cash flow, milestones, maybe timing? And then the follow-up would be thinking about Arena 1 here. Depending on how you think you can scale it, if that will sort of lower maybe that box office target that you would need to get to be free cash flow positive? And I have a follow-up.

So I'll let Sean talk about free cash flow positive and milestones along the like. But I want to just point out one thing to everybody, nice of you to list the sort of the getting things done on the to-do list. We put a lot of personal capital into play to convince studios to lengthen windows. Our cooperating with Netflix has been a major change. As I said on the call, things really seem to have been breaking our way of late. But I just want to talk about the balance sheet for just a second.

I would remind everybody that in the quarter, we just completed, especially with this $155 million debt-to-equity conversion that was announced this morning, that lowers our long-term debt to about $3.9 billion. Our debt going into COVID was over $5 billion. And when you add it in all the deferred rent obligations that we picked up in the closed year of 2020, by the time we ended 2020, we had over $6 billion of either actual long-term debt or deferred theater lease obligations that we've gotten rid of 1/3 of it is especially in a suboptimal box office environment the past several years, we think it's just a superb accomplishment. And we obviously have been paying attention to driving our income as best we can and to improving our balance sheet as best we can. And as we look back on the last crazy 6 years, but the good really threw our way with COVID and its aftermath, we're very proud of what we've accomplished at this company. As for free cash flow milestones, Sean?

Yes. Thanks. We are very focused on taking steps each day really to reduce the level of box office required for us to be free cash flow breakeven or free cash flow positive. And if one looks back to pre-pandemic, the box office required to be free cash flow positive was significantly, very significantly higher than it is today. And that's despite the fact that 6, 7 years have passed, costs have increased significantly. Our debt service costs are also significantly higher than they were pre-pandemic as well. So that just gives you an indication of what has happened in the business to reduce the required box office to be free cash flow breakeven.

And I said in my prepared remarks, and I've said it a number of times that we don't need the box office to get to pre-pandemic levels. to reach the same level of EBITDA as we had pre-pandemic. And that is certainly the case as our profit and contribution margin per patron improves over time. A reference point that one can look at to get an indication of where we are from a box office/free cash flow perspective is look at the last 9 months of 2025.

Last 9 months of 2025, we were not only free cash flow breakeven, we were free cash flow positive. Now there are some working capital benefits in that period of time that you can adjust for. But that just gives you an indication of where the business is at the moment. And I'll add one other thing is that as the box office improves, automatically, our interest rate on about $2.9 billion of debt reduces because inherent in the covenants or debt agreements that we have there is that the coupon or interest on that debt declines as our leverage improves. So that will help us as well.

And Mike, to your question about Arena One, we know the technology works, and we know the economics work because our investment was upfront was like nonexistent and it's a revenue share basis, which is sort of the whole model of our industry with studio partners. I think that what will determine -- well, we know that Americans and Europeans like to go to concerts, and we know that they pay up for it. So I think ultimately, the real success of Arena One will be based on what artists we attract to have these live concert events that are broadcast to 600-ish theaters in the U.S. and Europe.

But we're quite optimistic. And as we said, we believe this is going to be a very profitable activity for us and one that we have on an exclusive basis and one that we think has a great potential opportunity to deliver real dollars to the bottom line.

The second question from Ross is on film volume. CinemaCon, obviously, a lot of action this year, Adam. the Paramount Warner Bros. deal. David, I think, made a really compassionate pitch to you and your peer set exhibitors at the conference really sort of committing to that 30 films and 45-day window. But there also seems to be a healthy amount of skepticism just from history, I guess, on their ability to execute on the 30 films. So just curious if you could sort of frame that for us. I'm guessing if they got close, it would be a win, but curious your view on their ability when you talk to David for them to deliver on that promise.

And then on Netflix, just sort of trying to -- it's obviously very exciting and -- but also, I think there's some pushback maybe this is just a one-off led by Gretta. So just wondering when you talk to Netflix and Ted, the appetite you see from them in terms of putting additional films into exhibition? And if you think that the sort of 51-day window to streaming is a workable model for other films in the future as well?

So let me talk about Paramount first. We've had private conversations with Paramount for months and months at the highest levels. And the -- what you described as the sort of passionate commitment that David made at CinemaCon in front of 5,000 people in the auditorium. He and the people who work for him made those same commitments to AMC privately in the days, weeks and months previously. and we believe them. And we have great respect for the leadership at Paramount -- I that, looks like we have a great respect for the leadership team at Warner. They had a sensational year in 2025. And we strongly hope that the filmmakers at Warner stay because they're great. And we have enormous confidence and trust in the leadership under David at Paramount. And we believe that he is fully committed to the promises that he made and fully capable of pulling them off.

As for Netflix, again, there's been a tremendous amount of top-to-top diplomacy between the 2 companies that dating back to the fall of 2025. At AMC, we were very pleased to have participated in 3 projects with Netflix, the K-pop bring back at Halloween, the Stranger Things season finale of New Year's Eve and the introduction of new episodes of one piece just a couple of months back. The success of those 3, I think, is one of the reasons, not the only reason, but one of the reasons that Netflix is trying to see what happens with Narnia.

I believe that the three things that we've done already with Netflix have been successful, that Narnia will be successful, that we will find other successful opportunities to work with Netflix. And what this leads to, I'll leave you all to speculate amongst yourselves. It's not my place to talk to sort out what or announce what is or is not Netflix's strategy. But I can tell you that the interpersonal dynamics that have existed between Netflix and AMC since September of 2025 have been very positive. And both companies have said repeatedly, both publicly and privately that we are looking to do more together.

We'll move on to Brad Beynon with Macquarie.

This is Chad from Macquarie. I wanted to ask about the merchandising opportunity. [Technical difficulty] Think about the merchandising opportunities, Adam, I know you talked about this business, which kind of went from nothing was on its way to approach $100 million in '25. It seems like based on just looking at the titles and the content throughout the year, there should be another big merchandising year. But wondering if you could help us think about kind of what you have in store and how this business can continue to grow as more people come out to the theaters.

Well, if you judge by the number of people who wanted Prada perse popcorn bags, there is no end to the consumers' desire to have more movie themed merchandise at our theaters. I think that we are fully capable of driving 20% growth per annum in this merchandise business, and that's before Arena. And we also know that merchandise is very popular amongst live concert goers. So as you said, Chad, in 2022, our revenues were like nothing. And it's a $100 million a year business for AMC currently, and it's going to continue to grow.

Okay. And then just in terms of the convert, what the thinking was to strike that now given where the balance sheet is and the outlook. I know there's always working capital shifts. Sean, you talked about that. But what was the reasoning for executing the convert deal this week?

Yes, Chad, in terms of the agreement for that exchange note, there is a mandatory conversion provision based on our share price. So our share price achieved the targets for the mandatory convert, and therefore, we were able to convert that debt into equity. The benefit of this, of course, is it takes $155.8 million of debt off the balance sheet. There were also various covenants associated with that debt that with that no longer on the balance sheet, that frees us up to be even more opportunistic going forward in terms of refinancing opportunities that we may have.

And given -- just a little aside on that, given the refinancing of the $400 million of debt due in 2027, we now can be completely opportunistic in terms of taking advantage of lower interest rates and extending maturities when those opportunities arise. We're not forced into a situation of having to refinance based on coming up maturity.

And Chad, when you remember how much of our debt was due in 2026 and 2027 we've moved to around $3 billion to a maturity in 2031. And we '29 or '31, I should say. And we have a sizable amount of debt that's currently due in '29, which is a long time from now, but we do believe that as AMC's -- well, let me just go back to operating leverage. If the box office is going to grow, then AMC's EBITDA is going to grow. If our EBITDA grows by definition, our leverage levels fall. If our leverage levels fall, we ought to be able to refinance some even our '29 debt at significantly lower interest rates and push their maturity out further. So I do think our management of our balance sheet has been one of our most important success stories of the past few years.

We'll move on to Patrick Sholl with Barrington Research.

You provided a lot of detail on the screen base. I was wondering if you could provide just a little bit more on just where you think you are in that process of kind of rightsizing the footprint for profitability.

Yes. I think the press has misunderstood some of the comments we've been making. I saw articles after the last quarterly earnings call that AMC was "closing theaters. That's not the way to look at this. The way to look at this is AMC will constantly be pruning the fleet, which is to say that about 10% of our leases come up for renewal every single year. So when we look at those theaters, -- some number of them are huge home run winners. Some number of them could be more profitable if we can renegotiate rents with theater landlords. And some number of them are just like older buildings that are now 20, 30 years old. They may not be in ideal locations. They might have been in ideal locations when they were built 25 years ago, but not today. And so it makes sense to let them go.

At the same time, we are also adding new theaters. And I mean, I would point out that the 60 theaters that we -- these are round numbers. The 60 theaters that we opened in the last several years outgrows to 200 theaters that we closed. So I don't see this as like what's the right size of our footprint. I think that this is a perpetual business strategy that as our theaters come up for renewal consideration every single year, we're going to be thrilled to renew some. We're going to talk hard with landlords with others, and we'll close others. At the same time, all that's going on, we'll continue to look for either more new build theaters or more spot acquisitions where we can add theaters to our footprint that we think are economically attractive to do so. Think of it as you open shiny new theaters and you close older, more tire rooms. That's that's -- I think that's something that will be year in and year out for years, if not decades to come.

Okay. And then just on the shift in windows, do you think there's any sort of like consumer relearning that needs to happen with just like the longer windows? Or how do you guys expect that to sort of ultimately impact like the tail of box office searches overall...

Without attributing it to the studio executives who said it, I was at an industry-wide conference a few weeks ago, and the head of one of major studios said that we are going to retrain the consumer that movies will be in theaters longer and the movies will be going to the home at a slower pace. And there are actually 2 windows to pay attention to, not one. We all talk about the 45-day window as a short end, but there are 2 windows. The first is the so-called PVOD window, the premium video on-demand window, which is when movies go to the home where consumers can pay to watch that movie, often those movies are priced at $20 for a home viewing.

But also the same studios who have been committing to a 45-day window many of them have also committed to a 90-day SVOD window or subscription video-on-demand window. And that's when -- not when the movies go to the home where people pay for it to watch it, but it goes into subscription services where once you pay your monthly membership fee upfront, the cost of an incremental movie is 0. And in the minds of many consumers, they're paying nothing to watch a movie at home.

It's just as important to us that the 90-day window go into play because it's giving the opportunity for theater operators, AMC included, to convey a sense to consumers that if you want to be part of this global phenomenon of seeing a movie when it's hot, you got to do it in the theater and you can't wait until it comes to the home. And that's something that's quite different than movies going to the home at 17 or 21 or 25 days after initial release.

At this time, I'd be happy to return the call to Sean Goodman.

Thanks, operator. Adam, given the time, we'll just address 1 or 2 of the retail questions. But the first question here, very high-level broad question about we have a lot of growth opportunities, and there's a lot of things we talk about. Question to sort of prioritize what are the key growth areas that you're focused on?

There are so many. There's so much opportunity within this company because of the operating leverage that I talked to in the call. As our revenues rise, our EBITDA rises at a faster pace. And what we've been fighting for the last 3 years is that revenues have been -- for the industry have been flat. That seems to be changing fairly dramatically in 2026. So we're looking, of course, at just the fact that there are more films coming out with bigger consumer appeal where we can attract more guests to our theaters, which means we can sell them more for food and drink, and we can introduce merchandise that we have over the past couple of years. As one of the things that we have obviously noticed is that our premium large-format screens command higher prices and sell first.

Just the other day, when Michael came out, 10% -- sorry, the approximately 48% of our revenues for Michael opening weekend took place on premium large-format screens, even though premium large-format screens are only less than 10% of the total screen count. Like these are stunning numbers. So we've obviously already figured out ways to significantly increase the number of premium large-format screens. We created XL extra large screens out of thin air of whole cloth 2 years ago, and we now have 168 of them. I would not be surprised if we don't double that count of XL screens by the end of next year.

There's also the opportunity, I believe, as I mentioned on our call, to put in better seating at some of our most productive theaters. These new club rocker seats that we put in at Empire and Lincoln Square and Burbank, they are not recliner seats. So we don't have the 40% seat loss that we have when we put in recliners, but they're wider, they're much more comfortable. guests love them. And we've already identified 30 of our highest grossing theaters where we can put these seats in at pretty inexpensive capital costs because you don't have to renovate the whole theater or build new platforms, you're just putting in new seats themselves. So on and on, it's sort of opportunity after opportunity after opportunity.

I also think there's opportunity to make our marketing programs even more potent than they are today. As many of you know, A-List is a smash hit, especially among Gen Z moviegoers. We just in the last week, crossed 1 million people who are members of our A-List program. Our Stubs program, which is our loyalty program, which has 39 million member households, -- it only had 2 million member households when I joined this company 10 years ago, Stub is a static program for us. There are some evolutions in the Stub program that we think we can introduce later in 2026 that will appeal to people going to see, let's call it, 6 to 15 movies a year, which is a slightly different audience than our A-List crowd who tends on average to see more like 30 movies a year.

So just -- there's so much opportunity for this company. And not the least is there's pricing power in this business. And there's pricing power both ways. The fact that people are willing to pay more to -- and that has been the case traditionally, to see movies in our premium large format and extra large format screens. That's encouraging. I'll also tell you that in July of last year, we significantly upped our game by introducing discount Wednesdays in addition to discount Tuesdays, rebranding both as 50% off Tuesdays and Wednesdays. That's been a major, major positive for AMC.

So it's an example where price -- taking prices down has actually worked for our company as well. In the interest of time, we're over an hour, and that answer to that last question sort of touched on a lot of things that you might have asked me, Sean. So I think at this point, we're going to let everyone run from this call.

We thank you much. This was a great quarter for AMC, the first quarter of 2026. It was our best quarterly results for the first quarter in 7 years. Our EBITDA was up $96 million year-over-year, quarter-to-quarter. And it reminds us all how much operating leverage there is in this business. If revenues rise, which we believe firmly that they will, knowing the movie slate that's coming for the rest of this year, it's a very good news story for AMC going forward. Thank you for joining us today, one and all.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Hello, and welcome, everyone, joining to today's AMC Entertain Holdings, Inc. Fourth Quarter and Full Year 2025 Earnings Webcast. [Operator Instructions] Please note this call is being recorded. [Operator Instructions]

it is now my pleasure to turn the meeting over to John Merriwether, Vice President, Capital Markets. Please go ahead.

Thank you, Stephanie. Good afternoon. I'd like to welcome everyone to AMC's Fourth Quarter and Full Year 2025 Earnings Webcast. With me this afternoon is Adam Aron, our Chairman and CEO; and Sean Goodman, our Chief Financial Officer.

Before I turn the webcast over to Adam, I'd like to remind everyone that some of the comments made by management during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those that might be expressed today. Many of these risks and uncertainties are discussed in our most recent public filings including our most recently filed 10-K and 10-Q. Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict. In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned against relying on these statements. The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events.

On this webcast, we may reference non-GAAP financial measures, such as adjusted EBITDA and constant currency, among others. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the Investor Relations section of our website. After our prepared remarks, there will be a question-and-answer session. This afternoon's webcast is being recorded, and a replay will be available in the Investor Relations section of our website at amctheatres.com later today.

With that, I'll turn the call over to Adam.

Before I begin today's call, I'd like to make a personal comment, if I can. As you undoubtedly know, in early December, upon my return to AMC's home base in Kansas City, I put out a press release, which advise you all that just before Thanksgiving. During a business trip to London, I suffered a mild stroke. Fortunately for me, I got immediate care had a superb London hospital run by the United Kingdom's National Health Service, and it was envisioned that I would have a speedy and full recovery. There was no cognitive problem at the time of the stroke. No issue with reasoning or logic or decision-making or memory other than that for a day or so, I completely lost my ability to speak. That was 14 weeks ago [indiscernible] solves my voice today. My voice is back and that I am in fighting shape and fully ready to do battle.

Speaking of which, let's talk about AMC. As we close the books on 2025. One thing is clear. This was a year of meaningful progress with AMC, both operationally and financially. While it is frustrating for us, that the industry recovery unfolded at a much more measured pace than many, including ourselves, originally expected or holds. Even so, the trajectory clearly remained positive, and AMC once again distinguished itself through consistent outperformance, exceeding the expectations of many who doubted us. Even in a softer industry environment for the fourth quarter of 2025, where the North American box office declined by some 4.4%, AMC nonetheless, demonstrated strength and resilience.

For the fourth quarter, AMC generated approximately $1.29 billion in total revenue, $134 million of adjusted EBITDA and notably $127 million of cash from operating activities along the way, especially our domestic U.S. theaters once again delivered with a 140 basis points of industry outperformance as we continued to capture increased market share. That's a testament to the strength of the marketing and loyalty platforms at AMC, the growing consumer preference for our entry leading premium large format and extra large-format offerings and our commitment to deliver the very best in theatrical entertainment experiences.

We believe that AMC has a powerful and commanding market lead. Our market share confirms that AMC represents more than 1 out of 4 of all the box office dollars generated in the United States. AMC is about 50% larger in size than the second or the third largest U.S. players. And everyone else in our highly fragmented industry, has only a 1% or 2% market share or even less than that. Sean will discuss our full year financial results in more detail. But let me point you to this.

