Q2 2024 National CineMedia Inc Earnings Call
Speaker Change: © BF-WATCH TV 2021 © BF-WATCH TV 2021
Operator: Good day, and welcome to the National CineMedia Inc. second quarter 2024 earnings conference call. Today's conference is being recorded, and at this time, I would like to turn the conference over to Chan Park, Senior Vice President of Finance. Please go ahead.
Speaker Change: Good day and welcome to the National CineMedia Inc. second quarter 2024 earnings conference call. Today's conference is being recorded and at this time I would like to turn the conference over to Chan Park, Senior Vice President of Finance. Please go ahead.
Chan Park: Good afternoon. I'm joined today by our Chief Executive Officer, Tom Lesinski, and our Chief Financial Officer, Ronnie Ng. I would like to remind our listeners that this conference call contains forward-looking statements within the meaning of 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts communicated during this conference call may constitute forward-looking statements.
Speaker Change: Good afternoon. I'm joined today by our Chief Executive Officer, Tom Lesinski, and our Chief Financial Officer, Ronnie Ng.
Chan Park: These four forward-looking statements involve risks and uncertainty. Important factors that can cause actual results to differ materially from the company's expectations are disclosed in the risk factors contained in the company's filings with DSEC. All four forward-looking statements are expressly qualified in their entirety by such factors. Furthermore, our discussion today includes some non-GATT measures. In accordance with Regulation G, we have reconciled these amounts back to the closest gap basis measurement. These reconciliations can be found at the end of today's earnings release or on the investor relations page of our website at ncm.com.
Speaker Change: I would like to remind our listeners that this conference call contains four looking statements within the meaning of 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Speaker Change: All statements other than statements of historical facts communicated during this conference call may constitute overlooking statements.
Speaker Change: These four-looking statements involve risks and uncertainties. Important factors that can cause actual results to differ materially from the company's expectations are disclosed in the risk factors contained in the company's filings with DSCC.
Speaker Change: All four looking statements are expressly qualified in their entirety by such factors.
Speaker Change: Further, our discussion today includes some non- GAAP measures . In accordance with Regulation G, we have reconciled these amounts back to the closest GAP basis measurement.
Speaker Change: These recognizations can be found at the end of today's earnings release or on the investor relations page of our website at ncm.com.
Chan Park: Today, we will be discussing NCM LLC's operating results as they relate to the second quarter of 2024, which are largely similar to NCM Inc.'s results. We are reporting NCMLLC's operating results to provide an accurate comparison to the second quarter of 2023, when we also reported NCMLLC's results, given fiscal year 2023 results were unconsolidated. Now, I'll turn the call over to Tom.
Speaker Change: Today, we will be discussing NCM LLC's operating results as they relate to the second quarter of 2024, which are largely similar to NCM Inc.'s results.
Tom Lesinski: We are reporting NCMLLC's operating results to provide an accurate comparison to the second quarter of 2023 when we also reported NCMLLC's results, given fiscal year 2023 results were unconsolidated. Now, I'll turn the call over to Tom.
Tom Lesinski: Thank you, Chan, and good afternoon, everyone. Welcome to our second quarter 2024 earnings call. The cinema industry saw consistent momentum throughout the second quarter of 2024 as we entered into the summer. The box office brought in $1.9 billion, driven by highly anticipated theatrical releases including Inside Out 2, Kingdom of the Planet of the Apes, and Bad Boys Ride or Die. Inside Out 2 earned the spot as the biggest movie of the first half of 2024 and became the second largest animated opening of all time, bringing in $469 million in the second quarter alone.
Tom Lesinski: Inside Out 2 was also the first film since Barbie to earn more than $1 billion globally, the first $100 million opening in 2024, and Pixar's top grossing movie of all time. Kingdom of the Planet of the Apes added to the success of its franchise, bringing in $168 million, 16% higher than its last installment. And finally, the sequel, Bad Boys Arrive or Die, brought in $165 million, with the second highest R-rated opening since Oppenheimer.
Tom Lesinski: Thank you, Chan, and good afternoon, everyone. Welcome to our second quarter 2024 earnings call.
Tom Lesinski: The cinema industry saw consistent momentum throughout the second quarter of 2024 as we entered into the summer.
Speaker Change: The box office brought in $1.9 billion, driven by highly anticipated theatrical releases including Inside Out 2, Kingdom of the Planet of the Apes, and Bad Boys Ride or Die.
Speaker Change: Inside Out 2 earned the spot as the biggest movie of the first half of 2024 and became the second largest animated opening of all time, bringing in $469 million in the second quarter alone.
Speaker Change: Inside Out 2 was also the first film since Barbie to earn more than $1 billion globally, the first $100 million opening in 2024, and Pixar's top-grossing movie of all time.
Speaker Change: Kingdom of the Planet of the Apes added to the success of its franchise bringing in $168 million dollars, 16% higher than its last installment, and finally the sequel Bad Boys Arrive or Die brought in $165 million with the second highest R-rated opening since Oppenheimer.
Tom Lesinski: Deadpool and Wolverine built upon the strong box office momentum from the last several months, taking theatrical moviegoing to new heights and boosting moviegoer enthusiasm. Although the lingering effects of the industry strikes reduced and postponed releases in the second quarter, we were encouraged by the sequential improvement at the box office each month. Specifically, the 28% increase from April to May and the 75% increase from May to June reaffirmed that there is growing consumer demand for moviegoing, especially when the slate has broad demographic appeal. Inside Out 2 drew moviegoers of all ages to the theaters, reminding them of the joy they felt from cinema and sparking the success of many other films to overperform against expectations.
Speaker Change: Deadpool and Wolverine built upon the strong box office momentum from the last several months, taking theatrical moviegoing to new heights and boosting moviegoer enthusiasm.
Speaker Change: Although the lingering effects of the industry strikes reduced and postponed releases in the second quarter, we were encouraged by the sequential improvement at the box office each month.
Speaker Change: Specifically, the 28% increase from April to May and the 75% increase from May to June reaffirmed that there is growing consumer demand for moviegoing, especially when the slate has broad demographic appeal.
Speaker Change: Inside Out 2 drew moviegoers of all ages to the theaters, reminding them the joy they feel from cinema and sparking the success of many other films to overperform against expectations.
Tom Lesinski: Furthermore, June brought in nearly $1 billion at the box office, the best month of the year so far. We have seen the box office continue to accelerate in recent weeks with the massive success of Deadpool and Wolverine breaking numerous records, including becoming the biggest July opening of all time. We are highly confident that the box office will continue to build upon this momentum in the latter half of 2024 and into 2025, as supply continues to normalize and with several highly anticipated films hitting the big screen.
Speaker Change: Furthermore, June brought in nearly $1 billion at the box office, the best month year to date.
Speaker Change: We have seen the box office continue to accelerate in recent weeks, with the massive success of Deadpool and Wolverine breaking numerous records, including becoming the biggest July opening of all time.
Speaker Change: We are highly confident that the box office will continue to build upon this momentum in the latter half of 2024 and into 2025, as supply continues to normalize and with several highly anticipated films hitting the big screen.
Tom Lesinski: The box office, from family-friendly hits to new installments of franchise titles, catered to all demographics of moviegoers this quarter. Our core audience, Gen Z and Millennials, represented 70% of our viewership in the second quarter, with a cumulative reach of more than 30 million individuals. Recent opening weekends of Inside Out 2 and Bad Boys commanded 51% and 50% of the 18 to 34-year-old age demographic, respectively. So far this year, family-friendly films including Inside Out 2, Kung Fu Panda 4, and the Garfield movie have had widespread success.
Speaker Change: The box office, from family-friendly hits to new installments of franchise titles, catered to all demographics of moviegoers this quarter.
