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National CineMedia, Inc. (NCMI)·Q3 2024 Earnings Summary

Executive Summary

  • Revenue of $62.4M and Adjusted OIBDA of $8.8M both exceeded company guidance (revenue $56–$58M; OIBDA $6–$8M), despite lower YoY attendance and mix headwinds; diluted EPS was $(0.04) .
  • National revenue mix: 59% upfront and 41% scatter; scatter revenue up 35% YoY with strong category diversification (tech >10x, retail/apparel +123%, pharma +59%) .
  • Q4 2024 guidance: revenue $82–$86M and Adjusted OIBDA $28–$30M; management flagged tough YoY comp (Taylor Swift in 4Q23) and heavier G/PG mix in December .
  • Strategic catalysts: growth in Platinum ad unit (2.4x YoY), expansion of programmatic and self-serve (self-serve sales +96% QoQ), and NCMx measurement driving 47% of sales YTD; Investor Day announced for Spring 2025 .
  • S&P Global Wall Street consensus estimates were unavailable due to a request limit; comparisons are anchored to company guidance and reported results (Values would normally be retrieved from S&P Global).

What Went Well and What Went Wrong

What Went Well

  • Exceeded guidance: revenue $62.4M vs $56–$58M and Adjusted OIBDA $8.8M vs $6–$8M; management emphasized “fourth consecutive quarter of consistent results” and scatter strength .
  • Premium units and formats: Platinum sales up 2.4x YoY; new 4DX brand spot partnership extends experiential marketing and attention capture .
  • Measurement and retargeting: NCMx drove 47% of sales YTD; Boomerang and Boost improved engagement (Boomerang +20% post-theater engagement, Boost 3x audience reach) .

What Went Wrong

  • National revenue down 10% YoY to $46.8M due to lower attendance and a July slate skewed to G/PG ratings; national CPMs down low-single digits and revenue per attendee down 3% in Q3 .
  • Adjusted OIBDA margin compressed to 14.1% from 16.2% YoY; total advertising revenue declined to $62.4M from $69.6M (NCM LLC) with attendance down 8% .
  • Local/regional revenue decreased to $11.4M from $12.9M YoY, reflecting attendance pressure and prior government/travel contracts not returning .

Financial Results

Consolidated Headline Metrics

MetricQ3 2023Q2 2024Q3 2024
Revenue ($USD Millions)$24.7 $54.7 $62.4
Operating Loss ($USD Millions)$(12.3) $(9.3) $(7.5)
Diluted EPS ($USD)$2.89 $(0.09) $(0.04)

NCM LLC Operational Metrics

MetricQ3 2023Q2 2024Q3 2024
Total Advertising Revenue ($USD Millions, excl. beverage)$69.6 $54.7 $62.4
National Advertising Revenue ($USD Millions)$52.0 $41.7 $46.8
Local & Regional Advertising Revenue ($USD Millions)$12.9 $9.8 $11.4
Beverage Concessionaire Revenue ($USD Millions)$4.7 $3.2 $4.2
Adjusted OIBDA ($USD Millions)$11.3 $7.6 $8.8
Adjusted OIBDA Margin (%)16.2% 13.9% 14.1%

KPIs

KPIQ3 2023Q2 2024Q3 2024
Total Attendance (Millions)131.7 92.8 121.6
ESA Party Attendance (Millions)77.8 57.6 74.3
Total Screens (Period End)18,489 18,279 18,141
Capital Expenditures ($USD Millions)$0.6 $1.0 $1.0
Unlevered Free Cash Flow ($USD Millions)N/A$6.7 $(2.4)

Q3 2024 vs Guidance and Estimates

MetricGuidance (Q3 2024)Actual (Q3 2024)Street Consensus
Revenue ($USD Millions)$56–$58 $62.4 Unavailable – S&P Global request limit exceeded
Adjusted OIBDA ($USD Millions)$6–$8 $8.8 Unavailable – S&P Global request limit exceeded
Diluted EPS ($USD)N/A$(0.04) Unavailable – S&P Global request limit exceeded

