Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the United Parks Q4 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Matthew Stroud, Head of Investor Relations. You may begin.

Thank you and good morning, everyone. Welcome to United Parks & Resorts Fourth Quarter and Fiscal 2025 Earnings Conference Call. Today's call is being webcast and recorded. A press release was issued this morning and is available on our Investor Relations website at www.unitedparksinvestors.com. Replay information for this call can be found in the press release and will be available on our website following the call. Joining me this morning are Marc Swanson and Jim Forrester. This morning we will review our fourth quarter and fiscal 2025 financial results and then we will open the call for your questions. Before we begin, I would like to remind everyone that our comments today will contain forward-looking statements within the meaning of federal securities laws. These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward-looking statements, including those identified in the Risk Factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. These risk factors may be updated from time to time and will be included in our filings with the SEC that are available on our website. We undertake no obligation to update any forward-looking statements. In addition, on the call we may reference non-GAAP financial measures and other financial metrics such as adjusted EBITDA and free cash flow. More information regarding our forward-looking statements and reconciliations of non-GAAP measures to the most comparable GAAP measure is included in our earnings release available on our website and can also be found in our filings with the SEC. Now I would like to turn the call over to our Chief Executive Officer, Marc Swanson. Marc?

Thank you, Matthew. Good morning, everyone, and thank you for joining us. Before we turn to the quarterly and annual results, I want to point out that we uploaded a presentation to our Investor Relations site that includes some supplemental information that covers certain topics and other important points that we want to get across. I will refer to those slides later in my remarks. With that, let me get into our results. Our fiscal 2025 results did not meet our expectations. While the consumer environment was uneven and our results were impacted by negative international tourism trends and volatile weather during certain peak visitation periods, we should have delivered better results, particularly on the cost side of the income statement. We have moved decisively to address our less than optimal cost management and have updated and focused our plans and investments for 2026 designed to drive attendance and guest spending across our parks. These include a compelling lineup of new rides, shows, attractions, an updated events calendar, an expanded concert lineup, new and upgraded food and retail locations, a revamped and enhanced marketing plan and strategy as well as other investments that we expect will drive demand and spending across our parks. Combined with disciplined operational execution and an additional heightened focus on cost management and efficiency, we are confident these initiatives position us to deliver strong performance in 2026. Our fourth quarter performance was impacted by lower international visitation and fewer operating days compared to the fourth quarter of 2024. The net impact of weather was essentially flat compared to last year as the recovery from hurricanes in the prior year was offset by unfavorable weather during certain peak visitation periods, particularly in San Diego and Williamsburg as well as Florida in the peak last few days of…

Thank you, Marc, and good morning. During the fourth quarter, we generated total revenue of $373.5 million, a decrease of $10.8 million or 2.8% when compared to the fourth quarter of 2024. The decrease in total revenue was primarily a result of decreases in attendance and admissions per capita partially offset by an increase in in-park per capita spending. Attendance for the fourth quarter of 2025 decreased by approximately 126,000 guests or 2.6% when compared to the prior year quarter. The decrease in attendance was primarily due to a decrease in international visitation compared to the prior year quarter. In the fourth quarter of 2025, total revenue per capita decreased 0.2%. Admission per capita decreased 2.2% and in-park per capita spending increased 2.1%. Total revenue per capita decreased due to decreases in admissions per capita partially offset by increases in in-park per capita spending. Operating expenses decreased $1.8 million or 1.0% when compared to the fourth quarter of 2024. Selling, general and administrative expenses increased to $8.7 million or 17.4% compared to the fourth quarter of 2024. We reported net income of $15.1 million for the fourth quarter compared to net income of $27.9 million in the fourth quarter of 2024. We generated adjusted EBITDA of $115.2 million in the quarter. Looking at our results for fiscal 2025 compared to fiscal 2024. Total revenue was $1.66 billion, a decrease of $62.7 million or 3.6%. Total attendance was 21.2 million guests, a decrease of approximately 378,000 guests or 1.8%. Net income for the year was $168.4 million and adjusted EBITDA was $605.1 million. Now turning to our balance sheet. Our December 31, 2025, net total leverage ratio was 3.4x and we had approximately $789 million of total available liquidity, including approximately $100 million of cash on the balance sheet. The strong…

