Q2 2026 AMC Entertainment Holdings Inc Earnings Call

July 20, 2026

Speaker #4: Thank you, Angela. Good morning. I'd like to welcome everyone to AMC's second quarter 2026 earnings webcast. With me is Sean Goodman, Chief Financial Officer.

Speaker #4: Before I turn the webcast over to Adam, I'd like to remind everyone that some of the comments made by management today during this webcast may contain forward-looking statements that are based on management's current expectations.

John Merriwether: Thank you, Angela. Good morning. I'd like to welcome everyone to AMC's Second Quarter 2026 Earnings Webcast. With me and Sean Goodman, our Chief Financial Officer. Before I turn the webcast over to Adam, I'd like to remind everyone that some of the comments made by management today during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks and uncertainties and other factors may cause actual results to differ materially from those that might be expressed today. Many of those risks, and public filings, including our most recently filed 10-K and 10-Q. Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict. In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned against relying on these statements.

Speaker #4: Numerous risks, strategies, and other factors may cause actual results to differ materially from those that might be expressed today. Many of those risks are detailed in our filings, including our most recently filed 10-K and 10-Q. Several of the factors that will determine the company's future results are beyond the ability of the company to control or predict.

Speaker #4: In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned against relying on these statements. The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events.

Speaker #4: On this webcast, we may reference non-GAAP financial measures, such as adjusted EBITDA and free cash flow, among others. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the Investor Relations section of our website early this morning.

John Merriwether: The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events. On this webcast, we may reference non-GAAP financial measures such as adjusted EBITDA and free cash flow, among others. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the investor relations section of our website early this morning. After our prepared remarks, there will be a question and answer session. This afternoon's webcast is being recorded, and a replay will be available in the investor relations section of our. This morning's webcast is being recorded, and a replay will be available in the investor relations section of our website later today. With that, I'll turn the call over to Adam.

John Merriwether: The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events. On this webcast, we may reference non-GAAP financial measures such as adjusted EBITDA and free cash flow, among others. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the investor relations section of our website early this morning. After our prepared remarks, there will be a question-and-answer session. This morning's webcast is being recorded, and a replay will be available in the investor relations section of our website later today. With that, I'll turn the call over to Adam.

Speaker #4: After our prepared remarks, there will be a question and answer session. This afternoon's webcast is being recorded and a replay will be available in the Investor Relations section of our—excuse me, this morning's webcast is being recorded and a replay will be available in the Investor Relations section of our website.

Speaker #4: Later today. With that, I'll turn the call over to Adam.

Speaker #5: Thank you, John. Good morning, everyone, and thank you for joining us to discuss AMC's record-breaking results for the second quarter of 2026. What a quarter!

Speaker #5: What a quarter! What a quarter! In AMC's entire 106-year history, there has never been one like this. Needless to say, I am extremely pleased to report that AMC Entertainment achieved all-time record revenue and all-time record adjusted EBITDA for the period April to June—more than 71 million guests visited our theaters worldwide in the second quarter, 13.5% more than last year, drawn by one of the most powerful and diverse film slates that we've seen in years.

Adam Aron: Thank you, John. Good morning, everyone, and thank you for joining us to discuss AMC's record-breaking results for Q2 2026. What a quarter, what a quarter, what a quarter. In AMC's entire 106-year history like this one. Needless to say, I'm extremely pleased to report that AMC Entertainment achieved all-time record revenue and all-time record adjusted EBITDA for the period April to June. More than 71 million guests visited our theaters worldwide in Q2, 13.5% more than last year, drawn by one of the most powerful and diverse film slates than we've seen in years. Q2 total revenues for AMC and Odeon increased 14.2% year over year to approximately $1.6 billion, while adjusted EBITDA surged 70% to $321.4 million, exceeding $300 million in a quarter for the very first time ever.

Adam Aron: Thank you, John. Good morning, everyone, and thank you for joining us to discuss AMC's record-breaking results for Q2 2026. What a quarter, what a quarter, what a quarter. In AMC's entire 106-year history like this one. Needless to say, I'm extremely pleased to report that AMC Entertainment achieved all-time record revenue and all-time record adjusted EBITDA for the period April to June. More than 71 million guests visited our theaters worldwide in Q2, 13.5% more than last year, drawn by one of the most powerful and diverse film slates than we've seen in years. Q2 total revenues for AMC and Odeon increased 14.2% year-over-year to approximately $1.6 billion, while adjusted EBITDA surged 70% to $321.4 million, exceeding $300 million in a quarter for the very first time ever.

Speaker #5: Second quarter total revenue for AMC and Odeon increased 14.2% year over year, to approximately $1.6 billion, while adjusted EBITDA surged 70% to $321.4 million, in a quarter for the very first time ever.

Speaker #5: Let me say that again, so that the prognosticators of doom who have continued to vastly underestimate the will and the skill of AMC—despite having risen to meet challenge after challenge after challenge during these difficult past six years—can hear me clearly: AMC reported record adjusted EBITDA of $321.4 million in Q2 of 2026.

Adam Aron: Let me say that again so that the prognosticators of doom who have continued to vastly underestimate the will and the skill of AMC despite our having risen to meet challenge after challenge after challenge during these difficult past six years can hear me clearly. AMC reported record adjusted EBITDA of $321.4 million in Q2 of 2026. That's up $132 million off of the results of last year's Q2, and you may reckon the quarter itself was a strong one. Both Q2 revenue and Q2 adjusted EBITDA exceeded Wall Street's expectations and established new all-time high points for our company. Equally important, we converted this outstanding performance into generating cash. Free cash flow for the quarter was $190.1 million. You all have known for some time that the overall industry-wide domestic box office was showing strength in the quarter.

Adam Aron: Let me say that again so that the prognosticators of doom who have continued to vastly underestimate the will and the skill of AMC despite our having risen to meet challenge after challenge after challenge during these difficult past six years can hear me clearly. AMC reported record adjusted EBITDA of $321.4 million in Q2 2026. That's up $132 million off of the results of last year's Q2, and you may reckon the quarter itself was a strong one. Both Q2 revenue and Q2 adjusted EBITDA exceeded Wall Street's expectations and established new all-time high points for our company. Equally important, we converted this outstanding performance into generating cash. Free cash flow for the quarter was $190.1 million. You all have known for some time that the overall industry-wide domestic box office was showing strength in the quarter.

Speaker #5: That's up $132 million over the results of last year's second quarter, and the May report itself was a strong one. Both second quarter revenue and second quarter adjusted EBITDA exceeded Wall Street's expectations.

Speaker #5: And established new all-time high points for our company. Equally important, we converted this outstanding performance into generating cash. Free cash flow for the quarter was $190.1 million.

Speaker #5: You all have known for some time that the overall industry-wide domestic profit was showing strength in the quarter. At $2.99 billion, it was the highest second quarter in seven years.

Speaker #5: And perhaps of even greater note, of the 200 quarters in the past 50 years for which I have been able to personally scrutinize the statistics, this was the fifth-best quarter ever in the past half-century.

Speaker #5: Indeed, in the second quarter, six different film titles—coming from Universal, Lionsgate, A24, and three from Disney—had impressive domestic opening weekend grosses exceeding $75 million, or more. In some cases, far more.

Adam Aron: Perhaps of even greater note, of the 200 quarters in the past 50 years for which I have been able to personally scrutinize the statistics, this was the fifth-best quarter ever in the past half-century. Indeed, in Q2, six different film titles coming from Universal, Lionsgate, A24, and three from Disney had impressive domestic opening weekend grosses exceeding $75 million or more, in some cases, far more. AMC did not just benefit from the rising box office tide, which, as you know, saw an overall 10-point. We also increased AMC's market share as our domestic ticket revenues were up by even more, up by some 11.4%. Our European numbers also shined, as evidenced by our European attendance in Q2 increasing by 18% year-over-year.

Speaker #5: But AMC did not just benefit from the rising box office tide, which, as you know, saw an overall 10-point discipline. We also increased AMC's market share.

Speaker #5: As our domestic ticket revenues were up by even more, up by some 11.4%. Our European numbers also shined, as evidenced by our European attendance in the second quarter increasing by 18% year over year.

Speaker #5: And I might add, with our European second quarter adjusted EBITDA more than quadrupling over the second quarter of a year ago. Globally, in the quarter, we also successfully grew our food, beverage, and merchandise sales, which increased by 15.3%, as did our so-called "other revenues," which increased by 16.1%.

Speaker #5: By now, on this earnings webcast, you're probably hearing a common theme of one word being repeated over and over again: increasing. Increasing. Increasing. And doing so with increases of double-digit growth.

Adam Aron: I might add, with our European Q2 adjusted EBITDA more than quadrupling over Q2 of a year ago. Globally in the quarter, we also successfully grew our food and beverage and merchandise sales, which increased by 15.3%, as did our so-called, quote, other revenues, unquote, which increased by 16.1%. By now on this earnings webcast, you're probably hearing a common theme of one word being repeated over and over again. Increasing. Increasing. Increasing. Doing so with increases of double-digit growth. Happily, we get to use a different but equally impressive qualifier when you all take a look at just how well AMC kept a tight lid on our costs. With so much zeal in cost management, our adjusted EBITDA margin jumped from 13.6% in last year's Q2 to 20.1% in the quarter just completed.

