United Parks & Resorts Aktie

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the United Parks First Quarter 2026 Earnings Conference Call. [Operator Instructions]

It is now my pleasure to turn the call over to Matthew Stroud, Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to United Parks & Resorts first quarter earnings conference call. Today's call is being webcast and recorded. A press release was issued this morning and is available on our Investor Relations website at www.unitedparksinvestors.com. Replay information for this call can be found in the press release and will be available on our website following the call.

Joining me this morning are Marc Swanson, Chief Executive Officer; and Jim Forrester, Interim Chief Financial Officer and Treasurer. This morning, we will review our first quarter financial results, and then we will open the call to your questions.

Before we begin, I would like to remind everyone that our comments today will contain forward-looking statements within the meaning of the federal securities laws. These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward-looking statements, including those identified in the Risk Factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. These risk factors may be updated from time to time and will be included in our filings with the SEC that are available on our website. We undertake no obligation to update any forward-looking statements.

In addition, on the call, we may reference non-GAAP financial measures and other financial metrics, such as adjusted EBITDA and free cash flow. More information regarding our forward-looking statements and reconciliations of non-GAAP measures to the most comparable GAAP measure is included in our earnings release available on our website and can also be found in our filings with the SEC.

Now I would like to turn the call over to our Chief Executive Officer, Marc Swanson. Marc?

Thank you, Matthew. Good morning, everyone, and thank you for joining us. Our first quarter results fell short of our expectations, primarily due to unfavorable weather and a decline in international attendance. As many of you likely experienced yourselves, the weather was unfavorable in San Diego and Florida in January and February, and again in Florida and Texas during their peak spring break periods. Our international attendance decline was consistent with the broader United States international tourism declines resulting from geopolitical and other dynamics.

Attendance in the first quarter was negatively impacted by approximately 140,000 guests due to weather and approximately 80,000 guests due to declines in international visitation. Adjusting for these impacts, attendance would have increased more than 1% for the quarter. We delivered another strong quarter of in-park execution, growing our in-park per capita and producing another quarter of record results. We also saw strong pass sales performance during the quarter with paid pass sales up approximately 10% during the quarter and up approximately 12% and through April 30, 2026.

Looking ahead, our advanced bookings revenue for Discovery Cove and our group business are both currently outpacing 2025 levels with Discovery Cove bookings up a double-digit percentage. We continue to strongly believe our stock is materially undervalued, and as such, continue to repurchase shares in the first quarter by approximately 2.6 million shares for nearly $93 million. This action emphasizes the strong cash flow generation of this company. Our long-standing commitment to returning excess cash to our shareholders and our belief that our shares are materially undervalued.

As a reminder, for 2026, we have a truly outstanding lineup of new rides, shows and attractions and updated events calendar and expanded concert lineup, and new and upgraded food and retail locations. All of this is supported by a revamped and enhanced marketing plan and strategy. We are confident these planned investments will drive attendance and guest spending across our parks. Despite the headwinds in the first quarter, we are encouraged by our forward indicators and remain committed to delivering strong financial performance and growth in revenue and adjusted EBITDA in 2026.

I want to thank our ambassadors whose preparation and hard work are vital as we soon enter the busy summer period. I also want to be sure to communicate that we are well aware of and acknowledge the current reality of geopolitical and macro uncertainties and the current level of gas prices in particular and the potential impact on consumers. As a reminder, we operate a resilient business that offers incredible value to our visitors, and we have a long track record of successfully navigating through uncertain and volatile times, including when there is financial pressure on consumers. Because I'm sure it's on many of your minds, what I can tell you today is that we can't obviously see a material slowdown or other issues with our consumers' interest and willingness to spend, especially with the growth in our in-park per cap. We are closely monitoring conditions and are prepared to adjust our plans if we see any changes.

For 2026, along with our new rides and attractions, we just recently announced an exciting summer entertainment lineup across several of our parks, including exciting new drone shows, new nighttime animal presentations and other funds. We believe these additions will be well received and popular with our guests. We are also thrilled to note that Discovery Cove has just been named Newsweek's #1 Best Theme Park for 2026 in the Publication's Readers Choice Awards, placing the Orlando destination among the country's top summer travel experiences as voted by Newsweek readers nationwide. Congratulations to Discovery Cove.

Now let me give you a brief update on some of our strategic initiatives. On real estate, as discussed on our last call, we have received a number of inbounds on our real estate portfolio. During the first quarter, we enlisted the help of advisers to assist us in managing the interest of the various parties and have recently received the latest round of comprehensive formal proposals from multiple parties. We are current evaluating these proposals along with the advisers, and we'll update you as and when there is more information to share.

On sponsorships, during Q1, we entered into two sponsorship agreements with high-quality brands. Based on our current pipeline, we expect to enter into several more in the coming months and expect to realize over $15 million in sponsorship revenue in 2026. As previously discussed, we expect this business to be at least a $30 million line of business in the coming years. On international, we continue to be in discussions with multiple partners and expect to be able to share more news in the coming quarters.

On IP partnerships, we are in multiple active discussions to bring compelling and well-recognized IP into our parks in innovative and exciting ways and with different global partners. Later this year, we expect to have some exciting announcements related to these opportunities in '26 and in '27 and beyond.

On marketing, we have been making significant changes and enhancements to our plans and strategies. Admittedly, we have had some hiccups in our execution across some of the parks and incorporate as we transition to a more dynamic and ultimately more effective media and marketing model. We have been testing, learning and making fundamental changes to our media mix channel and geography allocation, creative and partners. We expect to improve considerably in our execution over the course of the year and are excited to launch a dedicated SeaWorld brand national campaign across key markets later this month. Please be on the lookout for this first meaningful national campaign from us in many years. We are very excited about this.

On costs, we continue to be committed to and make progress on our $50 million gross cost savings target for 2026 that we discussed last quarter. On the technology front, we are actively pursuing various initiatives, including implementing AI-powered camera technology, autonomous cleaning robotic technology more digital ordering kiosks in our food and beverage locations, automated front-turn [ styles ] and automated parking tools to help us deliver more revenue, reduce costs and improve guest experience.

Regarding capital allocation, we continue to benefit from a strong balance sheet and the flexibility to invest in and grow our business and to opportunistically allocate capital with the goal to maximize long-term value for shareholders. Given where our public shares currently trade, we find very compelling value in purchasing our shares, and we expect to do so as long as our stock trades at levels we find attractive. When and if we hit a limit on share repurchases, we and our Board will consider other forms of capital return, including regular and/or special dividends, debt paydown and other investment opportunities.

During the first quarter, we repurchased 2.6 million shares for an aggregate total of approximately $92.7 million. Subsequent to the end of the quarter, we have repurchased an additional 1.8 million shares for an aggregate total of approximately $64.8 million. I'm truly excited about the significant investments we are making and the many initiatives we have underway across our business that we are confident will improve the guest experience, allow us to generate more revenue and make us a more efficient and more profitable enterprise. We are building an even stronger and more resilient business that we expect going forward will deliver improved operational and financial results and increases in value for our stakeholders.

With that, Jim will discuss our financial results in more detail. Jim?

Thank you, Marc. During the first quarter, we generated total revenue of $278.3 million, a decrease of $8.7 million when compared to the first quarter of 2025. The decrease in total revenue compared to the first quarter of 2025 was primarily a result of a decrease in attendance, partially offset by an increase in total revenue per capita spending. Attendance for the first quarter of 2026 decreased by approximately 171,000 guests when compared to the prior year quarter. The decrease in attendance was primarily due to unfavorable weather and a decrease in international visitation compared to the prior year quarter. As Marc noted, our tenants would have been up more than 1% adjusted for weather and international.

In the first quarter of 2026, total revenue per capita increased 2.1%. Admission per capita decreased 0.5% and in-park per capita spending increased 5.3% to a record $40.62. Admission per capita decreased primarily due to lower realized pricing on certain admission products and the net impact of the emissions product mix when compared to the prior year quarter. In-park per capita spending involved improved, I should say, primarily due to an increase in demand across many in-park offerings when compared to the first quarter of 2025.

Operating expenses increased $10 million when compared to the first quarter of 2025. The increase in operating expenses is primarily due to an approximately $3.7 million increase in noncash self-insurance adjustments and an approximate $3.3 million increase in onetime nonrecurring consulting and other costs when compared to the first quarter of 2025. Selling, general and administrative expenses increased $3.9 million compared to the first quarter of 2025. The increase in selling, general and administrative expenses is primarily due to a noncash $3.1 million increase in information technology costs primarily related to the amortization of a new enterprise resource planning system when compared to the first quarter of 2025.

We reported a net loss of $34.1 million for the first quarter compared to a net loss of $16.1 million in the first quarter of 2025. We generated adjusted EBITDA of $58 million a decrease of $9.5 million when compared to the first quarter of 2025. The decline in EBITDA was driven by lower revenue and a modest increase in expenses.

During the first quarter, we repurchased 2.6 million shares for an aggregate total of approximately $92.7 million. Subsequent to the end of the quarter, we have repurchased an additional 1.8 million shares for an aggregate total of approximately $64.8 million. Of the $500 million stock repurchase authorization approved in 2025, the company has approximately $198 million remaining. Our deferred revenue balance as of the end of March was $203.8 million.

Deferred revenue increased approximately 4.1% when compared to March of 2025 reflecting a healthy outlook for ticketing, our group business and our ancillary biotics. As a reminder, our deferred revenue balance contains a number of products, including ticketing, vacation packages, annual and seasonal passes, group sales and ancillary products.

Through April 2026, our paid pass base, excluding any free passes was up compared to April 2025 as Marc mentioned, we are pleased to have seen paid pass sales up 12% so far this year through April 30. We believe we have our best past benefits program ever and one of the best in the industry, and we expect we will continue to drive additional increases in past sales and a strong pass base for the remainder of the year.

We are especially pleased since we are in the peak advertising and selling season right now. We spent $69.6 million on CapEx in the first quarter of 2026, of which approximately $62.7 million was on core CapEx at approximately $7.0 million go on expansion and/or ROI projects. For 2026, we expect to spend approximately $175 million to $200 million on core CapEx and approximately $50 million of CapEx on growth and ROI projects.

Now let me turn the call back over to Marc, who will share some final thoughts. Marc?

Yes. Thank you, Jim. Before we open the call to your questions, I have some concluding comments, in the first quarter of 2026, we came to the aid of 211 animals in need. Over our history, we have helped over 43,000 animals, including -- dolphins, manatees, sea lion, seals, sea turtles, sharks, birds and more. I'm really proud of the team's hard work and their continued dedication to these important rescue efforts.

Our 2026 road map is defined by a compelling lineup of new rides, attractions and events an updated events calendar and expanded concert lineup and upgraded food in retail locations all supported a revamped marketing plan designed to increase guest visitation and spending. With very clear opportunities to grow attendance, revenue and adjusted EBITDA, we are excited about the rest of 2026 and the years to come. Now we will take your questions.

[Operator Instructions] Our first question comes from the line of Steve Wieczynski with Stifel.

So Marc, I guess I'm interested in your comments that you guys think you can grow your EBITDA this year, especially with the first quarter results coming in below what you obviously were hoping for. So as we think about the rest of the year, I guess I'm probably a little bit surprised you seem so comfortable given that so-called, let's call it guidance, given we still aren't sure what it's going to look like. Obviously, international visitation remains somewhat subdued, and there's obviously other potential headwinds out there as well. So as we think about the last 3 quarters of the year, can you maybe just run through some of the gives and takes here. And maybe do you think the EBITDA, if there is growth year-over-year from here on out, it's going to be more top line driven? Or is it going to be more cost driven?

Yes. Steve, I can take that question for you. So I think about the year in a couple of different ways here. So first of all, we've got a really good lineup of new rides and attractions events and new things coming to our parks that's largely still have us. And as a reminder, our -- the bulk, the vast majority of our year is still ahead of us, even though we're here at the end of April, the vast majority of our tenants and revenue is still ahead of us. So there's a really good lineup of new things to do in our parks that will support what we believe will be more visitation and more spending in the parks.

We also, like you mentioned, with the weather component, we recognize there's some favorable comparisons on a go-forward basis. We also recognize we don't control the weather, but to the extent weather does improve over last year, that should be a benefit for us. We'll have to wait and see, obviously. And then we know we will start to lap some of the international decline that we've experienced here. If you remember, that was more of a second half component last year. So those are some of the things, and really my confidence is driven by all those things, but also a couple of other things that you heard us mention.

One is the increase in the paid pass sales in the first quarter was pretty substantial, as you heard me and Jim say. You may not have caught it, but Jim also pointed out that our deferred revenue is now up 4% at the end of March, and it looks like it's retaining pretty close to that for the end of April as well. And if you remember, at the end of last year, that was down 4%. So a pretty substantial improvement in deferred revenue, which is another go-forward indicator to kind of go along with the increase in the Discovery Cove's booking revenue and the guest sales pacing ahead as well. So the guest sales revenue pacing ahead of last year.

So all those things taken together, I think, give us a good amount of confidence that going forward here, we will see growth in our parks. I'm really excited, again, about the attractions, the lineup the things we're doing in marketing to hopefully put us in a better spot there. And then certainly, the past sales, and we're just getting into that peak period, as Jim mentioned. So hopefully, that gives you some color.

Yes, it does. I appreciate that, Marc. And then the second question, I'm not -- look, I'm not sure how much you're going to stay here, but given the fact where it's May 11, we're essentially kind of halfway through the -- or almost through your second quarter. Wondering if you could kind of give us some high-level thoughts around what you kind of witnessed in April? And then maybe what you've seen so far in May? I mean it seems like from our seat, weather was -- it was somewhat normal for the most part around most of the country in April and thus far in May. So anything you can say just in terms of how the second quarter has kind of started, I think, would be helpful as well. Appreciate it.

Sure. And Steve, I wanted to add one more thing on your prior question, just a little bit more. I didn't have mentioned the growth in the in-park per caps. Again, you've seen that accelerate even in Q1 from where it had been in the prior quarters. And then you have also seen the admissions per cap come back still slightly negative, but improving from prior quarters. So I think if we can continue to grow in-park and hopefully get admissions per cap to a better spot as well, that's another thing that contributes to that growth, obviously, going forward.

As far as the month of April, remember, with the shift of Easter, you had certainly some Easter days shift out of Q2 of this year into Q1. So that was an expected headwind in the month of April. So that probably gives you some color on how we think about that month. Weather is a little bit mixed. I mean, certainly, we had some better weather in like Williamsburg in April. But I know here in Orlando or in Florida, really one of the few days after Easter, we haven't had a ton of rain, but when it has rained, it was right after Easter there for a couple of days, we have some poor weather. So we'll see how it balances out. Hopefully, it's a more normalized trend, and we'll see where we're going forward. I mean May, many of such a backloaded month that, I don't know we can get much read on things this early in the month.

