Greetings, and welcome to the AMC Entertainment Holdings Incorporated First Quarter 2025 Earnings Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce John Merriwether. Thank you, John. You may begin.

Thank you, Julian. Good afternoon, everyone. I'd like to welcome you to AMC's first quarter 2025 earnings webcast. With me this afternoon is Adam Aron, our Chairman and CEO; and Sean Goodman, our Chief Financial Officer. Before I turn the call over to Adam, I'd like to remind everyone that some of the comments made by management during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks and uncertainties and other factors may cause actual results to differ materially from those that might be expressed today. Many of these risks and uncertainties are discussed in our most recent public filings, including our most recently filed 10-K and 10-Q. Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict. In light of the uncertainties inherent in any forward-looking statement, listeners are cautioned against relying on these statements. The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events. On this webcast, we may reference non-GAAP financial measures such as adjusted EBITDA and constant currency, among others. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the Investor Relations section of our website earlier this afternoon. After our prepared remarks, there will be a question-and-answer session. This afternoon's webcast is being recorded and a replay will be available in the Investor Relations section of our website at amctheatres.com later today. With that, I'll turn the call over to Adam.

Thank you, John. Good afternoon, everybody, and thank you for joining us today. Anyone who has ever driven a car knows that you spend far more time looking out the front windshield than you do looking at the rear view mirror. That metaphor about it being more important to look ahead than to look backward is particularly appropriate for the movie theater industry at this moment in time because the first quarter of 2025 was not at all indicative of the current strength and what we expect will be the coming strength of the movie theater business. Simply put, we believe that a dramatic reawakening of the industry-wide domestic box office has begun. Right now, movie theaters are literally booming, and we believe that this great news about a robust box office will continue for the foreseeable future. Clearly, though, that was not the case in the first quarter of 2025, which was entirely consistent with our earlier pronouncements that calendar year 2025 would start out slowly. How slow was it? Really slow. Setting aside those first quarters directly impacted by COVID and its aftermath, the 2025 January to March industry-wide domestic box office was the lowest it has been since 1996. But fortunately for us, in brilliant contrast to Q1 of 2025, we continue to believe that moviegoing demand for the balance of 2025 and all of 2026 will show great strength. So much so, in fact, that we now believe that the full year 2025 industry-wide domestic box office will come in at the high end of our previously forecasted range of $500 million to $1 billion ahead of the industry-wide domestic 2024 box office. Even more compelling, we also believe that the 2026 box office will wind up being considerably larger than that of 2025. After all, the April 2025 industry-wide domestic box office, being the first month of Q2, was double the box office of April 2024. And so far in May, the box office again has been running at double the rate of a year ago. And the movies that will be released through the end of 2025 are phenomenal one after another. As examples, just look at the dozen hit movie titles being released over the next 11 weekends, including among others, Disney's Lilo & Stitch, Elio, Tom Cruise's Mission Impossible, The Final Reckoning, Sony's Karate Kid, 28 Years Later, Lionsgate's John Wick movie, Universal's How to Train Your Dragon, M3GAN 2.0, Jurassic World: Rebirth, Apple's F1, Warner's DC Studios Superman, and Paramount's Smurfs. All the way through year-end, we will see a plethora of movie riches gracing the silver screens of AMC theaters and ODEON Cinemas. It's going to be one potential blockbuster after another all the way through the year-end opening of Avatar: Fire and Ash in mid-December. Moving from the industry to AMC, we can take great comfort in AMC's resilience being on full display in the first quarter of 2025. AMC surpassed Wall Street expectations once again, and our ability to continue growing per patron operating metrics, including achieving an all-time first quarter record for US admissions revenue per patron despite the challenging box office backdrop, speaks volumes about the enduring power of the AMC brand. The exceptional appeal of both our AMC stubs loyalty and A-list subscription programs, as well as our market-leading premium format offerings, contribute to our success. Given a box office for the rest of 2025 that is expected to soar above a lackluster Q1, we also expect AMC's upcoming financial results to show marked growth over our 2024 results. Looking ahead, the release calendar is stacked with action-driven blockbusters, precisely the kind of high intensity, visually spectacular content that plays best on the big screen, for which AMC has more big screens than anyone else. With our industry-leading PLF footprint of IMAX, Dolby Cinema, Prime at AMC, and iSense PLF screens in Europe, together with our expanding portfolio of XL at AMC auditoriums, AMC Theaters and ODEON Cinemas are perfectly positioned to lean into this action-heavy slate and report significantly improving financial results for the balance of 2025. My overarching comment about Q1 2025 is this: anyone trying to draw any negative conclusions about the appeal of movie theaters from the results of the first quarter of 2025 is highly likely to be mistaken because the industry-wide domestic box office in Q1 was, in our view, a distorting outlier, an anomaly that has already corrected itself. We continue to believe that moviegoing demand in theaters for the balance of 2025 and again in all of 2026 will show enormous strength. That is spectacular news for AMC Entertainment. I'll now pass the webcast over to Sean, our CFO, to provide more detail, after which I'll return to provide an update on AMC's Go plan. Sean?

