National CineMedia Q1 2025 Earnings Report

National CineMedia EPS Results

• Actual EPS: -$0.24
• Consensus EPS: -$0.20
• Beat/Miss: Missed by -$0.04
• One Year Ago EPS: N/A

National CineMedia Revenue Results

• Actual Revenue: $34.90 million
• Expected Revenue: $35.13 million
• Beat/Miss: Missed by -$233.00 thousand
• YoY Revenue Growth: N/A

National CineMedia Announcement Details

• Quarter: Q1 2025
• Date: 5/6/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, May 6, 2025
• Conference Call Time: 5:00PM ET

National CineMedia (NASDAQ:NCMI), through its subsidiary, National CineMedia, LLC, operates cinema advertising network in North America. It engages in the sale of advertising to national, regional, and local businesses in Noovie, a cinema advertising and entertainment show seen on movie screens; and sells advertising on its Lobby Entertainment Network, a series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theatre lobbies. The company also sells online and mobile advertising through its Noovie Audience Accelerator product across a suite of Noovie digital properties, such as Name That Movie and Noovie Trivia app to reach entertainment audiences beyond the theater. It offers its services to third-party theater circuits under long-term network affiliate agreements. The company was incorporated in 2006 and is headquartered in Centennial, Colorado.

National CineMedia Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Good day and welcome to the National CineMedia Inc. First Quarter twenty twenty five Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Chan Park, Senior Vice President of Finance.

[Chan Park, SVP - Finance at National CineMedia]

Thank you, operator, and good afternoon. I'm joined today by our Chief Executive Officer, Tom Lisinski and our Chief Financial Officer, Ronnie Ng. I would like to remind our listeners that this conference call contains forward looking statements within the meaning of 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 as amended. All statements other than statements of historical facts communicated during this conference call may constitute forward looking statements. These forward looking statements involve risks and uncertainties.

[Chan Park, SVP - Finance at National CineMedia]

Important factors that can cause actual results to differ materially from the company's expectations are disclosed in the risk factors contained in the company's filings with the SEC. All forward looking statements are expressly qualified in their entirety by such factors. Further, our discussion today includes some non GAAP measures. In accordance with Regulation G, we have reconciled these amounts back to the closest GAAP basis measurement. These reconciliations can be found at the end of today's earnings release or on the Investor Relations page of our website at ncm.com.

[Chan Park, SVP - Finance at National CineMedia]

Now, I'll turn the call over to Tom.

[Thomas Lesinski, CEO at National CineMedia]

Thank you, Chan. Hello, everyone, and thank you for joining our fiscal twenty twenty five first quarter earnings call. Before we dive into our highlights from the quarter, I want to thank everyone who attended our twenty twenty five Investor Day in March. As we shared, NCM is well positioned to win as the leading platform in cinema advertising with an unmatched competitive edge, attractive industry tailwinds, a premium audience and product, and a robust financial position. The key pillars of our growth strategy remain front and center as we move forward.

[Thomas Lesinski, CEO at National CineMedia]

We are diligently investing in both technology and top tier talent to enhance our platform and capitalize on opportunities within the premium video ad space. At the same time, we are committed to generating long term value for our shareholders through our share repurchase program and the reinstatement of our dividend. We look forward to building on this momentum as we continue to execute our business strategy. Now let's dive into the current dynamics we are seeing at the box office. In the first quarter of twenty twenty five, the box office generated approximately $1,400,000,000 representing an 11.6% decline compared to the same period last year.

[Thomas Lesinski, CEO at National CineMedia]

While the first quarter is a seasonally softer period for the box office, the year over year decline reflected both a weaker than anticipated slate with fewer tentpole films alongside the underperformance of several high profile titles such as Snow White. This said, we are encouraged that audiences continue to show up for new features, including Mufasa the Lion King, One of Them Days, and the animated comedy Dog Man. Looking ahead, we are optimistic that attendance will recover throughout the year, supported by a strong start to the second quarter. Kicking off the second quarter, a Minecraft movie delivered the largest opening day of the year thus far and set a record for the largest debut ever for a video game feature. Looking at attendance, the robust contribution from a Minecraft movie has more than offset the slower first quarter with NCM's year to date network attendance through April up 6% compared with the same period last year.