Your next question comes from the line of Patrick Scholes with Truist.

You had briefly mentioned about -- it was about $30 million or so expectations from partnership. I'm wondering, can you talk a little bit -- or give a little more granularity on how that impacted your per cap strength actually in the quarter. Is there a way to break that out? What was -- how much of the per cap growth came from increase in sponsorship in 1Q?

Yes, I can help you. I mean it's still, I think, a fairly small amount in the quarter. Some of the deals that we signed have been more recent, so you would see those more on a go-forward basis. So I won't call it a huge contributor at all to Q1. But we're excited about the go forward there, obviously.

Okay. Okay. And how are you thinking about the tailwind this year from various holiday shifts, whether it's [ June 10 ], July 4 and especially the Jewish holidays. When I look at certainly hotel bookings in Orlando, looks really strong and that curious your thoughts around that.

Sure. I can help you with that question. As far as the operating calendar, there's always puts and takes to that. And like I mentioned last quarter that we had one less Saturday in March, for example. So of this year compared to last year. And so that was a meaningful impact on the first quarter, not having that and it offsets some of the Easter days that -- or partially offset some of the Easter days shifting into the month of March. But on a go-forward basis, we just had the Easter shift here with some Q2 days shifting into Q1. If you look at the fourth of July, it's on a Saturday, ideally, I'd love to have that on a -- not on a Saturday because we're typically busy on Saturdays, regardless, especially in July. But nonetheless, we'll get a -- we should still get a 3-day weekend out of that for a lot of people, not everybody. So I don't know if that's probably just a push compared to last year.

And then go forward, things move around a little bit, but we're -- I don't know if there's any significant staying out of my mind right now. We do get a little bit of a longer summer with kind of the early Memorial Day-ish and Labor Day being a little bit later if you kind of line up when those actually occur, it's a longer kind of time between them than normal. But with so many schools not tied to those holidays anymore as far as when they get out of school or go back, I don't know that it's a significant impact.

Our next question comes from the line is from Arpine Kocharyan with UBS.

OpEx was a bit higher than expected. Was there any timing factors for the quarter? I think you mentioned a couple of things in your prepared remarks. Mostly I'm trying to understand how we should be thinking about overall OpEx for 2026, that mid-single digit increase. Would you say you're in the low single-digit range for full year or closer to that mid-single digit for OpEx for this year?

Arpine, it's Jim. I think you've obviously asked a good question about the inflation that we're seeing for our OpEx. If you look at our adjusted EBITDA, we're actually -- our expenses are a very modest 1% growth. So you are probably now focused on what we're showing in our financial statements for OpEx and selling, general administrative costs. And I will say that OpEx is being driven by a lot of noncash or onetime items. I think we mentioned the $3.7 million in the noncash reserve. There's also a significant amount related to taking care of the cold weather impacts to the Florida market and others predominantly, but mostly in Florida for was the plant material and repairs for damages from cold weather, freezing that we incurred in that February time frame.

For selling and general and administrative, you're going to see the increased almost exclusively as related to the amortization of our new ERP that we implemented back in October that will be amortized over the length of the agreement. And again, that's a non-cash again in the first quarter, and noncash going forward.

Yes. No, that makes sense. That's helpful. And going back to onetime items, I was actually looking at it, it probably makes sense to probably follow up more in detail after the call on this. What you're adjusting back to EBITDA something like $70 million for the quarter. And I think footnote mentions a bunch of business optimization costs. Could you maybe give a little bit more detail what those are, seems to be ongoing for several, several quarters here? Just trying to understand what makes those costs one-off? And then similarly, that $3.3 million that you're adjusting EBITDA back for, what are those costs for?

Yes. So as I mentioned, the consulting costs might be related either to some areas we've got on procurement, where we continue to try to ensure we are minimizing costs and doing strategic sourcing or having others who might have helped us in the implementation of that ERP system or addressing our impacts from the cold weather.

Your next question is from the line of Ben Chaiken with Mizuho.

I wanted to follow up on the deferred revenue. If I'm not mistaken, I think this is the first time in maybe 18 months that you're seeing a positive inflection here. obviously, you highlighted the increase, but what do you think is driving this? What caused the inflection?

Yes. Ben, it's Marc. We can take -- I can take that. And you're right, it has not been positive on a kind of year-over-year basis in quite a while, to your point. So there's a couple of things. But remember, as Jim mentioned, our deferred revenue has all our advanced products. So you've got season passes in there. You've got ancillary products, you've got tickets. So it's a combination of all those things, it's experiences in our parks. So I don't know that there's necessarily just one thing dominating it. But obviously, having better sales of passive has helped our in-park performance, a lot of the in-park stuff we can sell in advance. And so that sits in there until people come that type of thing.

Okay. That's helpful. And then maybe going back to the comment before that you touched on in the first question regarding higher EBITDA year-over-year, you kind of gave us the reasons you were constructive. But maybe we could unpack the variables somewhat. Is this top line driven? And if so, is where are you seeing the most traction? Or where do you expect to see the most traction? Is this attendance? Or is it pricing? Is it both? And then maybe why?

Sure. I mean I can -- I think it's -- so points I made to Steve. Look, on a go-forward basis, I like the setup of our events, our attractions, the things that are still to come. I like the setup of obviously, hopefully, having improved weather. We'll have to see. But obviously, last year, especially the second half of the year and when not the weather was not real cooperative for us. So hopefully, we get a little bit better on the weather. And then obviously, we're going to lap the international decline more in the second half of the year, and hopefully, that's no longer a drag as we lap that. And supporting that is really the growth in the in-park per caps in this quarter, our total per cap was up.

So even if you have the exact same attendance, and I'm not suggesting that's what we're shooting for. But even if you did, if you can grow your per caps that's going to drive the revenue growth there. And we did a good job this past quarter of growing our per cap overall. So we put per cap in there, we put attendance, put the sponsorship revenue. And then obviously, the costs, we've got to continue to manage to a level that is acceptable and Jim talked about that. So that's kind of how it all comes together on a go-forward basis.

Okay. Just to follow up very quickly. I mean, I guess the deferred revenue seems like quite an inflection. And so you didn't seem to kind of like obviously point to attendance, maybe you are, but we're not like harping on it. I guess is there a reason why you -- why plus [ 4 ] deferred revenue wouldn't translate to slightly positive attendance for the year or something that...

Yes. No, I wasn't suggesting we're not going to grow attendance. I mean, certainly, that's our plan, and that's our expectation. I was just pointing out kind of some of the other drivers as well. But certainly, the lineup of things we have across our parks, we believe will drive people to visit, obviously.

Your next question comes from the line of Lizzie Dove with Golden Sachs.

I wanted to just go back to costs for a second. You mentioned you're still targeting the $50 million of gross cost savings for this year, but you've had various wage headwinds. You mentioned in the advertising campaign that you're ramping up. So anything you could share just in terms of that like gross to net translation this year and your ability to kind of flow that through to the bottom line?

Yes. Let me start and then Jim can add anything he'd like to add. Yes, obviously, as you guys know, we hold ourselves to a pretty high standard with cost. We've done a lot of work over the years. And if you look at the margin expansion, especially since 2019, I think we've done good in that area. More recently here, obviously, we need to do a better job, clearly. And -- but keeping that EBITDA expense growth. The cost that sit between revenue and adjusted EBITDA for this quarter, as Jim mentioned, was under 1%. So our goal is to obviously achieve the cost savings that we've set out to achieve. And in a lot of cases, they're going to maybe offset other headwinds, other inflationary pressures that we have. But we want to manage to as low a growth as possible or realized savings, right? So that's kind of how we think about it holistically and obviously, we hold ourselves a pretty high center with that.

Look, I'd just add that reiterating the growth, the very modest growth we had, we did an exceptional job in managing our hourly labor in our theme park labor over the quarter in the face of some headwinds. And we also have had a very focused effort on things like reducing claims or the introduction of technology to reduce labor costs. So all of those are bearing fruit. I think we will continue to see those pay off in the coming quarters as well.

Got it. And then I wanted to ask about just capital allocation and leverage. You've obviously been buying back stock pretty consistently. And I appreciate 1Q is typically like a lower cash flow generation quarter, but I think you closed out with a cash balance of around $29 million. So curious as how you think about buybacks from here taking on more leverage and just where you feel comfortable longer term from that leverage standpoint?

Sure. I can help you with that question. Look, we're comfortable where the leverage ratio is now at the end of Q1. Not to say we wouldn't be comfortable with something higher or something lower and that's something we work with our Board on. But you kind of already noted it, we're kind of coming out of the trough of cash generation, just given the seasonality of our business. And on a go-forward basis, we would expect, obviously, cash to start to grow. And so that will be the catalyst for growing the cash and continuing to fund the share repurchases.

And so I think if you just step back and look over the full year, we've definitely done that we continue to generate a good amount of cash each year. And I expect we'll continue to do that going forward. What would we do, just to give you some comfort is obviously, if we ever got a situation where our leverage was really getting up there something. As we look at our use of cash and things like that, we're careful to take in mind the leverage ratio before making any of those decisions. But like I said, we're comfortable now. And we expect obviously that to improve going forward as we enter a traditionally busier time of the year.

Your next question comes from the line of James Hardiman with Citigroup.

This is Sean Wagner on for James. You had mentioned that weather should improve, particularly in the back half of the year, but also in 2Q last year, you had characterized it as among the worse weather you had seen in the second quarter. So I mean, obviously, a lot depends on how weather turns out this year. But assuming more normal weather, do you get any operating days back because of closures last year or are operating days expected to be relatively flat this year.

Sean, I think we'll they're going to be fairly consistent. We might pick up a day or two as mainly in water parks that may have closed last year. A lot of times with the weather, we're able to open, but just a lot of people may not comment. It's been raining or rains in the afternoon or early in the morning, whatever maybe that can have an impact. So we'll see where that shakes out, obviously, but we're optimistic. I'm generally optimistic about weather every year. So hopefully, this is the year it gets better for us. And we'll see.

We did have, I think call this out. We did have fewer operating days in the first quarter since you mentioned that our parks in California, our [ Sesame Park ], we did not open in January and February and really the first couple of weeks of March. So we lost some operating days there. And then obviously, we had some days where just especially the cold in Florida, where we had some days where our water park was closed.

Okay. That's fair. And I guess I think on your last call, you indicated that there's some pricing headroom in ticket pricing headroom in many markets and that admissions per caps should grow over time. We did see that improve sequentially from the declines we've seen for a handful of quarters now, but Wondering how we should think about that going forward? Do you have any sort of expectations on one that inflect positively? Or how should we think about maybe comparisons with some of the promotions or pricing that you guys ran last year?

Sure. So look, I think your first comment and what I've made in the past is, yes, our goal and our expectation is to grow pricing over time. And we certainly recognize there's room to do that in a lot of our markets. But we're always going to defer to driving total revenue. And the good news is, as you noted, the admissions per cap has improved to where it was. It's down less than it has been in prior quarters.

So to your point, we're making progress on that area, and I expect we'll continue to do that going forward. But look, there might be times where we do an offer or we do something that might be at odds with per cap. We're really focused on driving total revenue. But I think we've kind of demonstrated here, the movement, like you said the last couple of quarters has been in the right direction with admissions park out.

[Operator Instructions] Our next question is from the line of Chris Woronka with Deutsche Bank.

Marc, you talked, I think, in the last couple of years about how some of your marketing programs are -- you try to kind of -- them as I'm curious as to whether you're seeing any real tangible impacts on that yet or whether those are still more to come?

Chris, did you say marketing program? right?

Yes, yes, some marketing efforts. Yes.

Yes. Yes. Okay. Sorry. I just want to sure I heard. Look, I think as all of you know, I mean, there's more ways than ever to market to people now, right? And it's changing pretty rapidly almost all the time with all the ways that people consume media and get information and all that. So certainly, it's something you've got to be on top of. And as I mentioned, I think we certainly could have done things better and have some hiccups. But as we look at like how we allocate our spend, how we allocate the mix of that and where we advertise, what locations and what kind of platform. I think there's tweaks there.

And the good news is we test and learn and we try to optimize going forward. So we're going to continue to do that. We've had a lot of discussions around kind of this area in the recent weeks and months. So confident in the plan going forward, but obviously aware that things are always changing, right? So we're trying to stay ahead of it.

Okay. I appreciate that. And then Marc, on the land sales, I know you won't have much to say yet, but the question would be for the potential buyers you're looking at, how important is their use of -- if these are land parcels near your parts, how important is their kind of intended usage -- and what they would do is either complementary or perhaps not complementary to the park, the surrounding park.

Sure. So I think as far as like -- I think you're maybe alluding to like a hotel or entertainment district or housing, whatever it may be, some of the things that we've mentioned in the past. I mean, obviously, our goal is to find something that would complement our offering in the sense that people stay longer in our park, people come here for more days, whatever it may be, kind of what you see everybody else in the business doing with their hotels, right? It's meant to complement the spend and the stay by our guests.

So that's what we would look for, obviously, and there's probably different ways you could execute on that. But certainly, I think it would be a component of how we could benefit from that land being used to benefit our parks as well.

With no further questions in queue. I will now hand the call back over to Marc Swanson for closing remarks.

Yes. Thank you, Tina. On behalf of Jim and the rest of the management team here at United Parks & Resorts, I want to thank you for joining us this morning. As you heard today, we are confident in our long-term strategy which we believe will drive improved operating and financial results and long-term value for stakeholders. We invite everyone to join us on our parks this summer to experience the energy and excitement we are offering. Thank you, and we look forward to speaking again next quarter.

Thank you again for joining us today. This does conclude today's presentation. You may now disconnect.

Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the United Parks Q4 2025 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Matthew Stroud, Head of Investor Relations. You may begin.

Thank you and good morning, everyone. Welcome to United Parks & Resorts Fourth Quarter and Fiscal 2025 Earnings Conference Call. Today's call is being webcast and recorded. A press release was issued this morning and is available on our Investor Relations website at www.unitedparksinvestors.com. Replay information for this call can be found in the press release and will be available on our website following the call. Joining me this morning are Marc Swanson and Jim Forrester. This morning we will review our fourth quarter and fiscal 2025 financial results and then we will open the call for your questions.

Before we begin, I would like to remind everyone that our comments today will contain forward-looking statements within the meaning of federal securities laws. These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward-looking statements, including those identified in the Risk Factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. These risk factors may be updated from time to time and will be included in our filings with the SEC that are available on our website. We undertake no obligation to update any forward-looking statements.

In addition, on the call we may reference non-GAAP financial measures and other financial metrics such as adjusted EBITDA and free cash flow. More information regarding our forward-looking statements and reconciliations of non-GAAP measures to the most comparable GAAP measure is included in our earnings release available on our website and can also be found in our filings with the SEC.

Now I would like to turn the call over to our Chief Executive Officer, Marc Swanson. Marc?

