Hello, and welcome, everyone, joining today's AMC Entertainment Holdings, Inc. Fourth Quarter and Full Year 2025 Earnings webcast. [Operator Instructions] Please note this call is being recorded. [Operator Instructions] It is now my pleasure to turn the meeting over to John Merriwether, Vice President, Capital Markets. Please go ahead.

Thank you, Stephanie. Good afternoon. I'd like to welcome everyone to AMC's Fourth Quarter and Full Year 2025 Earnings Webcast. With me this afternoon is Adam Aron, our Chairman and CEO; 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 during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those that might be expressed today. Many of these risks and uncertainties are discussed in our most recent 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. 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 constant currency, 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. After our prepared remarks, there will be a question-and-answer session. This afternoon's webcast is recorded -- is being recorded, and a replay will be available in the Investor Relations section of our website at amctheatres.com later today. With that, I'll turn the call over to Adam.

Before I begin today's call, I'd like to make a personal comment, if I can. As you undoubtedly know, in early December, upon my return to AMC's home base in Kansas City, I put out a press release, which advise you all that just before Thanksgiving, during a business trip to London, I suffered a minor stroke. Fortunately for me, I got immediate care at a superb London hospital run by the United Kingdom's National Health Service, and it was envisioned that I would have a speedy and full recovery. There was no cognitive problem at the time of the stroke, no issue with reasoning or logic or decision-making or memory other than that for a day or so, I completely lost my ability to speak. That was 14 weeks ago. You can hear for yourselves my voice today. My voice is back. I am delighted to report to you all that I am in fighting shape and fully ready to do battle. Speaking of which, let's talk about AMC. As we close the books on 2025, one thing is clear. This was a year of meaningful progress with AMC, both operationally and financially. While it is frustrating for us that the industry recovery unfolded at a much more measured pace than many, including ourselves, originally expected or hoped, even so, the trajectory clearly remained positive, and AMC once again distinguished itself through consistent outperformance, exceeding the expectations of many who guided us. Even in a softer industry environment for the fourth quarter, of 2025, where the North American box office declined by some 4.4%, AMC nonetheless demonstrated strength and resilience. For the fourth quarter, AMC generated approximately $1.29 billion in total revenue, $134 million of adjusted EBITDA and notably, $127 million of cash from operating activities. Along the way,…

Thanks, Adam, and good afternoon to everyone. As Adam noted, 2025 did represent a year of meaningful operational and financial progress. Although the industry box office did fall short of expectations, AMC performed exceedingly well in the areas that are within our direct control. For the full industry box office increased by a modest 1.5% and industry attendance in the European markets in which we operate declined by approximately 3% versus 2024. Nonetheless, at AMC, we grew consolidated revenue by 4.6% versus 2024 to more than $4.8 billion as we welcomed more than 219 million guests to our theaters across the globe and we grew adjusted EBITDA to approximately $388 million, a nearly 13% year-over-year improvement, all of this in an essentially flat industry box office environment. We achieved these consolidated financial results with record-setting per patron revenue and per patron profit metrics. Admissions revenue per patron grew 5.9% to a record of $12.09. Food and beverage revenue per patron grew 5.1% to a record of $7.62, and total revenue per patron grew 6.8% to another record of $22.10. Importantly, our contribution margin per patron, this is defined as total revenue less film exhibition and food and beverage costs divided by attendance, this metric grew 7.2% to yet another record-setting $14.80. This measure of per patron profitability is now 51% higher than in pre-pandemic 2019, underscoring the meaningful improvements that we have made to the business over the last few years. Breaking down our results by segment, starting with U.S. operations, we outperformed the North American box office, growing our admissions revenue by 3.9%, 240 basis points in excess of the overall industry growth. This outperformance helped drive total revenue growth of 4.6%, along with a nearly 15% increase in adjusted EBITDA. And consistent with the overall consolidated trends I…

Thank you, Sean. Our 2025 results and our optimism for 2026 underscore that AMC remains firmly playing on offense, focused on bold strategic initiatives that elevate the moviegoing experience and reinforce AMC's position as the clear leader in theatrical exhibition. One year into our forward-looking AMC Go Plan, the results are both tangible and encouraging as AMC continues to delight our guests and AMC continues to position ourselves for sustained growth in 2026 and beyond. As one example, laser projection with its brighter, sharper screen images now exists in fully half of our U.S. theater circuit. And how can we not revel in the leadership position that AMC enjoys in the availability of premium large-format and extra large-format screens. As you know, they command sizable price premiums, and they're about 3x more productive than a standard screen. It's no accident that AMC has more premium large-format screens and more extra large-format screens than any other exhibitor on earth. So it's obvious why we are so glad that our count of IMAX screens and our count of upgraded IMAX with laser screens is growing, that our count of ever so popular Dolby Cinema screens is growing. You know that with CJ's ScreenX and 4DX offerings as well as for increases to the numbers of our PRIME and iSense house brand PLF offerings. I am especially pleased to by the story surrounding AMC's XL or extra large-format screens. They were created out of thin air and piloted by our Odeon team in Europe less than 2 years back. And given their success, we now are expanding the reach of XL broadly across our U.S. theaters as well. We now have just right around 170 or so XL screens globally, and I would expect that, that number will literally double by the end…

[Operator Instructions] Our first question comes from Chad Beynon with Macquarie.