Speaker #5: But happily, we get to use a different, but equally impressive, qualifier when you all take a look at just how well AMC kept a tight lid on our costs. With so much ceiling cost management, our adjusted EBITDA margin jumped from 13.6% in last year's Q2 to 20.1% in the quarter just completed.

Speaker #5: This all demonstrates the inherent operating leverage in our business model, which is significant at a time of rising revenues. The power of AMC's market-leading position stems from our size and scale, of course, but also from the compelling appeal of our theaters, the increasing numbers of our premium offerings, the prowess of our marketing programs, as well as our ability to keep our costs in check.

Speaker #5: Finally, after some admittedly tough years, as our industry recovered only slowly from the ravages of COVID-19 and its aftermath, the relentless focus of AMC on delighting our guests has seen AMC executing with all cylinders blazing.

Adam Aron: This all demonstrates the inherent operating leverage in our business model, which is significant at a time of rising revenues. The power of AMC's market-leading position stems from our size and scale, of course, but also from the compelling appeal of our theaters, the increasing numbers of our premium offerings, the prowess of our marketing programs, as well as our ability to keep our costs in check. Finally, after some admittedly tough years as our industry recovered only slowly from the ravages of COVID-19 and its aftermath, the relentless focus of AMC on delighting our guests has seen AMC executing with all cylinders blazing so far throughout 2026.

Speaker #5: So far, throughout 2026, combining both the first and second quarters of this year, AMC's revenues are up 16.9% year over year, and our adjusted EBITDA for the first six months of $359.7 million in the first half of '26 is considerably more than 2.5 times the $131.8 million reported in the first half of last year.

Speaker #5: Think about this as you reflect on the operating leverage inherent at AMC when revenues are rising. For the first six months of 2026, AMC's adjusted EBITDA is some $228 million above that achieved in the same period last year.

Adam Aron: Combining both Q1 and Q2 of this year, AMC's revenues are up 16.9% year over year, and our adjusted EBITDA for H1 of $359.7 million in H1 2026 is considerably more than two and a half times the $131.8 million reported in H1 last year. Think about this as you reflect on the operating leverage inherent at AMC when revenues are rising. For H1 2026, AMC's adjusted EBITDA is some $228 million above that achieved in the same period last year, up $228 million. As you've been learning this morning, the AMC story of 2026 includes our vastly improved operating results. We also should speak to the enormity of the progress that we've made in strengthening the AMC balance sheet. Sean will walk you through the details in a couple of minutes.

Adam Aron: Combining both Q1 and Q2 of this year, AMC's revenues are up 16.9% year-over-year, and our adjusted EBITDA for H1 of $359.7 million in H1 2026 is considerably more than two and a half times the $131.8 million reported in H1 last year. Think about this as you reflect on the operating leverage inherent at AMC when revenues are rising. For H1 2026, AMC's adjusted EBITDA is some $228 million above that achieved in the same period last year, up $228 million. As you've been learning this morning, the AMC story of 2026 includes our vastly improved operating results. We also should speak to the enormity of the progress that we've made in strengthening the AMC balance sheet. Sean will walk you through the details in a couple of minutes.

Speaker #5: Up $228 million. As you've been learning this morning, the AMC story of 2026 includes our vastly improved operating results. But we also should speak to the enormity of the progress that we've made in strengthening the AMC balance sheet.

Speaker #5: Sean will walk you through the details in a couple of minutes. Suffice it to say, we have $1.7 billion less debt than we had at the end of 2020. Assuming static overall market benchmark rates, interest expenses decrease as our debt levels decrease. And with rising Adjusted EBITDA, interest rates also decrease as our leverage ratios improve.

Speaker #5: Thanks in part to our success in generating free cash flow, and thanks in part to our success in raising equity, take it all together, AMC had $778 million of cash on hand, excluding restricted cash, at the end of Q2 2026.

Adam Aron: Suffice it to say, we have $1.7 billion less debt than we had at the end of 2020. Assuming static overall market benchmark rates, interest expenses decrease as our debt levels decrease, and with rising adjusted EBITDA, interest rates also decreased as our leverage ratios improved. Thanks in part to our success in generating free cash flow and thanks in part to our success in raising equity. Take it all together, AMC had $778 million of cash on hand, excluding restricted cash at the end of Q2 2026. Importantly, we do not expect any significant debt maturities prior to the year 2029, three years from now. Looking ahead, we continue to be ever so optimistic. This weekend's powerful debut of Universal Pictures and Christopher Nolan's "The Odyssey," with an encouraging media-reported $124 million domestic opening weekend gross, is the latest reminder of the strength of today's theatrical marketplace.

Speaker #5: And importantly, we do not expect any significant debt maturities prior to the year 2029, three years from now. Looking ahead, we continue to be ever so optimistic.

Speaker #5: This weekend's powerful debut of Universal Pictures and Christopher Nolan's The Odyssey, with an encouraging media-reported $124 million domestic opening weekend gross, is the latest reminder of the strength of today's theatrical marketplace.

Speaker #5: Indeed, we also announced this morning, in addition to second quarter earnings, that there were some 4.3 million guests in AMC theaters and Audiences Cinemas this weekend, from Thursday to Sunday.

Speaker #5: 4.3 million people in our theaters—big, big numbers. That outstanding debut of The Odyssey will be followed a mere two weeks from now by Sony's highly anticipated Spider-Man: Brand New Day, for which advance booking suggests yet another box office triumph is at hand.

Adam Aron: Indeed, we also announced this morning, in addition to Q2 earnings, that there were some 4.3 million guests in AMC Theatres and Odeon Cinemas this weekend from Thursday to Sunday. 4.3 million people in our theaters, big numbers. That outstanding debut of "The Odyssey" will be followed a mere two weeks from now by Sony's highly anticipated "Spider-Man: Brand New Day," for which advanced booking suggests yet another box office triumph is at hand. There will be more exciting movie weekends this year, especially including when Warner Bros. will be releasing "Dune: Part Three" and Disney will be unveiling "Avengers: Doomsday" just before Christmas. Accordingly, we believe that movie theaters will enjoy in the full 12 months of 2026, their strongest yet post-pandemic year at both the domestic box office and at the global box office.

Speaker #5: There will be more exciting movie weekends this year, especially when Warner Brothers will be releasing Dune: Part Three and Disney will be unveiling Adventures: Doomsday just before Christmas.

Speaker #5: Accordingly, we believe that movie theaters will enjoy, in the full 12 months of 2026, their strongest yet post-pandemic year, at both the domestic box office and the global box office.

Speaker #5: The summary of 2026 so far is that our strategy, our execution, and our preparation at AMC all came together as the recovering box office met a strong, lean, and well-positioned market leader in the largest movie theater chain on earth: AMC.

Speaker #5: In short, $321.4 million of adjusted EBITDA, the best in 106 years. One a quarter, one a quarter, one a quarter. With that, I'll forward the call over to Sean Goodman, our CFO, and we'll walk you through our second quarter financial results in greater detail after that.

Adam Aron: The summary of 2026 so far is that our strategy, our execution, and our preparation at AMC all came together as the recovering box office met a strong, lean, and well-positioned market leader in the largest movie theater chain on Earth, AMC. In short, $321.4 million of adjusted EBITDA, the best in 106 years. What a quarter. What a quarter. What a quarter. With that, I'll turn the call over to Sean Goodman, our CFO, who will walk you through our Q2 financial results in greater detail. After that, I'll return to highlight some of the consequential strategies and actions that encourage us greatly as we move forward. Sean?

Speaker #5: I'll return to highlight some of the consequential strategies and actions that encourage us greatly as we move forward. Sean?

Speaker #2: Thank you, Adam. And good morning to everyone. We are indeed proud of the Q2 results. They delivered the highest quarterly revenue and adjusted EBITDA in AMC's entire history.

Speaker #2: From a stronger industry box office, we outperformed. In the United States, admissions revenue increased by 11.4%, approximately 70 basis points ahead of the industry box office growth, which was 10.7%.

Speaker #2: And in Europe, our attendance increased by 17.9%, and that's approximately 170 basis points ahead of the relevant industry attendance growth. The success of our initiatives around market share for patron profit, cost management, and portfolio optimization, coupled with the benefits of operating leverage, drove second quarter adjusted EBITDA up 70% to a record $321 million.

Sean Goodman: Thank you, Adam, and good morning to everyone. We are indeed proud of the Q2 results. They delivered the highest quarterly revenue and adjusted EBITDA in AMC's entire history. From a stronger industry box office, we outperformed. In the United States, admissions revenue increased by 11.4%, approximately 70 basis points ahead of the industry box office growth that was 10.7%. In Europe, our attendance increased by 17.9%, and that's approximately 170 basis points ahead of the relevant industry attendance growth. The success of our initiatives around the market share for patron profit, cost management, and portfolio optimization, coupled with the benefits of operating leverage, drove Q2 adjusted EBITDA up 70% to the record $321 million. That is more than $30 million ahead of the previous record that was achieved almost nine years ago when our attendance was approximately 23% higher.

Speaker #2: That is more than 30 million ahead of the previous record. That was achieved almost nine years ago, when our attendance was approximately 23% higher.

Speaker #2: Comparing Q2 2026 results to the prior year, approximately $200 million of incremental revenue generated $131.9 million of additional adjusted EBITDA. That's a roughly 66% flow-through that drove our adjusted EBITDA margin up 650 basis points to 20.1%.

