Q4 2024 National CineMedia Inc Earnings Call
Speaker Change: Good day and welcome to the National CineMedia Incorporated Fourth Quarter 2024 Earnings Conference Call.
Speaker Change: All participants will be in a listen only mode? Should you need assistance, please signal conference specialists by pressing the star key, followed by zero. After today's presentation there will be an opportunity task questions.
Speaker Change: To ask a question, you may press star than one on your touchtone phone And to withdraw your question, please press star then two Please note this event is being recorded. I would now like to turn the conference over to Chan Park, Vice President of Finance. Please go ahead I would like to ask a question, you may press star then two Please note this event is being recorded. Please go ahead
Speaker Change: Thank you operator. Good afternoon. I'm joined today by our chief executive officer, Thomas Lesinski, and our chief financial officer, Ronnie Ng James Goss, Thomas Lesinski, Thomas Lesinski, Thomas Lesinski,
Speaker Change: I would like to remind our listeners that this conference call contains four looking statements within the meeting of 27A, the Streeties Act of 1933, as amended, and Section 21E of the Streeties Exchange Act of 1934, as amended.
These four looking segments involve risks and uncertainty.
Speaker Change: Important factors that can cause actual results deferred eternally from the company's expectations are disclosed and the risk factors contained in the company's filings with the SEC.
Speaker Change: All four looking statements are expressly qualified in their entirety by such factors.
However, our discussion today includes some non-get measures.
Speaker Change: In accordance with regulation G, we have reconciled his amounts back to the closest gap bases measurement.
Speaker Change: These reconflations can be found at the end of today's earnings relief or on the Investor Relations page of our website at NCM.com.
Speaker Change: Today, we will be discussing NCM LLCs after the results as they relate to the fourth quarter and full year of 2024, which are largely similar to NCM Inc's results.
Speaker Change: We're reporting NCM LLC's operating results to provide an accurate comparison to the fourth quarter and full year of 2023 when we also reported NCM LLC's results given fiscal year 2023 results were
Now I'll turn the call over to Tom.
Tom: Thank you, Chan, and good afternoon, everyone. Welcome to our fourth quarter and full year of 2020 for Earning School.
Tom: Before we begin, I want to take a moment to address the devastating wildfires that have swept through Southern California in the city of California.
Tom: Our hearts go out to all those impacted by this tragedy.
Tom: Families who have lost their homes, communities facing unimaginable hardship, and the brave first responders who risk their lives to protect others.
Tom: For many of us, including myself, this isn't just a new story, it's personal.
Tom: Southern California is my home and home to many of our employees, partners, friends, and loved ones.
Tom: We stand in solidarity with everyone affected and we're committed to supporting recovery efforts in every way we can.
while the fires have been contained.
We know the road to recovery will be long [inaudible]
Tom: Our thoughts remain with those who are grieving, rebuilding, and finding the strength to move forward.
Tom: We are here with you today and for the journey ahead.
James Goss, Thomas Les
Moving on to our ratings.
Tom: We're excited to share the highlights of what has been another landmark year for an NCM and the cinema industry as a whole. This year's performance demonstrated the resilience of cinema advertising and the ongoing appeal of theatrical experiences for moviegoers.
Let's dive into the details.
Tom: The fourth quarter of 24 was a great success for the box office.
Exceeding Most Industry Expectations
Tom: The total box office for the quarter generated approximately $2.4 billion dollars
Marking a 26% increase year-over-year
Tom: This success was driven by a diverse slate of films from massive tenfold releases to break out hits.
Tom: Wicked Part 1 generated 433 million in the quarter and shattered records for a November release.
Tom: Disney's Moana 2 followed closely behind with $404 million and cemented itself as a key player in the studio's animated film library.
Appealing to audiences both young and old.
Tom: Other highlights include the Gladiator 2, Sonic the Hedgehog 3, and Move House of the Lion King, which brought in nearly 450 million dollars combined.
. . . .
Tom: Thanksgiving Week in 24 was an especially historic moment for the domestic box office.