[Thomas Lesinski, CEO at National CineMedia]

The remainder of the quarter is expected to benefit from a stronger lineup of releases across a wide range of genres, including highly anticipated titles such as The Final Reckoning, Ballerina, and How to Train Your Dragon. The second half of twenty twenty five is also shaping up to be very promising, with a rich and diverse slate of blockbuster sequels, original tentpoles, and award season contenders poised to drive increased attendance and advertiser engagement. Many of these highly anticipated films are on display at this year's CinemaCon in early April, which highlighted the enduring power and cultural resonance of cinema. Early previews of titles like Walt Disney Studios Zootopia two, Universal Pictures Wicked for Good, and Paramount Pictures The Running Man captivated attendees and reaffirmed the depth and quality of the theatrical slate through 2026. Studio leaders continue to voice their commitment to the big screen, including Amazon MGM Studios, which made its CinemaCon debut this year.

[Thomas Lesinski, CEO at National CineMedia]

The content studio for the streaming giant announced 14 theatrical releases already planned for '26, a clear indicator of growing industry enthusiasm and momentum behind the theatrical model. The widespread support from across the entertainment ecosystem reinforces the enduring appeal of the theatrical experience and further validates our long term belief in the resilience of the industry. For NCM, this momentum represents an opportunity to connect brands with hard to reach audiences in one of the most immersive advertising mediums available today. With a strong slate of premium cinematic content expected to draw consumers to theaters, we believe we are well positioned to capture box office upside going forward. Next, I want to quickly discuss two trends we are currently seeing in the advertising marketplace.

[Thomas Lesinski, CEO at National CineMedia]

First, as we previewed on our last earnings call, recent shifts in government policy have resulted in an overall reduction in government ad spend. Second, advertisers across a range of categories delayed ad spend decisions in response to tariff uncertainty in the first quarter. As this uncertainty has increased, advertisers are reevaluating their near term marketing strategies. Consequently, we're seeing a trend towards fewer and smaller advertising campaigns, especially across local and regional channels. We are continuing to monitor these evolving trends and are working with our advertisers to help them place the right campaigns at the right time to continue to reach NCM's valuable audiences.

[Thomas Lesinski, CEO at National CineMedia]

With these dynamics in mind, NCM delivered results in line with our expectations. NCM's first quarter twenty twenty five total revenue was $34,900,000 within our guidance range. The 7% year over year decline reflects the slower first quarter at the box office and an expected degree of advertiser uncertainty regarding tariffs. Approximately 42 of first quarter national onscreen revenue was attributed to the scatter market compared to 29% in the prior year period, reflecting the market shift toward real time advertising solutions. Our core Platinum offering continues to represent a high quality and proven option for reaching sought after audiences at scale, attracting category leading advertisers in wireless, insurance, and dining.

[Thomas Lesinski, CEO at National CineMedia]

Adjusted OIBDA was negative $9,000,000 in line with our guidance and primarily driven by reduced theater attendance and the impact to the top line. Our adjusted OIBDA also reflects investments in sales and operations coupled with one time investments that were not incurred last year. As we've stated previously, we do not expect our first quarter results to be indicative of our full year performance. Based upon our current sales pacing, we expect to achieve year over year growth for the second quarter. Despite the headwinds we saw in the first quarter, the fundamentals of our business remain strong.

[Thomas Lesinski, CEO at National CineMedia]

NCM continues to be the largest cinema ad network in The U. S, providing advertisers unmatched reach to valuable, young, and diverse audiences in a brand safe, high impact environment. Across our entire network, NCM reached over 72,000,000 individuals in the first quarter, primarily driven by Gen Z and Millennials who accounted for 64% of our viewership in the quarter. Gen Z alone comprised 36% of our total audience and maintained a strong weekly average rating of four. This quarter, 30,000,000 of the hard to reach eighteen to thirty four year old demographic flocked to NCM theaters, resulting in a 3.9 average weekly rating, outperforming traditional media benchmarks and dominating entertainment in the first quarter.

[Thomas Lesinski, CEO at National CineMedia]

Our strength with these sought after demographics continues to attract advertisers who recognize the value of NCM's precision targeting, real time insights, and measurable performance outcomes. Year to date, NCMS welcomed 14 new advertisers who have not placed cinema campaigns since prior to the pandemic. As we expand our client base and enhance our platform, we remain confident that advertisers will continue turning to NCM even amid market uncertainties to leverage our high value audiences and maximize campaign performance. With strong fundamentals and a capital light business model, we remain focused on investing in the business and executing on our growth strategy. And we have several exciting updates to share.