Thank you, Matthew. Good morning, everyone, and thank you for joining us. Before we turn to the quarterly and annual results, I want to point out that we uploaded a presentation to our Investor Relations site that includes some supplemental information that covers certain topics and other important points that we want to get across. I will refer to those slides later in my remarks. With that, let me get into our results.

Our fiscal 2025 results did not meet our expectations. While the consumer environment was uneven and our results were impacted by negative international tourism trends and volatile weather during certain peak visitation periods, we should have delivered better results, particularly on the cost side of the income statement. We have moved decisively to address our less than optimal cost management and have updated and focused our plans and investments for 2026 designed to drive attendance and guest spending across our parks.

These include a compelling lineup of new rides, shows, attractions, an updated events calendar, an expanded concert lineup, new and upgraded food and retail locations, a revamped and enhanced marketing plan and strategy as well as other investments that we expect will drive demand and spending across our parks. Combined with disciplined operational execution and an additional heightened focus on cost management and efficiency, we are confident these initiatives position us to deliver strong performance in 2026.

Our fourth quarter performance was impacted by lower international visitation and fewer operating days compared to the fourth quarter of 2024. The net impact of weather was essentially flat compared to last year as the recovery from hurricanes in the prior year was offset by unfavorable weather during certain peak visitation periods, particularly in San Diego and Williamsburg as well as Florida in the peak last few days of the year. Excluding the impacts of international visitation and operating days, underlying attendance trends would have been approximately flat for the quarter.

Importantly, we reported record in-park per capita spending in the quarter underscoring that guests continue to respond positively to our offerings and spend when they visit our parks. In 2025 and through February 24, 2026, we repurchased 6.7 million shares representing approximately 12% of the shares outstanding underscoring our strong cash flow generation, long-standing commitment to returning excess cash to our shareholders and deep conviction in the exceptional value of our shares. Looking ahead to 2026, Discovery Cove advanced booking revenue is up high single digits and company-wide group booking revenue is pacing up over 50%.

We also continue to see meaningful upside in our sponsorship business and view it as a $30 million-plus revenue opportunity in the coming years. Our priorities remain clear: deliver memorable differentiated guest experiences that drive attendance and guest spending, operate with discipline and efficiency and build long-term value for shareholders. I want to thank our ambassadors for their hard work and dedication as we move through 2026. In 2025, we received numerous industry accolades, including SeaWorld Orlando being voted as the #3 Nation's Best Amusement Park by USA TODAY Readers and it was also recognized as a Golden Ticket Awards Legend for its 17-year streak of being voted the Best Marine Life/Wildlife Park.

Aquatica Orlando was voted at #3 for the Nation's Best Outdoor Water Park by USA Today Readers. Discovery Cove was awarded the 2025 Best Family Travel Award by Good Housekeeping and Newsweek Readers' Choice Awards voted it the #1 Best Animal Encounter in Florida. In addition, Discovery Cove received USA Today 10 Best Readers' Choice Awards. Its Wind-Away River was named the Best Lazy River in America. The park was also previously ranked as the #1 Theme Park in Orlando by the same publication. Busch Gardens Williamsburg was named the World's Most Beautiful Theme Park for the 35th consecutive year by the National Amusement Park Historical Association and reclaimed the title of Most Beautiful Park at the 2025 Golden Ticket Awards.

For 2026, company has an outstanding lineup of new rides and attractions, popular events and new and improved in-park venues and offerings across its parks. Company's new rides and attractions include the following. At SeaWorld Orlando, we have SEAQuest: Legends of the Deep. Guests will embark on a vibrant submersible adventure through dazzling undersea ecosystems where they'll encounter extraordinary lifeforms, breathtaking environments, and inspiring stories of the sea. This groundbreaking attraction plunges explorers into an environment of awe and mystery guided by the SeaWorld Adventure Team.

At SeaWorld San Diego, we will debut a re-imagined and immersive version of the Shark Encounter this spring as part of the Fin Shui project. Guests will encounter mesmerizing new shark species alongside a vibrant array of marine life, including additional sharks and colorful fish as the expanded exhibit transforms into a dynamic underwater adventure.

At SeaWorld San Antonio, we will introduce Barracuda Strike, Texas' first inverted family coaster. The one-of-a-kind attraction invites guests of all ages to dive into the deep and experience the ocean's most agile predator like never before. With every twist, drop and tight turn; Barracuda Strike will deliver a rush of excitement that's bold enough for thrill-seekers yet built for the whole family.

At Busch Gardens Tampa Bay, we will soon open the all-new Lion & Hyena Ridge, an extraordinary new addition to the park's award-winning animal care portfolio and the most ambitious new habitat in more than a decade. This reimagined area of the park expands the existing space to more than double its previous size, creating nearly 35,000 square feet of dynamic savanna terrain where 2 of Africa's most iconic species will thrive, a pride of 5 young male lions and a pair of playful hyenas.

And finally, at Busch Gardens Williamsburg, we'll have Verbolten - Forbidden Turn, a re-imagined indoor/outdoor multi-launch roller coaster opening this spring with new immersive storytelling and special effects. This family roller coaster delivers surprises at every turn as it transports visitors through the Black Forest soon discovering all is not what it seems.

Our balance sheet continues to be strong. On December 31, 2025, net total leverage ratio is 3.4x and we had approximately $789 million of total available liquidity and approximately $100 million of cash on hand. This strong balance sheet gives us flexibility to continue to invest in and grow our business and to opportunistically allocate capital with the goal to maximize long-term value for shareholders. So as we mentioned, we posted some slides on our Investor Relations website. So I'll be turning our attention to those slides now.

This presentation addresses certain topics that we have heard from shareholders that they'd like to be covered and some important points that we would like to get across. Beginning with capital spending on Page 5. We spent just under $220 million on CapEx in 2025, which is generally consistent with what we expect to spend on an annual basis going forward to support our business and growth initiatives. On Page 6, we lay out our very exciting lineup of new attractions, events and shows for 2026. I won't go through all of what's on the page in detail, but I encourage you to review the page to see what we have in store for our various parks this year and to see what we are so excited about this lineup. As you can see, we have a number of things still to be announced in key markets like Orlando that we are excited about.

On Page 7, we lay out our current key strategic initiatives. On hotels, we continue to have discussions with potential partners and are working deliberately to bring the best option forward. We will continue to update you as we make progress. On real estate, as we have discussed before, we have extremely valuable and strategic real estate holdings. We are actively evaluating various monetization opportunities, which we can discuss in a bit more detail in a few pages. On sponsorships, we have made good progress and have a nice pipeline for 2026, $15 million and growing, and we see significant upside in the coming years.

On international and IP partnerships, we are in multiple active discussions and we'll have more to share in the coming quarters. On marketing, we have a new and enhanced marketing strategy that we expect will lead to more optimized media spend, better creative execution and a more integrated approach to communicating with and attracting guests. On costs, we are really focused here with a new set of processes and plans that we can discuss in more detail in a few pages. On technology, we are pursuing various initiatives, including embracing automation, robotics and AI to help us deliver more revenue, reduce costs and improve guest experience. We also continue to work on our CRM initiative and various park enhancements.

On Page 8, we provide a bit more detail on our real estate. We have over 2,000 acres of owned real estate, including over 400 acres of undeveloped land. We estimate the replacement cost of our parks to be over $10 billion or about 2.5x our current enterprise value. In other words, our current enterprise value is less than half the replacement cost of our assets. While the public markets may not be appropriately recognizing the value of our assets, others are. We have received multiple sale-leaseback proposals that we are currently evaluating and have active discussions with various partners on hotel development, timeshare development, residential development and other commercial development on our owned property.

We have nothing more to share on this today and we will update you when we do have more to share. On Page 9, we provide a brief update on Orlando. Epic Universe is a great addition to the Orlando market and we believe has benefited the entire market. We are pleased with our attendance results in Orlando in 2025 and our 2026 forward booking numbers at Discovery Cove and our group booking numbers are both up. We are excited about the investments we are making in Orlando this year and we expect strong performance across our Orlando parks in 2026.

Page 10 outlines how we think about driving future attendance growth. We obviously have been disappointed by our attendance over the past few years. Our attendance has been impacted by various factors, including a combination of post-COVID consumer behavior volatility, a difficult run of extreme weather, international headwinds driven by geopolitical and other factors and a less than optimal execution at times. We are confident the drivers on this page will lead us to grow attendance in the near and long term.

The next page outlines drivers of future per cap growth split between admission and in-park per cap. We expect to grow our per caps in excess of inflation over time. We have done a decent job of growing in-park per cap consistently over the last several years and have seen admission per cap declines over the last number of quarters. Admission per cap has been impacted by various factors recently, including more promotional activity. While our primary focus is to grow total revenue, we expect to grow admissions per cap over time driven by the drivers outlined on this page. We have significant headroom for pricing in many of our markets, including in Orlando. We are a really good value for our guest.

The next page outlines our current cost initiatives, which total $50 million of gross cost reductions across labor, OpEx, SG&A and cost of goods sold. As already stated, we have a renewed focus on costs and are not pleased with how we managed this part of our business at times in 2026. We expect to deliver better outcomes in 2026. One quick correction as far as how we manage this business -- how we manage our costs in 2025 not 2026. Obviously we expect to deliver better outcomes in 2026.

The next page lays out an illustration of where our EBITDA would be if we achieved our 2019 or 2008 attendance levels and grew our total revenue per cap as outlined on prior slides and achieved our cost savings goals. As a reminder, this is not meant to be guidance. It's just meant as a simple illustration to show what we believe the earnings power of this business would be at the 2019 attendance levels and if we return to the 2008 historical peak attendance levels while growing our total revenue per capita along with the cost-saving opportunities and strategic initiative opportunities we have noted. As you can see in this illustration, we would have $900 million to $1 billion of EBITDA. Just a reminder, this is not guidance, but rather a simple illustration.

The next page outlines our current market valuation. This page underscores why we believe our shares are such an exceptional value at current prices. We are currently trading at 5 to 6 multiple points lower than the pre-COVID peer group multiple. We are currently trading at 5.5x to 6.5x levered free cash flow. The Board and company strongly believe our shares continue to be materially undervalued. We have confidence in our business, our growth prospects and the value of our assets. In any reasonable way you look at it, we feel there is significant upside opportunity in our current share price. Yet as we outline on the next page, we have outperformed all peers over a long time period.

On the following page, we show illustratively where our stock price would be if we achieve our recent 2024 EBITDA and traded at various discounts to the long-term pre-COVID multiple for the peer group and where our stock price would be if we achieve the $900 million of illustrative EBITDA shown on Page 13 and bring the return to 2019 attendance column. As you can see, our stock price is currently trading at a substantial discount to all numbers on this page.

Lastly, we outlined the key takeaways on Page 17. We have a clear strategy for 2026. We will spend capital with discipline. We have meaningful upside from our key strategic initiatives. We have significant asset value with various avenues to monetize and we are trading at a fraction of our replacement value. We are well positioned in a growing Orlando market. We have clear opportunities to grow attendance per caps, revenue and EBITDA and we are extremely undervalued just about any way you look at it.

I'm excited about the significant investments we are making and the many key initiatives we have underway across our business that we expect will improve the guest experience, allow us to generate more revenue and make us a more efficient and more profitable enterprise. We are building an even stronger and more resilient business that we are confident over time will deliver improved operational and financial results and meaningful increases in value for all stakeholders.

With that, Jim will discuss our financial results in more detail. Jim?

Thank you, Marc, and good morning. During the fourth quarter, we generated total revenue of $373.5 million, a decrease of $10.8 million or 2.8% when compared to the fourth quarter of 2024. The decrease in total revenue was primarily a result of decreases in attendance and admissions per capita partially offset by an increase in in-park per capita spending. Attendance for the fourth quarter of 2025 decreased by approximately 126,000 guests or 2.6% when compared to the prior year quarter. The decrease in attendance was primarily due to a decrease in international visitation compared to the prior year quarter.

In the fourth quarter of 2025, total revenue per capita decreased 0.2%. Admission per capita decreased 2.2% and in-park per capita spending increased 2.1%. Total revenue per capita decreased due to decreases in admissions per capita partially offset by increases in in-park per capita spending. Operating expenses decreased $1.8 million or 1.0% when compared to the fourth quarter of 2024. Selling, general and administrative expenses increased to $8.7 million or 17.4% compared to the fourth quarter of 2024.

We reported net income of $15.1 million for the fourth quarter compared to net income of $27.9 million in the fourth quarter of 2024. We generated adjusted EBITDA of $115.2 million in the quarter. Looking at our results for fiscal 2025 compared to fiscal 2024. Total revenue was $1.66 billion, a decrease of $62.7 million or 3.6%. Total attendance was 21.2 million guests, a decrease of approximately 378,000 guests or 1.8%. Net income for the year was $168.4 million and adjusted EBITDA was $605.1 million.

Now turning to our balance sheet. Our December 31, 2025, net total leverage ratio was 3.4x and we had approximately $789 million of total available liquidity, including approximately $100 million of cash on the balance sheet. The strong balance sheet gives us flexibility to continue to invest in and grow our business and to opportunistically allocate capital with a goal to maximize long-term value for shareholders. Our deferred revenue balance as of the end of December was $143.3 million, a decrease of 4.7% when compared to the prior year normalized for noncash write-off of bad debt expense. This balance greatly improved to being down 1.4% as of the end of January.

Through December 2025, our pass base, including all pass products, was down approximately 4% compared to December 2024. Our 2026 pass program includes our best-ever Best Benefits and we are pleased with the momentum we are seeing in sales as we head into our peak selling season in the next few weeks. Finally, as of December 31, 2025, we invested $217.5 million in CapEx, of which approximately $182.4 million was on core CapEx and approximately $35.1 million was on expansion or ROI projects. As outlined by Marc in the presentation, for 2026 we expect to spend approximately $175 million on core CapEx and approximately $50 million on CapEx for growth in ROI projects.

Now let me turn the call back over to Marc, who will share some final thoughts. Marc?

Thank you, Jim. Before we open the call to your questions, I have some closing comments. In the fourth quarter of 2025, we came to the aid of 178 animals in need. Over our history, we have helped over 42,000 animals, including Bottlenose dolphins, manatees, sea lions, seals, sea turtles, sharks, birds and more. I'm really proud of the team's hard work and their continued dedication to these important rescue efforts. We're excited about our ongoing and upcoming events this quarter, including Mardi Gras at all SeaWorld and Busch Gardens Parks, Seven Seas Food Festival at all SeaWorld Parks and the Food and Wine Festival at Busch Gardens Tampa Bay.

We are also excited about the ongoing and upcoming concerts we have planned for our SeaWorld and Busch Gardens Parks this year. I want to thank our ambassadors for their efforts during our recent holiday season and the preparation for our current and upcoming events this spring. I'm excited about the opportunity set in front of us both in the near term where we see clear paths to driving meaningful progress and over the medium term where the growth potential is even greater. We are focused, well positioned and confident in the investments we are making, the operational efficiencies we expect to realize and the value we can build for stakeholders.

