Mike Hickey

Mike Hickey inquired about the correlation between NCM's ad business and box office growth, asking if media buyers are excited for the Q2 and Q3 slate. He also questioned the company's capacity for more aggressive share buybacks given the stock price, the decision behind the 18% CPM reduction for 2025, and the anticipated impact of the Olympics, World Cup, and political spend.

Answer

CEO Tom Lesinski confirmed significant excitement for the Q2 and Q3 film slate, translating into strong bookings. He noted that the company continuously reviews its buyback program against free cash flow, having returned nearly $50 million to shareholders. CFO Ronnie Ng explained the 18% CPM reduction for 2025 was strategic, aimed at utilizing programmatic platforms for better inventory utilization and broadening the advertiser base to include categories with historically lower but deeper-pocketed CPMs. Mr. Lesinski added that political advertising has upside potential, with interest from select exhibitors, while the Olympics' advertising impact is more substantial than the World Cup in the U.S., especially given the Q1 timing.

Mike Hickey questioned the correlation between National CineMedia's advertising business and box office growth, particularly for Q2 and Q3, and whether media buyers share the excitement for the upcoming film slate. He also asked about the company's balance sheet capacity for more aggressive share buybacks, the rationale behind the 18% decrease in national advertising CPMs for 2025, and the anticipated impact of the Olympics, World Cup, and political spending.

Answer

Chief Executive Officer Tom Lesinski expressed optimism for Q2 and Q3, noting the best film slate since 2019, which has translated into solid bookings as advertisers line up. On buybacks, Mr. Lesinski stated that nearly $50 million in capital has been returned to shareholders through buybacks and dividends, and the company continuously reviews its buyback program against free cash flow. Chief Financial Officer Ronnie Ng clarified that the 18% decrease in national advertising CPMs for 2025 was partly due to programmatic strategy for better inventory utilization and opportunistically broadening the advertiser base into categories with historically lower CPMs but deeper pockets. Mr. Lesinski added that political advertising presents a potential upside, with interest from select exhibitors, while the Olympics' advertising impact is more substantial than the World Cup in the U.S., especially given the Q1 timing.

Mike Hickey from The Benchmark Company LLC inquired if the strong Q3 guidance was driven by spillover from Q2 or new business, the reasons for recent traction in programmatic advertising, and how NCM plans to improve revenue visibility in a scatter-heavy market.

Answer

CFO Ronnie Ng clarified that the Q3 strength is primarily from new business, not Q2 spillover. CEO Thomas Lesinski added that programmatic is gaining traction because it taps into a large portion of ad budgets, attracting a significant number of new-to-NCM advertisers. To improve visibility, Lesinski highlighted the creation of a dedicated new business sales team and increased industry engagement through events like Cannes Lions.

Mike Hickey also asked about Marcus Corporation's M&A strategy, specifically if the company is becoming more aggressive in its search, the potential impact of the Warner Bros. deal on theater acquisitions, the activity level in the hotel market, and where the company sees the biggest opportunities for growth.

Answer

Greg Marcus, Chairman, President, and CEO, noted that the hotel transaction market has been slow due to elevated cap rates and strong enough economy preventing forced sales. On the theater side, he mentioned limited transaction activity, with challenges often stemming from expensive leases, making 'onesie, twosie' deals more feasible. He also highlighted the company's focus on adjacencies and leveraging free cash flow for good investments, emphasizing tax efficiency and potential for shareholder returns if suitable investments aren't found.

Mike Hickey asked about the 2026 outlook for both hotel and theater segments, specifically if top-line growth is expected to exceed 2025, potentially reaching mid-single digits, and the implications for free cash flow conversion.

Answer

Greg Marcus, Chairman, President, and CEO, expressed optimism for the 2026 theater slate, noting its potential for blockbusters and strong alignment with their markets. He emphasized strategies like price optimization, the PLF footprint, and the Marcus Movie Club to maximize revenue and attendance. For hotels, he expects continued benefits from recent investments, linking performance to the economy and convention center activity. Chad Paris, CFO and Treasurer, added that the family-oriented film slate for 2026 should particularly benefit Marcus Theatres. He also highlighted that the theater business historically contributes around 50% to EBITDA on incremental revenue, and the significant step-down in CapEx for 2026 is expected to lead to very strong free cash flow conversion. Regarding M&A, Mr. Marcus noted the hotel transaction market is slow due to elevated cap rates and interest rates, while theater M&A faces challenges with expensive leases, leading them to focus on smaller, individual deals and exploring adjacencies for growth.

