Q1 2025 National CineMedia Inc Earnings Call
Speaker Change: Good day, and welcome to the National CineMedia Inc. 1st quarter 2025 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Chan Park, Senior Vice President of Finance.
Chan Park: Thank you, operator, and good afternoon. I'm joined today by our Chief Executive Officer, Tom Lesinski, and our Chief Financial Officer, Ronnie Ng.
Speaker Change: I would like to remind our listeners that this conference call contains four looking statements within the meeting of 27A of the Securities Act of 1933 as amended.
Chan Park: and Section 21 E of the Security Exchange Act of 1934 as amended.
Speaker Change: All statements other than statements of historical facts communicated through this conference call may constitute four looking statements.
Speaker Change: These four-looking payments involve risks and uncertainties. Important factors that can cause actual results to confirm thoroughly from the company's expectations are disclosed and the risk factors contained in the company's filings with the FEC.
Speaker Change: All four-looking statements are expressly all-fod in their entirety by such patterns.
Speaker Change: Further, our discussion today includes some non-get measures. In accordance with Regulation from G, we have reconciled this amounts back to the closest gap bases measurement.
Speaker Change: These recommendations can be found at the end of today's earnings release or on the Investor Relations page of our website at ncm.com Now I'll turn the call over to Tom.
Tom: Thank you, Chan. Hello, everyone. And thank you for joining our fiscal 2025 First order earnings call.
Tom: So, before we dive into our highlights from the quarter, I want to thank everyone who attended our 2025 Investor Day in March.
Tom: As we shared, NCM is well positioned to win as the leading platform in cinema advertising with an unmatched competitive edge, attractive industry tailwinds, a premium audience, and product, and a real-life financial position.
Tom: The key colors of our growth strategy remain front and center as we move forward.
Tom: We are diligently investing in both technology and top-tier talent to enhance our platform and capitalize on opportunities within the premium video ad space.
Tom: At the same time, we are committed to generating long-term value for our Shareholders through our Share Repurchase Program and the reenstatement of our dividend. We look forward to building on this momentum as we continue to execute our business strategy.
Tom: Now, let's dive into the current dynamics we are seeing at the box office.
Tom: In the first quarter of 25, the box office generated approximately $1.4 billion, representing an 11.6% decline compared to the same period last year.
Tom: While the first quarter is a seasonally softer period for the box office, the year-over-year-to-climb reflected both a weaker than anticipated slate, with fewer 10 pull films alongside the underperformance of several high-profile titles, such as Snow White. [inaudible]
Tom: This said, we are encouraged that audiences continue to show up for new teachers including with faster-to-line kink, one of them days in the animated comedy dogman.
Tom: Kicking off the second quarter, a Minecraft movie delivered the largest opening day of the year thus far and set a record for the largest debut ever for a video game teacher.
Tom: Looking at attendance, the robust contribution from a Minecraft movie has more than offset the slower first quarter with NCM's year-to-data network attendance through April up 6% compared with the same period last year.
Tom: The remainder of the court is expected to benefit from a stronger line of court releases across a wide range of genres, including highly anticipated titles such as Mission Impossible, The Final Reckoning, Valorina, and how to train your dragons.
Tom: The second half of 25 is also shaping up to be very promising, with a rich and diverse slate of blockbuster sequels, original tent poles, and award-season contender's poised to drive increased attendance and advertiser engagement.
Tom: Many of these highly anticipated films were on display at this year's cinema con in early April , which highlighted the enduring power and cultural residents of cinema.
Tom: Early previews of titles like Walt Disney Studios, Soutopia 2, Universal Pictures Wicked for Good, and Paramount Pictures, The Running Man, Captivated Attendees, and Reaffirmed the depth and quality of the theatrical slate through 2026.
Tom: Studio leaders continue to voice their commitment to the big screen, including Amazon MGM studios, which made it Cinematicon debut this year.
Tom: The content studio for the streaming giant announced 14 theatrical releases already planned for 26, a clear indicator of growing industry enthusiasm and momentum behind the theatrical law.
Tom: The widespread support from across the entertainment ecosystem reinforces the enduring appeal that the atrical experience and further validates are long-term belief in the resilience of the industry.
