NASDAQ:NCMI National CineMedia Q2 2025 Earnings Report $4.51 -0.18 (-3.84%) Closing price 08/7/2025 04:00 PM EasternExtended Trading$4.63 +0.12 (+2.57%) As of 08/7/2025 07:50 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast National CineMedia EPS ResultsActual EPS-$0.11Consensus EPS -$0.11Beat/MissMet ExpectationsOne Year Ago EPSN/ANational CineMedia Revenue ResultsActual Revenue$51.80 millionExpected Revenue$59.45 millionBeat/MissMissed by -$7.65 millionYoY Revenue GrowthN/ANational CineMedia Announcement DetailsQuarterQ2 2025Date8/5/2025TimeAfter Market ClosesConference Call DateTuesday, August 5, 2025Conference Call Time5:00PM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by National CineMedia Q2 2025 Earnings Call TranscriptProvided by QuartrAugust 5, 2025 ShareLink copied to clipboard.Key Takeaways Negative Sentiment: Q2 total revenue of $51.8 M and adjusted OIBDA of $0.7 M fell below guidance, driven by advertiser caution amid tariff uncertainties and a seasonally slow ad market. Positive Sentiment: Third-quarter ad sales commitments are pacing ahead of last year, underpinning guidance of $62–67 M in revenue and $7.5–11.5 M in adjusted OIBDA, thanks to stronger market visibility and momentum. Positive Sentiment: Programmatic volume surged over 50% quarter-over-quarter with ~70% new advertisers, while self-serve revenue rose >30% year-over-year, as NCM scales its digital ad offerings and aims to triple its programmatic footprint by year-end. Positive Sentiment: Local AI-powered “Bullseye” campaigns delivered double-digit foot-traffic gains for a national telecom client in two weeks, showcasing cinema’s ability to drive measurable, hyper-localized advertising results. Positive Sentiment: Cinema attendance climbed 24% year-over-year to 115 M viewers in Q2, and a robust upcoming film slate—including Wicked, Avatar sequels, Zootopia and Tron: Ares—should fuel Q4 box office reacceleration and ad demand. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallNational CineMedia Q2 202500:00 / 00:00Speed:1x1.25x1.5x2xThere are 7 speakers on the call. Operator00:00:00Good afternoon, and welcome to the National CineMedia Second Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. Operator00:00:31Please note this event is being recorded. I would now like to turn the conference over to Chan Park, Vice President of Finance. Please go ahead. Speaker 100:00:41Thank you, operator. 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. Speaker 100:01:15These forward looking statements involve risks and uncertainties. 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 fully 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. Speaker 100:01:48These reconciliations can be found at the end of today's earnings release or on the Investor Relations page of our website at ncm.com. Now, I'll turn the call over to Tom. Speaker 200:02:01Thank you, Chan. Hello, everyone, and thank you for joining our fiscal twenty twenty five second quarter earnings call. As we begin today's call, I want to take a moment to thank our team for their resilience and dedication to what has been a particularly demanding quarter in the face of a challenging economic and advertising environment. Their commitment and strength are what continue to drive our progress and physician and Centimeters for what's ahead. At the time of our last earnings call, we were encouraged by strong second quarter pacing, while recognizing the ongoing uncertainty in the advertising market. Speaker 200:02:41Over the balance of the second quarter, we faced a more challenging operating environment than anticipated caution among advertisers, especially in key categories like government, consumer packaged goods, and automotive deepened in response to broader tariff related market uncertainty and evolving government spending priorities. Further, this quarter's box office performance was driven by a handful of unexpected, though welcome breakout hits, including a Minecraft movie, Lilo and Stitch and Sinners. While the success of these films demonstrates the ongoing recovery of the box office and audience enthusiasm for cinema, their over performance took place during a seasonally slower advertising period, limiting our ability to fully monetize those impressions. As a result of these headwinds, our second quarter performance did not meet our expectation. NCM's second quarter twenty twenty five total revenue was $51,800,000 with adjusted OIBDA of 700,000.0 While this wasn't the quarter we set out to deliver, we're approaching the back half of the year with optimism. Speaker 200:03:54We are actively taking steps to better capitalize on box office momentum and deliver against our strategic priorities positioning the company for stronger performance and long term growth. We're encouraged by our third quarter momentum, ad sales commitments are pacing ahead of last year's levels and improved visibility into the pipeline gives us confidence in our ability to deliver a stronger start to the second half. To better position NCM to compete for growing premium video advertising budgets, we are continuing to scale our programmatic and self serve offerings. These capabilities are core to our strategy of delivering a more responsive and nimble advertising platform as the industry shifts towards flexible, closer to campaign date solutions. In the second quarter, we continue to expand our programmatic distribution through new partnerships with two leading programmatic platforms, providing advertisers with additional efficient pass to purchase NCM's premier inventory. Speaker 200:04:56Notably, programmatic advertiser volume grew by more than 50% quarter over quarter with approximately 70% of second quarter programmatic advertisers new to NCM underscoring the growing appeal of our platform to performance focused buyers. Looking ahead, we expect to build on this momentum and triple our programmatic footprint by year end positioning us to accelerate further into 2026. Additionally, our self serve platform is also gaining traction with second quarter revenue up more than 30% year over year signaling strong adoption heading into the 2025. On the local front, enhancing our sales capability remains a top priority. We are focused on onboarding new talent and taking a targeted approach to engage high value advertisers at the local and regional level. Speaker 200:05:51While we recognize this effort will take time, we are confident that a strategic rebuild in local will strengthen our market position and help maximize the local advertising recovery over the long term. We are also continuing to demonstrate the effectiveness of cinema as a performance advertising channel. To share one example, in the second quarter, a national telecom brand executed a campaign using our new bullseye product, which featured two fifty three hyper localized AI generated ads. Powered by our NCMX data platform, the campaign successfully delivered double digit gains in foot traffic to the locally promoted stores within the first two weeks of campaign launch. Following this success, the advertiser renewed their commitment with NCM, a powerful signal that when advertisers engage with our platform, we deliver impactful measurable results. Speaker 200:06:47Our premium platinum ad spot also continues to generate strong demand from advertisers who recognize the value of cinema's high attention environment capabilities. Our new agreement with AMC, which we announced last quarter went into effect in the second quarter and standardized our show format across our exhibitor network, improving our ability to meet demand for both platinum and post show ad inventory. To further drive utilization, we've also introduced added creative flexibility within the platinum offering at select theaters, enabling more dynamic use of the available ad window. As we continue to invest in the business, we are also committed to accelerating new client acquisition with more targeted outreach and a more agile go to market approach. In the second quarter, NCM welcomed 12 new advertisers that placed major cinema campaigns for the first time since the pandemic. Speaker 200:07:42As we continue to demonstrate the unique value of cinema as a high impact advertising channel, we will deepen existing advertiser relationships and strategically expand our client base. Driven by the successful box office, NCM reached over 115,000,000 individuals across our network in the second quarter, up 24% compared with the '4. As cinema continues to reclaim its prominent cultural relevance, we're not just seeing rising attendance, but also a deeper connection between audiences and content. This reinforces our confidence in the continued momentum of the theatrical ecosystem and positions NCM to benefit from the strong content pipeline heading back into the second half of the year. Looking ahead, early indicators from the third quarter are encouraging. Speaker 200:08:30Supported by a strong slate, booked sales are pacing ahead of the same period last year, with demand normalizing across key