Mike Hickey asked if the $35 million EBITDA savings from the Apricot deal and integration is still the target for 2026 and how much of it is baked into the current guidance. He also inquired if presumed savings from the Supercoin initiative are included in the guidance or will be realized as the product, particularly the wallet, rolls out. Finally, he asked how Super Group assesses and mitigates early tournament hold risk for the expanded World Cup, given experiences like the Africa Cup of Nations.

Answer

CFO Alinda van Wyk confirmed the $35 million is an annual life saving projection from reduced royalties, infrastructure, and staff integration, with the realized savings for 2026 included in the guidance. CEO Neal Menashe stated that Supercoin is already helping save on banking fees, with some benefit in guidance, but full impact will take time as customers adapt to the wallet launch in H1 2026. For the World Cup, Neal Menashe explained that with more teams, early round volatility is managed through incentives, boosts, and new AI pricing, leveraging lessons from the Africa Cup. CFO Alinda van Wyk added that with sports being 20% and casino 80% of the business, the casino focus helps navigate sports volatility.

Mike Hickey asked if the $35 million annualized EBITDA savings from the Apricot deal were still expected for 2026 and how much was included in the current guidance. He also inquired if Supercoin initiative savings were baked into guidance and how the company plans to mitigate early tournament hold risk during the expanded World Cup, drawing lessons from the Africa Cup.

Answer

CFO Alinda van Wyk confirmed the $35 million annualized EBITDA savings from Apricot, noting that 2026 guidance includes the portion expected to be realized this year from reduced fees and staff integration. CEO Neal Menashe stated that Supercoin is already generating some banking fee savings, with a portion included in guidance, and that the company is prepared for World Cup hold volatility through refined incentives, AI pricing, and lessons from the Africa Cup, leveraging the 80% casino business for stability.

Mike Hickey of The Benchmark Company LLC commented on the impressive EBITDA margins and asked if a 30% margin is achievable long-term. He also requested a comparison of the company's success in Botswana versus its challenges in Nigeria, and whether Nigeria could become a growth driver by 2026.

Answer

CEO Neal Menashe stated that a 30% margin is possible with scale, but guided toward a 25-26% range as a more stable expectation. He attributed Botswana's success to having the right product and regulatory tailwinds, while acknowledging Nigeria is underperforming due to product issues. He expressed hope that with focused efforts, Nigeria could become a significant growth market for the company.

Mike Hickey asked about Cinemark's view on the impact of AI on out-of-home entertainment and film development, and specifically about Netflix as a potential theatrical partner, including the viability of a 45-day window.

Answer

Sean Gamble, President and CEO, expressed optimism for AI's potential to drive efficiencies and revenue growth within Cinemark (e.g., pricing optimization, app development) and to unlock new capabilities in content creation (e.g., visual effects, increased volume), while acknowledging IP and copyright risks. Regarding Netflix, he noted long-term optimism for them recognizing theatrical value but expressed apprehension due to past contradictory remarks. He views a 45-day window as a good target for balance but emphasized the need for clarification on whether it leads to transactional or SVOD release, and for firmer, long-standing assurances on windows, investment, and marketing.

Mike Hickey asked for Cinemark's perspective on the impact of AI, specifically whether it's seen as destructive or positive, and its potential role in film development to reduce costs and increase volume. He also sought Sean Gamble's view on Netflix as a potential theatrical partner, particularly regarding a 45-day window and the sincerity of their recent comments.

Answer

Sean Gamble, President and CEO, expressed optimism about AI's potential to drive efficiencies and revenue growth within Cinemark (e.g., pricing, showtime optimization, app development, HR, guest services). For content creation, he sees AI unlocking new capabilities in visual effects, pre-vis, and efficiencies, potentially increasing film volume and quality, while emphasizing the importance of protecting IP. Regarding Netflix, Mr. Gamble noted long-standing optimism that they would recognize theatrical exhibition's value. He found recent comments encouraging but expressed apprehension due to past contradictory remarks, seeking firmer assurances. He views a 45-day window as a good target but stressed the need for clarity on whether it leads to transactional or SVOD offerings, and for long-standing commitments on investment and marketing.

Mike Hickey asked for the performance outlook for Latin America over the next few years and how the company plans to maximize the value of its Movie Club loyalty program.

Answer

CEO Sean Gamble expressed a positive outlook for Latin America, noting its recovery is pacing ahead of the U.S. due to strong consumer moviegoing behavior. Regarding Movie Club, he described it as a critical tool that drives loyalty, increases moviegoing frequency and concession spend, and enhances guest satisfaction through value and personalization. He confirmed the program continues to grow at a healthy pace, now representing 25% of domestic box office.