Thank you, Jim. Before we open the call to your questions, I have some closing comments. In the fourth quarter of 2025, we came to the aid of 178 animals in need. Over our history, we have helped over 42,000 animals, including Bottlenose dolphins, manatees, sea lions, seals, sea turtles, sharks, birds and more. I'm really proud of the team's hard work and their continued dedication to these important rescue efforts. We're excited about our ongoing and upcoming events this quarter, including Mardi Gras at all SeaWorld and Busch Gardens Parks, Seven Seas Food Festival at all SeaWorld Parks and the Food and Wine Festival at Busch Gardens Tampa Bay. We are also excited about the ongoing and upcoming concerts we have planned for our SeaWorld and Busch Gardens Parks this year. I want to thank our ambassadors for their efforts during our recent holiday season and the preparation for our current and upcoming events this spring. I'm excited about the opportunity set in front of us both in the near term where we see clear paths to driving meaningful progress and over the medium term where the growth potential is even greater. We are focused, well positioned and confident in the investments we are making, the operational efficiencies we expect to realize and the value we can build for stakeholders. With that, we can now take your questions.

[Operator Instructions] And our first question comes from the line of Steve Wieczynski with Stifel.

So Marc, if we think about 2026 and look, obviously you guys don't have a ton of visibility into your day-to-day operations. But you did note Discovery Cove and group bookings are both up nicely at this point. Wondering though how you guys are thinking about attendance growth for this year outside of Discovery Cove and group bookings. Obviously, you still have kind of these headwinds from the international side of the business. But do you think it's possible at this point to grow attendance with some of those headwinds still in play here?

Steve, it's Marc. I can take your question. What I'm excited about is what we talked about, the new attraction and event lineup that we're investing in and we do believe will lead to attendance growth. So great lineup in Orlando. Some of the things we've announced, some of them are still to come. And then as I mentioned in my prepared remarks, there's attractions across the parks. So you've got something just about everywhere. And so I really think the lifeblood of giving people a reason to visit is having new attractions and events and shows and things like that. So feel good about the lineup we have. We know international, as you mentioned, was still a headwind here to start the year. We expect that will normalize as we begin to lap some of the factors that drove that down last year. So assuming that normalizes for those reasons and we start to lap some of those things from last year, that gives me some confidence that at least we can hopefully stop kind of the decline in international. And then as we always talk about, we know there's weather impacts throughout the year. If we get a year of normalized weather, that certainly would be a factor in continuing to be able to add attendance in some of our parks. So that's kind of how we're thinking about it. It's really anchored by the attraction lineup and the event lineup and the new shows and things like that.

Okay. Got you. And then second question maybe just turning to capital deployment and maybe how you guys are thinking about leverage. I guess what I'm trying to understand here is if we look at the end of the year, I think your cash balance was, I don't know, somewhere around $100 million. It seems like you guys have already kind of bought back, let's call it, $90 million of stock this year. So cash balance is probably a little bit tighter at this point. So obviously it probably seems like you did take on a little bit of leverage to buy some of this stock back. I guess what I'm trying to figure out is where you guys feel comfortable from a leverage standpoint at this point and moving forward?

Sure, Steve. I can help you with that. I mean obviously we don't have a target leverage ratio or anything like that. We're comfortable where we are now at the end of the year and not to say we won't be comfortable with something higher than that or lower than that. So really the way we think about it is we work with the Board when there's opportunities to return cash to shareholders and we take that into account, our leverage ratio into account when we're doing that. Obviously as you know in this business, we're kind of this time of year at kind of the trough of the cash generation, right, and then it will start to pick up as we get into the spring and into the summer. So that's one factor to keep in mind. But I would say we're comfortable with the leverage ratio at the end of the year not to say that we wouldn't go higher or anything like that. We don't have a target. We just really work closely with the Board on deploying that cash accordingly.

Our next question comes from the line of James Hardiman with Citi.

So maybe an offshoot of Steve's question, but the language around 2026, I think strong financial performance is how you termed it. I think the previous few years you had talked about record revenues and EBITDA and sometimes attendance. And so this seems like a departure from that given the consistency of those projections in previous years. I don't know if that's more a function of sort of increased conservatism as you look back given that that growth has been elusive or is there something as we think about 2026 where there's some increased uncertainty? Just trying to understand the philosophy of, I don't know, guidance if you want to call it that.