[Thomas Lesinski, CEO at National CineMedia]

I am pleased to announce that NCM agreed to a five year extension of our contract with AMC Theatres, the world's largest theatrical exhibition company, through the February. We're excited to further strengthen a relationship that's been foundational to our success. The revised agreement aligns the payment structure more closely with actual performance metrics, specifically attendance, screen count, and advertising revenue, ensuring more dynamic and scalable revenue generation starting July one of twenty twenty five. NCM retains exclusive rights to lobby advertising at AMC Theatres and will collaborate with them to modernize lobby video screens, improving audience engagement and monetization potential. Additionally, the agreement strengthens the value of our advertising inventory at AMC theaters.

[Thomas Lesinski, CEO at National CineMedia]

Through this new agreement, we further solidified our position as the national leader in cinema advertising. Ronnie will provide additional details on the economics of this agreement in a few moments. In addition to strengthening our network, we are prioritizing investing in our platform and enhancing its capabilities. At Investor Day, we introduced Bullseye, a new NCMX product powered by artificial intelligence that leverages and analyzes key audience signals to deliver dynamic hyper localized messaging at scale. Launched in Q1, Bullseye builds on the success of Boomerang and Boost, strengthening our growing portfolio of innovative solutions that drive measurable results across key consumer categories.

[Thomas Lesinski, CEO at National CineMedia]

Additionally, we are excited to announce the introduction of Blueprint, the newest addition to the NCMX product suite, alongside Boomerang, Boost, and Bullseye. Blueprint uses real time renovation permit data to identify homeowners who are actively engaged in remodeling projects, giving brands the ability to reach high intent consumers at exactly the right moment. Bullseye and Blueprint reflect our ongoing commitment to develop smart, scalable solutions that connect brands with valuable audiences during team moments. Beyond continued innovation within NCMX, we are accelerating our efforts to align our platform with broader shifts in the advertising landscape, particularly the growing demand for programmatic and self serve solution. This quarter, we took a significant step in positioning NCMS to capitalize on this trend by signing a new supply side technology partner.

[Thomas Lesinski, CEO at National CineMedia]

The collaboration expands our addressable marketplace, enhances our targeting capabilities, and further strengthens our delivery of data driven solutions. We are starting to see our programmatic business gain meaningful traction. In the first quarter, NCM partnered with 61 unique advertisers across our on screen and in lobby programmatic offerings. Programmatic contributed 3% of total revenue for the first quarter, capturing 48% of our twenty twenty four full year total programmatic revenue. This momentum has continued into the second quarter, with programmatic revenue currently pacing ahead of the first quarter.

[Thomas Lesinski, CEO at National CineMedia]

Turning now to self serve. We are pleased to announce the relaunch of our enhanced self serve platform this quarter. The improved platform is a more user friendly solution that enables advertisers to seamlessly activate cinema advertising, launch hyper local campaigns, and target specific geographic areas. By providing new on ramps to cinema advertising for brands who previously may not have considered it, the self serve platform unlocks new demand channels for NCM. As demand accelerates and we continue to invest in technology, partnerships, and inventory optimization, we expect to see continued adoption of programmatic self serve with meaningful revenue contributions from these offerings expected beginning in 'twenty six.

[Thomas Lesinski, CEO at National CineMedia]

We also continue to recognize the potential in the local advertising space. The improvements we've made to our self serve offering have significantly streamlined campaign execution at the local level, reducing friction for advertisers and enabling our sales team to shift focus toward higher value opportunities across these markets. As we shared at our twenty twenty five Investor Day, we've been investing in experienced sales leaders to drive our local initiatives with a targeted approach. This includes dedicating resources to building relationships across the full spectrum of local advertisers, including national holding companies placing regional buys, larger franchise operators, and small independent businesses looking to drive awareness and foot traffic. This multi tiered strategy strategy will allow us to tap into growth categories at the local level, including lottery, education, automotive, and professional services.

[Thomas Lesinski, CEO at National CineMedia]

As the local advertising space continues to evolve and with our expanded capabilities and a clear focus on execution, we are optimistic about our ability to capture incremental revenue and unlock sustained local growth. As we look ahead to the second quarter, we are confident that we are taking the right steps to position MCM for the future. We are particularly encouraged by the robust upcoming movie slate and continue to deliver the most valuable sought after audiences with unmatched scale and reach in a uniquely immersive environment. While we expect continued headwinds for advertisers in certain categories impacted by tariffs, we are seeing solid sales pacing so far in the second quarter and into the second half of the year. And we're optimistic that advertisers will continue to turn to the unique value and ROI that NCM delivers.