Adam, great to hear that you're feeling and sounding much better here. I wanted to ask, I know, Sean, in the prepared remarks, you talked about the screen or the theater count reduction in '25 and in the past couple of years. How are we thinking about your fleet or portfolio at this point given the strong outlook for content in '26? And then related to that, are there expected to be any new builds that are in that CapEx number?

Chad, as I've said in my prepared remarks, we've done significant activity, closing over 200 theaters over the last 6 years and opening around 65-odd. We will continue to take actions to close theaters, to reduce leases as we go forward. About 10% of our leases come up for renewal each year. So that's about 85 leases coming up for renewal. And each time these leases come up for renewal, we have that opportunity to improve our overall theater economics. The portfolio has improved significantly over the last 6 years. It's one of the reasons that our per patron metrics and our per patron profitability is so much higher than it was before. But we believe there continues to be a very significant opportunity. Like most organizations or companies with a retail footprint, our theaters are a kind of normal distribution, and there is a tail of underperforming or loss-making theaters. And we see an opportunity to close those theaters or renegotiate leases and then take on new theaters that are significantly -- very significantly more profitable. So I think you're going to see the similar sort of pace going forward. We'll be closing more theaters than we open, but the new ones that we opened are generating significantly more profit than the ones that we closed. And to your question about sort of the CapEx level, there'll be a small number of new theater locations in 2026 and going forward, and that is included in our CapEx projections in the $175 million to $225 million range.

I might add that look, everything we've been doing smartly over the past few years, we've been capital-light. So you specifically used the phrase new build theaters. New build theaters are considerably more expensive than what we call spot acquisitions, where we can take over a theater where most of the capital has already been spent, and we maybe pop $500,000 to $1 million just to upgrade it and bring it into the AMC fleet and apply our marketing programs and our product experiences and expertise. And when we've done this in the past, we've seen substantial rises in the revenues of the theater and the efficiencies of the theater that we've taken over. So as Sean said, I'm sure we'll close some underperformers, which makes us money. It doesn't cost us money. And we'll probably add a handful of spot theaters -- spot acquisitions as well.

And maybe it's worth pointing out the example of the growth, right, which in Los Angeles that we took over as a spot acquisition. And that theater used to be #28 in the country in terms of annual box office receipts. Now we're adding the AMC secret sauce that theater is now #5 in the country in terms of receipts. And that's just one small example of the benefits that we bring and the attractiveness of AMC as a tenant for landlords in their developments.

Okay. Great. And then my unrelated follow-up. I think you mentioned most are expecting the U.S. box office to be up somewhere between $500 million and $1 billion. I think that's where most analysts are in this high single-digit, low double-digit growth rate. International is a little harder for, I think, us in the industry to pinpoint. Do you have a gut feel if international admission revenues could be higher or lower than kind of what we're seeing in North America this year?

Well, we've completed 7 weeks or 8 weeks of -- almost 8 weeks of '26, and we know already that Europe is recovering faster than the United States from the 2025 box office. So if I had to be a betting man, we'd say Europe is going to be stronger than the U.S. And some of you like to report in constant currency and some of you like to report as the dollars come in. The dollar has been pretty weak, which means that our overseas revenues and overseas EBITDA is coming back in U.S. dollars in even stronger levels. So this could be -- year-over-year, this could be Europe's best year of the last 6.

I'm showing no additional questions at this time. I'd like to now turn it back to Sean Goodman for retail shareholder questions.

Thank you, operator. Adam, we have a couple of questions here. Firstly, relating to the food and beverage business. As you and I both know, our food and beverage per patron numbers have just been spectacular post pandemic. And I think there's really exciting opportunities for us ahead there. But the question is sort of what future changes of innovations can people expect on the food and beverage side?

This is really important because if you look at why this company has been able to navigate really turbulent waters over the past half decade. Our strength in food and beverage sales has been a big reason. If you look at our contribution per patron, it's up not quite 50%, but almost 50%, which means that we don't actually need the box office to recover all the way back to 2019 pre-COVID levels. And that's a direct result in part because of our food and beverage success. I think at this point, there's a lot of finessing that's going on within our food and beverage operation where we're using menu experimentation to please the guests and help our bottom line. As one example, we just introduced in the fourth quarter of '25, freshly baked chocolate chip cookies, which not only taste great, but smell great in the theater lobbies, and they replaced doughnut holes, which we're not selling as well at our concession stands. We just introduced at our dine-in theaters a much better pizza than we've had in modern memory. It looks like real pizza. It tastes like real pizza. It is real pizza, and it's really good. I've tested it myself in the kitchens, and I'm a pizza buff. But -- so those are 2 examples. Another thing that's really important, though, of what's happened in our concession stands is not what you eat, but what you buy 3 years ago, AMC didn't sell essentially any movie-themed merchandise. And our movie-themed merchandise now has become a sizable business for us. In 2025, it was $65 million in the United States, another $10 million to $15 million in Europe. This was a business that didn't drive literally $0.01 of revenue or EBITDA 3 years ago, and it's now doing $80-ish million of business today and the profit margins in this thing are -- it's about 50% or so margin business, like that's substantial. And I think that this movie-themed merchandise business is poised to grow again dramatically in 2026. I wouldn't be surprised if it grows by 20% or more as we enter our fourth year of successful effort in and around our concession stands in our theaters.