In 2025, continuing an improvement trend that has been the case for several years now, we worked so hard at AMC to make our company more efficient. Globally, our attendance in the full year was down 2.1%, but our adjusted EBITDA was up 12.7%. That's a striking contrast. And there's so much operating leverage in our company. I cannot emphasize this point enough. The operating leverage in our company is meaningful. Approximately 2/3 of the incremental revenue dollar drops down to the adjusted EBITDA line. So if and when our revenues are growing, our adjusted EBITDA at AMC can grow and do so meaningfully. That's our expectation for 2026. No one's crystal ball is perfect, but most knowledgeable forecast testers have the 2026 movie slate being considerably richer than that of the past 3 years. Or for that matter, the past 6 years, and that is so vital because, candidly, the economic levels that we experienced in 2025 are simply not sufficient to carry the day.

But in -- looking to 2026, we are optimistic, and we are confident. Disney and Universal have what looked to be fabulous movie slates. Warner Brothers says that it will be releasing more movies in 2026. Paramount says that it will be releasing more movies in 2026. Amazon MGM says that it will be releasing more movies in 2026. Theatrically, even Netflix has the capability to be releasing more movies and smaller operations like A24 and Angel Studios, among others, also seem poised to embrace theatrical exhibition with ambition.

With an increased count of widely released film titles coming out in 2026. It is our firm expectation in AMC that the industry box office will grow markedly in 2026 that AMC's market share will remain compelling and that the very real operating leverage inherent in our business will kick in such a way that it can cause dramatic improvement in AMC's financial results.

2026 has only just begun, but encouragingly, January was off to a strong start with the North American box office up approximately 16% compared to last year. And growth in the European market has been even more significant. Across the 12-month a year ahead, the film slate is shaping up to be one of the most compelling in recent memory, anchored by an extraordinary lineup of films that could only be described as a parade of juggernauts that are ideally suited to AMC's industry-leading network of highly productive, high-grossing theaters.

Based on the strength of the upcoming release slate. We believe that the North American box office in 2026 could increase by approximately $500 million to as much as more than $1 billion greater than was the case in 2025. And as I just articulated, and as previously reported AMC financial results prove out to be true with rising revenues, the growth in AMC's adjusted EBITDA can be substantial.

I'm not going to take you through the list of 2026 movies title by title. That impressive cavalcade should play out during the year. Suffice it to say, though, that we expect to see a rising industry-wide box office in 2026, the biggest since 2019. And with the operating leverage of incremental revenues translating to incremental adjusted EBITDA, rising 2026 revenues bode well to engender a material and positive impact on AMC.

I do want to be clear though that we will likely need at least a strong 2027 film slate as well which we do expect, by the way, for AMC to be cash flow positive in the outer years, but the considerable progress that we expect to make in this year 2026 should fill us all with heightened confidence as to our future.

Now let's turn from operating leverage to financial leverage and the improvements taking place within the AMC balance sheet. Strengthening the AMC balance sheet remains an extremely important strategic priority for this company. Since the end of 2020, AMC has reduced total debt by approximately $1.8 billion, including a $1.4 billion reduction in the principal balance of our outstanding debt and an additional $420 million repayment of COVID-related theater rental lease deferrals.

During 2025, AMC continued to take capital markets actions to strengthen our balance sheet and prepare for the anticipated box office recovery that we think is coming this year. In July of 2025, we closed a series of transformative transactions, including receiving more than $240 million in cash from new debt issuance. And the equitization of $183 million in debt with the potential to equitize even more up to a total of approximately $337 million. These transactions address all, I repeat, all of our 2026 debt maturities, pushing them out to 2029. In addition, just last week, we launched yet another transaction to refinance another approximately $2.4 billion of our debt. If successful, that refinancing will extend the maturity of that debt from 2027 and 2029, all the way out to 2031.

Simply put, at AMC, we continue to do exactly what we said we would do, take a decisive action for AMC Entertainment to fortify our financial foundation to bolster our tax reserves and to enhance our flexibility.

With that, I'll now turn the call over to Sean Goodman, our CFO. Sean?

Thanks, Adam, and good afternoon to everyone. As Adam noted, 2025 would represent a year of meaningful operational and financial progress. Although the industry box office did fall short of expectations, AMC performed exceedingly well in the areas that are within our direct control. For the full year 2025, the North American industry box office increased by a modest 1.5% and industry attendance in the European markets in which we operate, declined by approximately 3% versus 2024. Nonetheless, at AMC, we grew consolidated revenue by 4.6% versus 2024, to more than $4.8 billion as we welcome to more than 219 million guests to our theaters across the globe. And we grew adjusted EBITDA to approximately $388 million and nearly 13% year-over-year improvement, all of this in an essentially flat industry box office environment.

We achieved these consolidated financial results with a record setting per patron revenue and per patron profit metrics. Admissions revenue per patron grew 5.9% to a record of $12.09, food and beverage revenue per patron grew 5.1% to a record of $7.62. And total revenue per patron grew 6.8% and to another record of $22.10. Importantly, our contribution margin per patron, this is defined as total revenue, less film exhibition and food and beverage costs divided by attendance, this metric grew 7.2% to yet another record setting $14.80. This measure of per patron profitability is now 51% higher than in pre-pandemic 2019, underscoring the meaningful improvements that we have made to the business over the last few years.

Breaking down our results by segment, starting with U.S. operations, we outperformed the North American box office growing our admissions revenue by 3.9%, 240 basis points in excess of the overall industry growth. This outperformance helped drive total revenue growth of 4.6%, along with a nearly 13% increase in adjusted EBITDA. And consistent with the overall consolidated trends I referenced earlier, our U.S. theaters delivered record-breaking per patron metrics for admissions food and beverage and total revenue with total revenue per patron growing 5.3% to $23.79. In addition, the business generated a record per patron contribution margin of $15.69, a 5.7% improvement over the prior year. Domestic total revenue per patron is now 48%, is now up 48% versus pre-pandemic 2019 and domestic contribution margin per patron is now up 56% compared to pre-pandemic 2019.

Now turning to our international operations. Note that the results are impacted by an increase in foreign currency exchange rates of approximately 4.5% year-over-year. With attendance at our international theater is down 5.5% versus the prior year. Revenue grew by 4.6% or was flat in constant currency and adjusted EBITDA declined by 2.1% or 10% in constant currency. Our international theaters also delivered record-breaking for patron metrics for admissions, food and beverage and total revenue, with total revenue per patron growing 10.6% or 5.8% in constant currency to a record setting $17.97, and contribution margin for patron growing 11.3% or 6.4% in constant currency to a record setting $12.61. Total international revenue per patron is now up 32% versus 2019, and international contribution margin per patron is up 37% compared to pre-pandemic 2019.

Our results for 2025 reflect the effectiveness of our industry-leading loyalty programs, innovative pricing strategies, leadership in premium formats and innovative food and beverage offerings complemented by a relentless focus on the efficiency of our operations and optimization of our theater footprint. In that regard, we continue to execute a transformation of our theater portfolio. Negotiating more favorable lease economics, exiting underperforming locations and selectively acquiring high-quality theaters that enhance our network.

During 2025, we closed 21 locations and we open 3. Since 2020, we've now closed 213 locations and opened 65 locations for a net reduction of 148 theaters or roughly 15% of our portfolio. This ongoing reshaping of our footprint reflects our commitment to improve asset productivity, expand margins and position AMC for sustainable long-term growth.

Now let's move to the balance sheet. We ended the year with $428 million of cash. This excludes restricted cash. Our free cash flow for the year was a use of cash equal to $366 million. It's very important to note that this negative free cash flow was entirely related to the first quarter of 2025. And that for the 9 months ending December 31, 2025, we generated positive free cash flow of $51 million. As you may recall, our traditional working capital cycle is closely tied to the seasonality of the box office. Generally, this has resulted in a positive cash impact from working capital in the second and fourth quarters, with a negative cash impact in the first and third quarters, the first quarter typically representing the largest negative cash impact. This pattern held true in 2025 and assuming similar box of office seasonality, we would expect this cadence to exist in 2026.

As Adam said, strengthening our balance sheet has been and will continue to be a top priority. This includes maintaining robust liquidity and continuing to pursue opportunities to extend debt maturities, reduce debt servicing costs and decrease the principal balance of our debt. As Adam noted as well, we recently launched a refinancing transaction targeting our $2 billion term loan due in 2029 and our $400 million Odeon notes during 2027. This new debt offering, if successful, will address the vast majority of our 2027 debt maturities extend a significant portion of our debt maturities to 2031, simplify our capital structure and reduce our debt servicing costs. In addition, we're also in the market with an at-market equity offering. Proceeds from the offering will be used to strengthen our balance sheet and also allow us to continue to invest in our core business to elevate and differentiate the moviegoing experience for our guests. As of last Friday, we received $26.2 million of gross proceeds from this equity offering.

Our capital allocation priorities are clear and consistent. First, maintain robust liquidity and strengthen the balance sheet; and second, invest in our core business to elevate the guest experience. This disciplined approach to capital allocation reflects our commitment to building an increasingly strong and resilient company to deliver long-term shareholder value.

From a capital expenditure standpoint, our 2025 CapEx, net of lease incentives, totaled $200 million, exactly at the midpoint of our previously communicated $175 million to $225 million range. And we expect 2026 CapEx net these incentives to be between the same range of $175 million to $225 million. Looking ahead, we see an exceptionally strong film site in 2026 and beyond. And the operating leverage inherent in our business, coupled with continued success in growing that per patron revenue and per patron profit metrics means that we are very well positioned to meaningfully increase adjusted EBITDA, improve free cash flow, and strengthen our balance sheet with the box office growth that is anticipated in 2026 and beyond.

And with that, I'll turn the call back over to Adam.

Thank you, Sean. Our 2025 results and our optimism for 2026 underscore that AMC remains firmly playing on offense focus on bold, strategic initiatives that elevate the moviegoing experience and reinforce AMC's position as the clear leader in theatrical exhibition. One year into our forward-looking AMC Go Plan, the results are both tangible and encouraging as AMC continues to delight our guests and AMC continues to position ourselves for sustained growth in 2026 and beyond.

As one example, laser projection with its brighter, sharper screen images now exists and fully half of our U.S. theater circuit. And how can we not revel in the leadership position that AMC enjoys and the availability of premium large format and extra large format screens. As you know, they command sizable price premiums, and they are about 3x more productive this than a standard screen. It's no accident that AMC has more premium large format screens and more extra large format screens than any other exhibitor on earth. So it's obvious why we are so glad that our count of IMAX screens and our count of upgraded IMAX with laser screens is growing, that our count of ever so popular Dolby Cinema screens is growing.

You know that with CJ's ScreenX and 4DX offerings as well as for increases to the numbers of our Prime and iSense house brand PLF offerings. I am especially pleased too, by the story surrounding AMC's XL or extra large format screens. They were created out of thin air and piloted by our Odeon team in Europe, less than 2 years back. And given their success we now are expanding the reach of XL broadly across our U.S. theaters as well. We now have just right around 170 or so XL screens globally. And I would expect that, that number will literally double by the end of 2026.

Moving beyond the auditorium. Our world-class AMC marketing and loyalty programs continue to evolve smartly in 2025. In January of 2025, we introduced a new successful AMC Stubs loyalty tier, called AMC Premiere GO! That allows consumers to trade up to premier status for a modified premier status will increase patronage at our chain without having to pay an added fee. That's taken our member enrollments all the way up to some 39 million households in the United States, accounting for an impressive 51% of our total U.S. attendance during the year playing for points in our frequent moviegoer loyalty program. That level of engagement not only deepens guest loyalty but also provides valuable insights given our extensive database containing as it is a myriad of purchase transactions guest by guest that enable us to smartly and more targeted basis, create marketing efforts to our best customers on an ongoing basis.

Another important pricing action within the scheme of our loyalty program was price increases, considerable pricing cases in our A-List loyalty program, subscription program that occurred in the month of May. And while those are examples of price rises, with a keen focus on having raised prices during peak demand periods and to the most frequent of our guests. It is also true that AMC simultaneously has remained committed to appealing to the value-conscious consumer as well. So in July of 2025, our marketing team reimagined our long-standing Discount Tuesdays program by launching an intriguing and attention getting new 50% off Tuesdays and Wednesdays initiative. Importantly, our analysis shows that the incremental attendance generated on these 2 weekdays now has not cannibalized our weekend attendance. And to the contrary, has increased the business generated in our theaters midweek, an outcome that benefits both AMC and our studio partners. And of course, benefits the movie-going public in addition.

And we did not stop there. At the end of 2025, we introduced the AMC Popcorn Pass to our loyalty members, an innovative annual offering that allows AMC Stubs members to enjoy 50% off pricing all year long on a large AMC Perfectly Popcorn for a onetime fee of $29.99 plus tax per year. In only the first 2 months after launch, more than 120,000 guests have already paid us this $30 fee, for a Popcorn Pass. Beyond delivering exceptional value to the guest, the Popcorn Pass also encourages more frequent theater visits and deeper guest engagement.

If those were things that we did in 2025, I would like to tease you today with one of what I think will be one of AMC's best new marketing ideas for 2026. Later this year, AMC will introduce preferred, so branded, premier seating, where we will block and reserve the best seats in the house in our theaters to be accessed first only by our A-List and our Stubs Premiere members. That's the 2 VIP tiers within our Stubs program. had no added charge. At AMC, we will assure that the best seats in our auditoriums are hold out only at first anyway for our best customers. We think it will be a considerable consumer benefit that our most frequent guests will notice and greatly appreciate further cementing their brand loyalty to AMC.

There are 2 other things I'd like to highlight before turning this call over to your questions. First, you may recall that a few months ago, AMC and Netflix made the joint decision to partner together. This was a significant departure from our 2 companies staying at arm's length from each other over a period of many years. That effort started in bringing Netflix' popular KPop Demon Hunters to AMC Tears over the Halloween weekend. That collaboration between AMC and Netflix proves highly successful with AMC delivering to Netflix approximately 35% of the film's total attendance during that holiday weekend time frame.

Building quickly on that momentum, our dialogue with Netflix continued, resulting in AMC's hosting the series finale of Stranger Things in some 231 AMC theaters across the United States over New Year's Eve and New Year's Day. The response to that AMC Netflix offering in theaters wildly exceeded all of our expectations. We initially only put on sale about 105,000 seats or so. But when it was all done a month later, AMC had the privilege to welcome more than 753,000 Stranger Things fans collecting approximately $15 million in cash from Netflix fans watching the Netflix product in an AMC theater.

In just 2 days, it was a powerful demonstration of the demand for shared theatrical experiences tied to culturally significant content. The success of our recent collaboration with Netflix highlights the strategic opportunity that lies ahead, and I am certain that we'll have more adventures together cooperatively with Netflix. With roughly 2/3 of AMC Stubs loyalty members also subscribing to Netflix, the audience overlap between our 2 companies is both significant and compelling. As a result, our companies, our 2 companies should be the best of friends. And I can confirm to you that AMC is enthusiastic about the prospects of expanding our relationships with Netflix. We look forward to working together to create innovative, mutually beneficial theatrical events that drive value for both companies.

The second thing that I'd like to mention before closing, with the recent meteoric rise in the share price of Hycroft mining company. I could not be more pleased to report to you that our investment in Hycroft has met and exceeded attractive financial hurdle returns. In November of 2025. We monetized just more than $24 million from a partial sale of our Hycroft stake. But importantly, at the time, we said that we would retain a significant number of shares and warrants to continue to experience upside. Those remaining shares and warrants in Hycroft are worth right about $39 million at today's market closing price. So that $63 million or so in total, compares quite favorably to the $29 million that we invested in high growth 4 years ago. For those of you who scoffed at our Hycroft investment at that time. And there were many of you, you were wrong, right.

As we conclude, AMC's resilience continues to set us apart. While the industry recovery has progressed more gradually than anyone might have originally anticipated or wish to see occur. Even so, AMC has remained agile, disciplined and firmly focused on long-term value creation. AMC has demonstrated our ability to navigate a dynamic environment, some would say an extremely difficult and challenging environment. But all the while we did so, we also strengthened our competitive position, and we emerged poised to capture gain from the opportunities that we believe are ahead. That opportunity is now at hand. We expect the box office to rise to 2026.

And please remember from this call, the two most important words that are relevant to AMC; operating leverage. An increase in our revenues in 2026 has the prospect of leading to many a smile as we watch our adjusted EBITDA levels as the year unfolds. As we have had to say far too many times over the past 6 years, we are not out of the woods yet, and there are challenges ahead still. But the signposts for 2026 are indicating a significantly strengthened year ahead.

With that, let's turn the call over to our operator. They pull analysts for their questions from equity research analysts. And then Sean, I'll give the podium to you. And you and I will review some questions submitted by our retail investors.

[Operator Instructions] Our first question comes from Chad Beynon with Macquarie.

