Earnings Call Transcript - FUN Q4 2025

Operator, Operator

My name is Ellie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Six Flags Entertainment Corporation 2025 fourth quarter earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' prepared remarks, there will be a question and answer session. If you would like to withdraw your question, press the pound key. Thank you. I will now turn the call over to the Six Flags management for opening remarks. Please go ahead.

Michael Russell, Corporate Director of Investor Relations

Good morning, everyone. And thank you for joining us to discuss Six Flags Entertainment Corporation's 2025 fourth quarter and full year results. Earlier this morning, we issued our earnings release which is available on the Investor Relations section of our website. Before we begin, I'd like to remind you that today's comments include forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings for a discussion of those risks. Joining me today are President and Chief Executive Officer John Reilly, and Chief Financial Officer Brian Witherow. John will kick things off with his observations of the business since joining the company late last year. Brian will provide a review of our financial and operating results, then John will close things out with his outlook for the business and how we are approaching the 2026 season. We will then take your questions. With that, I would like to turn the call over to John.

John Reilly, President and CEO

Thanks, Michael, and good morning, everyone. Thank you for joining us for our fourth quarter earnings call and my first earnings call as CEO of Six Flags Entertainment Corporation. On today's call, I will start by providing some background information on my experience in the industry, why I jumped at the opportunity to become Six Flags' next CEO, and my initial observations after spending the past two months on the ground. First, a little bit about me. I started out in the regional theme park business many years ago, selling popcorn as a teenager, before working my way up to executive positions in two of the world's largest regional amusement park companies, one based here in the U.S., and the other based in Europe. Theme parks are in my blood, and I am very proud of the work I have done at each career stop to deliver exceptional experiences for our guests, to provide a fun and dynamic work environment for our team members, and to drive higher profits for our owners. So what excited me about the opportunity to join Six Flags? First, I love this industry. The regional theme park is a resilient and growing industry, with high barriers to entry leading to limited supply, resilient performance during recessions, and consistent demand when parks are well managed. In addition, Six Flags Entertainment Corporation has a dominant position within the industry, as the largest regional theme park player in the world. Second, Six Flags parks are located in some of the largest and fastest-growing markets in North America. There are more than 200 million people living within easy driving distance to our parks, providing a huge opportunity to increase our penetration and to grow attendance over time. And finally, this company has tremendous assets and significant earnings potential. Throughout my career and, particularly as I have assumed executive-level positions over the past decade, I have often been tasked with turning around underperforming assets. I can tell you this: There is no better feeling than unleashing the potential of a talented team of people to revise strategy and to improve execution, all with the goal of delivering sustained earnings growth over time. I am not here to spend time on the past. I am here to build a disciplined operating culture that consistently delivers reliable, fun, and memorable guest experiences, as well as dependable financial outcomes, and to earn credibility with our guests and investors quarter by quarter. This role is personal for me. Growing up in the theme park industry, I know what great looks like. Over the past several weeks, I have been spending time in our parks. A lot of time. Walking the midways, meeting with park leadership teams, conducting focus groups with guests, and engaging with our frontline associates. Those visits have been invaluable, and they have reinforced my conviction about the underlying strength of our company. What I have seen reinforces two things: The underlying demand is there, and the biggest value creation opportunity is through better execution. Let me