Mike Hickey asked about the marketing strategy for GTA 6, questioning how much marketing is truly necessary given the massive pent-up demand and potential leverage from prior releases. He also inquired about Take-Two's perspective on affordability concerns within the video game space, considering rising console and software prices, and how the company plans to provide value to consumers.

Answer

CEO Strauss Zelnick stated that despite huge consumer anticipation for GTA 6, Take-Two will not 'sit back and relax,' promising astonishing creativity from Rockstar's marketing team. On affordability, Zelnick emphasized Take-Two's long-standing commitment to delivering more value than charged, noting that interactive entertainment is becoming more affordable on a real basis due to extensive engagement hours. He highlighted democratizing access, offering free mobile experiences, and providing deep value for console titles.

Mike Hickey asked about the marketing strategy for GTA 6, considering its massive pent-up demand, and Take-Two's thoughts on affordability in the video game space, including console prices and software inflation.

Answer

CEO Strauss Zelnick acknowledged the huge consumer anticipation for GTA 6 but assured that Rockstar's marketing team would bring 'astonishing creativity' to its efforts. On affordability, he emphasized Take-Two's commitment to delivering 'way more value than what we charge,' noting that interactive entertainment is becoming more affordable on a real basis due to long engagement hours and declining frontline prices over 20 years.

Mike Hickey asked about the Rockstar team's morale and culture in light of the GTA VI delay, inquiring how they are handling potential challenges in motivation. He also sought clarification on Rockstar's definition of 'polish' and the team's focus between polish and other content ideas for the GTA ecosystem.

Answer

Strauss Zelnick, Chairman and CEO, stated he could not discuss internal studio workings but emphasized Rockstar's extraordinary culture of seeking perfection, evidenced by Metacritic scores typically over 95 and GTA V's longevity. He acknowledged that delays can bring disappointment but highlighted the team's resilience, commitment to learning, and continuous drive to exceed expectations, which defines their current focus.

Mike Hickey from The Benchmark Company expressed concern about a potential economic slowdown and asked how it could impact Take-Two's business.

Answer

Chairman and CEO Strauss Zelnick shared his view of a likely 'soft landing' for the economy. He acknowledged that in tougher economic times, consumers become more selective, leading to a 'flight to quality.' He positioned Take-Two's long-standing strategy of focusing on creating the highest-quality entertainment as a key strength that should allow the company to perform well even in a more challenging macro environment.

Mike Hickey asked if prediction markets could drive legalization in sticky U.S. states and if there are concerns about them competing with existing partners, also inquiring about the vitality of the integrity business given recent issues in sports.

Answer

Mark Locke (CEO) viewed prediction markets as a potential TAM expansion opportunity, emphasizing the growing need for official Genius data, marks, logos, and integrity solutions, while closely monitoring regulatory evolution. Regarding integrity, Mark Locke (CEO) reiterated the company's long-standing focus on official data as a 'one source of truth' for market transparency, as predicted.

Mike Hickey inquired if prediction markets could drive legalization in sticky U.S. states and if they pose a competitive threat to existing partners. He also asked about the vitality of Genius Sports' integrity business in light of recent issues like the NBA and UFC scandals.

Answer

Mark Locke (CEO) stated that anything expanding the total addressable market (TAM) is positive, and Genius Sports is well-placed with official data, marks, logos, and integrity solutions, while closely monitoring regulatory evolution. Regarding integrity, Mark Locke reiterated its foundational importance, emphasizing the need for official data and transparency, which Genius Sports has championed since its U.S. market entry.

Mike Hickey from The Benchmark Company LLC asked about the skill set sought in the new CFO, Brian Castellani, and how his background will benefit Genius. He also requested an update on in-game betting growth expectations for the upcoming NFL season and the potential for upside driven by BetVision.

Answer

Mark Locke (Co-Founder, CEO & Director) highlighted the new CFO's extensive media background at Warner, Disney, and ESPN, which aligns with the company's strategic focus and shift towards the US. Nicholas Taylor (CFO) addressed the in-game betting question, stating that while BetVision is at the vanguard of this product-led evolution, the current guidance remains relatively conservative, acknowledging that significant acceleration in adoption this season could present an upside to their forecast.

Mike Hickey questioned the apparent disconnect between the prior strategic plan's target of $1 billion in adjusted EBITDA and the new CEO's compensation package tied to $675 million, asking if $675 million is the new official target.

Answer

CEO Tarun Lal confirmed that $675 million is the new adjusted EBITDA target, expressing confidence that it is achievable within the committed timeline. He was not aware of the specific timeline for the previous $1 billion target.

Mike Hickey questioned the apparent disconnect between the original strategic plan's target of $1 billion in adjusted EBITDA and Tarun Lal's compensation package tied to $675 million, asking if $675 million is the new target.