Adam, great to hear. It's sounding much better here. I wanted to ask, I know, Sean, in the prepared remarks, you talked about the screen -- or the theater count reduction in '25 and in the past couple of years. How are we thinking about your fleet or portfolio at this point given the strong outlook for content in '26? And then related to that, are there expected to be any new builds that are in that CapEx number?

Chad. As I said in my prepared remarks, we've done significant activity, closing over 200 theaters over the last 6 years and opening around 65-odd. We will continue to take actions to close theaters to reduce leases as we go forward. About 10% of our leases come up for renewal each year. So that's about 85 leases coming up for renewal. At each time these leases come up for renewal, we have that opportunity to improve our overall theater economics. The theater portfolio has increased significantly over the last 6 years. It's one of the reasons that our per patron metrics and our per patron profitability is so much higher than it was before.

We believe there continues to be a very significant opportunity. Like most organizations or companies with a retail footprint, our theaters are a kind of normal distribution, and there is a tail of underperforming or loss-making theaters. And we see an opportunity to close those theaters or renegotiate leases and then take on new theaters that are significantly -- very significantly more profitable. So I think you're going to see the similar sort of pace going forward. We'll be closing more theaters than we open, but the new ones that we opened are generating significantly more profit than the ones that we close.

And to your question about sort of the CapEx level, there'll be a small number of new theater locations in 2026 and going forward. And that is included in our CapEx projections in the $175 million to $225 million range.

I might add that, look, everything we've been doing smartly over the past few years, we've been capital-light. So you specifically used the phrase new build theaters. New build theaters are considerably more expensive than what we call spot acquisitions, where we can take over a theater where most of the capital has already been spent, and we maybe pop $500,000 to $1 million just to upgrade it and bring it into the AMC fleet, and apply our marketing programs and our product experiences and expertise. And when we've done this in the past, we've seen substantial rises in the revenues of the theater and the efficiencies of the theater that we've taken over. So as Sean said, I'm sure we'll close some underperformers, which makes us money. It doesn't cost us money -- and we'll probably add a handful of spot theaters -- spot acquisitions as well.

And maybe it's worth pointing out an example of the growth, right, which in Los Angeles that we took over as a spot acquisition. And that theater used to be #28 in the country in terms of annual box office receipts. Now with adding the AMC secret sauce, that theater is now #5 in the country in terms of receipts. And that's just one small example of the benefits that we bring and the attractiveness of AMC as a tenant for landlords in their developments.

Okay. Great. And then my unrelated follow-up, I know you mentioned most are expecting the U.S. box office to be up somewhere between $500 million and $1 billion. I think that's where most analysts are in this high single-digit, low double-digit growth rate. International is a little harder for -- I think us in the industry to pinpoint. Do you have a gut feel if international admission revenues could be higher or lower than kind of what we're seeing in North America this year?

Well, we've completed 7 weeks or 8 weeks of almost 8 weeks of '26, and we know already that Europe is recovering faster than the United States from the 2025 box office. So if I had to be a betting man, we'd say Europe is going to be stronger than the U.S. And some of you like to report in constant currency and some of you like to report as the dollars come in. The dollar has been pretty weak, which means that our overseas revenues and overseas EBITDA is coming back in U.S. dollars and even stronger levels. So this could be -- year-over-year, this could be Europe's best year of the last 6.

Thank you. I'm showing no additional questions at this time. I'd like to now turn it back to Sean Goodman for retail shareholder question.

Thank you, operator. Adam, we have a couple of questions here. Firstly, relating to the food and beverage business. As you and I both know, our food and beverage per patron numbers have just been spectacular post-pandemic. And I think there's really exciting opportunities for us ahead there. But the question is sort of what future change innovations can people expect on the food and beverage side?

This is really important because, if you look at why this company has been able to navigate really turbulent orders over the past half decade, our strength in food and beverage sales has been a big reason. If you look at our contribution per patron, it's up not quite 50%, but almost 50%, which means that we don't actually need the box office to recover all the way back to 2019 and pre-COVID levels. And that's a direct result in part because of our food and beverage success. I think at this point, there's a lot of finessing that's going on within our food and beverage operation, where we're using a menu experimentation to please to guess and help our bottom line.

As one example, we just introduced that in the fourth quarter of freshly baked chocolate chip cookies, which not only taste great, but smell great in theater lobbies, and they were replaced donut holes, which we're not selling as well at our concession stands. We just introduced at our dine-in theaters, a much better pizza than we've had in modern memory. It looks like real pizza, it taste like real pizza, it is real pizza. And it's really good. I tested it myself in the kitchens and I'm a pizza buff. So those are 2 examples.

And another thing that's really important though of what's happened in our concession stands. Is not what you eat, but when you buy, 3 years ago, AMC didn't sell essentially any movie merchandise. And our movie seen merchandise now has become a sizable business for us. In 2025, it was $65 million in the United States, another $10 million to $15 million in Europe. This is a business that didn't drive literally $0.01 of revenue or EBITDA 3 years ago, and it's now doing $80-ish million as of today and the profit margins in this thing are -- it's about 50% or so margin business, like that's substantial. And I think this movie theme merchandise business is poised to grow again dramatically in 2026. I wouldn't be surprised if it grows by 20% or more. As we enter our fourth year of successful effort in and around our concession stands in our theaters.

So there's a lot going on in the industry at the moment. And there's questions about -- just for you to comment on our relationships and relations with studios, what's going on with Windows update on union negotiations and the potential for a strike later this year?

Sure. When you talk about what's our relationship with studios, it sure helps when you sell more movie theater tickets for every single studio than anybody else on earth, especially if you combine the ticket selling in quantity with the amount of effort that AMC devotes to our studio interactions. I can say with confidence that AMC enjoys a very strong special relationship with each and every studio, every single one, we think highly of them because our life flow depends on it. And I believe that they said highly of us, because they know at the end of the day, we're going to outperform for them above everybody else.

So in terms of studio relations it's all great, an interesting development when I think of studios is not just the traditional studios, the majors. But we've had surprisingly good interactions of late, with some of the streamers who historically were not major theatrical exhibitors. Last year, we had real success with Apple in their film F1. We lean into it in a big way. We were very successful with the film. They were very successful with the film. We appreciate our relationship with them. I know they appreciated this support that we put forward. I'm looking forward to big things coming from Apple Original films going forward.

Amazon is now telling us that their goal is to release 15 theatrical movies in 2027, and that they'll probably get up to 10 to 13 theatrical movies on their slate in 2026. That's news. Amazon MGM was only good for a movie or 25 years ago. The they've become a real player in Hollywood. And then there's Netflix. We had this September meeting where we sorted through how we could work together and that it would be advisable to work together. And the first 2 efforts out of the chute were extraordinarily positive. I know that we're excited about doing more with them. And I know that they were pleased with AMC's effort on their behalf towards the end of 2025.

You mentioned in your question, do you need negotiations? For good or for bad, we're not a party to those union negotiations. We have invested interest in their outcome, but we're not at a table. I do know that the studios have taken these negotiations seriously. They've started the negotiation process earlier than they did last time around. I think the general consensus is that the 2 strikes a couple of years back, or devastating to everyone connected to the movie business, devastating to the members of the union have devastated devastating to movie makers. I would sure hope that we don't have to repeat anything like that. And that the union studio negotiations transpire in such a way that deals are met and that the production of movies goes on without interruption.

And then our final question here is on CapEx spend. We've guided to $175 million to $225 million a year, which is the same in 2026 as it was in 2025. It's a question on how we're allocating our CapEx spend sort of what are the focus areas for our CapEx spend?

Well, very round numbers, right? Very round numbers, $150 million of that number is what I'll call maintenance capital to keep our theaters in good shape, roofs not leaking, HVAC systems working, IT systems being overhauled as needed to continue to have AMC be a strong player from an IT standpoint. AI is capturing some of our money now because there are ways to make our company more efficient through the adoption of AI techniques.

Beyond that, though, in a capital-light way, we continue to be very committed to upgrading the theater experience. And we're going to add more IMAXs, we're going to add more Dolby Cinemas. We're going to add more Prime and iSenses, we're going to double the number of XL screens this is all good. At the same time a decade ago, and AMC was quite experienced in practice in renovating whole theaters expensively, ripping out seats, putting in the so-called recliner seats, which are very popular with guests.

But we have a problem and the problem is we have a number of theaters that -- where the volumes are so high that we can't afford the seat loss of auditoriums. It reminds me of the old Yogi Berra quote, "Nobody goes there anymore because it's so crowded," he once said. So there's -- it was easy to decide how you renovate a theater, if you got to rip everything down to the studs and put a in a recliner seats with 6 feet a leg room per row. But now we're at a point where that's pretty much behind us. And we're looking at how do we keep the product top flight in some of our highest volume theaters where more traditional seating is going to be the norm. We came up with what we think is the answer.

And interestingly, Sean, it's also a capital-light solution. We had a theater in Burbank, that was the single highest grossing theater in the United States, but it was in [ raty ] condition 2.5 years ago. The seats were tired and old and stained we knew we had to replace all the seats, the Burbank Theater, but we also knew that we -- the volumes were so high at the theater, we were going to need a similar seat count to what we had at the time.

So with a lot of studies. We investigated dozens and dozens of different potential seats. And we came up with what is now -- if you look at our website and app, is branded as the AMC Club Rocker. It's a very comfortable seat and much superior than anything that's in our traditional seating theaters today. It's kind of a leather look, I'm not sure it's actually leather, but it looks like leather, feels like leather, smells like leather. It's got a lot of padding and cushioning. It's wider than the older sheets and it rocks. It moves around a little bit, so people can adjust the seat to their own comfort. And it was a massive headwind we put it in to Burbank 16.

So we took that same exact seat, and we put it into our Empire Theater in Manhattan, in our Lincoln Square Theater in Manhattan. And week after week after week, I was seeing in our reports that of our 550-ish theaters in the country, the 3 highest grossing for AMC were Burbank, Empire and Lincoln Square, week after week after week. What is the common the Burbank seat? We have since put it into some of our other theaters. For those of you who are knowledgeable about a theater on the upper east side in Manhattan called Orpheum 6 (sic) [ Orpheum 7 ]. We're going to put that seat into Orpheum 6 (sic) [ Orpheum 7 ] sometime this year, we're going to greatly expand the legroom to 48-inch seat pitch, which is a lot. I love to say 4 feet for your 2 legs. And the combination of a lot of legroom and that very comfortable new Club Rocker seat is going to turn that theater into what is now a tired substandard old lows theater from ages ago into a real powerhouse on the upper east side.

And we're also going to look to take that Club Rocker seat into others of our theaters as well. And it's a very inexpensive effort to redo a theater and make it nice but do so in a smart capital-light way. So those are examples of where the money is going. There was an earlier question about will be just good track theaters or we add some. We will do both. So when we take over a theater, we might spend $0.5 million or $1 million to bring the theater into our system if it's in relatively good shape if it needs a little bit of renovation money. Maybe we work with the theater landlord to jointly put up $2 million, $3 million, $4 million to bring some theaters into our fleet in very good condition. Hopefully, the landlord would pay a significant chunk of that cost through tenant allowances and the like.

So that's another thing that's going on within the CapEx budget. But as you said, we've got a fairly tight constraint, the couple of years ago, we were spending $400 $450 million, $500 million of CapEx, we believe that rounding to the $200 million range is something that we can, plus or minus 25% is something that we can do going forward in the near term. So that's the update.

And that concludes the retail investor questions.

So let me just end the call by thank you all for listening to us today and participating with us. It is going to be the strongest slate of moviegoing that this industry has seen since 2019, the year is starting up in double digits, which is a nice way to start. And I leave you with this one thought that's dominating our thinking and my comments on this call, that notion of operating leverage as revenues rise, rises, and it does so a geometric pace. So we won't be all the way to where we need to be at the end '26, but we expect to make a dramatic amount of progress. So this should be a year that makes us all smile. Thank you for joining us today. See you at the movies.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Good afternoon, everyone. Welcome to the 2025 Annual Shareholder Meeting of AMC Entertainment being held here in person in our Leawood, Kansas headquarters location and also being attended by so many additional shareholders given our additional webcast.

I am Adam Aron, Chairman of the Board and CEO of AMC Entertainment Holdings. Before we begin today, I should note that last week, we made a fulsome public announcement about the aftermath surrounding my unexpected visit to a hospital emergency room in London on November 17.

Since then, I have received so many well wishes from our shareholders, lenders, studios, filmmakers, vendors, reporters in the press and other constituencies who are interested in AMC. I sincerely, so sincerely want to thank you all for your gracious and kind words of support. And I might add that my recovery since November 17 has been so fast that I am truly delighted to report to you today that the biggest medical challenge I seem to be facing at the moment is a good old-fashioned common cold picked up in the last 72 hours in Kansas City's frigid chilly weather. All things considered, pretty ordinary stuff.

Joining me for today's meeting as well is almost our entire Board of Directors who are with us on the phone. I'd like to send an extra special salute their way too. Over the past 3 weeks, each of the members of the AMC Board has been so genuine and empathetic about my recovery. At the same time, though, they also all were ever so professional in being totally committed to fulfilling their sacred obligations to you, our shareholders, to dispassionately assess whether my medical condition might interfere with my ability to continue to lead AMC.

The AMC Board deserves high praise for their diligent, skillful and steady hand and in carefully managing through what could have been a delicate situation had my condition been of greater alarm. Speaking of which, as you can hear for yourself, common cold sniffles notwithstanding, that while my voice is not 100% back, it's pretty close, and I'm in good shape.

And the recovery in my speech has been so much at a blistering fast pace that as a result, it is now my pleasure and honor to formally call to order the Annual Meeting of our shareholders.

At this point, I will hand center stage over to Eddie Gladbach, our General Counsel, who will take us through today's business and act as Chairman of today's meeting. Eddie, you're on.

Thanks, Adam. An agenda outlining today's business has been circulated prior to the meeting. Kelly Schemenauer, AMC's Vice President, Associate General Counsel and Assistant Secretary, will serve as Secretary of today's meeting. She's delivered an affidavit of Computershare, the notice agent for the annual meeting, which states that on October 24, a notice of meeting was mailed to stockholders of record as of the close of business on October 13, the record date for the meeting. This affidavit will be filed with the minutes of the meeting. Ms. Schemenauer will now discuss the procedures for transacting the business of the meeting.

Good afternoon. The meeting will take place as described in the agenda. A quorum of stockholders is present in person or via proxy. Rules and procedures for the meeting were filed with the SEC on December 3 and are printed on the back of the agenda.

When a proposal is before the meeting for consideration, questions and comments should be limited to that proposal. An opportunity will be provided at a designated time for other questions relevant to the company's business. If you wish to make a statement about a pending proposal, please raise your hand to be recognized. Once you are recognized, we will bring you a microphone and you will state your name and whether you are a stockholder or a proxy holder. If you are a proxy holder, please state the name of the stockholder that granted the proxy.

Please keep statements brief and limited to the specific item up for discussion. We may have to interrupt any statement that continues for an unreasonable amount of time. Speakers will be limited to a maximum of 2 minutes. You may not record the proceedings today and phones or other recording devices are not permitted in the meeting room. Anyone disrupting the orderly conduct of the business or acting in a threatening manner toward fellow stockholders or AMC employees will be asked to leave the premises and if necessary, escorted out by security personnel.

If you have not already submitted your vote and would like to do so during the meeting, you may do so on the ballot provided at check-in. Ballots will be collected at the conclusion of the business items on the agenda. Ballots not received when called for, will not be counted. We will announce the preliminary results at the conclusion of the meeting. Final results will be published in an 8-K filing with the SEC.

Thank you, Kelly. The Board of Directors has appointed Jeff Bennett and Kelly Schemenauer to act as inspectors of election for the meeting. They signed an oath to act as inspectors, which will be filed with the minutes of the meeting.

The inspectors have the registered list of stockholders as of the record date for determining stockholders eligible to vote today.

With a quorum present, I declare the meeting duly and lawfully convened and now declare the polls open. Except for proposal 1, the polls will remain open until all items of business have been presented and discussed and the tabulation of the votes has been completed. The polls will close for Proposal 1 after any questions or comments have been discussed with respect to that proposal.

We are aware that there is considerable interest in knowing how many shares have voted for this meeting. Number of shares voted prior to the meeting today is approximately 301 million shares, which is about 59% of our outstanding shares on the record date. That number includes broker discretionary voting on certain items such as ratification of our auditors.

For nonroutine items on which brokers cannot submit discretionary votes without instructions from the beneficial owner, we only have about 36% participation. We would remind our shareholders that voting is an important opportunity and encourage you to do that in the future.

The first item of business is an amendment of the company's certificate of incorporation to declassify the Board of Directors, shorten all existing terms to expire at this meeting and remove restrictions on the number of directors. The amendment, along with the reasoning therefore, is set forth in the proxy statement, and the Board of Directors recommends approval of this proposal. Are there any questions or comments? Seeing none, I declare the polls on this proposal closed, and we'll proceed with the agenda.

The next item of business is the election of directors. However, before proceeding, we will determine the outcome of the vote on Proposal 1. Kelly, do you have those results?

