Eric Wald

Eric Wald also asked about the hotel segment's leisure demand and higher Average Daily Rates (ADR) following renovations, seeking insights into current bookings for leisure versus business/group travel in 2026, the potential for a shift back to leisure, and its implications.

Answer

Chad Paris, CFO and Treasurer, clarified that while group pace started strong in early 2025, it normalized to mid-single digits, and 2026 pace is currently low single digit due to a high base. He noted that 2027 pace is too early to interpret. Greg Marcus, Chairman, President, and CEO, highlighted the properties' ability to cater to both group and leisure, allowing flexibility to adjust strategies based on demand shifts, especially with renovated assets performing well in the upper upscale segment.

Eric Wald inquired about the expected cadence of the theater segment's pricing strategy throughout 2026, particularly how it will lap the mid-2025 changes and what new programs are in place.

Answer

Chad Paris, CFO and Treasurer, explained that the key factor for 2026 will be anniversarying the mid-2025 price changes, with no major prospective program shifts. The primary focus will be on driving per caps on the food and beverage side. Regarding the hotel segment, Mr. Paris noted that group pace for 2026 is low single-digit due to a significant step-up in early 2025, and 2027 pace is too early to interpret. He highlighted strong leisure demand in Q4, especially for upper-upscale properties. Greg Marcus, Chairman, President, and CEO, added that their properties are versatile, catering to both group and leisure demand, allowing for strategic adjustments based on market conditions.

Eric Wald of Texas Capital Securities inquired about the purchasing patterns of Gloo's 20+ million-dollar annual contract value (ACV) customers, specifically whether they are multi-product/service or large-scale single offerings. He also asked about the factors influencing the speed of deal-to-revenue conversion and the expected pace of synergy realization from recent acquisitions, and their impact on Adjusted EBITDA.

Answer

CEO Scott Beck and Head of Technology Pat Gelsinger explained that $1M+ ACV customers are primarily buying Gloo 360, Masterworks for donor development, and Midwestern for next-generation technology, often as multi-product engagements. Pat Gelsinger noted an acceleration in deal closure due to established proof points in various categories (e.g., Bible translation, campus ministries). Both executives confirmed that synergy realization, encompassing both cost and revenue benefits from acquisitions like Westfall Gold, Midwestern, and Masterworks, is a significant factor for achieving profitability in the upcoming year, with efforts already underway and accelerating. Scott Beck also emphasized discipline and strategy in M&A, focusing on accretive opportunities that support the Q4 EBITDA profitability goal. He clarified that the $20 million revenue expected from Westfall in 2026 does not include significant synergy assumptions, but overall past acquisitions have shown good growth.