Cineplex (CGX) Q2 2024 earnings summary

Executive summary

• Q2 2024 total revenues were $277.3 million, down 24.6% year-over-year, with 8.7 million moviegoers; the quarter started slow due to Hollywood strikes but rebounded in June and July, with box office reaching over 90% of 2019 levels.

• Premium formats accounted for 41.4% of box office, and per-patron spend hit all-time highs for both box office ($13.11) and concessions ($9.56).

• Media and LBE segments showed growth, with LBE revenue at a record $29.4 million and media revenues up 11.6% year-over-year, driven by digital place-based media expansion.

• Scene+ loyalty program surpassed 15 million members, and CineClub exceeded 150,000 members.

• The company announced a normal course issuer bid to repurchase up to 10% of its public float, reflecting confidence in intrinsic value.

Financial highlights

• Q2 2024 box office revenue was $114.5 million, food service $96.7 million, media $29.1 million, and LBE $29.4 million.

• Adjusted EBITDAaL from continuing operations was $0.9 million, down from $47.2 million in Q2 2023; adjusted EBITDAaL margin was 0.3%, and net loss margin was -7.7%.

• Theatre attendance declined 31.8% year-over-year to 8.7 million.

• BPP and CPP reached record highs at $13.11 and $9.56, up 2.1% and 3.8% year-over-year, respectively.

• Adjusted free cash flow was negative $13.0 million, compared to positive $30.2 million in Q2 2023.

Outlook and guidance

• Management expects a strong second half of 2024, with a robust film slate and new LBE locations driving attendance and revenue.

• 2025 is anticipated to feature a steady stream of major releases, supporting continued growth in both theatrical and LBE businesses.

• Store-level LBE margins are expected to exceed 25% for the year.

• Free cash flow yields projected between 19.6% and 29.2% with FCF in excess of $100 million.

• The company is focused on expanding premium offerings, enhancing guest experience, and leveraging data analytics to drive visitation and spending.