The industry brought in 420 million over the Thanksgiving weekend.
Tom: Breaking the previous all-time record of $315,000,000,000,000 in 2017-2018 [inaudible]
Tom: December 24 was also exceptionally strong, preaching a wave of highly anticipated films, driving the 5th highest grossing month since 2019.
Tom: Looking at the year as a whole, the total domestic box office for 2024 reached $8.6 billion.
Driven by a robust second half
Tom: While the first half of 24 was impacted by the residual effects of the 2023 industry strikes,
Tom: The second half recovery underscored moviegoers enduring passion for the cinema.
Tom: Culminating in the fourth quarter. Notably, approximately 80 additional movies were released that drew meaningful attendance on top of the planned slate, keeping theaters buzzing with a diverse range of content.
Inside Out 2 was the highest grossing movie of 2024.
Tom: Marking the first time that an animated movie has been crowned the highest grossing film of the year since Finding Dory became the highest grossing movie of 2016.
Tom: Additionally, Deadpool and Wolverine, the second highest-grossing film of 24, had the sixth biggest domestic opening of all time, among any film.
Tom: and broke the record for the high-scroasing R-rated film domestically.
Tom: The strength of our core audience, which is predominantly made of Gen Z Millennials, continues to be a key driver of our success.
Tom: These groups accounted for 69% of our toll-reviewership in the fourth quarter [inaudible]
Cumgley reaching over 43 million movie hours.
Gen Z in particular represents 38% of our audience.
Maintaining a strong 6.6 weekly rating throughout the quarter.
Tom: Our reach with this young, highly sought after audience compares favorably to sports programming. For example, the recent Super Bowl drew an audience with a median age of 48.
Tom: with Gen Z comprising just 12% of viewers. Meanwhile, NCM's audience has a median age of 30.
Tom: and among the coveted 18 to 34-year-old demographic, 57 million individuals attended NCM theaters.
Averaging a 6.1 weekly rating in the fourth quarter [inaudible]
This demographic remains critical for advertisers.
Tom: and we're proud to have captured such a significant share of their attention.
The other three were NFL football games.
Tom: Advertisers to realize that platforms like NCM deliver a unique and powerful opportunity to connect with audiences.
Tom: In the fourth quarter, we welcome 25 new advertisers who launched a major cinema campaigns for the first time since the pandemic.
Tom: These brands are drawn to NCM for our ability to deliver unmatched audience engagements tied to culturally relevant content.
Tom: and for our proven track record of driving measurable results, including in-store traffic and online sales.
Now, on to our results.
The fourth quarter marked the fifth consecutive quarter [inaudible]
Tom: Where our results surpassed our expectations, reflecting our strategic focus on advertising growth as the box office continues its momentum.
Tom: For the full year <unk> results were approximately in line with the domestic box office, specifically and see them reported full year 2020 for revenue of $240 8 million compared to $259 8 million in 2023 and adjusted OIBDA.
A $45 7 million compared to $52 7 million despite the industry wide headwinds in the first half of the year. Our total twenty-four attendance was $390 7 million.
Tom: Primarily driven by the over performance of key titles, including inside out too.
Tom: Wicked part one and.
Tom: And Deadpool and Wolverine.
Tom: Our platinum advertising product continues to be a key growth driver for NCR.
Tom: Sales have increased significantly for this top tier inventory with revenue more than doubling year over year.
Tom: This growth was driven primarily by strength across the government wireless entertainment and dining categories.
Tom: Fourth quarter platinum revenue was up 28%.
Tom: Over the prior year period and.
Tom: And we're encouraged by continued demand for this premium offering by category leading advertisers.
Tom: Additionally.
Tom: Our standard attention ratings enable brands to push the boundaries of traditional advertising.
Tom: N C M brought Xfinity these campaign.
Tom: For Universal's Wicked part one to life in the first ever U S for Dx ad.
Tom: Running by platinum.
Tom: Combining dynamic onscreen visuals with synchronize the Moody's seats and hyper realistic environmental effects.