Speaker #2: The second quarter's performance was broad-based across our global circuit, with food and beverage revenue per patron and total revenue per patron reaching new all-time highs in both the domestic and the international businesses.

Speaker #2: In the United States, adjusted EBITDA increased by 57.5% year over year to $285.6 million, while in Europe, adjusted EBITDA increased by 337% to $35.8 million.

Sean Goodman: Comparing Q2 2026 results to the prior year, approximately $200 million of incremental revenue generated $131.9 million of additional adjusted EBITDA. That's a roughly 66% flow-through that drove our adjusted EBITDA margin up 650 basis points to 20.1%. The Q2's performance was broad-based across our global circuit with food and beverage revenue per patron and total revenue per patron hitting new all-time highs in both the domestic and the international businesses. In the United States, adjusted EBITDA increased by 57.5% year over year to $285.6 million, while in Europe, adjusted EBITDA increased by 337% to $35.8 million. Note that when comparing our Q2 2026 results to the prior year, international revenue and EBITDA benefited by approximately 2% from European currency appreciation versus the US dollar. Also note that 2026 general and administrative expenses benefited from an approximately $5.5 million credit associated with insurance recoveries.

Sean Goodman: Comparing Q2 2026 results to the prior year, approximately $200 million of incremental revenue generated $131.9 million of additional adjusted EBITDA. That's a roughly 66% flow-through that drove our adjusted EBITDA margin up 650 basis points to 20.1%. The Q2's performance was broad-based across our global circuit with food and beverage revenue per patron and total revenue per patron hitting new all-time highs in both the domestic and the international businesses. In the United States, adjusted EBITDA increased by 57.5% year-over-year to $285.6 million, while in Europe, adjusted EBITDA increased by 337% to $35.8 million. Note that when comparing our Q2 2026 results to the prior year, international revenue and EBITDA benefited by approximately 2% from European currency appreciation versus the US dollar. Also note that 2026 general and administrative expenses benefited from an approximately $5.5 million credit associated with insurance recoveries.

Speaker #2: Note that when comparing our second quarter 2026 results to the prior year, international revenue and EBITDA benefited by approximately 2% from European currency appreciation versus the U.S. dollar.

Speaker #2: And also note that 2026 general and administrative expenses benefited from an approximately $5.5 million credit associated with insurance recoveries. It’s important to note the second quarter of 2019, which was before the onset of the pandemic and before the strategic actions that we have taken over the last six and a half years.

Speaker #2: In this year's second quarter, the North American box office was approximately 7.5% less than the second quarter of 2019. Yet in Q2 2026, AMC generated 6% more revenue and 39.5% more adjusted EBITDA than we did in Q2 2019, with attendance at our theaters approximately 26 million people, or 26.5% less than in 2019.

Speaker #2: So we generated more revenue and significantly more adjusted EBITDA in a lower box office environment, after seven years of inflationary cost pressures, and with approximately 16% fewer theater locations.

Sean Goodman: It's important to compare the Q2 of 2019, that was before the onset of the pandemic and before the strategic actions that we have taken over the last six and a half years. In this year's Q2, the North American box office was approximately 7.5% less than the Q2 of 2019. Yet in Q2 2026, AMC generated 6% more revenue and 39.5% more adjusted EBITDA than we did in Q2 2019, with attendance at our theaters approximately 26 million people or 26.5% less than in 2019. We generated more revenue and significantly more adjusted EBITDA in a lower box office environment after seven years of inflationary cost pressures and with approximately 16% fewer theater locations. This very clearly illustrates that we do not need the box office to return to pre-pandemic levels to achieve the same levels of EBITDA.

Speaker #2: This very clearly illustrates that we do not need the box office to return to pre-pandemic levels to achieve the same levels of EBITDA. This is because of the actions that we have taken, and that we continue to take, to enhance our market share, grow profit per patron, reduce our cost base, optimize our theater portfolio, and invest in the guest experience.

Speaker #2: During the second quarter, we closed seven theaters and introduced six new premium large format and 25 new XL, or extra-large, auditoriums. Since 2020, we have now closed 225 locations with over 66 opened, for a net reduction of 159 theaters, or approximately 16% of our global circuit.

Speaker #2: At the same time, we have also added 77 premium large-format and 193 XL, or extra-large, auditoriums. This increases the number of premium enhanced auditorium options available to our guests by more than 50%.

Sean Goodman: This is because of the actions that we have taken and that we continue to take to enhance our market share, grow profit per patron, reduce our cost base, optimize our theater portfolio, and invest in the guest experience. During the Q2, we closed seven theaters and introduced six new premium large format and 25 new XL or extra large auditoriums. Since 2020, we have now closed 225 locations. We've opened 66 for a net reduction of 159 theaters or approximately 16% of our global circuit. We have, at the same time, also added 77 premium large format and 193 XL or extra large auditoriums. This increases the number of premium or enhanced auditorium options available to our guests by more than 50%. Now let's move to the balance sheet. Our priorities are clear. One, maintain sufficient liquidity. Two, reduce borrowing costs and extend maturities. Three, lower financial leverage.

Speaker #2: Now, let's move to the balance sheet. Our priorities are clear: one, maintain sufficient liquidity; two, reduce borrowing costs and extend maturities; three, lower financial leverage.

Speaker #2: And four, invest in higher return opportunities that enhance the movie-going experience at AMC. During the quarter, we successfully refinanced $400 million of debt that was due in 2027, thereby extending the maturity by four years.

Speaker #2: We also eliminated approximately $155.8 million of exchangeable debt that was due in 2030 through its conversion into equity. And we completed a $150 million at-the-market equity offering, raising more than $85 million of gross proceeds during the second quarter.

Speaker #2: In addition, we recently completed a $200 million registered direct equity offering with several institutional investors. Following the closing of that transaction, we exercised our right to redeem the remaining $125.5 million of 6.8% senior subordinated notes due in 2027.

Sean Goodman: four, invest in high-return opportunities that enhance the moviegoing experience at AMC. During the quarter, we successfully refinanced $400 million of debt that was due in 2027, thereby extending the maturity by four years. We also eliminated approximately $155.8 million of exchangeable debt that was due in 2030 through its conversion into equity. We completed $150 million of at-the-market equity offering, raising more than $85 million of gross proceeds during Q2. In addition, we recently completed a $200 million registered direct equity offering with several institutional investors. Following the closing of that transaction, we exercised our right to redeem the remaining $125.5 million of 6.8% senior subordinated notes due in 2027. This redemption is subject to a 30-day notice period, and as such, the subordinated notes will be redeemed on 24 July 2026.

Speaker #2: This redemption is subject to a 30-day notice period, and as such, the subordinated notes will be redeemed on July 24, 2026. As a result of the debt refinancing and repayment actions taken in the second quarter, we do not anticipate any material debt principal payments required prior to 2029.

Speaker #2: And our go-forward annual cash interest expense will be reduced by approximately $16 million. Our outstanding first half 2026 financial performance, together with a meaningful improvement in the balance sheet, has resulted in a substantial reduction in our financial leverage ratios.

Speaker #2: And thanks to the terms that we negotiated in our various debt documents, the financial leverage reduction achieved during the second quarter is expected to trigger a reduction in the interest rate paid on approximately 75% of our debt.

Speaker #2: This will result in a lowering of our annual interest expenses by approximately $51 million. Yet another significant step in the transformation that we've been driving for the last six years.

Sean Goodman: As a result of the debt refinancing and repayment actions taken in Q2, we do not anticipate any material debt principal payments required prior to 2029, and our go-forward annual cash interest expense will be reduced by approximately $16 million. Our outstanding H1 2026 financial performance, together with a meaningful improvement in the balance sheet, has resulted in a substantial reduction in our financial leverage ratios. Thanks to the terms that we negotiated in our various debt documents, the financial leverage reduction achieved during Q2 is expected to trigger a reduction in interest rate paid on approximately 75% of our debt. This will result in a lowering of the annual interest expenses by approximately $51 million. Yet another significant step in the transformation that we've been driving over the last six years.

Speaker #2: At the end of June, thanks to pre-cash flow generation of $190.1 million and the benefit of the capital raised during the quarter, our cash on hand was $707.8 million, excluding $42 million of restricted cash.

Speaker #2: It is important to note that, on July 24th of this year, $125.5 million of cash will go out to be used for the redemption of our subordinated debt.

Speaker #2: As you may recall, our working capital cycle is closely tied to the seasonality of the box office generally. This has resulted in a positive cash impact from working capital in the second and fourth quarters, and a negative cash impact in the first and third quarters.

Speaker #2: And we do expect this cadence to continue through 2026. With a strengthening balance sheet, enhanced cash position, and a resurgent box office, we're continuing to execute on the highly successful AMC Go-Bound.

Sean Goodman: At the end of June, thanks to pre-cash flow generation of $190.1 million and the benefit of the capital raised during the quarter, our cash on hand was $778 million, excluding $42 million of restricted cash. It is important to note that on 24 July of this year, $125.5 million of cash will go out to be used for the redemption of our subordinated debt. As you may recall, our working capital cycle is closely tied to the seasonality of the box office. Generally, this has resulted in a positive cash impact from working capital in Q2 and Q4, and a negative cash impact in Q1 and Q3. We do expect this cadence to continue through 2026. With a strengthening balance sheet, enhanced cash position, and a resurgent box office, we're continuing to execute on the highly successful AMC Go plan.