[Thomas Lesinski, CEO at National CineMedia]

The remainder of 2025 will be pivotal as the box office continues to recover and we build on our competitive edge in the marketplace. We remain mindful of the dynamic macroeconomic environment and continue to believe in the resilience of the theatrical exhibition industry supported by a compelling film slate and renewed commitments from key industry leaders. Now I'll turn the call over to Ronnie to provide you with more details on our operating results and outlook.

[Ronnie Ng, CFO at National CineMedia]

Thank you, Tom, and good afternoon, everyone. While the first quarter box office was seasonally slower than we typically see, we began the year with strong momentum, executing on value enhancing transactions, including a new $45,000,000 cash flow based revolver which significantly reduced our cost of financing and securing a revised AMC agreement that strengthens our value proposition to both clients and shareholders.

[Ronnie Ng, CFO at National CineMedia]

As we continue to execute on the growth strategy we outlined at our twenty twenty five Investor Day We remain focused on capturing opportunities in the premium video marketplace, improving the monetization of our inventory and managing our business with discipline. NCM's total revenue for the first quarter was $34,900,000 within our guidance range of 34,000,000 to $36,000,000 but down 7% from $37,400,000 in the same period last year. This decline was primarily driven by a 5% year over year reduction in attendance stemming from the underperformance of select film titles, temporary pullbacks in government advertising in connection with recent cost saving policy shifts, and delayed auto ad spending decisions in response to ongoing tariff announcements. These factors were partially offset by continued strength across travel, wireless and entertainment. Importantly, we are keeping a close eye on these dynamics as we continue to invest in our business.

[Ronnie Ng, CFO at National CineMedia]

Our team continued to expand our scatter participation, which increased to 42% of the mix versus 29% in the same quarter last year to mitigate the shift away from the upfront marketplace. National advertising revenue decreased to $27,400,000 down from $29,500,000 in the first quarter of twenty twenty four, driven primarily by lower March attendance. While we saw advertising delays in sectors such as government, automotive, and consumer packaged goods, increased demand from wireless, pharmaceutical, dining, and media helped mitigate some of this softness. The choppy environment did lead to lower inventory utilization for the quarter of approximately 8%, offset by slightly increasing CPMs. Attendance trends during the quarter also impacted our ability to monetize efficiently with strong February moviegoer turnout driven by the release of Captain America during a seasonally softer advertising month.

[Ronnie Ng, CFO at National CineMedia]

Conversely, March, which is a seasonally stronger advertising period during the quarter experienced a 37% decline in attendance due to the underperformance of Snow White. The box office performance for these two months led to March accounting for less than 30% of the quarterly attendance compared to over 40% historically. Despite these challenges March demonstrated robust advertiser demand highlighted by a 21 increase in inventory utilization and a 15% lift in CPMs resulting in an oversold month. We remain vigilant on current market dynamics but are also encouraged by the demand we experienced exiting the quarter. Local and regional advertising revenue totaled $4,900,000 down from $5,300,000 in the first quarter of twenty twenty four.

[Ronnie Ng, CFO at National CineMedia]

This decline was primarily driven by lower attendance and ongoing economic uncertainty which led to lower contract volume and smaller deal sizes, particularly within the dining, automotive, wireless, and healthcare categories. These declines were partially offset by increased contract activity and larger deal sizes within the travel and professional services categories. Turning to our expenses, first quarter operating expenses were $58,800,000 a 2% decrease from $60,100,000 in the prior year. Excluding one time items, depreciation, amortization, and non cash share based compensation, our adjusted operating expenses were $43,900,000 up 2% year over year. This increase was primarily driven by the timing of our annual sales event, which did not occur in the prior year, partially offset by lower exhibitor fees attributable to decreased attendance.

[Ronnie Ng, CFO at National CineMedia]

As we previously shared, we anticipate a high single digit percentage increase in adjusted SG and A for the full year, reflecting higher sales commissions tied to revenue growth, continued investment in our sales team and go to market initiatives and the implementation of new sales technology to optimize inventory utilization. First quarter adjusted OIBDA excluding non cash charges and one time items was negative $9,000,000 compared to negative $5,700,000 in the prior year. That said, our adjusted OIBDA result was in line with our guidance range of negative 9,500,000 to negative 7,500,000.0 Total unlevered free cash flow for the quarter as defined by cash flow from operations less capital expenditures was $5,500,000 As a reminder, our fourth quarter twenty twenty four unlevered free cash flow benefited from approximately $13,000,000 in client advance payments for advertising scheduled to run throughout 2025. As a result, these upfront payments will impact the year over year comparability of free cash generation in 2025. Turning to our consolidated balance sheet.