Yes. Based on the proxies received prior to the meeting and the number of shares present at the meeting, Proposal 1 has not obtained the support of a majority of the company's outstanding stock and therefore, has failed.

Since Proposal 1 has failed, we'll proceed with Proposal 2b to elect Class II directors for a term ending at the 2028 Annual Meeting. As disclosed in the proxy statement, the candidates for director who have been nominated by the Board are Adam Aron, Howard Koch and Anthony Saich.

Kathleen Pawlus, a Class II Director, is retiring from the Board and is not standing for reelection. I'd like to thank [indiscernible]. In accordance with the company's bylaws, stockholders are required to provide advanced notice of their intent to nominate candidates for director. No such notice having been properly received and therefore, no additional nominations can be accepted at this time. I declare the nominations for director closed. Are there any questions and comments on the election? Seeing none, we'll proceed with the agenda.

The next item of business is an amendment to the company's certificate of incorporation to eliminate the prohibition against stockholders acting by written consent. The amendment along with the reasoning therefore, is set forth in the proxy statement, and the Board recommends voting in favor of this proposal. Are there any questions or comments? Seeing none, we will proceed to proposal 4.

Proposal 4 is an amendment to the company's certificate of incorporation to remove the limitation on stockholders' ability to call special meetings. The amendment along with the reasoning therefore is set forth in the proxy statement, and the Board recommends approval of this proposal. Are there any questions or comments? Seeing none, we will proceed to Proposal 5.

Proposal 5 is an amendment to the company's certificate of incorporation to increase the total number of authorized shares of common stock. The amendment along with the reasoning therefore, is set forth in the proxy statement, and the Board recommends approval of this proposal. Are there questions or comments on this proposal? We will proceed to proposal 6.

Proposal 6 is a proposal to ratify appointment of Ernst & Young LLP as the company's independent public accounting firm for 2025. I'd like to recognize representatives from Ernst & Young, who are with us today, Kim Rock and Andy Gigstad. The Board of Directors recommends approval of this proposal. Are there any questions or comments? Seeing none, we will proceed.

Next item of business is to approve compensation of the company's named executive officers. This proposal is a nonbinding stockholder advisory vote. The company's executive compensation is discussed in the proxy statement, and the Board recommends approval of this proposal. Are there any questions or comments? Seeing none, we will move to the final proposal.

The final proposal before the meeting is a proposal to adjourn the meeting, if necessary, to permit further solicitation of proxies in the event there are insufficient votes to adopt the proposals. Board of Directors recommends approval of this proposal. Any questions or comments? Seeing none, I will now declare the polls closed.

If you have not voted or wish to change your vote, you may do so by marking your ballot.

[Voting]

Are there any ballots that need to be collected at this time? Seeing none -- okay. Thank you. We've collected the ballots. We'll now briefly recess the meeting. While we are recessed, we'd like to invite Sean Goodman, the company's Executive Vice President, International Operations, Chief Financial Officer and Treasurer; and Dan Ellis, the company's Executive Vice President, Chief Operations Development and Marketing Officer, to join Adam to address any questions that stockholders may have relevant to the company's operations or business.

We would remind everyone that some of the comments may contain forward-looking statements that are based on management's current expectations. Numerous risks, uncertainties and other factors may result -- may cause actual results to differ materially from those that might be expressed today. Many of the risks and uncertainties are discussed in our public filings, including our most recent 10-K. Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict.

In light of the uncertainties inherent in any forward-looking statement, you are cautioned not to place undue reliance on these statements. AMC undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events. If you have questions relating to the company, but not to matters already voted on at the meeting, you may raise them now. Only matters that concern all stockholders should be raised.

Any matter of individual concern should be raised after the meeting when representatives of the company will respond to your questions. To allow all stockholders an opportunity to participate, each stockholder will be limited to one question with one follow-up. To ensure questions can be answered, any individual speaker will be limited to a maximum of 2 minutes.

Please raise your hand to be recognized and the microphone will be brought to you. Please begin your question by stating your name and where you're from.

And as we're looking for questions, and I'd just say it's nice to see several shareholders joining us today.

Adam, my name is Larry. It's good to see you after 3 years here coming. My question, we really had questions for you, but I'm not going to ask them. I'd just rather wish you all happy holidays and a prosperous New Year since it is that time of season. And I really love my AMC like tree things.

Appreciate it.

Can I emphasize in your comment that we have a prosperous new year.

My name is [ Cory Seaman ] I'm a shareholder. Good to see you again. If we're going to be tied about the [indiscernible] I'm going to speed read, I'd rather just speak from the heart, but I just don't want to be.

But speed read loud, so I can hear you.

Yes, sir. Glad to see you're doing well from the stroke. I appreciate you giving all that you have to the company. This year, I want to bring up something from my line of work in real estate tax appeals, the fun world of real estate tax appeals. It shows an opportunity to build complementary partners. So assuming that the newly authorized shares are going to hit the market, I would prefer that we look for partners. And I want to give you an example of what I saw in Missouri recently.

We have an AMC Theater in Creve Coeur, and that's on the books for $11 million value, which is a $3.5 million assessment and it ends up being a $335,000 tax bill. I know we don't own that property, but what happens if we are a triple net lease or gross modified either pass-through or gets built into the rent, then we are hitting that expense on our operating expenses. And so as an example, that one got appealed by the property owner, which is also the manager. And they don't have the same incentive that we do because it gets passed through to us, right? And so in that case, they hired someone that's about to retire, and that person didn't get an appeal because they didn't submit any exhibits, whereas Marcus Theatres right down the road did provide exhibits, got a $3 million reduction, ended up getting $100,000 savings on that one property, which is $200,000 over 2 years. And it's just something that I would like us to look into to align our incentives with the people appealing those properties.

Side note, I do work for an appeal firm and can help. But what I want us to do is look at other operating expense line items, and we look for ways that we could create revenue because that -- if we took our 430 properties across our portfolio and saved 20% on 25% of those, our tax bill is at least $150 million north or north of that, right? Most of our properties are in higher value than Missouri.

And in any case, that's going to be at least $7.5 million in net revenue for our company. So you have to pay for goods and services. And I'm suggesting with our new shares, we look for ways to bring on partners and pay them where they have the flexibility to pay them in equity and cash rather than just giving it to the lenders or the market makers who previously in 2021 may have sold us $200 shares, but they're now recouping for $2. And so now we're building complementary partners. And just to look for that initiative and look at the other operating expenses, we're becoming more efficient. We're building partners. Please take a look at what we can do there.

So let me just respond by saying thank you for the interesting comments. I would tell you that we do have a tax department here, which is hyperactive and challenging property taxes all over the United States and even in other jurisdictions, we're still fighting property tax assessments in Canada that we vacated as a country over a decade ago. So this is not an area that is being ignored by AMC. It's a big opportunity for savings, and we're chasing it as hard as we can.

If there are no other questions, we will reconvene the meeting. I understand that a preliminary report of the inspector of election is ready. Kelly, will you please announce the preliminary results of the stockholder votes?

The preliminary report of the inspectors of election indicates that Proposal 1, to amend the certificate of incorporation to declassify the Board has failed. Mr. Aron Mr. Koch and Mr. Saich have been elected as directors.

Proposal 3, to amend the Certificate of Incorporation to eliminate the prohibition against stockholders acting by written consent has failed.

Proposal 4, to amend the certificate of incorporation to remove the limitation on stockholders' ability to call special meetings has failed.

Proposal 5, to amend the certificate of incorporation to increase the total number of authorized shares of common stock has been approved.

Proposal 6, to appoint Ernst & Young LLP as the company's independent public accounting firm for 2025 has been ratified.

Proposal 7, the nonbinding advisory vote to approve the compensation of the company's named executive officers as disclosed in the proxy statement, has obtained the support of a majority of votes cast.

The stockholders have approved proposal 8 for adjournment of the meeting to a later date, if necessary, to permit further solicitation of proxies for the foregoing proposals. However, adjournment of the meeting was deemed not necessary.

Thank you, Kelly. I hereby request that the final report of the inspectors of election be filed with the minutes of this meeting. With that, Adam, I will turn it over to you to adjourn us.

And I would like to, if I can just make one comment about the shareholder votes. In essence, in all cases where a majority of votes cast was needed for passage, the shareholders who voted their votes did, in fact, cast a majority of the votes cast.

On the other matters that failed, interestingly, also a majority of the votes that were cast were in favor of each of the proposals. But under the Delaware standard for those other matters, it's not the law that we just need a majority of the votes cast, we need a majority of the votes outstanding. And in many cases, not enough shareholders actually voted for us to get a majority of the votes cast even though majority of votes outstanding, even though the majority of the votes cast were in favor. So it's just one more reminder to us all as shareholders, next year, vote your votes. Because the will of the shareholders is actually being defeated, not because the shareholders are opposed to these measures, but because not enough shareholders are actually taking the time or trouble to vote.

With that, we've covered the business of the meeting. Dan, Sean and I, along with Eddie and Kelly and our auditors, E&Y, [indiscernible], we're going to stick around in case you want to talk to us individually after the meeting. And with that, the 2025 Meeting of Shareholders of AMC Entertainment Holdings is hereby adjourned. Thank you one and all.

Hello, and welcome, everyone, joining today's call, AMC Holdings Third Quarter 2025 Earnings Webcast. [Operator Instructions] Please note, this call is being recorded. [Operator Instructions].

It is now my pleasure to turn the meeting over to John Merriwether. Please go ahead.

Thank you, Sabrina. Good afternoon. I'd like to welcome everyone to AMC's Third Quarter 2025 Earnings Webcast. With me this afternoon is Adam Aron, our Chairman and CEO; and Sean Goodman, our Chief Financial Officer.

Before I turn the webcast over to Adam, I'd like to remind everyone that some of the comments made by management during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those that might be expressed today. Many of these risks and uncertainties are discussed in our most recent public filings, including our most recently filed 10-K and 10-Q. Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict. In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned against relying on these statements. The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events.

On this webcast, we may reference non-GAAP financial measures such as adjusted EBITDA and free cash flow. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the Investor Relations section of our website earlier this afternoon. After our prepared remarks, there will be a question-and-answer session. This afternoon's webcast is being recorded, and a replay will be available in the Investor Relations section of our website at amctheatres.com later today.

With that, I'll turn the call over to Adam.

Thank you, John, and good afternoon, everyone. Thank you for joining us today. At AMC, we're especially pleased that with revenue of precisely $1.3 billion and adjusted EBITDA of $122 million, yet again for another quarter, AMC Entertainment comfortably beat Wall Street consensus assessments for both our revenue and adjusted EBITDA. As has often been the case in the recent past, AMC's leading market position and the skills demonstrated in the implementation of our numerous and important marketing, operations and cost containment strategies allowed us for yet another time to overperform the expectations of those who underestimate us.

As we look at AMC's third quarter results and for that matter, the full year-to-date, calendar year 2025 is turning out exactly, and I mean exactly as we have long predicted. Due primarily to the timing of major studio film release dates, a weak first quarter was followed by a blazing hot second quarter, which then was followed by a softening third quarter. We continue to expect, however, that the year will culminate in what we hope will be quite a strong year-end in quarter 4. Hello Oz with WICKED: FOR GOOD, hello Disney's AVATAR: FIRE AND ASH, Indeed, a broad array of appealing movie titles will be coming out before year-end.

Our prediction of a so-so third quarter industry box office turned out to be true as the North American box office declined some 11% following tough comparisons against last year's strong third quarter. But when evaluating AMC's performance in the context of the third quarter's challenging industry-wide environment, I see our company firing on all cylinders, marketing prowess, operational strength, financial discipline, all are direct evidence that AMC is very well positioned to capitalize on the box office growth that we believe lies just ahead. Remember that about 2/3 of our incremental revenue drops to the adjusted EBITDA line. So when industry revenues rise, which we believe they will in Q4 of 2025 and again throughout 2026, AMC's financial results should rise even more rapidly.

The third quarter industry-wide softness should not be a cause for alarm nor a harbinger of some negative trend about which to hand ring or worry. To the contrary, we expect that this will turn out to be the highest-grossing fourth quarter in 6 years. We also continue to believe that the size of the 2026 box office will be dramatically larger than that achieved in 2025. There are clearly bright spots in AMC's third quarter financial results that bode well for AMC, with an expecting rising industry-wide box office in the fourth quarter of this year and again throughout 2026. Specifically, AMC outperformed the industry, achieving all-time record admissions revenue per patron of $12.25.

In addition, food and beverage continues to be a shining success for us as we achieved the second highest food and beverage revenue per patron in our company's entire 105-year history of $7.74. Combining revenue increases with aggressive cost management, it is noteworthy that in the third quarter, we grew our consolidated contribution margin per patron by 9.2% compared to the prior year, and this metric is now approximately 54%, 54% higher than it was pre-pandemic in 2019. The improvements in our efficiency as a company are one of the reasons we are standing proud and tall today.

Despite an industry-wide box office that was well below the third quarter of last year, AMC also generated improvements to cash used in operations and in free cash flow when compared to the same time of a year ago. And also looking at the third quarter, it is especially satisfying to us that in the United States, during the third quarter, AMC significantly increased its market share. so much so that in looking at studio-reported grosses for the full year-to-date, January to September, AMC's market share increase handily outshined that of any other movie theater circuit in the country.

AMC's share now approximates 24% of the domestic box office versus 15% for Regal and 15% for Cinemark. Taking out Canada, where we have no theaters, AMC has a 27% share of the U.S. box office, Regal and Cinemark 16% each. Marcus has just under a 3% share. No other U.S. circuit has even a 2% share. AMC is now about 50% larger than our 2 next nearest competitors. And we are 10-ish times the size or more of everyone else. Our market share increases this year are encouraging to us and a sign that our strategies are working. But it is simply the outsized magnitude of our market share that is so particularly compelling because, as the box office grows over the next 14 months, as we believe it will, AMC is better poised than anyone else to reap the benefit there from.

We believe all this sets us up so very well as we look ahead, given what AMC believes will be a rebounding industry-wide box office going forward, coupled, of course, with all the actions and improvements being made specifically within and across AMC theaters in the United States and Odeon Cinemas in Europe. As previously announced, perhaps more important than any other accomplishment during the third quarter, AMC successfully completed several transformative capital markets transactions that greatly strengthen AMC's financial foundation. We refinanced $173 million of debt maturing in 2026 and equitized $143 million of exchangeable debt, the latter of which, in turn, was subsequently increased to $183 million of equitized exchangeable debt without the issuance of any additional equity or additional use of cash.

Going forward, we will continue to take the necessary actions to enhance our balance sheet and position AMC to capitalize on what we believe will be a multiyear industry recovery. In conclusion, let me add that we are tremendously excited about the film slate coming in the remainder of this fourth quarter, both with blockbuster titles and also with more intimate storytelling. It all starts this weekend with Disney’s action-packed PREDATOR: BADLANDS coupled with Sony Pictures Classics NUREMBERG. In November, we also will have Lionsgate ‘s NOW YOU SEE ME NOW YOU DON’T, Disney’s family favorite ZOOTOPIA 2, , Paramount’s THE RUNNING MAN and Universal’s acclaimed and much awaited return to Oz with WICKED: FOR GOOD. Universal’s chilling FIVE NIGHTS AT FREDDY’S, Paramount’s animated adventure THE SPONGEBOB MOVIE: SEARCH FOR SQUAREPANTS, Focus Features’ SONG SUNG BLUE and the third chapter of Disney’s epic saga from the mind of the legendary James Cameron, AVATAR: FIRE AND ASH. What a lineup of movies.

With that and all the other highly anticipated films that will be coming out in November, December, in addition, we believe the fourth quarter box office will surpass that of last year and knocks 2025 as the largest post-pandemic box office year yet. Of course, that all depends on ticket sales in November and December. We'll all know for sure in about a couple of months. To put an exclamation point on that expected box office growth in the near term, if one sets aside the anemic first quarter of 2025, the domestic industry-wide box office has actually been on a $10 billion pace since April 1. That is a number that is still very much larger than the calendar year box office recorded for either 2023, 2024, or the current year 2025.

What's more knowing of the long list of great titles coming from our studio partners in 2026, we envision a strong and robust film slate is on the horizon for the full year ahead. Sean, let's go into the quarter in more detail.

Thanks, Adam, and thanks, everyone, for joining us today. As predicted, the third quarter was relatively soft compared to last year. Nonetheless, while the North American box office was down 11%, AMC's consolidated admissions revenue was down by only 3.9% and domestic admissions revenue was down by only 5%. This reflects the meaningful growth in our market share, thanks to the power of our premium large-format offerings, unrivaled loyalty programs, innovative marketing, promotions, and pricing. This afternoon, I'd like to focus my comments on several key third-quarter performance metrics that clearly demonstrate the underlying strength of our business. Our consolidated revenue increased by 7.5% versus last year and is now 47% above pre-pandemic Q3 2019. This remarkable growth is driven by a 60.5%, that's 60.5 6.5% increase in food and beverage revenue per patron and 33.8% increase in admissions revenue per patron, all relative to Q3 2019.

