Cineplex Q1 2026 Earnings Report

Cineplex EPS Results

• Actual EPS: -C$0.36
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Cineplex Revenue Results

• Actual Revenue: $290.98 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Cineplex Announcement Details

• Quarter: Q1 2026
• Date: 5/11/2026
• Time: Before Market Opens
• Conference Call Date: Monday, May 11, 2026
• Conference Call Time: 10:00AM ET

Cineplex (TSE:CGX) is a diversified media company that operates chains of movie theaters. The company has four reporting segments: film entertainment and content; media; amusement and leisure; and location-based entertainment. The film entertainment and content segment includes revenue from theater attendance. The media segment includes cinema media and digital place-based media operations. The amusement and leisure reporting segment manages the operation and distribution of gaming and vending equipment. Formerly housed in the amusement and leisure segment, the location-based entertainment business derives revenue from entertainment restaurant chains like The Rec Room and Playdium. The film entertainment and content segment generates most of its revenue from audiences located entirely in Canada.

Cineplex Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Cineplex delivered its strongest Q1 since 2019 with attendance up 17.3% to 9.8 million, total revenue of CAD 291 million (+15.6%) and consolidated adjusted EBITDA of CAD 4.1 million versus a CAD 10.7 million loss a year earlier.
• Positive Sentiment: Premium formats and higher per‑patron spending drove results — box office per patron reached a Q1 record of CAD 12.94, premium formats were 38.2% of box office, and Cineplex notably over‑indexed on international releases (e.g., >30% share of Dhurandhar’s North American box office).
• Negative Sentiment: Cineplex Media lagged, with revenue down 18.9% to CAD 13.9 million and media adjusted EBITDA falling to CAD 9.6 million, citing Olympics-related ad diversion and a tough year‑ago pharma comparison that may pressure near‑term advertising revenue.
• Positive Sentiment: Liquidity and capital priorities strengthened — the company ended Q1 with CAD 77.9 million cash, no drawings on its CAD 100M RCF, extended bank credit maturities to 2028/29, repurchased ~CAD 5M of shares, and reaffirmed ~CAD 50M FY capex guidance while prioritizing debt reduction and shareholder returns.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Cineplex first quarter 2026 earnings call. I'd now like to hand the conference over to Rayhan Azmat, Vice President, Investor Relations. Please go ahead.

[Rayhan Azmat, VP of Investor Relations at Cineplex]

Good morning, everyone. I would like to welcome you to Cineplex's first quarter 2026 earnings release conference call. I'm Rayhan Azmat, Vice President, Investor Relations, Corporate Development, and Financial Planning and Analysis at Cineplex. Joining me today are Ellis Jacob, our President and Chief Executive Officer, and Gord Nelson, our Chief Financial Officer. I'll remind you that certain statements being made are forward-looking and subject to various risks and uncertainties. Such forward-looking statements are based on management's beliefs and assumptions regarding information currently available. Actual results may differ materially from those expressed in forward-looking statements. Information regarding factors that could cause results to vary can be found in the company's most recently filed annual information form and management discussion and analysis. Following today's remarks, we will close the call with our customary question-and-answer period. I will now turn the call over to Ellis Jacob.

[Ellis Jacob, President and CEO at Cineplex]

Thank you, Rayhan, good morning, everyone. I'm pleased to join you today to discuss Cineplex's first quarter 2026 results. The first quarter of 2026 built on the momentum we've been seeing across the industry and our business, with attendance and box office increasing meaningfully year-over-year. We delivered our highest first quarter revenue since 2019. Our Q1 box office reached 125% of the prior with record Q1 results across several key operating metrics. More importantly, the performance we saw in Q1 reinforces what we have long known to be true. When there is quality, consistency, and breadth in the film slate, theatrical doesn't just perform well, it creates unforgettable moments that bring Canadians together. Before I speak to our strong first quarter results, I'd like to talk about the tremendous energy coming out of CinemaCon.

[Ellis Jacob, President and CEO at Cineplex]

This year's event reinforced the strength of what's ahead with strong early reactions for several high-profile upcoming releases, including Toy Story 5, Christopher Nolan's The Odyssey, Spider-Man: Brand New Day, Dune: Part Three, and Avengers: Doomsday. I haven't experienced this level of buzz coming out of CinemaCon in years. The presentations this year amplified the excitement surrounding these highly anticipated releases and the breadth and quality of the content for 2026 and beyond. Just as importantly, CinemaCon reinforced the industry's long-term commitment to the theatrical business. Amazon MGM reaffirmed its plans to theatrically release at least 15 films per year, making it clear that theatrical is not just an experiment but a core part of its strategy.

