Q2 2026 Marcus Corp Earnings Call

July 30, 2026

Operator 3: Good morning, everyone, welcome to Marcus Corporation's Q2 earnings conference call. My name is Jonathan, I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question and answer session towards the end of this conference. If at any time during this call you require assistance, please press star 0 an operator will be happy to assist you. As a reminder, this conference is being recorded. Joining us today are Greg S. Marcus, chairman, president, and chief executive officer, Chad M. Paris, chief financial officer and treasurer of The Marcus Corporation. At this time, I would like to turn the program over to Mr. Paris for his opening remarks. Please go ahead, sir.

Operator: Good morning, everyone, welcome to Marcus Corporation's Q2 earnings conference call. My name is Jonathan, I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question and answer session towards the end of this conference. If at any time during this call you require assistance, please press star zero an operator will be happy to assist you.

Speaker #1: At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. If at any time during this call you require assistance, please press *0 and an operator will be happy to assist you.

Speaker #1: As a reminder, this conference is being recorded. Joining us today are Greg Marcus, Chairman, President, and Chief Executive Officer; and Chad Paris, Chief Financial Officer and Treasurer of The Marcus Corporation.

Operator: As a reminder, this conference is being recorded. Joining us today are Greg S. Marcus, chairman, president, and chief executive officer, Chad M. Paris, chief financial officer and treasurer of The Marcus Corporation. At this time, I would like to turn the program over to Mr. Paris for his opening remarks. Please go ahead, sir.

Speaker #1: At this time, I'd like to turn the program over to Mr. Paris for his opening remarks. Please go ahead, sir.

Speaker #2: Good morning, and welcome to our 2026 second quarter conference call. I need to begin by stating that we plan to make a number of forward-looking statements on our call today, which may be identified by our use of words such as "believe", "anticipate", "expect", or other similar words.

Chad M. Paris: Good morning. Welcome to our 2026 Q2 conference call. I need to begin by stating that we plan to make a number of forward-looking statements on our call today, which may be identified by our use of words such as believe, anticipate, expect, or other similar words. Our forward-looking statements are subject to certain risks and uncertainties, which may cause our actual results to differ materially from those expected or projected in our forward-looking statements. These statements are only made as of the date of this conference call. We disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Speaker #2: Our forward-looking statements are subject to certain risks and uncertainties, which may cause our actual results to differ materially from those expected or projected in our forward-looking statements.

Chad M. Paris: Our forward-looking statements are subject to certain risks and uncertainties, which may cause our actual results to differ materially from those expected or projected in our forward-looking statements. These statements are only made as of the date of this conference call. We disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Speaker #2: These statements are only made as of the date of this conference call, and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Speaker #2: The risks and uncertainties that could impact our ability to achieve our expectations, as identified in our forward-looking statements, are included under the heading "Forward-Looking Statements" in the press release we issued this morning announcing our Q2 2026 results, and in the risk factors section of our fiscal 2025 Annual Report on Form 10-K, which you can access on the SEC's website.

Chad M. Paris: The risks and uncertainties which could impact our ability to achieve our expectations identified in our forward-looking statements are included under the heading Forward-Looking Statements in the press release we issued this morning announcing our 2026 Q2 results, and in the Risk Factors section of our fiscal 2025 annual report on Form 10-K, which you can access on the SEC's website. Additionally, we refer you to the disclosures and reconciliations we provided in today's earnings press release regarding the use of adjusted EBITDA, a non-GAAP financial measure, in evaluating our performance and its limitations, a copy of which is available on the investor relations page of our website at investors.marcuscorp.com. All right. With that behind us, let's begin. I'll start this morning by spending a few minutes sharing the results from our Q2 and discuss our balance sheet and liquidity.

Speaker #2: Additionally, we refer you to the disclosures and reconciliations we provided in today's earnings press release regarding the use of adjusted EBITDA, a non-GAAP financial measure, in evaluating our performance and its limitations, a copy of which is available on the Investor Relations page of our website at investors.marcuscorp.com.

Chad M. Paris: Additionally, we refer you to the disclosures and reconciliations we provided in today's earnings press release regarding the use of adjusted EBITDA, a non-GAAP financial measure, in evaluating our performance and its limitations, a copy of which is available on the investor relations page of our website at investors.marcuscorp.com. All right. With that behind us, let's begin. I'll start this morning by spending a few minutes sharing the results from our Q2 and discuss our balance sheet and liquidity.

Speaker #2: All right. With that behind us, let's begin. I'll start this morning by spending a few minutes sharing the results from our second quarter and discuss our balance sheet and liquidity.

Speaker #2: I'll then turn the call over to Greg, who will focus his prepared remarks on where our businesses are today and what we see ahead.

Chad M. Paris: I'll turn the call over to Greg, who will focus his prepared remarks on where our businesses are today and what we see ahead. We'll open up the call for questions. This morning, we reported our best Q2 since 2019, and it was a quarter where the intersection of strong demand and both businesses outperforming their respective industries and concepts combined to deliver new post-pandemic Q2 records for consolidated Marcus Corporation revenue and adjusted EBITDA. As we shared on our last call, the Q2 got off to a strong start in our theater division with The Super Mario Bros. Movie creating great momentum heading into a strong slate for the summer moviegoing season. Audiences headed to our theaters for one great movie after another to deliver several positive surprises and our strongest Q2 in theater since the pandemic.

Speaker #2: We'll then open up the call for questions. This morning, we reported our best second quarter since 2019, and it was a quarter where the intersection of strong demand and both businesses outperforming their respective industries and concepts combined to deliver new post-pandemic second quarter records for consolidated Marcus Corporation revenue and adjusted EBITDA.

Speaker #2: As we shared on our last call, the second quarter got off to a strong start in our theater division, with the Super Mario Galaxy movie creating great momentum heading into a strong slate for the summer moviegoing season.

Chad M. Paris: As we shared on our last call, the Q2 got off to a strong start in our theater division with The Super Mario Bros. Movie creating great momentum heading into a strong slate for the summer moviegoing season. Audiences headed to our theaters for one great movie after another to deliver several positive surprises and our strongest Q2 in theater since the pandemic.

Speaker #2: Audiences headed to our theaters for one great movie after another, delivering several positive surprises and our strongest second quarter in theaters since the pandemic.

Speaker #2: In our hotel division, we continue to benefit from strong group business and resilient leisure travel demand that drove overall revenue growth and another quarter of outperformance against our peers and the industry.

Chad M. Paris: In our hotel division, we continued to benefit from strong group business and resilient leisure travel demand that drove overall revenue growth and another quarter of outperformance against our peers and the industry. Overall, we are very pleased with the Q2 results we reported this morning. Shifting to the numbers, I'll start with a few highlights from our consolidated results for the Q2 of 2026. Consolidated revenues of $232 million were up 12.5% compared to the prior year quarter, with revenue before cost reimbursements growing in both divisions. Operating income for the quarter was $27 million, more than doubling compared to $13 million in the prior year quarter. Consolidated adjusted EBITDA for the Q2 was $46.2 million, a 43% increase over the Q2 of 2025.

Speaker #2: Overall, we are very pleased with the second quarter results we reported this morning. Shifting to the numbers, I'll start with a few highlights from our consolidated results for the second quarter of 2026.

Speaker #2: Consolidated revenues of $232 million were up 12.5% compared to the prior year quarter, with revenue before cost reimbursements growing in both divisions. Operating income for the quarter was $27 million, more than doubling compared to $13 million in the prior year quarter.

Speaker #2: Consolidated adjusted EBITDA for the second quarter was $46.2 million, a 43% increase over the second quarter of 2025. And finally, net earnings for the quarter increased $116% to $15.8 million, a net earnings per share increased over $121% to $51 cents per diluted common share, both compared to the prior year second quarter.