These are impressive metrics yet, but even more important is the incremental profit that we generate with each additional moviegoer. Our measure of this is contribution margin per patron, and we define it as total revenue minus both film exhibition and food and beverage costs divided by total attendance.

In the third quarter, we grew our consolidated contribution margin per patron by 9.2% compared to the prior year, and this metric is now approximately 54% higher than in 2019. From a segment perspective, our U.S. operations delivered a truly exceptional quarter. Consider the following: in Q3 2025, our domestic adjusted EBITDA reached $111 million. This is nearly $4 million more than in Q3 2019, despite us selling $18.9 million or 31% fewer tickets than we did in Q3 2019. This achievement was possible because domestic revenue per patron was 50% higher and domestic contribution margin per patron was 57.5% higher than in 2019.

Turning to our Odeon operations. The European industry was challenging in the third quarter, with attendance at our Odeon cinemas down 11.4% versus the prior year. Nonetheless, the business continued to deliver strong fundamental results with total revenue per patron up 13% and contribution margin per patron up 14.4% compared to last year. Total international revenue per patron is now up 37% versus 2019, and international contribution margin per patron is up 42.2% compared to 2019. These results are evidence that the box office does not need to fully recover to achieve pre-pandemic levels of adjusted EBITDA. This is thanks to a combination of initiatives focused on theater portfolio optimization, operational efficiencies, food and beverage innovations, industry-leading marketing programs, and the ongoing success of our AMC Go Plan.

Over the last few years, we have taken meaningful steps to optimize our theater portfolio. This includes rent negotiations, the closure of underperforming locations, and selective capital deployment in new and existing high-performing locations. In 2025 alone, we closed 20 locations and we opened 3. And since January 2020, we've now closed 212 locations and opened 65 for a net reduction of 147 theaters or about 15% of our fleet. Going forward, we'll continue to strategically manage our theater portfolio to optimize profitability.

Moving to the balance sheet. We ended the quarter with cash and cash equivalents of $365.8 million. This excludes restricted cash of $51.1 million. Our free cash flow in the fourth quarter will inevitably be dependent on the box office during the next 2 months. Provided this turns out in line with our expectations, we anticipate being free cash flow positive for the 9-month period ending December 31, 2025.

From a capital expenditure perspective, we expect full-year 2025 CapEx net of lease incentives to be in the range of $175 million to $225 million. Our capital allocation priorities remain: one, maintaining adequate liquidity and financial flexibility; two, strengthening the balance sheet; three, elevating the guest experience; four, pursuing high-return growth initiatives. This disciplined approach to capital allocation reflects our commitment to building an increasingly strong and resilient company to deliver long-term shareholder value. Since the beginning of 2022, we've now lowered the principal value of our debt, finance leases, and COVID-related lease deferrals by nearly $1.5 billion, and we're not yet done. We'll continue to take decisive steps to strengthen our balance sheet so that we are increasingly well-positioned as the box office recovery continues.

In closing, AMC's third-quarter results underscore the meaningful progress that we have made over the last few years. With promising fourth quarter already underway, a robust firm slate ahead, and an improving capital structure, we believe AMC is exceptionally well positioned to capture the full benefit of the industry's continued recovery and to deliver long-term value for our shareholders.

With that, I'll pass the call back over to Adam.

Thank you, Sean. Before we take your questions on this webcast, I'd like to touch briefly on 5 different points. First, AMC Theaters distribution took another bold and new step forward in the third quarter of 2025 when we partnered again with the iconic one and only Taylor Swift to highlight the debut of the 12th studio album in her astonishing career. All the planning occurred within the third quarter for our theatrical release on October 3 to 5 of the 1 weekend screening of Taylor Swift: The Official Release Party of the Showgirl. This unique theatrical event was showcased on approximately 6,500 movie theater screens in the United States and across some 56 countries, generating some $50 million in box office receipts in a weekend, $34 million domestically, and another $16 million internationally. We're proud that Taylor Swift, the official release party with Show Girl, came in at #1 in the domestic box office for its opening weekend. We're also proud that it was graded an A+ on CinemaScore and in the high 90s on Rotten Tomatoes. And as a result, that we put so many smiles on the faces of millions of Taylor Swift fans globally.

These impressive results speak to the strength of AMC's innovative distribution abilities, not only bolstering AMC's results but also contributing to the health of the overall industry. The numbers of the Taylor Swift project speak for themselves. To that end, here's a number for you, 7.5. 7.5 you ask, it is incredible to think, but from start to finish, from the time of our very first phone call about this potential project to generating from some 56 countries, fully $50 million in box office ticket sales receipts, plus, of course, food and beverage revenues in addition, AMC pulled all this off in only 7.5 weeks, 7.5 weeks from first conversation to completed project. And going back to the concept of our success in increasing AMC's outsized market share in the U.S. and Canada, of course, we take some real satisfaction that our normal market share has now grown up to 24%. But on the Taylor Swift official release party of the Sogirill event, AMC's market share was an eversoullant 36%.

As excited as we are by the numbers, it is especially gratifying to us that after our immensely successful 2023 experience with Taylor, she came back to AMC for another round in 2025. What a compliment it is to AMC that the Swift family was so pleased with us that they came back another time. I've said this often before, but I want to say it again. Our every interaction with Taylor, with everyone in the Swift family, and all the people in our camp, all those interactions, every single one has been nothing less than a true joy and an honor and a privilege for AMC. I say this with all the sincerity I can muster.

Thank you, Taylor. We are so proud to be a small part of your team. This all leads us to believe, by the way, that while our bread and butter will always remain the vast output of the current studio system in the future, there also is clear opportunity on an incremental basis for AMC to create and distribute more theatrical content. Second point, speaking of adding more content for our screens, I am especially optimistic that we can do more on a cooperative basis with Netflix. During the third quarter, we opened a new dialogue between AMC and Netflix that led to our showing KPop Demon Hunters over Halloween weekend. Not surprisingly, given our array of theaters and our loyal customer base, AMC generated more than 1/3 of all the U.S. theater guests seeing KPop last weekend.

The talks with Netflix are in their infancy, and we do not know yet the ultimate size there can be for this potential cooperation. There is much still to work out, especially, for example, on Windows. But even so, realizing that Netflix is a great company and the largest streaming service on the planet with an enormous amount of content, and that AMC is the largest movie theater chain in the world, sitting here today, I am highly confident that there is more to come with our 2 companies working cooperatively together. Stay tuned.

Third, again, on generating more content, given the success we've demonstrated with Keller Swift and Beyonce, and when you factor in that we have now built the technical capability, and this is unknown to many of you, to be able to live broadcast events to 277 of our 530 theaters in the United States and to a similarly large percentage of our theaters in Europe. I believe there is dramatic opportunity for AMC to broadcast live concerts and live sporting events on our giant screens. We intend to make this pursuit one of our highest priorities for 2026.

Fourth, when talking of giant screens, no one in our industry is anywhere close to AMC in the area of offering premium large-format screens, extra-large format screens, and other premium experiences. With 223 IMAX screens globally and right at around half of the IMAX screens in the United States, we are a significant recipient to share in IMAX's obvious success. Heretofore, our recent monies have been concentrated on improving the quality of our IMAX screens, enhancing them greatly through a multiyear effort to convert almost all of them to the much preferred IMAX with laser at AMC concept and format. That format includes laser projection, much enhanced sound, more attractable visual inauditorium aesthetics, and more comfortable seating.

Depending upon your view of the terminology, that effort to upgrade our IMAX theaters to IMAX with laser is now either in the back stretch or the home stretch such that we are now turning our attention to another notion that we have, in fact, entered into discussions with IMAX about once again increasing the number of our IMAX locations as well. Similarly, we are so incredibly pleased with our investment in Dolby Cinema PLFs, which are doing so, so very well for AMC. We currently have 177 installed globally. And as we announced earlier this year, we are so confident in our success with Dolby Cinema that we would like to grow that count of Dolby auditoriums by around 25% over the next few years. And while today, we only have 6 ScreenX auditoriums and no 4DX auditoriums, again, early this year, we signed an agreement with CJ to exponentially increase our count of their 2 premium offerings within the AMC and Odeon fleet of theaters.

Not to be outdone only by our so-called third-party PLFs, AMC also has 147 of our own house brand PLFs, primarily branded Prime in the United States and iSense in Europe. I would expect that in the next couple of years, our house brand PLF locations will also grow in numbers, and specifically that with Prime in the United States, we will double, possibly even triple, the number of our Prime auditoriums. And in a fast-moving advance for AMC, we've moved ever so quickly to introduce what we call our extra-large format screens with our new XL offerings, which I might add command a price premium in ticket price.

Launched just 1.5 years ago, we already have 151 XL screens installed and delighting moviegoers, 67 in the United States and 84 in Europe. By next Christmas, that number should about double. I expect that we'll have in the vicinity of around 300 or so XL screens in full operation a year from now. You all likely know that premium large-format and extra-large format screens greatly appeal to moviegoers. But what I find particularly impressive is that we have pulled off this great commitment to increasing and enhancing our premium experiences, all the while living within our very tight $175 million to $225 million annual net capital expenditures targets. And finally, the fifth point, as you might expect, AMC is actually -- is actively canvassing how AI, artificial intelligence, can be used both to make our company more efficient, but also to dazzle our guests.

We're already using AI internally in many ways, and our use cases will increase dramatically in 2026 and beyond. But especially interesting, during the third quarter, we found our first way to participate in AI-powered technology that already is dazzling those people seeking engaging out-of-home entertainment. In August, we made a single-digit multimillion-dollar equity investment in Nova Sky Stories, a company brilliantly conceived and led by its visionary founder, Tesla Board member, Kimbal Musk, and brother of Elon. Nova Sky Stories was created a few years ago when Kimbal acquired the formal aerial drone division of Intel. He has since turned its cutting-edge and leading AI-powered technology into also storytelling aerial drone shows that fascinate both free guests and paid ticket buyers alike, key in on that paid ticket buyers notion as Nova Sky Stories creatively lights up the dark evening skies with its just wonderful light shows.

Nova's most recent effort was in September, a truly mind-bending Grace for the World concert and aerial drone light show that took place over St. Peter's Square in Rome in full cooperation with the Vatican in conjunction with its Jubilee. You can see footage on Disney+, which telecasted live, and stunning excerts can be found throughout YouTube. The next incredible NovaSkytory show will take place at the Rose Bowl in Los Angeles just next weekend on Saturday, November 15. For more information, check out www.novaskystories.com, that's NOVA for novaskystories.com.

In addition to just investing in this company with what we expect will be its explosive growth financially in 2026 and 2027, there is much that AMC Entertainment can and will do together in cooperation with Nova Sky Stories. More details about that to come in the coming year. I'll wrap up our webcast today by saying that AMC is so very excited about the 8-week sprint that we have in front of us to finish out 2025. Over the next 2 months, it will be movie after movie after movie. I can't wait for Norberg this weekend. And I was not alone when I found my sight crying in a movie theater while I was viewing an advanced screening of Focus Features' movie coming out of Christmas, the remarkable Songsun Blue. After all, as our very own Kidman has said for some heartbreak feels really good in a place like this.

And of great importance financially to AMC. Advanced bookings for Wicked: For Good are Through the Roof. They exceed the advanced bookings that we previously had at the same time before release for the original Wicked movie of a year ago, which itself was a global Triumph, both for Universal and for AMC. And then what is there to say that James Cameron, storyteller extraordinary. The entire world is on pins and needles waiting to see your latest short of the masterpiece, Avatar Fire and Ash.

With that, Sean, let's go to questions from our shareholders and from analysts.

[Operator Instructions] And we'll take our first question from Eric Wold with Texas Capital Securities.

A question a little bit on kind of the concessions and ticket prices. I know, obviously, you had some great success driving up the per patron spending over the past couple of years with a lot of the initiatives you've had within the theater. Just want to talk about kind of the baseline pricing kind of below the surface given the consumer environment we're in right now. Maybe talk a little bit about the pricing power, maybe the price increases that you've been kind of pushing through on both tickets and concessions.

I guess starting with tickets, have you been pushing up baseline ticket prices kind of across the board? Or has the focus mostly been on the various premium pricing options, IMAX, and consumers kind of choose to pay the higher prices for the premium auctions versus raising prices across the board on all tickets? And then on concessions, kind of what are your thoughts on kind of price increases up and beyond the need to offset kind of inflationary headwinds right now, if you feel that's something that moviegoers would be accepting in this environment or if that's something that you think is kind of -- that maybe kind of need to wait a little bit as we get a little further into '26.

That's a question. Thank you, Eric. Nice to talk to you again, as always. I have to be very -- we're happy to talk to the point, but I got to be very careful because to talk about pricing thoughts on a going-forward basis because that could be interpreted to mean signaling to competitors. But I can comment on our pricing actions previously, and you can read into those whenever you want to read into those. If you look at our ticket pricing of $12.24 that was achieved in the third quarter, which is on a consolidated basis, it was the highest number we've ever had in our history. And if you look at our ticket pricing, it's risen pretty substantially over the past several years. It's moved in the past much faster than general consumer inflation.

And I would especially point you not only to looking at our consolidated prices, but looking at our prices by geographic segment. Our prices have increased in Europe and our prices have increased in the United States as well. But I think what's really interesting is, yes, some of those price increases derive from our growing commitment to PLFs. But we've also not been shy in taking ticket pricing up. And in fact, if you go back to May of 2025, just 6 weeks before the third quarter began, knowing that we had some big movies coming in June and July, we did take across-the-board price increases, not at all of our theaters in the United States, but I would say most of our theaters in the United States. And those price increases vary theater by theater and market by market. But prices did go up. And they went up because we think -- again, I want to be careful only to talk about what we've done looking backwards, not looking forward.

Our thoughts then were we ought to cleverly price. It goes back to your very first economics class in the Freshman college when you learned the laws of supply and demand and the laws of charging prices in the peak and charging different prices in the so-called off-peak, charging more in periods of high demand and charging less in periods of low demand. So we have not been shy in taking prices up at those theaters with the most demand. We have not been shy in taking prices up on Friday and Saturday nights when demand for our theaters is at their peak. But one of the things that gave us comfort in being able to put those prices -- those price increases into place is that we also have been maniacal in finding intriguing ways to discount prices for bargain hunters. And the 2 biggest examples that come to mind are A-List. We now have almost 1 million members of our A-List program.

And those people, it's out of -- this is -- we have a similar program in Europe, I might call limitless. But just talking about A-List in the United States. It's only 1 million consumers, just under. So only 1 million consumers out of a population of 330 million people. But these people account for 15% of our total patronage at AMC. That's like an incredible number from only 1 million people. And those people are paying between $20 and $28 a month. And on average, they're seeing 2.4 movies a month on average. But they're entitled to see 4 movies a week. That's theoretically 17 movies a month. And they're getting all that for -- depending upon what geographic market they live in, between $20 and $28 a month. For people who want to seek out a bargain, that's a good bargain.

The second bargain that comes to mind in what I think was a bold initiative by AMC that was announced effective with Tuesday, July 8, and Wednesday, July 9, and what we said would be a permanent feature going forward. We expanded our long-time discount Tuesday offering for AMC Stubs members to discount Tuesday and discount Wednesdays for AMC Stubs members. Now it's free to join AMC Stubs, and you can do it instantly merely by giving us your e-mail address. So anybody who wants to take advantage of the new Tuesday, Wednesday discounts can do so. We stepped -- we made the level of the discount much more dramatic by positioning it as a 50% discount to the typical evening list price on a standard auditorium. So it's a powerful discount. It's available on twice the number of days per week that it was for the last 15 or so years when the movie industry thoroughly had discount Tuesdays.

The fact that we now have 50% off Tuesdays and 50% off Wednesdays also is a tremendous enrollment device to encourage moviegoers to join AMC Stubs because they only get the discount if they're AMC Stubs members. But as I said, you can easily and instantly join. And so like AMC is committed to offering bargains -- but we're also -- we've also proven in the past that we believe we not only can offer premium experiences, which in themselves command premium prices, but we believe and we demonstrated through our past actions, again, not signaling about the future, that we are willing and able to raise price across the board.

As for food and beverage pricing, I'll let Sean talk to that and our otherwise compression strength in the area of concessions.

Thanks, Adam. Clearly, food and beverage is a key focus area for us, as one would expect, right, because of the profitability of that segment. And when we look at our food and beverage business, the key drivers of our food and beverage per person are the percentage of people participating going to the concession stands and buy food and beverage, the number of units that they buy when they go to the concession stand, and the price they pay. And if you look at the increase in food and beverage per person versus pre-pandemic levels, all 3 of those factors, all 3 participation units per transaction, and price has been part of that significant increase in food and beverage. If you look just at Q3, then in Q3, the percentage participation and the price were the biggest drivers of our food and beverage increase.

To drill down on the price aspect of that food and beverage per person in a little more detail, I think there's a couple of factors here. One is the price is impacted by mix, right? What are our guests buying. And as we've added collectible concession vehicles, we increasingly focused on movie-themed drinks and movie-themed cocktails, that's really helped to increase the price, even if actually the price for the regular item hasn't changed that you have that positive mix impact, and we see that still being very, very beneficial for our business.