just share a few examples from my park visits, because I believe they highlight the kind of high-return work that can change consumer perception and quickly improve results. At Six Flags Magic Mountain, I visited the park's maintenance shops during my tour, and from my interactions there, it was clear the maintenance team took great pride in their efforts this past year to restore coaster trains, put them back into service, driving better ride uptime, more rides for guests, and higher guest satisfaction. With a fleet of more than 60 coaster trains, we will benefit from their hard work and our investments even more so going forward. We are already seeing positive signs of this work and investment in guest KPIs in 2025 and early in the 2026 season. We expect to see significantly increased ride uptime and throughput at Magic Mountain and at other parks. Important work like this is going on in all operating areas across our parks. On the food and beverage front, we have placed executive chefs in the park to elevate food quality and improve guest satisfaction. During my tour of Carowinds, Eraj, our executive chef there, showed me how innovations are expanding the park's menu offering this year, and he and his team explained how they are more efficiently approaching food preparation during varying demand levels, with monitored holding times to ensure guests are getting the freshest and best-quality food. The placement of chefs has been fully deployed already, and now with the right resources in place, we are positioned to reliably deliver higher quality food across our parks. Our scale provides us with a clear mandate to constantly improve efficiency. As I have traveled to parks and conducted leadership town halls, I am encouraged that our park teams are not only embracing the challenge but taking pride in driving efficiency. They are committed to do this work the right way, always protecting the guest experience. When I visited Kings Island, our maintenance team shared their idea how we could save thousands by purchasing certain equipment we are currently renting. I can assure you this is something we are digging into further. During my stop at Canada's Wonderland, Vivendra, our workforce director, proudly explained how his efforts ensured labor is being scheduled according to forecasted demand levels, so that park labor is deployed at the right time and in the right place throughout our entire enterprise. Effectiveness in this area helps reduce costs and ultimately helps drive improved guest spending. The workforce management program was deployed across the portfolio this year, and now we stand to benefit from the resources and systems that are in place to drive efficiency and increase reliability in our business. Having been through this process a number of times, I can assure you this: The best ideas and highest-return innovations come from the people closest to the work. At Six Flags, that is our ride operators, our maintenance teams, food and retail leaders, call center teams, finance and accounting staff, among others. Therefore, we have recently created a formal feedback channel for associates to submit their ideas for innovation at all our parks. So far, we have received more than 300 proposals from our parks alone, recommending projects to create efficiencies and automate workflows. These submissions are currently under evaluation, as we look to activate the ideas with the highest paybacks. We want to recognize great ideas, reward them, and scale what works across our entire park portfolio. Everyone should expect a faster operating cadence and higher accountability across the board. We are committed to the operations levers that drive our guest experience in our business: reliability, throughput, cleanliness, value, and fun events and experiences. By mastering these, we will fuel demand and increase guest spending. Moving forward, we will simplify our processes and remain highly disciplined about where we invest to ensure maximum returns. For our employees, my commitment to you is to provide clear standards, to remove obstacles to progress, and to make decisions quickly so you can do your best work. For our guests and fans, when you come to our parks, your entertainment experience each visit should meet or exceed your expectations. We want you back, so we plan to earn your trust to ensure that happens. With that, I will turn it over to Brian to walk through the quarter and full-year results in more detail. I will then share some thoughts on our initial areas of focus. Brian?