categories including auto, wireless, retail and travel. Importantly, the third quarter is historically front weighted with the majority of revenue realized in July and August. This dynamic combined with the strength we are already seeing in the marketplace gives us meaningful greater visibility into third quarter performance than we've had at the same point last quarter. With a more robust sales pipeline and stabilization in the advertising market compared to the second quarter, we have increased confidence in our ability to deliver on our third quarter outlook, which Ronnie will share in a few moments. Overall, we're expecting continued box office momentum for full year 2025. Speaker 200:09:21While the third quarter box office is expected to be down year over year due to tough comparisons to last year's third quarter, which included hits such as Deadpool and Wolverine and Despicable Me four, we expect the strong and well paced theatrical slate to reaccelerate the box office during the critical fourth quarter holiday season. Highly anticipated tentpoles such as Wicked for Good, Avatar Fire and Ash, Zootopia and Tron Ares are positioned to drive box office reacceleration as we close out the year. Combined with standout performances from this summer's blockbusters including Jurassic World, Rebirth and Superman, this consistent cadence of high profile releases drives the ongoing covering in cinema attendance and reinforces cinema's appeal as a premium high impact advertising environment supporting increased interest from both national and local advertisers as we close out the year. NCM remains uniquely positioned to capture and convert this momentum. The fundamental differentiators of our offering, broad reach among highly desirable audiences and immersive premium video format and unmatched national scale continue to resonate with advertisers seeking performance, impact and efficiency. Speaker 200:10:36As brands look to engage consumers at moments of peak attention and emotional resonance, NCM remains a trusted and proven partner. With a healthy slate of tentpole movies, improving visibility and a strong start to the third quarter already underway, we are confident in our ability to perform. We're optimistic about the remainder of fiscal twenty twenty five and the steps we're taking to deliver sustainable value for partners, clients and shareholders. With that, I'll now turn it over to Ronnie. Thank you, Tom, and good afternoon, everyone. Speaker 200:11:12As Tom outlined, the second quarter presented a number of headwinds that impacted our results, most notably during the month of May. May saw heightened volatility in advertiser budgets across key verticals such as automotive, consumer packaged goods, and government, driven by broader economic uncertainty and shifting public sector spending priorities. In addition, ongoing tariff related uncertainties have fueled further hesitation, evidenced by several submitted budgets being withdrawn as advertisers reassessed market conditions. While June showed early signs of stabilization in a more consistent inventory environment, the softness mid quarter had a meaningful impact on our overall second quarter results. As a result of these factors, total revenue for the second quarter came in at $51,800,000 below our guidance range of $56,000,000 to $61,000,000 and down 5% versus the prior year period. Speaker 200:12:21The scatter market continues to represent an increasing percentage of NCM's revenue mix, equating to 40% of national on screen revenue in the second quarter. Inventory utilization was up 12%, partially offset by a decline in CPMs. National advertising revenue for the quarter was $41,200,000 compared with $41,700,000 in the 2024. National ad revenue per attendee was $0.36 for the second quarter compared with $0.45 in the same period last year, reflecting the 24% increase in quarterly attendance. Local and regional advertising revenue totaled $6,400,000 in the second quarter, down from $9,800,000 in the 2024, reflecting the cautious advertiser sentiment we've seen across the broader marketplace. Speaker 200:13:28Consistent with first quarter trends, we experienced reduced contract volume and smaller deal sizes, particularly across categories such as dining, automotive, wireless, and healthcare, sectors that have remained sensitive to shifting economic signals. The year over year decrease also reflects the re categorization of certain clients from local to national, which, excluding that change, would have resulted in a less pronounced decline. These headwinds were partially offset by growth in the travel and professional services categories, demonstrating that when aligned with the right audience and value proposition, local markets continue to present meaningful opportunities. We are encouraged by early signs of stabilization across the advertising market as brands adapt to ongoing tariff uncertainty, regain confidence, and begin to normalize their advertising budgets. Additionally, a robust slate of highly anticipated blockbusters is set to debut over the balance of the year with advertiser demand already materializing. Speaker 200:14:50These tentpole releases are expected to be significant drivers of growth in the second half. Turning to our expenses. Second quarter operating expenses were $63,800,000 down slightly compared with the prior year. Operating income was negative $12,000,000 compared to negative $9,300,000 in the same period last year. Excluding one time items, depreciation, amortization and non cash share based compensation, our adjusted operating expenses were $51,100,000 an increase of $4,000,000 or 8% compared to the prior year. Speaker 200:15:30This increase was primarily attributable to higher attendance driven costs with exhibitor fees rising $4,200,000 or 16%, while SG and A expenses declined slightly versus the prior year, reflecting our continued cost management efforts. Second quarter adjusted OIBDA, excluding non cash charges and one time items, was 700,000 compared to $7,600,000 in the prior year, driven primarily by the weaker top line results. Total unlevered free cash flow for the quarter, as defined by cash flow from operations plus capital expenditures, was negative 6,800,000.0 As a reminder, our fourth quarter twenty twenty four results included approximately $13,000,000 in advance payments from clients for advertising scheduled to run throughout 2025, of which $4,000,000 is attributable to the second quarter. As a result, these upfront payments will affect year over year comparability of free cash flow generation in 2025. Year to date, NCM has generated total revenue of $86,600,000 compared to $92,100,000 in the same period last year. Speaker 200:17:00National and local advertising revenues declined 425% respectively, primarily reflecting softer advertiser demand amid ongoing economic uncertainty. Total adjusted OIBDA for the period was negative 8,300,000.0 compared to $1,900,000 in the prior year, driven by the revenue shortfall resulting from the weaker ad market. Turning to our consolidated balance sheet. At the end of the second quarter, NCM had $40,300,000 of cash, cash equivalents, restricted cash and marketable securities and zero outstanding debt. We remain committed to a capital allocation strategy that delivers value by balancing investment in the future of NCM and returning capital to shareholders through our share repurchase and dividend programs. Speaker 200:18:00Under the dividend program, we reinstated this year. We announced a quarterly dividend of $03 per share today, amounting to 2,800,000.0 This quarter's dividend will be paid on 08/29/2025 to stockholders of record on 08/15/2025. To provide an update on our $100,000,000 share repurchase program, year to date, NCM has repurchased 3,300,000.0 shares at an average price per share of $5.78 for a total of approximately 18,800,000.0. This brings our total shares repurchased under this program to 5,900,000.0 shares at an average price of $5.51 for a total of approximately 32,500,000.0. We are encouraged by the momentum we've seen so far in the third quarter. Speaker 200:19:01The first two months, which historically accounted for the majority of third quarter revenue due to the summer box office slate and seasonal audience upticks are driving strong performance with book sales commitments pacing ahead of last year's third quarter results. We also continue to invest in our inventory forecasting capability to enable us to price and package our inventory more dynamically, delivering greater value to advertisers while helping us drive higher utilization. With improved planning tools, increased visibility into advertiser pacing and category demand, and continued investment in our strategic priorities, we are confident in our ability to deliver a stronger third quarter. With this said, we expect third quarter revenue to be between $62,000,000 and $67,000,000 reflecting improved advertiser commitment sustained theatrical strength. We anticipate adjusted OIBDA in the range of $7,500,000 to $11,500,000 supported by higher utilization, disciplined expense management, and improving market dynamics. Speaker 200:20:24As we look ahead, we are focused on disciplined execution of our strategic priorities from accelerating investment in programmatic and self serve to deepening advertiser relationships at both the national and local level. With a robust film slate on deck and signs of strengthening advertiser demand, we believe we are well positioned to drive improved performance in the back half of the year and lay the foundation for sustainable long term growth. Operator, please open the line for questions. Operator00:21:01We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Operator00:21:30Our first question is from Eric Wold with Texas Capital Securities. Please go ahead. Speaker 300:21:36Hey, good morning, Tom and Ronnie. Good afternoon. A couple of questions. I guess, first off, the midpoint of the revenue guidance for Q3 indicates an increase year over year even with expectation for box office and attendance to be down with a tough comp against last year, which clearly demonstrates your ability to drive ad share even in a tough environment. Yes, I know you're not giving full year guidance or Q4 guidance, but any reason to think this shouldn't continue through year end when this ad demand would be combined with a strong film slate and any potential for kind of year end ad budget flushes? Speaker 300:22:29And kind of on the last point, what are your thoughts around as you kind of dollars that kind of weren't spent maybe in the first part of the year and the second quarter around kind of uncertainty with tariffs and kind of where the economy was? What are you going to hear in your thoughts and kind of historically how that's kind of played out as you kind of move through the year and kind of how the dollars are kind of loosened up? Speaker 200:22:56Well, it's a good question. And it's exactly what to be focusing on. I think what we're seeing is a more relaxed amount of budgeting, which we didn't see in the middle of the tariff debate. And the pacing that we're seeing in the third quarter is very, very good compared to last year. So in my view, we've gotten at least a significant amount of confidence back related to what seemed to be a little bit of an issue in the second quarter. Speaker 200:23:34Granted, it was in very limited categories in the second quarter where that was happening. It was mostly government and automotive and CPG. But the third quarter doesn't seem to have had any impact for that. It's a little hard to say right now how the fourth quarter is shaping up. We know that there's obviously some great movies and we've got a lot of traction already in our pipeline on Wicked for Good and Avatar and some of the others. Speaker 200:24:03So I think barring any major tariff, what I would call issues or economic ones related to the tariffs, we're feeling pretty optimistic obviously about the third quarter and that momentum continuing into the fourth quarter. Speaker 300:24:22Got it. And then just last question. I know at the start of the year, I guess, on the fourth quarter call, you noted expectation for strategic investing this year around the sales team, marketing. But so far in the first quarter and the second quarter, selling, marketing and administrative have been flat to down and really haven't seen that play out. Is that should we expect that to be more back half weighted? Speaker 300:24:53Has that kind of been pushed out? Kind of what are your thoughts on how that's how should we think about that for this year now? Speaker 200:25:01So Eric, that's a great observation about how we're managing our expenses versus as the business is trending throughout the year. With that said, something that our team really focuses on is how we are monitoring our operating expenses, how we're investing into our team versus kind of what we're seeing in the current market. And we are investing into certain things that we called out earlier this year. Obviously, we're also trimming in some parts of the business that we find more efficiencies on and we're continuing to do that, right. So there's some offsets versus some of the investment and that's how we're continuing to invest into sales in the current environment. Speaker 300:25:54Got it. So we should expect things to improve in the back half of the year that maybe some of the stuff that wasn't spent in the first half of year maybe play out more Yes, in the back Speaker 200:26:05the way I would say is we're just going to have to see on the pace of the improvement to make that determination. So, we don't we obviously have a set plan, but quite frankly, we kind of change that plan as things play out. So, I wouldn't say it's definitely for sure that, you know, we're going to continue to invest. We're just going to have to see how the rest of the year continues to go. Speaker 300:26:36Perfect. Thank you both. Speaker 200:26:39You're welcome. The Operator00:26:41next question is from Mike Hickey with The Benchmark Company. Please go ahead. Speaker 400:26:47Hey, Tom, Ronnie, Chan. Thanks for taking our questions. Just the first one on your 3Q guide. Nice to see strength there, especially in a difficult box. Just curious, Ronnie, if any of that is sort of a spillover from 2Q, maybe some deals that got paused just because of the economic uncertainty or the loss in the tariff wash or if that's sort of a a clean Q3 in terms of what you're seeing in terms of demand that we could extrapolate into Q4 and beyond? Speaker 200:27:22Yes. I think those and what's embedded in our guide when we're looking at it and quite frankly, obviously the third quarter is really front half weighted, right. So really the majority of the revenues earned in July and August, not so much in September. What we've seen thus far in the business is mostly new business for the third. So that's I think what's actually the most promising part about it is it's not necessarily budgets being withheld for a very, very long time and then also you see a rush and that's why you see the upside in the third versus the prior year. Speaker 200:28:03These are a lot of brand new businesses that actually got placed specifically in the third quarter. Speaker 400:28:10Nice. Great to hear. Also nice to hear your programmatic looks like it's starting to get some traction here. Just curious, like, I think last quarter maybe it was 2% of your business. You look at the broader digital landscape thinking back to your Analyst Day, Tom, I think it was sort of like a normal 25%, 30% spend from the buyers. Speaker 400:28:38So it's an important piece of the puzzle that hadn't quite been, you know, polished and ready. And now it seems like it is. Just checking if that's true, why it's working now, and sort of what what feedback you're hearing from your media buyer partners in terms of utilizing programmatic moving forward? Speaker 200:28:57So starting at the most macro level, programmatic world, depending on what you're looking at in terms of a database, it can represent 50% to 60% to even 70% of an advertiser is open to buy dollars. So clearly investing in programmatic two years ago and rolling it out as rapidly as we can and continuing to roll out against all the platforms was a prudent idea. And I think most meaningfully is the percent of new buyers or new advertisers that we're getting out of programmatic is really significant. In fact, that's even higher than we had forecasted. So we can't give you a number just yet on where we are in programmatic. Speaker 200:29:42But I can tell you that all the metrics that we're looking at, particularly the new advertisers that are coming in, the increases quarter to quarter, and the strong adoption of the platform, buyer advertisers is really encouraging. And it's particularly, I think, gonna help on our self serve side on local as well. So we've been talking about programmatic on these calls for over two years. And it's certainly, I think, paying off the way we hoped it would. And I think it's going be even more significant, obviously, going into next year. Speaker 400:30:15Last question, can you sort of talk to us about maybe ways that you can think about increasing your visibility? Mean, Tom, when you look back on your business, you used to have a big upfront and, you know, that would pad, you know, if I remember right, maybe 60 to 70% of your revenue. And now just as digital is, I think, in general, you're seeing, you know, a larger mix to scatter and then you have disruptions on tariffs and economy. It just seems like it must be much more challenging for you guys to sort of guide your business that environment where buyers can sort of move in Speaker 400:30:57and out very quickly. So other ways that you see, Catherine, in your team in terms of trying to build better visibility with your media buyer partners in terms of steering the street and obviously your business as well? Speaker 200:31:14Yeah, I think that's a really important topic. And clearly when the upfront was a bigger part, not just of our