The other thing to say about price is we've been very analytical with the data that we have on pricing. So really looking at individual theaters, individual market locations, where can we take price, where should we reduce price. We're very focused on that. And then we're always offering opportunities in discounts, as we spoke about the discount days, if you look at the food and beverage, we have discount food and beverage offerings on those discount ticket days as well. So there's something available for the consumer in. But again, it's sort of food and beverage is really critical to our business and been a big part of why we've been so successful in our per-person metrics as we've gone through the recovery.

And if I can add, Eric, sort of I think getting to the thrust of your question as opposed to the factual answers, I think you were trying to inquire, do we think with angst in the general economy, and like are we somehow constrained by consumer sentiment that somehow our pricing actions will be limited. And again, I don't want to make any kind of speculative comment about what we will do in the future. But I would like to point out this fact. I don't feel -- I think we have to be -- I always say you want to be prudent in not taking prices up too quickly. But I don't feel any price limitation from our clientele. The fact that our premium screens sell out first tells us something. The fact that we introduced 151 XL screens that already were screens that already existed in our theaters. They are bigger than the other screens in our theaters, and we just slot the XL logo on the door to remind people it was a bigger screen and that we're able to command almost a 10% price premium from those XL screens.

But here's one other little factoid that shows you that I believe that our consumer is willing to pay for what we offer. Our merchandise business was literally nonexistent 3 years ago. nonexistent. I mean, like $0 in revenue for merchandise. This year, 2025, globally, U.S. and Europe combined, it's going to be over $65 million. And if you look at the price points of some of these merchandise items that we're selling at the concession stand, it's not hard to find items that are priced at $15.99, $19.99, $29.99, more than $30 a pop. And like literally, one of our biggest problems is that we're selling out too quickly. We are often sold out. We're sometimes ordering 50,000, 100,000 of these units in the United States alone, and we're selling out on the first night or 2. It's a high-class problem. And you do have to order this stuff 9 months in advance and get it shipped in economically.

But I mean, it's just another example. Consumers are willing to reach into their pockets to pay us for the experience that we offer, provided that we do a good job of it. And that's why we work so hard to keep our theaters in good shape. That's why we work so hard to keep our film crew staff motivated and treating our guests well. And just look at the results. highest ticket prices in our history, second best food, and revenues per patron -- I guess it's ticket prices per patron in our history, second highest food and beverage revenues per patron in our history achieved in this third quarter.

With that, operator, I think we're going to turn to some shareholder questions. Sean, what's the first question from our shareholder base?

Yes. There's been a lot in the press about the Warner Bros situation, and people are interested in what our comments on that are.

So it's a little premature to speculate about what's going to happen at Warner Bros. There are some obviously who believe that Warner Bros will stay independent. There are others who obviously are aware of Paramount's repeated offers. There are other potential suitors for Warner who seem to be emerging. Let me just say this because it's not a reality yet, and so there's no real need to speculate too much. I would like to comment that AMC is thrilled beyond thrilled that David Ellison and his organization, led by Jeff Shell, have bought Paramount. We think they're going to do a spectacular job, and they have committed to greatly increasing the movie count that Paramount will be releasing going forward. Paramount was down to 7 movies a year. We think that Paramount is on record as saying they want to more than double that movie count as quickly as they can under the ownership of David Ellison.

Similarly, Warner Bros has told us that they also -- I think they were down to 11 movies in 2025. And they also would like to be and are committed to increasing the release of more movies in 2026 and beyond. That also is very good for AMC. So I guess with respect to any potential studio consolidation, our attention will be laser-focused on one issue and one issue only. And that is the count of movie releases that's coming up from studios. Clearly, if it's more movies, that's good for AMC. And if it's less movies, that's not as good for AMC. So we're watching closely. And what we're watching more than anything else is will the number of movies being issued going forward go up or not. Next question.

We've had -- and we were just talking about it a few moments ago, we've had a couple of quarter-after-quarter of really, really strong performance metrics for the business. And kind of related to the question we just discussed as well is people are asking how sustainable is that? Can we continue to keep these key performance metrics at this high level as the industry box office continues to recover?

I'm completely convinced that we can keep these metrics strong, that they are, in fact, not flukes but sustainable and that we can grow them. And what gives me that confidence is we've been growing them now for 6 years, since 2019, or really in the last 3 years since the box office sort of got semi-respectable post-COVID. And we apply as a company so much attention and brainpower, mental acuity to getting those metrics up. They didn't happen by accident. And we'll apply that same emphasis on keeping those metrics strong and growing, looking ahead. There are 2 numbers that kind of fed my head more than anything else about how AMC survived the last 5 years, because look, I mean the industry box office is still 20% down from pre-pandemic levels. That's a problem. Some people don't want to admit that's a problem, but that's a problem. It would be much easier for us if we can see the box office grow to what we hope will be a much larger pace in 2026 than it's been in the last 3 years.

And as I said in my prepared remarks, if you look at the 9-month period from April 1 to December 31, 2025, the industry has not been on the $9 billion pace that it will probably be on for 2025 calendar year, but a $10 billion pace. And it sure be nice if that's the pace that we have going forward. In a rising box office environment, AMC does very well because 2/3 of our incremental revenue drops the EBITDA line. It's not a linear relationship between rising box office and rising EBITDA. It's an exponential relationship between rising box office and EBITDA. So the same attention that we're paying to keeping these metrics strong comes much more easily in a growing box office.

The other metric, the number that -- or I said there are 2 numbers that float in my head. Look at our contribution per patron. Our contribution per patron pre-pandemic 2019 versus say, it's up 54% in 6 years, 54% increase in contribution. We would not be alive today had it not been for our ability to increase our contribution margin by 54%. We are simply a much more efficient operator than we were pre-pandemic, and we don't need the box office to come all the way back to pre-pandemic levels for us to be very successful at the EBITDA line. This other number that floats in my head, of course, is we raised $4.5 billion of equity over the past 6 years and $2 billion of debt, which we have since repaid off not only the $2 billion that we raised, but we paid off more than $1 billion more than that. So our debt levels are actually lower today than they were going into the pandemic. But we still owe so much gratitude to our shareholder base, especially our retail shareholder base, who stayed with us all these years because their belief in our future, their willingness to let equity come into our coffers to keep our cash reserves robust and healthy and strong are why we made it.

Next question.

Do you want to comment a little bit about the M&A environment? We recently noticed Connapolis' acquisition of Imagin Entertainment, and any thoughts on the M&A environment in this industry for us?

Sure. So we ended the third quarter with $363 million of cash on hand. Every dollar of that cash is earmarked. So now is not a great time for us to be diverting cash to other strategies other than running our company well and strengthening our balance sheet. Similarly, we are out of shares. So it's not like under the current situation, we could use share equity capital as a currency for M&A activity. Having said that, over time, our cash reserves will grow from whatever means. And when I look at the M&A environment, it looks quite attractive to us right now.

Cinnapolis, a high-quality operator in Europe, bought 14 movie theaters in the United States at 5x trailing EBITDA, 5x. Now it's only 14 theaters. Like you couldn't buy AMC for 5x EBITDA because we're 900 theaters, not 14. But it does tell you that there are plenty of movie theater circuits out there who have less than 1% market share, less than 2% market share, where we, AMC, if we had cash to deploy for M&A purposes, could pick them up at levels at bargain levels and then arbitrage them into being worth much more if they were part of the AMC network. And not only much more merely because we trade at higher multiples than what you might pick up some of these circuits for the cheap, but also because if those theaters were run by AMC, we believe they would do better.

We have better marketing strategies. We have better purchasing power. And I think our ability to deliver the numbers bottom line beat a lot of the smaller operators who are still around, and what is still a quite fragmented industry, 40% of the industry is still coming from very small operators. So I think the M&A market is ripe for us to move if we have the resources to move. Today, we don't have those resources. But I can tell you that we are paying a lot of attention to M&A activity. We're still analyzing a lot of potential combinations, small ones, not necessarily big ones. It appears to us there are -- there is opportunity out there for us at hand when it's the right time for us to move intelligently, and that is as we can do it without compromising either our cash reserves or our absolute commitment to strengthening the balance sheet.

Final question here regarding the loyalty programs. We provided a lot of additional benefits to our loyalty members recently. And so people are just asking for an update about that. How is that going with things like discount Wednesdays? So we did just add a significant benefit by adding discount Wednesdays to the mix of discount Tuesdays.

Remember, one of our tiers of AMC Stubs is AMC Stubs A-List. Back in May, we enhanced the benefits of A-List. A-List was quite successful for us before. You used to be able to see 3 movies a week, now you can see 4 movies a week. We made it much easier to use the A-List program because you no longer need to fish for a state ID, a driver's license to get in, you're using A-List just as a flash your phone because we added a picture ID to your profile within our A-List within the app, within AMC app for A-List. So like that's all we did, add a lot of benefit. But the results are just great. A-List started out right after COVID when we reopened theaters in 2020, having only about 500,000 members. It's up to close to 1 million. So that's doubled over the last 5 years.

We also introduced a new tier of Stubs, our loyalty program on January 1 called Premier Go, which gives people double the points generosity that a so-called insider, a member of our free tier, gets and gives them other benefits. It's a path to getting from insider to Premier. Premier, you got there by paying $15 a year, now $18 a year, speaking of price increases. Now $18 a year. I guess my marketing department would assist. I say it's $17.99. So it's not quite $18, right? In the consumer head, we only raised it by $2, not $3. But with Premier Go, you get this increased generosity level. It's not all the way to the generosity level of Premier because Premier is a 5x level of discount. But you earn Premier Go not by paying us a $17.99 purchase price, but you earn it basically by seeing -- making 8 visits a year to our movie theaters, which isn't that hard to do. And the number, we didn't have one single member in our Premier Go tier on December 31, 2024. Sitting here today, we have between 600,000 and 700,000 of them.

And by definition, they're seeing 8 movies or more a year. Like this is really good for us. So our knowledge of loyalty programs continues to be enormous. We continue to reap great benefits from it. And we're doing this not only in the United States. In 2025, we launched a points-based loyalty program in the United Kingdom. The U.K. has always had -- not always, but it's for a long time, has had actually ever since we bought it in 2016, has had its limitless program, which was a model for A-List. But we now have a loyalty scheme in the U.K., just like we have Stubs here in the U.S. And that loyalty program in the U.K. is also being spread to some of our other country territories across Europe. So this is an area where we know we're doing, and we're -- and it's one of the reasons why we're optimistic for our future.

With that, I think is that the last question for today. So I'd just like to close by telling you all, I don't know where you're going to be Friday night, but I'm going to be at an AMC theater watching Nuremberg. It's going to be a really great movie, I think, starring Russell Crowe. And my goodness, the movies we have coming out over the next 8 weeks, it's a parade of one great title after another. I think I can say with some degree of confidence, America and the world is going to be in movie theaters in November and December. We hope we can count you among them. Thank you for listening to us today and joining. We'll talk to you again soon. All the best.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Good day, everyone, and welcome to the AMC Entertainment Holdings, Inc. Second Quarter Earnings Webcast.

[Operator Instructions]

It is now my pleasure to turn the program over to John Merriwether, Vice President, Capital Markets.

Thank you, Leo. Good afternoon. I'd like to welcome everyone to AMC's Second Quarter 2025 Earnings Webcast. With me this afternoon is Adam Aron, our Chairman and CEO; and Sean Goodman, our Chief Financial Officer.

Before I turn the webcast over to Adam, I'd like to remind everyone that some of the comments made by management during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks uncertainties and other factors may cause actual results to differ materially from those that might be expressed today.

Many of those risks and uncertainties are discussed in our most recent public filings, including our most recently filed 10-K and 10-Q.

Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict. In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned against relying on these statements.

The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events.

On this webcast, we may reference non-GAAP financial measures such as adjusted EBITDA, free cash flow and constant currency, among others.

For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the Investor Relations section of our website earlier this morning.

After our prepared remarks, there will be a question-and-answer session. This afternoon's webcast is being recorded, and a replay will be available in the Investor Relations section of our website at amctheaters.com later today. With that, I'll turn the call over to Adam.

Thank you, John. Good afternoon, everyone, and thank you for joining us today. It's earnings at AMC and what a day it is, in this second quarter of 2025, AMC showcased the impressive operating leverage that is inherent in our business. Importantly, in Q2, movies from just about every single major and minor studio alike crushed it at the box office in spectacular fashion.

With the second quarter domestic industry box office surpassing that of the first quarter of 2025 by a stunning 85%.

At AMC, we are particularly pleased that on many of these second quarter movies, our market share way overperformed. That came in part because of our network of especially productive theaters, AMC and Odeon having more premium large-format screens than any other exhibitor on the planet and the effectiveness of our compelling marketing programs.

In this year's second quarter, AMC and Odeon rolled out the red carpet for nearly 63 million guests worldwide, a 25.6% increase over the same period last year.

Beyond merely attaining that attendance growth, AMC's revenue growth was actually 35.6% above last year's second quarter, adding in our very tight control of our costs, AMC drove an adjusted EBITDA increase of 391.4% to a highly gratifying $189.2 million. That's a good formula.

Revenues way up, combined with quite a tight management of costs, and it generated $150.7 million more adjusted EBITDA in this year's second quarter than was posted in last year's second quarter.

It is a simple reality and hopefully a harbinger of things to come that as AMC's revenues grow, our EBITDA can soar.

With such a sizable increase in adjusted EBITDA from $38 million and change last year to $189 million and change this year, our net cash provided by AMC's operating activities in the quarter surged to a positive $138.4 million, such a dramatic turnaround from last year's net cash used in second quarter operating activities of $34.6 million. That's a total favorable swing of $173 million improvement quarter-over-quarter.

I would like to repeat those numbers so that all of you on this call and all of you on this webcast hear them very clearly.

In the second quarter of 2025, AMC Entertainment delivered a 25.6% increase in global attendance above that of Q2 '24.

Consolidated revenue growth of 35.6% versus Q2 of '24. Consolidated adjusted EBITDA growth of 391.4% versus Q2 of 2024. AMC's $189.2 million of adjusted EBITDA in Q2 2025 was just a hair under 5x the adjusted EBITDA of Q2 2024.

Cash generated from our operating activities of a positive $138.4 million stood a favorable swing of $173 million in this year's Q2 versus Q2 of '24.

Needless to say, it's all smiles at AMC today.

Our second quarter results are a combination of a recovering industry-wide box office and the undeniable fact that both AMC and Odeon are executing so well in so many different ways.

Indeed, we shattered all-time revenue records across nearly every per patron metric. As for the strengthening industry-wide box office, we firmly believe that this was not a short-lived spike, but rather the beginning of a sustained and powerful resurgence for our entire industry.

So that expectations are set correctly, the box office in the current third quarter will only be so given some seasonal, but not alarming softness. But hold on to your hats for the size of the box office in the fourth quarter of 2025.

Hello Disney's Avatar: Fire and Ash, Tron: Ares, and Zootopia 2. Hello Universal Wicked: For Good, and Five Nights at Freddy's 2.

Hello Glen Powell in Paramount for Running Man and, hello to so many other wonderful films that will be getting the big screens in theaters from so many of our studio partners in the fourth quarter of this year.

In total, it sure looks like 2025 is shaping up to be the biggest post-pandemic box office year yet and one which we believe will be some $500 million to $900 million more than that of full year 2024.

Even more compelling is the currently envisioned 12-month run rate for theatrical moviegoing after taking out the weak Q1 of 2025 and replacing it with the much stronger Q1 that we anticipate for 2026.

Perhaps with an occasional blip here or there, we expect the 2026 box office will radiate with great strength and resonate with theatrical moviegoers pretty much all year long.

Of particular note, this year, in 2025, the first quarter was terribly weak. In 2026's first quarter by contrast, we'll see the spillover benefits from Avatar: Fire and Ash's December 2025 opening, which, in our view, should greatly help to boost the Q1 2026 box office back up to a much healthier level. That should start the year 2026 off right, and we are highly encouraged by the extraordinary slate of films being released throughout the full year.

It's our view, and we are far from alone with this optimism for 2026 that the 2026 box office will be considerably larger than that of 2025.

Turning back to the performance of AMC and Odeon specifically in the just completed quarter. We set record after record in this year's second quarter. For the first time ever, AMC's consolidated admissions revenue per patron topped $12, coming in at $12.14.

Our consolidated food and beverage revenue per guest jumped to a record of $7.95.

And our total consolidated revenue per patron at AMC and Odeon hit an unprecedented $22.26 for us. We believe that these new records powerfully validate the rationale behind our various strategic initiatives and the fact that consumers view moviegoing at AMC and Odeon to be highly attractive out-of-home entertainment experiences.

In addition to setting new operational records during the quarter and delivering a powerful earnings reported result, just as important, we've continued to fortify our balance sheet.

As you know, in July, we just closed a series of transformative transactions, including receiving more than $240 million in cash from new debt issuance and the equitization of at least $143 million in debt with the potential to equitize even more up to a total of $337 million.

