Release Date: August 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- National CineMedia Inc (NCMI, Financial) saw a significant increase in advertising revenue per attendee, reaching $0.56, the highest since 2017.
- The company welcomed 11 new advertisers, demonstrating ongoing attractiveness to advertisers.
- NCMI's platinum advertising offering saw its second-best quarter ever, with sales up more than 15x compared to the second quarter of 2023.
- The company reported strong reach across young demographics, with Gen Z comprising 40% of NCMI's quarterly audience.
- NCMI's self-serve advertising platform saw significant growth, with orders up 157% and sales up 141% quarter-over-quarter.
Negative Points
- Total revenue for the second quarter declined 15% year-over-year due to a decline in attendance and beverage revenue.
- Local and regional advertising revenue decreased by 30%, largely due to the lingering effects of the 2023 writer and actor strike.
- Attendance dropped 31% year-over-year, impacting overall revenue.
- Beverage revenue derived from the ESA Parties beverage agreement decreased significantly due to the termination of the Regal ESA.
- Adjusted OIBDA for the second quarter was $7.6 million, down from $12.5 million in the same period the previous year.
Q & A Highlights
Q: Can you quantify the impact of the self-service platform and its usage trends?
A: (Thomas Lesinski, CEO) Both programmatic and self-serve platforms allow advertisers to buy inventory closer to airtime, creating efficiency. We are prioritizing these platforms and will provide more specifics in future quarters.
Q: How did the upfront meetings go, and what are your expectations for Q4?
A: (Thomas Lesinski, CEO) The upfront negotiations are ongoing, and we will provide more details next quarter. The process is slower this year, but we remain competitive and transparent about our performance.
Q: Can you elaborate on the improvement in per patron monetization and utilization rates?
A: (Ronnie Ng, CFO) The improvement is due to better inventory management and execution, with impressions sold per attendee up 27% year-over-year and a 5% increase in CPMs. This has led to higher revenue per attendee.
Q: Have there been any shifts in audience demographics or arrival times at theaters?
A: (Thomas Lesinski, CEO) Our core demographic remains the 18 to 34-year-old group, which we deliver consistently. Arrival times have been stable, and our post-showtime advertising has been effective in increasing ad viewership.
Q: What drove the upside in Q2 despite lower attendance?
A: (Thomas Lesinski, CEO) Higher utilization, better platinum sales, incremental programmatic revenue, and a diversified advertiser base contributed to our strong performance despite lower attendance.
Q: Are the positive trends from Q2 expected to continue into Q3?
A: (Thomas Lesinski, CEO) Yes, we are focusing on utilization optimization, maintaining pricing levels, and expanding our advertiser base. We are optimistic about the second half of the year, especially the fourth quarter.
Q: How did the challenging Q2 box office impact your upfront negotiations?
A: (Thomas Lesinski, CEO) Despite a slow start, our sales team performed well, driving higher utilization and platinum sales. The addition of new advertisers also helped, and we are confident about the second half of the year.
Q: Can you provide more details on the effectiveness of post-showtime advertising?
A: (Thomas Lesinski, CEO) Post-showtime advertising has been effective in increasing ad viewership. We implemented this strategy in late 2019, and it has consistently delivered strong impressions.
Q: What are your expectations for the macroeconomic environment and its impact on media buying?
A: (Thomas Lesinski, CEO) We are confident in our ability to deliver young, hard-to-reach audiences. Despite potential economic challenges, our diversified advertiser base and strong platform position us well for continued growth.
Q: How are you planning to leverage new innovations like programmatic and NCMx?
A: (Thomas Lesinski, CEO) We are focusing on expanding our programmatic reach and enhancing NCMx capabilities. These innovations will drive sustainable business revenues and provide enhanced solutions to our clients.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