[Ronnie Ng, CFO at National CineMedia]

At the end of the first quarter, the company had $63,100,000 of cash, cash equivalents, restricted cash and marketable securities and zero outstanding debt with an undrawn revolver. As we shared at Investor Day our capital allocation strategy reflects our commitment to delivering value by investing in the future of MCM and returning capital to shareholders. Strategic investments in our platform including the improvements in programmatic and self serve, new NCMX products and the extended AMC partnership will enhance NCM's ability to drive growth. As mentioned, on April 24 we announced a strengthened long term partnership with AMC through a revised agreement that extends the term by five years through 02/1942 underscoring the value of our advertising inventory and securing a stable revenue stream. The revised ESA introduces an improved advertising show structure that aligns with our other major exhibitor partners, simplifying operations and creating additional high value inventory, particularly during peak periods while expanding pre approved advertising categories.

[Ronnie Ng, CFO at National CineMedia]

We have also entered into a new multi screen lobby advertising and data sharing agreements modernizing our lobby offerings and further enhancing our data products within the NCMX suite. As part of this agreement our existing beverage arrangement remains in place. And we have established a revised payment structure with AMC which continues to include per patron and screen fees while introducing a potential revenue sharing component tied to performance. Regarding the revised fees, if we assume no incremental revenue from the agreement, the 2024 adjusted OIBDA margin would have been minimally impacted by approximately 1.5 points. Through the course of the agreement we expect adjusted OIBDA margins to be impacted between 1.5 to 2.5 points.

[Ronnie Ng, CFO at National CineMedia]

That said, we do expect to see incremental revenue from the improved agreement which we project to offset the increased fees and support potential adjusted OIBDA growth. As part of the revised terms NCM and AMC also agreed to terminate our joint venture agreements and dismissed ongoing litigation. This agreement positions NCM for accretive growth and reaffirms the long term strategic value of our ANC relationship. To complement these strategic initiatives, we have accelerated our share repurchase program year to date through April. NCM has repurchased 2,300,000.0 shares at an average price per share of $6.6 for a total of approximately $14,000,000 almost matching the total number of shares repurchased throughout all of 2024.

[Ronnie Ng, CFO at National CineMedia]

This brings our total shares repurchased under this program to 4,800,000.0 shares at an average price of $5.6 for a total of $27,000,000 Looking ahead, we plan to continue repurchasing shares opportunistically throughout the remainder of this year. We also announced a quarterly dividend of $03 per share today, amounting to $2,900,000 This dividend will be paid on 05/29/2025 to stockholders of record on 05/16/2025. This program provides a predictable baseline of capital returns for shareholders and aligns well with our high free cash flow conversion business model. With a balanced approach to investing in the business and returning capital to shareholders, we are committed to continuing to be a shareholder friendly company. Turning to our outlook.

[Ronnie Ng, CFO at National CineMedia]

We are excited about the upcoming major releases in the 2025 box office with a strong slate and demonstrated commitment from industry leaders. As we shared previously, we do not see the first quarter's results as indicative of our full year performance. The second quarter as sales pipeline remains active, but has heavily shifted into the SCADA market. And we expect continued headwinds in categories impacted by government policy shifts. We expect second quarter revenue to be between $56,000,000 and $61,000,000 reflecting the ongoing impacts of tariff uncertainty on the advertising market.

[Ronnie Ng, CFO at National CineMedia]

We expect adjusted OIBDA for the second quarter of twenty twenty five to be between two point five and seven point five million. In closing, we are encouraged by the industry momentum coming out of CinemaCon, where the upcoming film slate and unwavering support for theatrical exhibition from industry leaders were on full display. Looking at the remainder of the second quarter, we're particularly excited about Lilo and Stitch, twenty eight Years Later, and Karate Kid Legends. As audiences continue returning to theaters in great numbers, and as we deepen investment in our platform and capabilities, we believe advertisers will continue to recognize the value of NCM and turn to us to reach the most sought after audiences. The combination of our strong execution coupled with the share buyback and dividend programs give us confidence in our ability to sustain growth.

[Ronnie Ng, CFO at National CineMedia]

And we are committed to delivering long term value for our partners, clients, and shareholders. Operator, please open the line for questions.

[Operator]

We will now begin the question and answer session. Our first question comes from Eric Wold with Texas Capital Securities. Please go ahead.