Speaker Change: For NCM, this momentum represents an opportunity to connect brands with hard-to-reach audiences in one of the most immersive advertising mediums available today.
Speaker Change: With a strong, slater premium cinematic content, expected to draw consumers to theaters, we believe we are well positioned to capture box office upside going forward. Next, I want to quickly discuss two trends we are currently seeing in the advertising marketplace.
Speaker Change: First, as we previewed on our last earnings coal, recent ships in government policy have resulted in an overall reduction in government aspect.
Speaker Change: Second, advertisers across a range of categories delayed ad spend decisions in response to
Speaker Change: As if uncertainty has increased, advertisers are reevaluating their near-term marketing strategies.
Speaker Change: Consequently, we're seeing a trend toward fewer and smaller advertising campaigns, especially across local and regional families.
Speaker Change: We are continuing to monitor these evolving trends and are working with our advertisers to help them place the right campaigns at the right time to continue to reach NCM's valuable audiences.
Speaker Change: With these dynamics in mind, NCM delivered results in line with our expectations
Speaker Change: NCM's First Quarter 2025 Total Revenue was 34.9 million within our guidance range.
Speaker Change: The 7% neurobreur decline reflects the slower first quarter at the box office and an expected degree of advertiser uncertainty regarding tariffs.
Speaker Change: Approximately 42% of first quarter national on-screen revenue was attributed to the scatter market compared to 29% in the prior year period. Reflecting the market shift toward real-time advertising solutions
Speaker Change: Our core platinum offering continues to represent a high quality and proven option for reaching sought-after audiences at scale, attracting category leading advertisers in wireless insurance and dining.
Speaker Change: Ajustic, Oibito was negative 9 million in line with our guidance and primarily driven by reduced theater tendons and the impact to the top line.
Speaker Change: Our adjusted way, but it also reflects investments in sales and operations coupled with one-time investments that were not incurred last year. As we stated previously, we do not expect our first quarter results to be indicative of our full year performance.
Speaker Change: Based upon our current sales pacing, we expect to achieve your over your growth for the second quarter.
Speaker Change: Despite the headlines we saw in the first quarter, the fundamentals of our business remain strong. And James continues to be the largest cinema ad network in the US, providing advertisers unmatched, reached to valuable, young, and diverse audiences in a grand safe, high impact environment.
Speaker Change: Across our entire network, NCM reached over 72 million individuals in the first quarter.
Speaker Change: Primarily driven by Gen Z and millennials who have counted for 64% of our viewership in the quarter, Gen Z alone comprised 36% of our total audience and maintained a strong weekly average rating of 4.
Speaker Change: This quarter, 30 million of the hard to reach 18 to 34-year-old demographic flocked to MCM theaters, resulting in a 3.9-average weekly rating, outperforming traditional media benchmarks and dominating entertainment in the first quarter.
Speaker Change: As we expand our client base and enhance our platform we remain confident that advertisers will continue turning to NCM, even amid market uncertainties to leverage our high value audiences and maximize campaign performance.
Speaker Change: With strong fundamentals and a capital-life business model, we remain focused on investing in the business and executing on our pro strategy. And we have several exciting updates to share.
Speaker Change: I am pleased to announce that MCM agreed to a five year extension of our contract with AMC theaters. The world's largest theatrical exhibition company through the end of 2042. We're excited to further strengthen a relationship that's been foundational to our success.
Speaker Change: The revised agreement aligns the payment structure more closely with actual performance metrics, specifically attendance, screen count.
Speaker Change: An advertising revenue, ensuring more dynamic and scalable revenue generation starting July 1st of 2025.
Speaker Change: NCM retains exclusive rights to lobby advertising at AMC theaters and will collaborate with them to modernize lobby video screens improving audience engagement and monetization potential. Additionally, the agreement strengthens the value of our advertising inventory at AMC theaters.
Speaker Change: Through this new agreement, we further solidified our position as the national leader in cinema advertising.
Speaker Change: Ronnie will provide additional details on the economics of this agreement in a few moments
Speaker Change: In addition to strengthening our network, we are prioritizing investing in our platform and enhancing its capabilities.
Speaker Change: At Investor Day, we introduced Bullseye, a new NCMX product powered by artificial intelligence that leverages and analyzes key audience signals to deliver dynamic hyper-localized messaging at scale.