Speaker Change: Our core audience, Gen Z and Millennials, represented 70% of our viewership in the second quarter with a cumulative reach of more than 30 million individuals.
Speaker Change: Recent opening weekends of Inside Out 2 and Bad Boys commanded 51% and 50% of the 18 to 34 year old age demographic, respectively.
Speaker Change: So far this year, family-friendly films including Inside Out 2, Kung Fu Panda 4, and the Garfield movie have had widespread success.
Tom Lesinski: NCM's audience includes these highly sought-after groups, with families comprising 58% of our moviegoers, ultimately expanding the reach for our advertisers. Gen Z comprised 40% of NCM's quarterly audience, demonstrating a strong 5.9 weekly rating throughout the quarter, 3 times the average weekly rating of the NBA Finals and 10 times the average rating of the Stanley Cup Finals. Additionally, over 45 million of the hard-to-reach 18- to 34-year-old demographic came to MCM's theaters, averaging a 5.0 weekly rating, almost two times the average prime time rating of the largest streaming platform.
Speaker Change: NCM's audience includes these highly sought-after groups, with families comprising 58% of our moviegoers, ultimately expanding the reach for our advertisers.
Speaker Change: Gen Z comprised 40% of NCM's quarterly audience, demonstrating a strong 5.9 weekly rating throughout the quarter, 3 times the average weekly rating of the NBA Finals and 10 times the average rating of the Stanley Cup Finals.
Speaker Change: Additionally, over 45 million of the hard-to-reach 18 to 34-year-old demographic came to NCM Theaters, averaging a 5.0 weekly rating, almost two times the average primetime rating of the largest streaming platform.
Tom Lesinski: These trends are continuing into the third quarter as Deadpool and Wolverine seize the cultural spotlight, captivating young, diverse audiences and outperforming Olympic coverage, with an impressive 20.7 rating over the three-day weekend from the 18- to 34-year-old age group. Viewership of Deadpool and Wolverine outpaced the opening ceremony by nearly five times, with strong ratings and an average consumer age of 30, comparing very favorably to broadcast average age of 63 and the largest streaming services average age of 41.
Speaker Change: These trends are continuing into the third quarter as Deadpool and Wolverine seize the cultural spotlight, captivating young diverse audiences and outperforming Olympic coverage.
Speaker Change: With an impressive 20.7 rating over the three-day weekend from the 18 to 34-year-old age group, viewership of Deadpool and Wolverine outpaced the opening ceremony by nearly five times.
Speaker Change: with strong ratings and an average consumer age of 30 comparing very favorably to broadcast average age of 63 and the largest streaming services average age of 41.
Tom Lesinski: It is clearer than ever why advertisers continue to turn to NCM. Before turning to the company's results, I want to touch upon some of the trends we're seeing in the premium video advertising marketplace, which is experiencing a multi-year shift in spending away from legacy linear broadcast and cable networks. NCM's solutions continue to compare favorably to the new ad-supported streaming platforms, given our demonstrated track record of delivering strong impressions and our ability to provide brands with impactful metrics. Due to these dynamics, cinema remains uniquely positioned, given our track record of delivering hard-to-reach audiences at scale with synchronous viewing.
Speaker Change: It is clearer than ever why advertisers continue to turn to NCM.
Speaker Change: Before turning to the company's results, I want to touch upon some of the trends we're seeing with the premium video advertising marketplace.
Speaker Change: which is experiencing a multi-year shift in spending away from legacy linear broadcast and cable networks.
Speaker Change: NCM's solutions continue to compare favorably to the new ad-supported streaming platforms given our demonstrated track record of delivering strong impressions and our ability to provide brands with impactful metrics.
Speaker Change: Due to these dynamics, cinema remains uniquely positioned, given our track record of delivering hard-to-reach audiences at scale, with synchronous viewing.
Tom Lesinski: Through NCM's differentiated and highly valued offerings, we continue to grow our client base across key national and local ad categories, demonstrating our ongoing attractiveness to advertisers who are following consumers to the movies in a shifting marketplace. Year-to-date, NCM has welcomed 11 new advertisers that have placed major cinema advertising campaigns. Additionally, our Silence Your Cell Phones Courtesy Partnerships were among the largest revenue drivers in our premium offering. Currency advertising was up 88% year-over-year, driven by new travel and tech industry partners. Now, to our results.
Speaker Change: Throughout NCM's differentiated and highly valued offerings, we continue to grow our client base across key national and local ad categories, demonstrating our ongoing attractiveness to advertisers who are following consumers to the movies in a shifting marketplace.
Speaker Change: Year-to-date, NCM has welcomed 11 new advertisers that have placed major cinema advertising campaigns. Additionally, our Silence Your Cellphones Courtesy Partnerships were among the largest revenue drivers in our premium offering.
Speaker Change: Courtesy advertising was up 88% year over year, driven by new travel and tech industry partners.
Tom Lesinski: NCM's revenue continues to significantly outperform both the box office and attendance levels, reinforcing the appeal of our offering. Specifically, the second quarter box office was down 27% year over year, and attendance dropped 31% over the same period, while NCM's total advertising revenue was down only 11% year over year, proving our ability to continue to outpace a challenging market. This quarter, approximately 78% of the second quarter's national revenue was attributable to longer-term upfront commitments. Additionally, the scatter market continued to grow year over year, which helped offset the impact of the attendance loss.
Speaker Change: Now, to our results.
Speaker Change: NCM's revenue continues to significantly outperform both the box office and attendance levels, reinforcing the appeal of our offerings.
Speaker Change: Specifically, the second quarter box office was down 27% year-over-year and attendance dropped 31% over the same period.
Speaker Change: While NCM's total advertising revenue was down only 11% year-over-year, proving our ability to continue to outpace a challenging market.
Speaker Change: This quarter, approximately 78% of the second quarter's national revenue was attributable to longer-term upfront commitments. Additionally, the scatter market continued to grow year-over-year, which helped offset the impact of the attendance loss.
Tom Lesinski: NCM saw strength across several categories this quarter, with government, travel, and automotive categories leading the way. Advertisers in government and the travel industry, including booking sites, cruise lines, airlines, and hotels, continue to rely on cinema to reach high-value customers, as government accounted for 17% of total NCM ad spending this quarter, and travel advertisers comprised approximately 16% of total ad spending. Several categories also demonstrated meaningful growth, including tech, which was up more than six times year over year, insurance, up 89% year over year, and government, up 84% year over year.
Speaker Change: NCM saw strength across several categories this quarter, with government, travel, and automotive categories leading the way.
Speaker Change: Advertisers in government and the travel industry.
Speaker Change: including booking sites, cruise lines, airlines, and hotels.
Speaker Change: continue to rely on cinema to reach high-value customers as government accounted for 17% of total NCM ad spending this quarter and travel advertisers comprised approximately 16% of total ad spending.
Speaker Change: Several categories also demonstrated meaningful growth, including tech, which was up more than six times year over year, insurance up 89% year over year, and government up 84% year over year.
Tom Lesinski: Our strong reach across young demographics drove meaningful contributions from automotive, which comprised 13% of total NCM national ad spending this quarter. This quarter, we saw automotive and government initiatives focused on EVs, in particular, intentionally turning to NCM to target that elusive 18- to 34-year-old audience that NCM delivers. The second quarter of 2024 represented the second best quarter ever for our Platinum advertising offering, only trailing the fourth quarter of 2019, with sales up more than 15 times compared to the second quarter of 2023.
Speaker Change: Our strong reach across young demographics drove meaningful contributions from automotive which comprised 13% of total NACM national ad spending this quarter.
Speaker Change: This quarter, we saw automotive and government initiatives focused on EVs in particular intentionally turning to NCM to target that elusive 18- to 34-year-old audience that NCM delivers.