[Eric Wold, Executive Director, Equity Research at Texas Capital Securities]

Thanks, guys. Good afternoon. I appreciate you taking my questions. Just a couple. I kind think it back to the Q4 call, Tom, you talked about pacing was running strong for Q2 and use the same language again for the pacing in Q2 now.

[Eric Wold, Executive Director, Equity Research at Texas Capital Securities]

I know you don't give guidance beyond the quarter, but obviously the guidance came in below where us and consensus was looking for the quarter. I guess the simple question is, has that strength of pacing that you saw on the Q4 call weakened from the pacing you're seeing now on the Q1 call? Just trying get a sense of kind of the level of strength and how it might have changed.

[Thomas Lesinski, CEO at National CineMedia]

Well, here's what I would say. The pipeline is still very active in the second quarter. Scatter is obviously more important than ever. We're definitely seeing some headwinds in certain categories. Obviously, think our inventory and the value of it is going to continue to draw audiences.

[Thomas Lesinski, CEO at National CineMedia]

There are certain categories like pharma, CPG, travel, insurance, entertainment that seem to be unaffected by the tariff discussions. And there's other categories, including governments, cars, auto that I think are having more headwinds. I know when I mentioned this in Q4 that the pacing was strong. I think it softened a little bit. And I think that's the explanation, for how we're seeing the upcoming quarter.

[Thomas Lesinski, CEO at National CineMedia]

So I think what's very difficult right now is it's very hard to predict day to day, week to week announcements on tariffs and how they're going to impact individual investors. Clearly, uncertainty is driving some level of hesitancy that wasn't there candidly back in fourth quarter.

[Ronnie Ng, CFO at National CineMedia]

I'll just add one thing to that is that in terms of pacing, our scatter business is actually doing extraordinarily well right now. We were up at this point in time. What's already booked is up more than double at the versus the same period last year.

[Ronnie Ng, CFO at National CineMedia]

I think, again, just reiterating what Tom said, it is about kind of seeing you know, trying to find a little bit more clarity about the next two months, is a little bit more difficult in this environment today.

[Eric Wold, Executive Director, Equity Research at Texas Capital Securities]

Got it. And then so last question, you kinda mentioned on the at the beginning that you're seeing, kind of more shorter term campaigns or shorter term decisions and maybe some smaller campaigns from kind of an advertiser law uncertain. How much I know in the past you've been, I guess, for

[Eric Wold, Executive Director, Equity Research at Texas Capital Securities]

except for kind of maybe

[Eric Wold, Executive Director, Equity Research at Texas Capital Securities]

extraordinary circumstances, upfront commitments were upfront commitments and it was hard for somebody to get out of one. Are you planning to be any more flexible in terms of what the video committed to dollar wise and timing wise and during the last upfront and given the environment we're in? Or is this basically whatever has been delayed really has to be made up by the end of the current scatter period, or sorry, the upfront period.

[Thomas Lesinski, CEO at National CineMedia]

So you're really talking about two different periods. The new upfront negotiations start in the next couple months, for the next, call it, nine to twelve months. All advertisers are going to be more flexible in terms of cancellation policy and pricing, given what's going on in the economic marketplace. As it relates to what's happening over the next, call it two quarters, which is really the end of our current upfront, generally speaking, we hold to our cancellation policies, and we plan on doing that. No one's really been aggressive with us trying to change cancellation policies.

[Thomas Lesinski, CEO at National CineMedia]

So it hasn't been an issue yet. It is unlikely become an issue in any material way over the next two quarters. I think where it's going to become very interesting though is in the next upfront, where you have more and more advertisers buying closer and closer to air date. And that is gonna be a significant thing for every advertiser. And we're happy to compete and scatter.

[Thomas Lesinski, CEO at National CineMedia]

And with the outgrowth and implementation of programmatic and self serve, we'll be well positioned to deliver advertising within twenty four hours of an actual air date for a spot. So, it's an interesting question, and I think you're gonna see more of it in the next upfront, not so much for us in this upfront period.

[Eric Wold, Executive Director, Equity Research at Texas Capital Securities]

Perfect. Thanks, guys.

[Operator]

And

[Operator]

the next question comes from Patrick Scholl with Barrington Research. Please go ahead.

[Patrick Sholl, Vice President at Barrington Research Associates]

Hi. Just following up on what you're you're talking about about being able to deliver the advertising more quickly. Just kind of curious to what extent that that's helping to maybe improve some of the monetization on films that outperform and maybe kind of erase some of that gap when when there is like a stronger than expected box office period.

