Cinemark Holdings, Inc.: Form 10-Q for the period ended Jun 30, 2025
Filed with the SEC on Aug 1, 2025 and accepted by EDGAR at Aug 1, 2025, 06:45 ET.
Management's discussion and analysis
As filed, 78,201 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes and schedules included elsewhere in this report. Amounts included in the following discussion, except for theaters, screens, average screens, average ticket price and concessions revenue per patron, are rounded in millions.
We are a leader in the theatrical exhibition industry, with theaters in the U.S., Brazil, Argentina, Chile, Colombia, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, and Paraguay. As of June 30, 2025, we managed our business under two reportable segments – U.S. markets and international markets. See Note 15 to the condensed consolidated financial statements.
The success of the theatrical exhibition industry is contingent upon several key factors, including the volume of new film content available, which is continuing to recover from the effects of the COVID-19 pandemic and most recently the writers’ and actors’ guilds strikes (the “Hollywood strikes”), as well as the box office performance of new film content released, the duration of the exclusive theatrical release window, and evolving consumer behavior with competition from other forms of in-and-out-of-home entertainment.
Revenue and Expense
We generate revenue primarily from filmed entertainment box office receipts and concession sales, with additional revenue from screen advertising, screen rental and other revenue streams, such as transactional fees, studio trailer placements, meeting rentals, electronic video games and other games located in some of our facilities. Filmed entertainment box office receipts include traditional content from studios as well as alternative entertainment, such as foreign and faith-based films, concert events and other special events in our theaters. NCM provides our domestic theaters with various forms of in-theater advertising. Our Flix Media subsidiaries provide screen advertising and alternative content for our international circuit and for other international exhibitors.
Films leading the box office during the six months ended June 30, 2025 included new releases A Minecraft Movie, Lilo & Stitch, Sinners, How to Train Your Dragon, Captain America: Brave New World, Thunderbolts*, Mission: Impossible - The Final Reckoning, and Final Destination: Bloodlines, as well as the carryover of the 2024 release Mufasa: The Lion King.
Film rental costs are variable in nature and fluctuate with our admissions revenue. Film rental costs as a percentage of revenue are generally higher for periods in which more blockbuster films are released. Advertising costs, which are expensed as incurred, are primarily related to expanding our customer base, increasing the frequency of visits and growing loyalty. These expenses vary depending on the timing and length of such campaigns.
Concession supplies expense is variable in nature and fluctuates with our concession revenue and also product mix. Inflationary pressures and tariffs continue to impact product costs in the near term and may impact product costs going forward. We source products from a variety of partners around the world to minimize supply chain interruptions and manage costs, wherever possible.
Although salaries and wages include a fixed cost component (i.e., the minimum staffing costs to operate a theater facility during non-peak periods), salaries and wages tend to move in relation to anticipated changes in attendance. Staffing levels may vary based on the amenities offered at each location, such as full-service restaurants, bars or expanded food and beverage options. In certain international locations, staffing levels are also subject to local regulations, including minimum hour requirements. Labor market conditions and inflationary pressures have driven increases in wage rates across our labor base and similar increases may continue in the future.
Facility lease expense is primarily a fixed cost at the theater level as most of our facility leases require a fixed monthly minimum rent payment. Certain leases are subject to percentage rent only, while others are subject to percentage rent in addition to their fixed monthly rent if a target annual performance level is achieved. Facility lease expense as a percentage of revenue is also affected by the number of theaters under operating leases, the number of theaters under finance leases and the number of owned theaters.
Utilities and other costs include both fixed and variable costs and primarily consist of utilities, property taxes, property insurance, janitorial costs, credit card fees, third party ticket sales commissions, gift card commissions, repairs and maintenance expenses, security services, and projection and sound equipment maintenance expenses.
General and administrative expenses to support the overall management of the Company are primarily fixed in nature. Fixed expenses include salaries, wages and benefits costs for our corporate office personnel, facility expenses for our corporate and other offices, software license and maintenance costs and audit fees. General and administrative expenses include some variable expenses such as incentive compensation, consulting and legal fees, supplies, and other costs that are not specifically associated with the operations of our theaters.
Recent Developments
The One Big Beautiful Bill Act ("OBBBA") was signed into law on July 4, 2025. The OBBBA makes permanent certain expiring provisions of the Tax Cuts and Jobs Act and restores favorable tax treatment for certain business provisions including 100% bonus depreciation and the business interest expense limitation. The Company assesses the likelihood that it will be able to recover its deferred tax assets against future sources of taxable income and reduces the carrying amounts of deferred tax assets by recording a valuation allowance if, based on all available evidence, the Company believes it is more likely than not that all or a portion of such assets will not be realized. There is a possibility that the changes in tax law within the OBBBA will result in sufficient positive evidence to reach a conclusion that a portion of the valuation allowance in the U.S. will no longer be required. The Company is currently assessing the impact of the OBBBA on its consolidated financial statements.
