Financial Performance & Market Position - Cinemark reported second quarter total revenue of $941 million, a 28% increase year-over-year[35] - The company generated the highest quarterly Adjusted EBITDA and Adjusted EBITDA margin post-pandemic with $232 million and 24.7%, respectively[35] - Cinemark's domestic box office recovery surpassed the North American industry by over 1,000 basis points[35] - The company maintained core structural market share growth vs FY19 in excess of 100 bps in the U S and Latin America[35] - For the first half of 2025, Cinemark reported ~$1 5 billion of total revenue, an increase of 13% year-over-year[37] - Adjusted EBITDA for 1H25 was $269 million, representing an increase of 26% year-over-year, with an Adjusted EBITDA margin expansion of 190 bps to 18 1%[37] Assets & Customer Loyalty - Cinemark has consistently allocated $80-$100 million for global maintenance capex to maintain a high-quality circuit[15] - Approximately 70% of the U S footprint features reclined luxury seats[15] - Movie Club members increased to 1 45 million, growing 12% year-over-year and over 50% vs 2019, representing nearly 30% of domestic 2Q25 box office[35] Capital Allocation & Debt Management - The company is committed to repaying the $460 million principal amount of convertible notes maturing August 15, 2025, using cash on hand[48] - Cinemark repurchased $200 million of stock in March 2025 to proactively mitigate potential dilution from warrants, reducing share count by 7 93 million[48]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's analysis for Cinemark Holdings, Inc. and its subsidiaries [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Cinemark Holdings, Inc. and Cinemark USA, Inc., along with detailed notes on accounting policies, debt, and other financial disclosures [Cinemark Holdings, Inc. and Subsidiaries Financial Statements (unaudited)](index=5&type=section&id=Cinemark%20Holdings%2C%20Inc.%20and%20Subsidiaries%20Financial%20Statements%20%28unaudited%29) This sub-section provides the unaudited condensed consolidated financial statements for Cinemark Holdings, Inc. and its subsidiaries, including the Balance Sheets, Statements of Income, Statements of Comprehensive Income, Statements of Equity, and Statements of Cash Flows for the specified periods Cinemark Holdings, Inc. - Condensed Consolidated Balance Sheets (in millions) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :-------------- | | Total assets | $4,914.7 | $5,067.0 | | Total liabilities | $4,457.7 | $4,463.6 | | Total equity | $457.0 | $603.4 | Cinemark Holdings, Inc. - Condensed Consolidated Statements of Income (in millions, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $940.5 | $734.2 | $1,481.2 | $1,313.4 | | Operating income | $173.5 | $82.9 | $154.3 | $100.5 | | Net income attributable to Cinemark Holdings, Inc. | $93.5 | $45.8 | $54.6 | $70.6 | | Basic EPS | $0.81 | $0.37 | $0.46 | $0.58 | | Diluted EPS | $0.63 | $0.32 | $0.38 | $0.51 | Cinemark Holdings, Inc. - Condensed Consolidated Statements of Cash Flows (in millions) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $156.8 | $162.2 | | Net cash used for investing activities | $(45.2) | $(46.4) | | Net cash used for financing activities | $(246.3) | $(168.1) | | Decrease in cash and cash equivalents | $(125.7) | $(60.3) | | Cash and cash equivalents, end of period | $931.6 | $788.8 | [Cinemark USA, Inc. and Subsidiaries Financial Statements (unaudited)](index=12&type=section&id=Cinemark%20USA%2C%20Inc.%20and%20Subsidiaries%20Financial%20Statements%20%28unaudited%29) This sub-section provides the unaudited condensed consolidated financial statements for Cinemark USA, Inc. and its subsidiaries, including the Balance Sheets, Statements of Income, Statements of Comprehensive Income, Statements of Equity, and Statements of Cash Flows for the specified periods Cinemark USA, Inc. - Condensed Consolidated Balance Sheets (in millions) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :-------------- | | Total assets | $4,987.6 | $4,895.8 | | Total liabilities | $3,986.5 | $3,996.1 | | Total equity | $1,001.1 | $899.7 | Cinemark USA, Inc. - Condensed Consolidated Statements of Income (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $940.5 | $734.2 | $1,481.2 | $1,313.4 | | Operating income | $174.3 | $83.9 | $156.1 | $102.4 | | Net income attributable to Cinemark USA, Inc. | $99.2 | $50.1 | $64.6 | $77.5 | Cinemark USA, Inc. - Condensed Consolidated Statements of Cash Flows (in millions) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $164.4 | $164.9 | | Net cash used for investing activities | $(45.2) | $(46.4) | | Net cash used for financing activities | $(27.6) | $(168.1) | | Increase (decrease) in cash and cash equivalents | $100.6 | $(57.6) | | Cash and cash equivalents, end of period | $928.0 | $554.8 | [Notes to Condensed Consolidated Financial Statements](index=19&type=section&id=Cinemark%20Holdings%2C%20Inc.%20and%20Cinemark%20USA%2C%20Inc.%20Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies, new pronouncements, lease accounting, revenue recognition, debt, investments, and other financial disclosures for both entities - The Company operates in the theatrical exhibition industry with theaters in the U.S. and 13 countries in Latin America. Cinemark Holdings, Inc. consolidates Cinemark USA, Inc. and its subsidiaries, with CUSA's operations comprising nearly **100% of Holdings' revenue and expenses**[46](index=46&type=chunk) - The Company is evaluating the impact of new accounting pronouncements ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), with ASU 2023-09 effective for annual periods beginning after **December 15, 2024**, and ASU 2024-03 effective for annual periods beginning after **December 15, 2026**[49](index=49&type=chunk)[50](index=50&type=chunk) Lease Costs (in millions) | Lease Cost Classification | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total operating lease costs | $86.1 | $84.8 | $166.8 | $166.2 | | Total finance lease costs | $5.3 | $4.9 | $10.6 | $9.4 | - Revenue recognition policies include recognizing admissions revenue when showtime passes, concession revenue at the point of sale, and other revenues when performance obligations are fulfilled. Deferred revenue is recorded for gift cards, discount vouchers, and subscription program fees, with breakage revenue recognized based on historical experience[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) Disaggregated Revenue by Segment (in millions) | Revenue Type | U.S. Segment (Q2 2025) | International Segment (Q2 2025) | Consolidated (Q2 2025) | U.S. Segment (Q2 2024) | International Segment (Q2 2024) | Consolidated (Q2 2024) | | :------------------------------------ | :--------------------- | :------------------------ | :--------------------- | :--------------------- | :------------------------ | :--------------------- | | Admissions revenue | $383.4 | $83.7 | $467.1 | $287.4 | $78.4 | $365.8 | | Concession revenue | $307.6 | $70.1 | $377.7 | $231.4 | $61.5 | $292.9 | | Screen advertising, rental & promotional | $24.6 | $14.5 | $39.1 | $22.3 | $12.7 | $35.0 | | Other revenue | $43.7 | $12.9 | $56.6 | $30.9 | $9.6 | $40.5 | | **Total revenue** | **$759.3** | **$181.2** | **$940.5** | **$572.0** | **$162.2** | **$734.2** | Earnings Per Share (Holdings) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.81 | $0.37 | $0.46 | $0.58 | | Diluted EPS | $0.63 | $0.32 | $0.38 | $0.51 | - Holdings reinstated its quarterly dividend at **$0.08 per common share**, totaling **$19.5 million** for the six months ended June 30, 2025[81](index=81&type=chunk) Long-Term Debt Carrying Value (in millions) | Entity | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :-------------- | | Cinemark Holdings, Inc. | $2,360.5 | $2,363.7 | | Cinemark USA, Inc. | $1,900.5 | $1,903.7 | - Holders of the **4.50% Convertible Senior Notes** can convert them on or after **May 15, 2025**. The Company will repay the **$460.0 million principal** in cash on **August 15, 2025**, and settle amounts above principal in shares (estimated **17.0 million shares** based on June 30, 2025 closing price)[86](index=86&type=chunk)[87](index=87&type=chunk) - CUSA amended its senior secured credit facility on **June 30, 2025**, reducing the term loan interest rate by **0.50%** and resetting the 101% soft call for six months. This resulted in **$1.0 million in debt issuance costs** and a **$1.3 million write-off** of unamortized debt issuance costs[88](index=88&type=chunk)[90](index=90&type=chunk) Investment in NCMI and NCM Screen Advertising Advances (in millions) | Item | Investment in NCMI | NCM Screen Advertising Advances | | :------------------------------------ | :----------------- | :------------------------------ | | Balance at January 1, 2025 | $29.0 | $(318.5) | | Unrealized loss on fair market value adjustment | $(7.8) | — | | Amortization of screen advertising advances | — | $16.3 | | Balance at June 30, 2025 | $21.2 | $(312.9) | - Holdings repurchased **$201.6 million of common stock** under a share repurchase program that commenced on **March 11, 2025**, and concluded on **March 27, 2025**. The company also withheld **$17.4 million in shares** for employee tax liabilities upon vesting of restricted stock and performance stock units[106](index=106&type=chunk)[109](index=109&type=chunk) Goodwill by Segment (in millions) | Segment | January 1, 2025 | Foreign Currency Translation Adjustments | June 30, 2025 | | :------------------------------------ | :---------------- | :--------------------------------------- | :------------ | | U.S. Operating Segment | $1,182.9 | — | $1,182.9 | | International Operating Segment | $56.7 | $5.7 | $62.4 | | **Total** | **$1,239.6** | **$5.7** | **$1,245.3** | - The Company performed qualitative impairment analyses on goodwill, tradename intangible assets, and other long-lived assets as of **June 30, 2025**, finding no impairment indicators for goodwill and tradename. However, an asset impairment charge of **$1.6 million** was recorded for three international theaters due to insufficient recovery since reopening[127](index=127&type=chunk)[130](index=130&type=chunk) - The accumulated other comprehensive loss for Holdings and CUSA primarily includes cumulative net foreign currency losses (**$400.6 million for Holdings**, **$425.1 million for CUSA** as of June 30, 2025) from translating international subsidiaries' financial statements, and changes in fair value of interest rate swap agreements[135](index=135&type=chunk) - Argentina's economy has been classified as highly inflationary since **July 1, 2018**, requiring remeasurement of its financial statements to U.S. dollars. This resulted in foreign currency exchange losses of **$3.7 million** for the six months ended June 30, 2025[136](index=136&type=chunk)[139](index=139&type=chunk) Capital Expenditures by Reportable Segment (in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | U.S. | $25.0 | $16.1 | $41.9 | $34.2 | | International | $5.1 | $7.6 | $10.3 | $13.0 | | **Total capital expenditures** | **$30.1** | **$23.7** | **$52.2** | **$47.2** | - The Company is involved in various legal proceedings, including class action lawsuits related to the Fair and Accurate Credit Transactions Act, alleged mislabeling of draft beer cups, and California Labor Code violations. The Company maintains that the allegations are without merit and will vigorously defend itself[159](index=159&type=chunk)[160](index=160&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) - The Company is currently under IRS audit for tax years **2019 and 2020**, with a proposed income tax adjustment of **$65.0 million** before interest and penalties. The Company disagrees with the IRS's conclusions and intends to defend its reported positions[164](index=164&type=chunk) - The One Big Beautiful Bill Act (OBBBA), signed on **July 4, 2025**, makes permanent certain expiring tax provisions, including **100% bonus depreciation**. The Company is assessing the impact of OBBBA, which may lead to a conclusion that a portion of the U.S. valuation allowance will no longer be required[165](index=165&type=chunk)[167](index=167&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Cinemark Holdings, Inc.'s financial condition and results of operations, covering revenue, expenses, recent developments, and liquidity for the periods ended June 30, 2025 - The success of the theatrical exhibition industry depends on new film content volume, box office performance, exclusive theatrical release windows, and evolving consumer behavior amidst competition from other entertainment forms[170](index=170&type=chunk) - Revenue is primarily generated from box office receipts and concession sales, supplemented by screen advertising, screen rental, and other streams like transactional fees and gaming. Film rental costs are variable with admissions revenue, and concession supplies expense fluctuates with concession revenue and product mix[171](index=171&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) - Salaries and wages include fixed and variable components, influenced by attendance, amenities, and local regulations, with recent increases driven by labor market conditions and inflation. Facility lease expense is mostly fixed, while utilities and other costs include both fixed and variable components[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - General and administrative expenses are primarily