Cineplex TSE: CGX reported record second-quarter revenue and higher adjusted EBITDA as stronger attendance, spending per guest and a broad film slate lifted its exhibition business, while location-based entertainment remained under pressure from discretionary-spending headwinds.
Total revenue for the second quarter of 2026 rose 9.8% year over year to C$383.7 million, the company’s highest second-quarter revenue on record. Attendance increased 9.3% to 12.7 million guests, and consolidated adjusted EBITDA climbed 20.4% to C$40.8 million from C$33.9 million a year earlier.
President and Chief Executive Officer Ellis Jacob said the company had also just recorded its highest-grossing week in history, with box office results more than 20% above its prior record set during the 2015 release of Star Wars: The Force Awakens.
“This quarter’s success was not dependent on a single blockbuster or a small number of tentpole releases,” Jacob said. “Instead, consumers embraced a broad range of compelling content across multiple genres and formats.”
Film business drives records in attendance and guest spending
The film entertainment and content segment was the primary driver of the quarter. Box office revenue increased 11.2% to C$176.2 million, the company’s second-highest quarterly box office revenue since 2019. Segment adjusted EBITDA rose 32.8% to C$48.2 million.
Revenue per guest reached new company records. Box office revenue per patron increased 1.7% to C$13.91, while concession revenue per patron rose 2.2% to C$10.26. Theater food service revenue climbed 11.8% to a record C$130 million.
Chief Financial Officer Gord Nelson said box office revenue per patron benefited from inflationary and strategic pricing initiatives, although the improvement was partly offset by a lower mix of premium formats as the slate included more 2D releases. Concession spending was supported by pricing, higher purchase incidence and merchandise sales.
Merchandise sales increased 45% from the prior year and generated approximately C$4 million during the quarter, Nelson said. The category represented roughly one-third of the growth in concession revenue per patron. Jacob cited film-related items, including collectibles connected to The Super Mario Bros. Movie and Star Wars: The Mandalorian & Grogu, as well as a red popcorn purse tied to The Devil Wears Prada 2.
The company said Michael became the highest-grossing film ever distributed by Cineplex Pictures and was Cineplex’s second-highest-grossing title of the quarter. Other revenue increased 20.9%, reflecting higher online booking fees associated with attendance growth and increased distribution revenue.
Jacob said the quarter’s slate included successful family, horror, original and franchise releases. He also highlighted what he described as a return of younger moviegoers, particularly Gen Z audiences, to theaters.
Media grows while location-based entertainment softens
Cineplex’s media segment reported revenue growth of 4.4% to C$20.2 million, while adjusted EBITDA was unchanged at C$15 million. Cinema media revenue per patron declined to C$1.59 from C$1.67 in the prior-year period.
Nelson said the segment benefited from advertising demand across several customer categories despite a difficult comparison with elevated pharmaceutical advertising spending in the previous year. He said the broader advertising environment remains challenging, and Cineplex incurred costs during the quarter for an upfront event and research initiative intended to support advertiser demand.
Location-based entertainment revenue, which includes The Rec Room and Playdium, declined 3.7% to C$32 million. Segment adjusted EBITDA fell to C$1.7 million from C$4.4 million a year earlier, while adjusted store-level EBITDA declined to C$3.9 million from C$5.8 million.
Nelson said the second quarter is typically the lowest-traffic period for the business. Revenue mix also shifted toward food and beverage sales, while amusement revenue—the segment’s highest-margin category—declined. Same-store adjusted store-level EBITDA was down about C$2 million, though Nelson said the company expects some reversal as it moves forward.
The company opened Playdium Vaughan during the quarter, its 17th location in the portfolio. Management said the site, located at Vaughan Mills, has delivered strong early results. Cineplex also said it has seen competing concepts open near certain successful locations, though Nelson said the competitive effect was not widespread.
Cash position, leverage and shareholder-return plans
Cineplex ended the quarter with C$116.8 million in cash and no borrowings under its C$100 million revolving credit facility. About C$92.5 million remained available under the facility after letters of credit.
Net capital expenditures were C$7 million in the quarter, including spending related to Playdium Vaughan. Cineplex maintained full-year 2026 capital expenditure guidance of about C$50 million. Nelson said the company’s initial guidance for 2027 capital expenditures is approximately C$60 million.
Management said leverage has fallen by 1.5 turns over the past year and a half, and the company sees improved visibility toward its long-term leverage target of 2.5 times to three times. Nelson said that if the domestic box office reaches roughly C$10 billion in 2026, Cineplex would expect to be within that target range when it reports fourth-quarter results.
The company’s capital-allocation priorities include maintaining assets, improving the balance sheet, reaching its target leverage ratio, returning capital through share repurchases or dividends when appropriate, and selectively investing in growth opportunities. Nelson said both opportunistic buybacks under the company’s normal course issuer bid and a future dividend are under consideration, but management has not set an allocation between the two.
Nelson also said a C$6 million 2026 expense related to long-term incentive plan accounting for retirement-eligible employees is expected to be a one-time event for the year, with roughly half recognized in the first half. He attributed a quarterly increase in general and administrative expense partly to that item and to the timing of technology-related spending.
Management points to strong second-half slate
Jacob said the industry’s domestic box office had surpassed C$5 billion faster than in any year since 2019. He said recent releases including The Odyssey and Spider-Man: Brand New Day supported strong performance in Cineplex’s premium formats.
The Odyssey opened to C$124 million domestically, according to Jacob, and Cineplex operated three of North America’s top 20 theaters for the release. The company operates eight of the world’s 41 IMAX 70mm screens, he said. Jacob also said Cineplex was close to matching all of August 2025 box office in the first 10 days of August, aided by the two releases.
Looking ahead, management cited a diversified second-half schedule that includes family, comedy, horror, science-fiction and franchise releases, alongside films distributed by Cineplex Pictures. Jacob said Amazon MGM Studios is expanding its theatrical release activity and Netflix has increased its engagement with theatrical exhibition through a 49-day theatrical window for Narnia in 2027.
Jacob, who said he is preparing to retire by the end of 2026, said Cineplex’s board is managing a succession process that is “well underway.”
About Cineplex (TSE:CGX)
Cineplex 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.
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