Chad M. Paris: Finally, net earnings for the quarter increased 116% to $15.8 million, and net earnings per share increased over 121% to $0.51 per diluted common share, both compared to the prior year Q2. Turning to our segment results, I'll begin this morning with our Theatre Division. Q2 2026 total revenue of $150.6 million increased 14.4% compared to last year's Q2. Comparable theatre admission revenue for the Q2 increased 16.6%, and comparable theatre attendance increased 10.9% compared with our fiscal Q2 2025. According to data received from Comscore and compiled by us to evaluate our Q2 results, US box office receipts increased 11.5% during the 2026 Q2 compared to US box office receipts during the Q2 2025, indicating our admissions revenue outperformed the industry by approximately 5 percentage points.

Speaker #2: Turning to our segment results, I'll begin this morning with our theater division. Second quarter 2026 total revenue of $150.6 million increased 14.4% compared to last year's second quarter.

Speaker #2: Comparable theater admission revenue for the second quarter increased 16.6%, and comparable theater attendance increased 10.9% compared with our fiscal second quarter 2025. According to data received from ComScore and compiled by us to evaluate our second quarter results, U.S.

Speaker #2: box office receipts increased 11.5% during the 2026 second quarter compared to U.S. box office receipts during the second quarter of 2025, indicating our admissions revenue outperformed the industry by approximately 5 percentage points.

Speaker #2: We believe that our box quarter was primarily attributable to strategic pricing actions as well as favorable film slate that featured a higher mix of films that played well in our Midwestern markets, particularly family films.

Chad M. Paris: We believe that our box office outperformance during the Q2 was primarily attributable to strategic pricing actions as well as a favorable film slate that featured a higher mix of films that played well in our Midwestern markets, particularly family films. This contrasts with the Q2 last year, when our top markets underperformed the overall increase in the national box office and a quarter that was light on family film product. Average admission price increased 5.2% during the Q2 2026 compared to the prior year quarter, primarily due to strategic pricing actions. Our average concession, food, and beverage revenues per person at our comparable theatres increased by 2.4% during the Q2 2026 compared to last year's Q2, which was driven by an increase in merchandise sales, pricing, and an increase in incidence rate.

Speaker #2: This contrasts with the second quarter last year, when our top markets underperformed the overall increase in the national box office and a quarter that was light on family film product.

Speaker #2: Average admission price increased 5.2% during the second quarter of 2026 compared to the prior-year quarter, primarily due to strategic pricing actions. Our average concession food and beverage revenues per person at our comparable theaters increased by 2.4% during the second quarter of 2026 compared to last year's second quarter, which was driven by an increase in merchandise sales, pricing, and an increase in incidence rate.

Speaker #2: Our top five films in the quarter represented approximately 55% of the box office in the second quarter of 2026, compared to 59% for the top five films in last year's quarter.

Chad M. Paris: Our top 5 films in the quarter represented approximately 55% of the box office in the Q2 2026, compared to 59% for the top 5 films in last year's quarter. The slightly less concentrated film slate resulted in a less than 1 percentage point decrease in overall film cost as a percentage of admission revenues compared to last year's Q2. Theatre Division adjusted EBITDA during the Q2 2026 was $36.3 million, a nearly 37% increase over the prior year quarter. Turning to our Hotels & Resorts division, total revenues before cost reimbursements were $70.8 million for the Q2 2026, a 9.6% increase compared to the prior year.

Speaker #2: The slightly less concentrated film slate resulted in a less than one percentage point decrease in overall film cost as a percentage of admission revenues compared to last year's second quarter.

Speaker #2: Finally, theater division adjusted EBITDA during the second quarter of 2026 was $36.3 million, a nearly 37% increase over the prior year quarter. Turning to our hotels and resorts division, total revenues before cost reimbursements were $70.8 million for the second quarter of 2026, a 9.6% increase compared to the prior year.

Speaker #2: RevPAR for our comparable owned hotels increased 13.9% during the second quarter compared to the prior year, which benefited from an overall occupancy rate increase of 5.9 percentage points and a 4.7% increase in our average daily rate, or ADR.

Chad M. Paris: RevPAR for our comparable owned hotels increased 13.9% during the Q2 compared to the prior year, which benefited from an overall occupancy rate increase of 5.9 percentage points and a 4.7% increase in our average daily rate or ADR. Our average occupancy rate for our owned hotels was 73.2% during the Q2 2026. Our occupancy rate increase benefited from the Hilton Milwaukee being fully back in service compared to the Q2 last year when the hotel was under renovation and guest rooms were out of service. We estimate that the impact of the renovation in the prior year favorably impacted our RevPAR growth by approximately 4.4 percentage points during the Q2.

Speaker #2: Our average occupancy rate for our owned hotels was 73.2% during the second quarter of 2026. Our occupancy rate increase benefited from the Hilton Milwaukee being fully back in service, compared to the second quarter last year when the hotel was under renovation and guest rooms were out of service.

Speaker #2: We estimate that the impact of the renovation in the prior year favorably impacted our RevPAR growth by approximately 4.4 percentage points during the second quarter.

Speaker #2: According to data received from Smith Travel Research, comparable competitive hotels in our markets experienced RevPAR growth of 7.8% for the second quarter of 2026 compared to the second quarter of 2025, indicating that our hotels outperformed their competitive set by 6.1 percentage points.

Chad M. Paris: According to data received from Smith Travel Research, comparable competitive hotels in our markets experienced RevPAR growth of 7.8% for Q2 2026 compared to Q2 2025, indicating that our hotels outperformed their competitive set by 6.1 percentage points. After adjusting for the prior year impact of the Hilton Milwaukee renovation, we believe our hotel's RevPAR growth outperformed the competitive set by 1.1 percentage points, which we attribute to continued strength in group business and strong leisure demand.

Speaker #2: After adjusting for the prior-year impact of the Hilton Milwaukee renovation, we believe our hotels' RevPAR growth outperformed the competitive set by 1.1 percentage points. We attribute this to continued strength in group business and strong leisure demand.

Speaker #2: When comparing our RevPAR results to comparable upper-upscale hotels throughout the United States, the upper-upscale segment experienced RevPAR growth of 5.7% during our second quarter compared to the second quarter of 2025, indicating that our hotels outperformed the industry by 8.2 percentage points and outperformed the industry by approximately 3.9 percentage points when adjusting for the estimated impact of the Hilton Milwaukee renovation.

Chad M. Paris: When comparing our RevPAR results to comparable upper upscale hotels throughout the United States, the upper upscale segment experienced RevPAR growth of 5.7% during our Q2 compared to Q2 2025, indicating that our hotels outperformed the industry by 8.2 percentage points, and outperformed the industry by approximately 3.9 percentage points when adjusting for the estimated impact of the Hilton Milwaukee renovation. With the steady growth in group business and events, our banquet and catering operations continued to grow with food and beverage revenues up 5.7% in Q2 2026 compared to the prior year. Finally, hotels adjusted EBITDA increased $3.5 million or just over 31% in Q2 2026 compared to the prior year quarter, which primarily benefited from our revenue growth and improved operating efficiencies on higher occupancy.

Speaker #2: With the steady growth in group business and events, our banquet and catering operations continued to grow with food and beverage revenues up 5.7% in the second quarter of 2026 compared to the prior year.

Speaker #2: Finally, hotels adjusted EBITDA increased 3.5 million or just over $31% in the second quarter of 2026 compared to the prior year quarter, which primarily benefited from our revenue growth and improved operating efficiencies on higher occupancy.

Speaker #2: Shifting to cash flow and the balance sheet, our cash flow from operations was $54 million in the second quarter of 2026, compared to cash flow from operations of $31.6 million in the prior year quarter, with the increase in cash flow primarily due to higher earnings.