fixed, covering corporate personnel, office facilities, and software, with variable components like incentive compensation and professional fees[178](index=178&type=chunk) - The recently signed One Big Beautiful Bill Act (OBBBA) makes permanent certain expiring tax provisions, including **100% bonus depreciation**, and the Company is assessing its impact on deferred tax assets and valuation allowances[179](index=179&type=chunk) [Recent Developments](index=47&type=section&id=Recent%20Developments) The One Big Beautiful Bill Act (OBBBA), signed on July 4, 2025, permanently restores certain tax benefits, including 100% bonus depreciation and the business interest expense limitation. The Company is currently evaluating the potential impact of this new law on its deferred tax assets and the need for valuation allowances - The OBBBA, signed **July 4, 2025**, makes permanent **100% bonus depreciation** and the business interest expense limitation. The Company is assessing if this will reduce the valuation allowance on its U.S. deferred tax assets[179](index=179&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) This section details the financial performance of Cinemark Holdings, Inc. for the three and six months ended June 30, 2025, compared to the same periods in 2024, highlighting changes in revenue, operating costs, and other income/expense items. Key drivers include film slate performance, strategic pricing, and foreign currency fluctuations Operating Data (in millions, except percentages) | Item | Q2 2025 | Q2 2024 | % Change (QoQ) | H1 2025 | H1 2024 | % Change (YoY) | | :------------------------------------ | :------ | :------ | :------------- | :------ | :------ | :------------- | | Total revenue | $940.5 | $734.2 | 28.1% | $1,481.2 | $1,313.4 | 12.8% | | Operating income | $173.5 | $82.9 | 109.3% | $154.3 | $100.5 | 53.5% | | Total cost of operations | $767.0 | $651.3 | 17.8% | $1,326.9 | $1,212.9 | 9.4% | | Operating income as % of total revenue | 18.4% | 11.3% | 7.1 pp | 10.4% | 7.7% | 2.7 pp | | Average screen count | 5,646 | 5,708 | (1.1)% | 5,647 | 5,710 | (1.1)% | [Three Months Ended June 30, 2025 vs. 2024](index=49&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20%28the%20%22second%20quarter%20of%202025%22%29%20versus%20the%20three%20months%20ended%20June%2030%2C%202024%20%28the%20%22second%20quarter%20of%202024%22%29) For the second quarter of 2025, total revenue increased by 28.1% to $940.5 million, driven by a stronger film slate and strategic pricing. U.S. attendance rose by 26.8%, and international attendance saw a slight increase. Operating costs also increased, with film rentals and advertising up due to high-grossing films, and salaries and wages rising due to attendance and inflation. General and administrative expenses decreased, while interest expense increased due to new debt and swap agreement amortization Revenue Performance (Q2 2025 vs. Q2 2024, in millions, except percentages) | Item | U.S. 2025 | U.S. 2024 | U.S. % Change | Intl. 2025 | Intl. 2024 | Intl. % Change | Consolidated 2025 | Consolidated 2024 | Consolidated % Change | | :-------------------------- | :-------- | :-------- | :------------ | :--------- | :--------- | :------------- | :---------------- | :---------------- | :-------------------- | | Admissions revenue | $383.4 | $287.4 | 33.4% | $83.7 | $78.4 | 6.8% | $467.1 | $365.8 | 27.7% | | Concession revenue | $307.6 | $231.4 | 32.9% | $70.1 | $61.5 | 14.0% | $377.7 | $292.9 | 29.0% | | Other revenue | $68.3 | $53.2 | 28.4% | $27.4 | $22.3 | 22.9% | $95.7 | $75.5 | 26.8% | | **Total revenue** | **$759.3** | **$572.0** | **32.7%** | **$181.2** | **$162.2** | **11.7%** | **$940.5** | **$734.2** | **28.1%** | | Attendance (millions) | 36.9 | 29.1 | 26.8% | 21.0 | 20.9 | 0.5% | 57.9 | 50.0 | 15.8% | | Average ticket price | $10.39 | $9.88 | 5.2% | $3.99 | $3.75 | 6.4% | $8.07 | $7.32 | 10.2% | | Concession revenue per patron | $8.34 | $7.95 | 4.9% | $3.34 | $2.94 | 13.6% | $6.52 | $5.86 | 11.3% | - U.S. attendance increased by **26.8%** due to a stronger film slate. Average ticket price rose by **5.2%** due to strategic pricing and favorable format mix. Concession revenue per patron increased by **4.9%** from strategic pricing, higher merchandise mix, and increased incidence rates. Other revenue grew by **28.4%** due to higher attendance and gaming revenue[187](index=187&type=chunk) - International attendance slightly increased by **0.5%**. In constant currency, average ticket price increased by **17.3%** due to strategic and inflationary pricing. Concession revenue per patron increased by **24.1%** in constant currency due to pricing and merchandise mix. Other revenue increased by **37.7%** in constant currency due to inflation, screen advertising, and loyalty program revenue[187](index=187&type=chunk) Cost of Operations (Q2 2025 vs. Q2 2024, in millions, except percentages) | Item | U.S. 2025 | U.S. 2024 | U.S. % Change | Intl. 2025 | Intl. 2024 | Intl. % Change | Consolidated 2025 | Consolidated 2024 | Consolidated % Change | | :-------------------------- | :-------- | :-------- | :------------ | :--------- | :--------- | :------------- | :---------------- | :---------------- | :-------------------- | | Film rentals and advertising | $227.7 | $164.6 | 38.3% | $43.1 | $39.4 | 9.4% | $270.8 | $204.0 | 32.7% | | Concession supplies | $57.0 | $43.2 | 31.9% | $16.1 | $13.4 | 20.1% | $73.1 | $56.6 | 29.2% | | Salaries and wages | $90.9 | $80.8 | 12.5% | $18.5 | $16.5 | 12.1% | $109.4 | $97.3 | 12.4% | | Facility lease expense | $62.2 | $60.0 | 3.7% | $20.7 | $21.5 | (3.7)% | $82.9 | $81.5 | 1.7% | | Utilities and other | $97.7 | $80.1 | 22.0% | $27.0 | $24.6 | 9.8% | $124.7 | $104.7 | 19.1% | - U.S. film rentals and advertising costs increased to **59.4% of admissions revenue** (from 57.3%) due to high-grossing films and increased marketing. Concession supplies expense decreased to **18.5% of concession revenue** (from 18.7%) due to strategic pricing and higher rebates. Salaries and wages increased by **12.5%** due to higher attendance, operating hours, and wage inflation. Utilities and other costs increased by **22.0%** due to attendance, credit card fees, and real estate taxes[190](index=190&type=chunk) - International film rentals and advertising costs were **51.5% of admissions revenue** (from 50.3%) due to high-grossing films and marketing. Concession supplies expense increased to **23.0% of concessions revenue** (from 21.8%) due to a higher merchandise mix. In constant currency, salaries and wages increased due to inflation and labor hours. Facility lease expense and utilities and other costs also increased in constant currency due to inflation[190](index=190&type=chunk) - Holdings' general