Tom: We ran another unique campaign with U S. Cellular who is looking for an out of the box opportunity to help increase local awareness and sales.
Tom: N C M set up U S cellular branded activation in select theaters connecting the brand with current and prospective customers on a one on one basis.
Tom: These campaigns highlight how advertisers can creatively engage mcm's audience through immersive and experiential solutions.
Tom: Our industry.
Tom: <unk>, leading data intelligence platform N C. M X is playing an increasing role in our success.
Tom: We continue to leverage <unk> to create measurable impact and value for our advertising partners.
Tom: Offering strategic audience insights performance attribution continued engagement and cross channel reach.
Tom: In the fourth quarter and see them successfully delivered on key performance indicators for major retail advertisers.
Tom: Driving thousands of incremental visits to brands featured on our screens.
Tom: On average these brands saw a 47% lift in retail foot traffic.
Tom: Thanks to the power of NCL moviegoers.
Tom: Nearly half of our sales revenue.
Tom: Is now supported by N CMS initiatives.
Tom: As advertisers continue to leverage these advanced measurement tools to optimize their campaigns and maximize ROI as we look to 2025 as a whole we're encouraged by the continuation of the momentum we saw in the fourth quarter.
Tom: Within our business and across the cinema industry.
Tom: This said, we expect some near term variability in the first half of 2025.
Tom: For the first quarter, we're expecting softer performance compared with the prior year driven by a weaker slate and consequently, a slight decline in attendance year over year.
Tom: While the advertising and marketing is seasonally slower in the fourth quarter. We are also seeing headwinds from reductions in government spending and ongoing tariff uncertainty leading advertisers in certain categories to delay spending to later in the year.
Bonnie: Bonnie will provide further detail on these factors.
Bonnie: Despite these near term headwinds we are encouraged by the strong sales pacing, we're already seeing for the second quarter.
Signaling positive momentum for the remainder of the year.
Bonnie: Our focus remains on innovation and growth as we continue to invest in our client solutions.
Bonnie: Including programmatic and self serve.
Bonnie: Which we expect to continue to grow in revenue in the coming years.
Bonnie: With that I will turn the call over to Ronnie to provide you with more details on our operating results and future outlook.
Ronnie: Thank you Tal and good afternoon, everyone.
Speaker Change: As Tom noted the fourth quarter marked the fifth consecutive quarter, where the company's results surpassed our expectations with both revenue and adjusted OIBDA exceeding our guidance.
Speaker Change: Despite a challenging advertising climate neutral and a favorable mix of harder to monetize G and PG rated movies.
Speaker Change: And an anticipated additions to the film slate.
Speaker Change: We continue to demonstrate strong execution as we focus on the monetization of our inventory and disciplined management of our business.
Speaker Change: <unk> LLC total revenue for the fourth quarter was $86 3 million.
Speaker Change: Which exceeded our revenue guidance of $82 million to $86 million.
Speaker Change: As compared to the prior year's revenue of 99.
Speaker Change: National advertising revenue decreased to $69 2 million.
Speaker Change: Compared to $71 9 million in the fourth quarter of 2023, driven by a 22% decrease in utilization while pricing remain flat.
Speaker Change: Local and regional advertising revenue was $13 5 million compared to $16 2 million in the fourth quarter of 2023.
Speaker Change: Largely driven by reduced contract sizes across regional and local business.
Speaker Change: Total revenue for the quarter decreased 5% year over year.
Speaker Change: Primarily due to the dynamics, we explained when we provided guidance last quarter.
Speaker Change: The unusually high mix of harder to monetize G and PG rated movie was especially impactful in December.
Speaker Change: When advertising demand typically the highest.
Speaker Change: Additionally, the prior year.
Speaker Change: Taylor Swift the Arab or concert film in October 2023, presented a challenging year over year comparison, and the window between Thanksgiving and Christmas a period that is particularly popular for advertisers.
Speaker Change: One of the shortest we see.
Speaker Change: The shortened holiday season, coupled with the election, which caused advertisers to delayed as bad decisions ultimately impacted our top line.