Speaker Change: The second quarter of 2024 represented the second best quarter ever for our platinum advertising offering. Only trailing the fourth quarter of 2019 was sales up more than 15 times compared to the second quarter of 2023.
Tom Lesinski: Interest in this offering continues to broaden as advertisers from several premier categories, including government, entertainment, and dining, all utilize platinum advertising to showcase their campaigns in the second quarter. Furthermore, interest in experiential marketing is leading to new opportunities to drive demand, as demonstrated by the recent Nerds Candy campaign. This national on-screen campaign, which was developed in-house by NCM's creative team, brought the first ever holographic activation to select movie theaters in major U.S. cities, featuring a holographic Nerds Gummi cluster.
Speaker Change: Interest in this offering continues to broaden as advertisers from several premier categories, including government, entertainment, and dining, all utilize platinum advertising to showcase their campaigns in the second quarter.
Speaker Change: Furthermore, interest in experiential marketing is leading to new opportunities to drive demand, as demonstrated by the recent Nerds Candy campaign.
Speaker Change: This national on-screen campaign, which was developed in-house by NCM's creative team, brought the first ever holographic activation to select movie theaters in major U.S. cities, featuring a holographic nerd scummy cluster.
Tom Lesinski: Success in these alternative formats continues to expand advertisers' appetite to explore non-traditional, longer-form, or experiential advertising solutions. Regarding partnerships and sponsorships, in the second quarter of 24, one of the world's largest airlines joined NCM as the first ever official travel sponsor of our U.S. Young Lions competition, which is open to the rising stars of the advertising industry who are also aligned with NCM's Gen Z movie going on. We've also seen an uptick in sponsorships during the newbie pre-show, including custom-branded content from a leading insurance, automotive, beverage, and entertainment company.
Speaker Change: Success in these alternative formats continues to expand advertisers appetite to explore non-traditional longer form or experiential advertising solutions.
Speaker Change: Regarding partnerships and sponsorships in the second quarter of 24, one of the world's largest airlines joined NCM as the first ever official travel sponsor of our U.S. Young Lions competition, which is open to the rising stars of the advertising industry who are also aligned with NCM's Gen Z moviegoing audience.
Speaker Change: We've also seen an uptick in sponsorships during the newbie pre-show, including custom-branded content from a leading insurance, automotive, beverage, and entertainment company.
Tom Lesinski: As we've said before, NCM has been at the forefront of revolutionizing cinema measurements through our data intelligence platform known as NCMx. Year-to-date, 43% of our current sales revenue is directly tied to our advanced measurement capabilities provided by MCMX. The power of NCMX to prove business outcomes continues to pay dividends as leaders in undershared categories such as pharma and quick-serve restaurants realize NCM's ability to drive measurable results. To share one example, a leading QSR brand saw a 27% lift in foot traffic at their stores, with 42% of those visits occurring within 24 hours of exposure to a cinema ad.
Speaker Change: As we've said before, NCM has been at the forefront of revolutionizing cinema measurements through our data intelligence platform known as NCMx.
Speaker Change: Year-to-date, 43% of our current sales revenue is directly tied to our advanced measurement capabilities provided by NCMX.
Speaker Change: The power of NCMX to prove business outcomes continues to pay dividends as leaders in undershared categories, such as pharma and quick-serve restaurants, realize NCM's ability to drive measurable results.
Speaker Change: To share one example, a leading QSR brand saw a 27% lift in foot traffic at their stores, with 42% of those visits occurring within 24 hours of exposure to a cinema ad.
Tom Lesinski: NCMX is the most powerful data platform in cinema, and we continue to enhance its capabilities. Our proprietary suite of digital solutions now includes cutting-edge innovations designed to enhance a brand's message before, during, and after the movie. This includes introducing reminder messaging via NCMEC's Boomerang.
Speaker Change: NCMX is the most powerful data platform in cinema, and we continue to enhance its capabilities. Our proprietary suite of digital solutions now includes cutting-edge innovations designed to enhance a brand's message before, during, and after the movies.
Speaker Change: This includes introducing reminder messaging via NCMEC's Boomerang.
Tom Lesinski: NCM's new exclusive QR code enhancement product, moviegoer retargeting, and the largest programmatic cinema capabilities in the industry, all powered by the most extensive moviegoer database available. When a moviegoer scans the QR code displayed in theaters, it will enable them to receive a text, email, or calendar reminder to visit the respective advertiser's website after the movie, increasing engagement and driving outcomes. We have already launched our first two campaigns with a leading automotive company and a global quick-serve restaurant, and we are excited for what is to come in the future.
Speaker Change: NCM's new exclusive QR code enhancement product.
Speaker Change: moviegoer retargeting, and the largest programmatic cinema capabilities in the industry.
Speaker Change: all powered by the most extensive movie-over-database available.
Speaker Change: When a moviegoer scans the QR code displayed in theaters, it will enable them to receive a text, email, or calendar reminder to visit the respective advertiser's website after the movie, increasing engagement and driving outcomes. We have already launched our first two campaigns.
Speaker Change: with a leading automotive company and a global quick-serve restaurant, and we are excited for what is to come in the future.
Tom Lesinski: Additionally, this quarter, NCM announced the integration of its Cinema Audience data into the Nielsen All-Minute Respondent Level data, also known as AMRL. Through this integration, agency decision-makers will be able to compare cinema's effectiveness to other mediums, further proving it is the premier platform for storytelling with the most attentive audience in the media. As a leader in the premium video advertising marketplace, we are excited for advertisers to see firsthand why we're positioned to reach sought-after audiences. Looking ahead.
Speaker Change: Additionally, this quarter, NCM announced the integration of its Cinema Audience data into the Nielsen All-Minute Respondent Level data.
Speaker Change: also known as AMRLB.
Speaker Change: Through this integration, agency decision-makers will be able to compare cinema's effectiveness to other mediums, further proving it is the premier platform for storytelling with the most attentive audience in the media.
Speaker Change: As a leader in the premium video advertising marketplace, we are excited for advertisers to see firsthand why we're positioned to reach sought-after audiences.
Tom Lesinski: We are focusing on new and innovative client solutions. Interest in our recently launched on-screen programmatic offerings surged in the second quarter, unlocking new demand channels for NCM, including first-time deals with leading brands in CPG, retail, and automotive, with expansions across other categories, including government, tech, and travel. As we continue to expand our programmatic reach, we expect it will drive sustainable business revenues for NCM. Specifically, this June was our highest grossing month for on-screen programmatic offerings since launching in February, including our largest deal to date and our first programmatic guaranteed deal with a leading automotive company.
Speaker Change: Looking ahead, we are focusing on new and innovative client solutions.
Speaker Change: Interested in our recently launched on-screen programmatic offering, Surge, in the second quarter, unlocking new demand channels for NCM, including first-time deals with leading brands in CPG, retail, and automotive, with expansions across other categories including government, tech, and travel.
Speaker Change: As we continue to expand our programmatic reach, we expect it will drive sustainable business revenues for NCM. Specifically, this June was our highest grossing month for on-screen programmatic offering since launching in February .
Speaker Change: including our largest deal to date and our first programmatic guaranteed deal with a leading automotive company.
Tom Lesinski: Programmatic's launch introduced a new option for advertisers who have not historically purchased cinema directly, given NCM access to new agency buyers and parts of client budgets that were previously unavailable to us. Both private and programmatic guarantee deals have expanded NCM's client base by tapping into budgets earmarked for programmatic initiatives.
Speaker Change: Programmatic's launch introduced a new option for advertisers who have not had historically purchased cinema directly, given NCM access to new agency buyers and parts of client budgets that were previously unavailable to us.
Speaker Change: Both private and programmatic guarantee deals have expanded NCM's client base by tapping into budgets earmarked for programmatic initiatives.