Speaker Change: Launched in Q1, Bullseye builds on the success of boomerang and boost, strengthening our growing portfolio of innovative solutions that drive measurable results across key consumer categories. Additionally, we are excited to announce the reduction of blueprints, the newest addition to the NCMX products suite.
Alongside Boomerang Boost and Bullseye
Speaker Change: Blueprint uses real-time renovation permit data to identify homeowners who are actively engaged in remodeling projects.
Speaker Change: Giving brands the ability to reach high intent consumers at exactly the right moment. Both I and Blueprint reflect our ongoing commitment to develop smart, scalable solutions that connect brand-news with valuable audiences during key moments.
Speaker Change: Beyond continued innovation with an NCMX, we are accelerating our efforts to align our platform with broader shifts in the advertising landscape, particularly the growing demand for programmatic and self-service solution. This quarter, we took a significant step in positioning NCMX to capitalize on this trend by signing a new Supplyside Technology Partner.
Speaker Change: The collaboration expands our addressable marketplace, enhances our targeting capabilities, and further strengthens our delivery of data-driven solutions.
Speaker Change: We are starting to see our programmatic business gain meaningful traction in the first quarter NCM partnered with 61 unique advertisers across our on-screen and in lobby programmatic offerings.
Speaker Change: Programmatic contributed 3% of total revenue for the first quarter, captioned 48% of our 2024 full year total programmatic revenue. This momentum has continued in the second quarter, with programmatic revenue currently pacing out of first quarter.
Turning now to self-stuff
Speaker Change: We are pleased to announce the relaunch of our enhanced self-serve platform this quarter.
Speaker Change: The improved platform is a more user-friendly solution that enables advertisers to seamlessly activate cinema advertising, launch hyper-local campaigns.
Speaker Change: and Target-specific Geographic Areas by providing new on-ramps to cinema advertising for brands who previously made Donut considered it, the self-serve platform unlocks new demand channels for NCM.
Speaker Change: As the man accelerates and we continue to invest in technology, partnerships and inventory optimization, we expect to see continue the adoption of programmatic self-serve with meaningful revenue contributions from these offerings expected beginning in 26.
Speaker Change: We also continue to recognize the potential in the local advertising space.
Speaker Change: The improvements we've made to our self-serve offering have significantly streamlined campaign execution at the local level, reducing friction for advertisers and enabling our sales teams to shift focus toward higher value opportunities across these markets.
As we shared at our 2025 Investor Day
Speaker Change: including national holding companies, placing regional buys, larger franchise operators and small independent businesses looking to drive awareness of good traffic.
Speaker Change: This multi-tiered strategy will allow us to tap into growth categories at the local level, including lottery education, automotive and professional services.
Speaker Change: at the local advertising space continues to evolve, and with our expanded capabilities in a clear focus on execution, we are optimistic about our ability to capture incremental revenue and unlock sustained local growth.
Speaker Change: As we look ahead to the second quarter, we are confident that we are taking the right steps to position MCM for the future.
Speaker Change: We're particularly encouraged by the robust upcoming movie slate and continue to deliver the most valuable, sought-after audiences with unmatched scale and reach in a uniquely immersive environment.
Speaker Change: Well, we expect continued headlines for advertisers in certain categories impacted by tariffs. We have seen solid sales basing so far in the second quarter and into the second half of the year.
Speaker Change: and we're optimistic that advertisers will continue to turn to the unique value in ROI that NCM delivers.
Speaker Change: The remainder of 2025 will be pivotal as the box office continues to recover and we build in our competitive edge in the marketplace.
Speaker Change: We remain mindful of the dynamic macroeconomic environment and continue to believe in the resilience of the theatrical exhibition industry.
Speaker Change: Supported by a compelling film slate and renewed commitments from tea industry leaders.
Ronnie: Now, I'll turn the call over to Ronnie to provide you with more details on our operating results and outlook.
Thank you, Tom, and good afternoon everyone.
Ronnie: While the first quarter box office was seasonally slower than we typically see.
Ronnie: We began the year with strong momentum, executing on value enhancing transactions, including a new $45 million cash flow base revolver which significantly reduced our cost of financing.