Thanks, Adam, and thanks to everyone for joining us this afternoon. As Adam noted, the first quarter box office was indeed challenging. Nonetheless, while the North American box office was down 12.4% compared to last year, AMC in fact outperformed by around 150 basis points, recording a domestic admissions revenue decline of only 10.9%. Despite the relatively modest box office in the first quarter, AMC's business fundamentals were robust, as evidenced by the sustained strength of our underlying performance metrics, which, coupled with the operating leverage that is inherent in our business model, mean that we are exceptionally well-positioned to capitalize on the industry recovery expected in the remainder of 2025 and beyond. This afternoon, I'll focus my comments on some of the key indicators of the health of our business. In Q1, our consolidated revenue per patron on a constant currency basis was up 1.6% year-over-year and, notably, up a very substantial 40% compared to pre-pandemic 2019. This was fueled by a 49% increase in food and beverage revenue per patron, along with a 26% increase in admissions revenue per patron. Even more compelling, we grew our consolidated contribution margin per patron on a constant currency basis by 3.7% compared to last year, and this is approximately 51% higher than pre-pandemic 2019. Note that contribution margin per patron is calculated as total revenue minus film, exhibition, and food and beverage costs, divided by total attendance. This measure provides an indication of the incremental profit that we generate with each additional moviegoer, and this incremental profit per moviegoer is around 51% higher than in pre-pandemic 2019. From a segment perspective, our US operations delivered resilient results with admissions revenue per patron achieving an all-time Q1 record of $12.31, despite a notable lack of PLF-friendly titles during the quarter. Compared to pre-pandemic 2019, domestic revenue per patron is now up more than 45%, and domestic contribution margin per patron is up by an impressive 59% compared to pre-pandemic 2019. Our international markets delivered similarly strong and sustained growth, with total revenue per patron up 32% and contribution margin per patron up approximately 39% on a constant currency basis when compared to pre-pandemic 2019. In summary, while the year-over-year revenue growth and key performance metrics might appear somewhat modest, the sustained gains over pre-pandemic 2019 are significant and illustrate the resilience of the business and successful execution of our strategic growth initiatives focused on enhancing the guest experience and optimizing our profitability. Over the last five years, we have also been strategically managing our theatre portfolio. We've been renegotiating leases, closing underperforming locations, and investing in new high-performing theaters. In total, since the beginning of January 2020, we've closed 200 and opened 62 locations for a net reduction of 138 theatres, or nearly 14%. In the last 15 months alone, we've closed 38 theaters and opened just three. As previously noted, the 62 new locations opened since 2020 significantly outperform the 200 closed locations. Going forward, we'll continue to manage the theater portfolio actively to manage our lease costs, optimize our footprint, and enhance overall quality and earnings from our circuit. The sustained growth in our per patron metrics, the ongoing optimization of our theatre footprint, and the inherent operating leverage in our business allow us to reinforce an important point. We do not require a full return to 2019 box office levels in order to achieve pre-pandemic levels of adjusted EBITDA. Let's move over to the balance sheet. We ended the quarter with cash and cash equivalents of $378.7 million, excluding restricted cash of $49 million. As we previously discussed, AMC typically experiences a seasonal working capital shift from positive in Q4 when box office receipts are strong, to negative in Q1 when firm rental payments become due. This swing is amplified when the Q1 box office is especially soft, as it was this year. But looking ahead to the remainder of the year, provided that the box office performs in line with our expectations, we anticipate being free cash flow positive for the nine months ending December 31st, 2025, and we continue to take actions to strengthen our balance sheet. At the beginning of this year, we raised approximately $170 million of incremental equity capital, and since the beginning of 2022, we've lowered the principal value of our debt and finance leases by approximately $1.1 billion, and we've repaid approximately $281 million of deferred leases. Overall, we have achieved a total reduction of $1.34 billion in debt and deferred rent in a little over three years. Now, a few quick data points. CapEx net of landlord contributions was $42.8 million in the first quarter, and we continue to expect net CapEx in 2025 to range between $175 million to $225 million. The deferred rent balance at the end of Q1 was approximately $34.3 million, and we plan to reduce this balance by around $4.7 million during the remainder of the year. Our capital allocation priorities remain: one, ensuring sufficient liquidity; two, reducing financial leverage; three, investing in our existing business; and four, investing in attractive high-return growth initiatives. With an exceptionally strong start to Q2, this is already reflected nicely in the books, and with an impressive lineup of films ahead, 2025 is on pace to deliver the strongest box office since 2019, and the team at AMC is ready to seize the opportunity and unlock meaningful value for our stakeholders. With that, I'll pass the call back to Adam.