We have now addressed all of our 2026 debt maturities, pushing them out to 2029. That's 4 years from now. In so doing, we've put in place a solid foundation to capitalize on what we believe will be our industry's continued growth momentum and our company's continued growth momentum, which should be especially evident in the fourth quarter of 2025 and continuing deeply into 2026.

If I had to pick up just one set of words to characterize AMC's strong performance in the second quarter of 2025 and our optimism and our confidence about AMC's expected performance for 2026, it would be these.

And I quote myself, impressive operating leverage. As AMC's revenues grow, our EBITDA at AMC can soar. I'll now pass this call and webcast over to Sean Goodman, our CFO, to provide more detail on the financial results, after which I'll return to provide an update on the AMC Go plan and others of our strategic initiatives, Sean?

Thanks, Adam, and thank you, everyone, for joining us this afternoon. We are pleased to report a quarter in which, as Adam just noted, the team set a number of very impressive records about -- across both our domestic and international operations.

Substantial year-over-year industry growth drove our attendance growth, which when coupled with record-breaking per patron revenue and per patron profit resulted in an outstanding set of results for the second quarter.

Allow me to elaborate. I'm comparing consolidated results for Q2 2025 to Q2 of 2024. Global attendance rose 25.6% as we welcomed 63 million moviegoers to our theaters.

Total revenue grew by 35.6% or 34.1% in constant currency, reaching $1.4 billion. Adjusted EBITDA grew fourfold to $189.2 million, and we generated free cash flow of $89 million, a $168 million improvement compared to the prior year's second quarter.

These results were achieved through admissions revenue per patron growth of 7.5% or 6.2% in constant currency to an all-time record of $12.14. At the same time, food and beverage revenue per patron climbed 8.3% or 7.4% in constant currency to an all-time record of $7.95.

And total revenue per patron grew 8% or 6.7% in constant currency to yet another all-time record of $22.26. Total revenue per patron is now up approximately 43% compared to pre-pandemic 2019. This is driven in a large part by an approximately 56% increase in food and beverage revenue per patron.

Not only did we achieve the per patron revenue records that I just noted, we also grew our contribution margin per patron by 5.2% or 3.9% in constant currency to $14.48.

Note this is approximately 48% higher than pre-pandemic 2019. And you'll recall that we calculate contribution margin as total revenue minus both film exhibition costs and food and beverage costs, and this is then divided by total attendance to get to a contribution margin per patron. This is a measure that is intended to provide an indication of the incremental profit that we generate with each additional guest.

Based on all the above, it should come as no surprise that the total admissions revenue hit a Q2 post-pandemic high of $762.6 million, and this is an important one.

Total food and beverage revenue hit an all-time AMC high of $500 million. Our results highlight the significant operating leverage, as Adam just mentioned, that is inherent in our business.

With attendance up 25.6%, our adjusted EBITDA margin in Q2 2025 was almost 1,000 basis points above last year's second quarter. It's worth noting that thanks to operating efficiencies, despite consolidated Q2 2025 attendance being some 35% below pre-pandemic Q2 of 2019, which is the quarter that holds the record for the highest quarterly attendance in AMC's history, thanks to the spectacularly successful Avengers Endgame, despite being 35% lower attendance, our consolidated contribution margin in Q2 2025 was just 4% below Q2 of 2019, and our consolidated contribution margin per screen was, in fact, 9% above Q2 of 2019.

This all illustrates our conviction that the industry does not need to fully recover to pre-pandemic box office levels for us to achieve pre-pandemic levels of adjusted EBITDA.

Up until now, I focused on the consolidated results and record achievements, but note that both our domestic and international theaters operated at record levels during the quarter.

And that food and beverage revenue per patron and food and beverage profit per patron have never been higher at both our domestic and our international theaters.

The second quarter results reflect the impact of our continued focus on creating an unrivaled guest experience through industry-leading innovations, coupled with our enviable theater footprint and the most comprehensive and growing selection of premium large-format offerings.

Another driver of our success is the actions that we've taken to optimize our footprint and enhance profitability by renegotiating leases, closing underperforming locations and investing in high-performing new theaters.

Since the beginning of 2020, we have now closed 204 theaters and opened 65, resulting in a net reduction of 139 locations or nearly 14% reduction.

Notably, in just the last 18 months, we've closed 42 theaters and opened 6. Let's now turn briefly to our balance sheet. We ended the quarter with $423.7 million of cash and cash equivalents, excluding an additional $51 million in restricted cash.

From a CapEx perspective, for the full year 2025, we expect CapEx less landlord contributions to be in the range of $175 million to $225 million. Our capital allocation priorities remain unchanged: one, ensuring adequate liquidity; two, reducing our financial leverage; three, enhancing our existing circuit; and four, pursuing high-return growth-orientated initiatives.

With the first 2 capital allocation priorities squarely in mind, as Adam noted, we have recently taken important steps to strengthen our financial position.

The collaborative and transformative transactions announced in July strengthen our financial position by: one, enhancing liquidity and addressing near-term debt maturities by raising more than $240 million of new capital before fees and expenses that are primarily being used to repay all debt maturing in 2026; and two, lowering our financial leverage by equitizing at least $143 million of exchangeable debt with the potential to equitize up to $337 million of such debt in total in the future.

These actions, which were supported by approximately 90% of our term loan lenders represent a substantial vote of confidence in AMC's future and give us a runway to execute on our strategy and capitalize on the industry recovery.

Since the beginning of 2022, we have now lowered the principal value of our debt and finance leases by more than $1.1 billion, and we've repaid $284 million of deferred leases. All of this for total debt and deferred rent reduction of $1.42 billion in about 3.5 years.

Looking forward, we expect some seasonal box office weakness in the third quarter when we will also be up against some tough prior year comparators. However, we have high expectations for the fourth quarter, which may see the strongest quarterly box office in 6 years.

From a free cash flow perspective, we're pleased with the strong Q2 results. And while Q3 may be somewhat challenging, we continue to anticipate being free cash flow positive for the 9-month period ending December 31, '25, assuming that the box office performs in line with our expectations.

In conclusion, this quarter results reaffirm our conviction that our strategies are working and that AMC is extraordinarily well positioned to thrive as the industry continues along the recovery glide path.

And now I'll hand the webcast back over to Adam.

Thank you, Sean. I'd like to start a discussion of what comes next for AMC by first talking about some major pricing actions that we have recently taken. Showing our pro-consumer attitude, on Tuesday, July 8, and Wednesday, July 9, just a month ago, we kicked off our new 50% off, Tuesdays and Wednesdays discounted ticket pricing strategy here in the United States.

Bargain hunters can now find cheap admission ticket pricing at all of our showtimes on 2 days in a week at the vast majority of our U.S. theaters.

Discount Tuesdays has long been a staple in our industry. And it built up Tuesdays to being AMC's highest non-weekend attendance day of the week.

New this past month, we changed our messaging, instead of it being referred to as discount Tuesdays, it's now called 50% off Tuesdays, a message that we expect will be a far stronger communication to potential bargain-seeking moviegoers than merely saying discount Tuesdays, as we've said for years.

Why? Well, with our new messaging, potential guests instantly can see and instantly can understand the magnitude of the discount level that we're offering to them.

And of course, it's a sizable one. More than that, though, we now have extended that same pricing philosophy to Wednesdays as well.

We're doing so with the hope that just has been the case for Tuesdays for years now, we can turn Wednesdays into high patronage day for AMC in the United States.

Currently by contrast, Wednesday heretofore has been our single lowest attendance day of the week. We're only 4 weeks into this important new pricing initiative, so it's too early to declare victory yet, but we definitely have seen attendance spikes, and we are highly encouraged by the starting attendance numbers that we've seen so far as a result of the changes that we've made in the Tuesday messaging and the extension of those same discounts to Wednesdays at our U.S. theaters.

Two other really important things to note about our 50% off Tuesdays and Wednesdays effort.

First, this discount is only available to members of our AMC Stubs loyalty program, but that includes any instantaneous new member sign-ups. So that gives consumers a powerful incentive to join our loyalty program, which in turn allows us to track their package and market to them directly by communicating with them often. It's an ingenious acquisition device for us to gain new loyalty program member sign-ups.

Second, and this may be something that many of you are unaware of, because we knew that we would be doing so much and so visibly so to offer bargains to bargain seekers. Knowing that having a discount and Tuesday and Wednesday effort in the works also gave us the courage a couple of months ago to broadly raise prices at our U.S. theaters on Thursdays, Fridays, Saturdays, Sundays and Mondays when most of our patronage takes place.

That effort has worked out very well, and you'll see that in our second quarter numbers, for example, AMC's average ticket price in the U.S. often meaningfully exceeds the prices realized by some of our most important competitors.

The yield management strategies differ at our European theaters, but in looking back at the completed Q2 performance, again, you will see that we've had considerable success in realizing more ticket revenue per guest than was the case in prior quarters for us and is the case still for so many others in our industry.

Next, I'd like to turn to the efficacy of some of our most important marketing programs. Our U.S. loyalty program, AMC Stubs, has movie database purchase activity, collected on some 36 million U.S. households. That's around 90 million people in total.

About half of our total U.S. ticket-buying guests are members of our AMC Stubs program playing both for their points and to receive their other recognition benefits that come to them from being a Stubs member.

I am particularly excited that on January 1 of this year, we launched a new VIP tier within the Stubs program, a new level between the heretofore insider tier and the premier tier. In just 7 short months, we are already pushing close to 0.5 million active members in this newly created VIP tier. It's an incredible success story for AMC.

Then there's A-List, our monthly subscription program, which also is still a massive hit for AMC. Launched in the middle of 2018, A-List members see an average of about 30 movies per year at an AMC theater.

Just recently, like literally in the last few weeks, A-List was a [indiscernible] profiled in the pages of both the Wall Street Journal and the Los Angeles Times, the latter of which described A-List as having cult-like strong consumer appeal, especially with the younger Gen Z. That's so good for AMC, not the articles, but the fact of our -- the appeal of our program to Gen Z customers because it portends so well not only for our current patronage at AMC theaters, but our future patronage as those A-Listers stay with us for years and years to come. Paid membership in A-List is roaring hot. It's currently running up about 15% year-over-year.

Our similar subscription program in Europe, Limitless, also has considerable consumer appeal, especially so in the United Kingdom. Another marketing step forward for AMC Entertainment is this one.

In looking back to the arrival on scene in 2021 and since then of retail investors, we knew that they were interested in the prospects of AMC financially. It was obvious to us that we should set out to convert their interest in our company into securing their brand loyalty as moviegoing customers as well.

So we created the AMC Investor Connect program, which was individually enrolled in. There was no automatic enrollments, no group enrollments, people in this sign up one at a time. And incredibly, AMC Investor Connect now has some 1.7 million enrolled members, another marketing success for AMC.

And finally, there's our consumer advertising featuring Nicole Kidman. It certainly has hit the zeitgeist, both in the United States and across the United Kingdom and Europe.

All of us at AMC and all [indiscernible] are existentially proud that Nicole Kidman continues to be such a central part of our marketing activity. Speaking of global celebrity, the movie distribution effort that was such a success for AMC, starting with Taylor Swift and Beyonce in 2023 continues to deliver for us.

Last year, we did a Billie Eilish album release listening event with Interscope records. And just this past weekend, AMC exclusively played what I describe as an, Eminem's love letter to his legion of fans, a documentary called Stans.

This was an effort championed by Eminem himself, and you'll see repeated mention and praise of this documentary repeatedly on this very prominent wrapper social media postings. We continue to expect in the future that more interesting film products will come our way directly. And finally, let me turn to the AMC Go plan.

As you know, it's a comprehensive effort to continue positioning our company to fully seize the enormous potential of a resurgent industry-wide box office. Here are just a few of the actions that we're taking right now under the auspices of AMC Go because AMC Go focused as it is on offering our guests premium experiences of plenty.

We already have started the work to double the number of our already existing IMAX auditoriums that have been stepped up in their quality to the much improved IMAX laser projection technology and enhanced sound systems.

We also add some additional IMAX screens as well to our current worldwide total of 220. Paying close attention to the quality of the IMAX experience that AMC offers makes complete sense, given that currently, about half of all the IMAX screens in the United States, for example, are located at an AMC theater.

Just as we're growing our IMAX footprint, we're also growing our new -- sorry, our Dolby Cinema footprint. We are going to be adding 23 new Dolby Cinema screens in the U.S., just in '25 and 2026 alone to our current worldwide number of 178.

And we'll continue to add more Dolby Cinemas in 2027 and beyond. Over the next few years, we also hope to expand our house brands. That is to say we expect to more than triple the number of our house branded Prime and AMC PLF auditoriums, essentially eventually getting up to 100 or more Prime and AMCs. And that's in addition to the 82 house brand iSense PLF screens that Odeon already has internationally.

Looking past the PLFs per se, in AMC and Odeon Exclusive, we now already have open for business more than 120 XL branded extra large screens in the United States and across the Atlantic.

XL was launched by us with our first such screen only 1.5 years ago. And yet by this year-end, we should have more than 150. And by next year-end, meaning by December 2026, we should have close to 350 XL auditoriums opened and available for our guests. Our XL branding initiative is a smart, cost-effective way for us to shine a spotlight on some of the biggest and most impressive auditoriums in our circuit.

In the U.S., all with giant screens that are at least 40 feet wide and featuring sharp and crisp 4K laser projection. And in all cases, there'll be prominent XL branding that's highly in evidence across our theaters, our website and our mobile app and lets guests easily identify and select this upgraded experience that is offered only by AMC and Odeon.

And finally, we continue to broadly equip our theaters with state-of-the-art laser projection. Right now, more than 2/5 of our U.S. screens now feature laser projection, which through brighter, bolder and more energy-efficient projection, so noticeably improves the dazzling images cast onto our giant silver screens.

By year-end, this year, more than 55% of our U.S. screens should have laser projections installed. Laser at AMC is the future, and that future is now. These premium offerings are working. We're seeing strong guest satisfaction, greater capacity utilization, increased frequency of visits, higher loyalty engagement and increases to our realized prices as we deliver on our mission to offer more premium experiences than any other movie theater circuit in the world.

AMC already is the home of premium experiences more than anyone else, and we are going to continue to expand on that lead. In so doing, we offer to AMC and Odeon guests the best moviegoing experience imaginable, and we believe that's a key to driving long-term profitable growth in our business as a result.

As I close today's prepared remarks on this call and webcast, we recognize that there's still much work to be done on our path to a full recovery. The industry box office is still well below what it was pre-pandemic.

And yet as Sean outlined, because of the dramatic increase in our contribution per patron, we actually can see EBITDA levels climb higher than pre-pandemic levels on much lower attendance and a much lower industry-wide box office. We've become remarkably efficient in running our business as a result of all the steps we've taken to improve our performance over the past 5 years.

But more than just that, it is also a fact that we could not be more confident about the resurgence of the industry box office. It's finally a tailwind for AMC, not the headwind that it's been since 2020. With the strong second quarter results as our foundation this year, plus the bold actions that we're taking to harness the momentum of that resurgent box office, we believe that the future is exceedingly bright for AMC.

Remember my mantra that was proven both by our fourth quarter 2024 results and our second quarter 2025 earnings success. In Q4 of '24, our revenues were up by more than 18%. And that caused our adjusted EBITDA year-over-year to triple.

In Q2 of '25, our revenues were up by more than 35%, and that caused our adjusted EBITDA to nearly quintuple, impressive operating leverage. As our revenues grow at AMC, the adjusted EBITDA of AMC can soar. Sean, with that, let's move to questions from equity analysts and from our retail shareholders.

[Operator Instructions]

We'll take our first question from Eric Wold of Texas Capital Securities.

So you talked a lot about pricing Adam. You obviously mentioned the 50% off Wednesday pricing you implemented about a month ago to bring in the bargain hunters. And you also mentioned you took up or felt comfortable enough to raise prices every day of the week on Tuesday.

And I think you still have surcharges on some of the blockbuster films kind of opening weekend. So I guess you're comfortable raising prices on tickets kind of in this macro environment.

Maybe talk a little bit about food and beverages. What are your thoughts there once you get the consumers into the theaters? Are you taking up prices on food and beverage? Are you more focused on driving incidents and getting people to the counters instead of taking up price?

Where is the focus there? And what is the best way that you found to drive incidents recently? What's worked the best there?

First of all, hello, Eric, welcome back. Maybe you're a good luck charm. You're back and like delivered a quarter to end all quarters. So first of all, on pricing of tickets. I believe that the better messaging on Tuesdays, calling it 50% off Tuesdays instead of discount Tuesdays is going to explain the level of discount, the magnitude of discount such that we're going to boost our Tuesday revenues by the change in messaging.

I also believe because we're extending that Tuesday pricing philosophy, which has worked so well for like more than a decade in the movie theater business, that we have the chance to do something with Wednesdays.

We don't sell any tickets on Wednesdays now -- actually now, I should say, before July 9. We didn't sell any tickets on Wednesdays. So the price we charge on Wednesday doesn't really matter when you don't sell any.

And I'm actually hopeful that we can start to see Wednesday admission revenues rivaled Tuesday admission revenues, turning what is now the poorest day of the week for attendance into the strongest non-weekend day of the week for attendance that being Tuesday.