Speaker #2: And we expect net CapEx for 2026 to be between $200 and $235 million. As we look ahead, we are optimistic about the ongoing recovery of the global box office and confident in our ability to convert box office growth into significant growth in profit, cash flow, and ultimately shareholder value.

Speaker #2: And with that, I will turn the call back over to Adam.

Speaker #1: Thank you, Sean. I want to briefly address a few key topics—six to be specific—before turning to your questions. First, one of the reasons AMC continues to outperform is the strength of the relationships that we have built with our guests through our industry-leading loyalty programs. More than 40 million U.S. households, for example, have participated in our AMC Stubs loyalty program, creating a direct and ongoing relationship between AMC and our guests.

Sean Goodman: We expect net CapEx for 2026 to be between $200 and $235 million. As we look ahead, we are optimistic about the ongoing recovery of global box office and confident in our ability to convert box office growth into significant growth in profit, cash flow, and ultimately, shareholder value. With that, I will turn the call back over to Adam.

Speaker #1: It is especially helpful that we know exactly which movie genres and which movie titles our guests have seen in our theaters. Through our loyalty programs, we're then able to develop a valuable understanding of our guests, reward their patronage, and encourage them to visit our theaters for the movies that they most like, more often.

Adam Aron: Thank you, Sean. I want to briefly address a few key topics, six to be specific, before turning to your questions. First, one of the reasons AMC continues to outperform is the strength of the relationships that we have built with our guests through our industry-leading loyalty programs. More than 40 million US households, for example, have participated in our AMC Stubs loyalty program, creating a direct and ongoing relationship between AMC and our guests. It is especially helpful that we know exactly which movie genres and which movie titles they have seen in our theaters. Through our loyalty programs, we are able to develop a valuable understanding of our guests, reward their patronage, and encourage them to visit our theaters for the movies that they most like more often. AMC Stubs members represented just more than 50% of our total US guest count in Q2.

Speaker #1: AMC Stubs members represent just more than 50% of our total U.S. guest count in the second quarter. Second, benefiting from our many best practices and learnings from our highly successful limitless subscription programs in Europe, I cannot praise enough our A-List subscription program in the United States.

Speaker #1: The one that lets you see up to four movies a week for a flat monthly fee of somewhere between $24 and $30 a month, plus tax.

Speaker #1: At the end of the second quarter, more than 1.1 million moviegoers were members of our A-List program—more than double the membership that AMC's A-List had just five years ago.

Speaker #1: A-List is such a popular program, especially among Gen Z moviegoers, and it gives AMC a more consistent and increasingly predictable cadence to welcome a younger generation to flock to movie theaters.

Adam Aron: Second, benefiting from our many best practices learnings from our highly successful Limitless subscription programs in Europe. I cannot rave enough about A-List subscription program in the United States, the one that lets you see up to four movies a week for a flat monthly fee of somewhere between $24 and $30 a month, plus tax. At the end of Q2, more than 1.1 million moviegoers were members of our A-List program, more than double the membership that AMC's A-List had just five years ago. A-List is such a popular program, especially among Gen Z moviegoers. It gives AMC a more consistent and increasingly more predictable cadence to welcome a younger generation to flock to movie theaters, as their parents and grandparents did before them for decade after decade, dating back a full century or more.

Speaker #1: As their parents and grandparents did before them, for decade after decade—dating back a full century or more, indeed—A-listers who also get to participate in our AMC Stubs loyalty program were responsible for right around 20% of all AMC theater patronage in the U.S. during the second quarter.

Speaker #1: Think about that: 1.1 million people, out of the 330 million Americans, are so loyal to AMC that they represented about 20% of our moviegoing customers in the second quarter—which itself was so successful.

Speaker #1: Third, Sean often mentions with great satisfaction our closing non-performing theaters and opening shiny new ones. What is so impressive here is that the theaters that we're opening so outgross and have so much more combined profitability than the theaters that we've shut.

Speaker #1: What's more, our willingness to do so has also given us the credibility we need in the theater landlord community to successfully renegotiate and receive much more attractive lease terms on many of the theaters that routinely come up for renewal each and every year.

Adam Aron: A-listers, who also get to participate in our AMC Stubs loyalty program, were responsible for right around 20% of all AMC theater patronage in the US during Q2. Think about that. 1.1 million people out of the 330 million Americans are so loyal to AMC that they represented about 20% of our moviegoing customers in Q2, which itself was so successful. Third, Sean often mentions with great satisfaction our closing non-performing theaters and opening shiny new ones. What is so impressive here is that the theaters that we are opening so outgross and have so much more combined profitability than the theaters that we have shut.

Speaker #1: Fourth, AMC is the movie theater chain that led the way with reclining seating, both in the U.S. and at our Lux-branded theaters across Europe.

Speaker #1: Ironically, many of our highest-grossing theaters simply can't take reclining seats because they require so much seat loss. We just can't afford to give up those seats in theaters that are so thoroughly patronized.

Speaker #1: Fortunately, we have a solution to this. Our relatively new, branded AMC Club Rocker seats are much more attractive and much more comfortable than the seats that preceded them.

Adam Aron: Our willingness to do so also has given us the credibility we need in the theater landlord community to successfully renegotiate and receive much more attractive lease terms on many of the theaters that routinely come up for renewal each and every year. Fourth, AMC is the movie theater chain that led the way with recliner seating, both in the US and at our Luxe branded theaters across Europe. Ironically, many of our highest-grossing theaters simply cannot take reclining seats because they require so much seat loss. We just cannot afford to give up those seats in theaters that are so thoroughly patronized. Fortunately, we have a solution to this conundrum. Our relatively new branded AMC Club Rocker seat is much more attractive and much more comfortable than the seats that preceded it.

Speaker #1: The seat loss is but a fraction of the seating given up to install full recliners. And it also costs only a fraction to deploy the Club Rockers compared to what we previously were investing.

Speaker #1: The AMC Club Rockers seats propelled AMC Burbank, AMC Lincoln Square, and AMC Empire to be among the highest-grossing theaters across the entire country, week after week.

Speaker #1: Just as it has been for the past several years, we will remain highly disciplined with our capital expenditure efforts. But even so, we have figured out a way to relatively inexpensively get more of these Club Rockers into more of our top locations.

Speaker #1: Will make them that much more appealing to moviegoers. Fifth, I've noticed that many of us have been writing recently about the power of extra-large format and premium large format screens.

Adam Aron: The seat loss is but a fraction of the seating given up to install full recliners. It also costs only a fraction to deploy the AMC Club Rockers compared to what we previously were investing. The AMC Club Rocker seats propelled AMC Burbank, AMC Lincoln Square, and AMC Empire to be among the highest grossing theaters across the entire country week after week after week. Just as it has been for the past several years, we will remain highly disciplined with our capital expenditures efforts. Even so, we have figured out a way to relatively inexpensively get more of these AMC Club Rockers into more of our top that will make them even that much more appealing to moviegoers. Fifth, I've noticed that many analysts have been writing recently about the power of extra large format and premium large format screens.

Speaker #1: I want to remind you how much of a commanding lead AMC enjoys, most importantly with IMAX and with Dolby Cinema, among others, along with our house brands' consumer-preferred premium products—all proudly featured in the world of AMC in the U.S. and Odeon in Europe.

Speaker #1: Globally, AMC and Odeon now have deployed and operated some 226 IMAX screens, 182 Dolby screens, 83 iSense screens, 47 Prime screens, 14 ScreenX and 4DX screens, along with 193 XL screens.

Speaker #1: Just about 750 in total. No other movie theater chain on earth comes even close, and these auditoriums are so popular. They represent only about 8% of our total screen count, but for The Odyssey this weekend, for example, they generated more than 50% of our total ticket gross for the film.

Adam Aron: I want to remind you how much of a commanding lead AMC enjoys most importantly with IMAX and with Dolby Cinema, among others, along with our house brands, consumer preferred premium products all, and proudly featured in the world of AMC in the US and Odeon in Europe. Globally, AMC and Odeon now have deployed and operating some 226 IMAX screens, 182 Dolby screens, 83 iSense screens, 47 PRIME screens, 14 ScreenX and 4DX screens, along with 193 XL screens. Just about 750 in total. No other movie theater chain on Earth comes even close. These auditoriums are so popular. They represent only about 8% of our total screen count. For "The Odyssey" this weekend, for example, they generated more than 50% of our total ticket gross for the film.

Speaker #1: IMAX especially performed fabulously well with 'Odyssey.' Chris Nolan's epic movie was filmed entirely with IMAX cameras. And our IMAX auditoriums are just packed right now.

Speaker #1: That's a real triumph for both IMAX and AMC. It's no surprise Odeon are so committed to further increasing the number of our PLF and XLF screens.

Speaker #1: Mostly using third-party capital to get there, I think that we can affordably increase that total count of our PLFs and XLFs by 100 and 250 more auditoriums over the next two to four years.

Speaker #1: And finally, sixth, I really want to salute our headquarters staff and our theater teams in the field for the creative ways in which they've controlled in 2026.

Speaker #1: It will almost be mind-numbing on this webcast today to try to walk you through all the line items on which we've been vigilant in keeping costs in check.