With that, we can now take your questions.

[Operator Instructions] And our first question comes from the line of Steve Wieczynski with Stifel.

So Marc, if we think about 2026 and look, obviously you guys don't have a ton of visibility into your day-to-day operations. But you did note Discovery Cove and group bookings are both up nicely at this point. Wondering though how you guys are thinking about attendance growth for this year outside of Discovery Cove and group bookings. Obviously, you still have kind of these headwinds from the international side of the business. But do you think it's possible at this point to grow attendance with some of those headwinds still in play here?

Steve, it's Marc. I can take your question. What I'm excited about is what we talked about, the new attraction and event lineup that we're investing in and we do believe will lead to attendance growth. So great lineup in Orlando. Some of the things we've announced, some of them are still to come. And then as I mentioned in my prepared remarks, there's attractions across the parks. So you've got something just about everywhere. And so I really think the lifeblood of giving people a reason to visit is having new attractions and events and shows and things like that. So feel good about the lineup we have.

We know international, as you mentioned, was still a headwind here to start the year. We expect that will normalize as we begin to lap some of the factors that drove that down last year. So assuming that normalizes for those reasons and we start to lap some of those things from last year, that gives me some confidence that at least we can hopefully stop kind of the decline in international. And then as we always talk about, we know there's weather impacts throughout the year. If we get a year of normalized weather, that certainly would be a factor in continuing to be able to add attendance in some of our parks. So that's kind of how we're thinking about it. It's really anchored by the attraction lineup and the event lineup and the new shows and things like that.

Okay. Got you. And then second question maybe just turning to capital deployment and maybe how you guys are thinking about leverage. I guess what I'm trying to understand here is if we look at the end of the year, I think your cash balance was, I don't know, somewhere around $100 million. It seems like you guys have already kind of bought back, let's call it, $90 million of stock this year. So cash balance is probably a little bit tighter at this point. So obviously it probably seems like you did take on a little bit of leverage to buy some of this stock back. I guess what I'm trying to figure out is where you guys feel comfortable from a leverage standpoint at this point and moving forward?

Sure, Steve. I can help you with that. I mean obviously we don't have a target leverage ratio or anything like that. We're comfortable where we are now at the end of the year and not to say we won't be comfortable with something higher than that or lower than that. So really the way we think about it is we work with the Board when there's opportunities to return cash to shareholders and we take that into account, our leverage ratio into account when we're doing that. Obviously as you know in this business, we're kind of this time of year at kind of the trough of the cash generation, right, and then it will start to pick up as we get into the spring and into the summer. So that's one factor to keep in mind. But I would say we're comfortable with the leverage ratio at the end of the year not to say that we wouldn't go higher or anything like that. We don't have a target. We just really work closely with the Board on deploying that cash accordingly.

Our next question comes from the line of James Hardiman with Citi.

So maybe an offshoot of Steve's question, but the language around 2026, I think strong financial performance is how you termed it. I think the previous few years you had talked about record revenues and EBITDA and sometimes attendance. And so this seems like a departure from that given the consistency of those projections in previous years. I don't know if that's more a function of sort of increased conservatism as you look back given that that growth has been elusive or is there something as we think about 2026 where there's some increased uncertainty? Just trying to understand the philosophy of, I don't know, guidance if you want to call it that.

Yes. James, I mean we're not giving any sort of guidance obviously. I think it's really just a function of we're excited about 2026, the lineup we have. As I mentioned to Steve, the lineup of attractions and events and everything we have going on, some of the macro trends hopefully improve. Hopefully, we get some better weather as well and then obviously there's things we can better manage ourselves. So I'm not guiding you anything. I don't know where that will lead us. But obviously we believe we're going to grow the business in 2026 with everything we have going on.

Got it. And then you've talked a couple of times about how maybe the cost performance is not where you would have liked it to be in 2025. Maybe let's just do -- if we could maybe do a postmortem there. I mean coming into the year, I think you guys had targeted $50 million to $75 million of gross savings. Maybe sort of how did you do against those goals? It looks like total expenses were actually up about $25 million. And so maybe it's just that the gross to net, are there any callouts there I guess is the question? And then as we roll that forward to 2026, right, there's another $50 million of gross cost savings. As we think about the coming year, how should we think about that gross to net walk? Labor is obviously a big one, but how should we think about your ability to flow some, most, all of that to the bottom line?

Yes. James, let me start and then Jim can add whatever he would like. But look, as you know, we've worked at cost for quite a while at this company is something we've prided ourselves on and we hold ourselves to a really high standard and it's reflected in our margins that we've grown since 2019. Nonetheless, we believe we can do a better job and there was times in '26 that we weren't optimal on managing costs and reacting to things as quickly as we could and those are things that we're going to try to correct here in 2026.

So we have a lot of focus on this. We hold ourselves to a pretty high standard. Even with all that, if you look at like the cost growth in EBITDA cost, kind of the cost between revenue and adjusted EBITDA, it was I think just about 3% in 2025, which again it's low single digits, but we manage and have high expectations to do better than that. And so that's our goal for 2026. And there's some initiatives that we laid out on the slide that we think can help us get there and so that's what we're aiming for. But Jim, anything you want to add?

Yes. I would just say again to echo Marc, there are a number of headwinds that we've got going on; contractually or legislatively required minimum wages, the presence of hurricanes in some of our parks that happened in 2024 that we're recovering on and adding labor back for things that had to be closed and those type things. As Marc said, under our response to business conditions, we have to take those into account much more aggressively and dynamically match our volume for the guests and the labor that we're spending against that. And we need to use technology and a wide variety of resources at our disposal to be more nimble when it comes to that.

We've also got property tax and insurance that we are actively engaged on and trying to react to those. Again lots of headwinds over there both from a taxing authority trying to get more taxes. And then our marketing spend is something that we have tried to do some test and adjust with and sometimes that hasn't resulted in the attendance we hoped for. And so we're going to dial that in more aggressively to make sure that those decisions to spend are targeted.

Got it. And just to clarify, the wage headwinds that you called out, that was a '25 event. Do we expect similar pressure in '26 or has that subsided? How do we think about that?

The bulk of that would come from minimum wages. So Florida has legislatively constitutional required minimum wage increases as well as San Diego as well publicized have a very substantial minimum wage increase in 2026. So we're planning for those actively, how we're reacting to those so that we can take business conditions into account, our pricing for both in-park and our admissions to cover those costs and then to be again more aggressive in our match of the volume we're experiencing as well as use of technology and other tools to minimize those labor costs.

Next question comes from the line of Arpine Kocharyan with UBS.

So you mentioned cost improvement many times in prepared remarks and also in the release. But I was wondering regardless of where demand shakes up for 2026, what would that in aggregate add to your EBITDA for this year versus last? And to go back to the question on $50 million of cost you mentioned in the slides, what part of that is incremental today versus what you were targeting before and what was in the base already, if you could clarify?

This is Marc. Let me start and Jim can add anything. But I think the point on cost is we could have done better in 2025. We've got new discipline around some of the processes there, some new procedures around that. We've got a number of initiatives that I laid out in the slide. So we're very focused on that. I don't want to guide you to any specific numbers or anything like that. But I can tell you we're highly focused on this. Jim mentioned some of the activity we have going on to offset some of the kind of anticipated headwinds and then we have to do a better job of reacting to and proactively addressing things that maybe we don't know right now. So that's how we're approaching it. I think a more heightened attention to how we manage it and really focusing on it every day. We hold ourselves to a high standard, as I said, on cost.

The only thing I would add, Marc, is what we're planning is not so much to rely on the revenue or the attendance to cover some of these. We are aggressively trying to anticipate those headwinds that we know are on the horizon for taxes or these labor costs that we've talked about or in continued health care costs and try to address those on the expense line to try to at least flatten the year-over-year growth if not decrease it and that's our plan. In fact we've got some -- in our budget, we have plans to reduce costs on that basis. But again I don't want to guide to that, but that is our goal.

Okay. And then on early demand indicators, you mentioned momentum for 2026 pass product. Could you maybe give a little bit more detail in terms of volume and price? It sounds like you're seeing good improvement versus down 4% that you saw in 2025, but obviously it's early. What early demand indicators you're looking at and a little bit more detail on the pass product would be helpful.

Yes. We called out 2 of the things that we do have visibility into, which is Discovery Cove reservations and then kind of group bookings as well. Those are some of the indicators we have. We don't have as many as maybe others in the industry not having hotels and things like that. But the 2 we did call out, Discovery Cove and group, again look promising for 2026. I can tell you there are some other things that are maybe a little bit smaller, but nonetheless, things that we do look at like our VIP tour bookings are trending well. Some of our in-park products we feel good about. So there's a myriad of things that look promising.

These aren't again the lion's share of our revenue or anything like that, but they are the things that we have visibility into, right? On the pass, what I would tell you there is it's very early in the kind of cycle of pass sales. We do sell passes year-round, but really we start to see that ramp up here as we enter like spring into early summer depending on the park location. So we know we have a good product. We know there's reasons for people to visit with our rides, attractions, events. We expanded our concert lineup this year to include all the SeaWorld and Busch Gardens Parks and we're really excited about that. It gives people another reason I guess to buy a pass. So we'll see where pass sales ultimately end up. The key period is still ahead of us there.

Okay. That's helpful. Just on Discovery Cove, it seems like booking came down from more than 20% that you had previously given to now high single digits. I know probably most of the time you start at a higher number and then that comes down a little bit, right, as you enter the year. Is it just that or is there something else going on there? Because you had disclosed I think a more than 20% number for that for 2026 previously if I'm not wrong.

Yes. Here's what I'd say. I think we're pleased to see the high single digits. It's a great park and we're confident that that's going to have another solid year in 2026. It had a record attendance year in 2025. So we're building off of that.

Next question comes from the line of Thomas Yeh with Morgan Stanley.

Just 1 on the macro level. You've talked about the consumer environment as being uneven I think for 2 quarters now. Can you maybe just expand a little bit on that? You grew in-park spend clearly in a relatively healthy way, but admissions per caps down. Is there maybe just any evidence you see within the portfolio performance of a K-shape where, say, Discovery Cove at the higher end is performing, but you might be seeing lower-end consumers fall off? And then just for 1Q in terms of the pacing, can you just talk about how core attendance has been shaping up so far? And I think you had some Easter timing shift headwinds last year. Any update on that and how we should think about that for '26? I think it's a little bit earlier this year, but still in April.

Let me start with your first comment. I mean obviously pacing on Q1, I'm sure everybody is well aware of the weather across a good part of the country especially in Florida in January and February has been a challenge for us and I'm sure many others in the theme park industry. So that is what it is. The good news is January and February are relatively small months and the quarter is really driven in large part by how we do in March. So we still have that ahead of us. Your question on kind of timing of Easter, Easter is earlier this year, it's on April 5. So kind of the start of what we would call Easter week backs up a few days into March. We do have though some other kind of negative calendar impacts in Q1. So my guess is those will kind of offset each other.

We have 1 less Saturday in March this year than last year, but we again have a little bit few more Easter days in the month of March than last year. So they probably even out, but that's kind of how we're thinking about it. On your question on per caps, as I said, I look at in-park per cap spend to kind of gauge how people are doing and we've done a good job of growing that pretty consistently now for a few years. And so I think people find compelling reasons to come to spend money in our parks or whatever that may be on whatever product that is. And I think we can continue to tailor that to all income levels and we have to do a better job of that. We know there's people who clearly have been impacted over the last year I'm sure with some of the economic conditions over the last couple of years and there's people that are maybe not as impacted as those. So we have to tailor our products to make sure we're capturing opportunities from all demographic and income levels and we'll continue to do that and that's a big part of our strategy obviously going forward is to continue to grow in-park.

The one thing I might add, Marc, is that we talked about the K-shape economy. We do do demographic surveys of our guests and I looked at that in preparation for this call seeing that we actually don't show significant changes in our income levels of our guests as we segregate them. We're not seeing that the large shift at least in our business when we compare to the prior year.

Okay. That's very interesting. And then just a quick follow-up on the land monetization initiatives. I think you spoke in particular a little bit more about sale-leaseback interest. Can you just talk about how you weigh that in terms of how compelling that potential opportunity is? And it doesn't seem like it could be mutually exclusive necessarily with developing the land in other ways either. So maybe kind of just double tap on that.

Sure. The point we've been making now for several quarters and I think we leaned into it even more today is we have significant opportunities with our real estate and it could be a variety of -- it could be a sale leaseback, it could be developing that land into shopping, housing, entertainment, whatever it may be, hotels. So the point is there's a lot of valuable real estate and there's multiple ways to monetize that. We'll work obviously with our Board. I think you're very familiar with the makeup of our Board.

We're obviously more than 50% owned by a private equity firm and we get a lot of obviously guidance and counsel obviously from them and the rest of the Board on how to use cash. So I'm confident working together with the Board, we'll come to the right conclusions on how best to monetize our assets. I think the exciting thing is that people recognize the value, maybe not everybody because it's not, I don't think, fully appreciated by the public markets. But the people that we talk to or talk to our Board, they see that value, and that's what we were trying to point out in some of the slides.

And our last question comes from the line of Lizzie Dove with Goldman Sachs.

I wanted to ask about Orlando and I guess kind of Epic specifically. I know you've kind of called out in the past Orlando has been pretty solid or was pretty solid in 2025 at least from an attendance perspective. I'm not sure you've given detail about per caps or kind of costs. But as we get the kind of full annual impacts of Epic this year, it sounds like they're trying to kind of ramp that up even more. Just how you think about that in terms of the impact to your Orlando trends?

Yes, it's still a great opportunity. As we've consistently said, we think Epic in the market brings more people to Orlando and we have again the opportunity to share in that growth like we have for the last 50-some years that we've been in Orlando. So I would point to the things we're adding in our park, SeaWorld Orlando for example, the new rides attractions. Some of this hasn't been announced, but I can tell you it's some exciting stuff and these are differentiated than what you're going to get at Epic and I think that's a key part of what sets us apart. You're coming here for a different experience. It's a great thing. SeaWorld is a great park in itself. It's a differentiated experience with what we can offer with the animals and some of the rides that are blended in with animal components to them.

So we like that setup obviously. And then I haven't even mentioned Discovery Cove, which is a really good park as well and then we have Aquatica, which is a great water park. So we like that we're investing in a market that continues to attract high quality investments from other people as well. We think that benefits everyone. And we'll continue to do our part to drive people to our parks while they're here. I would point out, as I've said in the past, I also believe we have a value proposition that's really strong for guests that are in the market and want to experience again a differentiated product. I think we can do that at a good value as well.