business, but of everybody's business. There was, I would say, less face time involved because so much of the percentage of your buy was coming in advance and getting committed. What we've done is created an entire new business group in our sales team That's now exclusively charged with finding new business with new clients. And this team, is growing literally every quarter, their sole job is to get out and make sure that the new advertisers are aware of our platform. Speaker 200:31:55Our current team is much more responsible for going after our existing customers as well as for the advertisers. And we do a lot of big events. We sponsored the Cannes Lions fairly recently. Prior to that, we had a big event at Sundance. So I think the awareness levels are actually quite good. Speaker 200:32:17And I think the trust in the platform and the data metrics around it are very well known. We're obviously reinforcing those. And I think that's why we're having such a nice bounce back in Q3 as the pacing goes. So I can tell you, we're all advocates for this industry. It's what I spend a lot of my time on personally. Speaker 200:32:39There isn't a week that goes by where we're not advocating either directly to new clients or existing clients, making sure that cinema stays at the top of mind, particularly in light of the streaming guys becoming more and more significant. Speaker 400:32:56Thank you, guys. Good luck. Speaker 200:32:59You're welcome. Operator00:33:00The next question is from Alicia Reese with Wedbush Securities. Please go ahead. Speaker 500:33:06Hi, thanks. Hi, Tom. Hi, Ronnie. How are you guys doing? Speaker 200:33:11Hi, Thank you for participating in the call. Speaker 500:33:14Yes, thanks for taking my questions. I have a few actually. So I wanted to start by asking regarding third quarter guidance. What is baked into that in terms of CPMs either year over year or sequential decline flat versus utilization expectations? Can you share that with us? Speaker 200:33:36Yes, sure. So for the third quarter, obviously, you look at the middle of the guide, we are pointing to a year on year improvement versus last year in terms of total revenue. The attendance, I think, if you look at estimates out there, it looks to be down for the third quarter. So, are expecting improved utilization on a year on year basis and also CPMs to be relatively stable on a year on year basis. We've seen definitely better utilization thus far for the quarter in particular, obviously here in the July month that's passed. Speaker 200:34:25So that's what's baked into the guide in terms of the KPIs. Speaker 500:34:32Thanks. And the inventory forecasting capabilities you're talking about seeking to improve, is that going to require significant investment or is that relatively light investment and the result of that presumably is just better utilization, such that when CPMs eventually improve coming out of the current tariff situation, we would assume that that could drive some nice revenue gains perhaps. Can you give us a little more color on Yeah, so those Speaker 200:35:06on that, it's actually that tool specifically is actually part of the number of things that we highlighted in our Investor Day and also in the beginning of the year in terms of CapEx related investments. So it is we're not done with that yet, by the way. So we're still working to implement that system into our existing system, which is a little bit complicated. So we're not getting the full benefit of it right now. So I think that's still to come. Speaker 200:35:39And once we do that, it's really finding or improving utilization in seasonally slower months, right? Because that's actually the harder part. So I would suspect it's definitely for us by doing this, it's really a play on improving utilization, increasing ad loads really throughout the year is the biggest lever. Speaker 500:36:08Perfect. Yeah. That sounds great. Lastly, I wanted to ask about the local market expansion opportunity with the bullseye AI tech. A comment you made in your prepared remarks suggested that there's additional investment that could be made to expand that, or perhaps it's just a big push in that. Speaker 500:36:33So I'm curious, do you need to expand the tech there, expand the sales personnel, or is that just a sales push across the addressable market to really ramp that up? Speaker 200:36:45So it's a combination of all those things. It's not a direct heavy investment, really. We have found resources that have allowed us to do this kind of personalization at a very efficient rate. There is clearly an education involved with our sales team that we have the capability of doing significant personalization of advertising and localizing it. Pushing out nearly 300 ads in a really short time period for our clients who had given us the order a week before was something we couldn't have done without technology and without the help of AI. Speaker 200:37:28So it is a transition and a change for our sales team, particularly locally, to be able to have the skill set and the understanding of what we're capable of. But there's nothing like having a case study. In this case study, we executed on that, something we hadn't done before. And then the client was so pleased they renewed literally the following week. So that type of program is getting literally pushed out to all of our local people. Speaker 200:37:59And they're excited about it. And I'm sure we'll get more business out of it from our local advertisers. Speaker 500:38:05Yeah, seems like you're really early innings on a pretty exciting opportunity there. Speaker 200:38:10We're really happy about it. I mean, we're truly ahead of the curve, even compared to definitely compared to the traditional media companies. But what we're doing innovating, particularly at scale in a movie theater environment with that kind of personalization using automation is sort of a first of its kind. So we're quite proud of that. Honestly, it's a testament to our team, particularly the sales team and our team that does all of our analytics and strategic work around that, that they've really been staying on top of this. Speaker 200:38:46And it's paid out. So we're happy about it. Operator00:38:55The next question is from Patrick Scholl with Barrington Research. Please go ahead. Speaker 600:39:01Hi, thanks for taking the question. Kind of want Speaker 200:39:04to follow-up about the comment that you Speaker 600:39:06had about, you know, being mindful of CTV. Was just curious, you know, as Speaker 200:39:11ad supported plans have become more popular with that, Speaker 600:39:15to what extent is that impacting either you you see that impacting your utilization or CPMs and that not having as, I guess, a unique footprint in terms of reaching the younger audiences? Speaker 200:39:30Are you can you you were talking about CTV at the beginning, it kind of broke up for a second, Pat. Is that what you were referencing? Is that what you said at the top of it? Speaker 600:39:39Yeah, I'm sorry. Yeah, just maybe can you talk about like, just as the ad supported plans for the CTV services have increased popularity, what you're sort of seeing just in terms of your CPMs and utilization in Yeah, the Speaker 200:39:56so I think, you know, CTV is only one competitive bucket that we're competing in. And obviously we're focused on that as one that's a growing bucket. And it's a relatively younger demo, but it's not as young as our demo. So we're more than anything looking at watching and participating in that transition. And we're building out another programmatic platform that specifically addresses our ability to deliver within that CTV world. Speaker 200:40:30So far, it's hard honestly to measure a specific category impacting our platform. But more than anything, we've had our eye on CTV. We want to be able to compete programmatically in the CTV space. So we are going to be on those kinds of platforms in the very near future. Speaker 600:40:53Okay, thank you. Speaker 300:40:55All right. Operator00:40:57This concludes our question and answer session. I would like to turn the conference back over to Tom Lisinski for any closing remarks. Speaker 200:41:05Okay. Thank you for joining us today. We appreciate it. We are continuing to take decisive steps to adapt to this changing marketplace, including investing in our operations, deepening our client relationships, and strengthening, of course, the overall core business. The box office is showing real signs of vitality, and we're now seeing that momentum reflected in increased advertiser engagement. Speaker 200:41:30What gives us confidence is not just where we're headed, but how we're getting there with discipline, agility, and a clear strategy for the future growth. So we are grateful for your ongoing support and we look forward to seeing you again soon at the movies. Thank you. Operator00:41:46The conference has now concluded. Thank you for attending today's presentation. You may nowRead morePowered by Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) National