Speaker Change: Importantly, we see these trends as temporary.
Speaker Change: With audience mix expected to normalize and a strong film slate expected in 2025.
Speaker Change: Additionally, we are pleased with our revenue performance this quarter.
Especially given the sluggish start to the quarter due to the box offices other performance in October.
Speaker Change: In particular, our team continued to expand our scatter participation.
Speaker Change: Which increased to 45% of the mix versus the same quarter last year.
Speaker Change: 29% mitigating the soft upfront market.
Speaker Change: Yeah.
Turning to our expenses.
Speaker Change: Fourth quarter operating expenses were $66 3 million.
Speaker Change: 274 million in the prior year, primarily driven by one time expenses related to our chapter 11 restructuring.
Speaker Change: Additionally.
Speaker Change: Increased attendance in the fourth quarter resulted in higher exhibitor.
Speaker Change: Which were fully offset by lower personnel and overhead expenses from cost savings initiatives, excluding onetime items.
Speaker Change: Depreciation amortization and noncash share based compensation, our adjusted operating expenses for the fourth quarter of 2024.
Speaker Change: $51 3 million.
Which was in line with the same period last year.
Speaker Change: Fourth quarter, adjusted OIBDA, excluding noncash charges and onetime items was 35 million compared to $39 8 million in the prior year.
The variation in year over year results was primarily driven by.
Speaker Change: Favorable impact from harder to monetize.
Speaker Change: And P. G rated movies and the absence of Taylor Swift concert film from last year.
Speaker Change: As we mentioned.
Speaker Change: That said, our adjusted OIBDA results, well exceeded our guidance range of $28 million to $30 million.
Speaker Change: The outperformance was driven by lower than expected theater access fees and our successful cost savings initiatives.
Speaker Change: Total free cash flow for the quarter.
Speaker Change: Going by cash flow from operations less capital expenditures was $28 1 million.
Which represented an adjusted OIBDA to free cash flow conversion rate of 80%.
Speaker Change: Turning to the full year.
Speaker Change: In 2020 for MCM LLC generated $240 8 million in total revenue compared to $259 8 million in 2023.
Speaker Change: These results were largely driven by lower attendance during the year.
Speaker Change: Which ultimately resulted in higher revenue per attendee up 4%.
Speaker Change: Versus the prior year.
Speaker Change: National advertising revenue was $188 million for the year compared to $198 1 million in 2023, driven primarily by a weaker movie slate at first half of 2024 due to the writer and actor strike and the.
Speaker Change: Second half of 2023.
Local and regional advertising was $39 one Noah in 2024.
Speaker Change: <unk> to $51 1 million in 2023.
Speaker Change: Driven by a decrease in contract activity from small businesses.
Speaker Change: <unk> adopted a more cautious approach to advertising stemming from rising costs.
Speaker Change: The leading beverage revenue.
Speaker Change: Total advertising revenue was $227 1 million.
Speaker Change: Which was down 6% compared to the same period the previous year, while it hasn't declined 11% year over year.
Speaker Change: Average revenue derived from the ESA parties beverage agreement decreased from $18 6 million.
Speaker Change: Prior year at $13 7 million.
Speaker Change: The decrease was due to determination of the Regal Esa in July of 2023.
Speaker Change: And the coinciding discontinuation of their beverage revenue.
Speaker Change: With a decrease in your remaining ethane parties attendance.
Speaker Change: Turning to our expenses.
Speaker Change: For full year 2024, operating expenses were $260 3 million down from 447 million in the prior year driven by the absence of onetime expenses related to our chapter 11 restructuring.
Speaker Change: Excluding one time items depreciation amortization and noncash share based compensation, our adjusted operating expenses for 2024 were $195 1 million.
Speaker Change: Down 6% year over year from $207 1 million.
Speaker Change: The reduction in adjusted operating expenses was primarily due to a decrease in exhibitor fees attributable to an 11% decrease in network attendance, coupled with decreases in SG&A expenses.
Speaker Change: Full year 2024, adjusted OIBDA, excluding noncash charges and <unk>.