Adam Aron: IMAX especially performed fabulously well with "The Odyssey." Chris Nolan's epic movie was filmed entirely with IMAX cameras, and our IMAX auditoriums are just packed right now. That's a real triumph for both IMAX and for AMC. It's no surprise Odeon are so committed to further increasing the number of our PLF and XLF screens, mostly using third-party capital to get there. I think that we can affordably increase that total count of our PLFs and XLFs by 100 and 250 more auditoriums over the next two to four years. Finally, sixth, I really want to salute our headquarter staff and our theater teams in the field for the creative ways in which they have controlled in 2026. It would almost be mind-numbing on this webcast today to try to walk you through all the line items on which we've been vigilant in keeping costs in check.

Speaker #1: But you should know that our success in the second quarter in driving more EBITDA than almost any of you expected came from our determined efforts, first to get revenues growing, but more importantly, to get them growing at a far faster pace.

Speaker #1: ...than that of expense growth. With that, Sean and I would be pleased to take your questions from analysts and our retail shareholders. This was a quarter in which—I forgot to mention it before—we generated some $321.4 million, a 106-year record for AMC.

Speaker #2: Thank you. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two.

Speaker #2: Once again, that is *star one* to ask a question. We'll pause for a moment to allow everyone a chance to join the queue.

Speaker #2: And our first question today comes from Mike Hickey with Stonex. Your line is open, please go ahead.

Adam Aron: You should know that our success in Q2 in driving more EBITDA, more EBITDA than almost any of you expected, came from our determined efforts first to get revenues growing, but to get them growing at a far faster pace than that of expense growth. With that, Sean and I would be pleased to take your questions from analysts and our retail shareholders following a quarter in which I forgot to mention it before, generated some $321.4 million, 106-year record for AMC.

Speaker #3: Hey, I'm Sean John. Congrats, guys, on an incredible Q2, strong first half performance. Two questions, Adam. The first is probably your point six on your team's cost discipline here, which has been exceptional, holding your opex basically flat in Q2.

Speaker #3: How sustainable do you think that cost discipline is in the second half? And would you expect continued revenue growth to drive similar operating leverage?

Speaker #1: Thanks, Mike. And by the way, Mike, our top lawyer at Wild Godfell is named Michael Hickey, so it's very consistent. Very consistent.

Speaker #3: All right.

Speaker #1: Thanks for your nice words about the quarter. It was quite a good one. There were a few one-time items in the second quarter last year and this year.

Operator: Thank you. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question, we'll pause for a moment to allow everyone a chance to join the queue. Our first question today comes from Mike Hickey with StoneX. Your line is open. Please go ahead.

Speaker #1: So I don't know if we'll have exactly the same expense growth containment going forward as we had in Q2. But that's a small piece of what was going on in Q2.

Speaker #1: What was really going on in Q2 is just we really contained costs, and I'm so proud of our people because it took 30,000 of them across 850 theaters, as well as in our headquarters organizations in Europe and the US, to pull it off.

Mike Hickey: Hey, Adam, Sean, John. Congrats, guys, on an incredible Q2 strong H1 performance. Two questions, Adam. The first is probably your point six on your team's cost discipline here, which has been exceptional, holding your OpEx basically flat in Q2. How sustainable do you think that cost discipline is in H2, and would you expect continued revenue growth to drive similar operating leverage?

Speaker #1: We're going to be maniacal in continuing to try to keep our costs down. Will we have the full 700 basis point improvement in adjusted EBITDA margin every quarter going forward that we had in Q2?

Adam Aron: Thanks, Mike. By the way, Mike, our top lawyer at Weil, Gotshal & Manges is named Michael Hickey. It's very confusing. It's very confusing. Thanks for your nice words about the quarter. It was quite a good one. There were a few one-time items in Q2 last year and this year. I don't know if we'll have exactly the same expense growth containment going forward as we had at Q2, but that's a small piece of what was going on in Q2. What was really going on in Q2 is just we really contained costs. I'm so proud of our people because it took 30,000 of them across 850 theaters, as well as in our headquarters organizations in Europe and the US, to pull it off. We're going to be maniacal in continuing to try to keep our costs down.

Speaker #1: I guess that remains to be seen, based on how strong the revenues are and how much we can keep living costs down. But we're going to do everything in our power to maximize and drive revenue growth and keep costs under control.

Speaker #3: Thanks, Adam. The free cash flow is also exceptional—$190 million in free cash flow. And in Q2, I guess at this point, and I know that you've brought your leverage down, you've reduced your interest expense.

Speaker #3: That all seems very positive. But for the second half, and overall annually, do you have a sense at this point of the level of box office that would be required for you to consistently generate positive free cash flow going forward?

Speaker #1: To help me with decimal points, would you like that answer? We know exactly what the break-even box office needs to be for us to be free cash flow positive on a 12-month basis.

Adam Aron: Will we have the full 700 basis point improvement in adjusted EBITDA margin every quarter going forward that we had in Q2? I guess that remains to be seen based on how strong the revenues are and how much we can keep a lid on costs. We're going to do everything in our power to maximize and drive revenue growth and keep costs under control.

Speaker #1: Right now, it's right around $10.4 billion, which is so impressive because if you compare what it was back in 2019—pre-pandemic—add seven years of inflationary costs and wage pressure, among other things, and everything is more expensive that we buy.

Mike Hickey: Thanks, Adam. The free cash flow, also exceptional. $190 million free cash flow in Q2. I guess at this point, I know that you've brought your leverage down, you reduced your interest expense. That all seems very positive for H2 overall annually. Do you have a sense at this point the level of box office that would be required for you to consistently generate positive free cash flow moving forward?

Speaker #1: Because, as everything that everyone buys has become more expensive over seven years, you would have thought the break-even box office would have been much higher.

Speaker #1: But we've done such a great job in increasing our profit per patron and in controlling our costs. We're within sight of being cash flow positive, not for a quarter, but for a year.

Speaker #1: And the efforts to continue to drive that break-even box office level downwards to keep. If, in fact, we are successful in continuing to get lower interest rates going forward, and Sean deserves to be justifiably proud of helping build some automatic triggers into our various debt instruments that—.

Adam Aron: To how many decimal points would you like that answer? We know exactly what the breakeven box office needs to be for us to be free cash flow positive on a 12-month basis. Right now, it's right around $10.4 billion, which is so impressive because if you compare what it was back in 2019, pre-pandemic, add 7 years of inflationary costs and wage pressure, among other things, everything is more expensive that we buy, as everything that everyone buys is more expensive over 7 years. You would've thought the breakeven box office would've been much higher, but we've done such a great job in increasing our profit per patron and in controlling our costs. We're within sight of being cash flow positive, not for a quarter, but for a year. The efforts to continue to drive that breakeven box office level downwards continue.

Speaker #1: Our leverage ratios improve, our interest rates fall, and that's exactly what's happening right now with the strong operating results from the second quarter and having paid off or converted into equity a bunch of our debt so far this year.

Speaker #1: If interest rates go down, if interest expense goes down, that means that the break-even box office level goes down as well. As I said to your earlier question, Mike, we're going to continue to do all in our power to drive revenues. Remember that something like two-thirds of our incremental revenue dollar falls to the EBITDA line.

Speaker #1: We're going to do everything in our power to keep costs under control. So we're not quite at break-even neutral for the full year, but boy, are we close.

Speaker #1: And there's so much improvement. However, we've been here since 2019.

Speaker #3: Thanks, Adam. Thanks, guys. Congratulations.

Adam Aron: If, in fact, we are successful in continuing to get lower interest rates going forward, Sean deserves to be justifiably proud of how we've built some automatic triggers into our various debt instruments, that as our leverage ratios improve, our interest rates fall, that's exactly what's happening right now with the strong operating results from Q2 and having paid off or converted into equity a bunch of our debt so far this year. If interest expense goes down, that means that the breakeven box office level goes down as well. As I said to your earlier question, Mike, we're going to continue to do all in our power to drive revenues. Remember that something like 2/3 of our incremental revenue dollar falls to the EBITDA line, we're going to do everything in our power to keep costs under control.

Speaker #2: Thank you. And our next question will come from Alicia Rees with Guggenheim. Your line is now open.

Speaker #4: Thanks. Great numbers, guys. Congrats on the quarter. I have a couple of questions about international. Just looking at the admissions revenue per screen, growth of 20% year over year, and that's on a 34% growth last year in the second quarter.

Speaker #4: And some really nice growth in the first quarter, strong expectations for the back half of the year with a good slate. I wonder if you could talk about—you had mentioned about 250 more premium large format screens expected for the full, I think, global print over the next two to four years.

Speaker #4: To what extent have you completed your upgrades in Europe, and are those driving results? And to what extent are you still taking that 250 and driving that higher?

Speaker #1: Alicia, I'm going to let Sean answer your question, because our international theaters actually report to Sean, in addition to the CFO, that is. But I just want to clarify one thing.

Adam Aron: We're not quite at breakeven neutral for the full year, but boy, are we close, there's so much improvement over we've been since 2019.

Speaker #1: What I said in my prepared remarks is that we'll do somewhere between 150 and 200 to 250 more. Premium format and extra-large format screens—the so-called XL at AMC screens in the US and XL screens in Europe.

Mike Hickey: Thanks, Adam. Thanks, guys. Congratulations.