CineMedia Earnings HeadlinesWedbush Predicts Increased Earnings for National CineMediaAugust 7 at 2:17 AM | americanbankingnews.comNational CineMedia, Inc. (NASDAQ:NCMI) Receives $7.00 Average Target Price from AnalystsAugust 7 at 2:44 AM | americanbankingnews.comCrypto bros: Meet your replacementLarry Benedict made $274 million trading on Wall Street… Barron’s ranked his hedge fund in the top 1% worldwide. Now he’s applying the same expertise to the Bitcoin market. His system tracks 19 indicators to find quick Bitcoin profit opportunities. | Brownstone Research (Ad)Analysts Offer Insights on Communication Services Companies: Comcast (CMCSA) and National Cinemedia (NCMI)August 6 at 4:54 PM | theglobeandmail.comNational CineMedia Inc (NCMI) Q2 2025 Earnings Call Highlights: Navigating Challenges with New ...August 6 at 2:29 AM | gurufocus.comWedbush Issues Pessimistic Forecast for National CineMedia (NASDAQ:NCMI) Stock PriceAugust 6 at 2:27 AM | americanbankingnews.comSee More National CineMedia Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like National CineMedia? Sign up for Earnings360's daily newsletter to receive timely earnings updates on National CineMedia and other key companies, straight to your email. Email Address About National CineMediaNational 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.View National CineMedia ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Constellation Energy’s Earnings Beat Signals a New EraRealty Income Rallies Post-Earnings Miss—Here’s What Drove ItDon't Mix the Signal for Noise in Super Micro Computer's EarningsWhy Monolithic Power's Earnings and Guidance Ignited a RallyRivian Takes Earnings Hit—R2 Could Be the Stock's 2026 LifelinePalantir Stock Soars After Blowout Earnings ReportVertical Aerospace's New Deal and Earnings De-Risk Production Upcoming Earnings SEA (8/12/2025)Cisco Systems (8/13/2025)Alibaba Group (8/13/2025)NetEase (8/14/2025)Applied Materials (8/14/2025)NU (8/14/2025)Petroleo Brasileiro S.A.- Petrobras (8/14/2025)Deere & Company (8/14/2025)Palo Alto Networks (8/18/2025)Medtronic (8/19/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 7 speakers on the call. Operator00:00:00Good afternoon, and welcome to the National CineMedia Second Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. Operator00:00:31Please note this event is being recorded. I would now like to turn the conference over to Chan Park, Vice President of Finance. Please go ahead. Speaker 100:00:41Thank you, operator. 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. Speaker 100:01:15These forward looking statements involve risks and uncertainties. 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 fully 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. Speaker 100:01:48These reconciliations can be found at the end of today's earnings release or on the Investor Relations page of our website at ncm.com. Now, I'll turn the call over to Tom. Speaker 200:02:01Thank you, Chan. Hello, everyone, and thank you for joining our fiscal twenty twenty five second quarter earnings call. As we begin today's call, I want to take a moment to thank our team for their resilience and dedication to what has been a particularly demanding quarter in the face of a challenging economic and advertising environment. Their commitment and strength are what continue to drive our progress and physician and Centimeters for what's ahead. At the time of our last earnings call, we were encouraged by strong second quarter pacing, while recognizing the ongoing uncertainty in the advertising market. Speaker 200:02:41Over the balance of the second quarter, we faced a more challenging operating environment than anticipated caution among advertisers, especially in key categories like government, consumer packaged goods, and automotive deepened in response to broader tariff related market uncertainty and evolving government spending priorities. Further, this quarter's box office performance was driven by a handful of unexpected, though welcome breakout hits, including a Minecraft movie, Lilo and Stitch and Sinners. While the success of these films demonstrates the ongoing recovery of the box office and audience enthusiasm for cinema, their over performance took place during a seasonally slower advertising period, limiting our ability to fully monetize those impressions. As a result of these headwinds, our second quarter performance did not meet our expectation. NCM's second quarter twenty twenty five total revenue was $51,800,000 with adjusted OIBDA of 700,000.0 While this wasn't the quarter we set out to deliver, we're approaching the back half of the year with optimism. Speaker 200:03:54We are actively taking steps to better capitalize on box office momentum and deliver against our strategic priorities positioning the company for stronger performance and long term growth. We're encouraged by our third quarter momentum, ad sales commitments are pacing ahead of last year's levels and improved visibility into the pipeline gives us confidence in our ability to deliver a stronger start to the second half. To better position NCM to compete for growing premium video advertising budgets, we are continuing to scale our programmatic and self serve offerings. These capabilities are core to our strategy of delivering a more responsive and nimble advertising platform as the industry shifts towards flexible, closer to campaign date solutions. In the second quarter, we continue to expand our programmatic distribution through new partnerships with two leading programmatic platforms, providing advertisers with additional efficient pass to purchase NCM's premier inventory. Speaker 200:04:56Notably, programmatic advertiser volume grew by more than 50% quarter over quarter with approximately 70% of second quarter programmatic advertisers new to NCM underscoring the growing appeal of our platform to performance focused buyers. Looking ahead, we expect to build on this momentum and triple our programmatic footprint by year end positioning us to accelerate further into 2026. Additionally, our self serve platform is also gaining traction with second quarter revenue up more than 30% year over year signaling strong adoption heading into the 2025. On the local front, enhancing our sales capability remains a top priority. We are focused on onboarding new talent and taking a targeted approach to engage high value advertisers at the local and regional level. Speaker 200:05:51While we recognize this effort will take time, we are confident that a strategic rebuild in local will strengthen our market position and help maximize the local advertising recovery over the long term. We are also continuing to demonstrate the effectiveness of cinema as a performance advertising channel. To share one example, in the second quarter, a national telecom brand executed a campaign using our new bullseye product, which featured two fifty three hyper localized AI generated ads. Powered by our NCMX data platform, the campaign successfully delivered double digit gains in foot traffic to the locally promoted stores within the first two weeks of campaign launch. Following this success, the advertiser renewed their commitment with NCM, a powerful signal that when advertisers engage with our platform, we deliver impactful measurable results. Speaker 200:06:47Our premium platinum ad spot also continues to generate strong demand from advertisers who recognize the value of cinema's high attention environment capabilities. Our new agreement with AMC, which we announced last quarter went into effect in the second quarter and standardized our show format across our exhibitor network, improving our ability to meet demand for both platinum and post show ad inventory. To further drive utilization, we've also introduced added creative flexibility within the platinum offering at select theaters, enabling more dynamic use of the available ad window. As we continue to invest in the business, we are also committed to accelerating new client acquisition with more targeted outreach and a more agile go to market approach. In the second quarter, NCM welcomed 12 new advertisers that placed major cinema campaigns for the first time since the pandemic. Speaker 200:07:42As we continue to demonstrate the unique value of cinema as a high impact advertising channel, we will deepen existing advertiser relationships and strategically expand our client base. Driven by the successful box office, NCM reached over 115,000,000 individuals across our network in the second quarter, up 24% compared with the '4. As cinema continues to reclaim its prominent cultural relevance, we're not just seeing rising attendance, but also a deeper connection between audiences and content. This reinforces our confidence in the continued momentum of the theatrical ecosystem and positions NCM to benefit from the strong content pipeline heading back into the second half of the year. Looking ahead, early indicators from the third quarter are encouraging. Speaker 200:08:30Supported by a strong slate, booked sales are pacing ahead