Brian Witherow, CFO

Thanks, John, and good morning, everyone. I will begin with a recap of our fourth quarter and full-year results before providing an update on select balance sheet items as well as early performance indicators for the season ahead. For the fourth quarter, we are in the middle of our guidance range. Delivering adjusted EBITDA of $165 million on attendance of 9.3 million guests and revenues of $650 million. Two dynamics impacted the quarter. First, results for the quarter were up against a performance in October 2024, which we discussed on our last earnings call. Secondly, operating days in the winter holiday calendar mattered a lot. We operated 779 days in 2025 versus 878 days last year. As was expected and as we discussed last quarter, a significant portion of the decline in operating days reflects our decision not to operate winter holiday events at four parks, a decision that was made earlier in the year. In hindsight, that decision did not optimize profits at every park the way we needed it to. Those events can be meaningful demand drivers; removing them created a self-inflicted headwind in terms of both attendance and operating leverage. We are taking that learning directly into our planning for 2026, and we will rethink the winter holiday strategy with a tighter, returns-driven approach market by market rather than applying a broad brush. And while weather created variability in the quarter with 15 park closure days versus three last year, the more significant impact on demand was our decision to eliminate the winter holiday events, which created an attendance headwind of approximately 425,000 visits. At the same time during the quarter, spending by guests visiting our parks was strong. Per capita spending was up year over year supported by higher guest spending on admissions and on in-park products. That matters because it reinforces that when guests get through the gates, there is clear opportunity to drive revenue and profitability through better execution, including higher throughput, better staffing alignment, efficient food and beverage operations, and overall guest flow. For the full year, we produced net revenues of $3.1 billion and adjusted EBITDA of $792 million while entertaining 47.4 million guests and delivering per capita spending of $61.90. Similar to the quarter, the year reflects a mix of strong guest spending and execution gaps that impacted attendance and operating efficiency, particularly around the operating calendar. We are using those outcomes as inputs into a tighter operating plan for the upcoming season, with a focus on consistency and repeatability across the portfolio. As we noted on our last earnings call, this past season taught us a lot. It proved to be a tale of two cohorts. Our best-performing parks overcame their operating challenges, and in several instances, parks delivered record or near-record years. At the same time, there were other parks in our portfolio that were not as well positioned to withstand the operating challenges. The stark difference in park performance reinforces the notion that some of the profitability challenges we faced in 2025 were episodic, execution related, rather than structural or systemic in nature. This distinction matters as we strategize our path forward. Turning briefly to the balance sheet, in early January, we completed a significantly oversubscribed refinancing of our April 2027 notes at attractive rates. It is an important step in strengthening our capital structure and increasing financial flexibility as we focus on execution and performance. We have substantial covenant cushion at extended maturities and a clear deleveraging framework. Our leverage reflects 2025 depressed EBITDA, not structural over-indebtedness. Touching quickly on our longer lead indicators, at year end, deferred revenues were up approximately 1%, driven primarily by higher advanced sales of single-day tickets and increased deposits from our group business channel. More importantly, sales trends of season passes and memberships have accelerated since year end, supported by our new season pass architecture that includes guest access to multiple parks via newly designed regional pass products. While this represents a small sample size, the improved sales from the past few weeks are an indication that the strategic changes we have made are resonating with consumers. We are entering the most important part of the selling season with improving momentum, clear offerings, and a stronger platform to convert demand into park visits, a dynamic John will speak to in more detail in just a moment. Lastly, while we are not issuing formal guidance, our internal plans for the season are built around improving revenue and cash flow relative to 2025.

John Reilly, President and CEO

With that, let me turn the call back to John. Thanks, Brian. Let me build on that with how we are approaching the business as we plan for 2026. While demand was pressured this past year, spending by guests who did visit remained solid. That and the early strong response to changes we have made to our pass programs that Brian just mentioned tells me something important: The revenue engine is intact. This is not a broken model, but one that requires sharper execution, clearer focus, and tighter alignment between commercial strategy and operations. The opportunity is to run this portfolio with greater consistency, more disciplined decision-making, and a refined playbook to convert demand into durable earnings and stronger cash generation. I am early in my tenure, and I will not pretend to have every answer. But I have spent my career in this industry, and I know what high-performing parks look like. And what I see across this portfolio are very addressable opportunities that can unlock meaningful upside under disciplined execution. First, we are evaluating how we go to market. We operate powerful regional brands, and we must deploy them with greater precision. Our guests are not identical market to market, and our marketing strategy should not be either. Over the past year, we saw the same promotion produce very different outcomes across regions. This is not a demand problem. It is an opportunity for us to better tailor our efforts to our local communities by applying tighter test-and-learn discipline. Marketing then becomes a demand lever, not just a traffic driver. Pricing is part of that same reset. Our architecture must be simpler, clearer, easier to communicate, across ticket types, passes, and add-ons, with fewer and stronger offers that improve conversion and yield, better alignment between promotional timing, operating calendar, and staffing levels, not simply to produce more demand, but more profitable demand.

Operator, Operator

Second, we are driving consistency of execution and margin expansion. This business rewards operational excellence. A portfolio of our size should benefit from scale, and our guests should experience reliability everywhere—parks open on time, rides operating consistently, clean park environments, energized teams.