Tom Lesinski: During the second quarter, NCM had 44 unique advertisers across our on-screen and in-lobby programmatic offerings. As we look to the remainder of the year, there are more than a dozen programmatic deals in the pipeline, and we're seeing momentum across scatter businesses as well. We are always exploring new paths to expand our pipeline and are actively working to integrate programmatic with additional platforms to further increase our coverage and provide enhanced solutions to our clients.
Speaker Change: During second quarter, MCM had 44 unique advertisers across our on-screen and in-lobby programmatic offerings.
Speaker Change: As we look to the remainder of the year, there are more than a dozen programmatic deals in the pipeline, and we're seeing momentum across scatter businesses as well.
Speaker Change: We are always exploring new paths to expand our pipeline and are actively working to integrate programmatic with additional platforms to further increase our coverage and provide enhanced solutions to our clients.
Tom Lesinski: Through our self-serve offering, we are continuing to redefine the movie experience for advertisers through sponsored content, alternative distributions, and experiential activation. For those unfamiliar with our self-serve offering, it's the first fully automated self-serve solution in cinema advertising that empowers local and regional companies to plan, buy, schedule, and create their ads to run on the big screen. In the second quarter, our self-serve offering had 44 unique advertisers, and we saw an uptick in all the aspects of the offering compared to the first quarter of 2024, with orders up 157%, and sales up 141% quarter over quarter.
Speaker Change: Through our self-serve offering, we are continuing to redefine the movie experience for advertisers through sponsored content, alternative distributions, and experiential activations.
Speaker Change: For those unfamiliar with our self-serve offering, it's the first fully automated self-serve solution in cinema advertising that empowers local and regional companies to plan, buy, schedule, and create their ads to run on the big screen.
Speaker Change: In the second quarter, our self-serve offering had 44 unique advertisers.
Speaker Change: And we saw an uptick in all the aspects of the offering compared to the first quarter of 2024.
Speaker Change: with the orders up 157% and sales up 141% quarter over quarter.
Tom Lesinski: Since its initial testing, our self-serve program has delivered significant growth quarter-over-quarter, and we expect it to continue contributing to higher commercial utilization across the InSim network. Before I turn the call over to Ronnie, I want to take a moment to introduce the newest member of the NCIM Executive Team. In May, Catherine Sullivan joined NCM as our new President of Sales, Marketing, and Partnerships. She is a seasoned media executive and strategist, bringing over three decades of experience from PHD Media US, Omnicom Media Group, ABC Television, and NBC Universal Media.
Speaker Change: Since its initial testing, our self-serve program has delivered significant growth quarter-over-quarter and we expect it to continue contributing to higher commercial utilization across the NCM network.
Tom Lesinski: In her role, Catherine is responsible for leading the development and execution of our go-to-market strategy to propel the next stage of growth across NCM's premium video advertising platform. Specifically, she oversees our sales and marketing strategy with a focus on improving utilization and expanding our reach as we advance NCM's continued transformation into a modern, full-funnel media solution. She has already started to make a major impact on NCM, and we are extremely excited to have her on board at NCM. With that, I will turn the call over to Ronnie to provide you with more details on our operating results and future outlook. Thank you, Tom, and good afternoon, everyone.
Speaker Change: Before I turn the call over to Ronnie, I want to take a moment to introduce the newest member of the NCIM executive team.
Catherine Sullivan: In May, Catherine Sullivan joined NCM as our new President of Sales, Marketing, and Partnerships.
Speaker Change: Catherine is a seasoned media executive and strategist, bringing over three decades of experience from PHD Media US, Omnicom Media Group, ABC Television, and NBC Universal Media.
Speaker Change: In her role, Catherine is responsible for leading the development and execution of our go-to-market strategy to propel the next stage of growth across NCM's premium video advertising platform.
Speaker Change: Specifically, she oversees our sales and marketing strategy with a focus on improving utilization and expanding our reach as we advance NCM's continued transformation into a modern full funnel media solution.
Speaker Change: She has already started to make a major impact on NCM and we are extremely excited to have her on board at NCM.
Speaker Change: With that, I will turn the call over to Ronnie to provide you with more details on our operating results and future outlook.
Ronnie Ng: The second quarter saw the continuation of our strong execution and momentum in the advertising marketplace, driving results that exceeded our expectations for both revenue and adjusted OEBDO. We are pleased that our key fundamentals continue to improve, with inventory utilization increasing significantly as advertising revenue per attendee reached $0.56, ahead of 2019 and significantly surpassing 2023 levels. In fact, this marks the highest second-quarter advertising revenue per attendee since 2017. This was achieved through our focus on improving inventory management as impressions sold per attendee were up 27% year-over-year while slightly increasing prices.
Ronnie Ng: Thank you, Tom, and good afternoon, everyone. Second quarter saw the continuation of our strong execution and momentum in the advertising marketplace, driving results that exceeded our expectations for both revenue and adjusted OIBDA.
Ronnie Ng: We are pleased that our key fundamentals continue to improve, with inventory utilization increasing significantly, as advertising revenue per attendee reached 56 cents.
Ronnie Ng: ahead of 2019 and significantly surpassing 2023 levels.
Ronnie Ng: In fact, this marks the highest second quarter advertising revenue per attendee since 2017.
Ronnie Ng: This was achieved through our focus on improving inventory management as impressions sold per attendee was up 27% year-over-year while slightly increasing pricing.
Ronnie Ng: NCM LLC's total revenue for the second quarter was $54.7 million, exceeding our revenue guidance of $49.5 million to $51.5 million. Total revenue for the quarter declined 15% year-over-year due to the decline in attendance and the contracted decline in beverage revenue, which was offset by improved per-patron monetizing. In fact, when excluding beverage revenue, total advertising revenue declined only 11% year over year, despite a 31% decline in attendance. National advertising revenue was $41.7 million, down 6% due to the drop in attendance over the same period, offset by a significant 37% increase in revenue per attendee.
Ronnie Ng: NCM LLC's total revenue for the second quarter was $54.7 million, exceeding our revenue guidance of $49.5 million to $51.5 million.
Ronnie Ng: Total revenue for the quarter declined 15% year-over-year due to the decline in attendance and the contracted decline in beverage revenue, which was offset by improved per-patron monetization.
Ronnie Ng: In fact, when excluding beverage revenue, total advertising revenue declined only 11% year-over-year despite a 31% decline in attendance.
Ronnie Ng: National advertising revenue was $41.7 million, down 6% due to the drop in attendance over the same period, offset by a significant 37% increase in revenue per attendee.
Ronnie Ng: The growth in per-attendee monetization was a result of a 27% year-over-year increase in national advertising utilization, as well as a 5% year-over-year increase in CPMs in the second quarter of 2024. [inaudible] This quarter's national revenue per attendee of $0.45 was the highest second quarter national revenue per attendee since 2016. Local and regional advertising revenue was $9.8 million, down compared to $13.4 million the previous year. The decrease in local and regional advertising revenue was primarily attributable to the decrease in attendance.
Ronnie Ng: The growth in per-attendee monetization was a result of a 27% year-over-year increase in national advertising utilization.
Ronnie Ng: as well as a 5% year-over-year increase in CPMs in the second quarter of 2024.
Ronnie Ng: Additionally.
Ronnie Ng: This quarter's national revenue per attendee of $0.45 was the highest second quarter national revenue per attendee since 2016.
Ronnie Ng: Local and regional advertising revenue was $9.8 million.
Ronnie Ng: down compared to 13.4 million the previous year. The decrease in local and regional advertising revenue was primarily attributable to the decrease in attendance.