Got it. That makes sense. And then I wanted to ask about sponsorship given you kind of called that out as a big opportunity. I think a couple of quarters ago, you said you were expecting for 2025 at least maybe mid-single digits EBITDA. Curious if you realized that in 2025. And then when you talk about this $15 million-plus pipeline and kind of going to $30 million over time, like how much visibility you kind of have into that?

Yes. What I'm excited about is what I mentioned on the go forward is the 2026 pipeline is exciting. We mentioned $15 million plus and growing. We think the opportunity over kind of the coming years or long term, however you want to think about it, can be $30 million plus. So we like the pipeline. We like what we see now and the potential for this over the coming years.

The only thing I might add, Marc, is sometimes these relationships take a while to develop or review and over time they will bear fruit. And I think the company is comfortable, as Marc said, that pipeline that we have some concrete plans coming up in the future we'll be able to share.

That concludes the question-and-answer session. I would like to turn the call back over to Marc Swanson for closing remarks.

Thank you, Desiree. On behalf of Jim and the rest of the management team at United Parks & Resorts, I want to thank you for joining us this morning. As you heard today, we are confident in our long-term strategy, which we believe will drive improved operating and financial results and long-term value for stakeholders. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining in. You may now disconnect.

Good day, and welcome to the United Parks & Resorts Third Quarter Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Matthew Stroud of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to United Parks & Resorts Third Quarter Earnings Conference Call. Today's call is being webcast and recorded. A press release was issued this morning and is available on our Investor Relations website at www.unitedparksinvestors.com. Replay information for this call can be found in the press release and will be available on our website following the call.

Joining me this morning are Marc Swanson, Chief Executive Officer; and Jim Forrester, Incoming Interim Chief Financial Officer and Treasurer. This morning, we will review our third quarter financial results, and then we will open the call for your questions. Before we begin, I would like to remind everyone that our comments today will contain forward-looking statements within the meaning of the federal securities laws. These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward-looking statements, including those identified in the Risk Factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. These risk factors may be updated from time to time and will be included in our filings with the SEC that are available on our website. We undertake no obligation to update any forward-looking statements.

In addition, on the call, we may reference non-GAAP financial measures and other financial metrics such as adjusted EBITDA and free cash flow. More information regarding our forward-looking statements and reconciliations of non-GAAP measures to the most comparable GAAP measure is included in our earnings release available on our website and can also be found in our filings with the SEC.

Now I would like to turn the call over to our Chief Executive Officer, Marc Swanson. Marc?

Thank you, Matthew. Good morning, everyone, and thank you for joining us. We're obviously not happy with the results we delivered in the quarter. Performance during the quarter was negatively impacted by an unfavorable calendar shift, poor weather during peak holiday periods, a decline in international visitation, and less than optimal execution. The consumer environment in the United States appears to be inconsistent as has been outlined by a number of other leisure and hospitality businesses. Nonetheless, we can and expect to do better.

Attendance in the third quarter was negatively impacted by approximately 150,000 visits from unfavorable calendar impacts, particularly the timing of the 4th of July holiday, and was also impacted by poor weather over peak 4th of July and Labor Day weekends. We saw a decline in international visitation of approximately 90,000 guests during the quarter, which was a reversal of earlier trends we saw in the first half of the year. Adjusting for these calendar shifts and the international visitation declines, attendance would have been roughly flat for the quarter.

On the positive side, we are pleased to report growth in in-park per capita spending, which has grown in 20 of the last 22 quarters. Our Halloween events just concluded last week, and we saw meaningful year-over-year growth from our separately ticketed Howl-O-Scream events, including record attendance in Orlando and San Diego for these events. Looking forward, we are encouraged by the forward booking revenue trends into 2026 for our Discovery Cove property and our group business, both of which are up over 20% compared to the same time last year. We are also happy to report that our attendance at SeaWorld Orlando is up year-to-date.

We're also pleased that during the third quarter, stockholders granted authority to the Board of Directors to approve and implement additional share repurchases. The Board previously announced a $500 million share repurchase program contingent on receiving this approval, and we have already repurchased 635,020 shares for an aggregate total of $32.2 million through November 4, 2025, underscoring our strong balance sheet, significant free cash flow generation, and our strong belief that our shares are materially undervalued.

Later this month, we will begin our award-winning Christmas events at our SeaWorld, Busch Gardens, and Sesame Place Langhorne Parks. This year, we believe our Christmas events will be our best ever with the popular rides, attractions, and exhibits our guests have come to expect, plus additional new and exciting events, specialty food and beverage offerings, and holiday shopping for everyone. I want to thank our ambassadors for their dedication and efforts during our busy summer season and as well during our Halloween events and upcoming Christmas events.

As we move into 2026 and beyond, we firmly recognize there is significant opportunity to execute better and drive meaningfully more attendance to our parks, grow total per capita spending, and continue to reduce costs and find efficiencies. While this year has been disappointing to date, we have high confidence in our ability to deliver operational and financial improvements that will lead to meaningful increases in EBITDA, free cash flow, and shareholder value. We are focused, well-positioned, and confident in the investments we are making, the operational efficiencies we expect to achieve, and the value we plan to build for stakeholders.

We have announced several of the upcoming new rides, attractions, and events and upgrades for 2026. This includes the following: SeaWorld Orlando is pushing the boundaries of family thrills once again with its new attraction, SEAQuest: Legends of the Deep. Guests will embark on a vibrant, submersible adventure through dazzling undersea ecosystems where they will encounter extraordinary life forms, breathtaking environments, and inspiring stories of the sea. This groundbreaking attraction plunges explorers into an environment of awe and mystery, guided by the SeaWorld Adventure team.

SeaWorld San Diego is creating a reimagined and immersive version of the Shark Encounter, which will debut in the spring of 2026. SeaWorld San Antonio is making waves once again with an all-new thrill ride, Barracuda Strike, Texas' first inverted family coaster. The one-of-a-kind attraction invites guests of all ages to dive into the deep and experience the ocean's most agile predator like never before. With every twist, drop, and tight turn, Barracuda Strike will deliver a rush of excitement that's bold enough for thrill seekers yet built for the whole family. Suspended beneath the track, riders will glide above the park's iconic water ski lake in a high-speed pursuit that captures the speed, power, and precision of the Barracuda.

Busch Gardens Tampa Bay is roaring into 2026 with an all-new Lion & Hyena Ridge, an extraordinary new addition to the park's award-winning animal care portfolio and the most ambitious new habitat in more than a decade. This reimagined area of the park expands the existing space to more than double its previous size, creating nearly 35,000 square feet of dynamic Savannah terrain where two of Africa's most iconic species will thrive, a pride of 5 young male lions and a pair of playful hyenas. Busch Gardens Williamsburg will be announcing their upcoming attraction later this week.

Our balance sheet continues to be strong. On September 30, 2025, net total leverage ratio was 3.2x, and we had approximately $872 million of total available liquidity and approximately $221 million of cash on hand, including restricted cash. This strong balance sheet gives us flexibility to continue to invest in and grow our business and to opportunistically allocate capital with the goal to maximize long-term value for shareholders.

I'm disappointed in our management of costs during the quarter. We have made changes to address our execution issues in this area and have implemented new processes and initiatives to address cost opportunities across the enterprise.

Moving on to an update on select strategic initiatives. On the sponsorship front, we have made good progress on several partnerships that we expect to announce in the coming months. As a reminder, we have over 21 million annual visitors across our park portfolio and the average length of stay is over 6 hours. We continue to expect approximately $20 million of annual sponsorship revenue in the coming years.

On our international opportunities, we are in active discussions with multiple potential partners. We signed one MOU during the quarter with an international partner and have since entered a development advisory agreement and have begun concept development work. We expect to sign at least one additional MOU in the coming months.

In regards to the mobile app, we continue to make progress on functionality, adoption, usage, and financial impact. The app is being used by an increasing number of guests in our parks to improve their in-park performance. The app has now been downloaded more than 16.8 million times, up from 15.6 million at the end of Q2. Total revenue generated on the app continues to grow, and we are now seeing an approximate 37% increase in average transaction value for food and beverage purchases made through the app compared to point-of-sale orders. We're excited about the potential of the app and its ability to improve the in-park guest experience, drive increases in revenue, and decreases in costs.

On real estate, we continue to discuss alternatives with potential partners and have recently received specific proposals that we are actively evaluating. As we have discussed, we own over 2,000 acres of valuable real estate in desirable locations, including approximately 400 acres of undeveloped land adjacent to our parks, including significant developable land in Orlando. We do not believe that the public markets have or are appropriately giving credit to these attractive and valuable 100% owned real estate assets.

I'm excited about the significant investments we are making and the many initiatives we have underway across our business that we expect will improve the guest experience, allow us to generate more revenue, and make us a more efficient and more profitable enterprise. We are building an even stronger, more resilient business that we are confident over time will deliver improved operational and financial results and meaningful increases in value for all stakeholders. With that, Jim will discuss our financial results in more detail. Jim?

Thank you, Marc, and good morning. During the third quarter, we generated total revenue of $511.9 million, a decrease of $34.1 million or 6.2% when compared to the third quarter of 2024. The decrease in total revenue was primarily a result of decreases in attendance and admissions per capita, partially offset by an increase in in-park per capita spending. Attendance for the third quarter of 2025 decreased by approximately 240,000 guests or 3.4% when compared to the prior year quarter. The decrease in attendance was primarily due to an unfavorable calendar shift, including the timing of the 4th of July holiday and a decrease in international visitation compared to the prior year quarter.

In the third quarter of 2025, total revenue per capita decreased 2.9%. Admission per capita decreased 6.3% and in-park per capita spending increased 1.1%. Total revenue per capita lowered due to decreases in admissions per capita, partially offset by increases in in-park per capita spending. Operating expenses increased $7.1 million or 3.4% when compared to the third quarter of 2024. Selling, general, and administrative expenses increased $5.3 million or 9.6% compared to the third quarter of 2024. We reported net income of $89.3 million for the third quarter compared to net income of $119.7 million in the third quarter of 2024. We generated adjusted EBITDA of $216.3 million in the quarter.

Looking at our results for the 3 quarters of 2025 compared to 2024, total revenue was $1.29 billion, a decrease of $51.9 million or 3.9%. Total attendance was 16.4 million guests, a decrease of approximately 252,000 guests or 1.5%. Net income for the period was $153.3 million, and adjusted EBITDA was $490 million.

Now turning to our balance sheet. As Marc mentioned, our September 30, 2025, net total leverage ratio is 3.2x, and we had approximately $872 million of total available liquidity. We had approximately $221 million of cash on hand, including restricted cash. The strong balance sheet gives us flexibility to continue to invest in and grow our business and to opportunistically allocate capital with the goal to maximize long-term value for shareholders. Our deferred revenue balance as of the end of September was $145.5 million.

Through October 2025, our pass base, including all pass products, was down approximately 4% compared to October 2024. We have launched our 2026 pass program, which includes our best-ever pass benefits program. We're excited about our new 2026 pass program and expect to see improvement in growth in our pass base as we progress into next year. We started our Black Friday sale earlier this week. It's one of our bigger selling periods for the year, and we are encouraged with the preliminary results so far.

Finally, as of September 30, 2025, year-to-date, we have invested $167.2 million in CapEx, of which approximately $142.2 million was on core CapEx and approximately $25 million was on expansion or ROI projects. For 2025, we expect to spend approximately $175 million to $200 million on core CapEx and approximately $50 million of CapEx on growth and ROI projects.

Now let me turn the call back over to Marc, who will share some final thoughts. Marc?

Thank you, Jim. Before we open the call to your questions, I have some closing comments. In the third quarter of 2025, we came to the aid of 192 animals in need. Over our history, we have helped over 42,000 animals, including bottlenose dolphins, manatees, sea lions, seals, sea turtles, sharks, birds, and more. I'm really proud of the team's hard work and their continued dedication to these important rescue efforts.

I'm excited about the opportunity set in front of us, both in the near term, where we see a clear path to drive meaningful progress, and over the medium term, where the growth potential is greater. We are focused, well-positioned, and confident in the investments we are making, the operational efficiencies we are realizing, and the value we are building for stakeholders. Now let's take your questions.

[Operator Instructions] Our first question comes from Steve Wieczynski with Stifel.

So Marc, if we go back to your last call, which was early August, I think you noted then that attendance was up on a day-to-day basis through early August. So I'm just wondering maybe what happened from early August through the end of the quarter because that would kind of tell me that you witnessed somewhere low to mid-single-digit declines for the rest of the quarter. And this was also off of an easier comp since the third quarter of '24, I think you had a weather headwind of somewhere around 300,000 guests or somewhere in that range. So maybe just trying to figure out what kind of happened through August and September.

Yes, Steve, I can help you with that. So look, August is where we started to see -- I should say, we expected to get more of the weather recovery. We got some early in the month, early on, and then we did not get as much as we expected over Labor Day and obviously into September. You also had the international attendance impact in there as well. And that was there a little bit -- it was there in July as well, but obviously, there in August and more pronounced in September and here in the October. And I think that's been pretty well reported that we view that as more of a macro issue. And I'm sure there's things we can be doing better, too, but more of a macro issue.

You also have at kind of the end of the quarter, and this is just a function of how we report our results, we report at the end of the month regardless of what day a week it is. So if you kind of go back and look at the days in the quarter, right there kind of at the end of the month, you have a negative calendar shift that happens, and that's just unique to us. Some of that, we will get some benefit of that back in Q4. But that was another pretty meaningful impact in the quarter, obviously.

Okay. Got you. And then second question, Marc, you noted -- in your words, the consumer is inconsistent. And just maybe want to understand what that means a little bit more. And then maybe if you could kind of touch on as well the impact from -- or lack of impact from Epic through the summer and into the fall so far.

Sure. So I'll take your second one first. So on Epic, I mean, you heard me say in the prepared remarks that year-to-date attendance was up at SeaWorld Orlando. I'm not going to really comment much beyond that, obviously. But the thesis hasn't changed. We still view the Epic opportunity as a very good opportunity. We welcome investment into the market. We think it benefits the market in general. And obviously, we can share in that market improvement, if you will. And that's evidenced by more than 50 years of being in Orlando and continuing to grow and adding our own additional parks and things like that. So that has not changed. Obviously, it's going to ebb and flow from quarter-to-quarter, I'm sure, and they're going to do things, and we're going to do things and others in the market are going to do things. But I think we're going to continue to optimize and learn and take advantage of what will be more people coming to the market, obviously.

As far as the consumer, I said last quarter -- what I look at a lot of times is the in-park spend and our in-park spend was up in this quarter. So people are -- at least in our park, the in-park spend is growing. We recognize that there's a lot of companies talking about the consumer and the health of the consumer. So it's hard for us to pinpoint if it's having a significant impact on us, but we're not ignoring that. Obviously, a lot of people are talking about it. So I'm sure there is some impact to certain guests across our portfolio. It's just really hard for us to tell. And like I said, we see our per cap on an in-park basis up in the quarter. And I can tell you, it was up again in October. So that's kind of the commentary there around. It's just a little bit mixed. We're going to continue to move forward on our end. And like I said, the things we got to do to continue to drive our results. And we know there could be some challenges with consumers, obviously, but at least from where we sit, looking at our in-park per cap, which is the one thing I do look at, that is positive in the third quarter and positive in October as well.