[Ellis Jacob, President and CEO at Cineplex]

We also saw continued support for meaningful exclusive theatrical windows with studios such as Universal and Paramount reaffirming windows of at least 45 days, joining Sony and Disney, whose films already extend beyond that threshold. Amazon MGM further demonstrated its commitment to longer windows by delaying the streaming release of Project Hail Mary. In addition, David Ellison outlined plans for up to 30 theatrical releases per year should the proposed Warner Bros. and Paramount transaction receive regulatory approval. While that process remains ongoing, the emphasis on theatrical output reflects the broader recognition of its importance in the life cycle of a film. Taken together, these developments reinforce the confidence studios have in the theatrical release being foundational to a film's success designed to create scale, impact, and cultural relevance.

[Ellis Jacob, President and CEO at Cineplex]

That positioning aligns well with Cineplex's strengths from our focus on hospitality and community building that brings audiences together to our extensive premium format offerings that elevate the theatrical experience. Recently, Netflix announced that the upcoming Narnia film will now receive a wide release with a 49-day exclusive theatrical window in 2027 instead of only a limited release in IMAX screens. Non-traditional studios continue to expand their theatrical involvement as they increasingly recognize the benefits a theatrical release can have in elevating awareness and long-term performance. Finally, new agreements with both the Writers Guild and the Screen Actors Guild have resolved any uncertainty around labor negotiations. While the industry was not anticipating further disruptions, these agreements provide greater clarity and stability into the production pipeline as we look forward. The first quarter of 2026 featured a diverse slate with strength across original, franchise, and international programming.

[Ellis Jacob, President and CEO at Cineplex]

Five films generated more than CAD 100 million in domestic box office during the quarter compared to two films in the first quarter of the prior year. This performance reflects the breadth of the slate with films resonating across genres and demographics, and the importance a steady theatrical pipeline plays in solidifying moviegoing as a recurring entertainment choice. Original films played a particularly important role in Q1. Project Hail Mary delivered an outstanding performance and has become the highest grossing Amazon MGM release of all time and the studio's first film to surpass CAD 300 million in domestic box office, a notable achievement for a non-traditional studio. The film resonated strongly with our guests, with approximately 2/3 of its Q1 box office generated from premium experiences and Cineplex over-indexing significantly versus the U.S., capturing almost 10% of total domestic revenue.

[Ellis Jacob, President and CEO at Cineplex]

Pixar's Hoppers achieved the studio's biggest opening for original titles since 2017, and along with GOAT, highlighted strong audience appetite for fresh storytelling in animated family films on the big screen. The strength in original storytelling was complemented by continuing demand for franchise films. Scream 7 set new records for the franchise, becoming both the largest opening and highest grossing film in the series, underscoring the appeal of established intellectual property. 30% of our first quarter box office was generated from films released in 2025, including franchise titles such as Avatar: Fire and Ash and Zootopia 2, highlighting the value of extended theatrical runs. International programming continues to be a distinct strength for Cineplex, representing approximately 13% of our first quarter box office, more than double the domestic average.

[Ellis Jacob, President and CEO at Cineplex]

Dhurandhar: The Revenge became the highest grossing Hindi language film in North American history and the first to surpass CAD 25 million domestically, with Cineplex capturing more than 30% of the film's total box office. While Dhurandhar: The Revenge was a standout film, it represents less than half of our international box office in the first quarter. That outcome reflects both the breadth of international content we curate and our ability to use data and analytics to understand where films will perform best and how to connect them with the right audiences. These capabilities allow us to consistently over-index on international releases. Guest demand for premium experiences remains a critical differentiator for Cineplex, and we saw that demand strengthen year-over-year in the first quarter. By offering a broad range of premium formats that align with how guests want to experience films, we translated those preferences into record financial performance.

[Ellis Jacob, President and CEO at Cineplex]

Box office per patron reached a first quarter record of CAD 12.94, while concession per patron also delivered a Q1 record of CAD 9.54. Turning to our media, our first quarter results reflected the expected impact of the Olympics, which temporarily diverted advertising spend towards live sporting events. The tough year-over-year comparison also reflects particularly strong pharmaceutical spending in the prior year. Despite that dynamic, our cinemas remain a high-attention premium environment for advertisers. As we look ahead to the remainder of 2026, a strong film slate provides a backdrop for advertiser demand. We are encouraged by the opportunities we see in the balance of the year. Our location-based entertainment delivered store-level margins at our targeted 25% despite the broader macroeconomic pressures facing the industry that have contributed to a year-over-year decline in revenues.

[Ellis Jacob, President and CEO at Cineplex]

This performance emphasizes our focus on optimizing operations. Looking ahead, we see a number of opportunities to drive increased traffic and engagement. The FIFA World Cup is expected to bring meaningful demand into our locations in the summer. In June of 2026, we'll be opening a new Playdium location at Vaughan Mills, one of Canada's most highly visited retail destinations. We are also continuing to enhance the guest experience through increased convenience and digital engagement. Alongside our mobile ordering capabilities, we recently expanded our offerings with the launch of our online merchandise shop, giving guests more ways to buy exclusive merchandise for the films they love. Our CineClub memberships surpassed 230,000 members at the end of March, with members showing higher visit frequency, stronger premium adoption, and increased spending per visit.