And as I said, the early signs -- we can't declare victory in 4 weeks, but the early signs are quite encouraging that consumers are noticing. So that's Tuesday, Wednesday down. But Tuesday, Wednesday down as you -- as I said before and as you repeated, meant that Thursday and Mondays, we took up, and we see no pushback on the prices we've collected for tickets.

We had an average price 2 weekends ago, over $14 in the United States. Those kind of eye-popping numbers given where pricing has been in recent years and where it is even today at some of our competitors. The other thing that gives us confidence in having taken those pricing actions, and I want to be clear, I comply with the law very carefully. I'm making no comments about what we will do with pricing going forward.

I'm only talking about actions that we've taken on pricing retroactively in the rearview mirror, which we can't talk about the former and we can talk about the latter.

I would point out that our confidence in what the consumer is willing to pay to go to the movie, in part comes from the success of our PLF auditoriums because our PLF auditoriums often charge a $6 or $7 upcharge for an IMAX or a Dolby Cinema screen instead of a regular screen. Our primes sometimes get $3 to $6 more than our regular auditoriums. Our RealD 3D screens usually get $3 -- $3 to $4 more than our regular screens. And these formats have been killing it. If you look at -- when we put a movie on sale, gets what tickets sell first.

If you look at when we put a movie on sale, guess what, tickets sell first. It's our premium large-format screens at prices that are 30%, 40%, 50% higher than our regular auditoriums. That suggests to me that the consumer has demonstrated clearly then it's willing to pay up for the best. And so therefore, the challenge for AMC is to deliver them the best.

And that's why we're putting laser projection into our regular auditoriums. As I said, as we sit today, 43% of our screens in the U.S. now have laser projection.

By year-end, 55% of our screens will have laser projection. It increases the light levels on the screens by 50% to 100%, makes the picture much brighter, much sharper, and that greatly improves the quality of experience that our guests get, hence, our confidence in having raised prices a couple of months ago.

Now moving to your food and beverage question. The answer is we're doing all of it. So we're focusing on a variety of things. Number one, menu variety so that our overall menus, not only at our dine-in theaters, but also at our regular theater concession stands are more interesting and more appealing to our guests.

Second, we've added a whole -- because we've added so much variety to the experience, we've been successful in selling more units per transaction to a guest. So a guest who used to buy 1 product, now buys 2, a guest who used to buy 2, now buys 3. Guest who used to buy 3, now buys 4.

We've also had dramatic success in getting more people to stop at the concession stand and actually buy from us. It is a stunning statistic. How many people can go to a movie theater, just pass their historic $12 or more recently $13 or $14 ticket price to get in.

That's for an average screen, not for a PLF screen, more like $18 or $19 for a PLF screen. We're just able to pass the $12 to get in the door and that's it.

And then they go to their seat and they don't buy a thing. The number of people just at AMC in a year who go into our theaters and buy nothing from us at all at the concession stand is more than the entire attendance of any major, League Baseball team, in the entire American League or the entire National League, it is amazing.

And yet, one of the things that's caused real success for us ever since we reopened from COVID 5 years ago, is more and more people are no longer bypassing the concession counter. They're stopping at the concession counter and they're taking advantage of all the things that we now offer.

And I mean, there's a lot of creativity in that. Movie theme drinks, which we didn't do many years ago, we now have movie themed drinks just about every weekend of the year, and they're very profitable for us.

But it's also true with having 4 kinds of popcorn flavors instead of 1, having 140 drink flavor choices coming out of a freestyle machine instead of being some movie theater that has a little fountain where they can dispense 8 or 10 or 12 different flavors for the guest.

I could go on and on about the variety of things that we're offering our guests -- but that's causing more people to stop the concession as a buy. It's causing more purchased items per guest. And of course, yes, we have taken some pricing action up as well.

If I can squeeze one in as well. One more -- you signed the amended agreement with National Cine Media a few months back to extend the amount of advertisers prior to the showtime that started at the start of July. Reports out recently that you may now be cutting that back already. I guess any comments there that is true, you are cutting it back, what's leading to that decision to do so quickly after extending it?

Well, first of all -- so the reports that you're hearing are accurate and inaccurate at the same time, and you get -- you sort of got half of it, but not all of it right.

So first of all, there were 2 rationales for why we did the deal we did with National CineMedia. And it's something we resisted for many years because we don't like lengthening our preshow, and we don't particularly love using our customers with ads for third-party product. But the first rationale is our 2 largest competitors, Regal and Cinemark have been doing this for like 6 or 7 years, and we did not. And we noticed that their market share was not being hurt by these actions, and we were foregoing literally tens of millions of dollars a year.

And we made this decision in the first quarter, which is a pretty bleak year -- a pretty bleak quarter for revenues and profitability.

And we really thought it was irresponsible to pass up the monies that our competitors were taking. But there's a second interesting reason. When we bought Carmike in 2016, we inherited the Carmike contract with NCM's biggest competitor called Screenvision. And Screenvision is in place in a significant number of our AMC theaters.

Under the terms of the Screenvision contract, the Screenvision preshow played until 5 minutes after Showtime, whereas the NCM contract called for the preshow program as it were to stop at Showtime.

So already within the AMC circuit, we had a disharmony where some of our theaters, the preshow -- the preshow ads continue for 5 minutes post Showtime and the NCM theaters did not. By this -- the first change with the NCM contract is we allowed NCM to have the same 5 minutes of extra preshow that Screenvision has had since we bought Carmike in 2016, we saw no pushback at our Screenvision equipped theaters for the length of our preshow.

The only other change is this 1 minute of platinum spot that is going before, I believe, the second to last trailer prior to the start of the movie.

So those are what we added in with NCM. And as I said, it's worth tens of millions of dollars a year to AMC in bottom line EBITDA growth.

Now the press reports that said we're actually going to cut some things back. We're not cutting back the agreement that we put in place with NCM. That is contractual and it's contractual for many years to come.

But what we are going to try to streamline a bit is we run about 4 minutes or so of AMC marketing material and fluffy Silence is Golden and Turn Off Your Cell Phone and things like that as part of our whole preshow experience.

We think we can take -- it's like 4 to 5 minutes in length. We think we can easily take 2 to 3 minutes out of that. Another thing that we have to think hard about is we carefully surveyed the number of trailers that we show before the feature film and the number of trailers at our largest competitor show.

And it looks to us like we're showing extra trailer more than our principal competitors, which adds another 2.5 minutes or so to the length of our preshow package in total. And we knew that when we did the NCM deal, we might have to make a trade-off if we're going to add 6 minutes of what's called NCM time, we might have to reduce a trailer and might have to add down some of our marketing fluffier stuff in advance of the feature film.

And I mean, I'll give you a perfect example. Right now, like IMAX and Dolby very successful formats for us. And we put a 1-minute promotional teaser about IMAX or Dolby in front of every future film.

We think we can cut back to 45 seconds. It will be, in our view, just as effective, just as impactful. We'll tell a great IMAX story, we'll tell a great Dolby Cinema story, but it's 15 seconds saved. 15 seconds here, 15 seconds there. It adds up. We think we can shave 4 or 5 minutes out of it.

So it's not that there's been a change of heart. We always knew that when we did the NCM deal that we would probably have to shorten at the same time, we're lengthening so that those 2 vectors offset each other and balance each other out.

We know that consumers -- some consumers love the trailer packages because they get to see what's coming. And we know our studio partners love the trailer packages because the best form of advertising that they'll find anywhere, it's putting their movie product right in front of moviegoers faces.

So like -- but we also know that some of our other consumers think the trailer packages going too long, and we're trying to find a happy medium.

And we're also doing a better job of telling people when the movies will start, so that for those people who don't want to get their trailer time, they can come a little later or if they're anxious, they don't need running in the door at the single dot of showtime like they're going to miss the movie. So anyway, that's the reaction to the whole NCM and pre-show story.

We'll take our next question from Chad Beynon of Macquarie.

Nice quarter. I wanted to ask about just the overall portfolio, Adam. And Sean, you went through the net closures over the past couple of years. I think this was one of the first quarters where there was almost 0 net closures sequentially.

So with that in mind, can you just talk about given the profit outlook and the more positive view on the industry, are we at a point where we might start seeing net adds going forward?

Obviously, understanding that leases come up on an annual basis, but just kind of thinking about the portfolio and the cash flow per screen, could this start to be a floor in terms of the number of units in your portfolio.

Well, thanks for the question, Chad. So there was one really important statistic that Sean left out when he bragged about 205 closures and 65 openings. Is it 205 and 65? 203, 204, or some 200 change and 65 openings.

What he didn't mention is that the 65 openings are out grossing the 204-ish closures. So we're focusing on the wrong statistic by focusing just on the number of theaters that we closed.

What's more important is the profitability of the theaters that we're opening versus the profitability of theaters that we're closing.

And in the case of the theaters that we closed, most of them were losing money. When you look at the theaters that we're opening, we've opened hit after hit after hit. There are theaters that we've opened like in the last few years that are amongst our highest grossing theaters in the entire United States.

What come to mind, the Grove in Los Angeles, Americana brand in Los Angeles, Porter Ranch also in Los Angeles, Topanga 12 also in Los Angeles. The Grove and Americana are 2 of our 10 highest grossing theaters week in and week out. Porter Ranch and Topanga, they're in the top 25 highest grossing theaters or the top 50 highest grossing theaters out of 540 week in and week out.

And as you take the collective of it all, the theaters that we're opening far outshine and they're shiny and they're new and they're in great locations today. They're far outshining the 25-year-old theaters that are somewhat more abund that might have been in bad locations today.

They were good locations 25 years ago when they opened, but those locations aren't as compelling today as they once might have been at the turn of the 21st century. So again -- but about 10% of our leases come up for renewal every year.

So figure 100-ish theaters come up for renewal. I wouldn't be shocked if we closed 10 of them. So I don't know that we're at an absolute floor. But what you can assume is that when we close a theater with almost 100% reliability, we're not closing a profitable theater. We made a lot of money.

We're closing a theater that was a drag on our EBITDA, that was lowering the consolidated EBITDA of the company. So as it closes, the EBITDA of the company rises. Will we get to a point where we still have that many expression theaters left on our system, having closed 200 of them.

But we have a few. So maybe we close 5 to 15 a year for the next few years. But we will -- we're continuing on the hunt for new theaters in A locations.

We're just opening in Chicago, a theater that we believe will be one of the highest grossing theaters in Chicago. And again, the theaters that we're opening are grossing more than the theaters we're closing and they're producing more EBITDA than the theaters that we're closing.

At some point, I think we'll move to a net add of theaters rather than a net decline of theaters. I don't know that we're there yet exactly, except one key circumstance.

And that is we continue to be offered portfolios of theaters on an M&A basis, sometimes at very attractive prices, like really attractive prices, like 3 or 4x EBITDA kind of attractive prices.

And so I do think if you look forward over the next 36 months, maybe, you'll see that some of our biggest additions of theaters, which might far outstrip some of the closures may come to us in interesting acquisition opportunities where we can bring theaters in good condition into our fleet at very attractive M&A expenditures.

Lastly, quickly, Sean, just on the big beautiful build benefits to CapEx generating companies. Can you just talk about, as you see it now, maybe what some of the cash benefits could be either from a cash tax standpoint or a cash shield standpoint in future years?

Sure. So obviously, as a result of that build, we get 2 key benefits. The one is the depreciation deduction and the other is the interest deduction based on EBITDA as opposed to EBIT.

So that has a benefit for us. But bear in mind that we have NOLs that will run through, probably through 2026 or so. So the cash benefit will only be in future years '27, '28 and going forward from there. So it's certainly -- it's beneficial. It increases the NOLs for future cash deductions, but it's not a short-term cash benefit. It's more of a longer-term cash benefit for us.

Thank you. We have no further questions at this time. I'd be happy to return the call to Adam Aron.

Thank you, Leo. We're going to now take a couple of questions from shareholders. Sean?

Sure.

What came in from our retail investors.

Yes. So just briefly, the first question is just asking if we have any reaction to Skydance's acquisition of Paramount, that's not just closed.

Yes, we sure do have a comment about the Paramount acquisition from Skydance. First of all, we've had a very good relationship with Paramount across many generations of its leadership. I'd especially like to thank Brian Robbins and his executive team. They've been superb partners for AMC over the course of the last many years.

At the same time, though, we are excited by Skydance's acquisition of Paramount because Paramount has been cash hampered in recent years, which has caused them to greenlight fewer movies than they might have liked to.

It appears to us that Skydance is cash rich. And it would be our expectation that Skydance will be releasing more movies coming out of Paramount than Paramount has been releasing in recent years.

You'll also recall that David Ellison is no rookie in the movie business. He's been a prime force in some of the most important movies that have come out in recent years and what especially comes to my mind is Top Gun: Maverick, which, in my mind, is the single movie that you can point to since COVID hit in 2020 that turned the movie theater industry around. It set us back on a course where studio with its $1.5 billion worldwide gross, it finally reminded various studio chiefs that the future was not only in their streaming services, but also in their theatrical releases.

And that sometimes the most successful movies on streaming services were those movies that had a great theatrical release. [ Point in Case ] was the highest movie watched on Paramount Plus, Top Gun: Maverick. Why? Because it had a spectacular $1.5 billion theatrical release worldwide.

So the fact that David and Skydance want to make more movies and the fact that they have experience in making really good movies. And then you can add in the fact that the new President of Skydance is going to be Jeff Shell, who used to be the Chairman of Universal Studios.

And we've had a superb relationship with Jeff Shell over the past decade. And I've talked to Jeff. I know that he's excited to be back at the helm of a major studio.

Well, he's got more than the studio, of course, he's got the whole enchilada, but his influence over what happens at Paramount will be profound, and we think it's going to be very good for theatrical exhibition.

Terrific. Do you want to comment about AMC distribution? There -- we just made the Eminem announcement last weekend. Anything you'd like to point out on AMC distribution and future opportunities there?

Sure. Obviously, 2 years ago, we had these massive successes with Taylor Swift and Beyonce. And we've had lots of conversations with lots of world-class artists since then, some deals got very close, but then didn't materialize.

Others have happened. We did this Billie Eilish album release a year ago. We did this Eminem documentary just this weekend, which is apparently a movie beloved by his fans. It got some spectacular scores on Rotten Tomatoes, I heard.

We're in several conversations right now with more world-class talent about more projects coming out as soon as 2026. It's also given us the -- again, the courage to look more broadly at how movies are distributed. And we had success in distributing some concert movies. Maybe there are some nonconert movies we could help bring into theaters as well. We'll see. The vast majority of our product is always going to come from our studio partners, of course.

But I think there's opportunistic profit opportunity. There is plenty of excess capacity in the movie theater industry. It is -- I'm an old airline guy. If an airline had fewer than 75% of its seats filled, an airline marketer would have slashed his wrist. In the movie theater industry, we're -- instead, we're a church built for Easter Sunday, we only sell less than 20% of our seats in the course of any given year. There's tons of capacity. We certainly have the screens to show more product if there's more product to be made.

Terrific. And Adam, finally a question here on AI and the impact on our business and the extensive benefits. I wonder if you'd like to comment on that.

So every company in America is talking about AI. Every Board of Directors of America is talking about AI. We're no different. So we're talking about AI. And the AI revolution is happening very quickly. I know that I've completed -- personally, I've completely abandoned Google in exchange for ChatGPT.

And you just see it in every aspect of our company, there's opportunity to use it. We're already using it in software development and software optimization and software testing. We're using it in image creation for marketing. We're using it for the automation and simplification of tasks here in our corporate office.

We process our accounts payable using AI. We've got teams in our theaters looking at AI and how it can be used to address operational issues in our theaters. We're using AI already in demand planning for our inventory management.

But like we've just scratched the surface. I really do think going forward, there'll be an opportunity for us to take care -- take advantage of the powerful AI technology to assist with our pricing, with our film scheduling, with our customer service programs and our consumer response programs. And there's more -- and the more -- which might be the most exciting of all, we've actually been talking and are in conversations right now about making small investments in some AI technology-enabled companies whose prospects are related to the movie industry related to entertainment and whose prospects are incredibly bright. And we'd like to benefit fully from the AI revolution that clearly is already at hand.

Terrific. I think that's all the questions that we have at this point.

Great. All right. Well, look, thank you, everybody, for joining us today, for staying with us. The second quarter of 2025 was one that made us very excited here at Leewood, Kansas.

We delivered big numbers, almost a quintupling of our EBITDA. We were ahead of the street on just about every expectation you all had for us. And we think this is just the beginning of something that's going to happen quarter after quarter starting in the fourth quarter of 2025.

Remember what I said, in the fourth quarter '24, revenues were up 18%, EBITDA tripled. In the second quarter 2025, revenue was up 35% and change. Our EBITDA was quintupled. There's enormous operating leverage in this business.

If we can finally have the wind in our backs with rising industry revenues, the sky is a limit for the EBITDA that AMC can generate as a result.

Thank you for joining us today. We'll talk to you in 90 days.

This does conclude the AMC Entertainment Holdings, Inc. Second Quarter Earnings Webcast. You may now disconnect. And everyone, have a great day.