and administrative expense decreased to **$54.1 million** (from $55.7 million) primarily due to lower share-based compensation and favorable exchange rates, partially offset by wage inflation and higher professional fees. Depreciation and amortization remained stable at **$49.4 million**[191](index=191&type=chunk)[192](index=192&type=chunk) - An asset impairment charge of **$1.6 million** was recorded for three international theaters in Q2 2025; no such charges were recorded in Q2 2024. Loss on disposal of assets decreased to **$1.0 million** (from $1.7 million)[193](index=193&type=chunk)[194](index=194&type=chunk) - Holdings' interest expense increased to **$39.4 million** (from $34.6 million) due to the issuance of 7.00% Senior Notes and amortization of swap losses. Interest income decreased to **$11.2 million** (from $12.5 million) for Holdings due to lower average cash balances from stock repurchases[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk) - Loss on debt amendments and extinguishments decreased to **$1.5 million** (from $2.5 million). Foreign currency exchange loss decreased to **$1.0 million** (from $6.3 million). Net loss on investment in NCMI increased to **$4.3 million** (from $3.2 million) due to mark-to-market adjustments[198](index=198&type=chunk)[199](index=199&type=chunk)[201](index=201&type=chunk) - Holdings' income tax expense was **$42.5 million** (effective rate **31.0%**) in Q2 2025, compared to a **$0.9 million benefit** (effective rate **(1.8)%**) in Q2 2024. The Q2 2024 rate was favorably impacted by valuation allowance changes in foreign jurisdictions[202](index=202&type=chunk) [Six Months Ended June 30, 2025 vs. 2024](index=53&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20%28the%20%222025%20period%22%29%20versus%20the%20six%20months%20ended%20June%2030%2C%202024%20%28the%20%222024%20period%22%29) For the six months ended June 30, 2025, total revenue increased by 12.8% to $1,481.2 million, driven by a stronger film slate and strategic pricing. U.S. attendance rose by 9.1%, while international attendance remained flat. Operating costs increased, with film rentals and advertising up due to high-grossing films, and salaries and wages rising due to attendance and inflation. General and administrative expenses increased, and interest expense rose due to new debt and swap agreement amortization Revenue Performance (H1 2025 vs. H1 2024, in millions, except percentages) | Item | U.S. 2025 | U.S. 2024 | U.S. % Change | Intl. 2025 | Intl. 2024 | Intl. % Change | Consolidated 2025 | Consolidated 2024 | Consolidated % Change | | :-------------------------- | :-------- | :-------- | :------------ | :--------- | :--------- | :------------- | :---------------- | :---------------- | :-------------------- | | Admissions revenue | $591.0 | $519.2 | 13.8% | $140.2 | $136.4 | 2.8% | $731.2 | $655.6 | 11.5% | | Concession revenue | $472.0 | $410.0 | 15.1% | $116.1 | $107.1 | 8.4% | $588.1 | $517.1 | 13.7% | | Other revenue | $113.4 | $99.8 | 13.6% | $48.5 | $40.9 | 18.6% | $161.9 | $140.7 | 15.1% | | **Total revenue** | **$1,176.4** | **$1,029.0** | **14.3%** | **$304.8** | **$284.4** | **7.2%** | **$1,481.2** | **$1,313.4** | **12.8%** | | Attendance (millions) | 57.5 | 52.7 | 9.1% | 37.0 | 37.0 | 0.0% | 94.5 | 89.7 | 5.4% | | Average ticket price | $10.28 | $9.85 | 4.4% | $3.79 | $3.69 | 2.7% | $7.74 | $7.31 | 5.9% | | Concession revenue per patron | $8.21 | $7.78 | 5.5% | $3.14 | $2.89 | 8.7% | $6.22 | $5.76 | 8.0% | - U.S. attendance increased by **9.1%** due to a stronger film slate. Average ticket price rose by **4.4%** due to strategic pricing. Concession revenue per patron increased by **5.5%** from strategic pricing, higher merchandise mix, and increased incidence rates. Other revenue grew by **13.6%** due to higher attendance and gaming revenue[211](index=211&type=chunk) - International attendance was flat. In constant currency, average ticket price increased by **15.2%** due to inflationary pricing. Concession revenue per patron increased by **20.4%** in constant currency due to pricing and merchandise mix. Other revenue increased by **35.0%** in constant currency due to inflation, screen advertising, and loyalty program revenue[211](index=211&type=chunk) Cost of Operations (H1 2025 vs. H1 2024, in millions, except percentages) | Item | U.S. 2025 | U.S. 2024 | U.S. % Change | Intl. 2025 | Intl. 2024 | Intl. % Change | Consolidated 2025 | Consolidated 2024 | Consolidated % Change | | :-------------------------- | :-------- | :-------- | :------------ | :--------- | :--------- | :------------- | :---------------- | :---------------- | :-------------------- | | Film rentals and advertising | $340.9 | $290.9 | 17.2% | $71.3 | $67.4 | 5.8% | $412.2 | $358.3 | 15.0% | | Concession supplies | $90.8 | $77.5 | 17.2% | $26.6 | $23.1 | 15.2% | $117.4 | $100.6 | 16.7% | | Salaries and wages | $165.5 | $153.3 | 8.0% | $34.2 | $30.9 | 10.7% | $199.7 | $184.2 | 8.4% | | Facility lease expense | $122.4 | $120.5 | 1.6% | $38.8 | $38.3 | 1.3% | $161.2 | $158.8 | 1.5% | | Utilities and other | $179.5 | $158.4 | 13.3% | $50.9 | $46.7 | 9.0% | $230.4 | $205.1 | 12.3% | - U.S. film rentals and advertising costs increased to **57.7% of admissions revenue** (from 56.0%) due to high-grossing films and marketing. Concession supplies expense increased to **19.2% of concession revenue** (from 18.9%) due to merchandise mix and inflation. Salaries and wages increased by **8.0%** due to attendance, operating hours, and wage inflation. Utilities and other costs increased by **13.3%** due to attendance, credit card fees, and real estate taxes[212](index=212&type=chunk) - International film rentals and advertising costs were **50.9% of admissions revenue** (from 49.4%) due to high-grossing films and marketing. Concession supplies expense increased to **22.9% of concessions revenue** (from 21.6%) due to inflation and merchandise mix. In constant currency, salaries and wages increased due to inflation and labor hours. Facility lease expense and utilities and other costs also increased in constant currency due to inflation and reduced rent abatements[212](index=212&type=chunk)[213](index=213&type=chunk) - Holdings' general and administrative expense increased to **$108.6 million** (from $104.6 million) due to wage inflation and higher professional fees, partially offset by favorable exchange rates. Depreciation and amortization decreased slightly to **$98.9 million**[214](index=214&type=chunk)[215](index=215&type=chunk) - An asset impairment charge of **$1.6 million** was recorded for three international theaters in H1 2025; no such charges in H1 2024. A gain on disposal of assets of **$3.1 million** was recorded in H1 2025 (vs. $2.1 million loss in H1 2024) from land and theater sales[215](index=215&type=chunk)[216](index=216&type=chunk) - Holdings' interest expense increased to **$77.9 million** (from $72.3 million) due to the issuance of 7.00% Senior Notes and amortization of swap losses. Interest income decreased to **$23.2 million** (from $26.1 million) for Holdings due to lower average cash balances from stock repurchases[217](index=217&type=chunk)[218](index=218&type=chunk) - Loss on debt amendments and extinguishments decreased to **$1.5 million** (from $2.5 million). Foreign currency exchange loss decreased to **$0.5 million** (from $4.9 million). Net loss on investment in NCMI was **$7.9 million** (vs. $1.2 million gain in H1 2024) due to mark-to-market adjustments[219](index=219&type=chunk)[221](index=221&type=chunk)[225](index=225&type=chunk) - Holdings' income tax expense was **$27.8 million** (effective rate **33.1%**) in H1 2025, compared to a **$28.6 million benefit** (effective rate **(66.0)%**) in H1 2024. The H1 2024 rate was favorably impacted by a **$39.5 million deferred tax benefit** from valuation allowance releases in foreign jurisdictions[226](index=226&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity and capital resources, including cash flows from operating, investing, and financing activities. It details the company's debt structure, including convertible senior notes, senior secured credit facility, and senior notes, along with associated covenants and compliance. The company believes existing cash and expected cash flows are sufficient to meet obligations for the next twelve months and beyond - The Company primarily collects revenue in cash, creating an operating 'float' that historically negates the need for traditional working capital financing. Existing cash and expected cash flows are deemed sufficient for working capital, capital expenditures, and contractual obligations for the next **12 months and beyond**[229](index=229&type=chunk) - Cash provided by operating activities decreased for both Holdings (**$156.8 million** vs. $162.2 million) and CUSA (**$164.4 million** vs. $164.9 million) for the six months ended June 30, 2025, primarily due to the timing of vendor payments[230](index=230&type=chunk) - Cash used for investing activities decreased to **$45.2 million** (from $46.4 million) for the six months ended June 30, 2025, primarily due to the sale of a land parcel and a theater property, partially offset by increased capital expenditures[231](index=231&type=chunk) Capital Expenditures by Type (in millions) | Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :----------------------------- | :----------------------------- | | New theaters | $11.6 | $2.8 | | Existing theaters | $40.6 | $44.4 | | **Total** | **$52.2** | **$47.2** | - As of **June 30, 2025**, the Company operated **497 theaters** with **5,647 screens** worldwide. It has commitments for **4 new theaters** and **35 screens**, with an estimated remaining investment of **$71.4 million**[232](index=232&type=chunk)[233](index=233&type=chunk) - Cash used for financing activities increased for Holdings to **$246.3 million** (from $168.1 million) due to common stock repurchases (**$200 million**), quarterly cash dividends, and increased restricted stock withholdings. CUSA's cash used for financing decreased to **$27.6 million** (from $168.1 million) due to the redemption of secured notes in 2024, partially offset by increased restricted stock withholdings[236](index=236&type=chunk) - Holdings completed a **$200 million share repurchase program** between **March 11 and March 27, 2025**, funded by cash on hand[237](index=237&type=chunk) - Holdings reinstated a quarterly cash dividend of **$0.08 per common share**, totaling **$19.5 million** for the six months ended June 30, 2025[239](index=239&type=chunk)[240](index=240&type=chunk) - The **4.50% Convertible Senior Notes**, with **$460.0 million principal**, mature on **August 15, 2025**. The Company will repay the principal in cash and settle amounts above principal in shares (estimated **17.0 million shares**). Concurrently, hedge transactions will offset this share issuance[241](index=241&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk) - Warrant transactions allow option counterparties to purchase approximately **32.2 million shares** at a strike price of **$21.95 per share**, expiring between **November 2025 and March 2026**. The Company may settle these in cash or shares (estimated **8.8 million shares** if settled in shares)[251](index=251&type=chunk) - CUSA amended its senior secured credit facility on **June 30, 2025**, reducing the term loan interest rate by **0.50%**. Quarterly principal payments of **$1.6 million** are due through **March 31, 2030**, with the remaining balance due **May 24, 2030**. The average interest rate on the term loan was approximately **5.8%** as of June 30, 2025[256](index=256&type=chunk)[257](index=257&type=chunk)[265](index=265&type=chunk) - CUSA's **7.00% Senior Notes** (**$500.0 million**) mature on **August 1, 2032**, and **5.25% Senior Notes** (**$765.0 million**) mature on **July 15, 2028**. Both are senior unsecured obligations, guaranteed by certain CUSA subsidiaries, and structurally subordinated to non-guarantor subsidiaries' debt[266](index=266&type=chunk)[267](index=267&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk) - As of **June 30, 2025**, CUSA could distribute up to **$4.2 billion** to Holdings under indenture terms. The required minimum coverage ratio for incurring additional indebtedness is **2 to 1**, with the actual ratio at **6.7 to 1**. The Consolidated Net Total Leverage Ratio was **1.41 to 1.00**, and the Available Amount was **$1,023.4 million**, indicating compliance with debt covenants[274](index=274&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the Company's exposure to financial market risks, specifically interest rate risk and foreign currency exchange rate risk. It details the impact of potential interest rate changes on variable rate debt and confirms no material changes in foreign currency exchange rate risk from previous disclosures - The Company has exposure to interest rate risk due to variable rate debt. As of **June 30, 2025**, with **$185.5 million in variable rate debt** (after interest rate swaps), a **100 basis point increase** in market interest rates would increase annual interest expense by **$1.9 million**[279](index=279&type=chunk) Holdings Debt by Rate Type (in millions) | Debt Type | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | Fair Value | Average Interest Rate | | :---------- | :--- | :--- | :--- | :--- | :--- | :--------- | :---- | :--------- | :-------------------- | | Fixed rate | $460.0 | — | — | $765.0 | $450.0 | $500.0 | $2,175.0 | $2,712.9 | 5.5% | | Variable rate | $6.4 | $6.4 | $6.4 | $6.4 | $159.9 | — | $185.5 | $186.6 | 6.5% | | **Total debt** | **$466.4** | **$6.4** | **$6.4** | **$771.4** | **$609.9** | **$500.0** | **$2,360.5** | **$2,899.5** | **5.6%** | CUSA Debt by Rate Type (in millions) | Debt Type | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | Fair Value | Average Interest Rate | | :---------- | :--- | :--- | :--- | :--- | :--- | :--- | :---- | :--------- | :-------------------- | | Fixed rate | — | — | — | $765.0 | $450.0 | $500.0 | $1,715.0 | $1,736.6 | 5.8% | | Variable rate | $6.4 | $6.4 | $6.4 | $6.4 | $159.9 | — | $185.5 | $186.6 | 6.5% | | **Total debt** | **$6.4** | **$6.4** | **$6.4** | **$771.4** | **$609.9** | **$500.0** | **$1,900.5** | **$1,923.2** | **5.9%** | - The Company uses three interest rate swap agreements to hedge a portion of the interest rate risk on its variable rate term loan, which qualify for cash flow hedge accounting[283](index=283&type=chunk) - There have been no material changes in foreign currency exchange rate risk from the disclosures in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[284](index=284&type=chunk) [Item 4. Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that Cinemark Holdings, Inc. and Cinemark USA, Inc.'s principal executive and financial officers evaluated the effectiveness of their disclosure controls and procedures as of June 30, 2025, concluding they were effective. It also states that there were no material changes in internal control over financial reporting during the quarter - As of **June 30, 2025**, the principal executive and financial officers of Cinemark Holdings, Inc. and Cinemark USA, Inc. concluded that their disclosure controls and procedures were effective in providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[285](index=285&type=chunk)[286](index=286&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended **June 30, 2025**, that materially affected, or are reasonably likely to materially affect, Holdings' and CUSA's internal control over financial reporting[287](index=287&type=chunk) [PART II. OTHER INFORMATION](index=70&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides other information including legal proceedings, risk factors, equity sales, Rule 10b5-1 plans, and supplemental financial schedules [Item 1. Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 17 for details on legal proceedings, indicating no material changes from previously reported legal proceedings in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in legal proceedings from those previously reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, other than the discussion in Note 17[290](index=290&type=chunk) [Item 1A. Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes in risk factors have occurred since those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[291](index=291&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details Holdings' purchases of its common stock during the second quarter of 2025, primarily to satisfy employee tax-withholding obligations upon vesting of restricted stock. No shares were purchased as part of publicly announced plans during this period Holdings' Common Stock Purchases (Q2 2025) | Period | Total Number of Shares Purchased (thousands) | Average Price Paid per Share | | :-------------------- | :----------------------------------------- | :--------------------------- | | April 1 through April 30 | 1.03 | $29.03 | | May 1 through May 31 | 7.90 | $30.29 | | June 1 through June 30 | — | — | | **Total** | **8.93** | | - Shares were repurchased to satisfy employee tax-withholding obligations upon vesting in restricted stock. No shares were purchased under publicly announced plans during this period[292](index=292&type=chunk) [Item 5. Other Information](index=71&type=section&id=Item%205.%20Other%20Information) This section provides information on Rule 10b5-1 trading plans adopted by several executives and a director, outlining their intentions to sell company common stock for personal financial planning. It also includes supplemental consolidating financial schedules for Cinemark USA, Inc. and its restricted/unrestricted subsidiaries, as required by senior notes indentures - Several executives and a director adopted Rule 10b5-1 trading plans between **September 2024 and June 2025** to sell shares of the Company's common stock for personal financial planning purposes. These plans are intended to satisfy the affirmative defense of Rule 10b5-1(c)[294](index=294&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk) - Supplemental consolidating financial schedules for Cinemark USA, Inc. and its restricted and unrestricted subsidiaries are included, as required by the indentures governing CUSA's **7.00% Senior Notes** and **5.25% Senior Notes**[301](index=301&type=chunk) [Adoption of Rule 10b5-1 Trading Plans](index=71&type=section&id=Adoption%20of%20Rule%2010b5-1%20Trading%20Plans) This sub-section details the adoption of Rule 10b5-1 trading plans by several key personnel, including the CFO, CEO, President of Cinemark International, General Counsel, Chief Marketing and Content Officer, and a director, for the orderly sale of company common stock for personal financial planning - Melissa Thomas (CFO) adopted a plan on **Sept 6, 2024**, to sell up to **36,000 shares**, expiring **Sept 14, 2025**[294](index=294&type=chunk) - Sean Gamble (CEO) adopted a plan on **Sept 6, 2024**, to sell up to **131,750 shares**, which expired on **April 18, 2025**[295](index=295&type=chunk) - Valmir Fernandes (President of Cinemark International) adopted a plan on **Nov 27, 2024**, to sell up to **50,000 shares**, expiring **Sept 10, 2025**[296](index=296&type=chunk) - Michael Cavalier (EVP General Counsel) adopted a plan on **March 12, 2025**, to sell up to **22,140 shares**, expiring **Feb 18, 2026**[297](index=297&type=chunk) - Wanda Gierhart (Chief Marketing and Content Officer) adopted a plan on **March 13, 2025**, to sell up to **63,693 current shares** plus **2,136 vesting shares**, expiring **Nov 12, 2025**[298](index=298&type=chunk) - Mark Zoradi (Director) adopted a plan on **June 10, 2025**, to sell up to **63,370 shares**, expiring **Dec 31, 2025**[299](index=299&type=chunk) [Supplemental Schedules Specified by the Senior Notes Indentures](index=72&type=section&id=Supplemental%20Schedules%20Specified%20by%20the%20Senior%20Notes%20Indentures) This sub-section presents unaudited condensed consolidating financial statements for Cinemark USA, Inc. and its Restricted and Unrestricted Groups, as mandated by the senior notes indentures. These schedules include the Balance Sheet, Statement