Results of Operations
The following table sets forth, for the periods indicated, the amounts for certain items reflected in the operating income of Holdings along with each of those items as a percentage of revenue.
| Operating data (in millions): Revenue | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
|---|---|---|---|---|
| Admissions | $467.1 | $365.8 | $731.2 | $655.6 |
| Concession | 377.7 | 292.9 | 588.1 | 517.1 |
| Other | 95.7 | 75.5 | 161.9 | 140.7 |
| Total revenue | $940.5 | $734.2 | $1,481.2 | $1,313.4 |
| Cost of operations | ||||
| Film rentals and advertising | 270.8 | 204.0 | 412.2 | 358.3 |
| Concession supplies | 73.1 | 56.6 | 117.4 | 100.6 |
| Salaries and wages | 109.4 | 97.3 | 199.7 | 184.2 |
| Facility lease expense | 82.9 | 81.5 | 161.2 | 158.8 |
| Utilities and other | 124.7 | 104.7 | 230.4 | 205.1 |
| General and administrative expenses (1) | 54.1 | 55.7 | 108.6 | 104.6 |
| Depreciation and amortization | 49.4 | 49.8 | 98.9 | 99.2 |
| Impairment of long-lived and other assets | 1.6 | — | 1.6 | — |
| Loss (gain) on disposal of assets and other | 1.0 | 1.7 | (3.1) | 2.1 |
| Total cost of operations (1) | 767.0 | 651.3 | 1,326.9 | 1,212.9 |
| Operating income (1) | $173.5 | $82.9 | $154.3 | $100.5 |
| Operating data as a percentage of total revenue: | ||||
| Revenue | ||||
| Admissions | 49.6% | 49.8% | 49.4% | 49.9% |
| Concession | 40.2% | 39.9% | 39.7% | 39.4% |
| Other | 10.2% | 10.3% | 10.9% | 10.7% |
| Total revenue | 100.0% | 100.0% | 100.0% | 100.0% |
| Cost of operations (2) | ||||
| Film rentals and advertising (2) | 58.0% | 55.8% | 56.4% | 54.7% |
| Concession supplies (2) | 19.4% | 19.3% | 20.0% | 19.5% |
| Salaries and wages | 11.6% | 13.3% | 13.5% | 14.0% |
| Facility lease expense | 8.8% | 11.1% | 10.9% | 12.1% |
| Utilities and other | 13.3% | 14.3% | 15.6% | 15.6% |
| General and administrative expenses | 5.8% | 7.6% | 7.3% | 8.0% |
| Depreciation and amortization | 5.3% | 6.8% | 6.7% | 7.6% |
| Impairment of long-lived and other assets | 0.2% | —% | 0.1% | —% |
| Loss (gain) on disposal of assets and other | 0.1% | 0.2% | (0.2)% | 0.2% |
| Total cost of operations | 81.6% | 88.7% | 89.6% | 92.3% |
| Operating income | 18.4% | 11.3% | 10.4% | 7.7% |
| Average screen count (3) | 5,646 | 5,708 | 5,647 | 5,710 |
(1) The only difference between components of operating income for Holdings, as presented above, and those of CUSA is incremental general and administrative expense recognized by Holdings. The following table sets forth, for the periods indicated, the amounts for general and administrative expense, total cost of operations and operating income of CUSA:
| Operating data (in millions): Cost of operations | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
|---|---|---|---|---|
| General and administrative expenses | $53.3 | $54.7 | $106.8 | $102.7 |
| Total cost of operations | $766.2 | $650.3 | $1,325.1 | $1,211.0 |
| Operating income | $174.3 | $83.9 | $156.1 | $102.4 |
(2) All costs are expressed as a percentage of total revenue, except film rentals and advertising, which are expressed as a percentage of admissions revenue, and concession supplies, which are expressed as a percentage of concession revenue.
(3) Average screen count is calculated based on the average of month-end screen counts.
Three months ended June 30, 2025 (the “second quarter of 2025”) versus the three months ended June 30, 2024 (the “second quarter of 2024”)
Second quarter of 2025 - The North American Industry box office generated approximately $2.7 billion during the second quarter of 2025, which included new releases A Minecraft Movie, Lilo & Stitch, Sinners, How to Train Your Dragon, Thunderbolts*, Mission: Impossible - The Final Reckoning and Final Destination: Bloodlines.
Second quarter of 2024 - The North American Industry box office was approximately $2.0 billion during the 2024 period, which included new releases Inside Out 2, Kingdom of the Planet of the Apes, Bad Boys: Ride or Die, Godzilla x Kong: The New Empire, IF and The Fall Guy.