John Reilly, President and CEO

To deliver that, we have tightened our operating procedures, established clear standards, defined measurable KPIs, and developed protocols for rapid follow-through. A critical lever in this effort is throughput—how efficiently we move guests through every touchpoint—entry gates, parking flow, food service, retail counters, and ride operations. Throughput directly influences guest satisfaction, in-park spending, and improves cost efficiency. Third, we are applying disciplined ROI standards to our business decisions. Every investment must answer a simple question: Does it enhance the guest experience in a way that drives profitable demand, reduces cost, or strengthens free cash flow? And does it do so at returns that justify the investment? That discipline applies to events, rides, and attractions at every level. Our experience with several winter holiday events this past year provided valuable lessons. We will approach seasonal programming with market-specific rigor, clear ROI thresholds, and test-and-scale methodology. It applies equally to capital investment. Safety and ride reliability are nonnegotiable. Beyond that, discretionary investments will prioritize projects that attract incremental visitors, improve throughput, enhance guest value, and generate measurable returns. And some of the highest ROI opportunities are operational improvements—reducing downtime, eliminating inefficiencies, and standardizing systems that allow our teams to perform at their best. Taken together, these actions are designed to accelerate attendance recovery, deepen guest engagement, and restore durable earnings power. Let me wrap up with these closing thoughts. Our near-term priorities are clear: improving profitability, strengthening the balance sheet, concentrating our time and resources on the assets and initiatives that generate the highest returns. Six Flags Entertainment Corporation is a company with unique assets and significant earnings potential. Together, our teams are working to further our progress on elevating the guest experience, realizing the benefits of our incomparable scale to improve efficiency and margin, correcting missteps in marketing and operations, and continuing to create financial flexibility through deleveraging and disciplined capital allocation. We will be transparent about where we are. We will move decisively on what we can fix. And we will earn credibility and your trust the way it should be earned—through execution and results. The opportunity in front of us is meaningful, I am energized by what I have seen across the parks, I am confident in our path forward, and excited about what we can deliver together. With that, operator, please open the line for questions.

Operator, Operator

We will now open for questions. Please press star followed by one on your telephone keypad.

James Lloyd Hardiman, Analyst

Hey. Good morning. Thanks for taking my questions. And, John, certainly welcome aboard. In your prepared remarks, I think you said something along the lines of you are not here to spend time in the past. But I wanted to maybe take a minute and just get your thoughts on 2025 in its totality, you know, maybe do a brief postmortem here in an effort to sort of diagnose some of the problems that you are gonna be looking to solve for in 2026. And maybe specifically, if—and this is a question I get a lot, I am sure a lot of other people get this question a lot—like, how do we put the various issues into buckets? Right? Clearly, there are some cyclical pressures here. Clearly, there were some weather issues in 2025. I think you guys have spoken to maybe some unforced errors along the way. And then there is this sort of secular piece, right, that I think a lot of people struggle to identify, much less quantify. But, you know, ultimately, is there changing consumer behavior here at play? I think one of the other statements you made is that you think this is a resilient and growing industry, so maybe you do not think that there is, you know, meaningful changes there. But maybe help us put some of the issues into these categories so that we can get a better framework for the, you know, business going forward. Thanks.

John Reilly, President and CEO

When we say we are not here to dwell on the past, it does not mean we are not taking the lessons that we have learned from 2025 and correcting missteps and addressing other opportunities as we see them. So, you know, first, if you look at the consumer, we launched products in markets, as we said, that were not sufficiently localized. And in some markets that produced some abrupt changes. As we were integrating—and in those markets, the consumers were used to different messaging. In some cases, they were confused about their benefits on passes, for example. In some cases, they were paying more for a pass than they felt they had paid in the past. And so we are looking at all of those opportunities and then looking to address that misstep. So Brian mentioned on the pass program, we recently, I think two weeks ago, launched a regional pass. This is a really powerful product. And we are, you know, we are in the very early stages. But we see opportunity here, and we see increased cross-visitation. We see people in markets where we have membership moving to membership. So in terms of the consumer—no. We do not think this is a consumer problem. We think we can address this through improving our execution and through addressing some missteps and learning from what was done last year. And then, also, I would say in terms of performance, we have a clear mandate to do margin work. And our scale gives us that mandate. And you see in the numbers, we closed out at 27%. And we need to do better than that. And I am encouraged by what I am seeing internally that the team is embracing this challenge and doing it the right way. So we see opportunity on that front, and we are working to execute a number of initiatives there.