Chad M. Paris: Shifting to cash flow and the balance sheet, our cash flow from operations was $54 million in Q2 2026 compared to cash flow from operations of $31.6 million in the prior year quarter, with the increase in cash flow primarily due to higher earnings. Total capital expenditures during Q2 2026 were $10 million, compared to $16.9 million in Q2 2025. Our capital expenditures during the second quarter were primarily invested in maintenance and ROI projects in both businesses. For H1 2026, our capital expenditures decreased $23 million compared to H1 fiscal 2025. Given that we are now halfway through the year, our capital investments project planning continues to evolve, and we now expect capital expenditures of $45 to $50 million for 2026.

Speaker #2: Total capital expenditures during the second quarter of 2026 were $10 million, compared to $16.9 million in the second quarter of 2025. Our capital expenditures during the second quarter were primarily invested in maintenance and ROI projects in both businesses.

Speaker #2: For the first half of 2026, our capital expenditures decreased $23 million compared to the first half of fiscal 2025. Given that we are now halfway through the year, our capital investments project planning continues to evolve, and we now expect capital expenditures of $40 to $45 to $50 million for 2026.

Speaker #2: We will continue to update our capital expenditure estimates as the year progresses. As we have discussed since the beginning of the year, we continue to expect our lower capital expenditures to result in a significant increase in free cash flow in 2026.

Chad M. Paris: We will continue to update our capital expenditure estimates as the year progresses. As we have discussed since the beginning of the year, we continue to expect our lower capital expenditures to result in a significant increase in free cash flow in 2026. In Q2 2026, we generated $44 million in free cash flow, nearly tripling our free cash flow from the Q2 last year. For H1 2026, free cash flow was $22 million, a $65 million increase compared to H1 fiscal 2025. We ended the Q2 with approximately $26 million in cash and over $245 million in total liquidity, with a debt to capitalization ratio of 25% and net leverage of 1.1 times. With that, I will now turn the call over to Greg.

Speaker #2: In the second quarter of 2026, we generated $44 million in free cash flow, nearly tripling our free cash flow from the second quarter last year.

Speaker #2: For the first half of 2026, free cash flow was $22 million, a 65 million dollar increase compared to the first half of fiscal 2025.

Speaker #2: We ended the second quarter with approximately $26 million in cash and over $245 million in total liquidity, with a debt-to-capitalization ratio of 25% and net leverage of 1.1 times.

Speaker #2: With that, I will now turn the call over to Greg.

Speaker #3: Thanks, Chad. Good morning, everyone. Today, we are thrilled to report a quarter with great financial performance in both of our businesses. In our theater division, our admission revenue growth outperformed the domestic box office driven by a strong film slate and a mix of films that played well in our predominantly Midwestern markets.

Greg S. Marcus: Thanks, Chad. Good morning, everyone. Today, we are thrilled to report a quarter with great financial performance in both of our businesses. In our Theatre division, our admission revenue growth outperformed the domestic box office, driven by a strong film slate and a mix of films that played well in our predominantly Midwestern markets. In hotels, momentum built throughout the quarter with strong group bookings and steady leisure demand that delivered a record Q2 for the division with results that exceeded our expectations. Overall, we are very pleased with the results for the quarter and H1 of the year, and we entered Q3 with solid momentum. I'll start with our Theatre division. If there is one overarching takeaway from the Q2, it is this. The theatrical experience is not merely holding steady, it is thriving.

Speaker #3: In hotels, momentum built throughout the quarter with strong group bookings and steady leisure demand that delivered a record second quarter for the division with results that exceeded our expectations.

Speaker #3: Overall, we are very pleased with the results for the quarter and first half of the year, and we entered the third quarter with solid momentum.

Speaker #3: I'll start with our Theater division. If there is one overarching takeaway from the second quarter, it is this: the theatrical experience is not merely holding steady; it is thriving.

Speaker #3: When studios deliver compelling, high-quality stories across diverse genres, consumers choose the big screen first, frequently, and with clear enthusiasm. As we shared on our last call, the second quarter got off to a great start with the Super Mario Galaxy movie.

Greg S. Marcus: When studios deliver compelling, high-quality stories across diverse genres, consumers choose the big screen first, frequently, and with clear enthusiasm. As we shared on our last call, the Q2 got off to a great start with The Super Mario Bros. Movie and a strong carryover performance from Project Hail Mary. That was only the beginning. A string of blockbuster successes followed, with huge audiences coming out to see Michael, The Devil Wears Prada 2, Obsession, Star Wars: The Mandalorian & Grogu, Backrooms, Scary Movie, and the record-breaking Toy Story 5. The slate was robust and well-balanced with films that hit across a variety of genres with something for everyone, and meaningful contributions to the box office coming from multiple titles.

Speaker #3: And a strong carryover performance from Project Hail Mary. But that was only the beginning. A string of blockbuster successes followed, with huge audiences coming out to see Michael, The Devil Wears Prada 2, Obsession, Star Wars: The Mandalorian and Grogu, Backrooms, Scary Movie, and the record-breaking Toy Story 5.

Speaker #3: The slate was robust and well-balanced, with films that hit across a variety of genres with something for everyone. And meaningful contributions to the box office coming from multiple titles.

Speaker #3: This year, there were nine films that grossed over $100 million in the second quarter, which compares to seven such films last year, five in '24, and six in 2023.

Greg S. Marcus: This year, there were nine films that grossed over $100 million in the Q2, which compares to the seven such films last year, five in 2024, and six in 2023. While established IP and sequels were certainly an important core component to the overall box office, the breakout success of new originals, Obsession and Backrooms, connected with Gen Z and young adult audiences to deliver huge surprise contributions to the box office. The success of small and mid-size original films played a critical role in diversifying the box office and making the industry less dependent on the success of individual tent-pole films. Original cinema serves as the essential lifeblood of the theatrical ecosystem. It is both the birthplace of tomorrow's legacy franchises and the primary engine of creative innovation.

Speaker #3: While established IP and sequels were certainly an important core component to the overall box office, the breakout success of new originals, Obsession, and Backrooms connected with Gen Z and young adult audiences to deliver huge surprise contributions to the box office.

Speaker #3: The success of small and midsize original films played a critical role in diversifying the box office and making the industry less dependent on the success of individual tentpole films.

Speaker #3: Original cinema serves as the essential lifeblood of the theatrical ecosystem. It is both the birthplace of tomorrow's legacy franchises and the primary engine of creative innovation.

Speaker #3: Original films like these are an opportunity to engage new demographics, create fresh cultural touchstones, and deliver the thrill of discovery that draws audiences out of their homes.

Greg S. Marcus: Original films like these are an opportunity to engage new demographics, create fresh cultural touchstones, and deliver the thrill of discovery that draws audiences out of their homes. Ultimately, a sustainable, resilient box office requires strategic balance, leveraging trusted sequels to generate dependable cash flow while actively nurturing bold, original stories that expand the total movie-going audience. This quarter, we saw a balance of both. The mix of film genres was also favorable to our circuit, with a higher mix of family and horror films resulting in our circuit achieving above-average market share on seven of the top 10 movies in the quarter.

Speaker #3: Ultimately, a sustainable, resilient box office requires strategic balance. Leveraging trusted sequels to generate dependable cash flow, while actively nurturing bold, original stories that expand the total movie-going audience and this quarter, we saw a balance of both.

Speaker #3: The mix of film genres was also favorable to our circuit. With a higher mix of family and horror films resulting in our circuit achieving above-average market share on seven of the top 10 movies in the quarter.

Speaker #3: As Chad discussed, we again outperformed the industry in box office growth, and we remain focused on providing customers with a variety of price points to both optimize pricing for peak demand periods while offering various promotional programs for value-oriented customers.