Steve, I'll add -- sorry, just one quick thing to add to that. I kind of mentioned it, but if you do look at our pass base, we know that's been down. And look, I'm sure when we -- some of the peak selling seasons for our passes were around when the tariff noise was happening. I said this last quarter, it's hard to know if that had an impact on us. I'm sure it didn't help us is, I think, what we're trying to say. And so we have opportunities to close that gap, and I can talk more about that I'm sure a little later.

Our next question comes from Arpine Kocharyan with UBS.

I have a couple of quick ones. First, what do you think drove the reversal in international visitation you were seeing in the first 6 months of the year? It seems like you're saying it is not Orlando. What do you think drove that? And then I have a quick follow-up.

I think the -- if you're asking specifically about international attendance, I mean, we saw it up in the second quarter and then obviously, a decline in the third quarter. And I know I think Visit Orlando has put out some projections that it's going to be -- to the market in Orlando for the year. And so I think it's more macro factors. Obviously, there's always things we can do better, but I think this one is pretty well understood on the macro side that international visitation to the United States is slowing, and we see that mentioned. I think some of you guys even mentioned that in some of your reports this morning, so...

Okay. And you don't see that tied to some of the immigration stuff and harder to get visas and whatnot versus macro?

No. All those things you said, I'm sure, are factors. That's what I'm saying. I think there are more macro factors that aren't necessarily in our control. So whether it's visas or immigration costs, whatever it may be, that's what I'm saying. I think all those things are a drag for just the international visitation in general.

Our next question comes from Thomas Yeh with Morgan Stanley.

Yes, I just wanted to follow up a little bit more on that Orlando market comment. Can you maybe just flesh out what you're seeing at the regional level a little bit more because you did cite SeaWorld Orlando attendance up year-to-date. And I would imagine most of the international visitation headwind you cited stems from that market. Is that fair? And if so, then were the other markets kind of underperforming even relative to that?

Thomas, I think you can, as we've said in the past, assume that the international attendance is, as you noted, more of an impact to the Florida market and Orlando. So the fact that we're up year-to-date at SeaWorld Orlando with that headwind, I think you could view that as a positive. We'll see where we shake out, obviously. But your point is a valid one on a relative basis, there's other parks that we need to see do better that are outside of the Orlando market.

Okay. That's helpful. And then for October, you cited per caps growing. How is attendance pacing? If you can comment on that, particularly given I think you're comping the Hurricane Milton issues that you were facing in early October last year.

Yes. So on October attendance, we had the hurricane recovery in Tampa, which we got a good portion of that and to some extent here in Orlando as well. There's been a couple of headwinds against that, mainly the weather in Williamsburg, which is one of our more popular Halloween parks. You guys might remember over Columbus Day, a pretty big nor'easter up the East Coast that really impacted that park and to some extent, our Sesame Park in Langhorne for a number of days. And then we did have a couple of rain weekends here in Orlando. So we did get -- and then we have the continued international decline as well.

I mean when you net it all up, attendance was up in October, not as much as we'd like because the weather recovery was not as strong in part due to just poor weather in other places and the international decline. I will say, I think it's important to note, I said in-park per cap was positive for October. Admissions per cap was also positive as well for the month. No one has asked me yet about this, but the comment I'd make around that is I think we're doing a better job of managing the admissions per caps here in October, and we'll see where that goes going forward, but that's a couple of data points for you.

Our next question comes from Chris Woronka with Deutsche Bank.

Marc, I guess, as you guys kind of collect feedback from guests and any surveys you do, your marketing approach. I mean, do you get the sense that you need a more strategic pivot, whether it's in part of offerings or marketing approach and thinking about things like social media versus traditional. But really, the gist of the question is, as you're collecting feedback from customers, is there something more different they want to see outside of price value situation?

Well, look, Chris, thanks for the question. I mean when you kind of back up in the quarter and you take out the weather and the calendar shift, those are things that just kind of happened. So I don't think that has to do with necessarily what we offer in the parks or anything. The international impact is a new emerging thing, and that's more macro related. So look, there's obviously things we can do better in our parks, and we got to execute better on some things. But I think as far as the events and the rides and the attractions we offer are compelling, and we're going to continue to do that. We saw, like I noted for our Howl-O-Scream event in San Diego and Orlando, record attendance for those events. And we have a good Christmas event ready to start this weekend in one of our parks and then the rest of the parks later on.

But one of the, I think, key things, I don't know that pivot is the right word, I think we will continue -- and I think this is really important. We are going to continue to invest in our parks. We're going to continue to drive improvements in putting new attractions in, updating venues, aesthetics, all those things that have been things we've done for years. And so we're not ever going to neglect the parks or anything. We're going to make sure they're fresh and reasons to visit. So we'll continue to make that capital investment. So there's no change in that strategy. That will attract people if you give them some good reason to come and it's new and exciting and things like that. Where I think we could do a better job is obviously on the execution around that. And some of that comes down to marketing. Some of that comes down to the different ticket offers we have and whatnot. So we've got to do a better job on some of those areas. But the core of what we do to our parks, the rides, the attractions, the collection of assets still remains really strong, and we'll continue to invest in those.

Okay. And then as a follow-up, I think you mentioned the MOU being signed internationally in the third quarter and one, I think you said you expect to sign soon. Can you maybe give us just a little bit of an overview of the overall size of that pipeline and knowing that things may or may not happen, but how big can that get over the next 3, 5 years? And then also on the sponsorship side, you gave us kind of a run rate number you expect I think in the next couple of years. Same question, is there a -- is the pipeline growing there as well?

Sure. So on international, I think what's exciting is people continue to reach out to us. And so we talked about in our release or in my prepared comments, the two things that we're comfortable mentioning the 2 MOUs, one signed, one we expect to sign in the coming months. So I think that outreach should continue. I don't want to guide you to anything. Obviously, these things can take a while to develop. But certainly, I think having people see the potential in our product, the park in Abu Dhabi, if you've not seen it, go there or look online, it's a really well-done park. I mean it just really showcases the brand well, in my opinion. And I think people see the potential of what our kind of know-how and knowledge can bring to wherever they may be located, right? And it doesn't just have to be SeaWorld. I mean we have obviously other brands, whether it's Busch Gardens or Aquatica or even Discovery Cove. So I expect outreach will continue. And -- but I don't have anything specific to guide you to. We'll update you each quarter.

On the sponsorships, similar. I mean, people recognize that we have over 20 million visitors coming to our parks on an annual basis. It's somewhat of a captive audience, and there's a lot of activation and different things we can do. And so there's a list that we're working through, and we're excited about those opportunities going forward. So I expect we'll continue to find more opportunities in that over the coming years.

Our next question comes from James Hardiman with Citigroup.

This is Sean Wagner on for James. I guess you've talked somewhat about the international weakness. Are you able to break down domestic visitors? Are you seeing any differences there between destination of fly-in versus local drive-in?

Yes. I don't know that we'll comment a whole lot on just the nuances. I mean just a lot of our parks get visitation from closer in, right? So even here in Florida, where we're sitting today, a lot of our attendance is coming from the state of Florida. And things move around from quarter-to-quarter. I think the most pronounced thing like we saw, which is why we called it out was the international attendance changing.

Okay. On the attendance per cap front, are you able to provide any more color on how that breaks down by park? Are you more aggressive in Orlando versus other markets given some of the international and competitive headwinds there?

Yes. I don't think we're going to break it down by park. But I think a couple of comments since you kind of asked. I mean, obviously, you have a lot of things that impact your admissions per cap. So you kind of mentioned international decline. That's typically a higher per cap guest. So when that -- for all the reasons that were mentioned earlier, why those folks -- when that attendance goes down, that can have an impact on your per cap, obviously. The weather and the holiday shift as well, you can't wait around for weather to get better in a compressed summer. I think summer is, in my opinion, getting more compressed. So you don't have a whole lot of time. You have to react somewhat quickly.

And then obviously, with our pass base down, you're looking to fill the gap, and we do -- there's different strategies for doing that, which we went after. We also -- when I talk to our revenue management team. We have a little team that manages this process. They see more competitive offers, if you will, more promotions from some of our competitors in several markets, right? So I think we're not the only ones -- or maybe said another way, we're sometimes having to react to some of those offers that other competitors are putting out in more than one of our markets.

The good news, as I said, is we did see improvements in the per cap in October. And I mentioned -- or I think Jim mentioned in his prepared remarks that we just launched our 2026 passes and one of the big kind of acquisition periods is around Black Friday. And that's kind of our first kind of big time of the year where we start to acquire passes for the following year. And so that sale has just started this week. It's very early, but obviously, we're encouraged by the trends, as Jim said, that we see there. We know it's very important that we close that gap. And early on here, we're encouraged, still a long way to go and still that gap can live with you for a little while because it's a yearly pass. So that will start to cycle through as we go into next year and into the spring and summer of next year and hopefully become more of a tailwind for us.

And we -- I'm not going to give you specific what we did. But obviously, we've done a few things differently with some of our pass products that we think are going to be compelling to guests. And we continue to have very good benefits as well. And I think most importantly, to give you a really long-winded answer is the key thing you need -- one of the key things you need for a strong pass program is to have reasons to visit. And I said this already, but we have another exciting lineup of new things coming to our parks next year, whether it's attractions, rides, events, refresh venues, that type of thing. That you fundamentally need to have, I think, in most years to continue to have pass members visit and continue to also give them reasons to come. The second thing would be continue to give them a compelling value proposition.

Our passes are among, I think, one of the best values you can buy for entertainment, for your family and friends and things like that. If you look at the kind of the value you get in a season pass for coming to our park. So the investments in the product is there. The value proposition is there. We have to do a better job of driving the awareness around those pass products, the -- how we're marketing those products and how we're driving people to buy that product.

Our next question comes from Lizzie Dove with Goldman Sachs.

I guess just to go like bigger picture for a second, it feels like as an industry and for you guys, like attendance isn't back to 2019 levels and for you guys not back to the peak levels either that you've kind of laid out in the past. Like what do you think is the kind of gating factor to growing attendance longer term? Like is it something structural, more competition, maybe not even from other parks, but just other kind of in-home, out-of-home entertainment? Or how do you kind of think about that forward trajectory?

So look, I still have a lot of confidence in the industry as a whole. It's a good industry. And there's a lot of -- I kind of mentioned on the last question about the value proposition and things of going to a theme park. And I think we line up very nicely with that. And we're continuing to make the investments in the product, which I think is really important to do that, and we'll continue to do that. In our case, we've not had the best weather over the last several years here. We know there's a lot of competition for people's time more than ever. And I think we've got to continue to kind of break through on the awareness and why you should have a ticket or a pass to our park.

We sometimes talk about like if you moved into town, if you moved into Tampa and you were a new resident, like it should almost be like your neighbor should be telling you like, hey, you got to get a pass to Busch Gardens. It's a great value. Everybody has a pass. So we've got to, I think, market that better, give people reasons to buy our product. And we will -- the way to do that is to continue to invest in the parks, continue to give a strong value proposition and people reasons to visit. And so I'm still real confident in not only our business, but obviously, the industry as a whole.

Got it. That makes sense. And then just to kind of ask one of the other cost questions in a slightly different way, but you've got these kind of cost saving targets. Your margins are still higher generally than the rest of the industry. And look, I know there's nuances with footprint and operating days and all of that. But I guess just can you maybe speak to the confidence of being able to kind of grow margins from here or whether there is some reinvestment needed, whether that's events, marketing, anything like that?

Sure. Well, look, you know that we hold ourselves to a pretty high standard, and we've executed over the years, I think, reasonably well with some of the cost initiatives. Now obviously, I said I was disappointed in the quarter with the cost saves and efficiencies, and I was. And we've got some new efforts around kind of how we're processing some of that, how we're managing that. And I think we're going to do a better job of managing that going forward. There's obviously, as you noted, always new costs and new things that emerge, and we have to do a better job of managing those things as well.

So I think the stuff that is in our cost plan, we're managing. It's some of the new things that emerge that we've got to address more quickly and be more able to mitigate those as much as possible. So I don't know -- I'm not going to guide you to where margins can go. Margins, we're not guiding to that. But what I can say is a core kind of piece of our strategy going forward is continuing to find cost efficiencies and managing our costs. Like you said, the margins are still strong for the industry. And if you look at the cost -- I call them the adjusted EBITDA cost, the difference between revenue and adjusted EBITDA. If you look at that growth this year, it's, I think, under 2%. So it's not like we're out of control or anything. We've managed to a fairly low level. But we know we can do more, and we got to execute better on that, and we're addressing that as we speak.

Our next question comes from Patrick Scholes with Truist.

I got on to the call a little bit late, so I apologize if any of these have been asked already. Any initial expectations or how should we think about CapEx spend for next year?

Yes. So I can take that. I mean, I think you would expect us to be in a similar range to where we are this year. And that -- it might move around slightly, but that's been our kind of target somewhere in that range. For the most part, we haven't given you anything specific. I think the key thing for you, and I know I've said this already, but we're going to continue to make investments in the parks. We're not going to suddenly change that mindset. So we'll continue to invest in the parks with capital, with new events, with aesthetics, whatever it may be to keep our parks fresh and reasons to visit.

Okay. And then -- my next question is just sort of a high-level sort of thematic question. Certainly, attendance in the last quarter was soft, but then you point out some really strong initial metrics for next year with Discovery Cove and group up 20%. When I think about especially Discovery Cove, a really high-end type of exclusive type of product, would you say that -- in your business, you're seeing these bifurcated trends where, say, Discovery Cove doing initial bookings looking really well, but then sort of last minute, more mass market attendance softer. Is that something that you also see in your business, this K-shape bifurcation? And then any other those types of trends that you see?

Yes. Sure, Patrick. So look, I'm glad you called out Discovery Cove. And that park is on pace this year to have record attendance and revenue. And as I mentioned in my prepared remarks, the revenue trends for next year are up. The bookings and revenue for next year are up over 20% compared to the same time last year. So that's a good sign. It's a really good park, and it's our most expensive park, right? So that kind of feeds into the comment about we look at that park, it's solid bookings. We look at our in-park per cap growing in the quarter and again in October.

So there's -- are there consumers that are being impacted as part of our kind of guest mix? I'm sure there are. So I don't want to say they're not. But we see other things, like I said, like Discovery Cove and our in-park per cap that tell us there's also consumers who are fine, right? So kind of the mixed bag there, as you noted. But I think the takeaway, Discovery Cove, which is in Orlando, pacing well this year to a record attendance and revenue and looking solid for next year as well.

This concludes our question-and-answer session. I would like to turn the conference back over to Marc Swanson for any closing remarks.