James Lloyd Hardiman, Analyst

That is a really good outline. And maybe to the latter point, about cost and margins, just curious to hear your philosophy as it relates to cost. Obviously, there is a fine line between sort of streamlining the cost structure and, you know, impairing the customer experience and, by extension, the demand of the business along the way. So maybe speak to how you have, you know, operationalized some of those cost savings at previous stops. And then, Brian, I think we have maybe lost a little bit of a thread in terms of the cost savings that were previously outlined. Maybe give us an update—what has been completed, how much is left for 2026, and if there is anything incremental that is been identified. Thanks.

John Reilly, President and CEO

So I will start over, and then I will turn it over to Brian, James. In terms of the line between the guest experience and cost savings, I think the thin line you mentioned, I would say it is a red line. And that is what I have learned in doing this cost work in other chains. You have to protect the guest experience. It has to be a guardrail. Every initiative has to be weighed and measured.

Brian Witherow, CFO

And you have to be willing to reverse if you do something that ends up with an unintended consequence. What really works here, I gave some examples on the call, but we have these 300 ideas that were under evaluation. And, you know, maybe just some specific anecdotes will give you an idea of the power of this. You know, we have a suggestion from Magic Mountain where they are renting an air compressor for $32,000 a year. It will cost us $35,000 to buy one and take that rental out of the P&L forever.

John Reilly, President and CEO

At Knott's Berry Farm, it will cost them $14,000 to buy a forklift that we can capitalize. It costs us $19,000 a year to rent it. And then there are a lot of ideas like that where they are just one-offs from parks, and we can scale them across the enterprise. We have not begun to do that work yet. So storage units for events. We are in the event business in a big way. We are going to be in the event business as we go forward. But we are renting equipment that we could buy for the same price that—for the same price we could purchase it for. And then automation—parking lots, automated entry at tolls, other things—those can actually improve the guest experience while creating efficiency. There are a lot of studies that show that guests actually prefer that type of frictionless entry. So I am confident that we will do the cost work the right way.

Brian Witherow, CFO

Yeah, James. And then as it relates to your follow-up, you know, in terms of the original gross cost synergies that were part of the merger, we have effectively delivered on 100% of those by the end of 2025. But as John just outlined, you know, we are not satisfied or stopping there. We are going to continue to look for more meaningful opportunities to offset other cost pressures, other inflationary pressures that are in the business, whether that is through more efficiency initiatives, a few of which John just gave some examples to, additional and further standardization of procedures and policies. And then, you know, as you are fully aware, right, labor is our largest single cost. You know, more labor productivity improvements in the system. So not going to put a specific number on it at this point in time. A lot of work is in motion, and there is more to be done, but we are confident that we can get more efficiencies rung out of the system over the course of 2026.

Michael Russell, Corporate Director of Investor Relations

Thanks.

Arpine Kocharyan, Analyst

Good morning. Thanks for taking my question. John, it is very clear you know and understand this business well. If you look at the performance for 2025, it was clear to even someone that is not an operator, right, that decremental margin and some of the underperforming parks is very large. So my question is, do you feel like you have a good handle on capturing that this year regardless of demand? In other words, a leaner organization that is more flexible to adapting to demand levels, or do you think it can take some time to get to that leaner organization?