Greg S. Marcus: As Chad discussed, we again outperformed the industry in box office growth, we remain focused on providing customers with a variety of price points to both optimize pricing for peak demand periods while offering various promotional programs for value-oriented customers, including Value Tuesday, Everyday Matinee, Marcus Mystery Movie, and Marcus Movie Club. These programs have two goals, providing customers with the right price at the right time based on demand levels and growing attendance through increasing the frequency of moviegoing. Looking ahead to the Q3, the streak of hits continued in July with the epic opening of Christopher Nolan's "The Odyssey," pre-sales for this weekend's opening of "Spider-Man: Brand New Day" are very strong. This weekend will be another great example of how our investments in premium large format screens provide a significant operational advantage that continues to pay dividends for us.

Speaker #3: Including Value Tuesday, Everyday Matinee, Marcus Mystery Movie, and Marcus Movie Club. These programs have two goals: providing customers with the right price at the right time based on demand levels, and growing attendance through increasing the frequency of movie-going.

Speaker #3: Looking ahead to the third quarter, the streak of hits continued in July with the epic opening of Christopher Nolan's "The Odyssey," and pre-sales for this weekend's opening of "Spider-Man: Brand New Day" are very strong.

Speaker #3: This weekend will be another great example of how our investments in premium large-format screens provided significant operational advantage to continues to pay dividends for us.

Speaker #3: Not only do we have a PLF screen at 84% of our theater locations, we actually have multiple PLFs at 75% of those PLF theaters, giving us greater opportunity to capture PLF demand.

Greg S. Marcus: Not only do we have a PLF screen at 84% of our theater locations, we actually have multiple PLFs at 75% of those PLF theaters, giving us greater opportunity to capture PLF demand. In addition, because our PLF screens are almost entirely our proprietary UltraScreens and SuperScreens, we have the scheduling flexibility in PLF film selection to maximize the box office. The remainder of the summer includes "Super Troopers 3," "Insidious: Out of the Further," "The End of Oak Street," and "Practical Magic 2." We are looking forward to an exciting fall and holiday film slate with "Digger," "Verity," "The Social Reckoning," "Clayface," "Focker In-Law," "Hexed," "Avengers: Doomsday," and "Dune: Part Three," just to name a few.

Speaker #3: In addition, because our PLF screens are almost entirely our proprietary UltraScreens and SuperScreens, we have the scheduling flexibility and PLF film selection to maximize the box office.

Speaker #3: The remainder of the summer includes Super Troopers 3, Insidious: Out of the Further, The End of Oak Street, and Practical Magic 2. We are looking forward to an exciting fall and holiday film slate with Digger, Verity, The Social Reckoning, Clayface, Focker-in-Law, Hexed, Avengers: Doomsday, and Dune: Part 3, just to name a few.

Speaker #3: Looking even further ahead, the 2027 film slate also looks strong, with major franchises including Shrek 5, Star Wars: Starfighter, Minecraft 2, Frozen 3, Sonic the Hedgehog 4, Spider-Man: Beyond the Spider-Verse, Man of Tomorrow, The Legend of Zelda, Avengers: Secret Wars, and many more.

Greg S. Marcus: Looking even further ahead, the 2027 film slate also looks strong with major franchises including "Shrek 5," "Star Wars: Starfighter," "Minecraft 2," "Frozen 3," "Sonic the Hedgehog 4," "Spider-Man: Beyond the Spider-Verse," "Superman," "The Legend of Zelda," "Avengers: Secret Wars," and many more. There are many more great films coming, noted in today's earnings release. In summary, with a great slate of films and audiences once again are showing that the best way to see the hottest movies of the summer is on the big screen. We are on pace for the best summer box office in years. Moving to our hotel and resorts division. You've seen the segment numbers, Chad shared some additional detail on the performance metrics, including our outperformance to our comp sets in the industry.

Speaker #3: There are many more great films coming, noted in today's earnings release. In summary, with a great slate of films and audiences once again, our showing that the best way to see the hottest movies of the summer is on the big screen.

Speaker #3: And we are on pace for the best summer box office in years. Moving to our hotel and resorts division, you've seen the segment numbers and Chad shared some additional detail on the performance metrics, including our outperformance to our comp sets in the industry.

Speaker #3: We set new records for revenue and adjusted EBITDA for any fiscal second quarter in the division's history, which we believe speaks to the quality of our hotel assets and the great execution by our team.

Greg S. Marcus: We set new records for revenue and adjusted EBITDA for any fiscal Q2 in the division's history, which we believe speaks to the quality of our hotel assets and the great execution by our team. We are happy to report that the summer season's off to a good start, we saw growth at most of the properties in our portfolio. RevPAR grew at six of our seven comparable hotels during the Q2 compared to the prior year quarter, with both occupancy and average daily rates growing at five of our seven comparable hotels. While the dynamics in each market vary, during the Q2, we generally saw continued strength in group business and a more resilient, higher-income consumer that has continued to support steady transient leisure demand at our portfolio of upper upscale hotels and resorts.

Speaker #3: We are happy to report that the summer season is off to a good start, and we saw growth at most of the properties in our portfolio.

Speaker #3: RevPark grew at six of our seven comparable hotels, during the second quarter compared to the prior year quarter, with both occupancy and average daily rates growing at five of our seven comparable hotels.

Speaker #3: While the dynamics in each market vary during the second quarter, we generally saw continued strength in group business, and a more resilient, higher-income consumer that has continued to support steady transient leisure demand at our portfolio of upper-upscale hotels and resorts.

Speaker #3: The combination of strong group bookings at higher rates at our newly renovated assets, along with stronger transient leisure demand, drove average daily rate growth, which increased 4.7% overall.

Greg S. Marcus: The combination of strong group bookings at higher rates at our newly renovated assets, along with stronger transient leisure demand, drove average daily rate growth, which increased 4.7% overall. Our rate growth has benefited from our ability to command higher rates at our hotels with newly renovated room product, including the Pfister, Grand Geneva Resort & Spa, and Hilton Milwaukee, with these three properties achieving a nearly 9% average increase in ADR over Q2 2025. Group business during the quarter continues to grow. The bookings continue to look solid with our group room revenue bookings for 2026. Our group pace in the year for the year, running approximately 3% ahead of where we were at this time last year.

Speaker #3: Our rate growth has benefited from our ability to command higher rates at our hotels with newly renovated room product, including The Pfister, Grand Geneva Resort & Spa, and Hilton Milwaukee. These three properties achieved a nearly 9% average increase in ADR over the second quarter of 2025.

Speaker #3: Group business during the quarter continues to grow. The bookings continue to look solid, with our group room revenue bookings for 2026. Our group pace in-the-year, for-the-year, is running approximately 3% ahead of where we were at this time last year. For 2027, group room pace is running approximately 9% ahead of where we were at this time last year for the next year out.

Greg S. Marcus: Looking a bit further ahead to 2027, group room pace is running approximately 9% ahead of where we were at this time last year for the next year out. This far out, the timing of bookings can vary significantly. Banquet and catering pace is running similarly ahead for the remainder of 2026 and 2027. As we previewed earlier in the year, we opened Wee Nip, our new 11-hole short golf course at the Grand Geneva Resort & Spa with a ribbon-cutting ceremony in May. First, I would like to congratulate our entire Grand Geneva team for their successful opening of our new course. In particular, I'd like to thank Skip Harless, Ryan Brown, and our entire golf operations team for all the hard work over the last two years that went into getting the course into great shape for the opening.

Speaker #3: Although this far out, the timing of bookings can vary significantly. Banquet and catering pace is running similarly ahead for the remainder of 2026 and 2027.