Speaker Change: One time items was $45 7 million.
Speaker Change: Compared to $52 7 million in 2023.
Speaker Change: Driven by the attendance loss, partially mitigated by strong scatter market performance and lower operating costs.
Speaker Change: Additionally.
Speaker Change: Total free cash flow for the year of 54, and a half million significantly outperform all year 2023 levels of negative 48, 8 million due to the absence of restructuring expenses.
Speaker Change: Turning to our consolidated balance sheet.
Speaker Change: At the end of the fourth quarter. The company had $78 2 million of cash cash equivalents restricted cash and marketable securities.
Speaker Change: Total debt of $10 million, which was flat year over year.
Speaker Change: Notably on January 24, 2025.
Speaker Change: We closed on a new revolving facility with U S Bank.
Speaker Change: The revolving facility.
Speaker Change: <unk> the cost of debt by over 200 basis points and our annual interest expense by $1 million.
Speaker Change: Importantly.
Speaker Change: The facility is a cash flow credit facility versus an asset based facility.
Speaker Change: Indicating the credit market confidence.
Speaker Change: Our business.
Speaker Change: And our ability to generate consistent cash flows.
Speaker Change: Yes.
Speaker Change: Upon closing of the new facility with US Bank, we repaid the entirety of our outstanding debt with Ci team.
Speaker Change: Meaning that as of today.
Speaker Change: Have no outstanding long term debt.
Speaker Change: We provide an update of our $100 million share repurchase program.
As of December 26, 2024.
Speaker Change: We have repurchased two 5 million shares for $13 $4 million and an average share price of $5 28.
As we continue to focus on returning value to our shareholders.
Speaker Change: While we plan to continue to Opportunistically repurchase shares at prevailing market prices through April 2027.
Speaker Change: We are also focused on strategically investing capital in growing our advertising network, new innovations such as programmatic.
Speaker Change: It's self serve.
Speaker Change: Turning to our outlook.
Speaker Change: As we shared earlier, we are excited about the slate for 2025 and look forward to the continued box office momentum.
Speaker Change: While the first quarter slate is expected to be slightly softer than the same period last year.
Speaker Change: Leading to a slight year over year decline in attendance.
Speaker Change: We see this as a temporary dynamic and what we expect to shape up to be strong year overall.
Speaker Change: With this in mind.
Speaker Change: We expect first quarter revenue.
Speaker Change: Each falls within a seasonally slower advertising period to be between 34 and $36 million.
Speaker Change: This not only reflects the expected reduction in impressions.
Speaker Change: But also a recent policy shifts relating to federal government spending and tariffs that have in certain cases.
Speaker Change: <unk> advertising spend to subsequent quarters within the year.
Speaker Change: As a result.
Speaker Change: We expect adjusted OIBDA for the first quarter of 2025 to be between negative nine and a half and negative $7 5 million.
Speaker Change: In addition to the revenue impacts already discussed.
Speaker Change: Our guidance reflects planned investment.
Speaker Change: Sales and operations coupled.
Speaker Change: Coupled with one time expenses that were not incurred last year.
Speaker Change: That said, we do not see first quarter revenue and adjusted OIBDA being indicative of our full year results.
Speaker Change: Go ahead.
Speaker Change: We are encouraged by the strength of our second quarter pipeline, which is currently pacing well ahead of last year.
Speaker Change: With an improving content lineup.
Speaker Change: Rowing advertising demand.
Speaker Change: The continued expansion of our client solutions, we are confident in our ability to drive strong results as the year progresses.
Speaker Change: But that said.
Speaker Change: I would like to provide some additional context on our expectations for 2025.
Speaker Change: As we continue to position <unk> for long term success.
Speaker Change: We expect our annual SG&A expenses to increase by a high single digit percentage in 2025.
Speaker Change: This increase reflects a deliberate and strategic investments in key areas that we expect will drive sustained growth.
Speaker Change: Merrily expanding our sales team.
Speaker Change: Enhancing targeted marketing efforts and.