Ronnie Ng: However, the local and regional team continued to focus on the monetization of its inventory and recorded a revenue per attendee of $0.11 for the second quarter of 2024, which was slightly ahead of both 2023 and 2019. Turning to the categories,
Ronnie Ng: However,
Ronnie Ng: The local and regional team continued to focus on the monetization of its inventory and recorded a revenue per attendee of $0.11 for the second quarter of 2024, which was slightly ahead of both 2023 and 2019.
Ronnie Ng: We experienced increased activity in average steel size within apparel, technology, and automotive. Local and regional also saw growing demand for its new programmatic offering. While still small, revenue for the second quarter exceeded expectations and continues to gain momentum. Beverage revenue derived from the ESA party's beverage agreement decreased $3.5 million to $3.2 million compared to the prior year. This decrease was due to the termination of the Rego ESA in July of 2023 and the resulting discontinuation of their beverage revenue, combined with a decrease in the remaining ESA parties' attendance year over year.
Ronnie Ng: Turning to the categories.
Speaker Change: We experience increased activity in average steel sides within apparel, technology, and automotive.
Speaker Change: Local and regional also saw growing demand for its new programmatic offering. While still small, revenue for the second quarter exceeded expectations and continues to gain momentum.
Speaker Change: Beverage revenue derived from the ESA party's beverage agreement decreased $3.5 million to $3.2 million compared to the prior year.
Speaker Change: This decrease was due to the termination of the Rego ESA in July of 2023 and the resulting discontinuation of their beverage revenue.
Speaker Change: combined with a decrease in the remaining ESA parties.
Speaker Change: attendance year-over-year.
Ronnie Ng: Turning to our... For the second quarter, total operating expenses were $64 million, down 4% versus the same period last year, excluding one-time items, appreciation, amortization, and non-cash share-based compensation. Our adjusted operating expenses for the second quarter of 2024 were $47.1 million, down 9% year-over-year. The decline in adjusted operating expenses was driven by an 11% decline in theater access fees and affiliate expenses from lower attendance offset by higher per attendee fees. In a vision,
Speaker Change: Turning to our expenses.
Speaker Change: Second quarter total operating expenses were $64 million, down 4% versus the same period last year.
Speaker Change: excluding one-time items.
Speaker Change: depreciation, amortization, and non-cash share-based compensation, our adjusted operating expenses for the second quarter of 2024 were $47.1 million, down 9% year-over-year.
Speaker Change: The decline in adjusted operating expenses was driven by an 11% decline in theater access fees and affiliate expenses from lower attendance offset by higher per-attendee fees.
Ronnie Ng: Adjusted SG&A expenses of $20.3 million. We're down 7% compared to the same period last year. The decrease in SG&A expenses was driven by a 5% year-over-year reduction in personnel expenses as we continue to benefit from the $5.5 million annual cost savings plan we executed at the start of the year.
Speaker Change: In addition.
Speaker Change: Adjusted SG&A expenses of $20.3 million.
Speaker Change: were down 7%.
Speaker Change: compared to the same period last year.
Speaker Change: The decrease in SG&A expenses was driven by a 5% year-over-year reduction in personnel expenses as we continue to benefit from the $5.5 million annual cost savings plan we executed at the start of the year.
Ronnie Ng: We are currently on track to achieve the full cost savings for the year. Second quarter Adjusted Orbita, excluding non-cash charges and one-time items, was $7.6 million, down compared to $12.5 million in the same period the previous year but considerably exceeding our guidance range of $3.5 million to $4.5 million. Again, the decline in adjusted EURA was related to the 15% year-over-year decline in revenue and offset by a 9% decline in adjusted operating. However, unleveraged free cash flow for the second quarter improved significantly. 6.7 million compared to 0.9 million in the same quarter the prior year, which reflected the absence of restructuring expenses in the prior year. You're up to date.
Speaker Change: We are currently on track to achieve the full cost savings for the year.
Speaker Change: Second quarter Adjusted Orbita, excluding non-cash charges and one-time items, was $7.6 million.
Speaker Change: down compared to $12.5 million in the same period the previous year, but considerably exceeding our guidance range of $3.5 million to $4.5 million.
Speaker Change: Again, the decline in adjusted OIDA was related to the 15% year-over-year decline in revenue and offset by 9% decline in adjusted operating expenses.
Speaker Change: Unlover free cash flow for the second quarter improved significantly.
Speaker Change: to $6.7 million, compared to $0.9 million in the same quarter the prior year, which reflected the absence of the restructuring expenses in the prior year.
Ronnie Ng: NCM LLC's total revenue was $92.1 million, compared to $99.3 million in the previous year. National Advertising revenue increased 7% due to a 40% increase in national advertising utilization in the six months ended June 27, 2024, compared to the same period in the prior year. Local and regional advertising revenue decreased by 30 percent, largely due to the lingering effects of the 2023 Rider-N-Ax program. NCM's adjusted OIDA year-to-date is 1.9 million compared to 1.6 million the previous year.
Speaker Change: Year-to-date, NCM LLC's total revenue is $92.1 million, compared to $99.3 million in the previous year.
Speaker Change: National advertising revenue increased 7% due to a 40% increase in national advertising utilization in the six months ended June 27, 2024.
Speaker Change: compared to the same period in the prior year.
Speaker Change: Local and regional advertising revenue decreased by 30% largely due to the lingering effects of the 2023 Ryder and Actor strike.
Speaker Change: NCM's adjusted OIDA year-to-date is 1.9 million compared to 1.6 million the previous year.
Ronnie Ng: Turning to our consolidated balance, At the end of the second quarter, the company had $56.8 million of cash, cash equivalents, restricted cash, and marketable securities compared to $60.1 million at the end of the first quarter of 2024, while the total debt balance remained unchanged at $10 million. On our fourth-quarter 2023 earnings call, we announced that our board approved a $100 million share repurchase program. Since the launch of this program, We have repurchased nearly 2.1 million shares for $9.8 million and an average share price of $4.78. This also includes the redemption of Cinemark's common membership units of approximately 130,000 shares.
Speaker Change: Turning to our consolidated balance sheet.
Speaker Change: At the end of the second quarter, the company had $56.8 million of cash.
Speaker Change: Cash Equivalents, Restricted Cash, and Marketable Securities compared to $60.1 million at the end of the first quarter of 2024, while Total Debt Balance remained unchanged at $10 million.
Speaker Change: On our fourth quarter 2023 earnings call, we announced that our board approved a $100 million share repurchase program.
Speaker Change: Since the launch of this program,
Speaker Change: We have repurchased nearly 2.1 million shares for $9.8 million and an average share price of $4.78.
Speaker Change: This also includes the redemption of Cinemark's common membership units of approximately 130,000 shares.
Ronnie Ng: We plan to continue opportunistically repurchasing shares at prevailing market prices over the next three years, while also strategically investing capital in growing our advertising network through new innovations such as programmatic and self-serve. In addition, we expect adjusted EUR for the third quarter of 2024 to be between $6 million and $8 million.
Speaker Change: We plan to continue opportunistically repurchasing shares at prevailing market prices over the next three years.
Speaker Change: while also strategically investing capital in growing our advertising network through new innovations such as programmatic and self-serve.
Speaker Change: Turning to guidance.
Speaker Change: For the third quarter of 2024, we expect revenue to be between $56 million and $58 million.
Speaker Change: In addition, we expect adjusted EUR for the third quarter of 2024 to be between $6 million and $8 million.
Ronnie Ng: The outlook for the third quarter assumes a continuation of the attendance trends we've experienced year-to-date due to the lower slate count offset by our improved execution increasing revenue per attendance. Looking to the remainder of the year, there is a lot to be excited about as the movie lake continues to recover and generate momentum heading into 2025, and as we further deploy new products, such as programmatic and MCMX to reach new clients.
