National CineMedia(NCMI) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q4 2024, National CineMedia, Inc. reported revenue of $86.3 million, slightly exceeding the guidance of $82 million to $86 million, but down from $90.9 million in Q4 2023 [22][33] - Adjusted OIBDA for Q4 2024 was $35 million, surpassing the guidance range of $28 to $30 million, compared to $39.8 million in the prior year [22][38] - Full-year 2024 revenue was $240.8 million, down from $259.8 million in 2023, with adjusted OIBDA of $45.7 million compared to $52.7 million in 2023 [24][39] Business Line Data and Key Metrics Changes - National advertising revenue for Q4 2024 decreased to $69.2 million from $71.9 million in Q4 2023, while local and regional advertising revenue fell to $13.5 million from $16.2 million [33] - The fourth quarter saw attendance of 101 million, driven by new titles, with full-year attendance at 390.7 million, reflecting a decline of 11% year over year [24][40] Market Data and Key Metrics Changes - The total domestic box office for Q4 2024 reached approximately $2.4 billion, a 26% increase year over year, with the full-year box office totaling $8.6 billion [12][15] - The audience demographic remains strong, with Gen Z and Millennials accounting for 69% of total viewership in Q4 2024 [17] Company Strategy and Development Direction - The company is focusing on advertising growth, leveraging its NCMx data intelligence platform to enhance audience engagement and drive measurable results for advertisers [28][29] - National CineMedia, Inc. plans to continue investing in client solutions, including programmatic and self-serve advertising, to drive revenue growth in the coming years [31][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the cinema industry's recovery, particularly in Q2 2025, despite expecting a softer performance in Q1 due to a weaker film slate and advertising market headwinds [30][48] - The company anticipates a strong film slate for 2025, with several high-profile releases expected to drive attendance and revenue growth [51] Other Important Information - The company closed a new revolving facility with US Bank, reducing its cost of debt and annual interest expense, and has no outstanding long-term debt as of now [44][45] - National CineMedia, Inc. has repurchased 2.5 million shares for $13.4 million as part of its $100 million share repurchase program [45] Q&A Session Summary Question: Expectations on advertising headwinds - Management indicated that the pacing for Q2 looks encouraging compared to last year, with optimism for the second half of the year [55][56] Question: KPI-based ad sales and advertiser retention - Management noted that half of the business is supported through NCMx, which is significant for advertiser retention and engagement [58] Question: Share of national advertisers still on the sidelines - Management acknowledged the need to calculate the percentage of pre-pandemic advertisers that have yet to return [63] Question: Attendance growth expectations for 2025 and 2026 - Management stated that attendance is the primary driver of revenue growth, with forecasts for 2025 and 2026 aligning with industry expectations [66][67] Question: Advertiser sentiment compared to prior years - Management reported positive sentiment among advertisers, with expectations for a better upfront season compared to the previous year [72][76] Question: Demand for premium screens and advertising - Management confirmed strong demand from advertisers for premium screens, which is expected to benefit the company [80] Question: Local and regional business growth - Management expressed optimism about the local and regional teams' potential for growth in 2025 and 2026, following reinvestment in sales resources [84]