Ronnie: and securing a revised ANC agreement that strengthens our value proposition to both clients and shareholders.
Ronnie: As we continue to execute on the Grove Strategy, we outline our 2025 Investor Day.
Ronnie: We remain focused on capturing opportunities in the premium video marketplace, improving the monetization of our inventory and managing our business with the supply.
Ronnie: NCM's total revenue for the first quarter was 34.9 million, within our guidance range of 34 to 36 million, but down some percent from 37.4 million in the same period last year.
Ronnie: This decline was primarily driven by a 5% year-over-year reduction in attendance, stemming from the underperformance of select film titles.
Ronnie: Temporary pullbacks in government advertising in connection with recent cost-saving policy shifts.
Ronnie: and delayed auto-adspending decisions in response to ongoing tariff announcements.
Ronnie: These factors were partially offset by continued strength across travel, wireless, and entertainment.
Ronnie: Importantly, we are keeping a close eye on these dynamics as we continue to invest in our business.
Ronnie: Our team continued to expand our scatter participation, which increased to 42% of the mix versus 29% in the same quarter last year to mitigate the shift away from the front marketplace.
Ronnie: National advertising revenue decreased to 27.4 million, down from 29.5 million in the first quarter of 2024, driven primarily by lower March attendance.
Ronnie: While we saw advertising delays in sectors such as government, automotive, and consumer package goods,
Ronnie: Increased demand from wireless, pharmaceutical, dining, and media help mitigate some of this softness.
Ronnie: The choppy environment did lead to lower inventory utilization for the quarter of approximately 8%, asked that by slightly increasing CPMs.
Ronnie: Attendance Trends during the quarter also impacted our ability to monetize efficiently. With strong February moviegoer turned out, driven by the release of Captain America during a seasonally softer advertising month.
Conversely, March
Ronnie: which is a seasonally stronger advertising period during the quarter experience a 37% decline in attendance due to the unfortunate performance of Snow White.
Ronnie: The boss office performance for these two months led to March accounting for less than 30 percent of the quarterly attendance compared to over 40 percent historically. [inaudible]
Despite these challenges, March demonstrated robust advertiser demand.
Ronnie: Highlighted by 21% increase in inventory utilization in a 15% list in CPMs.
Resulting in an Oversold Month
Ronnie: We remain vigilant on current market dynamics but are also encouraged by the man we experience exiting the quarter.
Ronnie: Local and regional advertising revenues total 4.9 million, down from 5.3 million in the first quarter of 2024.
Ronnie: This decline was primarily driven by lower attendance in ongoing economic uncertainty.
Ronnie: which led to lower contract volume and smaller deal sizes, particularly within the dining, automotive, wireless, and healthcare categories.
Ronnie: These declines were partially offset by increased contract activity and larger deal sizes within the travel and professional services categories.
Turning to our expenses. Thank you.
Ronnie: First quarter operating expenses were 58.8 million, a 2% decrease from 60.1 million in the prior year.
Ronnie: Excluding one-time items, depreciation, amortization, and non-cash share-based compensation are adjusted operating expenses were 43.9 million, up 2% year-over-year.
Ronnie: This increase was primarily driven by the timing of our annual sales event.
which did not occur in the prior year.
Partially offset by lower exhibitor fees attributable to decreased attendance.
Ronnie: As we previously shared, we anticipate a high single-digit percentage increase in adjusted FGNA for the full year. Reflecting higher sales commissions tied to revenue growth?
Ronnie: Continue an investment in our sales team and go to market initiatives and the implementation of new sales technology to optimize inventory utilization.
First Quarter Adjustment Orbiter
Ronnie: excluding non-cast charges and one-time items with negative 9 million compared to negative 5.7 million in the prior year.
Ronnie: That said, our just-a-orgota result was in line with our guidance range of negative 9.5 million to negative 7.5 million.
Ronnie: Total and lover free cash flow for the quarter, as defined by cash flow from operations, less capital expenditures was five and a half million.
As a reminder,
Ronnie: Our fourth quarter, 2024, Unlever free cash flow, benefited from approximately 13 million in client-favanced payments for advertising.
Scheduled to run throughout 2025.