[Thomas Lesinski, CEO at National CineMedia]

Yeah. I mean, the best application for our ability to deliver ads quickly is when a movie outperforms. So on a movie like Minecraft, which did phenomenally well in its opening weekend, everyone wanted to chase that, the following weekend. And unless you have the tools to do it, or the platform to do it, it's very hard to deliver incremental inventory that quickly. We're in a position where we can do it fairly well today, As programmatic becomes more pervasive across our whole capability platform, we'll be able to do it literally within twenty four hours, or even in some cases a couple of hours.

[Thomas Lesinski, CEO at National CineMedia]

So yes, it will be a great tool for improving utilization.

[Patrick Sholl, Vice President at Barrington Research Associates]

Okay. And then just in terms of

[Patrick Sholl, Vice President at Barrington Research Associates]

like the category weakness, is there any maybe a breakout between kind of more brand driven versus performance ad purchases that they're from your advertisers?

[Thomas Lesinski, CEO at National CineMedia]

I I think where you see some pausing in the, call it, upper end of the funnel is that those who are trying to build brand awareness or image advertising. Those are typically the kind of companies that put more of a pause on things during uncertain environments. I think the performance based companies, particularly CPG, pharma, travel insurance, etcetera, those people continue to invest in marketing because of the ability to quantify the outcomes. And obviously, we're a great platform for delivering high levels of predictable outcomes. So that's sort of the landscape of what's happening right now.

[Patrick Sholl, Vice President at Barrington Research Associates]

Okay, thank you.

[Thomas Lesinski, CEO at National CineMedia]

Sure.

[Operator]

And the next question comes from Mike Hickey with The Benchmark Company. Please go ahead.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Hey Tom, Ronnie, Chan, thanks for taking our questions and great job in a very challenging environment here. Just I guess first on AMC, one congratulations, this is a big deal, a lot of great things and as you highlighted, It seems like one of the bigger unlocks here is the post showtime inventory including the platinum spot. Obviously, that's been a big piece of your growth there on the national side. Just I'm curious if you can help us understand the incremental revenue opportunity that this new inventory can give you on revenue.

[Thomas Lesinski, CEO at National CineMedia]

Ronnie will get into more of the specifics of it, but let me say, we are really thrilled to be enhancing our relationship with AMC. It's just a fantastic circuit. A lot of respect for that whole company and what they do. They have certainly some of the best theaters in all the biggest markets, and they've been a particularly innovative company. To unlock new and better inventory with them, is a huge opportunity for our company.

[Thomas Lesinski, CEO at National CineMedia]

So we're already out there selling it. And I think candidly, it'll take a little while to get everyone aware of the opportunity. But we think in the second half of the year, we're going to see definitely some material impact from the new AMC relationship. Ronnie can speak a little more quantitatively about it. You know, one of one of the things that that to to think about is the way we've been selling platinum before the AMC deal, was it was, you know, not the entire network per se, because AMC was excluded from that.

[Thomas Lesinski, CEO at National CineMedia]

So that really limited, to some extent the way the way we can actually sell the product to to advertisers. Now that we're gonna have, you know, the entire network available to to to platinum, it's not gonna be you know, our expectation is not just gonna be straightly linear. So it will have a greater growth effect just because that it is now truly a national network that people can buy in platinum and post show. You know, historically, we never provided the dollar amounts for platinum. But I'll say last year, in 2024, platinum's growth was, you know, pretty strong, pretty high.

[Thomas Lesinski, CEO at National CineMedia]

It's a pretty meaningful part of the revenue. And I think back half of twenty five when the full agreement kicks in, you know, our expectation is going to be greater than that.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Thanks guys. On NCMX, I guess first nice to see another B in the portfolio there. Curious on BLUEPRINT. But I guess overall like how is NCMX sort of helping you compete with other digital video platforms? And what kind of feedback are you guys hearing from advertisers that are using the attribution or data targeting tools?

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Obviously, this is a set of tools that sort of the new NCM versus what you guys are doing sort of pre pandemic. So kind of wondering how helpful it is in terms of generating national business. And then I would love to hear more about the new addition Blueprint.

[Thomas Lesinski, CEO at National CineMedia]

So we now have four Bs in our portfolio. Blueprint, the most new one, is a really exciting one. We can now scrape individual construction data by market, by ZIP code. And we can retarget that to advertisers, for example, like Home Depot or anyone in the business of selling, to people who are buying a new home or building a new home. We're not aware of anyone else doing that today.