of Income, Statement of Comprehensive Income, and Statement of Cash Flows for the six months ended June 30, 2025 Cinemark USA, Inc. - Condensed Consolidating Balance Sheet (as of June 30, 2025, in millions) | Item | Restricted Group | Unrestricted Group | Eliminations | Consolidated | | :------------------------------------ | :--------------- | :----------------- | :----------- | :----------- | | Total assets | $5,050.0 | $443.5 | $(505.9) | $4,987.6 | | Total liabilities | $4,244.9 | $134.5 | $(392.9) | $3,986.5 | | Equity | $805.1 | $309.0 | $(113.0) | $1,001.1 | Cinemark USA, Inc. - Condensed Consolidating Statement of Income (Six Months Ended June 30, 2025, in millions) | Item | Restricted Group | Unrestricted Group | Eliminations | Consolidated | | :------------------------------------ | :--------------- | :----------------- | :----------- | :----------- | | Revenue | $1,481.2 | — | — | $1,481.2 | | Total cost of operations | $1,325.1 | — | — | $1,325.1 | | Operating income | $156.1 | — | — | $156.1 | | Net income attributable to Cinemark USA, Inc. | $64.4 | $0.2 | — | $64.6 | Cinemark USA, Inc. - Condensed Consolidating Statement of Cash Flows (Six Months Ended June 30, 2025, in millions) | Item | Restricted Group | Unrestricted Group | Eliminations | Consolidated | | :------------------------------------ | :--------------- | :----------------- | :----------- | :----------- | | Net cash provided by operating activities | $155.6 | $8.8 | — | $164.4 | | Net cash (used for) provided by investing activities | $(55.9) | $10.7 | — | $(45.2) | | Net cash used for financing activities | $(27.6) | — | — | $(27.6) | | Increase in cash and cash equivalents | $81.1 | $19.5 | — | $100.6 | | Cash and cash equivalents, end of year | $774.6 | $153.4 | — | $928.0 | [Item 6. Exhibits](index=77&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including amendments to credit agreements, certifications from the CEO and CFO (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and interactive data files formatted in iXBRL for the financial statements - Exhibits include the Third Amendment to the Second Amended and Restated Credit Agreement (Exhibit **10.1**), CEO and CFO certifications for both Cinemark Holdings, Inc. and Cinemark USA, Inc. (Exhibits **31.1-31.4** and **32.1-32.4**), and iXBRL formatted financial statements (Exhibit **101**)[317](index=317&type=chunk) [SIGNATURES](index=78&type=section&id=SIGNATURES) This section contains the official signatures of the Chief Executive Officer and Chief Financial Officer for both Cinemark Holdings, Inc. and Cinemark USA, Inc., certifying the filing of the report pursuant to the Securities Exchange Act of 1934 - The report is signed by Sean Gamble, Chief Executive Officer, and Melissa Thomas, Chief Financial Officer, for both Cinemark Holdings, Inc. and Cinemark USA, Inc., on **August 1, 2025**[320](index=320&type=chunk)

Core Insights - CJ 4DPLEX and Cinemark have announced the addition of 20 new SCREENX locations, expanding their partnership and increasing the total number of SCREENX theaters to 26 [1][2] - Of the 20 new locations, 18 will be in the United States, with six set to open in 2025 and the rest in 2026, while SCREENX will debut in Latin America for the first time [2][4] - SCREENX technology offers a 270-degree panoramic viewing experience, enhancing storytelling by extending visuals onto the auditorium walls [3][7] Company Overview - CJ 4DPLEX is a leading cinema technology company based in Seoul, known for innovative formats like SCREENX, 4DX, and Ultra 4DX [5][6] - Cinemark is one of the largest theatrical exhibition companies globally, operating nearly 500 theaters and over 5,500 screens across the U.S. and Latin America [10] Market Impact - The expansion of SCREENX locations is a response to strong audience demand for premium cinema formats, indicating a growing trend in the industry towards immersive viewing experiences [4][10] - The partnership aims to revolutionize the cinematic experience, reinforcing Cinemark's position as a key player in the theatrical exhibition market [4][10]

Core Insights - Cinemark is expanding its partnership with CJ 4DPlex by adding 20 new ScreenX theaters, with 18 located in the U.S. and the expansion marking ScreenX's entry into Latin America [2][4] - The ScreenX format offers a 270-degree panoramic viewing experience, enhancing the cinematic experience and catering to the growing demand for premium large format screens [3][6] - Premium large format (PLF) tickets have gained popularity post-pandemic, representing 22% of domestic sales this year, with an average ticket price of $17.61, indicating a willingness among moviegoers to pay more for enhanced experiences [8] Company Developments - Cinemark currently operates six ScreenX locations and plans to open six more by the end of the year, aiming to capitalize on upcoming major film releases [3][4] - The investment in ScreenX theaters is part of a broader trend in the theatrical industry towards premium viewing experiences, which are seen as a way to differentiate from streaming services [6][7] Industry Trends - The theatrical industry is witnessing a shift towards premium formats, with moviegoers increasingly favoring larger screens and better sound systems, leading to higher ticket prices [6][8] - CJ 4DPlex, known for its 4DX theaters, is focused on providing unique cinematic experiences that cannot be replicated at home, further driving the demand for premium formats [7]

Core Viewpoint - Cinemark Holdings (CNK) is anticipated to report a year-over-year increase in earnings driven by higher revenues for the quarter ended June 2025, with a consensus EPS estimate of $0.78, reflecting a 143.8% increase from the previous year, and revenues expected to reach $947.59 million, a 29.1% increase [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for August 1, and the stock may rise if the reported figures exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised down by 6.09% over the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP for Cinemark is +1.27%, suggesting analysts have recently become more optimistic about the company's earnings prospects [12]. - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. Historical Performance - In the last reported quarter, Cinemark was expected to post a loss of $0.32 per share but delivered exactly that, resulting in no surprise [13]. - Over the past four quarters, Cinemark has beaten consensus EPS estimates twice [14]. Industry Context - In the broader industry context, Live Nation (LYV) is expected to report earnings of $1.03 per share for the same quarter, with revenues projected at $6.82 billion, a 13.2% increase from the previous year [18][19].