Revenue. The table below, presented by reportable segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenue.
| U.S. Reportable Segment Three Months Ended June 30, 2025 | 2024 | % Change | International Reportable Segment Three Months Ended June 30, 2025 | 2024 | % Change | Constant Currency (3) 2025 | % Change | Consolidated Three Months Ended June 30, 2025 | 2024 | % Change | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Admissions revenue | $383.4 | $287.4 | 33.4% | $83.7 | $78.4 | 6.8% | $92.3 | 17.7% | $467.1 | $365.8 | 27.7% |
| Concession revenue | 307.6 | 231.4 | 32.9% | 70.1 | 61.5 | 14.0% | 76.7 | 24.7% | 377.7 | 292.9 | 29.0% |
| Other revenue (1) | 68.3 | 53.2 | 28.4% | 27.4 | 22.3 | 22.9% | 30.7 | 37.7% | 95.7 | 75.5 | 26.8% |
| Total revenue (1) | $759.3 | $572.0 | 32.7% | $181.2 | $162.2 | 11.7% | $199.7 | 23.1% | $940.5 | $734.2 | 28.1% |
| Attendance | 36.9 | 29.1 | 26.8% | 21.0 | 20.9 | 0.5% | 57.9 | 50.0 | 15.8% | ||
| Average ticket price (2) | $10.39 | $9.88 | 5.2% | $3.99 | $3.75 | 6.4% | $4.40 | 17.3% | $8.07 | $7.32 | 10.2% |
| Concession revenue per patron (2) | $8.34 | $7.95 | 4.9% | $3.34 | $2.94 | 13.6% | $3.65 | 24.1% | $6.52 | $5.86 | 11.3% |
(1) U.S. reportable segment revenue includes eliminations of intercompany transactions with the international reportable segment. See Note 15 to our condensed consolidated financial statements.
(2) Average ticket price is calculated as admissions revenue divided by attendance. Concession revenue per patron is calculated as concession revenue divided by attendance.
(3) Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2024. We translate the results of our international reportable segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign currency exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our international reporting segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.
- U.S. Attendance increased 26.8% to 36.9 million patrons during the second quarter of 2025 compared with 29.1 million patrons during the second quarter of 2024 primarily driven by a film slate with stronger consumer appeal and the enhanced scale of content released during the second quarter of 2025. Average ticket price increased 5.2% to $10.39 during the second quarter of 2025 compared with $9.88 during the second quarter of 2024 primarily driven by strategic pricing initiatives and, to a lesser extent, favorable format and ticket type mix. Concession revenue per patron increased 4.9% to $8.34 during the second quarter of 2025 compared with $7.95 during the second quarter of 2024 primarily driven by strategic pricing actions, a higher mix of merchandise and increased incidence rates. Other revenue for the second quarter of 2025 increased 28.4% to $68.3 million compared with $53.2 million during the second quarter of 2024 primarily due to higher attendance, which drove an increase in the variable components of other revenue such as transaction fees and promotional income, as well as higher gaming revenue.
- International. Attendance increased slightly to 21.0 million patrons for the second quarter of 2025 compared with 20.9 million patrons for the second quarter of 2024 reflecting a film slate with a comparable level of consumer appeal in our international markets year-over-year. Revenues, average ticket price and concession revenue per patron for our international segment, as reported, were unfavorably impacted by exchange rate fluctuations during the second quarter of 2025. In constant currency, the average ticket price increased 17.3% to $4.40 for the second quarter of 2025 primarily due to strategic and inflationary pricing actions and higher premium format mix. Similarly, in constant currency, concession revenue per patron increased 24.1% to $3.65 for the second quarter of 2025 primarily due to strategic and inflationary pricing actions and a higher mix of merchandise. Other revenue increased 37.7% in constant currency to $30.7 million for the second quarter of 2025 primarily due to inflationary impacts, higher screen advertising and loyalty program revenue, as well as increased transaction fees.
Cost of Operations. The table below, presented by reportable segment, summarizes our year-over-year theater operating costs.
| U.S. Reportable Segment Three Months Ended June 30, 2025 | 2024 | % Change | International Reportable Segment Three Months Ended June 30, 2025 | 2024 | % Change | Constant Currency (1) 2025 | % Change | Consolidated Three Months Ended June 30, 2025 | 2024 | % Change | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Film rentals and advertising | $227.7 | $164.6 | 38.3% | $43.1 | $39.4 | 9.4% | $47.8 | 21.3% | $270.8 | $204.0 | 32.7% |
| Concession supplies | $57.0 | $43.2 | 31.9% | $16.1 | $13.4 | 20.1% | $17.6 | 31.3% | $73.1 | $56.6 | 29.2% |
| Salaries and wages | $90.9 | $80.8 | 12.5% | $18.5 | $16.5 | 12.1% | $20.5 | 24.2% | $109.4 | $97.3 | 12.4% |
| Facility lease expense | $62.2 | $60.0 | 3.7% | $20.7 | $21.5 | (3.7)% | $22.4 | 4.2% | $82.9 | $81.5 | 1.7% |
| Utilities and other | $97.7 | $80.1 | 22.0% | $27.0 | $24.6 | 9.8% | $29.9 | 21.5% | $124.7 | $104.7 | 19.1% |
(1) Constant currency expense amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2024. We translate the results of our international reportable segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign currency exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our international reportable segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.