Speaker Change: And strengthening our operational infrastructure to support future revenue generation.
Additionally.
Speaker Change: We plan to increase our annual capital expenditures by $2 million to $3 million, which will mostly be one time with a majority of that related to delayed investment.
Speaker Change: Originally planned in 2024, and the remainder focused on upgrading our it systems.
Speaker Change: <unk> technology and research tools.
Speaker Change: These investments are highly targeted to enhance efficiency.
Speaker Change: Improved scalability.
Speaker Change: And ensure we remain well positioned to capitalize on future opportunities.
Importantly, we are making these investments with discipline and confidence.
Speaker Change: Ensuring they generate meaningful value for both advertisers and our shareholders.
Speaker Change: Overall, we continue to expect 2025 to be another robust year for cinema.
Speaker Change: There are many films to be excited about as we look forward to 2025.
Speaker Change: Simple.
And original content.
Speaker Change: Such as Avatar fire at Ash.
Speaker Change: We get part too.
Bill White: Bill White.
Speaker Change: Minecraft.
Speaker Change: The new mission impossible.
Speaker Change: Superman.
Speaker Change: The fantastic four first steps.
Speaker Change: And how to train your Dragon.
Speaker Change: MCM Jose distinctive advantage with its strong connection to highly valuable audiences and we are confident.
Speaker Change: That advertisers will continue to rely on NCS and the premium audiences we deliver.
Speaker Change: Box office gains momentum in 2025 and beyond.
Speaker Change: We will be providing more detail on what we expect for 2025 at our upcoming Investor day in March.
Speaker Change: Operator.
Speaker Change: Please open the line for questions.
Speaker Change: Thank you we will now begin the question and answer session.
Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: Anytime your question has been addressed and you would like to withdraw your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.
Speaker Change: And your first question will come from Patrick So with Barrington Research. Please go ahead.
Patrick So: Hi, Thanks for taking the questions.
Speaker Change: I was wondering if you could provide a little bit more detail on what you expect on how.
Speaker Change: Sort of temporary you expect you see these advertising headwinds as being.
Speaker Change: Specifically, if you could talk a little bit about.
Speaker Change: What youre seeing in the second half of the year, especially since that was kind of the stronger the stronger periods for box office.
Speaker Change: Hey, Patrick it's Tom I think what I would say is that the pacing in the second quarter.
Speaker Change: He is very encouraging compared to last year.
Speaker Change: First quarter is always kind of an odd quarter to forecast.
Speaker Change: And I think some of the exogenous things out there like the tariffs and policy shifts affected.
Speaker Change: Some of the commitments.
Speaker Change: But as I look at Q2.
Speaker Change: Which is an important quarter and typically significantly larger than Q1.
Speaker Change: Looking at the pacing for Q2, which looks very good compared to the prior year.
Speaker Change:
Speaker Change: I can't really get into the second half yes.
Speaker Change: At this point, but.
Speaker Change: We're very encouraged by what's going on in Q2 right now.
Speaker Change: Okay.
Speaker Change: And you had talked about.
Speaker Change: Some of the Kpis based AD sales I was just wondering how has that has supported advertiser retention.
Speaker Change: I think it's pretty it's earlier in that process, but with advertiser attention and efforts to increase.
Speaker Change: The client base.
Speaker Change: But what I can say in general is within our <unk>.
Speaker Change: Team that supports a lot of the outcome based advertising commitments.
Speaker Change:
Speaker Change: Basically half of our business is supported through and CMS.
Speaker Change: Whether it's through a <unk> or some other measurement.
Speaker Change: So it's pretty much a significant piece of what we're doing every day.
Speaker Change:
Speaker Change: So we're really encouraged by that and we put a lot of money and effort into it. So we're really happy with the attention we're getting from our clients.
Speaker Change: Okay, and then I guess the last question I had you talked about.
Speaker Change: Going back more of the advertisers that hadn't been spending since COVID-19. It was kind of curious what sort of share of like your national advertisers.
Speaker Change: Maybe still on the sidelines.
Speaker Change: On the advertising.