[Ellis Jacob, President and CEO at Cineplex]

We also continue to evolve the guest experience through initiatives such as Monday Surprise Premieres, which continues to be well-received and helps create moments of exclusivity and discovery. Alongside programs such as $5 Tuesdays, these initiatives play an important role in driving attendance and frequency and are particularly effective at re-engaging lapsed moviegoers. By bringing guests back into the theatrical environment, we help restart the moviegoing cycle from experiencing trailers and upcoming films on the big screen to ongoing communication that builds awareness and supports increased visitation. Within our broader loyalty ecosystem, Tangerine and Shell joined the Scene+ program in Q1, expanding the program's everyday relevance to 15 million members. Following a successful launch in Alberta during the first quarter, the Shell partnership will roll out nationwide in May.

[Ellis Jacob, President and CEO at Cineplex]

Tangerine has also recently launched a new credit card that allows customers to earn and redeem Scene+ points, further extending the program into everyday financial services. With the ability to earn and redeem points across groceries, entertainment, dining, travel, and now fuel, Scene+ continues to create more touch points in the day-to-day lives of Canadians. I'd also like to provide a brief update on the online booking fee. The Federal Court of Appeal upheld the Competition Tribunal's decision regarding the presentation of our online booking fee. We respectfully disagree with that decision and continue to believe the fee has always been presented clearly.

[Ellis Jacob, President and CEO at Cineplex]

We have filed an application for leave to appeal to the Supreme Court of Canada and have been granted an interim stay regarding a payment of the administrative warranty penalty and penalty and costs, pending the Supreme Court of Canada's decision on Cineplex's application seeking leave to appeal. Looking forward, as we look ahead, momentum from the first quarter has clearly carried into the second quarter. The Super Mario Galaxy Movie delivered the largest opening of the year so far and the highest grossing Easter weekend in Cineplex history, reinforcing the power theatrical plays in creating cultural moments. From March 1st through the end of the Easter weekend, Cineplex operated nine of the top 20 grossing theaters domestically, reflecting the appeal of our premium formats, the quality of our circuit, and our strong operational execution.

[Ellis Jacob, President and CEO at Cineplex]

The second quarter has also benefited from the release of Michael, which has achieved the biggest opening for a biopic and Lionsgate biggest opening since 2015, marking another important chapter for Cineplex Pictures, which is distributing the film in Canada. More broadly, 2026 is shaping out to be a strong year for our distribution business with momentum building from the continued performance of The Housemaid, a late 2025 release that generated meaningful box office in the first quarter, the release of Michael in Q2, and looking ahead to The Hunger Games: Sunrise on the Reaping later this year. Together, these films reflect the growing scale of Cineplex Pictures and our ability to consistently connect titles with Canadian audiences.

[Ellis Jacob, President and CEO at Cineplex]

Capitalizing on the success of The Super Mario Galaxy Movie and Michael, our April box office increased 17% over the prior year, driven by the strength of the slate alongside our ability to create compelling premium environments in which audiences choose to experience these films. More recently, The Devil Wears Prada 2 delivered a record-breaking opening weekend well ahead of the original film, reinforcing the strength of adult-skewed event-driven content. This momentum carried through to this past weekend, one of the strongest domestic box office periods in recent years. Notably, it marks just the third weekend since 2019 where three films each generated over CAD 30 million of box office, with Mortal Kombat 2 opening strongly with Michael and The Devil Wears Prada 2 continuing to perform.

[Ellis Jacob, President and CEO at Cineplex]

Driven by the strength of the slate alongside our ability to create compelling premium environments in which audiences choose to experience these films, our second quarter box office to date is up 23% over the prior. The remainder of 2026 continues to shape out, up as one of the most compelling film slates we've seen in years, defined by depth and diversity across multiple categories. Family audiences will be well-served with a strong lineup that includes Toy Story 5, Minions and Monsters, a live-action Moana, and Jumanji: Open World. The superhero universe is also featured prominently with highly anticipated releases including Supergirl, Spider-Man: Brand New Day, already the most-watched thriller of all time, Clayface, and Avengers: Doomsday. Original storytelling remains an important driver with titles such as Steven Spielberg's Disclosure Day, Christopher Nolan's epic The Odyssey, Viggo starring Tom Cruise, and Pixar's Hex offering fresh content.

[Ellis Jacob, President and CEO at Cineplex]

Beyond that, a wide range of established IP round out the slate from sci-fi films Star Wars: The Mandalorian & Grogu and Dune: Part Three to the comedy Father-in-Law. With this breadth across genres and a continued focus on the guest experience. We believe Cineplex is well positioned to capture the full value of a strengthening theatrical landscape. I will now turn the call over to Gord Nelson, our Chief Financial Officer, to walk through the financials in more detail.