of the same period last year, with demand normalizing across key categories including auto, wireless, retail and travel. Importantly, the third quarter is historically front weighted with the majority of revenue realized in July and August. This dynamic combined with the strength we are already seeing in the marketplace gives us meaningful greater visibility into third quarter performance than we've had at the same point last quarter. With a more robust sales pipeline and stabilization in the advertising market compared to the second quarter, we have increased confidence in our ability to deliver on our third quarter outlook, which Ronnie will share in a few moments. Overall, we're expecting continued box office momentum for full year 2025. Speaker 200:09:21While the third quarter box office is expected to be down year over year due to tough comparisons to last year's third quarter, which included hits such as Deadpool and Wolverine and Despicable Me four, we expect the strong and well paced theatrical slate to reaccelerate the box office during the critical fourth quarter holiday season. Highly anticipated tentpoles such as Wicked for Good, Avatar Fire and Ash, Zootopia and Tron Ares are positioned to drive box office reacceleration as we close out the year. Combined with standout performances from this summer's blockbusters including Jurassic World, Rebirth and Superman, this consistent cadence of high profile releases drives the ongoing covering in cinema attendance and reinforces cinema's appeal as a premium high impact advertising environment supporting increased interest from both national and local advertisers as we close out the year. NCM remains uniquely positioned to capture and convert this momentum. The fundamental differentiators of our offering, broad reach among highly desirable audiences and immersive premium video format and unmatched national scale continue to resonate with advertisers seeking performance, impact and efficiency. Speaker 200:10:36As brands look to engage consumers at moments of peak attention and emotional resonance, NCM remains a trusted and proven partner. With a healthy slate of tentpole movies, improving visibility and a strong start to the third quarter already underway, we are confident in our ability to perform. We're optimistic about the remainder of fiscal twenty twenty five and the steps we're taking to deliver sustainable value for partners, clients and shareholders. With that, I'll now turn it over to Ronnie. Thank you, Tom, and good afternoon, everyone. Speaker 200:11:12As Tom outlined, the second quarter presented a number of headwinds that impacted our results, most notably during the month of May. May saw heightened volatility in advertiser budgets across key verticals such as automotive, consumer packaged goods, and government, driven by broader economic uncertainty and shifting public sector spending priorities. In addition, ongoing tariff related uncertainties have fueled further hesitation, evidenced by several submitted budgets being withdrawn as advertisers reassessed market conditions. While June showed early signs of stabilization in a more consistent inventory environment, the softness mid quarter had a meaningful impact on our overall second quarter results. As a result of these factors, total revenue for the second quarter came in at $51,800,000 below our guidance range of $56,000,000 to $61,000,000 and down 5% versus the prior year period. Speaker 200:12:21The scatter market continues to represent an increasing percentage of NCM's revenue mix, equating to 40% of national on screen revenue in the second quarter. Inventory utilization was up 12%, partially offset by a decline in CPMs. National advertising revenue for the quarter was $41,200,000 compared with $41,700,000 in the 2024. National ad revenue per attendee was $0.36 for the second quarter compared with $0.45 in the same period last year, reflecting the 24% increase in quarterly attendance. Local and regional advertising revenue totaled $6,400,000 in the second quarter, down from $9,800,000 in the 2024, reflecting the cautious advertiser sentiment we've seen across the broader marketplace. Speaker 200:13:28Consistent with first quarter trends, we experienced reduced contract volume and smaller deal sizes, particularly across categories such as dining, automotive, wireless, and healthcare, sectors that have remained sensitive to shifting economic signals. The year over year decrease also reflects the re categorization of certain clients from local to national, which, excluding that change, would have resulted in a less pronounced decline. These headwinds were partially offset by growth in the travel and professional services categories, demonstrating that when aligned with the right audience and value proposition, local markets continue to present meaningful opportunities. We are encouraged by early signs of stabilization across the advertising market as brands adapt to ongoing tariff uncertainty, regain confidence, and begin to normalize their advertising budgets. Additionally, a robust slate of highly anticipated blockbusters is set to debut over the balance of the year with advertiser demand already materializing. Speaker 200:14:50These tentpole releases are expected to be significant drivers of growth in the second half. Turning to our expenses. Second quarter operating expenses were $63,800,000 down slightly compared with the prior year. Operating income was negative $12,000,000 compared to negative $9,300,000 in the same period last year. Excluding one time items, depreciation, amortization and non cash share based compensation, our adjusted operating expenses were $51,100,000 an increase of $4,000,000 or 8% compared to the prior year. Speaker 200:15:30This increase was primarily attributable to higher attendance driven costs with exhibitor fees rising $4,200,000 or 16%, while SG and A expenses declined slightly versus the prior year, reflecting our continued cost management efforts. Second quarter adjusted OIBDA, excluding non cash charges and one time items, was 700,000 compared to $7,600,000 in the prior year, driven primarily by the weaker top line results. Total unlevered free cash flow for the quarter, as defined by cash flow from operations plus capital expenditures, was negative 6,800,000.0 As a reminder, our fourth quarter twenty twenty four results included approximately $13,000,000 in advance payments from clients for advertising scheduled to run throughout 2025, of which $4,000,000 is attributable to the second quarter. As a result, these upfront payments will affect year over year comparability of free cash flow generation in 2025. Year to date, NCM has generated total revenue of $86,600,000 compared to $92,100,000 in the same period last year. Speaker 200:17:00National and local advertising revenues declined 425% respectively, primarily reflecting softer advertiser demand amid ongoing economic uncertainty. Total adjusted OIBDA for the period was negative 8,300,000.0 compared to $1,900,000 in the prior year, driven by the revenue shortfall resulting from the weaker ad market. Turning to our consolidated balance sheet. At the end of the second quarter, NCM had $40,300,000 of cash, cash equivalents, restricted cash and marketable securities and zero outstanding debt. We remain committed to a capital allocation strategy that delivers value by balancing investment in the future of NCM and returning capital to shareholders through our share repurchase and dividend programs. Speaker 200:18:00Under the dividend program, we reinstated this year. We announced a quarterly dividend of $03 per share today, amounting to 2,800,000.0 This quarter's dividend will be paid on 08/29/2025 to stockholders of record on 08/15/2025. To provide an update on our $100,000,000 share repurchase program, year to date, NCM has repurchased 3,300,000.0 shares at an average price per share of $5.78 for a total of approximately 18,800,000.0. This brings our total shares repurchased under this program to 5,900,000.0 shares at an average price of $5.51 for a total of approximately 32,500,000.0. We are encouraged by the momentum we've seen so far in the third quarter. Speaker 200:19:01The first two months, which historically accounted for the majority of third quarter revenue due to the summer box office slate and seasonal audience upticks are driving strong performance with book sales commitments pacing ahead of last year's third quarter results. We also continue to invest in our inventory forecasting capability to enable us to price and package our inventory more dynamically, delivering greater value to advertisers while helping us drive higher utilization. With improved planning tools, increased visibility into advertiser pacing and category demand, and continued investment in our strategic priorities, we are confident in our ability to deliver a stronger third quarter. With this said, we expect third quarter revenue to be between $62,000,000 and $67,000,000 reflecting improved advertiser commitment sustained theatrical