Speaker Change: The key sitting what percent of them what was the question again I'm, sorry, I think.
Speaker Change: The number of advertisers you had pre pandemic, how many of them have yet to sort of return.
Speaker Change: I think we need to calculate that for you I don't have that off the.
Speaker Change: <unk> ever had but we can get it to you.
Speaker Change: In short order.
Speaker Change: Okay. Thank you.
Speaker Change: Again, if you have a question. Please press Star then one our next question will come from Mike Hickey with the benchmark company. Please go ahead.
Speaker Change: Hey, Tom Ronny, Thanks for taking our questions here and congratulations on them.
Speaker Change: Better than expected Q4, and 24, especially with the.
Speaker Change: Ends on attendance.
Tom: I guess that segways, Tom it looks like 'twenty five 'twenty six film Bryan is going higher.
Speaker Change: We see the expectation here is we should continue to see a strong recovery.
Speaker Change: In attendance I guess the question is what are your expectations for attendance growth in 'twenty five 'twenty six is that sort of in line with.
Speaker Change: With what the market is thinking.
Speaker Change: As higher attendance or the primary driver of your revenue growth. What are you seeing more of an opportunity today and better monetizing your.
Speaker Change: Your existing ad inventory.
Speaker Change: I would say attendance is always the number one driver.
Speaker Change: And I think the quality of the attendance is probably the second driver in terms of the demographic mix.
Speaker Change: The more geared towards <unk> the more we can monetize it but I think as I look at all of the forecast for 25% and 26.
Speaker Change: And they're actually relatively uniform across the whole base of forecasters I'm feeling pretty much in sync.
With most of the big analyst and most of the big forecasters in terms of how twenty-five, particularly 'twenty six looks.
Speaker Change: So.
Speaker Change: You know I think truthfully. This is an important year for the industry.
Speaker Change: It's the first real year without a strike in post COVID-19. So ranks just to see how the movies perform.
Speaker Change: And how many releases come out this year and next year.
Speaker Change: But we have a very focused sales team you know talking about the year all the way out through the end of this year.
Speaker Change: And the response, we've gotten from advertisers and looking at the slate.
Speaker Change: And looking at all the data around it is encouraging.
Speaker Change: Yes, it makes sense I mean, I guess, how is advertiser sentiment for your medium Tom sort of compare it to.
Speaker Change: Prior year, obviously, we knew there was some.
Speaker Change: Lack of product given the Hollywood strikes I think there was a box.
Speaker Change: Box better than we thought we thought is can be down 10% did better than we thought but obviously, we weren't expecting growth we're expecting growth. This year. So some place improving the demo you have as well.
Speaker Change: Obviously very attractive I would think for media buyers the attribution work Youre doing.
Certainly something we've never had before it looks like you're getting good feedback on.
Speaker Change: On the product side programmatic self serve obviously those are sort of industry standards and you're in the right direction. There. So I guess how sentiment today given all the improvements in the macro and in your business and when do you think that will sort of translate into higher media buys.
Speaker Change: I think the sentiment is really good right now and when you think about all of the negative sentiment and we had to deal with for the past several years, even in the first half of last year.
Speaker Change: I think we're finally in a state where there shouldn't be any surprises.
Speaker Change: From an industry point of view, so I think the advertising side of the story is actually looking really good and for the first time, we can really communicate with them.
Speaker Change: I'm looking at a schedule that's unencumbered by any of the crazy things that have impacted our industry.
Speaker Change: And I think we're really lined up nicely with all of the capabilities that we've built over the last couple of years.
Speaker Change: On the data side.
Speaker Change: So we're really encouraged every now and again youre going to have situations, where certain industry in the case of government spending.
Speaker Change: Creates a little bit of a.
Speaker Change: I hate Gabon, our forecasting, but I don't think anyone could have predicted that in Q1.
Speaker Change: But as we look to Q2 and beyond.
Speaker Change: We're really optimistic about how the industry is going to be performing against the box office.