[Gord Nelson, CFO at Cineplex]

Thanks, Ellis. I am pleased to present a condensed summary of the first quarter 2026 results for Cineplex Inc. For further reference, our financial statements and MD&A have been filed on SEDAR+ and are also available on our investor relations website at cineplex.com. Our MD&A and earnings press release include a complete narrative on the operational results. I will focus on highlighting select items in addition to providing commentary on liquidity, capital allocation priorities, and our outlook. For my comments on operations, all amounts following will be from continuing operations unless otherwise stated. The first quarter reflected a meaningful improvement in performance compared to the prior year, driven by a stronger film slate and higher attendance, partially offset by continued macroeconomic pressure in certain non-theatrical businesses.

[Gord Nelson, CFO at Cineplex]

Total revenues for the quarter were CAD 291 million, an increase of 15.6% from CAD 251.7 million in Q1 2025, primarily driven by a 17.3% increase in theater attendance to 9.8 million guests. Our consolidated adjusted EBITDA for the quarter was CAD 4.1 million compared to a loss of CAD 10.7 million in the prior year. This improvement reflects higher attendance and strength in per patron metrics. Let's take a closer look at the segments. In the film entertainment and content segment, box office revenue increased 25% year-over-year to CAD 127.4 million, supported by the 17.3% increase in attendance and a higher mix of premium products.

[Gord Nelson, CFO at Cineplex]

Attendance increased by 1.5 million guests, reflecting improved content breadth versus prior year, with strong contributions from titles such as Project Hail Mary, Hoppers, Dhurandhar: The Revenge, and GOAT, as well as extended theatrical runs from 2025 films Avatar: Fire and Ash and Zootopia 2. March, in particular, represented a material step up in performance, culminating in our strongest first quarter box office since 2019. Box office revenue per patron increased to a first quarter record of CAD 12.94, up 6.6% from the prior year, driven by strategic pricing initiatives, film mix, and an increase in revenue from premium formats, which accounted for 38.2% of box office revenue, up from 35.6% last year.

[Gord Nelson, CFO at Cineplex]

Theater food service increased 22.5% to CAD 93.9 million, reflecting the increase in attendance and purchase incidents. Concession revenue per patron reached a first quarter record of CAD 9.54, an increase of 4.5% year-over-year. Other revenue increased 22.2% year-over-year, reflecting increased attendance as well as a stronger quarter from our distribution business. Results from Cineplex Pictures benefited from the continued performance of The Housemaid, which was released late in 2025 and contributed meaningfully during the first quarter. The increase in attendance over the prior year highlights our operating leverage.

[Gord Nelson, CFO at Cineplex]

While theater payroll and theater operating expenses increased year-over-year, growth in these costs remained well below the rate of growth in attendance and revenue, reflecting the largely fixed nature of our costs and the benefit each incremental attendee brings to our [extra] exhibition business. Cash rent paid and payable is lower relative to the prior year due to closed locations and the renegotiation of leases upon renewal. Other occupancy costs increased by approximately CAD 0.8 million over the prior year, primarily due to increased common area maintenance and real estate tax expenses. Segment adjusted EBITDA for film entertainment and content was CAD 8.9 million, representing a significant improvement compared to a loss of CAD 12.4 million in the prior year, driven by attendance recovery and per patron growth.

[Gord Nelson, CFO at Cineplex]

In the media segment, revenues declined 18.9% year-over-year to CAD 13.9 million. This performance reflects lower demand for in-theater advertising, driven by the diversion of spend toward the 2026 Winter Olympics and a tougher year-over-year comparison following significantly higher pharmaceutical advertising spend in the prior year. Cinema media per patron declined to CAD 1.41 compared to CAD 2.04 in the prior year, reflecting the decreased demand despite higher attendance during the period. Adjusted EBITDA for the media segment was CAD 9.6 million compared to CAD 12.9 million in the prior year, reflecting lower revenues during the quarter. Location-based entertainment revenues for the quarter were CAD 35 million, a decrease of 8.1% year-over-year.

[Gord Nelson, CFO at Cineplex]

Same-store revenues excluding the 2024 new builds were down 5.6%, which aligns closer to the declines we are seeing in the industry as a result of the broader economic headwinds. Despite this, adjusted store-level EBITDA margin declined modestly and remained at our targeted 25%, supported by labor optimization and operating efficiencies. Notably, our same store, excluding 2024 new builds, the adjusted store level EBITDA margin was 27.8%. Adjusted store level EBITDA decreased to CAD 8.8 million compared to CAD 9.8 million in the prior year, primarily due to lower revenues partially offset by cost controls.

[Gord Nelson, CFO at Cineplex]

At the segment level, despite the revenue decline, adjusted EBITDA was only down slightly at CAD 7.2 million versus CAD 7.7 million in the prior year, and the segment adjusted EBITDA margin increased modestly to 20.7% from 20.2% in the prior year, highlighting the operational efficiencies we've implemented at the segment overhead level. G&A expenses for the quarter were CAD 21.6 million, an increase from CAD 18.9 million in the prior year. The increase is primarily due to timing of recognition of LTIP expenses for retirement-eligible employees and increased LTIP costs from an increase in Cineplex's common share price, partially offset by lower costs in other G&A expense categories.