Yes. Thank you. On behalf of Jim and the rest of the management team here at United Parks & Resorts, I want to thank you for joining us this morning. As you heard today, we're confident in our long-term strategy, which we believe will drive improved operating and financial results and long-term value for stakeholders. So we thank you, and I look forward to speaking with you next quarter.

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, and welcome to the United Parks & Resorts Second Quarter 2025 Earnings Conference Call.

[Operator Instructions]

Please note, this event is being recorded. I would now like to turn the conference over to Matthew Stroud of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to United Parks & Resorts Second Quarter Earnings Conference Call. Today's call is being webcast and recorded. A press release was issued this morning and is available on our Investor Relations website at www.unitedparksinvestors.com. Replay information for this call can be found in the press release and will be available on our website following the call.

Joining me this morning are Marc Swanson, Chief Executive Officer; and Jim Mikolaichik, Chief Financial Officer and Treasurer.

This morning, we will review our second quarter financial results, and then we will open the call for your questions. Before we begin, I would like to remind everyone that our comments today will contain forward-looking statements within the meaning of the federal securities laws. These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward-looking statements, including those identified in the Risk Factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission.

These risk factors may be updated from time to time and will be included in our filings with the SEC that are available on our website. We undertake no obligation to update any forward-looking statements. In addition, on the call, we may reference non-GAAP financial measures and other financial metrics such as adjusted EBITDA and free cash flow. More information regarding our forward-looking statements and reconciliations of non-GAAP measures to the most comparable GAAP measure is included in our earnings release available on our website and can also be found in our filings with the SEC.

Now I would like to turn the call over to our Chief Executive Officer, Marc Swanson. Marc?

Thank you, Matthew. Good morning, everyone, and thank you for joining us. We are pleased to have grown attendance in the second quarter despite experiencing amongst the worst weather we have ever experienced in the second quarter. Despite those headwinds, we saw an increase in International and Group visitation compared to the prior year in the second quarter.

Additionally, we saw an increase in attendance at all of our Orlando parks, including SeaWorld Orlando, Aquatica Orlando and Discovery Cove. Looking forward, we continue to be encouraged by the forward-booking trends we are seeing in our Group business and at our Discovery Cove property, both of which are up mid- to high single digits for the remainder of the year. While it's early, the 2026 bookings are also showing very strong trends in both areas as well.

We are excited about the remaining lineup of events as we wrap up the summer, including Bands, Brew and BBQ at SeaWorld Orlando, Summer Spectacular at SeaWorld San Diego, Red, White and BBQ at SeaWorld San Antonio and Bier Fest Brews and BBQ at both Busch Gardens Tampa Bay and Busch Gardens Williamsburg over the next few weeks.

Later in September, we'll start our popular Halloween events, which will run through October and be followed by our Christmas events in November and December. These special events continue to grow in popularity, and we expect this year's events to be among our biggest ever. Early forward-booking ticket sales for our Howl-O-Scream events across our parks are running ahead of prior year. I want to thank all of our ambassadors for their hard work and dedicated efforts to make these things happen. I'm also happy to announce that our Board has approved a new $500 million share repurchase program, subject to approval by a majority of the non-Hill Path stockholders. We intend to file preliminary proxy materials for a special meeting of stockholders within the coming days and expect to have the vote within the next 30 days.

With our strong balance sheet and significant free cash flow generation, we are excited to be able to take advantage of what we believe to be a very attractive opportunity to invest in the shares of our own company via a share repurchase and return capital to our stockholders. The Board and the company strongly believe our shares are materially undervalued. As we have expressed in the past, we have significant confidence in our business, our prospects and the value of our assets, and we believe any reasonable way you look at it, we feel we are materially undervalued and that there is meaningful upside opportunity in our current share price. Our balance sheet continues to be strong. Our June 30, 2025 net total leverage ratio is 3.0x, and we have approximately $883 million of total available liquidity, including approximately $194 million of cash on the balance sheet.

As a reminder, we generate a majority of our cash flow in our peak summer season, stretching over the second and third quarters. The strong balance sheet gives us the flexibility to continue to invest in and grow our business and to opportunistically allocate capital with the goal to maximize long-term value for shareholders. On cost, we are a little disappointed and probably could have and should have done a better job of proactively managing some of our park labor and operating expenses in the face of poor weather that impacted demand.

We have tightened and improved our processes and added additional resources to help manage these areas better in the future. There are other areas of the P&L that we have opportunities to manage better also. In light of this, we are implementing an additional cost reduction plan that we expect will reduce up to $15 million of cost in the second half of the year. On Orlando, there has been considerable interest from you all on the opening of Universal's new Epic Universe theme park this year in Orlando and the potential impact on demand at our SeaWorld Park in Orlando.

As we and some of our other competitors have consistently communicated, we welcome investment in the Orlando market, and we believe more high-quality investment is good for the overall market and good for our business. As you know, over the past 50 years since we arrived in Orlando, there has been significant investment in the market, which has driven more and more visitors and residents to this highly attractive market. Today, Orlando is the most visited city in America and amongst the top most visited cities in the world. We benefit substantially from this strategic position in this market.

As you know, for competitive and other reasons, we do not normally share individual park performance information. However, in the spirit of hopefully giving clarity and some conclusion to this open question, I will share with you all that as expected, our attendance at our SeaWorld Orlando Park has been up in attendance since Epic opened on May 22. It was up for the full second quarter, and it was up if you measure from the date Epic opened through the end of the second quarter. It continues to be up quarter-to-date in the third quarter through August 6 on a day-to-day basis, and we expect attendance for the remainder of the year at this park to be up as well. We hope this provides helpful context for you all. We have great respect for our competitors in Orlando. We welcome increased investment from them, and we are very happy to be a major operator in this market, benefiting from its growth and vibrancy.

We hope we really don't have to discuss this topic again, and we do not plan to make it a normal practice to discuss individual park performance information in the future. I'd also like to take a minute to highlight our early forward insights into 2026. As I mentioned earlier, our early Group booking trends for 2026 are up. Our early Discovery Cove property booking trends for 2026 are up and our very early and recently launched at select parks, 2026 pass sales are up.

We have another exciting lineup of new rides, attractions, events and activations we are planning for 2026, in addition to certain food and beverage, retail and technology improvements, which we look forward to implementing. We are in the midst of 2026 planning right now, and the team is working hard on putting a good plan in place for next year. Moving on to some of our strategic initiatives. On the sponsorship front, we have been actively working over the past several months on various sponsorship opportunities that leverage our valuable assets and customer database. As a reminder, we have over 21 million annual visitors across our park portfolio and the average length of stay is over 6 hours.

We have secured agreements with a number of partners across our parks and continue to work through a pipeline of other potential opportunities. We are projecting approximately up to mid-single-digit million dollars in sponsorship revenue for this year with an annual outlook of approximately $20 million in the coming years. On our international opportunities, we are in active discussions with multiple potential partners and expect to have 2 signed MOUs by the end of the year. More to share in the coming quarters. On the digital transformation front, we continue to make investments and build out our CRM capabilities and our mobile app. We continue to believe that CRM will play a role in our long-term growth strategy, providing deeper insights and more meaningful connections with our guests as we continue to scale.

In regards to the mobile app, we continue to make progress on functionality, adoption, usage and financial impact. The app is being used by an increasing number of guests in our parks to improve their in-park performance. The app has now been downloaded by more than 15.6 million -- excuse me, the app has now been downloaded more than 15.6 million times, up from 14.3 million at the end of Q1. Total revenue generated on the app continues to grow, and we are now seeing an approximate 35% increase in average transaction value for food and beverage purchases made through the app compared to point-of-sale orders.

We're excited about the potential of the app and its ability to improve the in-park guest experience, drive increases in revenue and decreases in cost. On the hotel front, our work and discussions continue with various potential partners on a variety of structures. As we have discussed previously, we continue to be excited about opportunities to monetize a portion of our substantial and valuable unused land holdings and have hotels integrated into our properties. On real estate more generally, as we have discussed, we own over 2,000 acres of valuable real estate in desirable locations, including approximately 400 acres of undeveloped land adjacent to our parks, including significant developable land in Orlando.

We do not believe that the public markets have or are appropriately giving credit to these attractive and valuable 100% owned real estate assets. On IP partnerships, we continue our discussions with various partners to bring globally recognized IP to our parks via new rides, attractions and our other exciting activations. I'm excited about the significant investments we are making and the many initiatives we have underway across our business that we expect will improve guest experience, allow us to generate more revenue and make us a more efficient and more profitable enterprise. We are building an even stronger and more resilient business that we are confident over time will deliver improved operational and financial results and meaningful increases in value for stakeholders.

With that, Jim will discuss our financial results in more detail. Jim?

Thank you, Marc, and good morning, everyone.

During the second quarter, we generated total revenue of $490.2 million, a decrease of $7.4 million or 1.5% when compared to the second quarter of 2024. The decrease in total revenue was primarily a result of decreases in admissions per capita and in-park per capita spending, partially offset by an increase in attendance. Attendance for the second quarter of 2025 increased by approximately 48,000 guests or 0.8% when compared to the prior year quarter. The increase in attendance was primarily due to a favorable calendar shift, including the shift of Easter and spring break holidays from the first quarter to the second quarter, partially offset by the impact of significantly worse weather compared to the prior year quarter.

In the second quarter of 2025, total revenue per capita decreased 2.2%. Admission per capita decreased 3.9% and in-park per capita spending decreased 0.4%. Admission per capita decreased primarily due to lower realized pricing on certain admission products when compared to the prior year quarter. Operating expenses increased $14.6 million or 7.7% when compared to the second quarter of 2024. The increase in operating expenses is primarily due to a $9.6 million increase in noncash self-insurance adjustment compared to the second quarter of 2024. Selling, general and administrative expenses increased $0.6 million or 1% compared to the second quarter of 2024. We reported net income of $80.1 million for the second quarter compared to net income of $91.1 million in the second quarter of 2024. And we generated adjusted EBITDA of $206.3 million, a decrease of $11.9 million when compared to the second quarter of 2024.

Looking at our results for the first half of 2025 compared to 2024, total revenue was $777.2 million, a decrease of $17.9 million or 2.2%. Total attendance was 9.6 million guests, a decrease of 11,000 guests or 0.1%. Net income for the period was $64 million, a decrease of $15.9 million and adjusted EBITDA was $273.7 million, a decrease of $23.6 million.

Now turning to our balance sheet. Our June 30, 2025, net total leverage ratio is 3x, and we had approximately $883 million of total available liquidity, including approximately $194 million of cash on the balance sheet. This strong balance sheet gives us flexibility to continue to invest in and grow our business and to opportunistically allocate capital with the goal to maximize long-term value for shareholders. Our deferred revenue balance as of the end of June was $207.8 million. Deferred revenue decreased approximately $22.7 million when compared to June of 2024. Through July 2025, our pass base, including all pass products, was down approximately 3% compared to July 2024. We have been pleased to see our pass base improve since the end of the second quarter, and we are also in the midst of launching our 2026 passes, which will include what we believe are our best ever pass benefits program.

We are excited by our new 2026 pass program, and we expect the launch of the new passes will be well received by our guests to drive continued improvement and growth in our pass base as we progress through the second half of the year. Very early signs in a few of the parks where we have launched are positive. As a reminder, approximately 40% of our total annual attendance comes from our loyal and recurring pass base.

Finally, as of June 30, 2025, we have invested $110.5 million in CapEx. of which approximately $98 million was on core CapEx and approximately $12.5 million on expansion or ROI projects. For 2025, we expect to spend approximately $175 million to $200 million on core CapEx and approximately $50 million of CapEx on growth and ROI projects. Before turning the call back over to Marc, I want to reiterate our comments on costs. We have been and continue to be focused on operational efficiencies and optimizing our expense structure to deliver results. While we have expense growth of 1.6% in the quarter and just 1.2% year-to-date, which was approximately in line with our discussions the last 2 quarters, we are not satisfied with our ability to dynamically manage our costs in the face of weather headwinds and related impact to demand that we experienced.

We should move more quickly and more proactively to manage our labor and operating expenses in reaction to lower demand over certain periods. We have improved and will continue to improve our processes and organizational talent to ensure we are better going forward. And also, as Marc mentioned, we have implemented an incremental and accelerated cost reduction program that we expect will reduce second half expenses by up to $15 million.

With that, I'll turn the call back over to Marc, who will share some final thoughts.

Thanks, Jim. Before we open the call to your questions, I have some closing comments. In the second quarter of 2025, we came to the aid of 500 animals in need. Over our history, we have helped over 42,000 animals, including bottlenose dolphins, manatees, sea lions, seals, sea turtles, sharks, birds and more. I'm really proud of the team's hard work and their continued dedication to these important rescue efforts. While we are just over 7 months into 2025, we are excited about the remainder for the year with our current and upcoming events, including our summer festivals going on now and starting later our Halloween events, which will be followed by our Christmas events.

I want to thank our ambassadors for their efforts during our busy summer season as well as their ongoing preparation for our exciting fall and winter events. We are confident in our ability to deliver operational and financial improvements that will result in meaningful increases in revenue, adjusted EBITDA and total shareholder value. While headwinds impacted our performance in the first half of the year and took us off the pace we initially set, we are focused on and expect to deliver strong second half financial results.

I'm excited about the opportunity set in front of us, both in the near term where we see clear paths drive meaningful progress and over the medium term, where the growth potential is even greater. We are focused, well positioned and confident in the investments we are making, the operational efficiencies we are realizing and the value we are building for stakeholders.

With that, we can now take your questions.

[Operator Instructions]

And our first question will come from Steve Wieczynski with Stifel.

So Marc, you gave us a lot of color around the Epic opening, and it sounds like visitation into the Orlando parks continues to be up year-over-year even through July, which I think is probably a little bit surprising to some folks. But I guess my question is, did you guys do anything to maybe drive that visitation, meaning if I look at your costs in the second quarter, they were obviously a little bit higher than we were expecting. Something that sounds like it was from you guys not being aggressive enough around labor tied to weather. But wondering if you guys were a little bit more aggressive on the marketing side of things to kind of drive that visitation into the Orlando parks to help maybe offset some of the impact from Epic?

Yes. Steve, I can take that question. And just to make one quick comment. I mean, I said the attendance was actually through yesterday. It was up at SeaWorld Orlando for the quarter-to-date on a day-to-day basis. So that's through August 6. But as far as like what we did, obviously, we were well aware, Epic was coming. And I think you can imagine that we do look at our marketing and make certain adjustments and tweaks to that in response to things we know that are coming.

So I would agree with you that probably put a little more emphasis than maybe normal on that. And then obviously, we had some weather impacts in the second quarter where we had to be a little more promotional than we would probably normally like to be. Can't wait around for the weather to get better. So that drove some promotions as well kind of across the company.