Operator: Thank you. Our next question will come from Alicia Reese with Wedbush. Your line is now open.

Speaker #1: We have 193 of them now. I'm sure that we can add 100 more—maybe more than that—across the U.S. and Europe, going forward.

Alicia Reese: Thanks. Great numbers, guys. Congrats on the quarter. I had a couple questions about international. Just looking at the admissions revenue per screen growth of 20% year-over-year, that's on the 34% growth last year in Q2. Had some really nice growth in Q1, strong expectations for H2 with a good slate. I wonder if you could talk about, you had mentioned about 250 more premium large format screens expected for the full, I think, global print over the next two to four years. To what extent have you completed your upgrades in Europe, and are those driving results? To what extent are you still taking that 250 and driving that higher?

Speaker #1: So, there's a lot of opportunity to add more screens. And we do get a healthy price premium for our premium products. Here in the US, for example, our IMAX auditoriums, our Dolby Cinema auditoriums, usually are carrying something like a $6 or $7 price premium.

Speaker #1: ...over a traditional auditorium. Our Prime auditoriums and our iSense auditoriums are also commanding healthy premiums, and even our XL screens are commanding smaller price premiums—but price premiums nonetheless—basically up maybe 10%.

Adam Aron: Alicia, I'm going to let Sean answer your question because our international theaters actually report to Sean in addition to his CFO duties. I just want to clarify one thing. What I said on my prepared remarks is that we'll do somewhere between 150 and 250 more premium format and extra large format screens, the so-called XL at AMC screens in the US and XL screens in Europe. We have 193 of them now. I'm sure that we can add 100 more, maybe more than that, across the US and Europe going forward. There's a lot of opportunity to add more screens. We do get a healthy price premium for our premium products. Here in the US, for example, our IMAX auditoriums, our Dolby Cinema auditoriums usually are carrying something like a $6 or $7 price premium over a traditional auditorium.

Speaker #1: Above normal auditorium pricing. And not only do we get higher prices for these premium products, but they're also the auditoriums that book first. And you just need to look at this one weekend on Odyssey, when our premium and extra-large format screens were 80% of our screens.

Speaker #1: But 50% of our growth—I mean, these premium format screens and extra-large format screens have the generating power of six times that of a normal auditorium.

Speaker #1: So you can be sure that we're going to do all in our power to increase the number of IMAX auditoriums in our system, Dolby Cinema auditoriums in our system, ScreenX and 4DX auditoriums in our system, and our house-brand Prime and iSense auditoriums and our XL screens.

Speaker #1: With that, do you want to make a further comment, Sean, about Europe?

Adam Aron: Our PRIME auditoriums and our iSense auditoriums are also commanding healthy premiums. Even our XL screens are commanding smaller price premiums, but price premiums nonetheless, basically up maybe 10% above normal auditorium pricing. Not only do we get higher prices for these premium products, but they're also the auditoriums that book first. You just need to look at this one weekend on The Odyssey that our premium and extra large format screens were 80% of our screens, but 50% of our gross. The premium format screens and extra large format screens have the generating power of six times that of a normal auditorium.

Speaker #3: Thanks, Adam. And thanks, Alicia, for the question. We are very fortunate because, in line with what Adam is saying, we have a very long list of extremely high-return projects.

Speaker #3: Longer list than we could afford to actually invest one particular point in time. We're also fortunate that we're able to get co-funding from our technology partners, from our landlords.

Speaker #3: To do investments in our theaters. The opportunity in Europe is pretty much the same as it is in the U.S. The recliner penetration in Europe is actually quite significant compared to the U.S.

Speaker #3: So, there's an increased opportunity with recliner penetration. The luxe theater conversions that we've done in Europe have generated extremely high returns, and so those opportunities exist.

Speaker #3: And we're spending, at the moment, pretty much a proportionate amount of capital in the US and Europe on these very, very high-return projects.

Speaker #1: And I'm going to add, as excited as we are about the current profitability of the second quarter at AMC, there's so much operating leverage when revenues rise.

Adam Aron: You can be sure that we're going to do all in our power to increase the number of IMAX auditoriums in our system, Dolby Cinema auditoriums in our system, ScreenX and 4DX auditoriums in our system, and our house brand PRIME and iSense auditoriums and our XL screens. With that, do you want to make any further comments, Sean, about Europe?

Speaker #1: EBITDA rises at a much more rapid clip. And as Sean said, there are a lot of growth opportunities that we look at. But I don't want anyone to have the wrong takeaway from this conversation.

Speaker #1: As you look at the last six years, AMC has been incredibly disciplined in our capital expenditure efforts. We've slimmed down CapEx and embraced only the most obviously successful products and projects.

Sean Goodman: Thanks, Adam, and thanks, Alicia, for the question. We are very fortunate because in line with what Adam is saying, we have a very long list of extremely high return projects, a longer list than we could afford to actually invest one particular point in time. We're also fortunate that we're able to get co-funding from our technology partners, from our landlords to do investments in our theaters. The opportunity in Europe is pretty much the same as it is in the US. The recliner penetration in Europe is actually quite significant than in the US, so there's an increased opportunity with recliner penetration. The Luxe theater conversions that we've done in Europe have generated extremely high returns. Those opportunities exist and we're spending, at the moment, pretty much a proportionate amount of capital in the US and Europe on these very, very high return projects.

Speaker #1: We intend to continue to be extraordinarily disciplined in our capital expenditure process as we go forward.

Speaker #4: And as a quick follow-up, can you just discuss briefly the ROI on the European recliner upgrades? And just compare that to the U.S. back when you were doing that.

Speaker #4: And the premium and large format screens as well—Is the ROI similar to the US?

Speaker #1: Yeah, yeah. Yes, it's a simple answer. And they vary project by project, but it's not uncommon for us to see ROIs achieved of 30% or more, 40% or more, 50% or more.

Adam Aron: I might add, for as excited as we are about the current profitability in Q2 of AMC, there's so much operating leverage. When revenues rise, EBITDA rises at a much more rapid clip. As Sean said, there are a lot of growth opportunities that we look at, I don't want anyone to have the wrong takeaway from this conversation. If you look at the last six years, AMC has been incredibly disciplined in our capital expenditure efforts. We've skinnied down CapEx and embraced only the most obvious successful products and projects. We intend to continue to be extraordinarily disciplined in our capital expenditure process as we go forward.

Speaker #1: On the XL screens, they were so inexpensive to create because the screens already existed. We just didn't necessarily market that we had them. The IRR in the XL screens is pretty much imminent.

Speaker #1: Our total cost to put an XL screen in place—an XL screen for which we're getting a 10% price premium in perpetuity, at least if current pricing were to continue.

Speaker #1: I don't want to make any forward-looking statements about pricing. But our XL screen—$120,000 a screen. I mean, the returns are really high when you can create a product of close to 200 screens globally with very little money doing it.

Speaker #3: And I'll add to that as well. As one would expect, the returns are also really high when you can get co-funding from your landlords or your technology providers as well.

Alicia Reese: As a quick follow-up, can you just discuss briefly the ROI on the European recliner upgrades and just compare that to US back when you were doing that and the premium and large format screens as well? Is the ROI similar to US?

Speaker #3: And given what I said at the beginning about a long list of very high-return projects, because of that, and because of our disciplined approach to capital spending, we're investing in the highest-return of those projects.

Adam Aron: Yes is the simple answer. They vary project by project. It's not uncommon for us to see ROIs achieved 30% or more, 40% or more, 50% or more. On the XL screens, they were so inexpensive to create because the screens already existed. We just didn't necessarily market that we had them. The IRR on the XL screens is pretty much infinite. Our total cost to put an XL screen in place, XL screen, for which we're getting a 10% price premium in perpetuity, at least if current pricing were to continue. I don't want to make any forward-looking statements about pricing. Our XL screen were under $20,000 a screen. I mean, dead serious. The returns are really high when you can create a product of close to 200 screens globally, very little money doing it.

Speaker #3: So we're really generating and investing in very high-return projects that are going to be beneficial to our revenue and profit growth going forward.

Speaker #4: Excellent. Thank you, gentlemen. I appreciate your responses, and congrats again.

Speaker #1: Thank you, Alicia.

Speaker #2: Thank you.

Speaker #4: And our next question comes from Chad Bynon with Macquarie. Your line is now open.

Speaker #3: Hey, good morning, Adam and Sean. Nice quarter. Thanks for taking my question. I wanted to ask just about the per-patron spending metrics. Obviously, this industry has always been affordable compared to others, with what we're seeing with World Cup pricing, concerts this summer, and a number of other sub-sectors.

Speaker #3: But how are you thinking about pricing opportunities? I know you've already talked a lot about premium formats and kind of what that does to pricing.

Speaker #3: But are there still opportunities, either on emissions or concessions, in the back half of the year or '27 to keep raising pricing? Thank you.

Speaker #1: So, Chad, it's either school as a young market—though it's probably illegal for me to talk about pricing strategies on a going-forward basis.

Sean Goodman: I'll add to that as well, as one would expect, the returns are also really high when you can get co-funding from your landlords or your technology providers as well. Given what I said at the beginning about a long list of very high return projects because of that and because of our disciplined approach to capital spending, we're investing in the highest return on those projects. We're really investing in very high return projects that are going to be beneficial to our revenue and profit growth going forward.