Thank you, Sean. Today, I'd like to take you a little deeper into how we're proactively positioning AMC to capitalize on what we firmly believe will be a resurgent box office for the balance of 2025 and the full year 2026 and beyond. It starts with our strategic playbook, the AMC Go Plan, a forward-leaning, intensely designed blueprint to elevate the guest experience at AMC theaters and ODEON Cinemas. It was named the Go Plan, GO because we're going on the offensive. Frankly, we got tired of being on our heels defensively for the past five years, and it's time to move forward with big ideas. The Go Plan is built around AMC's most compelling competitive strengths: our unmatched customer loyalty programs, our sophisticated marketing engine, our innovative food and beverage offerings, and our global leadership in immersive premium large format experiences. AMC is already the global leader in Premium Large Format and Extra Large Format screens, with more than 600 such screens in total. That's more premium experiences than offered by any other movie theater operator in the world. But under the AMC Go Plan, starting in 2025 and continuing in the years ahead, we are going to further that lead, and we will do so in a big way. We expect to grow our Premium Large Format and Extra Large Format screens from more than 600 now to more than 1,000 in the months and years ahead. To do so, we'll be doubling our footprint of upgraded IMAXs with laser screens by converting some of our older IMAX auditoriums into state-of-the-art IMAX with laser systems. We're also growing our count of Dolby Cinema screens by almost 25%, adding about 40% more. Both of these growth initiatives are structured so as to require minimum upfront capital expenditures from AMC. We expect to more than triple our number of Prime at AMC screens in the United States, growing the number of theaters with Prime to 100. And something I'm particularly excited about, we've also just opened our very first Extra Large Format auditoriums in the United States. This initiative is a smart, capital-efficient way to spotlight the largest non-PLF auditoriums in our circuit, all of which will feature massive at least 40-foot screens or larger and all with crisp 4K laser projection. With clear XL branding, both inside the theater and across our app and website, guests can easily identify and choose this enhanced format. We expect to roll out as many as 50 or more XL at AMC locations by the end of 2025 and by the end of 2026, we should have around 250 XL at AMC screens in place in the United States, joining the 65 XL screens that we piloted last year in Europe to great success. Innovation is in our DNA at AMC, and we're turning up the volume on that innovation with a dynamic new partnership with CJ 4DPLEX. Over the next 30 months, including some this year being installed, we will bring 40 4DX and 25 ScreenX auditoriums to audiences across the United States and Europe. In Europe, we've already opened ScreenX auditoriums in six ODEON Cinema locations where guest feedback has been quite positive. We're eager to scale this next level experience to even more moviegoers worldwide. Additionally, our laser AMC initiative in partnership with Barco delivers a brighter, sharper, more energy-efficient projection experience that is also quite eco-friendly. It isn't just for XL at AMC auditoriums that we have laser projection. In fact, we already have deployed Laser at AMC projection across nearly 40% of our US circuit, and we will take laser projection to the entire domestic fleet of our theaters on a multi-year rollout. Another initiative under the AMC Go Plan is the transformation of select high-traffic theaters with premium seating upgrades. Not necessarily recliner seats because the theaters could not afford the seat loss that comes with installing recliners, but much improved wider, more comfortable padded rocking seats. These have been deployed already in flagship locations like AMC Lincoln Square 15 in Manhattan, AMC Empire 25 in Manhattan, and AMC Burbank 16 in Greater Los Angeles. This new luxury seating is being marketed as AMC Club Rockers, and it has significantly lifted guest satisfaction scores and overall theater performance. Indeed, in recent weeks, we have consistently seen nights when our three highest-grossing theaters in the entire country out of almost 550 theaters are Lincoln Square, Empire, and Burbank, all of which feature the new Club Rocker seat. It's a proven model, and it's no surprise that we are looking to expand these Club Rocker seats to more of our theaters as growth capital becomes available to us. Elevating the guest experience isn't limited to sight, sounds, and seats, but it also extends to delivering ease of access and developing customer loyalty. That's exactly what our loyalty and subscription platforms are engineered to do, and no one does it better than AMC. In January of this year, for example, we launched AMC Stubs Premiere GO, a new tier within our AMC Stubs loyalty program that increases rewards received by guests who see at least eight movies per year or who earn 5,000 Stubs points annually. Impressively, we already have more than 300,000 Premier GO members. Just this morning, we launched enhancements to our flagship subscription service, AMC's Stubs A-List. With increased benefits designed to ease the pain of a healthy price increase, the A-List weekly movie access has been expanded from three titles a week to four, and we've lowered the age eligibility from 16 to 13 to encourage teen and family moviegoing. We've also simplified how A-listers can check in at our theaters with a new in-app photo ID system, eliminating the need to produce a physical identification card. And we've introduced a new A List Classic tier, a streamlined, lower-price plan for guests who prefer to watch a maximum of one movie per week at our AMC Classic locations. This new offering broadens our reach and makes subscription moviegoing accessible to even more consumers. As we close today's formal remarks, we do so with genuine momentum. April delivered a powerful rebound at the box office and set the tone for what we believe will be a breakout second quarter for AMC and a record-setting 2025 for AMC as well. The road ahead is packed with blockbuster titles, and with the successful execution of our AMC Go Plan, we are enhancing every aspect of the moviegoing experience at AMC and Odeon, from immersive premium large format and extra-large format auditoriums to upgraded seating, and from innovative loyalty to innovative subscription programs. All designed to increase attendance, deepen guest engagement, increase guest satisfaction, and grow both AMC's revenue and our EBITDA. After five challenging years, we believe the tide has finally turned and that the future looks encouraging, not just for a quarter or two, but for an extended multi-year period of sustained growth and increased shareholder value. Having said that, there are still other important achievements needed for full recovery, but we are optimistic that we'll get what needs to be done and that AMC is poised to capture the momentum arising from strength in 2025 and 2026 and what we believe will be an even brighter future ahead. With that, Sean, let's turn to questions from equity analysts and from our retail shareholders.