Ronnie: As a result, these up front payments will impact the year-over-year operability of free cash generation in 2025.
Turning to our Consolidated Balance Sheet [inaudible]
Ronnie: At the end of the first quarter, the company has 63.1 million of cash, cash equivalents, restricted to cash and marketable securities, and zero outstanding debt with an undrawn revolver.
Ronnie: As we shared at investor day, our capital allocations strategy reflects our commitment to delivering value by investing in the future of MCM and returning capital to shareholders.
Ronnie: Strategic investments in our platform, including the Improvements in Programmatic and Cell Serve, New NCMX Products,
Ronnie: and the extended ANC partnership will enhance and seems ability to drive growth.
As mentioned on April 24th
We announce a strengthened long-term partnership with ANC.
Ronnie: underscoring the value of our advertising inventory and securing a stable revenue stream.
Ronnie: The Revived EFA introduces an improved advertising show structure that aligns with our other major
Ronnie: Simplifying Operations in creating additional high-value inventory, particularly during peak periods, while expanding pre-approved advertising categories.
Ronnie: We have also entered into a new multi-screen, lobby advertising and data sharing agreements.
Ronnie: Modernizing our lobby offerings and further enhancing our data products within the NCMX suite as part of this agreement our existing beverage arrangement remains in place
Ronnie: and we have established a revised payment structure with AMC which continues to include per patron and screen fees while introducing a potential revenue sharing component tied to performance.
Regarding the revised piece [inaudible]
Ronnie: If we assume no incremental revenue from the agreement, the 2024 Adjusted Ovid of Morgan would have been minimally impacted by approximately one and a half points.
Ronnie: Through the course of the agreement, we expected just the Oybalot margins to be impacted between one and a half to two and a half point [inaudible]
That's bad [inaudible]
Ronnie: We do expect to see incremental revenue from the improved agreement which we project to ask that the increase fees and support potential adjusted overall growth.
Ronnie: As part of the revised terms, NCM and AMC also agreed to terminate our joint venture agreements in the SNS ongoing litigation.
Ronnie: Disagreement Positions NCM for Creative Growth and reaffirms the long-term strategic value of our ANC relationship.
Ronnie: To complement these strategic initiatives, we have accelerated our Share Repurchase Program.
You're going to stay through April .
Ronnie: NCM has repurchased 2.3 million shares and an average price per share of six dollars and six cents.
Ronnie: for a total of approximately 14 million, almost matching the total number of shares repurchased throughout all of 2024.
This brings our total shares repurchase under this program.
to 4.8 million shares at an average price of $5.60.
for a total of 27 no.1.
Ronnie: Looking ahead, we plan to continue repurchasing shares opportunistically throughout the remainder of this year.
Ronnie: We also announce a quarterly dividend of three cents per share today, amounting to 2.9 million.
This driven will be paid on May 29th, 2025.
to stockholders of record on May 16, 2025.
Ronnie: and aligns well with our high free cash flow conversion business model.
Ronnie: with a balanced approach to investing in the business and returning capital to shareholders. We are committed to continuing to be a shareholder friendly company.
Turning to our Outlook.
Ronnie: We are excited about the upcoming major releases in the 2025 box office.
with a strong slate and demonstrated commitment from industry leaders.
Ronnie: As we share previously, we do not see the first quarter's results as indicative of our full year performance.
The second quarter, Asheville's pipeline remains active. [inaudible]
Ronnie: but has heavily shifted into the scatter market and we expect continued headwinds in categories impacted by government policy shifts. [inaudible]
Ronnie: We expect second quarter revenue to be between 56 and 61 million reflecting the ongoing impacts of tariff uncertainty on the advertising market.
Ronnie: We expect adjusted over the second quarter of 2025 to be between two and a half and seven and a half million.
Ronnie: In closing, we are encouraged by the industry momentum coming out of CinemaCon.
Ronnie: Where the upcoming film slate and the wavering support for theatrical exhibition from industry of leaders were on full display.
Ronnie: Looking at the remainder of the second quarter, we're particularly excited about Lilo and Stitch.
28 years later in Karate Kids Legends.
As audiences continue, returning to theaters and great numbers .
Ronnie: And as we deepen investment in our platform and capabilities, we believe advertisers will continue to recognize the value of NCM and turn to us to reach the most sought after audiences.