Speaker #3: As we previewed earlier in the year, we opened We Nip, our new 11-hole short golf course at the Grand Geneva Resort and Spa, with a ribbon-cutting ceremony in May.

Speaker #3: First, I would like to congratulate our entire Grand Geneva team for their successful opening of our new course. In particular, I'd like to thank Skip Harless, Ryan Brown, and our entire golf operations team for all the hard work over the last two years that went into getting the course into great shape for the opening.

Speaker #3: In the first few months of play, We Nip has enjoyed an overwhelmingly positive reception from golfers and golf critics alike. With customers looking for distinctive experiential destinations, this added amenity aligns with industry trends, and we expect the short course to enhance the overall appeal of the resort to both leisure customers and group customers.

Greg S. Marcus: In the first few months of play, Wee Nip has enjoyed an overwhelmingly positive reception from golfers and golf critics alike. With customers looking for distinctive experiential destinations, this added amenity aligns with industry trends, and we expect the short course to enhance the overall appeal of the resort to both leisure customers and group customers looking to mix in another social activity with conferences, training events, and outings. We are already well on our way, booking group events and outings on the Wee Nip for 2027 as event planners see and get to play the course for the first time this summer. Golf has long been an important part of the guest experience at Grand Geneva, and it continued to be an area of growth.

Speaker #3: We're looking to mix in another social activity with conferences, training events, and outings. We are already well on our way, booking group events and outings on the We Nip for 2027, as event planners see and get to play the course for the first time this summer.

Speaker #3: Golf has long been an important part of the guest experience at Grand Geneva, and it continued to be an area of growth. During the second quarter, the number of rounds played on our 218-hole courses—the Brute and the Highlands—grew over 11%, and greens fees grew 21%, with increases in group outings and higher weekend leisure demand driving our growth.

Greg S. Marcus: During Q2, the number of rounds played on our two 18-hole courses, The Brute and The Highlands, grew over 11%, and greens fees grew 21%, with increases in group outings and higher weekend leisure demand driving our growth. Overall, the division had a very good quarter, and the current state of our hotel business remains stable and on track with our expectations for the year. While transient demand has remained healthy, I want to again acknowledge that there continues to be volatility in key travel costs, including gas prices and airfare. If market conditions change and we begin to see softness, we are prepared to react and adjust quickly. Finally, I'd like to briefly comment on capital allocation.

Speaker #3: Overall, the division had a very good quarter, and the current state of our hotel business remains stable and on track with our expectations for the year.

Speaker #3: While transient demand has remained healthy, I want to again acknowledge that there continues to be volatility in key travel costs, including gas prices and airfare.

Speaker #3: If marketing conditions change and we begin to see softness, we are prepared to react and adjust quickly. Finally, I'd like to briefly comment on capital allocation.

Speaker #3: As Chad discussed, our free cash flow for the year has significantly improved, which is due to a reduction in CapEx to a more normal level following several years of significant reinvestment in our hotel business.

Greg S. Marcus: As Chad discussed, our free cash flow for the year has significantly improved, which is due to a reduction in CapEx to a more normal level following several years of significant reinvestment in our hotel business, and is also due to our revenue and earnings growth. We continue to look for opportunities to deploy capital to grow both of our businesses with value-accretive investments. We have a strong balance sheet that allows us to move quickly when we see good opportunities to acquire quality assets, and we have a history of executing when they arise. To the extent that we don't see attractive investments that are actionable, we expect to return excess capital to shareholders through our longstanding dividend or share repurchases.

Speaker #3: And this is also due to our revenue and earnings growth. We continue to look for opportunities to deploy capital, to both to grow both of our businesses with value accretive investments.

Speaker #3: We have a strong balance sheet that allows us to move quickly when we see good opportunities to acquire quality assets, and we have a history of executing when they arise.

Speaker #3: To the extent that we don't see attractive investments that are actionable, we expect to return excess capital to shareholders through our long-standing dividend or share repurchases.

Speaker #3: Before we open the call up for questions, I want to once again thank all the people that worked so hard every single day making our ordinary days extraordinary for our guests.

Greg S. Marcus: Before we open the call up for questions, I want to once again thank all the people that work so hard every single day, making our ordinary days extraordinary for our guests. We talk a lot about the investments that we make in our businesses, but we can never lose sight of the fact that our people are our most important asset, and they proved that once again this quarter. With that, at this time, Chad and I would be happy to open the call up for any questions you may have.

Speaker #3: We talk a lot about the investments that we make in our businesses, but we can never lose sight of the fact that our people are our most important asset.

Speaker #3: And they prove that once again this quarter. With that, at this time, Chad and I would be happy to open the call up for any questions you may have.

Speaker #1: We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand.

Operator 3: We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimal sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from the line of Mike Hickey at StoneX. Your line is open. Please go ahead.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimal sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from the line of Mike Hickey at StoneX. Your line is open. Please go ahead.

Speaker #1: To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimal sound quality.

Speaker #1: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from the line of Mike Hickey at StoneX.

Speaker #1: Your line is open. Please go ahead.

Speaker #2: Hey, Greg, Chad. Congrats, guys, on a record quarter. Pretty incredible performance. I guess the first question, Greg, obviously, obsession and backrooms very topical here.

Mike Hickey: Hey, Greg, Chad. Congrats, guys, on a record quarter. Pretty incredible performance. I guess the first question, Greg, obviously, Obsession and Backrooms, very topical here. A huge breakout for you and the industry, especially with younger audiences. Are you seeing a broader return of younger moviegoers? If so, how confident are you that you can convert that demand into more frequent attendance, whether through loyalty or other avenues? I'm also curious if either film indexed materially better at Marcus than it did nationally.

Speaker #2: Huge breakout for you and the industry, especially with younger audiences. Are you seeing a broader return of younger moviegoers and, if so, how confident are you that you can convert that demand into more frequent attendance, whether through loyalty or other avenues?

Speaker #2: And also curious if either film index materially better at Marcus than it did nationally.

Speaker #3: The let's start. That was a what you're seeing is actually not new. We've been following the data pretty closely as an industry. As to what which demographics have been returning to the theaters.

Greg S. Marcus: What you're seeing is actually not new. We've been following the data pretty closely as an industry as to which demographics have been returning to the theatres, what we're seeing is really positive signs out of the younger demographic. Obsession and Backrooms has highlighted it, but it's not new. We, for the last year or so, have been noting that that customer has been coming back at levels that are really back to old times in a way. There's a great stat that they track, and that is, where would you prefer to see a movie, at home or in a theatre? That demographic is back to preferring to see a movie in the theatres, which I like having the younger demographic that's coming back and saying that's where they want to see it, because that's got the longest runway for a customer base.

Speaker #3: And we're seeing it's really positive signs out of the younger demographic. They really obsessions and backrooms has highlighted it, but it's not new. We for the last year or so have been noting that that customer has been coming back at levels that we haven't that are really back to old times in a way.

Speaker #3: And there's a great stat that they track, and that is where would you prefer to see a movie at home or in a theater?

Speaker #3: And that demographic is back to preferring to see a movie in the theaters. Which I like having the younger demographic that's coming back and saying that's what they want to see it.

Speaker #3: Because that's got the longest runway for a customer base. So it's not new. I'd say it's everyone's seeing it now and the good news is when things work.

Greg S. Marcus: It's not new. I'd say everyone's seeing it now, the good news is, when things work, they get copied. I think that when you ask how we're going to get those customers to be more frequent, I think we're going to see more attempts to provide movies that are going to continue to attract that customer out of Hollywood. That's the way it works. We continue to use our programs, whether it's Fresh Movie or our Marcus Movie Club to hold frequency. We've got all that, our Marcus Mystery Movie. Our Marcus Mystery Movie overlaps with our Marcus Movie Club, because if you're in the Marcus Movie Club, you get to come to the Marcus Mystery Movie. It's included. We're trying to lever all those programs.

