Core Viewpoint - Zeekr Technology Group has demonstrated significant financial improvements in Q2 2025, with record high gross margins and revenue growth driven by strategic synergies with Lynk & Co [1][3]. Financial Performance - In Q2 2025, Zeekr's revenue reached 27.431 billion yuan, a quarter-over-quarter increase of 24.6% and a year-over-year increase of 36.9% [1]. - The overall gross margin was 20.6%, marking a historical high, while the vehicle gross margin was 17.3%, up 5.8 percentage points year-over-year [1]. - For the first half of 2025, total revenue was 49.45 billion yuan, a year-over-year increase of 42.2%, with vehicle revenue at 42.012 billion yuan, up 8% [3]. Cost Management - R&D expense ratio decreased to 7.8%, down 5.8 percentage points year-over-year, while selling and administrative expense ratio was 12.3%, down 1.2 percentage points year-over-year [3]. Strategic Synergies - The merger with Lynk & Co has led to three strategic outcomes: a clear restructuring of the brand matrix, significant reductions in R&D and management costs due to scale effects, and a robust product cycle with new models and technologies set to drive sales and financial performance [3]. Privatization Progress - On July 15, 2025, Geely Holding Group announced a merger agreement to acquire Zeekr at $2.678 per share, with an estimated total cash requirement of approximately $2.4 billion [4][5]. - The merger is expected to be completed by the end of the year, pending approvals from shareholder meetings on September 5 and September 15 [5].

Financial Data and Key Metrics Changes - The first quarter operating loss was greater than the combined loss of the legacy companies in 2024, but only slightly above expectations in the operating plan, consistent with off-season investments [5][12] - First quarter attendance represented approximately 5.5% of full year attendance, and revenues were closer to 6%, lower than the historical expectation of 7% [12][40] - The company maintains its full year 2025 adjusted EBITDA guidance of $1,080 million to $1,120 million [19] Business Line Data and Key Metrics Changes - Attendance trends in April showed a slight increase of over 1% compared to the prior year, despite adverse weather conditions [14] - Per capita spending improved in April, indicating a positive trend as attendance levels increased [15][55] - Season pass sales narrowed the gap to prior year by approximately 2% in units sold and 3% in total sales [15] Market Data and Key Metrics Changes - Bookings at resort properties increased by more than 10% compared to the same week last year, indicating strong consumer engagement [7] - The company experienced a significant impact on attendance due to weather, estimating a loss of approximately 175,000 visits in April [14][51] Company Strategy and Development Direction - The company is focused on executing its merger integration plan, optimizing cost structures, and enhancing guest experiences to drive demand [8][27] - Plans to close the Maryland parks after the 2025 season align with the strategy to simplify operations and focus on high-margin parks [24][25] - The capital strategy remains disciplined, with expectations to invest approximately $1 billion in capital projects for 2025 and 2026 [26] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the business outlook despite macroeconomic uncertainties, supported by strong demand indicators [6][19] - The company is actively monitoring consumer behavior and has seen resilience in spending on entertainment options [7][55] - Management emphasized the importance of maintaining a strong guest experience to drive repeat visits [86] Other Important Information - The company ended the quarter with $62 million in cash and $179 million available under its revolving credit facility [21] - Capital expenditures for the first quarter were $140 million, consistent with the full year expectation of $475 million to $500 million [22] Q&A Session Summary Question: How do you expect attendance and sales growth in the second quarter? - Management believes the second and third quarters present higher margin opportunities and expects strong demand [31][32] Question: Can you quantify the attendance impact from the Easter and Boysenberry Festival shifts? - Management noted that weather impacted attendance, but they expect to recover lost opportunities in the second quarter [33][34] Question: What gives you confidence to keep the guidance unchanged despite softer April tracking? - Management cited strong long lead indicators, including season pass sales and positive consumer behavior even in poor weather [50][51] Question: What are the expectations for proceeds from land sales? - Management indicated that proceeds from land sales could exceed a couple of hundred million dollars [59] Question: How is the unification of the season pass selling strategy progressing? - Management noted that harmonization efforts are ongoing and that they expect improved sales trends as the season progresses [61][65]

Financial Data and Key Metrics Changes - The first quarter operating loss was greater than the combined loss of the legacy companies in 2024, but only slightly above expectations in the operating plan, consistent with off-season investments [6][14][15] - First quarter attendance represented approximately 5.5% of full year attendance, and revenues were closer to 6%, lower than the historical expectation of 7% [15][46][47] - The company maintains its full year 2025 adjusted EBITDA guidance of $1,080 million to $1,120 million [23][24] Business Line Data and Key Metrics Changes - Attendance trends in April showed a slight increase of over 1% compared to the prior year, despite adverse weather conditions [17] - Per capita spending improved in April, indicating a positive trend as attendance levels increased [18][60] - Season pass sales narrowed the gap to prior year by approximately 2% in units sold and 3% in total sales [19] Market Data and Key Metrics Changes - Bookings at resort properties trended higher, up more than 10% compared to the same week last year, indicating strong consumer engagement [8] - The company expects to add 36 additional operating days in the second quarter, which should enhance attendance and revenue opportunities [20] Company Strategy and Development Direction - The company is focused on executing its merger integration plan, optimizing cost structures, and enhancing guest experiences to drive demand [10][26] - Plans to close the Maryland parks after the 2025 season align with the strategy to simplify operations and focus on high-margin parks [27][28] - The capital strategy remains disciplined, with expected investments of approximately $1 billion for 2025 and 2026 [29][30] Management's Comments on Operating Environment and Future Outlook - Management remains confident in achieving the 2025 performance goals despite economic uncertainties, supported by strong demand indicators [10][62] - The company is actively monitoring consumer behavior and has seen resilience in spending on entertainment options [9][60] - Management emphasized the importance of cost management and anticipates a reduction in operating costs and expenses by more than 3% this year [22][84] Other Important Information - The company ended the quarter with $62 million in cash and $179 million available under its revolving credit facility, indicating strong liquidity [24] - The company incurred $15 million in non-recurring merger-related integration costs during the first quarter [20] Q&A Session Summary Question: How do you expect attendance and sales growth in the second quarter to compare to the additional operating days? - Management believes the second and third quarters present higher margin opportunities and expects strong demand during these periods [35][36] Question: Can you quantify the attendance impact from the Easter and Boysenberry Festival shifts? - Management noted that weather impacted attendance, estimating a loss of approximately 175,000 visits in April, but expects to recover in the second quarter [37][38] Question: What gives you confidence to maintain guidance despite softer April performance? - Management highlighted strong demand indicators, including season pass sales and attendance at parks despite adverse weather [56][60] Question: What are the expectations for proceeds from land sales in Maryland? - Management indicated that gross proceeds from land sales could exceed a couple of hundred million dollars, contributing to deleveraging efforts [66] Question: How is the unification of the season pass selling strategy progressing? - Management reported positive trends in sales and emphasized the importance of harmonizing ticketing systems across the portfolio [69][72]