[Gord Nelson, CFO at Cineplex]

We ended the first quarter with CAD 77.9 million of cash on the balance sheet and no drawings under our CAD 100 million covenant-lite revolving credit facility. During the quarter, we completed an amendment to extend the maturity of our bank credits agreement to September 2028 or March 2029, depending on the status of our secured notes. The extension preserves the covenant-lite structure but does not contain financial maintenance covenants. The amendment provides flexibility with respect to permitted distributions and debt repayments, strengthening our liquidity profile and financial flexibility. Net capital expenditures for the quarter were CAD 6.7 million, reflecting a spend of approximately CAD 3 million related to our Playdium location opening at Vaughan Mills in the summer.

[Gord Nelson, CFO at Cineplex]

The decline in capital expenditures relative to the prior year is primarily due to the timing of cash payments, with Q1 of the prior year being elevated due to the three LBE locations that opened in the fourth quarter of 2024. Our guidance for the year continues at approximately CAD 50 million. Our capital allocation priorities remain unchanged and include maintenance capital expenditures, strengthening the balance sheet to achieve our target leverage ratios, providing shareholder returns in the form of share buybacks and or dividends, and selective investment in growth opportunities. During the first quarter, we repurchased approximately CAD 5 million in common shares for cancellation under our normal course issuer bid. We continue to view share repurchases as a flexible tool within our capital allocation framework, subject to liquidity and restrictions under our debt agreements and market conditions.

[Gord Nelson, CFO at Cineplex]

In light of ongoing global and economic uncertainty, we continue to monitor potential impacts to our business. We do not expect these conditions to have a material effect on Cineplex's operations. Our business is not meaningfully exposed to fuel-related costs, and the majority of goods sold across our circuit are sourced from North America, limiting exposure to supply chain disruption. As a result, we do not anticipate any material impact to operating performance or liquidity. Before concluding, I would like to take a moment to recognize Ellis Jacob. At CinemaCon last month, Ellis was named the recipient of the Legend of Cinema Award, one of the highest honors in the global exhibition industry. This recognition speaks not only to his decades of leadership at Cineplex, but also to his lasting impact on theatrical exhibition worldwide. On behalf of the entire Cineplex team, congratulations, Ellis, on this very well-deserved honor.

[Gord Nelson, CFO at Cineplex]

Building on the momentum from the first quarter, industry excitement following CinemaCon is the highest we have seen in years. This sentiment reflects recent successes and the breadth and consistency of the 2026 film slate and positions us well for the remainder of the year. We expect this increased depth of content to support continued attendance momentum throughout 2026. At the same time, we remain focused on disciplined capital management, strengthening our financial flexibility, and executing against our long-term strategic priorities. With that, I will turn it back to the operator for questions.

[Operator]

On your touch-tone phone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from Adam Shine with National Bank.

[Adam Shine, Analyst at National Bank]

Hello.

[Gord Nelson, CFO at Cineplex]

Morning, Adam.

[Ellis Jacob, President and CEO at Cineplex]

Morning, Adam.

[Adam Shine, Analyst at National Bank]

Hi. Good morning. I'm not sure I was hearing anything. Okay, I can hear you now, so that's great. A couple of questions. One for you, Ellis. Just, you know, coming out of CinemaCon, a lot of positives. You had highlighted, I think, going into it that you had hoped to see the studios maybe step up some of their marketing going forward. Maybe you could just talk to whether, you know, there are any commitments related to that.

[Adam Shine, Analyst at National Bank]

Then for Gord Nelson, and you, Ellis Jacob, as well, just in the context of media, very clear as to what transpired in the Q1, maybe talk about how things are going so far into Q2 and any particular concerns heading into, you know, the FIFA World Cup months and whether, you know, we might see a repeat of the Olympics dynamic or perhaps not. Thanks.

[Ellis Jacob, President and CEO at Cineplex]

In response regarding CinemaCon and the area of promotion and media, we are really working very hard and well with the studios in using the data and basically being able to attract our guests in a big way back to the movie that they are releasing across the next four quarters and into 2027. I think that's been a real positive. Given the window making it longer also is beneficial overall because you're getting a longer period of time for these films to play through. You look at a movie like The Devil Wears Prada and how well it's done, and it was pretty tough to get a movie ticket on the weekend to see that movie. Those are all positives for us going forward. We are excited about both the slate and the ability to push the movies in a big way.

[Gord Nelson, CFO at Cineplex]

On the second question then on media then, Adam. A couple callouts on media. You know, last year was an incredibly strong year for the media business. If you actually went back to 2024, we had, you know, we actually had the same attendance levels in the first quarter of 2024, and our media revenue is up 12% versus that quarter. We were down CAD 3.2 million versus last year, as we noted. Roughly CAD 2.2 million of that was related to kind of reduced spend from pharma. You know, the extra color on pharma for your interest is that, you know, a number of the weight loss drugs had their patents expiring at the end of 2025.