Speaker #1: So I'm not trying to dodge your question, but I can't answer your question. However, I can answer your questions in a different way. What I'm very proud of—looking backwards, not looking forward—is AMC has done a really successful job of raising prices where we should when demand is strong, and reducing prices where we should so that bargain hunters can find appealing ways to get into our buildings and buy stuff from us profitably.

Alicia Reese: Excellent. Thank you, gentlemen. Appreciate your responses and congrats again.

Speaker #1: And just some examples—last July, well, for the last more than a decade, the movie theater industry has had cheap pricing on Tuesdays. Last July, AMC took that cheap pricing on Tuesdays and instead added another second discount day by introducing cheap prices on Wednesdays.

Adam Aron: Thank you, Alicia.

Operator: Thank you. Our next question comes from Chad Beynon with Macquarie. Your line is now open.

Chad Beynon: Hey, good morning, Adam and Sean. Nice quarter. Thanks for taking my question. Wanted to ask just about the per patron spending metrics. Obviously, this industry has always been affordable compared to other, out of between what we're seeing with World Cup pricing, concerts this summer and a number of other sub-sectors. How are you thinking about pricing opportunities? I know you've already talked a lot about premium format and kind of what that does to pricing. Are there still opportunities either on admissions or concessions in the back half of the year or 2027 to keep raising pricing? Thank you.

Speaker #1: 50% off Wednesdays, 50% off Tuesdays. It was brilliant, if I do say so myself, because prior to that effort, we didn't have anybody in our movie theaters on Wednesdays to speak of.

Speaker #1: And now Wednesdays are a strong day for us. So there's an example where reducing price worked. Another example of reducing price: A-List. Now 20% of our patronage are A-List members.

Adam Aron: Chad, I was schooled as a young marketer that is totally illegal for me to talk about pricing strategies on a going-forward basis. I'm not trying to duck your question, but I can't answer your question, but I can answer your question in a different way. What I'm very proud of looking backwards, not looking forwards, is AMC has done a really successful job of raising price where we should when demand is strong and reducing price where we should so that bargain hunters can find appealing ways to get into our buildings and buy stuff from us profitably. Just some examples. Well, for the last more than a decade, the movie theater industry has had cheap pricing on Tuesday.

Speaker #1: They have the right to go to four movies a week—that's 17 movies a month. They don't go to 17 movies a month; they go to two or three movies a month.

Speaker #1: But they have the right to. They can do it. Some do. Many occasionally do a lot more than two or three in a particular month.

Speaker #1: But this has given us a great opportunity to drive moviegoing to secondary movies that might not have made the blockbuster cut. And it also allows us to sell more food.

Speaker #1: So, there are examples where we have reduced price. But as you say, we have certainly not been shy at AMC in raising prices for our premium offerings.

Speaker #1: On weekends, for our blockbuster titles, I could give you example after example after example where we have proven to ourselves and to the outside world that there has been price opportunity, and that AMC has smartly been able to take it. Again, that's looking backwards, not looking forwards.

Adam Aron: Last July, AMC took that cheap pricing on Tuesdays and instead added another second discount day by introducing cheap prices on Wednesdays, 50% off Wednesdays, 50% off Tuesdays. It was brilliant, if I do say so myself, because prior to that effort, we didn't have anybody in our movie theaters on Wednesdays to speak of and now Wednesdays is a strong day for us. There's an example where reducing price worked. Another example of reducing price, A-List. Now 20% of our patronage. Our A-List members have the right to go to four movies a week, that's 17 movies a month. They don't go to 17 movies a month. They go to two or three movies a month, but they have the right to, they can do, some do. Many occasionally do a lot more than two or three in a particular month.

Speaker #1: And if you compare the average ticket price that AMC achieves, and you compare that to all the other large, mass operators, you're going to continue to find, I believe, that AMC is more successful in commanding higher ticket pricing than our competition.

Speaker #1: That is a testimony to our proven ability to smartly price, both in having raised prices where we should and having reduced prices where we should.

Speaker #3: And just one thing to add to that: we shouldn't completely equate revenue per patron increases to price increases, right? Because, for example, in the case of our average ticket price, a significant portion of that increase is driven by the mix—more guests are choosing to go to premium formats and are willing to pay for that.

Speaker #3: In the case of food and beverage per patron, it is driven by us introducing the movie-themed popcorn containers, which have been incredibly successful. Now, if you look even at the case of our other revenue, it's driven by adding new revenue streams such as retail popcorn, etc.

Adam Aron: This has given us a great opportunity to drive moviegoing to secondary movies that might not have made the blockbuster cut, and it also allow us to sell more food. There are examples where we have reduced price. As you say, we have certainly not been shy at AMC in raising price for our premium offerings on weekends, for our blockbuster titles. I could give you example after example after example, where we have proven to ourselves and to the outside world that there, again, looking backwards, not looking forwards, that there has been price opportunity, and that AMC has smartly been able to take it. If you compare the average ticket price That AMC achieves.

Speaker #3: So, we can grow our revenue per patron without necessarily increasing price by providing new opportunities for audiences to experience premium formats, offering new movie-themed concerts, movie-themed merchandise, etc.

Speaker #3: To excite the movie-going experience, etc. That drives the revenue per patron up as well.

Speaker #1: And we are cognizant that the market's opening in seven minutes, so we're going to make sure we try to be quick. But I'm just so proud of this.

Speaker #1: First thing, it seems, four years ago, our movie-themed merchandise business had revenues of zero because we weren't in the business. This year, 2026, full year, when you add up our U.S. movie-themed merchandise and our European movie-themed merchandise, we should see $100 million in movie-themed merchandise in our various theaters.

Adam Aron: You compare that to all the other large mass operators, you're going to continue to find and believe that AMC is more successful in commanding higher ticket pricing than our competition. That is a testimony to our proven ability to smartly price, both in having raised prices where we should and having reduced prices where we should.

Speaker #1: That's out of thin air. Good for us.

Speaker #3: Thank you both. I'll leave it there. Appreciate it.

Speaker #1: Thank you.

Speaker #2: Thank you. And our next question comes from Patrick Scholl with Barrington Research. Your line is now open.

Speaker #1: That's the question.

Sean Goodman: If I could add just one thing, is that we shouldn't completely equate revenue per patron increases to price increases, right? Because in the case, for example, the average ticket price, significant portion of that increase is driven by the mix. More guests choosing to go to premium formats and willing to pay for that price. In the case of food and beverage per patron, is driven by us introducing of the movie-themed popcorn containers, which have been incredibly successful. Now, if you look even in the case of our other revenue, it's driven by adding new revenue streams such as retail popcorn, et cetera. We can grow our revenue per patron without necessarily increasing price, is providing new opportunities for audiences to go to premium formats, providing new movie-themed content, movie-themed merchandise, et cetera, to excite the movie-going experience, et cetera.

Speaker #4: Hi, good morning. Thanks for taking the question, and congrats on the record results. Just following up on Mike's question about the level of box office.

Speaker #4: Is there a level of box office or leverage level—and you've made great progress on that over the past few years—but a leverage level where you'd be more comfortable with the balance sheet?

Speaker #3: It's not a leverage level that we've had over the past six years, and that's why we've been reducing our debt every year since then.

Speaker #3: As you can see from our June 2026 results, our leverage level has improved considerably. But I want to be quite clear, that is not the leverage level that our goal is to get to as well.

Speaker #3: We know that there's further to go, and we will get there by continuing to reduce the principal balance of the debt and also by increasing EBITDA.

Sean Goodman: That drives the revenue per patron up as well.

Speaker #3: Ultimately, and it's going to take a little while to get there, we'd like to get to around a 3-times leverage level. We recognize that's not where we are now.

Adam Aron: We are cognizant that the market's opening in 7 minutes, we're going to make sure we try to be quick. I'm just so proud of this, I keep bursting at the seams. Four years ago, our movie-themed merchandise business

Speaker #3: But look at the significant change in the leverage level that has happened over just the last six months. We went from a double-digit leverage level to now what looks like a leverage level that is less than 6.5 times.

Sean Goodman: Yeah, it was nothing

Adam Aron: had revenues of zero because we weren't in the business. This year, 2026, full year, when you add up our U.S. movie-themed merchandise and our European movie-themed merchandise, we should see $100 million in movie-themed merchandise in our various theaters. That's out of thin air. Good for us.

Speaker #3: So, very significant improvement. And we'll continue to work towards making those significant improvements.

Speaker #4: Okay, thank you. And then on your updated expectations on CapEx, is that an expectation that you would have going forward, or is that kind of timing—seeing some of the projects accelerated ahead of the Q4 slate?

Speaker #4: Or, yeah, or is that also what you alluded to earlier with the increased lease incentives from the landlords? That's a little bit more kind of color around that.

Chad Beynon: Thank you both. I'll leave it there. Appreciate it.

Sean Goodman: Thank you.

Operator: Thank you. Our next question comes from Patrick Shull with Barrington Research. Your line is now open.

Speaker #4: Thank you.

Speaker #3: I wouldn't read anything into future years with that because, as Adam said earlier, we're incredibly disciplined on our CapEx spend, and it will be very box office dependent.

Patrick Shull: Next question.

Patrick Sholl: Next question.