Group 1 - The article provides a buy rating for Cinemark (NYSE: CNK), indicating a belief that the industry is entering a new cycle of recovery supported by an increase in film supply [1] - The company has a clean balance sheet, which allows for potential growth opportunities [1] - The investment approach focuses on understanding core business economics, including competitive moat, unit economics, reinvestment runway, and management quality, which are essential for long-term free cash flow generation and shareholder value creation [1] Group 2 - The author emphasizes a focus on sectors with strong secular tailwinds, suggesting a positive outlook for the industry [1] - The motivation for sharing insights is to help readers focus on what drives long-term equity value [1] - The analysis aims to be both analytical and accessible, providing value to readers seeking high-quality, long-term investment opportunities [1]

Core Viewpoint - The company demonstrates growth through effective operational management, despite having lower revenue compared to competitors, and possesses a business model that ensures financial sustainability [1]. Investment Approach - The analysis follows a triangulation approach involving valuation by multiples, discounted cash flow (DCF), and dividend yield, focusing on Consumer Discretionary and Consumer Staples sectors [1]. - Emphasis is placed on companies with smaller capitalization and low institutional coverage, which present greater potential for asymmetries and alpha generation [1]. - The investment philosophy integrates income and value investing strategies, requiring a sufficient margin of safety in multiples and projected cash flow [1]. Dividend Yield - Dividend yield is considered a crucial element for generating returns and serves as a risk mitigation criterion, particularly for low coverage stocks [1]. Analytical Methodology - The analysis is grounded in a bottom-up approach, concentrating on operational fundamentals, execution history, and sustainable growth drivers [1]. - In-depth, rational, data-driven analyses are produced to support informed and independent investment decisions [1].

Investment Rating - The report does not explicitly state an investment rating for the theater industry or specific companies like Cinemark and IMAX Core Insights - Domestic Box Office (DBO) is tracking +26% Year-to-Date (YTD) through May 2025 compared to the previous year, but remains -28% YTD compared to 2019 levels [4] - The second quarter DBO is projected to be $3.0 billion, representing a +55% increase YoY and -8% compared to 2019 [4] - Cinemark's attendance is up +18% YTD through May, with fluctuations in market share observed [3][30] - Consumer sentiment metrics indicate that Cinemark outperforms peers in areas such as pricing and concessions, although it has lost some ground in screen and sound quality [9][60][66] Box Office Performance - The DBO for May 2025 showed a significant increase of +76% YoY [13] - Major titles like "Sinners," "Final Destination: Bloodlines," and "Lilo & Stitch" have performed well, while big action titles like "Thunderbolts" and "Mission Impossible 8" have underperformed [4][39] - The report anticipates a total DBO of $9.5 billion for 2025, with an increase in expectations for 2Q25 DBO by +$90 million [10] Attendance and Market Share - Cinemark's mobile app downloads increased by +86% YoY in May, with monthly active users (MAUs) up +33% [49][51] - Attendance data from Placer AI indicates that Cinemark's theater attendance is +54% YoY in May [30] - Cinemark has maintained market share gains post-COVID, attributed to investments in quality and loyalty programs [21] Consumer Sentiment - Net Purchase Intent (NPI) for Cinemark remained flat month-over-month in April 2025, indicating positive consumer sentiment compared to peers [9][60] - Cinemark has consistently outperformed competitors in consumer sentiment metrics related to pricing and concessions [60][64] Film-by-Film Estimates - The report includes detailed film-by-film estimates for 2024-2026, indicating a strong pipeline of upcoming releases that could impact box office performance [71]

Core Viewpoint - President Trump's threats of tariffs on foreign-produced movies could significantly impact the American movie industry, which he claims is "dying" due to incentives offered by other countries to filmmakers [2][4]. Industry Impact - Trump's comments have created uncertainty in the movie industry, particularly for major companies like Walt Disney Co, which generates billions at the box office annually [1][4]. - The movie sector's performance may contradict Trump's claims, as the box office is projected to increase by 15.8% year-over-year in 2025, potentially benefiting companies like AMC Entertainment and Cinemark Holdings [3]. - Tariffs could slow down the movie theater sector and affect stock prices of major studios such as Disney, Paramount Global, and Warner Bros. Discovery, as well as streaming services like Netflix, which produces many series outside the U.S. [4][5]. Tariff Details - Trump has authorized the Department of Commerce to begin the process of instituting a 100% tariff on movies produced in foreign lands, labeling it a "national security threat" [2][6]. - The vagueness of Trump's comments raises questions about how tariffs would apply to films with foreign filming locations but American production credits [7][9]. Examples and Concerns - The upcoming Paramount film "Mission: Impossible – The Final Reckoning," filmed primarily in the U.K., may serve as an early example of how tariffs could affect the industry [7][8]. - Industry veterans express concerns that such tariffs could harm the sector significantly, with some suggesting that it could lead to the collapse of independent distributors [10][11]. State Incentives - In contrast to Trump's tariff threats, California Governor Gavin Newsom is advocating for $750 million in annual incentives for content filmed in the state, aiming to support the local industry [10].

Core Insights - The CEO of Cinemark, Sean Gamble, expressed optimism about a box office recovery that began in April, highlighting Amazon MGM's commitment to theatrical releases [1][3] - The ongoing debate regarding theatrical windows was addressed, with Gamble supporting a 45-day window for most films [2][5] - Despite a widening loss of $39 million in Q1, revenue increased by 7% to $541 million, indicating a potential recovery in the industry [2][3] Industry Performance - The industry has historically performed well during economic uncertainty, with the North American box office growing in six of the last eight recessions [7] - The current box office recovery is attributed to strong content and a positive outlook from studios, including plans from Amazon MGM to release 14 to 16 films by 2027 [3][4] - The debate on theatrical windows is ongoing, with a consensus that a 45-day window may be beneficial for most films to build cultural relevance [5][6] Market Dynamics - M&A activity in the exhibition sector may increase as surviving theaters look for buyers, with the box office showing signs of recovery [3] - The industry remains resilient in the face of economic challenges, as consumers continue to seek affordable out-of-home entertainment options [8] - The impact of external factors, such as trade tariffs and economic growth, is acknowledged, but the industry is optimistic about navigating these challenges [6]