[Gord Nelson, CFO at Cineplex]

There was significant spending throughout 2025, and particularly in the first quarter, to get their brand awareness out there. Yes, the Olympics had a little bit of an impact. We do not foresee that the FIFA will have the same level of impact in our business as the Olympics had, you know, as we look to take advantage of FIFA in our LBE locations, and then kind of just sort of general excitement around it occurring in Canada.

[Adam Shine, Analyst at National Bank]

Thank you. Just thanks for that, Ellis and Gord. Gord, can you just elaborate a little bit further as to how the early trend is so far for media into Q2?

[Gord Nelson, CFO at Cineplex]

We continue to see strength. I would say if you look at sort of the remainder of the year, you know, Ellis has highlighted, you know, strength of the product. Adam, I think you're aware of sort of some of the domestic box office predictions out there. General economic conditions are, you know, obviously tougher. Overall advertising spend was down in Q1 in Canada, so not just for Cineplex. If we see attendance growth in the remainder of the year, we would expect that our media business should grow in relation to that attendance growth.

[Adam Shine, Analyst at National Bank]

Great. I'll queue up again. Thank you very much.

[Ellis Jacob, President and CEO at Cineplex]

Thank you.

[Operator]

As a reminder, to ask a question, please press star one one. Our next question comes from Cheryl Zhang with TD Cowen.

[Cheryl Zhang, Analyst at TD Cowen]

Hey, good morning, Ellis and Gord. Thanks for taking our questions, and congratulations, Ellis, on the well-deserved recognition.

[Ellis Jacob, President and CEO at Cineplex]

Thank you very much.

[Cheryl Zhang, Analyst at TD Cowen]

First question is on CPP. You called out higher purchase incidents as the main driver of growth. Can you provide some color around what's driving that and what you're seeing in terms of consumer purchasing behavior?

[Ellis Jacob, President and CEO at Cineplex]

Yeah. Cheryl, you know, the one thing that we've always found is theatrical exhibition is very resilient to general economic conditions. When customers come out, they want an indulgence, and they want to spend both in buying a ticket and also at the concession stand. When I look at the CPP being up roughly 4.5% in the first quarter, approximately 3.25% of that is pricing, and the remainder is sort of the basket size and the incidence of purchase at the concession stand.

[Ellis Jacob, President and CEO at Cineplex]

Guests feel like they wanna come out, and they wanna spend, and they wanna buy and have their total experience when they come out. As economic conditions get tougher, they stay closer to home, and the movie theater becomes a great entertainment option, and it's very, very important that we provide them with the choices.

[Cheryl Zhang, Analyst at TD Cowen]

Absolutely. That's great color. Thank you. On LBE, were there any changes in consumer behavior in Q1 versus Q4? I guess, how has the trend so far in Q2? Then maybe just to follow up on that, you mentioned that there were initiatives that helped improve operating efficiency there. I wonder if you could provide some color around that.

[Gord Nelson, CFO at Cineplex]

Sure. I mean, the trends that we were seeing in Q1 are just really a continuation of some of the consumer trends that we've seen throughout 2025. Particularly the one that's most noticeable across not only our business but, you know, the restaurant sector and just general, the spirits beverage in general is reduced consumption of alcoholic beverages across Canada and the U.S. We're continuing to see spend in alcohol decrease. That's one trend that we can continue to see. Obviously, with economic conditions too and the cost of fuels, we're seeing, you know, a little bit of a spend. It's a bit more of a discretionary spend in the LBE business.

[Cheryl Zhang, Analyst at TD Cowen]

Thank you.

[Gord Nelson, CFO at Cineplex]

I'm sorry. In terms of. In terms of efficiencies and operating costs, obviously we've looked at kind of where spending is going and we've managed and looked at the tools that we have in place, and the systems in place to better optimize the Labor scheduling in our boxes. We've been able to kinda optimize our scheduling in relation to the business levels that we're seeing through. Whether that means the business levels at the bar versus the business levels, you know, of the amusement side of things.

[Cheryl Zhang, Analyst at TD Cowen]

Okay. That's helpful. Thanks so much, I will queue.

[Gord Nelson, CFO at Cineplex]

Thank you.

[Operator]

That concludes today's question and answer session. I'd like to turn the call back to Ellis Jacob for closing remarks.

[Ellis Jacob, President and CEO at Cineplex]

Thank you all again for joining us this morning. We are excited for the remainder of 2026 and beyond, and look forward to seeing you at our venues. Have a great day and a wonderful week. We got any other questions? Sarah, are you gonna double check and confirm that there are no further questions?

[Operator]

We do have a follow-up from Cheryl Zhang with TD Cowen. Your line is now open.

[Cheryl Zhang, Analyst at TD Cowen]

Hello?

[Ellis Jacob, President and CEO at Cineplex]

Hi, Cheryl.

[Cheryl Zhang, Analyst at TD Cowen]

Oh, okay, great. Wasn't sure I was still connected. Yeah, just quickly maybe, recently, there was a media report on you exploring a potential sale. I'm curious if you have any thoughts on that and any thoughts on the potential strategic review.