Sean Goodman: Hi. Good morning. Thanks for taking the question, and congrats on the record results. Just following up on Mike Hickey's question on maybe the level of box office. Is there a level of box office or leverage level, and you've made great progress on that over the past few years, but a leverage level where you'd be more comfortable with the balance sheet? It's not the leverage level that we've had over the past six years, and that's why we've been reducing our debt every year since then. As you can see from our 2026 June results, leverage level has improved considerably. I want to be quite clear, that is not the leverage level that our goal is to get to as well. We know that there's further to go, and we will get there by continuing to reduce the principal balance of the debt and also by increasing EBITDA.

Speaker #3: As we said earlier on this call, we have just such incredible opportunities to spend money this year and create significant ROI that will benefit our results, and we've taken advantage of the opportunity to do that.

Speaker #3: We're doing that this year. And we'll have to look at 2027 CapEx, look at the individual projects, look at our expectations for the box office, etc.

Speaker #3: And at that point, we will decide what our CapEx spend, and what the appropriate level will be for 2027 and going forward.

Speaker #4: Okay. Thank you so much.

Speaker #3: Thank you.

Speaker #2: Thank you. At this time, there are no further questions in the queue. I will now turn the meeting back to Sean Goodman.

Speaker #3: Thank you very much. Adam, I think it's time for just one quick question from our retail investors. The question relates to equity and capital markets.

Sean Goodman: Ultimately, and it's going to take a little while to get there, we'd like to get to around a 3x leverage level. We recognize that's not where we are now, but look at the significant change in the leverage level that has happened over just the last 6 months. We went from a double-digit leverage level to now what looks like a leverage level that is less than 6.5x. A very significant improvement, and we'll continue to work towards continuing to make those significant improvements.

Speaker #3: The question notes that we have done two equity raises during the second quarter. Can you discuss the rationale for these equity raises and why they are important?

Speaker #1: Thank you, Sean. We've raised a lot of equity over the past six years, and that's why, when other movie theater chains went into bankruptcy or liquidation, AMC did not.

Patrick Shull: Okay. Thank you. On your updated expectations on CapEx, is that an expectation that you would have going forward, or is that timing and just increasing some of the projects ahead of the Q4 slate? Is that also what you alluded to earlier with increased lease incentives from the landlords? Just a little bit more color around that. Thank you.

Patrick Sholl: Okay. Thank you. On your updated expectations on CapEx, is that an expectation that you would have going forward, or is that timing and just increasing some of the projects ahead of the Q4 slate? Is that also what you alluded to earlier with increased lease incentives from the landlords? Just a little bit more color around that. Thank you.

Speaker #1: But even we know that the issuance of stock is a precious commodity; we don't issue it widely. We think very hard about how much equity we should offer and when.

Sean Goodman: I wouldn't read anything into future years with that because, as Adam Aron said earlier, we're incredibly disciplined on our CapEx spend, and it will be very box office dependent. We, as we said earlier on this call, have just such incredible opportunities to spend money this year and create a significant ROI that will benefit the results that we've taken advantage of the opportunity to do that. We're doing that this year, and we'll have to look at 2027 CapEx, look at the individual projects, look at our expectations for the box office, et cetera, and therefore decide what our CapEx spend on appropriate level will be for 2027 and going forward.

Speaker #1: There's always a good reason for it. In the case of the equity that we raised in the second quarter this year, we had a debt maturity coming up less than a year from now where we needed to repay $125.5 million of debt.

Speaker #1: And the alternative to not repaying that debt would have been catastrophic. So we made sure that we needed to prosper. Having said that, I’ve also said many times publicly that cash is king.

Patrick Shull: Okay. Thank you so much.

Patrick Sholl: Okay. Thank you so much.

Sean Goodman: Thank you.

Operator: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Sean Goodman.

Speaker #1: We also know that the thing that separated the companies that survived COVID and the Hollywood strikes is that they had cash in the bank.

Sean Goodman: Thank you very much. Adam, I think there is time for just one quick question from our retail investors. The question relates to equity and capital markets, and the questioner notes that we have done two equity raises during the Q2. Just a question to discuss the rationale for these equity raises and why they are important to AMC Theatres.

Speaker #1: And the companies that did not have cash in the bank faltered. In our industry, there were many companies that faltered. And so, we've also been quite insistent that we always have, to the extent possible, robust cash reserves so that we have the time for recovery.

Adam Aron: Thank you, Sean. We've raised a lot of equity over the past six years. That's why when other movie theater chains went into bankruptcy or liquidation, AMC did not. Even we know that the issuance of stock is a precious commodity. We don't issue it lightly. We think very hard about how much equity we should offer and when. There's always a good reason for it. In the case of the equity that we raised in the Q2 this year, we had a debt maturity coming up less than a year from now, where we needed to repay $125.5 million of debt. The alternative to not repaying that debt would have been catastrophic. We made sure that we needed to prosper. Having said that, we also know, I've said many times publicly, that cash is king.

Speaker #1: And look what's just happened with the second quarter. Because we gave ourselves the time to recover, between the end of 2020 and the beginning of 2026, we put ourselves in the position, through a better film rate and a more successful company that was driving revenues and cutting costs.

Speaker #1: We put ourselves in a position to report a record quarter of $121 million of EBITDA and $190 million of free cash flow. So, while the decisions we made were not always popular with our shareholder base, we knew that they were absolutely essential for our survival.

Speaker #1: And gave us the runway we needed to get to the promised land. We're not quite at the promised land yet, because while we were free cash flow positive in Q2, we've got a little way to go to be free cash flow positive here.

Speaker #1: But we're ever so close, and as I said, we ended the second quarter with $778 million of cash on hand. Tough decisions, but they were made with great care and deliberation.

Adam Aron: We also know that the thing that separated the companies that survived COVID and the Hollywood strikes is that they had cash in the bank, and the companies that did not have cash in the bank faltered. In our industry, there were many companies that faltered. We've also been quite insistent that we always have, to the extent possible, robust cash reserves so that we have the time to recover. Look what's just happened with the Q2. Because we gave ourselves the time to recover between the end of 2020 and the beginning of 2026, we put ourselves in the position, through a better film slate and a more successful company that was driving revenues and cutting costs, we put ourselves in a position to report a record quarter of $321 million of EBITDA and $190 million of free cash flow.

Speaker #1: With that, I think the market's opening, so we're going to finish off this call. I want to thank all of you for participating today, both our analyst community and our retail shareholders.

Speaker #1: Who joined the webcast. And I leave you with three simple thoughts, which are not going to be a surprise to any of you. Number one: holy moly, what a quarter we just completed.

Speaker #1: The best in 106 years, with $321.4 million of EBITDA. Number two, if you were one of the 4.3 million people in our theaters this weekend who reveled at the odyssey, it's got a 95% score from critics on Rotten Tomatoes and a 97% score from audiences on Rotten Tomatoes.

Speaker #1: I would strongly encourage you to buy a movie theater ticket, go out, and see The Odyssey on a giant screen. It's how that movie was meant to be seen.

Speaker #1: And you're in for two hours and fifty minutes of extraordinary entertainment. And three, while I think The Odyssey is going to have legs for many, many weeks, just two weeks from now Spider-Man: Brand New Day will open in our theaters as well.

Adam Aron: While the decisions we made were not always popular with our shareholder base, we knew that they were absolutely essential for our survival and gave us the runway we needed to get to the promised land. We're not quite at the promised land yet because while we were free cash flow positive in Q2, we got a little way to go to be free cash flow positive, but we're ever so close, and as I said, we ended the Q2 with $778 million of cash on hand. Tough decisions, but they were made with great care and deliberation. With that, I think the market's opening. We're going to finish off this call. I want to thank all of you for participating today, both our analyst community and our retail shareholders who joined the webcast.

Speaker #1: And our theory, based on the advanced bookings that we've seen, is with all these good movies that have come out this year, especially in the second quarter—six movies opening to $75 million or more, twice over, five coming out to $140 million opening, coming out to $124 million.

Speaker #1: Opening, we think that Spider-Man is going to be the biggest movie of the year so far—so this week, this month, and throughout the remainder of calendar year '26.

Speaker #1: Thank you, one and all, for joining us today.

Adam Aron: I leave you with three simple thoughts which are not going to be a surprise to any of you. Number one, holy moly, what a quarter we just completed. The best in 106 years with $321.4 million of EBITDA. Number two, if you were one of the 4.3 million people in our theaters this weekend who reveled at "The Odyssey," which got a 95% score from critics on Rotten Tomatoes and a 97% score from audiences on Rotten Tomatoes, I would strongly encourage you, buy a movie theater ticket. Go out and see "The Odyssey" on a giant screen. It's how that movie was meant to be seen. You're in for two hours and 50 minutes of extraordinary entertainment.

Adam Aron: Three, while I think "The Odyssey" is going to have legs for many, many weeks, just two weeks from now, "Spider-Man: Brand New Day" will open in our theaters as well. Our theory, based on the advanced bookings that we've seen, is with all these good movies that have come out this year, especially in Q2, six movies opening to $75 million or more, "Toy Story 5" coming out to a $140 million opening, coming out to $124 million opening. We think that "Spider-Man" is going to be the biggest movie of the year so far. This week, this month, and throughout the remainder of calendar 2026. Thank you one and all for joining us today.

Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Q2 2026 AMC Entertainment Holdings Inc Earnings Call

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