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ActualChange
Revenue ($USD Millions)Q3 2024$56–$58 $62.4 actual Raised (beat guidance)
Adjusted OIBDA ($USD Millions)Q3 2024$6–$8 $8.8 actual Raised (top-end beat)
Revenue ($USD Millions)Q4 2024N/A$82–$86 New
Adjusted OIBDA ($USD Millions)Q4 2024N/A$28–$30 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2024)Trend
ProgrammaticLaunched Feb; 44 unique advertisers in Q2; June highest month; pipeline expanding Building self-serve and programmatic into meaningful contributors; AI feature added; automation 72% Expanding reach and efficiency
Self-ServeQ2: 44 unique advertisers; orders +157% QoQ; sales +141% QoQ Biggest quarter since launch; 59 unique advertisers; sales +96% QoQ Accelerating adoption
Platinum Ad UnitBest Q1 since 2019; >$2.5M commitments Sales up 2.4x YoY; key driver of advertiser interest Strong premium mix
Scatter vs UpfrontQ2 scatter helped offset attendance; 78% national revenue upfront 59% upfront/41% scatter; scatter up 35% YoY; advertisers buying closer to air date Shift toward scatter
NCMx Measurement43% of sales tied to NCMx (Q2); QSR foot traffic +27% 47% of YTD sales tied to NCMx; Boomerang +20% engagement; Boost 3x reach Increasing data-driven outcomes
Audience Mix & AttendanceQ2 attendance down 31% YoY; national revenue per attendee $0.45 highest since 2016 July skew to G/PG reduced monetization; attendance down 8% YoY Mix headwinds impacting CPMs
Premium Formats/ExperientialHolographic activation; sponsorship growth First-ever 4DX ad spot partnership with Xfinity/Regal Innovative formats broaden demand

Management Commentary

  • “NCM delivered its fourth consecutive quarter of consistent results, achieving $62.4 million in revenue... while attracting new, category-leading advertisers... Looking ahead to 2025, there is a lot to be excited about” — CEO Tom Lesinski .
  • “Revenue was $62.4 million, exceeding our guidance… adjusted OIBDA was $8.8 million… 59% national upfront, 41% scatter… scatter revenue up 35% YoY” — CFO Ronnie Ng .
  • “Platinum… showing impressive signs of growth with sales up 2.4x compared to the third quarter of 2023” — CEO .
  • “Self-serve had its biggest quarter since launch, with sales up 96% quarter-over-quarter… added a new AI feature… 72% automation rate” — CEO .
  • “We will be hosting an Investor Day in the spring of 2025 in New York City” — CEO .

Q&A Highlights

  • Upfront dynamics: pricing stable YoY; trend shift toward buying closer to scatter; NCM performing well relative to streaming CPM decay reported in trade media .
  • Premium formats ad package: strong momentum; likely multiple advertisers per inventory window rather than exclusive; update expected next quarter .
  • Q4 guidance color: tough comp from Taylor Swift (Oct 2023); heavier G/PG mix expected in December; attendance growth but margin compression vs prior year .
  • Operating leverage: room to improve revenue per attendee and margins in 2025; fixed screen fees supportive .
  • Capital allocation: buybacks prioritized; small strategic investments ($3M total) in advertising-related equity and on-screen inventory-for-equity deals .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2024 EPS and revenue was unavailable due to a daily request limit; as a result, comparisons are anchored to company guidance and reported results (Values would normally be retrieved from S&P Global).
  • Given beats vs internal guidance, Street models may need to reflect stronger scatter performance, accelerating premium unit sales, and 4Q mix headwinds (Taylor Swift comp, G/PG skew) with revenue $82–$86M and OIBDA $28–$30M .

Key Takeaways for Investors

  • Beat on internal guidance with $62.4M revenue and $8.8M Adjusted OIBDA; continued execution despite attendance and mix pressures — supportive for near-term sentiment .
  • Premium inventory (Platinum) and experiential formats (4DX ad spot) are expanding pricing power and attention metrics; expect sustained advertiser interest in premium placements .
  • Programmatic and self-serve are scaling (self-serve +96% QoQ; automation 72%), broadening demand channels and improving utilization — a medium-term margin lever .
  • NCMx-driven outcomes underpin category diversification (tech, retail/apparel, pharma) and reinforce ROI narratives; 47% of sales tied to measurement YTD .
  • Q4 guide acknowledges tough comp and mix headwinds; watch revenue per attendee and margin trajectory into 2025’s normalized slate .
  • Share repurchases ($12.8M to date; avg price $5.07) and minimal debt ($10M) provide capital flexibility while investing in innovation .
  • 2025 slate breadth (Superman, Avatar 3, Mission: Impossible 8, Captain America) and Investor Day in Spring 2025 are likely narrative catalysts for multiple expansion if monetization improves .