Okay. Got you. And then, Marc, I want to ask about deferred revenues, which were down about 10% year-over-year. And I'm just trying to square that up with your commentary around forward indicators in terms of group bookings, Discovery Cove bookings that you said have been pretty solid, I think, all the way out through early into 2026. So just trying to understand maybe why that deferred is down so much. Maybe that is some pricing pressure around pass products. Just trying to understand and square that away a little bit better.

Yes. On the deferred revenue, I mean, there's a number of factors, as Jim mentioned. But certainly, you have the different mix of products in that bucket. So whether it's the type of pass that people acquire or anything like that can have an impact on that. We're obviously have sold less passes than we'd like with the pass base being down. That did get a little bit better, as Jim mentioned, in July. And then you have this dynamic of people that have passes over time over after a year, they cycle out of deferred revenue. So there's a variety of factors. Certainly, some of the promotions that we had to do around the weather had an impact as well, and we'll have to kind of live with those for a little while until they cycle through.

But I think the point we were trying to make a little bit is while deferred revenue is down, like you noted for the quarter, we do see good indicators in Discovery Cove and in Group bookings and the Howl-O-Scream sales as well. So those give us some confidence that, that at least is headed in the right direction and then pass sales did get a little better in July as well.

You have to also remember that there is some roll-off to month-to-month. So we have experienced the month-to-month roll-off, and we do continue to have pass visitation has continued to range in kind of that 40% range for us historically. So that's been pretty steady. So between that and what Marc said about the past sales and kind of what we have queued up for next year, I think we're in a good spot.

Our next question will come from James Hardiman with Citigroup.

To Steve's question, I think you mentioned maybe a little bit more marketing given the Epic opening. I wanted to ask about per cap specifically admissions per caps being down 4%. I doubt you're going to share this number, but you've given us a lot of info on Orlando. Care to share what the Orlando per caps look like. But ultimately, the question is, have you gotten more aggressive in Orlando given that Epic opening?

Yes. James, I can take that question. So yes, I'm not going to break out the per caps by park. I mean I think attendance is a good metric. I can tell you revenue for the second quarter was positive at SeaWorld Orlando. So you can read into that what you'd like. But clearly, with the weather we had really kind of coming out of May or around Memorial Day and into June, we had to be more promotional than we'd like. And that's being smart though. We have to react to these situations, can't wait for weather to get better. So that puts some pressure on those per caps, not only in Orlando, but across the company.

Going forward, if we can have a more normalized weather pattern, we do feel optimistic that, again, like we've said repeatedly that over time, we think we can grow our admissions per cap and our pricing. We're always going to defer though to driving more total revenue. So there's going to be at times that we do things that might be at odds with per cap, but a better total revenue play.

Makes sense. And then you've called out a few different factors moving the numbers. I don't know if you'll quantify any of these. But I guess as I think about the weather headwinds, you've quantified that at times in the past. It sounds like there was a calendar benefit. Any way to quantify that? And then the marketing that you -- the increased marketing. Any quantification on any of those 3?

Yes. I mean I think what I can tell you is -- I'll just give you a little more color. The Easter benefit, if you will, in the second quarter, like we said, was almost entirely offset by bad weather in the quarter. So those kind of neutralized each other, unfortunately. So that gives you a little more color on that. I don't know that we'll share much more than that.

Our next question will come from Thomas Yeh with Morgan Stanley.

I just wanted to maybe dig into the underlying trends if we kind of remove that weather timing and the Easter timing. I think a peer cited some low-end consumer value consciousness at the margin that's been seeping into the market a little bit. Is that something that you've been seeing as well?

Yes. Thomas, I can help you on that. Look, we don't see anything materially obvious on the consumer. What we -- what I typically look at would be our in-park spend. And it was almost flat for the quarter, down $0.15, which is a very small decline. So I think if there was some significant headwind, you would see it show up in there. The other thing I would point out is that our pass sales did improve in July, as Jim mentioned. Our early Howl-A-Scream sales are positive as well. And then one that I think is really impressive is Discovery Cove here in Orlando, which is our most expensive park by a lot. That park is on pace for a record attendance year.

So if you were to see some sort of consumer pullback, I think in one of these areas I just mentioned, you would have seen it. So there's nothing like I said materially obvious that we're seeing. Having said that, it probably didn't help that some of the economic uncertainty and some of the noise around the economy was happening at times where we saw a lot of passes. So I don't think it was a benefit by any means to us, probably didn't help us. But like I said, there are some other indicators that from where we sit, look like we're still able to hang in there. And if anything, the forward indicators give us confidence that people are still wanting to come to our park and buy our products.

Understood. That's helpful. And then did I hear you correctly that you expect 2 MOUs on the hotel initiatives? You said stay tuned, but just maybe any help on shaping that from a capital intensity appetite perspective and how much you think you might be putting into growth CapEx for that?

Yes. You did hear me correct. We would expect -- sorry, Thomas, did you say hotels or MOUs, I'm sorry.

I was asking about the MOUs and then just also on the hotel initiative, whether or not there's any expectation on.

Yes. Okay. So you heard me correctly on the MOUs. There's -- I said we would expect to sign 2 of those, right? And that is related to international opportunities. And I think you can expect probably something in line with how we did Abu Dhabi from a capital-light standpoint. On the hotels, I don't have anything more specific to share with you as far as how that may or may not impact our capital spending. Obviously, there's a variety of structures you could look at, a variety of ways you could structure those things.

I think you're obviously familiar with the makeup of our Board and the folks on our Board and the private equity component of having Hill Path on our Board, and they're obviously very involved in the business and certainly very involved in the hotel discussions and what that may or may not ultimately look like.

Our next question will come from Lizzie Dove with Goldman Sachs.

You mentioned that the SeaWorld Orlando attendance was up, and I think that means that the kind of non-Orlando parks was down, which looking at the foot traffic data for a while, it feels has been the case for the last kind of year or so. And so particularly, let's say, the Busch Gardens parks, like what has been the gating factor here? And are there drivers you can pull to kind of turn the attendance trends around there, whether it's new rides or kind of any other initiatives you have?

Yes, I can take that question. So look, I think we have to do a better job and have more opportunity certainly in like Busch Gardens Tampa, for example. And there's a variety of reasons, some of which obviously has been the weather in that area. We had a pretty meaningful hurricane impact in that park last year. The weather has not been ideal for the second quarter in Florida as well. So some of it certainly is weather. It's a great park, has a lot of great attractions. I'm not sure that the awareness is where we'd like it to be, and that's certainly, I think, an area where we can improve. But a lot of opportunity there. That park does have, I would argue, one of the more popular Halloween events, and I think we can play that up more, and we're looking forward to doing that going forward. So certainly some opportunity there.

Great. And then just as a follow-up, obviously, not referring to record EBITDA for this year anymore. And you mentioned in the release, meaningful increases in revenue and EBITDA. I'm not sure if that's like this year comment specifically or the rest of this year comment. And so curious just now like what's changed in terms of any expectations for the second half specifically and what you're kind of factoring in assumptions around how attendance can trend, per caps costs, that would be super helpful.

Yes. Look, I think my general comment on the ability to grow is kind of something we talk about every quarter, and that's meant to be more over time and how we think about things. And then I did have a specific comment, obviously, on the second half. So the way we kind of think about the second half is, like I said, the quarter-to-date attendance through August 6, if you look on a day-to-day basis for the company is slightly positive for the quarter.

So we had a, I'd say, a challenging July with the shift of the 4th of July from a Thursday to a Friday. And what we could clearly see is that one day shift essentially was almost like losing a holiday day. I think last year, a lot of people had a 4-day weekend. This year it was a 3-day weekend. So that had an impact on us. We also had some challenging weather in some of our markets over the 4th of July. And then the rest of July had some positives and some negatives, but ended up being down and not something we liked.

But then we've made that attendance up here in August. And -- so that's good that we've made up that lost July attendance here in August. Some of that is we have some better weather comparisons. But sitting here today, like I said, quarter-to-date through yesterday, we're slightly positive on a day-to-day basis in attendance. And we still have big weekends ahead of us. Still have the conclusion of our events to wrap up the summer, and then we'll start our Halloween events, which generally have been pretty popular over the years, and then we'll move into Christmas.

A couple of other things. pass sales improved in July, as you heard Jim talk about, Howl-A-Scream ticket sales for the separately ticketed event are positive. We like our Halloween event. So that's good to see that. The Discovery Cove and Group bookings are positive for the rest of the year. And then obviously, we know we have some pretty meaningful weather benefits ahead of us, especially around the hurricanes that we had last year that were more in end of Q3 and into Q4.

Now obviously, part of our assumption is that we're going to have better or improved weather than last year. So hopefully, we won't have the type of hurricanes we had last year. But our assumption would be the weather normalizes and we have -- we pick up some pretty meaningful attendance from not having such a significant hurricane impact as last year. And then we've got to execute on the cost plan that Jim and I both spoke about. And so we're focused on executing on that plan.

And I think the other thing we have to see is improvement in our admissions per cap. And again, some of the really early indicators on sales, I think it's at least headed in the right direction. Still negative, I think, for the quarter right now, but it appears to be moving in the right direction. And that will be something that we have to see continue to improve. And then obviously, another assumption would be getting our in-park per cap back to positive.

The one thing I'll kind of leave you with is kind of a long answer, but I do think historically, the Halloween and Christmas seasons are distinct and separate in many ways from the summer. So just because you had to maybe do things in the summer, whether it was reacting to weather with certain promotions and things like that, I don't know that you necessarily have to repeat that or would be expected to repeat that into the fall and winter. It's almost like you're resetting kind of the business, and we're resetting, I think, into what traditionally has been a strength of ours with our Halloween and Christmas events. So putting that all together, that's kind of how we think about the second half of the year.

Our next question will come from Arpine Kocharyan with UBS.

I'm sorry I'm hopping between calls this morning, very busy morning. So I'm sorry if I missed, but you had previously alluded to slightly over $700 million of EBITDA as a benchmark. You should be able to hit this year in terms of full year performance, but your release does not have that guidance, of course, and you did mention expectations of solid sort of performance for the back half. I was wondering if you could give us your updated thoughts whether you can still sort of come in, in that range for the year.

Yes. It's Marc. I don't know if you just kind of caught my answer. I just gave Lizzie, but we're not guiding to anything, but I did walk you through kind of the ins and outs of how we think about things. I can do that maybe quickly again, if you'd like. But obviously, our tenants on a day-to-day basis through through yesterday is slightly positive quarter-to-date. Like I said, we were down in July. We made that up here at the start of August. And again, the shift to 4th of July was a negative for us. The weather around 4th of July in some of our markets was a negative. We're getting the benefit here in August of some better weather relative to last year.

So kind of where we sit today, our attendance is slightly positive. So that kind of then hopefully kind of sets us up for some big weekends still ahead of us in August and into Labor Day, then our Halloween events starting as well and then eventually our Christmas events, which traditionally have been, like I said, stronger events for us and have a fair amount of popularity to them. Our Howl-A-Scream ticket sales for the parks where it's separately ticketed, those are positive to date. So that's good. Our Discovery Cove and Group bookings are also positive for the rest of the year. And then we'll have -- we would expect to have a meaningful weather benefit in late Q3 and into Q4 with the hurricane -- hurricanes, I guess, but especially Hurricane Milton that we had last year.

So one caveat would be assuming we don't have any big hurricanes, we would expect to hopefully pick up just with improved weather alone. We have to execute on the cost savings that Jim and I talked about, and we're focused and have a plan to try to deliver on those cost savings. And then we need to see, I think, improvement in admissions per cap and in-park per cap. And again, there are some signs that those are -- they're heading in the right direction, still negative for the quarter-to-date, it looks like. Those are still preliminary numbers, but I think moving in the right direction.

And the point I was really trying to wrap up with was that I think you have an opportunity here with summer concluding, you kind of reset the business and you move into a different phase of the business with Halloween and Christmas that traditionally I would argue, has been one of our stronger parts of the year. If you look at the growth in Halloween, the growth in Christmas, that's certainly been something that we've been able to take advantage of. And I'm confident that the product we have coming out this year is going to be as good as ever. And if we can just execute our plans, not have any really big weather impacts, I like the opportunity to have a better second half, obviously.

That's very helpful. Just a quick follow-up. Would you agree that folks that are actually showing up are spending less? There is this broader takeaway that the customer might be showing up, but spending a little bit like what patterns are you seeing? I mean is there a difference between kind of different cohorts? And then on admissions per cap, that can vary, I understand a bit depending on sort of pass mix and other things that you're doing to drive visitation. But in-park spend, you guys have historically done a pretty good job on that. Do you still expect that to be up for the year, just the in-park spend of per cap spend?

Well, we've had pretty good success with our in-park spend over the last many, many quarters, right, until this quarter, we were slightly down. So I'm optimistic we can get those issues corrected. And we are moving into -- and ultimately get to a positive in in-park. We're moving into Halloween and Christmas, which have quite a bit of opportunity to drive in-park spend around them. So we'll have to see how we execute. But certainly, we were disappointed. We were a little negative in the quarter.

Again, some of that was driven by having to be a little more promotional than we normally would like to be because of the weather. So I think we can hopefully get that corrected. And certainly, that's one of the things we're focused on.

Our next question will come from Chris Woronka with Deutsche Bank.

Marc, you just kind of mentioned that Halloween, Christmas and as you say, have greater awareness and maybe you're a little bit more unique and also maybe a little bit more hoping. So the question is, have you guys historically or can you almost reverse engineer and tie these fall and winter events into opportunities to sell people for summer? Is that already going on? Or can it happen since summer tends to be a little bit more -- I don't want to say commoditized, but a little bit more commoditized on a national level.

Well, yes, and you broke up a little bit, but I think what you were kind of asking was, is there opportunities to kind of leverage the popularity of Halloween and Christmas to maybe have a better summer, right? Is that kind of what you're asking, Chris?

Yes, exactly. Yes.

Okay. So look, certainly, we need to do a better job of that, but it is an opportunity, like you said. So one of the things we really try to do, like in some of our parks, we've already started to sell season passes for next year. And one of the things we talk about is, hey, get your pass now and you can still enjoy the summer, but more -- but maybe more exciting to that person buying in the past is, hey, you're also going to get to be able to come around Halloween and Christmas. So we want to -- we know people like coming to Halloween and Christmas. If we can give them a reason to secure that product and also have some hook to come in the summer as well. Those are things that we're going to continue to try to do. And I think that's certainly an opportunity for us going forward.

This concludes our question-and-answer session. I would like to turn the conference back over to Marc Swanson, CEO, for any closing remarks.

Thanks, Wyatt. On behalf of Jim and the rest of the management team here at United Parks Resorts, I want to thank you for joining us this morning. As you heard today, we are confident in our long-term strategy, which we believe will drive improved operating and financial results and long-term value for stakeholders. Thank you very much, and we look forward to speaking with you next quarter.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.