[Thomas Lesinski, CEO at National CineMedia]

Bullseye provides a similar thing where we can actually localize inventory against our for audience. So for example, we could have literally hundreds of different versions of an ad for the same insurance company or for the same travel company. So now that we've built out our unique our platform, we can really cover and and be much more competitive with a lot of other digital media companies. When you think about this company, you know, even three years ago, we really couldn't with a straight face tell the advertising world that we really could deliver on the promise of bringing data and outcome based results to their platform and to their brand. So, this is a really something that's going to be a continuous investment for us.

[Thomas Lesinski, CEO at National CineMedia]

There'll probably be more Bs, in the future. But I'm really proud of our team, that's put together these great products. It has allowed us to compete for every ad dollar out there. As you know, certain advertisers wanna have a high degree of proof in the pudding. And candidly, we never used to be able to do that.

[Thomas Lesinski, CEO at National CineMedia]

We were kind of a big reach awareness building vehicle. And now candidly, with all the data we have and all of the data products that we have, we can compete in a much more predictive way and a results way. And I think that's what advertisers are more and more geared to. That's where all the money's going. And now we're in a position really to compete very effectively with anyone as it relates to those kind of metrics.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Thanks, Tom. Last question from us. Obviously, challenge, but 2Q has been sort of a rocket ship here and you gave some data and enthusiasm. It looks like you look at the slate of films going forward, it seems like the momentum here is going to continue and into 2026. How does that affect sort of media buyers enthusiasm to want to put ads into your network?

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

I mean you've got the attribution, you've got the demo, you've got a defensive model, an exciting model in a challenging environment. Are you seeing sort of incremental interest I guess Tom for ad placements given that sort of lineup of good data.

[Thomas Lesinski, CEO at National CineMedia]

Well, it's funny you mentioned that we recently had a screening for Thunderbolts that was sold out with all of our clients. We have another one for Mission Impossible coming up. If you look at the quality of movies coming out in in May and June, into July, those big hit movies, whether it's Jurassic World, whether it's f one, those movies are all gonna get incredibly positive results at the box office and really good press. And it's that kind of, awareness building and positive awareness building for the movie business that so helps our company. You know, in the first quarter, candidly, there were a lot of movies that didn't do well, and some really high profile ones that actually, you know, failed, including Snow White.

[Thomas Lesinski, CEO at National CineMedia]

And that kind of negative buzz, you know, candidly, that puts a little cloud over the business. And and now that we've had Minecraft and Sinners, The Accountant, Thunderbolts, Mission Impossible and Lionel and Stitch coming up in two weeks. We have, again, like, this wind at our sails, and that the consistency at the box office creates excitement and sustainable excitement. And that's what we need to continue to deliver. Obviously, first quarter was a tough one, but the second quarter and the rest of the summer look really strong.

[Thomas Lesinski, CEO at National CineMedia]

And I can already tell our advertisers are talking about it. A lot of it is indicative of being sold out at a screening in LA and New York. So people are anxious to get back to the movies. I'm sure that Mission Impossible will not disappoint people. One of the underdogs I have for the summer is Ballerina, which is off the John Wick series.

[Thomas Lesinski, CEO at National CineMedia]

So I think it's gonna be a really, really good theatrical summer, and one we haven't seen in a long time.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

That's awesome. Good luck, guys. Thank you.

[Operator]

Thank you. This concludes our question and answer session. I would like to turn the conference back over to Tom Lisinski for any closing remarks.

[Thomas Lesinski, CEO at National CineMedia]

Thank you for joining us today. We appreciate your questions and ongoing support of NCM. And while we're operating against a bit of an uncertain backdrop, we remain committed to executing on our growth strategy and are optimistic that an upcoming and improving slate will drive recovery at the box office. NCM continues to attract advertisers as a top player in the premium video advertising space with advertising industry leading data capabilities and unmatched scale and reach among the most sought after young audiences. So with our fortified balance sheet, robust cash flow and a shareholder friendly capital allocation strategy, we are well positioned to capitalize on the opportunities that lie ahead and generate long term value for our shareholders.

[Thomas Lesinski, CEO at National CineMedia]

Finally, you to the NCM team for their hard work and to our shareholders for their support. See you at the movies.

[Operator]

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

Participants

Executives

• Chan Park, SVP - Finance
• Thomas Lesinski, CEO
• Ronnie Ng, CFO

Analysts

• Eric Wold, Executive Director, Equity Research at Texas Capital Securities
• Patrick Sholl, Vice President at Barrington Research Associates
• Mike Hickey, Equity Research Analyst at The Benchmark Company LLC