Speaker #3: They get copied. So we're going to— I think that when you ask, how are we going to get those customers to be more frequent, I think we're going to see more attempts to provide movies that are going to continue to attract that customer out of Hollywood.

Speaker #3: That's the way it works. So and then we continue to use our programs whether it's personal or Marcus Movie Club to build frequency. We all we've got all that.

Speaker #3: Our mystery movie, we've actually over our mystery movie overlaps with our movie club. Because if you're in the movie club, you get to come to the mystery movie.

Speaker #3: It's included. So we're trying to leverage all those programs. As I think you are aware, I shouldn't admit this publicly, but I—because most of the people on this call don't see our social media probably.

Greg S. Marcus: As I think you are aware, I shouldn't admit this publicly, because most of the people on this call don't see our social media, probably, but I think you know the Marcus Theatres has a pretty active social media account, they use me, boy, we get some real traction, that group is. I promise you, none of my contemporaries see my social media posts, fortunately.

Speaker #3: But I think you know I have a pretty—the Marcus Theater has a pretty active social media account, and they use me. And boy, we get some real traction.

Speaker #3: And that group is I mean, I promise you, none of my contemporaries see my social media posts. Fortunately.

Speaker #4: Mike, just on share on those films for our circuit, it's on those particular two. It's a little bit mixed. We were in line with our normal share on "Obsessions," but meaningfully above normal market share for "Backrooms."

Chad M. Paris: Mike, just on share on those films for our circuit. On those particular two, it's a little bit mixed. We were in line with our normal share on Obsession, but meaningfully above normal market share for Backrooms. It's a space and a demographic where we do well in.

Speaker #4: So it's a space and a demographic where we do well.

Speaker #2: Nice. Good color. On theater margins, it looks like for the quarter, incremental EBITDA flow-through is about 52%. I guess looking forward here, is that the right framework, Chad, to be modeling the biggest drivers of, or I guess levers of, leverage here moving forward for you?

Mike Hickey: Nice. Good color. On theater margins, looks like for the quarter, incremental EBITDA flow-through is about 52%. I guess looking forward here, is that the right framework, Chad, to be modeling future box office growth? Sort of what are the biggest drivers of, or I guess levers of leverage here moving forward for you?

Speaker #4: Yeah. I mean, the way that I look at it over time, because I think if you look at any given quarter, it can move around a little bit.

Chad M. Paris: Yeah. I mean, the way that I look at it over time, because I think if you look at any given quarter, it can move around a little bit. Call it plus or minus two or three points. I always think of it as the incremental dollar falls through in that business to EBITDA at about 50%. In a quarter like this, where you get the benefits of the additional operating leverage from higher attendance, we were a little bit above that. So, we benefit in those kinds of quarters. In the seasonally slower periods of the year, or when we have a negative surprise at the box office, execution there can be a little bit tougher. Generally, on average, about 50% is how to think about it.

Speaker #4: Call it plus or minus 2 or 3 points. But I always think of it as the incremental dollar falls through in that business to EBITDA at about 50%.

Speaker #4: In a quarter like this, where you get the benefits of additional operating leverage from higher attendance, we were a little bit above that.

Speaker #4: And so we benefit in those kinds of quarters. In the seasonally slower periods of the year, or when we have a negative surprise at the box office, execution there can be a little bit tougher.

Speaker #4: But generally, on average, about 50% is how to think about it.

Speaker #3: Yeah, I think it also depends on the cadence. Because one of the things we've bumped into is, when things get slow, we do a floor to man the theaters.

Greg S. Marcus: Yeah. I think it also depends on the cadence because one of the things we bump into is when things get slow, we do a floor to man the theaters. So if you have one pop, but a bunch of slow weeks, that's more challenging than a better cadence. We just had a better cadence, too.

Speaker #3: And so, if you have one pop at a bunch of slow weeks, that's more challenging than having a better cadence. And we just had a better cadence, too.

Speaker #2: Maybe squeeze one quick one. Wildcard obviously Spider-Man coming out this weekend. That seems like a film that would do exceptional on your network. Just curious what you guys are seeing in terms of the advanced demand for that film.

Mike Hickey: Maybe squeeze one quick one. Wild card. Obviously, "Spider-Man" coming out this weekend. That seems like a film that would do exceptional on your network. Just curious what you guys are seeing in terms of the advanced demand for that film.

Speaker #3: Spider-Man's opening?

Greg S. Marcus: Spider-Man's opening?

Speaker #2: Yeah. That's the rumor. Yeah.

Mike Hickey: That's the rumor. Yeah.

Speaker #3: I heard about it. Yeah, it's very positive. But even better, again, the thing that I like the most is I was looking at the review score, and it's very high.

Greg S. Marcus: I heard about Yeah. It's very positive. Even better, again, the thing that I like the most is I was looking at the review score, and it's very high. When you mix enthusiasm with a great movie, or perceptually a great movie, that's. I mean, just look what happened with Odyssey. I mean, that's just wild what's happened with that.

Speaker #3: And so when you mix enthusiasm with a great movie or perceptually a great movie, that's I mean, just look what happened with the Odyssey.

Speaker #3: I mean, it's just that's just wild what's happened with that.

Speaker #4: I think on Spider-Man, particularly this weekend, Mike, the other thing for our circuit that I think we will benefit from—and that Greg started to allude to in his comments—is we have a lot of flexibility on our PLF screens.

Chad M. Paris: I think on Spider-Man, particularly this weekend, Mike, the other thing for our circuit that I think we will benefit from, that Greg started to allude to in his comments, is we have a lot of flexibility on our PLF screens. With our locations with multiples, we can play Spider-Man and we can play Odyssey and we can get the show times right to optimize for demand on the two films, and I think that'll help our performance on Spider-Man.

Speaker #4: And so, with our locations with multiples, we can play Spider-Man and we can play Odyssey, and we can get the showtimes right to optimize for demand on the two films.

Speaker #4: And I think that'll help our performance on Spider-Man.

Speaker #2: Awesome. Thanks, guys. Best of luck.

Mike Hickey: Awesome. Thanks, guys. Best of luck.

Speaker #1: Your next question is from the line of Patrick Scholl at Barrington Research. Your line is now open. Please go ahead.

Operator 3: Your next question is from the line of Patrick Sholl at Barrington Research. Your line is now open. Please go ahead.

Operator: Your next question is from the line of Patrick Sholl at Barrington Research. Your line is now open. Please go ahead.

Speaker #5: Hi. Thanks for taking the question. With the outperformance of the industry in the quarter, I was wondering if you could provide maybe a little bit of an update on how you've seen your overall market share maybe just in your markets since the pandemic.

Patrick Sholl: Hi. Thanks for taking the question. With the outperformance of the industry in the quarter, I was wondering if you could provide maybe a little bit of an update on how you see your overall market share, maybe just in your markets since the pandemic or just, yeah, just overall market share in the theater segment.

Speaker #5: Yeah, just the overall market share in the theater segment.

Speaker #4: Yeah. I mean, our market share in our markets has been good. We were immediately coming out of the pandemic, we were quite a bit ahead.

Chad M. Paris: Yeah. I mean, our market share in our markets has been good. Immediately coming out of the pandemic, we were quite a bit ahead. We've seen some normalization of that over time. Still quite strong, and on a national basis, our market share is a touch below where it was, but we've also optimized store footprint and gotten out of some locations that generated some box office but really didn't contribute to the bottom line. I think we're comfortable with where we're at, and we've been, as you know, Pat, we've been optimizing price here quite a bit in the last year. That's been a big driver of our admission revenue per cap growth. I think we should expect to see that certainly moderate in the second half of the year as we anniversary some of those changes that we made mid-year last year.

