AMC Entertainment Puts A Blockbuster On The Books

AMC Entertainment put its financial results in a starring role last period, turning packed theaters into the best quarter in its 106-year history. The theater operator reported second-quarter revenue of $1.60 billion, up 14.2% from a year earlier, while adjusted EBITDA surged nearly 70% to a company-record $321.4 million. Adjusted net income swung to $104.3 million from a $500,000 loss, translating to adjusted earnings of $0.14 per share when analysts expected another loss. Shares closed up 26.8% Monday at $2.46 after reaching $2.48 and were little changed early Tuesday, as investors rewarded a company that converted a resurgent box office into meaningful cash flow.

AMC’s margins needed a crowd, and this quarter they got one. Global attendance increased 13.5% to 71.3 million, including growth of 12% in the U.S. and 17.9% internationally. AMC’s total U.S. revenue climbed 13%, compared with a 10.7% increase in the broader domestic box office, although AMC’s figure also includes concessions and other theater sales. Its average ticket price was virtually flat at $12.11, while food and beverage revenue per patron edged up to $8.08 from $7.95. That combination matters because it shows that the quarter was primarily powered by higher attendance instead of another aggressive round of price increases.

The additional traffic flowed through AMC’s cost structure at a pace rarely seen in the theater business. Its adjusted EBITDA margin widened to 20.1% from 13.6%, operating cash flow increased 70% to $235.4 million, and free cash flow more than doubled to $190.1 million. AMC still posted a GAAP net loss of $11.4 million after recording $51.1 million of mark-to-market derivative losses, $63.1 million of debt-extinguishment losses and a $1.5 million Hycroft investment loss, although those adjustments obscured a sharp improvement in the underlying business. This was the first quarter in AMC’s history with adjusted EBITDA above $300 million, showing just how powerful its cost structure can become when attendance rises.

Behind the record results sits a balance sheet that still needs substantial repair. AMC ended the quarter with $778.4 million in cash and does not expect any material debt maturities before 2029 after refinancing $400 million and moving to redeem $125.5 million of notes due in 2027. However, it also raised approximately $285 million in gross proceeds through equity offerings. Its weighted-average diluted share count increased to 722 million from 433 million, while principal debt still totaled $3.91 billion. The post-quarter opening of The Odyssey and upcoming releases including Spider-Man: Brand New Day, Dune: Part Three and Avengers: Doomsday give AMC a promising second-half slate. The company still needs a long run of strong showings, but AMC finally gave its recovery something worth putting on the marquee.

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