NCMI — National CineMedia, Inc.

Summary of NCMI Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 Revenue: $93 million, up 8% year-over-year, in line with guidance.
• Adjusted OIBDA: $37 million, exceeding guidance and up 6% from the prior year.
• Advertising Revenue: Increased 9% to $90 million, with significant contributions from retail, wireless, travel, and entertainment sectors.
• Total Attendance: Approximately 107 million, a 7% increase year-over-year, benefiting from an extra week in the fiscal quarter.
• Programmatic Revenue: Grew 100% year-over-year, reflecting increased adoption of programmatic advertising.
• Local Advertising Revenue: Increased 2% to $13.8 million, indicating recovery in local demand.
• Full Year 2025 Revenue: $243.2 million, a slight increase from $240.8 million in 2024.

2. Strategic Updates and Business Highlights

• Acquisition of Spotlight: Enhanced NCM's network with luxury screens, broadening advertiser appeal.
• Strengthened Relationships: New agreement with AMC improved inventory standardization and campaign efficiency.
• Investment in Technology: Continued focus on enhancing programmatic capabilities and audience targeting, leading to improved advertiser engagement.
• Custom Preshow Activations: Successful campaigns linked to major releases, such as "Wicked: For Good," are set to expand in 2026.

3. Forward Guidance and Outlook

• Q1 2026 Revenue Guidance: Expected between $32.5 million and $36.5 million, with adjusted OIBDA projected to be negative between $13 million and $10 million due to higher attendance-related expenses.
• Positive Demand Indicators: Encouraging early demand for 2026 with a robust film slate expected to drive advertising interest.
• Long-term Growth Strategy: Continued investment in local advertising and programmatic initiatives is anticipated to capture more premium ad spend.

4. Bad News, Challenges, or Points of Concern

• Box Office Performance: Mixed results in Q4, with lower-than-expected box office totals impacting advertising demand and leading to higher make-good obligations for advertisers.
• Local Advertising Revenue Decline: Full-year local revenue decreased from $39.1 million in 2024 to $34.6 million in 2025, primarily due to earlier trade-related pullbacks.
• Increased Operating Expenses: Total operating expenses rose to $69.4 million in Q4, influenced by one-time charges and the inclusion of Spotlight's costs.
• Cash Flow Decrease: Unlevered free cash flow fell to $6.1 million from $28.3 million year-over-year, impacted by timing of receivables collections.

5. Notable Q&A Insights

• Forward Bookings: Advertisers are showing increased confidence, with stronger upfront bookings compared to the previous year.
• Impact of Premium Inventory: The new AMC agreement is expected to enhance average revenue per impression, particularly for premium inventory.
• Political Advertising Potential: There is growing interest in political advertising, with select exhibitors open to supporting such campaigns.
• Olympics vs. World Cup: The upcoming Olympics is anticipated to create a more competitive advertising landscape, while the World Cup may not have the same impact on U.S. advertising.

Overall, NCMI demonstrated solid performance in Q4 2025, with strategic initiatives positioning the company for future growth, despite facing challenges related to box office performance and local advertising revenue. The outlook for 2026 remains optimistic, driven by a strong film slate and increased advertiser demand.