Speaker Change: The outlook for the third quarter assumes a continuation of the attendance trends we've experienced year to date due to the lower slate count offset by our improved execution increasing revenue per attendee.
Speaker Change: Looking to the remainder of the year, there is a lot to be excited about as the movie slate continues to recover and generate momentum heading into 2025.
Speaker Change: and as we further deploy new products such as Programmatic and NCMX to reach new clients.
Ronnie Ng: While industry strike-related delays linger, production is fully up and running again, and we are bullish about the resurgence of film volume over the coming years. We have most recently witnessed the huge success of Deadpool and Wolverine, and for the remainder of 2024, we are particularly excited about the release of Joker 2. The Lord of the Rings prequel, Mufasa: The Lion King, and Gladiator 2. 2025 promises another set of highly anticipated films, including Captain America and Brave New World.
Speaker Change: While industry strike-related delays linger, production is fully up and running again, and we are bullish about the resurgence of film volume over the coming years.
Speaker Change: We most recently witnessed the huge success of Deadpool and Wolverine and for the remainder of 2024 we are particularly excited about the releases of Joker 2, the Lord of the Rings prequel, Mufasa the Lion King.
Speaker Change: and Gladiator 2.
Speaker Change: 2025 promises another set of highly anticipated films, including Captain America, Brave New World, Mission Impossible 8, Superman, and Avatar 3.
Ronnie Ng: Mission Impossible VIII, Superman, and Avatar 3. NCM is uniquely positioned to continue to make positive gains in utilization and attendee monetization as we move forward and the box office recovers in the latter half of 2024 and into 2025. Operator, please open the line for questions.
Speaker Change: NCM is uniquely positioned to continue to make positive gains in utilization and attendee monetization as we move forward and the box office recovers in the later half of 2024 and into 2025.
Speaker Change: Operator, please open the line for questions.
Operator: Thank you. And at this time, we will now begin the question and answer session. If you would like to ask a question, please press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the key.
Speaker Change: Thank you, and at this time we will now begin the question and answer session.
Speaker Change: If you would like to ask a question, please press star then 1 on your touch-tone phone.
Speaker Change: If you are using a speakerphone, please pick up your handset before pressing the keys.
Operator: To withdraw your question, please press star, then two. And at this time, we'll pause momentarily for the first question. And our first question today will come from Eric Wold with eRiley Securities. Please go ahead.
Speaker Change: To withdraw your question, please press star, then two. And at this time, we'll pause momentarily for the first question.
Speaker Change: and the next person is... ... ... ... ... ... ... ... ... ... ... ... ... ...
Speaker Change: And our first question today will come from Eric Wold with eRileySecurities. Please go ahead.
Eric Wold: Thanks. Good afternoon, Tom and Ronnie.
Eric Wold: Thanks for taking my questions. There are a couple of questions, I guess. One, you talked about the self-service platform, you talked about the improvements you've seen with that sequentially since launching it and about the 44 unique advertisers. Any way you can kind of quantify just how big that is right now, you know, whatever range you want to give? But then also, are you seeing, with the usage of the self-service platform, kind of the average window between when advertisers are kind of buying their spot?
Eric Wold: Thanks, good afternoon Tom and Ronnie. Thank you for taking my questions.
Eric Wold: Is that shrinking such that you can kind of fill up inventory that would otherwise be unsold, and they can be more reactionary? Or are you mainly seeing no change in that, but just they're doing it more on their own versus using your services as a little bit more of a cost savings? Or is it both?
Eric Wold: A couple questions. I guess one, you talked about on the self-service platform, you talked about the improvements you've seen with that sequentially since launching it and kind of the 44 unique advertisers. Any way you can kind of quantify?
Dan Dorenkamp: and Dan Dorenkamp.
Dan Dorenkamp: average window between when the average are gonna buy in their spot and that's shrinking such that you can kind of fill up inventory that would have otherwise been
Speaker Change: unsold and they can be more reactionary or are you mainly seeing no change in that but just they're doing it more on their own versus using your services as a little bit more of a cost savings or is it or is it both?
Tom Lesinski: So a lot of questions, just to unbundle them there quickly. Let me try to answer the second half first.
Speaker Change: So a lot of questions just to unbundle there quickly. Let me try to answer the second half first. So both programmatic and self-serve help us allow advertisers to buy inventory closer to the actual airtime.
Tom Lesinski: So both programmatic and self-serve help us allow advertisers to buy inventory closer to the actual airtime, so that's a good thing, and it creates a lot of efficiency as well in terms of just the resources that we devote to it. So those are both very positive.
Speaker Change: So that's a good thing and it creates a lot of efficiency as well in terms of just the resources we devote to it So those are both very positive and I can tell you that We're doubling down all of our efforts on self-serve and on programmatic
Tom Lesinski: And I can tell you that we're doubling down all of our efforts on self-serve and on programmatic. It's definitely one of the highest priorities we have, both from an allocation of people and resources over the next six months. I can't give you any specific revenue or metrics associated with self-serve just yet. I think, you know, given that it's relatively new, same with programmatic, we will be in a position over the next couple quarters to provide more specifics on that. And I think, especially with Catherine Sullivan joining us and all of her experience in programmatic, we'll be able to give you a lot of insights on that, Eric. But I appreciate the question.
Speaker Change: It's definitely one of the highest priorities we have, both from an allocation of people and resources, over the next six months.
Speaker Change: Can't give you any specific revenue or metrics associated with self-serve just yet. I think, you know, given that it's relatively new, same with ProDemac, we will be in a position.
Speaker Change: over the next couple quarters to provide more specifics on that. And I think especially with Catherine Sullivan joining us in all of her experience in programmatic, we'll be able to give you a lot of insights on that, Eric. And I appreciate the question.
Tom Lesinski: Last question, I know you're only at this point providing Q3 or one-quarter out guidance, but maybe now that we're past the upfront meetings and you have a firmer sense of the commitments coming out of that, which we'll start in Q4, maybe just give kind of a post-wardum of those meetings, kind of how you felt coming out of them, maybe some sense of revenue increase as that box starts to improve heading into next year. So I think the upfront is still important.
Eric Wold: Now it's perfect. And then my last question, I know you're only at this point providing...
Speaker Change: Q3 or one quarter out guidance, but maybe now that we're
Speaker Change: You know, past the upfront meetings and you have a firmer sense of
Speaker Change: the commitments coming out of that, you know, which we'll start in Q4, maybe it's kind of a post-mortem of those meetings, kind of how you felt coming out of them, maybe some sense of, you know, revenue increase as that box office starts to improve heading into next year.
Tom Lesinski: So I think the upfront is still an active negotiation. I think we're about halfway through it, Eric. So for this call, we're not going to give you a number, an update on it.
Speaker Change: So I think the upfront is still an active negotiation. I think we're about halfway through it, Eric.
Tom Lesinski: We'll definitely be able to do it next quarter. We are actively working on it right now. What you have noticed so far from the major media companies is not a lot of specifics so far, as those deals are just getting wrapped up. We're obviously very competitive in the upfront. It's an important part of our business, but it's probably going a little slower this year from a timing point of view than it has in the past.
Eric Wold: So for this call, we're not going to put a number, an update on it, and we'll definitely be able to do it next quarter.
Speaker Change: We are actively in it right now. What you have noticed so far from the major media companies is not a lot of specifics so far, as those deals are just getting wrapped up.
Speaker Change: We're obviously very competitive in the upfront, it's an important part of our business. But it's probably going a little slower this year from a timing point of view than it has in the past.
Tom Lesinski: But I can assure you, come next quarter, when we'll have completed the upfront, we'll give you a lot of specifics on that. And as you know, we've always created a lot of transparency around our performance in the upfront and in scatter. So we'll do that next quarter.