Ronnie: The combination of our strong execution, coupled with the share buy-back, and dividend programs.
Ronnie: Give us confidence in our ability to sustain growth, and we are committed to delivering long-term value for our partners, clients and shareholders.
Operator, please open in line for questions.
Speaker Change: We will now begin the question and answer session to ask a question you may press star
Ronnie: If you're using a speaker phone, please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Eric Wold with Texas Capital Securities. Please go ahead.
Eric Wald: Thanks, guys. Good afternoon. I appreciate taking my questions. Just a couple.
Tom: I can't stick it back to the Q4 call Tom, he talked about [inaudible]
Tom: You're pacing, you know, was running strong for two two and use the same language again for the pacing to two now. I know you don't give guidance beyond a quarter, but obviously the guidance can then below. [inaudible]
Speaker Change: where us in consensus was looking for the quarter. I guess the simple question is, have that strength of pacing that you saw on the Q4 call weekend from the pacing you're seeing now on the Q1 call to try and get a sense of the level of strength and how it might have changed.
Speaker Change: Well, here's what I would say, you know, the pipeline is still very active in the second quarter. Scatter is obviously more important than ever. We're definitely seeing some headwinds in certain categories.
Speaker Change: I see we think our inventory and the value of it is going to continue to draw audiences.
Speaker Change: There are certain categories like pharma, CPG, travel, insurance, entertainment that seem to be unaffected by the tariff discussions and there's other categories, including government, cars, auto that I think are, you know, having more headwinds.
Speaker Change: So I think what's very difficult right now is it's very hard to predict you know day-to-day week-to-week announcements on tariffs and how they're going to impact individual investors.
Speaker Change: Clearly, you know, uncertainty is driving some level of hesitancy. That wasn't there candidly back in fourth quarter.
I'll just I'll just have one thing
Yes, to that.
Is that...
Speaker Change: Um, you know, in terms of pacing, our our scatter business is actually doing extraordinarily well right now. Um, we were up at this point in time. What's already booked
is upward and double.
Speaker Change: at the versus the same period last year. I think, again, just reiterating what Tom said, it is about kind of seeing, you know, trying to find a little bit more clarity about the next two months. It's a little bit more difficult in this environment today. [inaudible]
Got it. And then so...
Speaker Change: Last question, you can mention on the beginning that you're seeing me.
Speaker Change: You've got a more shorter term campaigns or shorter term decisions and maybe some smaller campaigns from kind of it's an advertisement law of certain I much I know the past you've been I guess we're you know
Except for kind of maybe extraordinary circumstances It's closed.
Speaker Change: You know, upfront commitments were upfront commitments and it was as hard for somebody to get out of one. Are you planning to be any more flexible in terms of? [inaudible]
Speaker Change: What would the video committed to? Dollar-wise and timing-wise and during the last upfront and given the environment ran or is it spacey?
Speaker Change: you know, the current scatter period, or sorry, the upfront period.
Speaker Change: So you're really talking about two different periods that the new upfront negotiations start, you know, in the next couple months.
Speaker Change: for the next, call it 9 to 12 months. All advertisers are going to be more flexible.
Speaker Change: As it relates to what's happening over the next, call it two quarters, which is really the end of our current upfront. Generally speaking, we hold to our cancellation policies.
Speaker Change: over the next two quarters. I think where it's going to become very interesting though is in the next upfront.
Speaker Change: where you have more and more advertisers buying closer and closer to air date. And that, you know, is going to be a significant thing for every advertiser. And we're happy to compete and scatter, and with the outgrowth and implementation of programmatic and self-serve.
Speaker Change: will be well positioned to deliver, you know, advertising, you know, within 24 hours of an actual air
Speaker Change: It's an interesting question, and I think you're going to see more of it in the next up front, not so much for us in this up front, for period.
Ronnie Ng: , Ronnie Ng , , Ronnie Ng , Ronnie Ng , Ronnie Ng , Ronnie
Forward. First desk.
Yep.
Speaker Change: And the next question comes from Patrick Sholl with Barrington Research. Please go ahead.