[Ellis Jacob, President and CEO at Cineplex]

You know, there's a lot of discussions out there, but we don't really comment on rumors. Our focus now is to strengthen the company, the balance sheet, and enjoy the product as we move forward through the 2026 and 2027 year.

[Cheryl Zhang, Analyst at TD Cowen]

Okay. Understood. Thank you.

[Ellis Jacob, President and CEO at Cineplex]

Thank you.

[Operator]

As a reminder, that is star one one if you'd like to ask a question at this time. I'm showing no further questions in queue. Please press star one one to ask a question. We have a question from the line of Maher Yaghi with Scotiabank.

[Maher Yaghi, Analyst at Scotiabank]

Great. Thank you. Been trying to get on the call. Perfect. Thanks for taking my question. I wanted to ask you know, there I've been hearing industry discussions suggesting theatrical windows may be stabilizing or lengthening. You know, are you seeing? Can you confirm that and, you know, maybe some discussion about the premium mix that you're seeing in your theaters?

[Ellis Jacob, President and CEO at Cineplex]

Yeah, great question. Definitely we are seeing the benefits of the lengthening window. You look at a movie like Project Hail Mary with Amazon extending the timeframe before it goes to streaming, and it's doing extremely well in the theater. It also helps us reduce consumer confusion, because now you know you're not gonna be able to just turn your TV on and see the movie. That really helps, and it's getting stronger as we move forward. As we've always said, we are really the engine that drives the train for the theatrical and the future of the title and its benefits through the other different portfolios.

[Maher Yaghi, Analyst at Scotiabank]

Ellis, are you seeing it across the board, these kind of moves? You know, because in the past, that was a worry for investors, I guess. Are you seeing that lengthening happening across different studios or it's still specific to certain producers?

[Ellis Jacob, President and CEO at Cineplex]

No, at CinemaCon, we got some definitive, you know, lengthening of the windows. Universal talked about it publicly and so did Paramount, which was extremely beneficial, and Sony and Disney are already beyond those dates. Overall, you don't have, you know, too many companies not following that policy. With Netflix and Narnia, they are even coming forward, which is very positive overall when you have the biggest streamer moving forward with the lengthening distribution. To me, it's all very positive and it continues to, you know, justify the fact for studios that the theatrical release is very important for the future of the product.

[Maher Yaghi, Analyst at Scotiabank]

That's great to hear. Okay, my second question, it's on the premium mix again, like just going back. You know, with yields rising, can you talk a little bit about the premium mix? What are you seeing in terms of price elasticity? Any evidence of trade downs in Canada yet or demand is still resilient?

[Ellis Jacob, President and CEO at Cineplex]

No, demand is very strong with the premium experiences. What is, what we see in a lot of cases is guests are seeing the movie more than once, and they are going to different premium experiences to watch the films. To me, that continues to be beneficial. They don't, you know, push back on the pricing because they feel that it's a special experience that they cannot replicate. To me, we in North America have one of the highest percentages of premium experiences. It's a much bigger differentiator from sitting home and watching it on your TV with your kids crying or your cell phone ringing. Those are all very positive.

[Maher Yaghi, Analyst at Scotiabank]

Perfect. Okay. I wanted to ask you, we've been talking about the recovery phase post the pandemic and it feels like we're getting there, especially with the second half slate coming up. Maybe this is more like a big picture question for you. What markers should we be looking for to quite confidently say that the recovery is in full force and kind of declaring the going back pre-pandemic? What are the markers in terms of attendance, in terms of revenue, run rate, that gives us confidence that we're back to normal?

[Ellis Jacob, President and CEO at Cineplex]

Looking ahead, we are encouraged by the strength and depth of the balance of 2026's slate, which includes many marquee titles we just talked about in the call, about Star Wars, Toy Story, Minions and Monsters and others as we go through. You know, all the demos are coming back, which is very positive, and we will see that continue to improve. The frequency was down, but as content is there, we feel that our guests will come back in a big way. When we look at our, you know, loyalty program, we are seeing that having a positive impact of people starting to return to the movie theaters.

[Maher Yaghi, Analyst at Scotiabank]

Is there, like, a number of releases that you'd like to see in a typical year, you know, running above CAD 100 million per title that you think the industry needs to achieve to give us confidence that, you know, it's back to where it was before the pandemic? Are you still looking at it from that kind of a lens or it's more specific to Cineplex?

[Ellis Jacob, President and CEO at Cineplex]

No, I feel that we need a good mix of titles. You need the, you know, the big titles, and you also need the titles that will bring in the right demographics and the audiences to our theaters. I think we're in a good position now with a lot of movies with some great directors and producers. We feel pretty comfortable, you know, and the second half of 2026 looks really, really strong. In the fourth quarter, there are so many strong movies that we're really excited about them.