Speaker #4: And we've seen some normalization of that over time, but it's still quite strong. On a national basis, our market share is a touch below where it was, but we've also optimized our store footprint and exited some locations that generated some box office, but really didn't contribute to the bottom line.

Speaker #4: So I think we're comfortable with where we're at. And we've been, as you know, Pat, we've been optimizing price here quite a bit in the last year.

Speaker #4: That's been a big driver of our admission revenue per cap growth. And I think we should expect to see that certainly moderate in the second half of the year, as we anniversary some of those changes that we made mid-year last year.

Speaker #4: But I still think you're looking at sort of low single-digit type of inflationary growth, but don't expect additional changes that would drive any meaningful changes in market share in the near term.

Chad M. Paris: I still think you're looking at low single-digit type of inflationary growth, don't expect additional changes that would drive any meaningful changes in market share in the near term.

Speaker #5: Okay. And then just in terms of the potential M&A opportunity, with the longer tail of operators, I guess my understanding is that the lease structures could be kind of a gating factor for the attractiveness of acquisitions.

Patrick Sholl: Okay. Just in terms of the potential M&A opportunity, with the longer tail of operators, I guess my understanding is that the lease structures could be a gating factor for the attractiveness of acquisitions. As the long recovery from the pandemic, has that enabled some, I guess, rationalization in some of those lease structures to make a broader pool of potential M&A targets? Maybe just a little bit more commentary on that opportunity.

Speaker #5: As kind of the long recovery from the pandemic—has that enabled some, I guess, rationalization in some of those lease structures to make a broader pool of potential M&A targets?

Speaker #5: Or maybe just a little bit more commentary on that opportunity?

Speaker #4: Yeah. I think it's a on the specific issue of leases and how onerous those might be as you look at acquisition targets, at times that can be very challenging.

Chad M. Paris: Yeah. On the specific issue of leases and how onerous those might be as you look at acquisition targets, at times, that can be very challenging depending upon the volume that's going through any specific location. It's a high operating leverage business, you need a critical mass of attendance to make buildings work. With attendance where it is today relative to pre-pandemic, in some locations that's certainly more challenging. It's very much a, I would say, a location-by-location analysis. It depends. It's facts and circumstances specific to the location. Our focus in M&A is around quality in a number of different dimensions. Markets, growth profiles, locations within the markets, we think about all of those things as we look at M&A, hopefully there will be some additional M&A opportunities. That's true in both of our businesses, in hotels as well.

Speaker #4: Depending upon the volume that's going through any specific location. It's a high operating leverage business. And so you need a critical mass of attendance to make buildings work.

Speaker #4: And with attendance, where it is today relative to pre-pandemic, in some locations that's certainly more challenging. It's very much, I would say, a location-by-location analysis—it depends.

Speaker #4: It's facts and circumstances specific to the location. Our focus in M&A is around quality on a number of different dimensions—markets, growth profiles, and locations within those markets. We think about all of those things as we look at M&A.

Speaker #4: And hopefully, there will be some additional M&A opportunities. I mean, that's true in both of our businesses. In hotels as well.

Speaker #3: Yeah, I mean, I think a commonality in both our businesses is that we obviously want to grow our businesses, and we've exhibited that over time for years.

Greg S. Marcus: Yeah. A commonality in both our businesses is that while we obviously want to grow our businesses, we've exhibited that over time for years, the desire and the ability to grow the businesses. The one advantage we have is that it's not imperative. We will continue to focus on it, we will be disciplined and make disciplined investments. If the opportunity is there, we of course will do our best to capitalize on it. I think the good news is it's a business that where scale is not really helpful, it's not seismic, let's put it that way.

Speaker #3: The desire and the ability to grow the businesses. The one advantage we have is that it's not imperative. We will continue to focus on it.

Speaker #3: And we will be disciplined and make disciplined investments. And if the opportunity is there, we, of course, will do our best to capitalize on it.

Speaker #3: But I think the good news is it's a business that we're scale is moderately helpful, but it's not it's not seismic, let's put it that way.

Speaker #5: Okay. And then just on the hotel side, was there any sort of benefit from, I guess, the locations of the World Cup events in terms of how or where consumers decide to go for leisure travel, just in terms of your markets—which I think were largely absent of that—but yeah, is that something that might have played into how consumer spending was, or was it just more macro?

Patrick Sholl: Okay. Just on the hotel side, was there any sort of benefit from the locations of the World Cup events in terms of where consumers decided to go for leisure travel? Just in terms of your markets, which I think were largely absent of that, but yeah. If that might have played into how consumer spending, or was it just more macro?

Speaker #3: I think more macro. It was not a World Cup year for us.

Greg S. Marcus: I think more macro. It was not World Cup for us.

Speaker #4: Yeah, I think I can just confirm, Pat, it didn’t really help us in the hotel business one way or the other, just because we weren’t participating in markets that had big economic activity from hosting those events.

Chad M. Paris: Yeah, I think I can just confirm, Pat. It didn't really help us in the hotel business one way or the other, just because we weren't participating in markets that had big economic activity from hosting those events.

Speaker #5: Okay. Thank you.

Patrick Sholl: Okay. Thank you.

Speaker #1: Your next question comes from the line of Drew Crumb at B Reilly Securities. Your line is now open. Please go ahead.

Operator 3: Your next question comes from the line of Drew Crum at B. Riley Securities. Your line is now open. Please go ahead.

Operator: Your next question comes from the line of Drew Crum at B. Riley Securities. Your line is now open. Please go ahead.

Speaker #5: Okay. Thanks.

Drew Crum: Okay, thanks. Hey, guys. Good morning. I think entering the year, your expectations for RevPAR growth were more modest. Based on the strength you saw in Q2 and now up, I think 15% year to date, has your annual outlook changed? If so, how do you see RevPAR shaking out for 2026?

Speaker #6: Hey, guys. Good morning. So I think entering the year, your expectations for RevPAR growth were more modest. But based on the strength you saw in Q2 and now up, I think 15% year-to-date, has your annual outlook changed?

Speaker #6: And if so, how do you see RevPAR shaking out for 2026?

Speaker #4: Yeah. Thanks for the question, Drew. I don't think we see really a change in the view for the full year. Our guide was industry growth, low single digits.

Chad M. Paris: Yeah. Thanks for the question, Drew. I don't think we see really a change in the view for the full year. Our guide was industry growth, low single digits, I think that's still where our view is, with some opportunity for our assets to outperform their markets because of the investments that we've made and the quality of the assets. I would just say it's a bit lumpy. From week to week, we see pockets of real strength and then some softer pockets as well. On average, this quarter, it obviously was a really nice result. Visibility is fairly short in that business and it is very much tied to what the economy does at a GDP level. Our view is unchanged, and we'll see how the rest of the year plays out.

Speaker #4: And I think that's still where our view is. With some opportunity for our assets to outperform their markets because of the investments that we've made and the quality of the assets.

Speaker #4: I would just say it's a bit lumpy. It can be from week to week—we see pockets of real strength, and then some softer pockets as well.

Speaker #4: And on average, this quarter, it obviously was a really nice result. But visibility is fairly short in that business. And it is very much tied to what the economy does at a GDP level.

Speaker #4: And so our view is, it plays out.

Speaker #3: Yeah. I think we were looking at a stat yesterday that I think is it's a good stat. And that is what's our group booking pace?

Greg S. Marcus: I think we were looking at a stat yesterday that I think is a good stat, and that is, what's our group booking pace? How much have we booked the rest of the year? Remember, the marginal dollars are very profitable, so I'm going to couch that with that. 80% of our business is already on the books. It's not like we have a huge gap. It's not like we're really back-end loaded, which I feel comfortable in. Again, as I said, and as Chad pointed out, it can be week to week, shorter booking windows, and those last dollars are very profitable or not.