strength. We anticipate adjusted OIBDA in the range of $7,500,000 to $11,500,000 supported by higher utilization, disciplined expense management, and improving market dynamics. Speaker 200:20:24As we look ahead, we are focused on disciplined execution of our strategic priorities from accelerating investment in programmatic and self serve to deepening advertiser relationships at both the national and local level. With a robust film slate on deck and signs of strengthening advertiser demand, we believe we are well positioned to drive improved performance in the back half of the year and lay the foundation for sustainable long term growth. Operator, please open the line for questions. Operator00:21:01We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Operator00:21:30Our first question is from Eric Wold with Texas Capital Securities. Please go ahead. Speaker 300:21:36Hey, good morning, Tom and Ronnie. Good afternoon. A couple of questions. I guess, first off, the midpoint of the revenue guidance for Q3 indicates an increase year over year even with expectation for box office and attendance to be down with a tough comp against last year, which clearly demonstrates your ability to drive ad share even in a tough environment. Yes, I know you're not giving full year guidance or Q4 guidance, but any reason to think this shouldn't continue through year end when this ad demand would be combined with a strong film slate and any potential for kind of year end ad budget flushes? Speaker 300:22:29And kind of on the last point, what are your thoughts around as you kind of dollars that kind of weren't spent maybe in the first part of the year and the second quarter around kind of uncertainty with tariffs and kind of where the economy was? What are you going to hear in your thoughts and kind of historically how that's kind of played out as you kind of move through the year and kind of how the dollars are kind of loosened up? Speaker 200:22:56Well, it's a good question. And it's exactly what to be focusing on. I think what we're seeing is a more relaxed amount of budgeting, which we didn't see in the middle of the tariff debate. And the pacing that we're seeing in the third quarter is very, very good compared to last year. So in my view, we've gotten at least a significant amount of confidence back related to what seemed to be a little bit of an issue in the second quarter. Speaker 200:23:34Granted, it was in very limited categories in the second quarter where that was happening. It was mostly government and automotive and CPG. But the third quarter doesn't seem to have had any impact for that. It's a little hard to say right now how the fourth quarter is shaping up. We know that there's obviously some great movies and we've got a lot of traction already in our pipeline on Wicked for Good and Avatar and some of the others. Speaker 200:24:03So I think barring any major tariff, what I would call issues or economic ones related to the tariffs, we're feeling pretty optimistic obviously about the third quarter and that momentum continuing into the fourth quarter. Speaker 300:24:22Got it. And then just last question. I know at the start of the year, I guess, on the fourth quarter call, you noted expectation for strategic investing this year around the sales team, marketing. But so far in the first quarter and the second quarter, selling, marketing and administrative have been flat to down and really haven't seen that play out. Is that should we expect that to be more back half weighted? Speaker 300:24:53Has that kind of been pushed out? Kind of what are your thoughts on how that's how should we think about that for this year now? Speaker 200:25:01So Eric, that's a great observation about how we're managing our expenses versus as the business is trending throughout the year. With that said, something that our team really focuses on is how we are monitoring our operating expenses, how we're investing into our team versus kind of what we're seeing in the current market. And we are investing into certain things that we called out earlier this year. Obviously, we're also trimming in some parts of the business that we find more efficiencies on and we're continuing to do that, right. So there's some offsets versus some of the investment and that's how we're continuing to invest into sales in the current environment. Speaker 300:25:54Got it. So we should expect things to improve in the back half of the year that maybe some of the stuff that wasn't spent in the first half of year maybe play out more Yes, in the back Speaker 200:26:05the way I would say is we're just going to have to see on the pace of the improvement to make that determination. So, we don't we obviously have a set plan, but quite frankly, we kind of change that plan as things play out. So, I wouldn't say it's definitely for sure that, you know, we're going to continue to invest. We're just going to have to see how the rest of the year continues to go. Speaker 300:26:36Perfect. Thank you both. Speaker 200:26:39You're welcome. The Operator00:26:41next question is from Mike Hickey with The Benchmark Company. Please go ahead. Speaker 400:26:47Hey, Tom, Ronnie, Chan. Thanks for taking our questions. Just the first one on your 3Q guide. Nice to see strength there, especially in a difficult box. Just curious, Ronnie, if any of that is sort of a spillover from 2Q, maybe some deals that got paused just because of the economic uncertainty or the loss in the tariff wash or if that's sort of a a clean Q3 in terms of what you're seeing in terms of demand that we could extrapolate into Q4 and beyond? Speaker 200:27:22Yes. I think those and what's embedded in our guide when we're looking at it and quite frankly, obviously the third quarter is really front half weighted, right. So really the majority of the revenues earned in July and August, not so much in September. What we've seen thus far in the business is mostly new business for the third. So that's I think what's actually the most promising part about it is it's not necessarily budgets being withheld for a very, very long time and then also you see a rush and that's why you see the upside in the third versus the prior year. Speaker 200:28:03These are a lot of brand new businesses that actually got placed specifically in the third quarter. Speaker 400:28:10Nice. Great to hear. Also nice to hear your programmatic looks like it's starting to get some traction here. Just curious, like, I think last quarter maybe it was 2% of your business. You look at the broader digital landscape thinking back to your Analyst Day, Tom, I think it was sort of like a normal 25%, 30% spend from the buyers. Speaker 400:28:38So it's an important piece of the puzzle that hadn't quite been, you know, polished and ready. And now it seems like it is. Just checking if that's true, why it's working now, and sort of what what feedback you're hearing from your media buyer partners in terms of utilizing programmatic moving forward? Speaker 200:28:57So starting at the most macro level, programmatic world, depending on what you're looking at in terms of a database, it can represent 50% to 60% to even 70% of an advertiser is open to buy dollars. So clearly investing in programmatic two years ago and rolling it out as rapidly as we can and continuing to roll out against all the platforms was a prudent idea. And I think most meaningfully is the percent of new buyers or new advertisers that we're getting out of programmatic is really significant. In fact, that's even higher than we had forecasted. So we can't give you a number just yet on where we are in programmatic. Speaker 200:29:42But I can tell you that all the metrics that we're looking at, particularly the new advertisers that are coming in, the increases quarter to quarter, and the strong adoption of the platform, buyer advertisers is really encouraging. And it's particularly, I think, gonna help on our self serve side on local as well. So we've been talking about programmatic on these calls for over two years. And it's certainly, I think, paying off the way we hoped it would. And I think it's going be even more significant, obviously, going into next year. Speaker 400:30:15Last question, can you sort of talk to us about maybe ways that you can think about increasing your visibility? Mean, Tom, when you look back on your business, you used to have a big upfront and, you know, that would pad, you know, if I remember right, maybe 60 to 70% of your revenue. And now just as digital is, I think, in general, you're seeing, you know, a larger mix to scatter and then you have disruptions on tariffs and economy. It just seems like it must be much more challenging for you guys to sort of guide your business that environment where buyers can sort of move in Speaker 400:30:57and out very quickly. So other ways that you see, Catherine, in your team in terms of trying to build better visibility with your media buyer partners in terms of steering the street and obviously your business as well? Speaker 200:31:14Yeah, I think that's a really important