[Maher Yaghi, Analyst at Scotiabank]

Okay. Maybe one last question on the CEO search. Any updates you can provide us on that? We hate to see you leave, Ellis, but, you know, you did put a date in the calendar. Can you maybe just give us anything new to report on that?

[Ellis Jacob, President and CEO at Cineplex]

Yeah. The process is underway, and the board is, you know, considering candidates both internally and externally. I am sure they will get through the process and make the best choice for the company. As we've said before, our focus is continuing to strengthen and grow the business and have the right person to take over the position.

[Maher Yaghi, Analyst at Scotiabank]

Okay. Nothing yet, but something in, you know, when would you say that that should be announced? Sometime in the fall? Not too close to the, you know, your departure date?

[Ellis Jacob, President and CEO at Cineplex]

We have to wait for the board and the committees to go through the process before we can say a specific date.

[Maher Yaghi, Analyst at Scotiabank]

Okay. Okay, fair enough. Thank you very much.

[Ellis Jacob, President and CEO at Cineplex]

Thanks a lot. Thanks, Maher.

[Operator]

We have a question from the line of Drew McReynolds with RBC Capital Markets.

[Drew McReynolds, Analyst at RBC Capital Markets]

Yeah. Thanks very much. Good morning. Just had a tough time getting on, but we're here. Three for me. First, maybe just to follow up Maher's question in and around box office. Historically, I seem to recall 80%-85% of kind of box office revenues on major films being realized in the first three weeks. Just wondering if you've seen any evolution of that kind of behavior. Second question, just back to Cineplex Media, Gord. With respect to the tough comp, again, just kind of well spelled out what happened here in Q1. As we go through the remainder of the year, do you see any particularly tough category comp for Cineplex Media?

[Drew McReynolds, Analyst at RBC Capital Markets]

Lastly, a little bit more kind of restructuring, I think, in the numbers this quarter. Just wondering kind of what we should expect for the rest of the year. I assume in terms of the operating leverage dynamic that you've been talking about for two or three years, I assume just that's largely intact, just given all the moving parts. Thank you.

[Ellis Jacob, President and CEO at Cineplex]

Thank you. On the first question regarding the product and moving forward, we feel very strong and comfortable about, you know, the films out there and their delivery. When you talk about the first three weeks and the bigger numbers, certain movies are in that category where guests want to see it as soon as possible. Now with the longer windows and things changing, you know, I feel that there will be more guests coming back either to see the movie more than once or to see the movie for the first time because the movie length has increased as far as its theatrical release. I hope that answers your question on that.

[Drew McReynolds, Analyst at RBC Capital Markets]

Yeah, that does.

[Gord Nelson, CFO at Cineplex]

On the other, three questions, on the media side of things, you know, I tried to call out where we thought things were gonna come in for the remainder of the year, which is, you know, relatively in line with where we see attendance growth. Just as sort of a reminder to a number of you, domestic box office projections range anywhere for the industry projection, they range from CAD 9.5 billion-CAD 10 billion for North American box office, which is roughly a 10%-15% box office growth, which part of that would be pricing. That gives you some indication of sort of where the year might fall in.

[Gord Nelson, CFO at Cineplex]

You asked about specific kind of verticals and categories, I called out pharma, you know, as a category, which we're gonna be impacted in year-over-year. Our team is comfortable that we've done work to build out the other categories that will either return or increase versus versus prior year to kind of soften the impact of the pharma category. In terms of restructuring, we're always kind of looking to optimize our operations, particularly, you know, kind of post-pandemic and into 2025, 2026. That is at a little bit more elevated levels than it has been historically. I think your last question was on operating leverage.

[Gord Nelson, CFO at Cineplex]

You know, we continue to use roughly the same metrics that, you know, the incremental EBITDA contribution for each guest is about CAD 13.50 from a exhibition perspective and CAD 1.50 or so for from a media perspective. The numbers that we've previously communicated still hold true.

[Drew McReynolds, Analyst at RBC Capital Markets]

Okay. That's great. Ellis, congrats on the recognition. Obviously no surprise to all of us that have followed you over the years, but wish you congratulations on that.

[Ellis Jacob, President and CEO at Cineplex]

Thank you very, very much.

[Operator]

As a reminder, if you'd like to ask a question at this time, please press star one one on your touchtone phone. That's star one one to ask a question at this time. I'm showing no further questions in queue at this point.

[Ellis Jacob, President and CEO at Cineplex]

Thank you very much. Appreciate you joining us this morning. Sorry for difficulties in getting your questions through. As I've said before, we're excited for the remainder of 2026 and beyond and look forward to seeing you at one of our venues having a great time. Have a great day and a wonderful week. Thank you.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Ellis Jacob, President and CEO
• Gord Nelson, CFO
• Rayhan Azmat, VP of Investor Relations

Analysts

• Adam Shine, Analyst at National Bank
• Cheryl Zhang, Analyst at TD Cowen
• Drew McReynolds, Analyst at RBC Capital Markets
• Maher Yaghi, Analyst at Scotiabank