- U.S. Film rentals and advertising costs were 59.4% of admissions revenue for the second quarter of 2025 compared with 57.3% of admissions revenue for the second quarter of 2024 primarily due to a higher concentration of high-grossing films and increased marketing spend. Concession supplies expense for the second quarter of 2025 was 18.5% of concession revenue compared with 18.7% for the second quarter of 2024. The decrease in the concession supplies rate for the second quarter of 2025 was primarily driven by strategic pricing actions and higher rebates, partially offset by a higher mix of merchandise and inflationary pressures.
Salaries and wages increased 12.5% to $90.9 million for the second quarter of 2025 compared with $80.8 million for the second quarter of 2024 due to higher attendance, expanded operating hours, and wages and benefits inflation, partially offset by labor productivity initiatives. Facility lease expense, which is predominantly fixed in nature, increased 3.7% to $62.2 million primarily due to higher percentage rent. Utilities and other costs increased 22.0% to $97.7 million, driven by the increase in attendance, as many of these costs are variable or semi-variable in nature, primarily credit card fees and repairs and maintenance. An increase in real estate taxes and property and liability insurance also contributed to the increase.
- International. Our international operating costs, as reported, were favorably impacted by exchange rate fluctuations for the second quarter of 2025.
Film rentals and advertising costs were 51.5% of admissions revenue as reported for the second quarter of 2025 compared with 50.3% for the second quarter of 2024 due to a higher concentration of high-grossing films, the overall mix of films and increased marketing spend. Concession supplies expense was 23.0% of concessions revenue as reported for the second quarter of 2025 compared with 21.8% for the second quarter of 2024. The increase in the concession supplies rate was primarily driven by a higher mix of merchandise.
Salaries and wages, facility lease expense and utilities and other expenses, as reported, for the second quarter of 2025 benefited from favorable exchange rate fluctuations. In constant currency, salaries and wages increased to $20.5 million for the second quarter of 2025 primarily driven by wages and benefits inflation, as well as higher labor hours. Facility lease expense increased 4.2% to $22.4 million in constant currency for the second quarter of 2025 primarily due to inflationary increases. Utilities and other costs increased to $29.9 million in constant currency for the second quarter of 2025 due to inflationary pressures, higher screen advertising related commissions and higher credit card fees.
General and Administrative Expense. General and administrative expense for Holdings decreased to $54.1 million for the second quarter of 2025 compared with $55.7 million for the second quarter of 2024. General and administrative expense for CUSA decreased to $53.3 million for the second quarter of 2025 compared with $54.7 million for the second quarter of 2024. The decrease for both Holdings and CUSA is primarily due to lower share-based compensation and related payroll taxes, and the favorable impact of exchange rate fluctuations, partially offset by wages and benefits inflation, increased headcount and higher professional fees.
Depreciation and Amortization. Depreciation and amortization expense was $49.4 million for the second quarter of 2025 compared with $49.8 million for the second quarter of 2024.
Impairment of Long-Lived Assets. We recorded an asset impairment charge of $1.6 million during the second quarter of 2025 related to three international theaters that have not demonstrated sufficient recovery since reopening after the temporary COVID-19 related closures. We did not record any asset impairment charges during the second quarter of 2024.
Loss on Disposal of Assets and Other. A loss on disposal of assets and other of $1.0 million was recorded for the second quarter of 2025 compared with $1.7 million for the second quarter of 2024. Activity for the second quarter of 2025 was primarily related to the retirement of certain assets that were replaced as a result of theater remodels. Activity for the second quarter of 2024 was primarily related to the removal and disposal of equipment at closed theaters.
Interest Expense. Interest expense for Holdings, which includes amortization of debt issuance costs and original issue discount and amortization of accumulated losses for swap amendments, was $39.4 million during the second quarter of 2025 compared with $34.6 million during the second quarter of 2024. The interest expense attributable to CUSA was $33.4 million during the second quarter of 2025 compared with $28.6 million during the second quarter of 2024. The increase in interest expense was primarily due to the impact of the issuance of the 7.00% Senior Notes in July 2024 and the amortization of accumulated losses for amended swap agreements during the second quarter of 2025 versus the amortization of accumulated gains during the second quarter of 2024, partially offset by the redemption of the remaining principal amount of the 8.75% Secured Notes during May 2024, the extinguishment of the 5.875% Senior Notes during July 2024, and the term loan reprice transactions that reduced our margin rate by 50 bps in each of May and November 2024. See further discussion in Liquidity and Capital Resources below.