Yes. James, I mean we're not giving any sort of guidance obviously. I think it's really just a function of we're excited about 2026, the lineup we have. As I mentioned to Steve, the lineup of attractions and events and everything we have going on, some of the macro trends hopefully improve. Hopefully, we get some better weather as well and then obviously there's things we can better manage ourselves. So I'm not guiding you anything. I don't know where that will lead us. But obviously we believe we're going to grow the business in 2026 with everything we have going on.

Got it. And then you've talked a couple of times about how maybe the cost performance is not where you would have liked it to be in 2025. Maybe let's just do -- if we could maybe do a postmortem there. I mean coming into the year, I think you guys had targeted $50 million to $75 million of gross savings. Maybe sort of how did you do against those goals? It looks like total expenses were actually up about $25 million. And so maybe it's just that the gross to net, are there any callouts there I guess is the question? And then as we roll that forward to 2026, right, there's another $50 million of gross cost savings. As we think about the coming year, how should we think about that gross to net walk? Labor is obviously a big one, but how should we think about your ability to flow some, most, all of that to the bottom line?

Yes. James, let me start and then Jim can add whatever he would like. But look, as you know, we've worked at cost for quite a while at this company is something we've prided ourselves on and we hold ourselves to a really high standard and it's reflected in our margins that we've grown since 2019. Nonetheless, we believe we can do a better job and there was times in '26 that we weren't optimal on managing costs and reacting to things as quickly as we could and those are things that we're going to try to correct here in 2026. So we have a lot of focus on this. We hold ourselves to a pretty high standard. Even with all that, if you look at like the cost growth in EBITDA cost, kind of the cost between revenue and adjusted EBITDA, it was I think just about 3% in 2025, which again it's low single digits, but we manage and have high expectations to do better than that. And so that's our goal for 2026. And there's some initiatives that we laid out on the slide that we think can help us get there and so that's what we're aiming for. But Jim, anything you want to add?

Yes. I would just say again to echo Marc, there are a number of headwinds that we've got going on; contractually or legislatively required minimum wages, the presence of hurricanes in some of our parks that happened in 2024 that we're recovering on and adding labor back for things that had to be closed and those type things. As Marc said, under our response to business conditions, we have to take those into account much more aggressively and dynamically match our volume for the guests and the labor that we're spending against that. And we need to use technology and a wide variety of resources at our disposal to be more nimble when it comes to that. We've also got property tax and insurance that we are actively engaged on and trying to react to those. Again lots of headwinds over there both from a taxing authority trying to get more taxes. And then our marketing spend is something that we have tried to do some test and adjust with and sometimes that hasn't resulted in the attendance we hoped for. And so we're going to dial that in more aggressively to make sure that those decisions to spend are targeted.

Got it. And just to clarify, the wage headwinds that you called out, that was a '25 event. Do we expect similar pressure in '26 or has that subsided? How do we think about that?

The bulk of that would come from minimum wages. So Florida has legislatively constitutional required minimum wage increases as well as San Diego as well publicized have a very substantial minimum wage increase in 2026. So we're planning for those actively, how we're reacting to those so that we can take business conditions into account, our pricing for both in-park and our admissions to cover those costs and then to be again more aggressive in our match of the volume we're experiencing as well as use of technology and other tools to minimize those labor costs.

Next question comes from the line of Arpine Kocharyan with UBS.

So you mentioned cost improvement many times in prepared remarks and also in the release. But I was wondering regardless of where demand shakes up for 2026, what would that in aggregate add to your EBITDA for this year versus last? And to go back to the question on $50 million of cost you mentioned in the slides, what part of that is incremental today versus what you were targeting before and what was in the base already, if you could clarify?

This is Marc. Let me start and Jim can add anything. But I think the point on cost is we could have done better in 2025. We've got new discipline around some of the processes there, some new procedures around that. We've got a number of initiatives that I laid out in the slide. So we're very focused on that. I don't want to guide you to any specific numbers or anything like that. But I can tell you we're highly focused on this. Jim mentioned some of the activity we have going on to offset some of the kind of anticipated headwinds and then we have to do a better job of reacting to and proactively addressing things that maybe we don't know right now. So that's how we're approaching it. I think a more heightened attention to how we manage it and really focusing on it every day. We hold ourselves to a high standard, as I said, on cost.