Speaker Change: But I can assure you, come next quarter, when we'll have completed the upfront, we'll give you a lot of specifics on it. And as you know, we've always, you know, created a lot of transparency around our performance in the upfront and in scatter. So we'll do that next quarter.
Operator: And our next question will come from Jim Goss with Barrington Research. Please go ahead.
Speaker Change: [inaudible]
Speaker Change: Our next question will come from Jim Goss with Barrington Research. Please go ahead.
Jim Goss: All right, thank you. I'd like to talk a little more about the, you to talk a little more about the Per Patron Monetization Improving. Did you know what you said?
Jim Goss: All right, thank you.
Jim Goss: I'd like you to talk a little more about the
Jim Goss: The per patron monetization improving
Jim Goss: The current level of national utilization is, they said it was up 27 percent, and you talked about a 5% increase in the CPM pricing attributable to it. How wide is the variance of pricing between, say, direct sales and programmatic and self-serve? Is it considerable based on when you buy and how you buy it?
Speaker Change: What did you say the current level of national utilization is? You said it was up 27%.
Speaker Change: and you talked about a 5% increase in the CPM pricing attributable to it. How wide is the variance of pricing between, say, direct sales and programmatic and self-serve?
Speaker Change: Is it considerable based on when you buy and how you buy it?
Ronnie Ng: I'm going to let Ronnie deal with the specifics, and then I'm going to chime in more. So why don't you answer that? Yeah.
Speaker Change: I'm going to let Ronnie deal with the specifics and then I'm going to chime in more. So why don't you answer that? Yeah, so a lot of the better monetization, if you actually look at
Ronnie Ng: So a lot of the better monetization, if you actually look at the actual total advertising revenue per attendee, again, it was down 11% year-on-year versus the attendance overall being down 31%. I'll tell you, again, a lot of that is just due to the ability to sell more per unit or per attendee and also better at utilizing our inventory versus what our advertisers or agencies have contracted to do. And we have actually done those improvements over the last three quarters now, and that's why you see – or that's why our impressions per attendee, especially on the national side, are up 27%. You know, this is – again, we're not utilizing pricing to drive better utilization because pricing is.
Speaker Change: Look at the actual total advertising revenue per attendee. Again, it was down 11% year-on-year versus the attendance overall being down 31%.
Ronnie Ng: I think, you know, again, a lot of that is just due to the ability to spell more through per unit or per attendee.
Ronnie Ng: and also better at utilizing our inventory versus what our advertisers or agency...
Ronnie Ng: have contracted to do.
Ronnie Ng: And we have, you know, actually done those improvements over the last three quarters now. And that's why you see, or that's why our impressions per attendee, especially on the national side, is up 27%.
Ronnie Ng: You know, this is, again, we're not utilizing pricing to drive better utilization, because pricing is up roughly 5% on a year-on-year basis, it's literally just better execution and better inventory management from our side.
Tom Lesinski: Okay, and... I was wondering if you could talk about any shifts in the audience demographics you've noticed to either your benefit or detriment. Transcripts provided by Transcription Outsourcing, LLC, improved the situation as well.
Speaker Change: Okay, and
Speaker Change: I was wondering if you could talk about any shifts in the audience demographics you've noticed to either your benefit or detriment.
Speaker Change: ...trends in the time...
Speaker Change: during which they're witnessing your ads.
Speaker Change: Are the audiences arriving at theaters any earlier or later than they had before? And maybe you benefit a lot from having a lot of the advertising post the stated show time, and maybe that's part of the...
Tom Lesinski: Okay, so demographics first. I mean, the one great thing about the cinema business, particularly cinema media, is the consistency of our young platform in terms of demographics. No one delivers the young 18- to 34-year-old demo better than cinema, and that has been consistent and, in fact, growing over time. And in a world where every marketer is anxious to reach that demo, Jim, no one does it better than us, and no one does it more consistently than we do.
Speaker Change: improved situation as well.
Speaker Change: Okay, so demographics first. I mean, the one great thing about the cinema business, particularly cinema media, is the consistency.
Speaker Change: of our young platform in terms of demographics. No one delivers the young 18- to 34-year-old demo better than Cinema.
Speaker Change: And that has been consistent and, in fact, growing over time.
Jim Goss: and in a world where every marketer is anxious to reach that demo, Jim, no one does it better than us and no one does it more consistently than we do.
Tom Lesinski: If you compare our delivery on that demo to any of the major media networks in recent times, whether it was against sports or the Olympics, we are clearly the best way to reach those people today in terms of an attention-grabbing ad to a young demographic. So we're really happy about that. Remind me of what the second half of your question was.
Jim Goss: If you compare our delivery on that demo to any of the major media networks in recent times, whether it was against sports or the Olympics, we are clearly the best way to reach those people today in terms of an attention-grabbing ad to a young demographic.
Jim Goss: So we're really happy about that. Remind me of what the second half of your question was?
Tom Lesinski: Well, I was just asking about the... you know, the arrival times relative to when your content is on display.
Speaker Change: Well, I was just asking about the, you know, the arrival times relative to when your content is on display.
Tom Lesinski: So we do a good job monitoring this on a regular basis. The actual arrival times have been consistent for people for the last two years. And as you know, we have created a lot of inventory for almost every exhibitor in post-showtime advertising as well as platinum. But moviegoing, ever since reserved seating has been entrenched, has not really changed that much over the last three or four years. So the arrival times are what they are, and clearly we were monitoring that for a long time. So we found a way to deliver the vast majority of that inventory in post-show and in platinum. And we'll continue to keep doing that.
Speaker Change: So we we do a good job monitoring this on a regular basis. The actual arrival times has been consistent for people for the last two years.
Speaker Change: And as you know, we have created a lot of inventory in almost every exhibitor in post-showtime advertising as well as platinum.
Speaker Change: but movie-going ever since reserved seating has been entrenched.
Speaker Change: has not really changed that much over the last three or four years. So the arrival times are what they are, and clearly we were monitoring that for a long time. So we found a way to deliver the vast majority of that inventory in post shell and in platinum.
Tom Lesinski: And I guess the other part of that was when you shifted to, you know, the..., having a lot of advertising post the stated show time. Has that been effectively been effective in terms of increasing the viewership of your ads?
Speaker Change: and we'll continue to keep doing that.
Speaker Change: And I guess the other part of that was when you shifted to, you know, the
Speaker Change: having a lot of the advertising post the stated show time. Has that effectively been effective in terms of increasing the viewership of your ads?
Tom Lesinski: Yes, it has. Definitely. Remember, we did that back in 2019, in the fourth quarter, so it's been going on for a relatively long period of time, and we've seen consistent growth in the delivery of impressions based on that new platform that we created in the fourth quarter of 2019.
Speaker Change: Yes, it has. Definitely.
Speaker Change: Remember, we did that back in 2019 in the fourth quarter, so it's been going on for a relatively long period of time, and we've seen a consistent growth in the delivery of impressions based on that new platform that we created in the fourth quarter of 2019.
Jim Goss: Okay, thank you very much.
Speaker Change: Okay, thank you very much.
Operator: And our next question will come from Mike Hickey with The Benchmark Company. Please go ahead.
Jim Goss: You're welcome, Jim.
Speaker Change: And our next question will come from Mike Hickey with The Benchmark Company.
Mike Hickey: Hey Tom, Ronnie, Chan, Catherine, nice quarter guys. I guess just a few questions here on the queue. I mean, I heard your. [inaudible] despite a nice little healing process.
Speaker Change: Please go ahead.
Mike Hickey: Hey Tom, Ronnie, Chan, Catherine, nice quarter guys. I guess just a few questions here on the Q2.
Mike Hickey: I mean, I heard your...
Mike Hickey: prepared comments guys, but obviously Q2.