Interest Income. Interest income for Holdings was $11.2 million during the second quarter of 2025 compared with $12.5 million during the second quarter of 2024. The interest income attributable to CUSA was $11.2 million during the second quarter of 2025 compared with $9.4 million during the second quarter of 2024. The decrease in interest income for Holdings primarily reflects interest earned on a lower average cash and cash equivalents balance at the Cinemark Holdings, Inc. holding company level as a result of cash used in the first quarter of 2025 for the repurchase of common stock through the Company’s share repurchase program, while the increase at CUSA reflects interest earned on a higher average cash and cash equivalents balance. See further discussion of the Company’s share repurchase program in Liquidity and Capital Resources below.
Loss on Debt Amendments and Extinguishments. We recorded a loss on amendment and extinguishment of debt of $1.5 million during the second quarter of 2025 related to the amendment of our term loan, including the write-off of unamortized debt issuance costs and original issue discount, and legal and other fees paid. We recorded a loss on amendment and extinguishment of debt of $2.5 million during the second quarter of 2024 related to the amendment of our term loan and the redemption of the remaining 8.75% Secured Notes, including the write-off of unamortized debt issuance costs and original issue discount, and legal and other fees paid. See Note 7 to the condensed consolidated financial statements for information about our loss on debt amendments and extinguishments.
Foreign Currency Exchange Loss. We recorded a foreign currency exchange loss of $1.0 million during the second quarter of 2025 compared with $6.3 million during the second quarter of 2024. The loss on foreign exchange is primarily driven by the impact of hyper-inflationary accounting for Argentina, partially offset by currency exchange fluctuations related to US-denominated accounts in certain international countries.
Distributions from NCMI/NCM. We recorded distributions received from NCMI and NCM of $1.4 million during the second quarter of 2025 primarily related to a tax receivable agreement with NCM.
Equity in Income of Affiliates. Equity in income of affiliates of $2.6 million was recorded during the second quarter of 2025 compared with $2.5 million during the second quarter of 2024. See Note 8 to the condensed consolidated financial statements for information about our equity investments.
Net Loss on Investment in NCMI. We recorded a net loss on our investment in NCMI of $4.3 million during the second quarter of 2025 compared with $3.2 million during the second quarter of 2025, primarily related to the mark-to-market adjustment of our investment in NCMI under the fair value basis of accounting. See Note 8 to the condensed consolidated financial statements for information about our investment in NCMI.
Income Taxes - Holdings. An income tax expense of $42.5 million was recorded for the second quarter of 2025 compared with an income tax benefit of $0.9 million for the second quarter of 2024. The effective tax rate was approximately 31.0% for the second quarter of 2025 compared with (1.8)% for the second quarter of 2024. The effective tax rate for the second quarter of 2025 differs from the U.S. statutory rate primarily due to foreign tax rate differences, the U.S. tax impact of foreign operations, and state and local taxes. The effective tax rate for the second quarter of 2024 was favorably impacted by changes in valuation allowances previously recorded against certain deferred tax assets in certain foreign jurisdictions. Income tax provisions for interim periods are generally based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items (i.e. discrete items) occurring during the interim period. As a result, the interim rate may vary significantly from the normalized annual rate.
Income Taxes - CUSA. An income tax expense of $43.6 million was recorded for the second quarter of 2025 compared with an income tax benefit of $1.3 million for the second quarter of 2024. The effective tax rate was approximately 30.3% for the second quarter of 2025 compared with (2.8)% for the second quarter of 2024. The effective tax rate for the second quarter of 2025 differs from the U.S. statutory rate primarily due to foreign tax rate differences, U.S. tax impact of foreign operations, and state and local taxes. The effective tax rate for the second quarter of 2024 was favorably impacted by changes in valuation allowances previously recorded against certain deferred tax assets in certain foreign jurisdictions. Income tax provisions for interim periods are generally based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items (i.e. discrete items) occurring during the interim period. As a result, the interim rate may vary significantly from the normalized annual rate.
Six months ended June 30, 2025 (the “2025 period”) versus the six months ended June 30, 2024 (the “2024 period”)
2025 Period - The North American Industry box office generated approximately $4.2 billion during the 2025 period, which included new releases A Minecraft Movie, Lilo & Stitch, Sinners, How to Train Your Dragon, Captain America: Brave New World, Thunderbolts*, Mission: Impossible - The Final Reckoning and Final Destination: Bloodlines, as well as the carryover of the 2024 release Mufasa: The Lion King.
2024 Period - The North American Industry box office was approximately $3.7 billion during the 2024 period, which included new releases Inside Out 2, Dune: Part Two, Godzilla x Kong: The New Empire, Kung Fu Panda 4, Kingdom of the Planet of the Apes, Bad Boys: Ride or Die, Ghostbusters: Frozen Empire, IF, Bob Marley: One Love and The Fall Guy.