Patrick Scholl: Hi, just following a phone you were talking about being able to deliver the advertising more quickly, just kind of curious to what extent that that's helping to
Speaker Change: It maybe improves some of the monetization on films that I'll perform and maybe kind of erase some of that gap when there is like a stronger than expected box office period.
Speaker Change: I mean, the best application for our ability to deliver ads quickly is when a movie outperforms. So on a movie like Minecraft, which did phenomenally well in its opening weekend, everyone wanted to chase that the following weekend.
Speaker Change: and unless you have the tools to do it, or the platform to do it, it's very hard to deliver incremental inventory that quickly. We're in a position where we can do it fairly well today.
Speaker Change: As programmatic becomes more pervasive across our whole capability platform, we'll be able to do it literally within 24 hours or even in some cases a couple of hours.
Speaker Change: So yes, it will be a great tool for improving utilization.
Speaker Change: Okay, and then just in terms of like the category weakness, is there any...
Speaker Change: Maybe a breakout between kind of more brand driven versus performance, ad purchases that are there from your advertisers.
Some pausing in the...
Speaker Change: Call it Operative Funnels, but those who are trying to build. .
Brand Awareness, or Image Advertising.
Speaker Change: Those are typically the kind of companies that put more of applause on things during uncertain environments. I think the performance based companies, particularly CPG, Pharma.
Speaker Change: Travel Insurance, etc. Those people continue to invest in marketing because of the ability to quantify the outcomes. And obviously we're a great platform for delivering high levels of predictable outcomes. So that's sort of the landscape of what's happening right now. Thank you.
Okay. Thank you.
Sir.
Speaker Change: And the next question comes from Mike Hickey with the benchmark company. Please go ahead.
Mike Hickey: Hey Tom Ronnie Chan, thanks for taking our question, great job and I'm
Speaker Change: Very challenging environment here. Just, I guess first on AMC, one, congratulations. This is a big deal. A lot of great things in it as you highlighted. Seems like one of the bigger unlocks here is the post showtime inventory, including the platinum spot. Obviously, that's been a big piece of your...
Speaker Change: Growth there on the national side. I'm curious if you can help us understand the incremental revenue opportunity that this new inventory can give you on revenue.
Speaker Change: Ronnie will get into more of the specifics of it, but let me say, we are really thrilled to be-
Enhancing our relationship with AMC. It's just a fantastic...
Speaker Change: Circuit, a lot of respect for that whole company and what they do. They have certainly some of the best theaters in all the biggest markets.
and they've been a particularly innovative company to unlock.
Speaker Change: New and better inventory with them. It's a huge opportunity for our company.
Um, so we're already out there, um,
Selling it.
Speaker Change: You know, one of the things that to think about is the way we've been selling platinum 40 AM CDO.
Speaker Change: was it was, you know, not the entire network per se, because AMC was excluded from that. So that really limited
Speaker Change: To some extent, the way we can actually sell the product to advertisers. Now that we're going to have the entire network available to Platinum.
Speaker Change: It's not going to be, you know, our expectation is not just going to be straightly linear. So it will have a greater growth effect just because that it is, it is now truly a national network that people can buy in platinum and in post show.
You know, historically we never-
Speaker Change: We never provided the dollar amounts for platinum, but I'll say last year.
Speaker Change: In 2024, platinum's growth was pretty strong, pretty high. It's a pretty meaningful part of the revenue. And I think back half of 25, when the full agreement kicks in, our expectations is going to be greater than that.
Speaker Change: The set of tools that's sort of the new NCM versus what you guys are doing, sort of prepandemic, so kind of wondering how helpful it is in terms of during national business, and then I would love to hear more about the new edition blueprint.
Speaker Change: So we, you know, we now have four bees in our portfolio of our portfolio.
Speaker Change: Blueprint, the most new one, is a really exciting one. We can now...
Speaker Change: Scrape Individual Construction Data by Market, by Zip Code, and we can re-target that two advertisers, for example, like Home Depot or anyone in the business of selling to people who are buying a new home or building a new home.
We're not aware of anyone else doing that today.
Speaker Change: Bulls Eye provides a similar thing where we can actually localize inventory against our foreign audience. So for example, we could have literally hundreds of different versions of an ad for the same insurance company or for the same travel company.
