United Parks & Resorts Inc. (SEAS)·Q3 2023 Earnings Summary

Executive Summary

• Q3 2023 revenue declined 3.0% year over year to $548.2M with diluted EPS of $1.92 vs. $1.99 last year; Adjusted EBITDA fell 2.8% to $266.4M as adverse weather and admission mix pressured attendance and admissions per-capita, partially offset by continued strength in in-park per-capita spending .
• Management emphasized record in-park per-capita spending ($34.85, +1.6% YoY) and cost discipline that improved Adjusted EBITDA margin YoY, despite peak-season weather headwinds .
• October per-capita spending ran up low-single-digits and 2024 revenue bookings are trending up double-digits for groups and Discovery Cove, with a new pass benefits program expected to support the 2024 pass base .
• Drivers to watch: execution on cost initiatives and venue refreshes, cadence of 2024 ride openings, and follow-through on double-digit bookings strength; weather normalization would be a positive catalyst while sustained mix shifts pressuring admissions per-capita are the key risk .

What Went Well and What Went Wrong

• What Went Well

  • In-park per-capita spending rose to a record $34.85 (+1.6% YoY), marking the 14th consecutive quarter of growth, reflecting pricing initiatives and in-park offering investments .
  • Management cited improved Adjusted EBITDA margin YoY in Q3 driven by cost initiatives and tight expense control .
  • Forward indicators: October total per-capita spending up low-single-digits; 2024 revenue bookings trending up double-digits in groups and Discovery Cove; launch of best pass benefits program positions pass sales/base into 2024 .

• What Went Wrong

  • Attendance declined 2.8% to ~7.1M as “unusual and significantly adverse weather” (heat/rain) impacted most markets during peak periods; admissions per-capita fell 1.6% on admissions product mix while revenue decreased 3.0% YoY .
  • Net income fell 8.2% YoY to $123.6M as revenue softness and higher interest expense (vs. prior quarters) weighed on earnings .
  • Construction delays/closures at certain in-park venues and weather-related disruptions pressured in-park performance despite pricing actions .

Financial Results

KPIs

Revenue Mix (Q3 2023)

Drivers and context

• Weather/mix: Attendance fell ~207k and admissions per-capita declined on product mix, partly offset by higher realized prices; in-park per-capita improved on pricing, partially offset by weather and construction-related disruptions .
• Costs/margin: Cost initiatives and expense discipline supported YoY Adjusted EBITDA margin improvement despite lower revenues, per management .
• Cash/Capex: Q3 operating cash flow $163.6M; Q3 capex $88.6M; Q3 free cash flow $74.9M; YTD capex up 55% to $234.2M (core + expansion/ROI) .

Guidance Changes

Note: The company did not issue numerical revenue/EPS/EBITDA guidance for Q4/FY 2023 within the Q3 materials; commentary focuses on bookings, pass program, and 2024 attractions .

Earnings Call Themes & Trends

Management Commentary

• “We are particularly pleased to continue to see strong results from our focus, efforts and investment in our in-park offerings as we grew in-park per capita spending for the 14th consecutive quarter to a record level during the quarter… Our relentless focus on cost management also continued to deliver as we improved adjusted EBITDA margin on a year-over-year basis for the quarter.” — Marc Swanson, CEO .
• “Looking beyond the holiday season into 2024, we are pleased to see 2024 revenue bookings trending up double-digit percentage ahead of prior year for both 2024 groups and our Discovery Cove property. In addition, we recently launched our best pass benefits program ever…” .
• “Our attendance levels are still below the total attendance levels we achieved in 2019 and well below our historical high attendance of approximately 25 million guests recorded in 2008… we are planning new initiatives for next year that will make us an even stronger, more profitable and more resilient business…” .

Q&A Highlights

• October per‑capita and 2024 mix: Management stated both admissions and in‑park per‑capita were positive in October, producing low-single-digit total per‑capita growth; reiterated strategy to grow admissions pricing a few points, increase attendance modestly, and manage costs to drive EBITDA, alongside venue refreshes to support per‑cap growth .
• Booking cadence and 2024 attractions: Management emphasized double‑digit growth in 2024 revenue bookings and a robust slate of 2024 ride openings to support volume and per‑cap spend .
• Cost initiatives: Continued focus on cost management/tactical initiatives expected to carry into 2024, underpinning margin resilience even amid weather and mix variability .
• Venue refreshes and operational execution: The company expects venue refresh investments to generate solid returns and support in‑park spending momentum as construction‑related disruptions abate .

Estimates Context

• Wall Street consensus (S&P Global) for Q3 2023 EPS and revenue was unavailable via the S&P Global tool at the time of analysis; therefore, explicit comparisons versus consensus could not be provided. If needed, we can refresh and append comparisons when the mapping issue is resolved.
  • Tool error details: Missing CIQ mapping for ticker 'SEAS' prevented retrieval of “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and estimate counts for Q3 2023.

Key Takeaways for Investors

• Per‑cap momentum intact: In‑park per‑cap hit a record again (+1.6% YoY) with October per‑cap up low‑single‑digits; this supports the pricing/merchandising leg of the thesis even as admissions per‑cap faced mix pressure .
• Margin discipline a differentiator: Despite revenue softness, management improved Adjusted EBITDA margin YoY and is executing cost initiatives into 2024, providing a buffer against volatile weather/mix .
• Forward indicators positive: Double‑digit 2024 revenue bookings growth (groups/Discovery Cove) and a new pass program should underpin volume and pass base in 2024 .
• Watch operational execution: Timely opening of 2024 attractions and completion of venue refreshes are near‑term drivers for attendance and in‑park monetization .
• Weather remains the swing factor: Peak‑season weather adversely impacted Q3 attendance; normalization could unlock upside, while continued volatility keeps risk elevated .
• Capital intensity is rising by design: YTD capex rose 55% with both core and ROI/expansion projects; returns on these investments are a key proof‑point for the 2024–2025 story .
• Setup: With per‑cap momentum, bookings strength, and cost control, the narrative into 2024 hinges on execution and weather; traders should monitor updates on pass sales, bookings cadence, ride opening timelines, and early‑season attendance reads .

Sources

• Q3 2023 8‑K/Press Release: Results, KPIs, commentary, capex/FCF, and non‑GAAP reconciliations .
• Q2 2023 8‑K/Press Release: Trend context on weather, group bookings, venue closures/construct delays, per‑cap and EBITDA .
• Q1 2023 8‑K/Press Release: Early‑year per‑cap records, pricing power, and weather commentary .
• Q3 2023 Earnings Call Transcript (public sources): InsiderMonkey, Seeking Alpha, MarketScreener for quotes/context .
• PR Newswire publication of Q3 press release (duplicate of EX‑99.1) .