Revenue. The table below, presented by reportable segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenue.
| U.S. Reportable Segment Six Months Ended June 30, 2025 | 2024 | % Change | International Reportable Segment Six Months Ended June 30, 2025 | 2024 | % Change | Constant Currency (3) 2025 | % Change | Consolidated Six Months Ended June 30, 2025 | 2024 | % Change | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Admissions revenue | $591.0 | $519.2 | 13.8% | $140.2 | $136.4 | 2.8% | $157.4 | 15.4% | $731.2 | $655.6 | 11.5% |
| Concession revenue | 472.0 | 410.0 | 15.1% | 116.1 | 107.1 | 8.4% | 128.9 | 20.4% | 588.1 | 517.1 | 13.7% |
| Other revenue (1) | 113.4 | 99.8 | 13.6% | 48.5 | 40.9 | 18.6% | 55.2 | 35.0% | 161.9 | 140.7 | 15.1% |
| Total revenue (1) | $1,176.4 | $1,029.0 | 14.3% | $304.8 | $284.4 | 7.2% | $341.5 | 20.1% | $1,481.2 | $1,313.4 | 12.8% |
| Attendance | 57.5 | 52.7 | 9.1% | 37.0 | 37.0 | —% | 94.5 | 89.7 | 5.4% | ||
| Average ticket price (2) | $10.28 | $9.85 | 4.4% | $3.79 | $3.69 | 2.7% | $4.25 | 15.2% | $7.74 | $7.31 | 5.9% |
| Concession revenue per patron (2) | $8.21 | $7.78 | 5.5% | $3.14 | $2.89 | 8.7% | $3.48 | 20.4% | $6.22 | $5.76 | 8.0% |
(1) U.S. reportable segment revenue includes eliminations of intercompany transactions with the international reportable segment. See Note 15 to our condensed consolidated financial statements.
(2) Average ticket price is calculated as admissions revenue divided by attendance. Concession revenue per patron is calculated as concession revenue divided by attendance.
(3) Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2024. We translate the results of our international reportable segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign currency exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our international reporting segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.
- U.S. Attendance increased 9.1% to 57.5 million patrons during the 2025 period compared with 52.7 million patrons during the 2024 period primarily driven by a film slate with a stronger consumer appeal and the enhanced scale of content released during the 2025 period. Average ticket price increased 4.4% to $10.28 during the 2025 period compared with $9.85 during the 2024 period driven by strategic pricing initiatives. Concession revenue per patron increased 5.5% to $8.21 during the 2025 period compared with $7.78 during the 2024 period primarily driven by strategic pricing actions, a higher mix of merchandise and increased incidence rates. Other revenue for the 2025 period increased 13.6% to $113.4 million compared with $99.8 million during the 2024 period primarily due to higher attendance, which resulted in an increase in the variable components of other revenue, such as higher transaction fees and promotional income, as well as higher gaming revenue.
- International. Attendance of 37.0 million patrons for the 2025 period was flat compared with the 2024 period reflecting a film slate with a comparable level of consumer appeal in our international markets year-over-year. Revenues, average ticket price and concession revenue per patron for our international segment, as reported, were unfavorably impacted by exchange rate fluctuations during the 2025 period. In constant currency, the average ticket price increased 15.2% to $4.25 for the 2025 period primarily due to inflationary pricing actions. Similarly, in constant currency, concession revenue per patron increased 20.4% to $3.48 for the 2025 period primarily due to inflationary pricing actions and a higher mix of merchandise. Other revenue increased 35.0% in constant currency to $55.2 million for the 2025 period primarily due to inflationary impacts, higher screen advertising and loyalty program revenue, as well as increased transaction fees.
Cost of Operations. The table below, presented by reportable segment, summarizes our year-over-year theater operating costs.
| U.S. Reportable Segment Six Months Ended June 30, 2025 | 2024 | % Change | International Reportable Segment Six Months Ended June 30, 2025 | 2024 | % Change | Constant Currency (1) 2025 | % Change | Consolidated Six Months Ended June 30, 2025 | 2024 | % Change | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Film rentals and advertising | $340.9 | $290.9 | 17.2% | $71.3 | $67.4 | 5.8% | $80.3 | 19.1% | $412.2 | $358.3 | 15.0% |
| Concession supplies | $90.8 | $77.5 | 17.2% | $26.6 | $23.1 | 15.2% | $29.5 | 27.7% | $117.4 | $100.6 | 16.7% |
| Salaries and wages | $165.5 | $153.3 | 8.0% | $34.2 | $30.9 | 10.7% | $38.4 | 24.3% | $199.7 | $184.2 | 8.4% |
| Facility lease expense | $122.4 | $120.5 | 1.6% | $38.8 | $38.3 | 1.3% | $42.6 | 11.2% | $161.2 | $158.8 | 1.5% |
| Utilities and other | $179.5 | $158.4 | 13.3% | $50.9 | $46.7 | 9.0% | $57.2 | 22.5% | $230.4 | $205.1 | 12.3% |
(1) Constant currency expense amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2024. We translate the results of our international reportable segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign currency exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our international reportable segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.