Answer

Tarun Lal (CEO) stated he was not aware of the timeline for the $1 billion target but confirmed that $675 million is the new, achievable EBITDA target for the team.

Mike Hickey questioned the apparent disconnect between the original strategic plan's target of $1 billion in adjusted EBITDA and the CEO's compensation package tied to a near-term achievement of $675 million. He asked if $675 million is the new target.

Answer

Tarun Lal, CEO & Board Director, stated he was not aware of the timeline for the $1 billion target but confirmed confidence in hitting the $675 million target within the committed timeline. He explicitly stated that, from his and the team's perspective, $675 million is the new EBITDA target.

Mike Hickey from The Benchmark Company LLC questioned the expected pace of traffic decay from AI's impact on search and the company's ability to offset it. He also asked if there were cost optimization synergies to be realized across the growing portfolio.

Answer

Co-Founder and CEO Charles Gillespie stated that much of the effect from AI on search has already been seen and that the company is successfully ramping up traffic from other channels to compensate. Regarding costs, he asserted that now is not the time for optimization. Instead, the company is in "investment mode," hiring and allocating capital to build new capabilities and capture growth opportunities.

Mike Hickey asked for an update on the iGaming platform in Brazil and its scalability, and also sought a perspective on the overall health of the U.S. gaming market in Q2 and early Q3.

Answer

CEO Carsten Koerl detailed strong progress in Brazil, with integrations covering 50 of 70 licensed operators. He described Brazil as a test market for their "360-degree flywheel" connecting sports betting with iGaming. Regarding the U.S., he noted a continued strong adaptation and growth trend, and while careful about Q3 predictions, he suggested that early-season surprises could lead to stronger hold numbers for operators.

Mike Hickey asked about management's view on state-level regulatory pressures against sweepstakes and how the company gets comfortable investing amid this risk. He also questioned the potential impact of user acquisition spending on near-term EBITDA and whether the company's balance sheet is strong enough to manage the transition.

Answer

Andrew Pascal, Co-Founder, Chairman, & CEO, stated that the company manages regulatory risk by assessing it on a state-by-state basis and dynamically allocating capital. He explained that while UA spending for sweepstakes will impact near-term EBITDA during its growth phase, it is a necessary investment to capture market share, targeting a 4-6 month return horizon. He affirmed that the company's strong cash position and debt-free balance sheet provide ample capital to aggressively fund both the sweepstakes and Tetris growth initiatives.

Mike Hickey of The Benchmark Company asked for EA's perspective on the competitive landscape for Battlefield versus Call of Duty and whether a new casual soccer game poses a threat to EA SPORTS FC.

Answer

CEO Andrew Wilson expressed strong confidence in Battlefield's competitive positioning, stating it aligns with fan expectations. Regarding soccer competition, he welcomed it, saying it makes EA better, but feels very secure in FC's market position due to its extensive licenses, global reach, and development team strength.

Mike Hickey of The Benchmark Company LLC asked about confidence in growing the global box office (GBO) in 2026 given the strong film slate visibility, and questioned if the current installation momentum is sustainable or merely pulling forward demand.

Answer

CEO Richard Gelfond expressed "incredible confidence" in 2026 growth, citing a nearly full slate of blockbusters. On installations, he stated it is both: exhibitors are accelerating installs for the upcoming slate, while a record pace of new signings is simultaneously replenishing the backlog, ensuring continued momentum.

Mike Hickey of The Benchmark Company questioned the revenue level required to achieve the company's target of positive adjusted EBITDA in Q4. He also sought more details on the market opportunity for the LANduel product and the user acquisition and LTV dynamics of cross-selling sportsbook offerings to the Lucky Dino casino player base.

Answer

CFO Dan Marks estimated that a quarterly revenue run-rate in the low-to-mid $30 million range would be needed to reach positive adjusted EBITDA in Q4. CEO Grant Johnson described LANduel as a skill-based betting product with strong interest from traditional casinos. Regarding cross-selling, Johnson and Marks highlighted the minimal acquisition cost and the potential for a cross-sold customer to be worth up to two times more in ARPU, citing the successful conversion of 40-45% of SportNation sportsbook players to casino.

Mike Hickey from Benchmark Company asked for an update on the total addressable market (TAM) for U.S. esports, the company's perspective on the opportunity, and the status of the LANduel platform.

Answer

CEO & Chairman Grant Johnson estimated the company's total addressable market across iGaming and esports to be approximately $170-$180 billion. He noted that partnerships with pro sports teams allow them to target the broader gamer demographic, not just esports fans. He also confirmed that the LANduel software is complete and awaiting final approval for an inaugural launch event in Atlantic City.