So there's a lot going on in the industry at the moment. And there's questions about -- just for you to comment on our relationships and relations with studios, what's going on with windows, update on union negotiations and the potential for a strike later this year?

Sure. When you talk about what's our relationship with studios, it sure helps when you sell more movie theater tickets for every single studio than anybody else on earth, especially if you combine the ticket selling in quantity with the amount of effort that AMC devotes to our studio interactions. I can say with confidence that AMC enjoys a very strong special relationship with each and every studio, every single one, we think highly of them because our lifeblood depends on it. And I believe that they think highly of us because that they know at the end of the day, we're going to outperform for them above everybody else. So in terms of studio relations, it's all great. An interesting development when I think of studios is not just the traditional studios, the majors, but we've had surprisingly good interactions of late with some of the streamers who historically were not major theatrical exhibitors. Last year, we had real success with Apple in their film F1. We leaned into it in a big way. We were very successful with the film. They were very successful with the film. We appreciate our relationship with them. I know they appreciated the support that we put forward. I'm looking forward to big things coming from Apple original films going forward. Amazon is now telling us that their goal is to release 15 theatrical movies in 2027 and that they'll probably get up to 10 to 13 theatrical movies on their slate in 2026. That's news. Amazon MGM was only good for a movie or two 5 years ago. They've become a real player in Hollywood. And then there's Netflix. We had this September meeting where we sorted through how we could work together and that it would be advisable to work together. And the first 2 efforts out of the shoot were extraordinarily positive. I know that we're excited about doing more with them, and I know that they were pleased with AMC's effort on their behalf towards the end of 2025. You mentioned in your question, union negotiations. For good or for bad, we're not a party to those union negotiations. We have a vested interest in their outcome, but we're not at the table. I do know that the studios have taken these negotiations seriously. They've started the negotiation process earlier than they did last time around. I think the general consensus is that the 2 strikes a couple of years back were devastating to everyone connected to the movie business, devastating to the members of the union, have devastated -- devastating to movie makers. I would sure hope that we don't have to repeat anything like that and that the union studio negotiations transpire in such a way that deals are met and that the production of movies goes along without interruption.

And then our final question here is on CapEx spend. We've guided to $175 million to $225 million a year, which is the same in 2026 as it was in 2025. Just questions on how we're allocating our CapEx spend, sort of what are the focus areas for our CapEx spend?

Well, very round numbers, right, very round numbers. $150 million of that number is what I'll call maintenance capital to keep our theaters in good shape. Roofs aren't leaking, HVAC systems working, IT systems being overhauled as needed to continue to have AMC be a strong player from an IT standpoint. AI is capturing some of our money now because there are ways to make our company more efficient through the adoption of AI techniques. Beyond that, though, in a capital-light way, we continue to be very committed to upgrading the theater experience. And we're going to add more IMAXs. We're going to add more Dolby Cinemas. We're going to add more PRIMEs and iSenses. We're going to double the number of XL screens. This is all good. At the same time, a decade ago, AMC was quite experienced and practice in renovating whole theaters expensively, ripping out seats, putting in the so-called recliner seats, which are very popular with guests. But we have a problem. And the problem is we have a number of theaters that -- where the volumes are so high that we can't afford the seat loss of pulling a lot of seats out of the auditoriums. It reminds me of the old Yogi Bear quote, "Nobody goes there anymore because it's so crowded," as he once said. So there's -- it was easy to decide how do you renovate a theater if you got to rip everything down to the studs and put them in recliner seats with 6 feet of leg room for row. But now we're at a point where that's pretty much behind us. And we're looking at how do we keep the product top flight in some of our highest volume theaters where more traditional seating is going to be the…

And that concludes the retail investor questions.

So let me just end the call by thank you all for listening to us today and participating with us. It is going to be the strongest slate of moviegoing that this industry has seen since 2019. The year is starting up in double digits, which is a nice way to start. And I leave you with this one thought that's dominating our thinking and my comments on this call, that notion of operating leverage, as revenues rise, EBITDA rises, and it does so at a geometric pace. So we won't be all the way to where we need to be at the end of '26, but we expect to make a dramatic amount of progress. So this should be a year that makes us all smile. Thank you for joining us today. See you at the movies.

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