- U.S. Film rentals and advertising costs were 57.7% of admissions revenue for the 2025 period compared with 56.0% of admissions revenue for the 2024 period primarily due to the higher concentration of high-grossing films and increased marketing spend. Concession supplies expense for the 2025 period was 19.2% of concession revenue compared with 18.9% for the 2024 period. The concession supplies rate for the 2025 period was primarily impacted by a higher mix of merchandise and inflationary pressures, partially offset by strategic pricing actions.
Salaries and wages increased 8.0% to $165.5 million for the 2025 period compared with $153.3 million for the 2024 period due to higher attendance, expanded operating hours, and wages and benefits inflation, partially offset by labor productivity initiatives. Facility lease expense, which is predominantly fixed in nature, increased 1.6% to $122.4 million primarily due to higher percentage rent. Utilities and other costs increased 13.3% to $179.5 million, largely driven by the increase in attendance, as many of these costs are variable or semi-variable in nature, primarily credit card fees and repairs and maintenance. An increase in real estate taxes and property and liability insurance also contributed to the increase.
- International. Our international operating costs, as reported, were favorably impacted by exchange rate fluctuations for the 2025 period.
Film rentals and advertising costs were 50.9% of admissions revenue as reported for the 2025 period compared with 49.4% for the 2024 period due to the higher concentration of high-grossing films and increased marketing spend. Concession supplies expense was 22.9% of concessions revenue as reported for the 2025 period compared with 21.6% for the 2024 period. The increase in the concession supplies rate was primarily driven by inflationary pressures and a higher mix of merchandise.
Salaries and wages, facility lease expense and utilities and other expenses, as reported, for the 2025 period benefited from favorable exchange rate fluctuations. In constant currency, salaries and wages increased to $38.4 million for the 2025 period primarily driven by wages and benefits inflation, as well as higher labor hours. Facility lease expense increased to $42.6 million in constant currency for the 2025 period primarily due to inflationary increases and the dissipation of temporary rent abatements that benefited the 2024 period. Utilities and other costs increased to $57.2 million in constant currency for the 2025 period due to inflationary pressures, higher screen advertising related commissions and an increase in credit card fees.
General and Administrative Expense. General and administrative expense for Holdings increased to $108.6 million for the 2025 period compared with $104.6 million for the 2024 period. General and administrative expense for CUSA increased to $106.8 million for the 2025 period compared with $102.7 million for the 2024 period. The increase for both Holdings and CUSA is primarily due to wages and benefits inflation and higher professional fees, partially offset by the favorable impact of exchange rate fluctuations.
Depreciation and Amortization. Depreciation and amortization expense decreased to $98.9 million for the 2025 period compared with $99.2 million for the 2024 period.
Impairment of Long-Lived Assets. We recorded an asset impairment charge of $1.6 million during the 2025 period related to three international theaters that have not demonstrated sufficient recovery since reopening after the temporary COVID-19 related closures. We did not record any asset impairment charges during the 2024 period.
(Gain) Loss on Disposal of Assets and Other. A gain on disposal of assets and other of $3.1 million was recorded for the 2025 period compared with a loss of $2.1 million for the 2024 period. Activity for the 2025 period was primarily related to gains on the sale of a land parcel and one of our owned theater properties, partially offset by the retirement of certain assets replaced as a result of remodels. Activity for the 2024 period was primarily related to the removal and disposal of equipment at closed theaters.
Interest Expense. Interest expense for Holdings, which includes amortization of debt issuance costs and original issue discount and amortization of accumulated losses for swap amendments, was $77.9 million during the 2025 period compared with $72.3 million during the 2024 period. The interest expense attributable to CUSA was $65.8 million during the 2025 period compared with $60.2 million during the 2024 period. The increase in interest expense was primarily due to the impact of the issuance of the 7.00% Senior Notes in July 2024 and the amortization of accumulated losses for amended swap agreements during the 2025 period versus the amortization of accumulated gains during the 2024 period, partially offset by the redemption of the remaining principal amount of the 8.75% Secured Notes during May 2024, the extinguishment of the 5.875% Senior Notes during July 2024, and the term loan reprice transactions that reduced our margin rate by 50 bps in each of May and November 2024. See further discussion in Liquidity and Capital Resources below.
Interest Income. Interest income for Holdings was $23.2 million during the 2025 period compared with $26.1 million during the 2024 period. The interest income attributable to CUSA was $20.9 million during the 2025 period compared with $19.7 million during the 2024 period. The decrease in interest income for Holdings primarily reflects interest earned on a lower average cash and cash equivalents balance at the Cinemark Holdings, Inc. holding company level as a result of cash used in the first quarter of 2025 for the repurchase of common stock through the Company’s share repurchase program. See further discussion of the Company’s share repurchase program in Liquidity and Capital Resources below.