topic. And clearly when the upfront was a bigger part, not just of our business, but of everybody's business. There was, I would say, less face time involved because so much of the percentage of your buy was coming in advance and getting committed. What we've done is created an entire new business group in our sales team That's now exclusively charged with finding new business with new clients. And this team, is growing literally every quarter, their sole job is to get out and make sure that the new advertisers are aware of our platform. Speaker 200:31:55Our current team is much more responsible for going after our existing customers as well as for the advertisers. And we do a lot of big events. We sponsored the Cannes Lions fairly recently. Prior to that, we had a big event at Sundance. So I think the awareness levels are actually quite good. Speaker 200:32:17And I think the trust in the platform and the data metrics around it are very well known. We're obviously reinforcing those. And I think that's why we're having such a nice bounce back in Q3 as the pacing goes. So I can tell you, we're all advocates for this industry. It's what I spend a lot of my time on personally. Speaker 200:32:39There isn't a week that goes by where we're not advocating either directly to new clients or existing clients, making sure that cinema stays at the top of mind, particularly in light of the streaming guys becoming more and more significant. Speaker 400:32:56Thank you, guys. Good luck. Speaker 200:32:59You're welcome. Operator00:33:00The next question is from Alicia Reese with Wedbush Securities. Please go ahead. Speaker 500:33:06Hi, thanks. Hi, Tom. Hi, Ronnie. How are you guys doing? Speaker 200:33:11Hi, Thank you for participating in the call. Speaker 500:33:14Yes, thanks for taking my questions. I have a few actually. So I wanted to start by asking regarding third quarter guidance. What is baked into that in terms of CPMs either year over year or sequential decline flat versus utilization expectations? Can you share that with us? Speaker 200:33:36Yes, sure. So for the third quarter, obviously, you look at the middle of the guide, we are pointing to a year on year improvement versus last year in terms of total revenue. The attendance, I think, if you look at estimates out there, it looks to be down for the third quarter. So, are expecting improved utilization on a year on year basis and also CPMs to be relatively stable on a year on year basis. We've seen definitely better utilization thus far for the quarter in particular, obviously here in the July month that's passed. Speaker 200:34:25So that's what's baked into the guide in terms of the KPIs. Speaker 500:34:32Thanks. And the inventory forecasting capabilities you're talking about seeking to improve, is that going to require significant investment or is that relatively light investment and the result of that presumably is just better utilization, such that when CPMs eventually improve coming out of the current tariff situation, we would assume that that could drive some nice revenue gains perhaps. Can you give us a little more color on Yeah, so those Speaker 200:35:06on that, it's actually that tool specifically is actually part of the number of things that we highlighted in our Investor Day and also in the beginning of the year in terms of CapEx related investments. So it is we're not done with that yet, by the way. So we're still working to implement that system into our existing system, which is a little bit complicated. So we're not getting the full benefit of it right now. So I think that's still to come. Speaker 200:35:39And once we do that, it's really finding or improving utilization in seasonally slower months, right? Because that's actually the harder part. So I would suspect it's definitely for us by doing this, it's really a play on improving utilization, increasing ad loads really throughout the year is the biggest lever. Speaker 500:36:08Perfect. Yeah. That sounds great. Lastly, I wanted to ask about the local market expansion opportunity with the bullseye AI tech. A comment you made in your prepared remarks suggested that there's additional investment that could be made to expand that, or perhaps it's just a big push in that. Speaker 500:36:33So I'm curious, do you need to expand the tech there, expand the sales personnel, or is that just a sales push across the addressable market to really ramp that up? Speaker 200:36:45So it's a combination of all those things. It's not a direct heavy investment, really. We have found resources that have allowed us to do this kind of personalization at a very efficient rate. There is clearly an education involved with our sales team that we have the capability of doing significant personalization of advertising and localizing it. Pushing out nearly 300 ads in a really short time period for our clients who had given us the order a week before was something we couldn't have done without technology and without the help of AI. Speaker 200:37:28So it is a transition and a change for our sales team, particularly locally, to be able to have the skill set and the understanding of what we're capable of. But there's nothing like having a case study. In this case study, we executed on that, something we hadn't done before. And then the client was so pleased they renewed literally the following week. So that type of program is getting literally pushed out to all of our local people. Speaker 200:37:59And they're excited about it. And I'm sure we'll get more business out of it from our local advertisers. Speaker 500:38:05Yeah, seems like you're really early innings on a pretty exciting opportunity there. Speaker 200:38:10We're really happy about it. I mean, we're truly ahead of the curve, even compared to definitely compared to the traditional media companies. But what we're doing innovating, particularly at scale in a movie theater environment with that kind of personalization using automation is sort of a first of its kind. So we're quite proud of that. Honestly, it's a testament to our team, particularly the sales team and our team that does all of our analytics and strategic work around that, that they've really been staying on top of this. Speaker 200:38:46And it's paid out. So we're happy about it. Operator00:38:55The next question is from Patrick Scholl with Barrington Research. Please go ahead. Speaker 600:39:01Hi, thanks for taking the question. Kind of want Speaker 200:39:04to follow-up about the comment that you Speaker 600:39:06had about, you know, being mindful of CTV. Was just curious, you know, as Speaker 200:39:11ad supported plans have become more popular with that, Speaker 600:39:15to what extent is that impacting either you you see that impacting your utilization or CPMs and that not having as, I guess, a unique footprint in terms of reaching the younger audiences? Speaker 200:39:30Are you can you you were talking about CTV at the beginning, it kind of broke up for a second, Pat. Is that what you were referencing? Is that what you said at the top of it? Speaker 600:39:39Yeah, I'm sorry. Yeah, just maybe can you talk about like, just as the ad supported plans for the CTV services have increased popularity, what you're sort of seeing just in terms of your CPMs and utilization in Yeah, the Speaker 200:39:56so I think, you know, CTV is only one competitive bucket that we're competing in. And obviously we're focused on that as one that's a growing bucket. And it's a relatively younger demo, but it's not as young as our demo. So we're more than anything looking at watching and participating in that transition. And we're building out another programmatic platform that specifically addresses our ability to deliver within that CTV world. Speaker 200:40:30So far, it's hard honestly to measure a specific category impacting our platform. But more than anything, we've had our eye on CTV. We want to be able to compete programmatically in the CTV space. So we are going to be on those kinds of platforms in the very near future. Speaker 600:40:53Okay, thank you. Speaker 300:40:55All right. Operator00:40:57This concludes our question and answer session. I would like to turn the conference back over to Tom Lisinski for any closing remarks. Speaker 200:41:05Okay. Thank you for joining us today. We appreciate it. We are continuing to take decisive steps to adapt to this changing marketplace, including investing in our operations, deepening our client relationships, and strengthening, of course, the overall core business. The box office is showing real signs of vitality, and we're now seeing that momentum reflected in increased advertiser engagement. Speaker 200:41:30What gives us confidence is not just where we're headed, but how we're getting there with discipline, agility, and a clear strategy for the future growth. So we are grateful for your ongoing support and we look forward to seeing you again soon at the movies. Thank you. Operator00:41:46The conference has now concluded. Thank you for attending today's presentation. You may nowRead morePowered by