All right, thank you. We will now be conducting a question-and-answer session. Okay. I would like to turn the floor back to management for further questions.

Thank you. So, Adam, the first question from our shareholders is related to the tariffs. What are your thoughts about the current discussions around tariffs in Hollywood?

Well, obviously this is a new topic. It is our understanding that there are no final specific plans as to what may transpire and that there's going to be ample opportunity for discussion between the government and industry on this topic. It goes without saying that we'll be paying very close attention to developments in this area.

A lot of questions about the Go Plan. Some of them are as follows. What proportion of AMC locations do you think ultimately could include a premium format auditorium? Likewise, recliner seating? What percentage of our auditoriums could have recliner seating? And then questions about other innovations that we might be looking at for our auditorium, such as someone suggesting semi-private viewing booths.

So there's a lot in there. As I said in my prepared remarks, we have more than 600 PLF and XLF screens. That number should grow to around something over 1,000. In what percentage of our theaters will we find that? In the plans we have now, probably we will hit three-quarters of our theaters worldwide. But that's just the plans we have now. We've only announced 250 XL auditoriums in the United States. That's based on our current plan. But you could easily see XL auditoriums, if they're successful, if they resonate with consumers, potentially going up from 250 to maybe 500, in which case we could find ourselves with a PLF or an XLF in almost every theater in our circuit, depending on guest response. In terms of recliners, more than half of our circuit is reclined at the moment. That number could grow. We will need growth capital available to us to do so because those theater renovations aren’t cheap. Interestingly, we have a significant number of theaters, I'd say 50 where placing recliner seats would be uneconomic due to high volumes that we cannot afford the loss of seats. For that reason, we came up with this Club Rocker seat, the AMC Club Rocker that we deployed in AMC Burbank, Lincoln Square, and Empire. We are seeing stunning results, as our three highest-grossing theaters in the entire United States are Lincoln Square, Empire, and Burbank, all featuring the new Club Rocker seat. It will cost some money to install the Club Rocker so we need more investment capital available before deploying them in more places. There are a significant number of theaters, a dozen to 20 potentially, where we could implement those AMC Club Rockers, and we believe we would see a substantial rise in the bottom line results of the theaters where they are installed. We're excited about our new partnership with CJ to introduce 4DX and ScreenX auditoriums. We currently have six open, and that number is going to grow to 71. Regarding a theater in the UK experimenting with a two-person pod seat with a privacy shell around it, that has been very successful with consumers. So that could be another rollout, though it will require investment capital. I must emphasize that we are being disciplined with our CapEx spending. We are down to a range of $175 million to $225 million a year. I could foresee increasing our CapEx by $50 million to $100 million annually, but only if our EBITDA dramatically increases, allowing us to invest in these growth projects with attractive returns and fast paybacks.

Kind of a related question here from one of our shareholders. At what point do you expect the business to be in a position to generate positive free cash flow?