John Reilly, President and CEO

Yeah. What I can tell you is that the work is underway to improve the margin, to work on these initiatives that we have mentioned both in workforce deployment, in efficiency, automation, and in other efficiency initiatives that we have underway in the company. I do not have a timeline today to get to a specific target. I have, you know, I am just joining here. But as I said before, 27% gives us a mandate. And I have been quite encouraged by our team members who are embracing that and embracing doing it the right way. So we believe there is considerable opportunity over time. And then the last thing, I think, that you mentioned in terms of organization, you know, getting the organization to do that is also very important. What we are doing is important, but I think the why, the how. You know, we believe strongly in pushing more decisions back, with local input, to the parks. We believe strongly in simplicity. We need more urgency in the organization. More localization. And more accountability, quite frankly. So we are working while we work on the initiatives, we are working in the spirit of more accountability, more localization, and more urgency in execution to get it done.

Operator, Operator

Okay. Helpful. Thank you. Then a quick follow-up. I was curious how you think about asset optimization, and it could be early still, since you, as you said, you just got there. It is clear, you know, there are at least maybe six to eight parks that generate less than 5% of EBITDA in this portfolio. At the same time, it seems to me it is not straightforward to even decide what can be pruned because there will be underperforming parks that are worth investing in to improve operations, and maybe there are assets that are not quite worthwhile to invest in. How do you think about that?

Michael Russell, Corporate Director of Investor Relations

Yeah. We approach asset evaluation through a disciplined return framework. We have rigorous work underway on that front in terms of assessing. But our highest ROI parks represent the core of the portfolio. And certainly, as you mentioned, there is a—done right, this could benefit leverage to optimize the portfolio. But really, one of the opportunities that we are looking at is the strategic focus it gives us, in order to be able to dedicate management time, expertise, know-how, capital investments, resource allocation. And I think that has, in the longer term, the potential to be the greater benefit.

Steven Moyer Wieczynski, Analyst

Yeah. Hey, guys. Good morning. And, John, welcome in. So I guess my first question is around guidance or lack of guidance for this year. Brian, you kind of touched on this in your prepared remarks. But maybe wondering what drove the decision not to give formal guidance. And then maybe from a high-level perspective, Brian, if you could give us some color on maybe how you think the year could play out, whether that is from an operating days perspective, whether that is from an attendance perspective, anything there would be helpful. And then, Brian, also, do you have forecast for CapEx and interest this year as well? Thanks.

John Reilly, President and CEO

John. I will start and then turn things over to Brian on the latter part that you mentioned. Look, in terms of guidance, I just got here. You know, I have been on the ground just a little bit over two months. Now is not the time for me to come out with guidance. We are really early in the season. We have some nascent signs of growth, but it is too early to go down that road. And we want to earn your trust with execution and results over time. And, you know, just for me, two months is not enough. We are confident, however, that we have the opportunity in volume, pricing, operating costs, off the 2025 base to begin to deliver sequential improved results.

Brian Witherow, CFO

Yes, Steve. In terms of operating days, as we alluded to in the prepared remarks, there is still work being done in the field as we challenge our park leadership teams to ensure that we are, you know, we are optimized on the operating day front and the operating calendar. And so there is still an opportunity to see this move. But if we look at our outlook for '26, sans the sunset park in Bowie, Maryland, I would say that the overall operating days right now are expected to be up slightly, maybe as much as 1%. That could change as we get, you know, further into the year and the opportunity to potentially add back a winter holiday event, as an example, or two. Those decisions, you know, will be made, you know, in the next several weeks. But that is the outlook on that front. In terms of CapEx, we are still expecting that our spend is going to be in the $400 to $425 million range for the calendar year 2026, versus a cash spend this past year of closer to $475 million, and interest is expected to be in the $135 to $145 million range.

James Lloyd Hardiman, Analyst

Okay. Gotcha. Thanks for that color. And then second question, you know, back to you, John. You mentioned in your prepared remarks you have a history of working with, you know, with so-called underperforming parks. So as you have kind of had the chance now to go through the portfolio, it sounds like you have been to, you know, about half of the portfolio at this point. What would you say as you kind of think about the underperforming parks, what are some of the top two, three, four things that, you know, you can identify and potentially make changes to. And I am not sure that makes sense, but hopefully it does.