The only thing I would add, Marc, is what we're planning is not so much to rely on the revenue or the attendance to cover some of these. We are aggressively trying to anticipate those headwinds that we know are on the horizon for taxes or these labor costs that we've talked about or in continued health care costs and try to address those on the expense line to try to at least flatten the year-over-year growth if not decrease it and that's our plan. In fact we've got some -- in our budget, we have plans to reduce costs on that basis. But again I don't want to guide to that, but that is our goal.

Okay. And then on early demand indicators, you mentioned momentum for 2026 pass product. Could you maybe give a little bit more detail in terms of volume and price? It sounds like you're seeing good improvement versus down 4% that you saw in 2025, but obviously it's early. What early demand indicators you're looking at and a little bit more detail on the pass product would be helpful.

Yes. We called out 2 of the things that we do have visibility into, which is Discovery Cove reservations and then kind of group bookings as well. Those are some of the indicators we have. We don't have as many as maybe others in the industry not having hotels and things like that. But the 2 we did call out, Discovery Cove and group, again look promising for 2026. I can tell you there are some other things that are maybe a little bit smaller, but nonetheless, things that we do look at like our VIP tour bookings are trending well. Some of our in-park products we feel good about. So there's a myriad of things that look promising. These aren't again the lion's share of our revenue or anything like that, but they are the things that we have visibility into, right? On the pass, what I would tell you there is it's very early in the kind of cycle of pass sales. We do sell passes year-round, but really we start to see that ramp up here as we enter like spring into early summer depending on the park location. So we know we have a good product. We know there's reasons for people to visit with our rides, attractions, events. We expanded our concert lineup this year to include all the SeaWorld and Busch Gardens Parks and we're really excited about that. It gives people another reason I guess to buy a pass. So we'll see where pass sales ultimately end up. The key period is still ahead of us there.

Okay. That's helpful. Just on Discovery Cove, it seems like booking came down from more than 20% that you had previously given to now high single digits. I know probably most of the time you start at a higher number and then that comes down a little bit, right, as you enter the year. Is it just that or is there something else going on there? Because you had disclosed I think a more than 20% number for that for 2026 previously if I'm not wrong.

Yes. Here's what I'd say. I think we're pleased to see the high single digits. It's a great park and we're confident that that's going to have another solid year in 2026. It had a record attendance year in 2025. So we're building off of that.

Next question comes from the line of Thomas Yeh with Morgan Stanley.

Just 1 on the macro level. You've talked about the consumer environment as being uneven I think for 2 quarters now. Can you maybe just expand a little bit on that? You grew in-park spend clearly in a relatively healthy way, but admissions per caps down. Is there maybe just any evidence you see within the portfolio performance of a K-shape where, say, Discovery Cove at the higher end is performing, but you might be seeing lower-end consumers fall off? And then just for 1Q in terms of the pacing, can you just talk about how core attendance has been shaping up so far? And I think you had some Easter timing shift headwinds last year. Any update on that and how we should think about that for '26? I think it's a little bit earlier this year, but still in April.

Let me start with your first comment. I mean obviously pacing on Q1, I'm sure everybody is well aware of the weather across a good part of the country especially in Florida in January and February has been a challenge for us and I'm sure many others in the theme park industry. So that is what it is. The good news is January and February are relatively small months and the quarter is really driven in large part by how we do in March. So we still have that ahead of us. Your question on kind of timing of Easter, Easter is earlier this year, it's on April 5. So kind of the start of what we would call Easter week backs up a few days into March. We do have though some other kind of negative calendar impacts in Q1. So my guess is those will kind of offset each other. We have 1 less Saturday in March this year than last year, but we again have a little bit few more Easter days in the month of March than last year. So they probably even out, but that's kind of how we're thinking about it. On your question on per caps, as I said, I look at in-park per cap spend to kind of gauge how people are doing and we've done a good job of growing that pretty consistently now for a few years. And so I think people find compelling reasons to come to spend money in our parks or whatever that may be on whatever product that is. And I think we can continue to tailor that to all income levels and we have to do a better job of that. We know there's people who clearly have been impacted over the last year I'm sure with some of the economic conditions over the last couple of years and there's people that are maybe not as impacted as those. So we have to tailor our products to make sure we're capturing opportunities from all demographic and income levels and we'll continue to do that and that's a big part of our strategy obviously going forward is to continue to grow in-park.