Speaker Change: I mean, despite a nice little healing process towards the end of the quarter was brutal.
Speaker Change: And I imagine that attendance didn't meet your expectations. Can you just, you know, I guess, summarize real quick what was it that drove you upside in Q2 and how we should think about it, I guess.
Mike Hickey: I guess, summarize real quick what it was that showed the upside, and how we should think about it. That's a good question. It's a good question, Mike, and then we'll get to your other questions too.
Tom Lesinski: It was pretty simple when you think about how well we performed despite the attendance being down. It was driven really by higher utilization, better platinum sales, slightly increased pricing, incremental programmatic, and a more diversified advertiser base. So those combined are what drove higher revenue per attendee and the performance, which was really impressive against a relatively down quarter in attendance and box office. Good, that's helpful. And then...
Speaker Change: That's a good question. It's a good question, Mike, and we'll get to your other questions too. It was pretty simple when you think about how well we performed despite the attendance being down. It was driven really by higher utilization.
Speaker Change: Better Platinum Sales, Slightly Increased Pricing, Incremental Programmatic, and a More Diversified Advertiser Base.
Speaker Change: So those combined is what drove the higher revenue per attendee and the performance, you know, which was really impressive against a relatively down-quarter attendance in box office wise.
Tom Lesinski: I mean, are you taking those trends into Q3 or is Q3 sort of, you know, kind of conservative again, sort of built back the case?
Mike Hickey: Good, that's helpful. And then, I mean, are you taking those trends into Q3? Where's Q3 sort of, you know, kind of conservative again, sort of build back the case, like, you know?
Tom Lesinski: Yeah, I mean, our priority is obviously utilization optimization. Obviously, we want to keep pushing platinum because of the high CPMs and try to make sure we at least retain pricing levels or grow them a little bit.
Speaker Change: Yeah, I mean our priority is obviously in utilization optimization. Obviously we want to keep pushing platinum because of the high CPMs.
Speaker Change: and try to make sure we at least retain pricing levels or grow them a little bit. And more importantly, what we've been doing more than ever is creating more and more of a diversified ad base.
Tom Lesinski: And more importantly, what we've been doing more than ever is creating more and more of a diversified ad base. You know, we added more than a dozen new advertisers last quarter, and we have many more coming in during the third quarter and towards the fourth quarter. We're optimistic about the second half of the year. The third quarter is obviously going to be a very tough comparable with Barberheimer's last third quarter, but the fourth quarter looks really good.
Speaker Change: You know, we added more than a dozen new advertisers past quarter and we have many more coming in in the third quarter and towards the fourth quarter.
Speaker Change: We're optimistic about the second half of the year. Third quarter is obviously going a very tough comparable with Barb and I in our last third quarter, but fourth quarter looks really good. So the whole second half, from an attendance box office point of view, looks very good compared to the prior year.
Tom Lesinski: So the whole second half from an attendance and box office point of view looks very good compared to the prior year. So I think we've got a good set of titles lined up with a really good performance by our sales team, particularly on utilization and our platinum sales.
Speaker Change: So, I think we've got a good set of titles lined up with a really good performance of our sales team, particularly on utilization and our platinum sales.
Mike Hickey: The last question you touched on up front, Tom, I don't want to say you sounded guarded, but you didn't give us a lot of details, either. Obviously, the box was, for the most part, doing awful. That couldn't have been helpful for you. You're a great salesman, but Q2 was rough, and all of a sudden, the box started working, and everyone was excited. So I imagine, you know, through that progression, it helped Catherine and her team and you to apply it.
Speaker Change: The last question we touched on up front, Tom, I don't want to say you sounded guarded but you didn't give us a lot of details, two obviously.
Speaker Change: Vox was, for the most part, doing awful. That couldn't have been helpful for you. You're a great salesman, but I mean, Q2 is rough, and all of a sudden, you know, the box started working, and, you know, everyone's excited. So I imagine, you know, through that progression,
Speaker Change: It helped Catherine and her team and you.
Speaker Change: you know in the up front and so sort of maybe more color there and then how you think about this macro picture
Speaker Change: Good day now.
Dan Dorenkamp: and Dan Dorenkamp.
Tom Lesinski: I think, Mike, you were asking about the progression in Q2, which started off obviously really slowly but grew towards the end. You know, we were overly focused on making sure that even in a down quarter our utilization was higher. And I think our record platinum sales are also testament to the sales team being able to sell in any kind of an environment. You know, we've got a really senior, seasoned team that knows how to sell in any environment.
Dan Dorenkamp: I think, Mike, you were asking about the progression in Q2, which started off obviously really slowly but grew towards the end.
Speaker Change: You know, we were overly focused on making sure that even in a down quarter that our utilization was higher.
Speaker Change: And I think our record platinum sales also was a testament.
Speaker Change: to the sales team being able to sell in any kind of an environment. You know, we've got a really senior seasoned team that knows how to sell in any environment. In fact, we even had prices up slightly, was positive. But I think, you know, the way we brought new people into this business, new advertisers, new clients.
Tom Lesinski: In fact, we even had prices up slightly, which was positive. But I think the way we brought new people into this business, new advertisers, new clients, it's just the most impressive thing. Even in a quarter where the box office was down pretty significantly year on year. So it's really a testament to the company's experience and just aggressiveness in optimizing the platform that's really made me feel really confident about the second half of the year.
Speaker Change: It's just the most impressive thing. Even in a quarter where the box office was down...
Speaker Change: pretty significantly year-on-year. So it's really a testament to the company's experience.
Speaker Change: and just aggressiveness in optimizing the platform. That's really made me feel really confident about the second half of the year.
Mike Hickey: Thanks, Tom. I appreciate it, guys.
Speaker Change: Thanks, Tom. Appreciate it, guys.
Tom Lesinski: And that will conclude our question and answer session. I'd like to turn the conference back over to Tom Lesinski for any closing remarks.
Tom Lesinski: Good to talk to you Mike.
Tom Lesinski: And this will conclude our question and answer session. I'd like to turn the conference back over to Tom Lesinski for any closing remarks.
Tom Lesinski: Okay, thank you all for joining us today and especially thank you for your support of NCM, heading into the second half of 2024 with really strong box office momentum. NCM's differentiated and high-value offerings position us for continued growth at the forefront of this industry. We remain focused on our two pillars of utilization and inventory modernization as we demonstrate our unique ability to deliver young, hard-to-reach audiences at an unmatched scale. As we continue to assert our position as a frontrunner in the premium video advertising space, we are very excited about what the future holds for NCM.
Tom Lesinski: Okay, thank you all for joining us today and particularly thanking you for your support of NCM.
Speaker Change: heading into the second half of 2024 with a really strong box office momentum.
Speaker Change: NCM's differentiated and high-value offerings position us for continued growth at the forefront of this industry.
Speaker Change: We remain focused on our two pillars of utilization and inventory modernization as we demonstrate our unique ability to deliver young hard-to-reach audiences at an unmatched scale.
Speaker Change: As we continue to assert our position as a frontrunner in the premium video advertising space, we are very excited for what the future holds for NCM.
Tom Lesinski: Given the strong commitments from the studios, early industry analyst forecasts, and consumer feedback from meeting consumers alike, we are confident that 20.25 will be the true indication of the box office's ultimate resurgence. I'd like to thank the entire NCM team for all their hard work and thank our shareholders for their support. See you at the movies. Thank you.
Speaker Change: Given the strong commitments from the studios, early industry analyst forecast, and buzz from meeting consumers alike, we are confident that 2025 will be the true indication of the box office's ultimate resurgence.
Speaker Change: I'd like to thank the entire NCM team for all their hard work and thank our shareholders for their support. See you at the movies. Thank you.
Operator: The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect your lines at this time.
Speaker Change: The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect your lines at this time.