That's a nice question to get because the answer is right now. The first quarter, while bleak, should not lead to negative conclusions. The second quarter, third quarter, and fourth quarter of 2025 are expected to perform radically differently than the first quarter of 2025. We predicted last year that the industry would start very slowly in Q1 because we were aware of the titles coming out. We also know what titles are lined up for the rest of the year. If we meet our internal forecasts for the balance of 2025, the company will be free cash flow positive for the nine-month period from April to December 2025. That is a stark change compared to where we have been since the pandemic hit in 2020.

Let's talk a little bit about food and beverage. We are doing very well on food and beverage growth. Are there plans to enhance and expand the food and beverage offerings to our guests?

Sure there are. We’re proud of what we've accomplished in driving the revenues of this company and cutting costs such that our contribution per patron is up more than 50% above pre-pandemic levels. This came with hard work and cooperation from various sectors, including our landlords. We not only closed unprofitable theaters, but we also managed to reduce rents on many theaters, enhancing their profitability. Another area of cooperation has been from our guests, who are purchasing more at the concession stand than ever in AMC's 105-year history. We lead the industry in terms of food and beverage spending per patron amongst mass operators. As a few examples, when I started, we had around 100 bars at our theaters. We now have 350 MacGuffins Bars in the US and serve liquor across Europe. Movie-themed drinks are a huge hit; we frequently create special movie-themed drinks that generate significant sales. In Q1, we rolled out Dippin' Dots across the domestic fleet, which has doubled our ice cream sales. We’re piloting an exciting new initiative this summer at five Southern California theaters using new equipment that can automate the perfect creation of cocktails and mocktails. We've already tested this successfully in our corporate office. If that testing succeeds, we plan to broadly implement this new drink equipment across our system. Additionally, we’ve added DoorDash to our home delivery service at the end of 2024, which is projected to yield approximately $5 million in profit in 2025. Our merchandise sales, which started at zero three years ago, will be around $75 million in 2025, with nearly half dropping to the EBITDA line. We're innovating in food and beverage offerings and will continue to do so.

Well, talking about that and the profitability per patron that has been, as you say, so much higher than pre-pandemic levels, there is a question about how sustainable is that? Because as the box office recovers, will there be pressure on those profitability per patron metrics?

Well, it depends on whether we think logically or look at the data. Logic suggests that if we add a substantial number of attendees, as we expect for the remaining 2025 and 2026, it might be challenging to keep driving these massive improvements in contribution per patron that we have enjoyed over the last couple of years, with figures up over 50% compared to pre-pandemic. However, April was a month where we experienced a significant surge in attendance, and instead of those surging numbers eroding key performance metrics, it was the exact opposite. In April, our revenue per patron and our contribution per patron increased even as attendance surged. This indicates that we have managed the business innovatively and effectively to drive revenues and profits, and it appears that trend will continue.

That's all the questions we have at this time.

Well, good. Thank you, everybody, for joining us today. The first quarter of 2025, while beating analysts' expectations, was not particularly impressive. However, what you're going to see out of AMC and the movie theater industry across the remainder of 2025 will be quite remarkable. If we hit our forecasts, we are poised to perform exceptionally well and reveal a dramatic improvement from just a year ago. Thank you for joining us all.

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