Speaker #3: How much have we booked for the rest of the year? And now, remember, every dollar is the margin of dollars are very profitable. So I'm going to couch that with that.

Speaker #3: But 80% of our business is already on the books. So it's not like we have huge gaps. It's not like we're really back end loaded.

Speaker #3: So that's which I feel comfortable in. But then again, as I said, and as Chad pointed out, it can be week to week, shorter booking windows, and those last dollars are very profitable or not.

Chad M. Paris: Yeah. Just to clarify, the 80% is within the group segment.

Speaker #4: Yeah. And just to clarify, the 80% is within the group segment.

Speaker #3: Yeah. Just the group segment.

Greg S. Marcus: Yeah, just the group segment.

Speaker #4: Just the group segment. And the transient part of the business is very, very shortly timed.

Chad M. Paris: Just the group segment and the transient part of the business is very shortly timed.

Speaker #3: Yeah.

Greg S. Marcus: Yep.

Speaker #6: Got it. Okay. And then I guess separately, there's been some movement and effort to extend theatrical windows. Curious if you believe the industry has seen any lift and specifically if you saw any benefit across your circuit in Q2 and into early third Q or if it's too early.

Drew Crum: Got it. Okay. I guess separately, there's been some movement and effort to extend theatrical windows. Curious if you believe the industry has seen any lift, and specifically if you saw any benefit across your circuit in Q2 and into early Q3, or if it's too early.

Speaker #3: Well, I mean, look, we are I think just as the discussion is not helpful where everyone's talking about, "Oh, we're going to shorten the windows," and they're really short, you're right.

Greg S. Marcus: Well, look, I think just as the discussion is not helpful where everyone's talking about, Oh, we're going to shorten the windows, and they're really short, you're right. There's been a lot of discussion about the extension of the window, and we have to continue to talk about it, and it needs to be not just a broad, well, how long is the window? It's how long is that transactional window? That got way too short. We also have to make sure that we maintain an adequate streaming window, that there is an adequate period of time. It doesn't just benefit us. It benefits the distributors, the creators, as well. Again, this idea of windows, selling the same thing to the same person over and over again. Well, the tighter you make those windows, the less likely you are to have those multiple sales.

Speaker #3: There's been a lot of discussion about the extension of the window, and we have to continue to talk about it. It needs to be not just a broad, "Well, how long is the window?" It's, "How long is that transactional window?" Because that got way too short.

Speaker #3: And then we, but we also have to make sure that we maintain an adequate streaming window, that there is an adequate period of time.

Speaker #3: And it doesn't just benefit us. It benefits the distributors, the creators as well because again, this idea of windows, selling the same thing to the same person over and over again.

Speaker #3: Well, the tighter you make those windows, the less likely you are to have those multiple sales. And if you're going to invest in the content, man, I would think you would want as many kicks at the can as you can get and sell it as many times as you can get.

Greg S. Marcus: If you're going to invest in the content, man, I would think you would want as many kicks at the can as you can get and sell it as many times as you can get. Fortunately, their marketing has become a lot more efficient. They're talking directly to the consumer with their streaming, with their transactional. They talk directly to the consumer. In the old days, they'd say, Oh, we've got to have multiple marketing campaigns. Yes, you've got to market. You can't not market your film. It is different, and I actually think that the setting is more conducive to a longer window than it had been historically, given the ability to reach the consumers directly. If they want to maximize the revenue from their content, everything old is new again, right?

Speaker #3: And fortunately, their marketing has become a lot more efficient. They're talking directly to the consumer with their streaming, with their transactional. They talk directly to the consumer.

Speaker #3: And so in the old days, it's, "Oh, we got to have multiple marketing campaigns." And yes, there's you've got to market. You can't not market your film.

Speaker #3: But it is different, and I actually think that the setting is more conducive to a longer window than it had been historically, given the ability to reach the consumers directly.

Speaker #3: And so, if they want to maximize the revenue from their content, what is it? Everything old is new again, right? Let's see. Let's go back to understanding how to do that.

Greg S. Marcus: Let's go back to the understanding for how to do that. It benefits us, and it benefits them.

Speaker #3: It benefits us, and it benefits them.

Speaker #4: Drew, on the quarter, on that question, I mean, it's great to see our studio partners and distributor partners implement longer windows. It's tough to tell or see.

Chad M. Paris: Drew, on the quarter, on that question, it's great to see our studio partners and distributor partners implement longer windows. It's tough to tell or see.

Greg S. Marcus: Yeah

Speaker #4: This early on, they see that coming through the results just like when as the windows shorten, it didn't all hit overnight. I think it is going to take some time.

Chad M. Paris: this early on, to see that coming through the results. Just like as the windows shortened, it didn't all hit overnight. I think it is going to take some time and a year or longer to retrain customers on how long it will be before product is in the home and recondition customers. It's absolutely a net positive.

Speaker #4: And it can take a year or longer to retrain customers on how long it will be before the product is in the home, and to recondition customers. But it's absolutely a net positive.

Speaker #3: Yeah. I mean, I'd even further add to it too. I do think it's important. Where it will matter the most, actually, in a way and again, we talk about marginal customers because they're the most profitable.

Greg S. Marcus: Yeah. I'd even further add to it, too. I do think it's important. Where it will matter the most, actually, in a way, again, we talk about marginal customers because they're the most profitable. The most patient audiences are the older audiences. That customer will wait for free, or even the perception that it's free. As we've seen in the numbers, the kids are off the couch. They want to get out. They want to be with other humans. I don't think that should just be restricted to just young people. It's probably good for older people to get off the couch and stop sitting at home going nuts. It's good to get out and be with people. You need to have a window that that customer says, you know what? I'm going to have to wait.

Speaker #3: But the most patient audiences are the older audiences. And if that customer will wait for free. And if they've or even the perception that it's free.

Speaker #3: And as we've seen in the numbers, the kids are off the couch. They want to get out. They want to be with other humans.

Speaker #3: But I don't think that should just be restricted to just young people. It's probably good for older people to get off the couch and stop sitting at home going nuts.

Speaker #3: It's good to get out and be with people. But you need to have a window that that customer says, "You know what? I'm going to have to wait.

Speaker #3: I'd like to go see it now. And then I'll watch it again, because I want to watch The Odyssey again—a few times.

Greg S. Marcus: I'd like to go see it now. Then I'll watch it again because I want to watch The Odyssey again. A few times.

Speaker #6: Gotcha. Makes sense. Appreciate the thoughts, Chad. Yeah. Next.

Drew Crum: Got it. Makes sense. Appreciate the thoughts, guys.

Greg S. Marcus: Yeah.

Drew Crum: Thanks.

Speaker #4: Thanks, Drew.

Chad M. Paris: Thanks, Drew.

Speaker #1: There are no further questions at this time. We have reached the end of the Q&A session. I will now turn the call back to Mr. Paris for closing remarks.

Operator 3: There are no further questions at this time. We have reached the end of the Q&A session. I will now turn the call back to Mr. Paris for closing remarks.

Operator: There are no further questions at this time. We have reached the end of the Q&A session. I will now turn the call back to Mr. Paris for closing remarks.

Speaker #4: All right. Well, once again, thank you, everyone, for joining us today. We look forward to talking to you again in late October when we release our third quarter results.

Chad M. Paris: All right. Well, once again, thank you everyone for joining us today, and we look forward to talking to you again in late October when we release our Q3 results. Until then, have a great summer.

Speaker #4: Until then, have a great summer.

Operator 3: This concludes today's call. Thank you for attending. You may now disconnect.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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