John Reilly, President and CEO

Yeah. I think it is a good question. So I would say that the top takeaway I have as I have toured the parks and then as we have—Brian and I and the teams in the parks and in the park support center here—is that the issues are not systemic. The issues are market by market, park by park. And, for example, you know, we have parks where price—maybe price was an issue in terms of lost opportunity. We have parks where attendance was an issue. And we have parks where cost was an issue. And then we have parks that, you know, where two of those were a factor. So I think the key for us is to approach these parks issue by issue and to address it that way. And that is how—so that is how we are approaching the 2026 plans for these parks.

Brian Witherow, CFO

It is not systemic.

John Reilly, President and CEO

In some parks, we have opportunities, and, you know, for example, as I traveled to Mexico—mean, this is a great park and a great market with great weather. And so, for example, I think in Mexico is a place to lean in. We are going to add over 20 operating days in Mexico.

Brian Witherow, CFO

So, you know, it really is case by case. That is a different situation than many other parks.

Operator, Operator

Okay.

John Reilly, President and CEO

Thanks for the color, guys. Appreciate it.

Michael Russell, Corporate Director of Investor Relations

Thanks.

Operator, Operator

If you would like to ask questions, please press star followed by one on your telephone keypad. Again, if you would like to ask a question, please press star followed by one on your telephone keypad.

Thomas L. Yeh, Analyst

I wanted to ask about the particular strength in per cap in 4Q. I know the shoulder season has some mixed factors to it, but you maybe just talk about the sustainability of that growth? And, Brian, I think you mentioned pass uptake improvement, recognizing it is still early in the cycle relative to last year, can you share how units and pricing are pacing on a blended basis given some of the uptake on the higher priced regional passes?

Brian Witherow, CFO

Yeah. Maybe I will start with the latter, Thomas, and then John can provide some color after that. But, you know, on the season pass side, we are not going to give, you know, specific metrics at this point in large part because it is a small sample size. And I think sometimes, you know, the law of small numbers, right, some of these percentage year-over-year variances, you know, can be a little less informative than not. But we are encouraged not only by the volume and the pickup in that, but also, you know, with the reconstructed architecture of the pass, you know, as we talked about even last year, moving over to a single unified ticketing platform is going to give us more opportunity, more flexibility around things like the regional pass. We are seeing folks migrate up to more higher-priced products. I guess, I would say it that way. And, you know, that is certainly helping at certain parks in regards to that average price. Now, not all of our parks are in right now, as you know, Thomas. And so that is, you know, you have got not only a small sample size in terms of window of time, but also in terms of the parks that are in play. So, you know, there is more work to be done, but the team is very encouraged by the early signs there. In terms of per cap, again, very encouraging. Fourth quarter is not—as you get deeper into the quarter, not nearly as meaningful in terms of the number of parks in operation or the total number of days, say, third quarter—but seeing the impact of some of the late-season changes we made around promotions and pricing benefiting the admissions per cap, as well as then seeing guests continuing to spend inside the park on those in-park products like food and beverage, extra-charge attractions, to name a couple. It is very encouraging.

John Reilly, President and CEO

And I think supports what John said before, which is we do not see a problem with the consumer or the health of the consumer. They are spending when they visit our parks. And, you know, our job is to just continue to find ways to improve that demand level. And I would say, this is John again. As we said, the solid spending that we saw is a sign that the revenue engine is intact. Along with the regional pass that we have laid out. But I would—I am taking the fourth quarter in-park per caps with a bit of caution. Because there is a lot of change in there with the reduction of the events, with the reduction of the operating days. So, you know, as we look at 2026, we expect growth in our in-park spending, but I think we are going to be careful about modeling what we saw in Q4 going forward because of the sort of noise in the quarter.