The one thing I might add, Marc, is that we talked about the K-shape economy. We do do demographic surveys of our guests and I looked at that in preparation for this call seeing that we actually don't show significant changes in our income levels of our guests as we segregate them. We're not seeing that the large shift at least in our business when we compare to the prior year.

Okay. That's very interesting. And then just a quick follow-up on the land monetization initiatives. I think you spoke in particular a little bit more about sale-leaseback interest. Can you just talk about how you weigh that in terms of how compelling that potential opportunity is? And it doesn't seem like it could be mutually exclusive necessarily with developing the land in other ways either. So maybe kind of just double tap on that.

Sure. The point we've been making now for several quarters and I think we leaned into it even more today is we have significant opportunities with our real estate and it could be a variety of -- it could be a sale leaseback, it could be developing that land into shopping, housing, entertainment, whatever it may be, hotels. So the point is there's a lot of valuable real estate and there's multiple ways to monetize that. We'll work obviously with our Board. I think you're very familiar with the makeup of our Board. We're obviously more than 50% owned by a private equity firm and we get a lot of obviously guidance and counsel obviously from them and the rest of the Board on how to use cash. So I'm confident working together with the Board, we'll come to the right conclusions on how best to monetize our assets. I think the exciting thing is that people recognize the value, maybe not everybody because it's not, I don't think, fully appreciated by the public markets. But the people that we talk to or talk to our Board, they see that value, and that's what we were trying to point out in some of the slides.

And our last question comes from the line of Lizzie Dove with Goldman Sachs.

I wanted to ask about Orlando and I guess kind of Epic specifically. I know you've kind of called out in the past Orlando has been pretty solid or was pretty solid in 2025 at least from an attendance perspective. I'm not sure you've given detail about per caps or kind of costs. But as we get the kind of full annual impacts of Epic this year, it sounds like they're trying to kind of ramp that up even more. Just how you think about that in terms of the impact to your Orlando trends?

Yes, it's still a great opportunity. As we've consistently said, we think Epic in the market brings more people to Orlando and we have again the opportunity to share in that growth like we have for the last 50-some years that we've been in Orlando. So I would point to the things we're adding in our park, SeaWorld Orlando for example, the new rides attractions. Some of this hasn't been announced, but I can tell you it's some exciting stuff and these are differentiated than what you're going to get at Epic and I think that's a key part of what sets us apart. You're coming here for a different experience. It's a great thing. SeaWorld is a great park in itself. It's a differentiated experience with what we can offer with the animals and some of the rides that are blended in with animal components to them. So we like that setup obviously. And then I haven't even mentioned Discovery Cove, which is a really good park as well and then we have Aquatica, which is a great water park. So we like that we're investing in a market that continues to attract high quality investments from other people as well. We think that benefits everyone. And we'll continue to do our part to drive people to our parks while they're here. I would point out, as I've said in the past, I also believe we have a value proposition that's really strong for guests that are in the market and want to experience again a differentiated product. I think we can do that at a good value as well.

Got it. That makes sense. And then I wanted to ask about sponsorship given you kind of called that out as a big opportunity. I think a couple of quarters ago, you said you were expecting for 2025 at least maybe mid-single digits EBITDA. Curious if you realized that in 2025. And then when you talk about this $15 million-plus pipeline and kind of going to $30 million over time, like how much visibility you kind of have into that?

Yes. What I'm excited about is what I mentioned on the go forward is the 2026 pipeline is exciting. We mentioned $15 million plus and growing. We think the opportunity over kind of the coming years or long term, however you want to think about it, can be $30 million plus. So we like the pipeline. We like what we see now and the potential for this over the coming years.

The only thing I might add, Marc, is sometimes these relationships take a while to develop or review and over time they will bear fruit. And I think the company is comfortable, as Marc said, that pipeline that we have some concrete plans coming up in the future we'll be able to share.

That concludes the question-and-answer session. I would like to turn the call back over to Marc Swanson for closing remarks.

Thank you, Desiree. On behalf of Jim and the rest of the management team at United Parks & Resorts, I want to thank you for joining us this morning. As you heard today, we are confident in our long-term strategy, which we believe will drive improved operating and financial results and long-term value for stakeholders. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining in. You may now disconnect.