Speaker Change: Is that higher advertiser sentiment, Tom does that sort of puts you in a better position this year in terms of driving.
Speaker Change: Maybe some growth in the upfront season, I know last year.
That was certainly not the case scatter.
It was a larger factor it seemed like that was more secular but given all the improvement in the market and your business do you think you have.
Speaker Change: Better shot at you I think a higher upfront I think we will do is well you know proportionately in the Upfronts given that our industry is doing really well compared to linear television and broadcast television I think the question is how are people buying versus how they used to buy.
Speaker Change: I do think we'll have a better upfront than we had last year.
Speaker Change: But I think as you look at it there's still an unusual mix between scatter and upfront where people are buying closer and closer.
Speaker Change: Two the actual broadcast eight but remember, but youre right last year. When we were doing the upfront there were still some uncertainty in the theatrical business.
Speaker Change: We were still coming off the strike.
So this next up where it should be one probably the cleanest upfront me that since 2019.
Nice.
Speaker Change: I know premium obviously is a very hot area of the box office.
Speaker Change: I think you've been sort of trying to corner that market, a little bit Tom to maybe IMAX and mpls.
Speaker Change: Sort of what are you seeing in terms of advertiser demand.
Speaker Change: To get on the premium screens.
Speaker Change: And how big of a factor or can that be for you in 'twenty five as with everybody.
Speaker Change: Everybody wants to be on those premiums everyone loves to be on those premium screens.
Speaker Change: And that's always a topic of discussion and if that is married to our platinum inventory in particular.
Speaker Change: It's where the biggest advertisers wanted to go first so whenever we're working either with a new advertiser if someone is particularly interesting piece of creative.
Speaker Change: They were always focused on platinum and on these large screen formats. So I think that that trend continues which it seems to be.
Speaker Change: And all of the major exhibitors in terms of their investment plans and their growth, that's only going to benefit us and help us from an advertiser interest point of view.
Speaker Change: Last question from US time on the moving away from National looking at the local regional.
Speaker Change: Piece of your business, obviously pre pandemic have pretty good scale and I think you've gone through restructuring.
Speaker Change: Restructuring.
Speaker Change: Process, just what are you seeing I guess from your local and regional teams the excitement there to sort of scale and grow the business 25 and 26.
Speaker Change: Historically local pre Covid was a really significant part of our business.
Speaker Change: During the Covid period and during the recovery period.
Speaker Change: We cut back on cost local I think was impacted pretty significantly given what a <unk>.
Speaker Change: Individual sales sort of kind of business that is we've reinvested in our sales team locally and allocated more sources to them resources to them. So we're really optimistic that local is going to have a nice comeback in 'twenty five and 'twenty six.
Speaker Change: Thank you guys. Good luck.
Speaker Change: Youre welcome.
Speaker Change: This.
Our question and answer session I would like to turn the conference back over to Mr. Tom Lesinski for any closing remarks. Please go ahead Sir.
Speaker Change: Okay. Thank you for your questions, everyone and your support of National Cinema media with our unmatched scale and <unk> has maintained its position as a top player in this premium video advertising space. This past year has proven that movies are thriving once again, an MCM has consistently connected to advertisers with high value audiences protecting both.
Speaker Change: New and loyal brands to our platform every quarter.
Speaker Change: Further we believe <unk> is well positioned for the future with strong growth catalyst a fortified balance sheet positive cash flow and an opportunistic share repurchase program.
Speaker Change: As we look forward to 'twenty five we are energized by our momentum and eagerly anticipate the opportunities that wages in this year ahead.
So as a final reminder, and Tim will be hosting its 2025 Investor day in New York City.
Patrick So: Thursday March 13th at three o'clock, So I do for you to hear more about our strategy innovation.
Patrick So: And performance of myself Brownie and other members of our talented management team.
Patrick So: So finally, what I think our MCM team as always for their hard work and dedication and thank your for to our shareholders for their support as well.
Patrick So: See at the movies.
Patrick So: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Patrick So: Yeah.
Patrick So: Yeah.
Patrick So: Sure.
Patrick So: [music].