Thomas L. Yeh, Analyst

Okay. Understood. That is very helpful. And then one last one, just on the points about optimizing the investment structure. Wonder if you could just drill down a bit more on planned marketing spend because last year, I think you leaned into areas that did not stimulate as much demand as you desired. Just maybe any insights on unpacking the right level for that. Was it allocation issue? Or was it, you know, just kind of marketing into a weather situation that was the problem, how would you approach kind of taking that into the next season?

John Reilly, President and CEO

Yeah. So I would look at a couple of factors when we look at our marketing spending. I would look at, number one, the timing of the spend is something that is under evaluation. So, you know, we need to be sure that we are putting it in the right period of year that gives us the highest return on the ad spend. So that is one thing that is under review. We also have to look at the—you know, in terms of the power of the return on marketing, we have to look at the quality of creative. So the team is doing a lot of work to address some creative that they do not feel was as effective as it should have been last year. And then finally, in terms of our marketing spend, just more of the general sense, we have to look at our mix of awareness versus conversion spend. And, you know, one of the really great things about these parks is we have very high unaided awareness in our markets, but we are doing a lot of awareness marketing. And we think there is an opportunity to move more of our spend into dedicated conversion. So those are just three more general factors, if it helps, that are some of the work underway.

Thomas L. Yeh, Analyst

Yeah. Very helpful. Thank you.

Operator, Operator

Our last question for today comes from the line of Anthony Burney of Jefferies. Your line is now open.

Brian Witherow, CFO

Hey, good morning. This is Anthony on for David Brian Katz. Thanks for taking our questions. The first one is, can you talk a little bit about your capital allocation priorities? How should we weigh deleveraging versus CapEx spend?

John Reilly, President and CEO

And on CapEx, can you provide any ROIC targets that you have for that spending? This is John. I will start out. You know, first, what I would say is we have sufficient flexibility in our CapEx spend. You know, once we look at what is required for maintenance, which we would, you know, which we would always do, the remainder—you know, there is a lot of discretion in terms of attraction investments and other investments. I would say in terms of a change in focus or an accelerated change in focus would be CapEx dated to efficiency and automation that we talked about earlier. But we feel, you know, overall, we have a good amount of flexibility in the plan even when we address the maintenance CapEx as a given.

Brian Witherow, CFO

Yeah. And I think, Anthony, just maybe adding on to that, you know, as we have been very clear, you know, in addition to, you know, continuing to reinvest in the parks and to drive growth, to mine more of those cost efficiencies, as John just mentioned. We are looking to those projects—we are going to focus those on our highest and best ROI, certainly looking to exceed our weighted average cost of capital in any of those investments. But our priority, you know, in addition to growing the business through the right level—and we think that the $400 to $425 million for the plan for 2026 includes a very attractive and comprehensive capital program. Beyond that, it is continuing to funnel all of our excess free cash flow back towards paying down debt until we get net leverage back inside of 4.0x on a sustained level.

Anthony Burney, Analyst

Okay. Very helpful. Thank you. And just a quick follow-up. D&A was a little elevated this quarter. It seems it was due to some changes in accounting. Should we expect this to be sort of the new run rate for D&A? Or is this a one-time change?

Brian Witherow, CFO

Yeah. I would say you are right. I mean, it is a little bit of accounting noise, related to some purchase price adjustments on some of the legacy Six Flags parks as well as an accounting change related to the Cedar side, the legacy Cedar side of the ledger. I think, at this point in time, sans any significant change in the asset base, that is sort of the normalized run rate for the go forward.

John Reilly, President and CEO

Great. Thank you very much.

Michael Russell, Corporate Director of Investor Relations

That concludes today's question and answer session. I will now turn the call back to Michael Russell for closing remarks. Thanks again, everybody, for joining us today. Our next earnings call will be in early May when we will report our financial results for our February. Ellie, that concludes our call today. Thanks, everyone.

Operator, Operator

For attending today's call. You may now disconnect. Goodbye, everyone.