National CineMedia’s Mixed Earnings Call: Growth Amid Challenges

National Cinemedia ((NCMI)) has held its Q4 earnings call. Read on for the main highlights of the call.

The latest earnings call from National CineMedia, Inc. painted a mixed picture of the company’s performance and future prospects. While the call highlighted strong growth in box office performance and audience engagement, there were notable challenges, including a decline in full-year revenue and decreases in national and regional advertising revenue. Despite these hurdles, the company expressed optimism about future growth opportunities.

Record Box Office Performance

The fourth quarter of 2024 was a standout period for National CineMedia, Inc., with the box office generating approximately $2.4 billion, marking a 26% increase year over year. This success was largely driven by key films such as ‘Wicked Part One’ and ‘Moana 2’, which significantly contributed to the impressive figures.

Strong Audience Engagement

National CineMedia, Inc. successfully captured a significant share of the Gen Z and Millennial demographics, accounting for 69% of total viewership in Q4. This translated to reaching over 43 million moviegoers, underscoring the company’s ability to engage younger audiences effectively.

Platinum Advertising Revenue Growth

The company’s platinum advertising product saw remarkable growth, with sales more than doubling year over year. In Q4 alone, platinum revenue was up 28% compared to the prior year period, highlighting the product’s increasing appeal to advertisers.

New Advertisers and Campaigns

In Q4, National CineMedia, Inc. attracted 25 new advertisers who launched major cinema campaigns. These advertisers were drawn to the company’s ability to deliver unmatched audience engagement, further solidifying its position in the advertising market.

Positive Financial Performance

The company reported Q4 revenue of $86.3 million, slightly exceeding the revenue guide, and an Adjusted OIBDA of $35 million, surpassing guidance. This positive financial performance reflects the company’s resilience and strategic execution.

Decline in Full-Year Revenue

Despite the strong quarterly performance, full-year 2024 revenue was $240.8 million, down from $259.8 million in 2023. This decline was attributed to lower attendance and a weaker movie slate in the first half of 2024, presenting a challenge for the company.

Challenges in National and Regional Advertising

The company faced challenges in its advertising segments, with national advertising revenue decreasing to $69.2 million in Q4 from $71.9 million in 2023. Local and regional advertising revenue also fell to $13.5 million, down from $16.2 million, indicating a need for strategic adjustments.

First Quarter 2025 Outlook

Looking ahead, National CineMedia, Inc. expects a softer performance in Q1 2025, with projected revenue between $34 million and $36 million and an Adjusted OIBDA expected to be negative. This outlook is influenced by seasonal slowdowns and external economic factors.

Temporary Advertising Headwinds

The company encountered temporary advertising headwinds in Q4, stemming from a high mix of G and PG-rated movies and challenges such as reduced government spending and tariff uncertainty, which led to delayed advertising spends.

Forward-Looking Guidance

During the earnings call, National CineMedia, Inc. provided forward-looking guidance, projecting first-quarter 2025 revenue between $34 million and $36 million, with an expected adjusted OIBDA between negative $9.5 million and negative $7.5 million. Despite these short-term challenges, the company anticipates stronger performance in the second quarter and beyond, supported by strategic investments in sales, technology, and client solutions.

In summary, National CineMedia, Inc.’s earnings call reflected a company navigating through a mix of successes and challenges. While the fourth quarter showcased strong growth in box office performance and audience engagement, the company faces hurdles with declining full-year revenue and advertising challenges. However, with strategic investments and a focus on future growth, National CineMedia, Inc. remains optimistic about its long-term prospects.