Speaker Change: So now that we've built out our unique, our platform, we can really cover
Speaker Change: and be much more competitive with a lot of other digital media companies. When you think about
This Company is
Speaker Change: You know even three years ago we really couldn't with a straight face tell .
Um...
Speaker Change: The advertising world that we really could deliver on the promise of bringing data and outcome based results to their platform and to their brand. So this is a really something that's going to be a continuous investment for us, there probably more bees in the future. Yeah.
Speaker Change: But I'm really proud of our team that's put together these great products. It has allowed us to compete.
Speaker Change: for every ad dollar out there. As you know, certain advertisers want to have a high degree.
of Proof in the Putting in.
Speaker Change: And, you know, Candy, we never used to be able to do that. You know, we were kind of a big reach awareness building vehicle.
Speaker Change: And now candidly, with all the data we have and all of the data products that we have,
You know, we can compete.
in a much more predictive way on the results way.
Speaker Change: And I think that's what advertisers are more and more geared to.
Speaker Change: That's where all the money's going and now we're in a position really to compete very effectively with anyone as it relates to those kind of metrics.
Speaker Change: Thanks Tom. Last question from from us. Obviously one queue is a challenge but two queue has been sort of a rocket ship here and you gave some data.
Speaker Change: And enthusiasm. It looks like, you know, you look at the slate of films going forward. It seems like the...
Speaker Change: The momentum here is going to continue, and into 26. How does that affect sort of...
Speaker Change: Media Buyers, Enthusiasm, to want to put ads into your network. I mean, you've got the attribution.
Speaker Change: You've got the demo, you've got a defensive model, an exciting model in a challenging environment. Are you seeing sort of incremental interest, I guess, Tom, for ad placement, it's given that sort of lineup of, you know, good data.
Tom: Well, you know, it's funny you mentioned it. We recently had a screening for Thunderbolts that was sold out with all of our clients. We have another one for Mission Impossible coming up. If you look at the quality of movies coming out in May and June , in through July .
Tom: Those big hit movies, whether it's Jurassic World, whether it's F1, those movies are all going to get incredibly positive results at the box office and really good press.
And it's that kind of awareness building.
Tom: and positive awareness building for the movie business that so helps our company. You know, in the first quarter
Tom: Candidly, there were a lot of movies that didn't do well. [inaudible]
Tom: and some really high profile ones that actually, you know, failed, including Snow White. And that kind of negative buzz, you know, can't lead it, puts a little cloud over the business. And now that we've had Minecraft and sinners, the accountant, Thunderbolts,
Tom: Mission Impossible in Lionel and Stitch coming up in two weeks. We have again like this wind at our sales and at the consistency of the box office creates excitement and sustainable
Tom: And that's what we need to continue to deliver. I would say first quarter was a tough one, but the second quarter and the rest of the summer look really strong. And I can already tell our advertisers are talking about it.
Tom: A lot of it is indicative of, you know, being sold out at a screening in LA in New York. So, people are anxious to get back to the movies. I'm sure that mission impossible will not disappoint people. One of the underdogs I have for the summer's ballerina.
Tom: which is off the John Wick series. So I think it's going to be a really, really good theatrical summer and one we haven't seen in a long time.
That's awesome. Good luck guys. Thank you. Thank you.
Speaker Change: This concludes our question and answer session. I would like to turn the conference back over to Tom Lesinski for any closing remarks.
Tom Lesinski: Oh, thank you for joining us today. We appreciate your questions and on-going support of NCM.
Tom Lesinski: And while we're operating against a bit of an uncertain backdrop, we remain committed to executing on our growth strategy and are optimistic that an upcoming and improving slate will drive recovery at the box office.
Tom Lesinski: NCM continues to attract advertisers as a top player in the premium video advertising space with advertising industry leading data capabilities and unmatched scale and reach among the most sought after young audiences.
Tom Lesinski: So with our fortified balance sheet, robust cash flow, and a shareholder-friendly cap location strategy, we are well-positioned to capitalize on the opportunities that lie ahead and generate long-term value for our shareholders members.
Tom Lesinski: Finally, thank you to the NCM team for their hard work and to our shareholders for their support [inaudible]
See you at the movies!
Tom Lesinski: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.