Loss on Debt Amendments and Extinguishments. We recorded a loss on amendment and extinguishment of debt of $1.5 million during the 2025 period related to the amendment of our term loan, including the write-off of unamortized debt issuance costs and original issue discount, and legal and other fees paid. We recorded a loss on amendment and extinguishment of debt of $2.5 million during the
2024 period related to the amendment of our term loan and the redemption of the remaining 8.75% Secured Notes, including the write-off of unamortized debt issuance costs and original issue discount, and legal and other fees paid. See Note 7 to the condensed consolidated financial statements for information about our loss on debt amendments and extinguishments.
Foreign Currency Exchange Loss. We recorded a foreign currency exchange loss of $0.5 million during the 2025 period compared with $4.9 million during the 2024 period. The loss on foreign exchange is primarily driven by the impact of hyper-inflationary accounting for Argentina, partially offset by currency exchange fluctuations related to US-denominated accounts in certain international countries.
Distributions from NCMI/NCM. We recorded distributions received from NCMI and NCM of $1.4 million during the 2025 period primarily related to a tax receivable agreement with NCM.
Equity in Income of Affiliates. Equity in income of affiliates of $3.5 million was recorded during the 2025 period compared with $6.3 million during the 2024 period primarily due to lower income from our investment in AC JV, LLC during 2025. See Note 8 to the condensed consolidated financial statements for information about our equity investments.
Net (Loss) Gain on Investment in NCMI. We recorded a net loss on our investment in NCMI of $7.9 million during the 2025 period compared with a net gain of $1.2 million during the 2024 period, primarily related to the mark-to-market adjustment of our investment in NCMI under the fair value basis of accounting. See Note 8 to the condensed consolidated financial statements for information about our investment in NCMI.
Income Taxes - Holdings. An income tax expense of $27.8 million was recorded for the 2025 period compared with an income tax benefit of $28.6 million for the 2024 period. The effective tax rate was approximately 33.1% for the 2025 period compared with (66.0)% for the 2024 period. The effective tax rate for the 2025 period differs from the U.S. statutory rate primarily due to foreign tax rate differences, the U.S. tax impact of foreign operations, and state and local taxes. During the 2024 period, a deferred tax benefit of $39.5 million was recorded discretely related to the release of valuation allowances in certain foreign jurisdictions. The release of these valuation allowances was the result of the availability of positive evidence related to sustained taxable income in the relevant jurisdictions to support the future realizability of deferred tax assets. This discrete benefit favorably impacted the effective tax rate for the 2024 period, causing the income tax benefit to vary significantly from the tax expense derived by applying the statutory tax rate to the pre-tax income for the period. Income tax provisions for interim periods are generally based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items (i.e. discrete items) occurring during the interim period. As a result, the interim rate may vary significantly from the normalized annual rate.
Income Taxes - CUSA. An income tax expense of $29.4 million was recorded for the 2025 period compared with income tax benefit of $27.9 million for the 2024 period. The effective tax rate was approximately 30.7% for the 2025 period compared with (55.0)%% for the 2024 period. The effective tax rate for the 2025 period differs from the U.S. statutory rate primarily due to foreign tax rate differences, U.S. tax impact of foreign operations, and state and local taxes. During the 2024 period, a deferred tax benefit of $39.5 million was recorded discretely related to the release of valuation allowances in certain foreign jurisdictions. The release of these valuation allowances was the result of the availability of positive evidence related to sustained taxable income in the relevant jurisdictions to support the future realizability of deferred tax assets. This discrete benefit favorably impacted the effective tax rate for the 2024 period, causing the income tax benefit to vary significantly from the tax expense derived by applying the statutory tax rate to the pre-tax income for the period. Income tax provisions for interim periods are generally based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items (i.e. discrete items) occurring during the interim period. As a result, the interim rate may vary significantly from the normalized annual rate.
Income Taxes - Valuation Allowances
The Company assesses the likelihood that it will be able to recover its deferred tax assets against future sources of taxable income and reduces the carrying amounts of deferred tax assets by recording a valuation allowance, if, based on all available evidence, the Company believes it is more likely than not that all or a portion of such assets will not be realized. There is a possibility that within the next 12 months, sufficient positive evidence may become available to reach a conclusion that a portion of the valuation allowance in the U.S. will no longer be required.
Liquidity and Capital Resources
Operating Activities
We primarily collect our revenue in cash, mainly through box office receipts and the sale of concessions. Our revenue is generally received in cash prior to the payment of related expenses; therefore, we have an operating “float” and historically have not required traditional working capital financing. However, our working capital position will fluctuate based on seasonality, the timing and volume of new film content, the timing of interest payments on our debt as well as timing of payment of other operating expenses that are paid annually or semi-annually, such as property and other taxes and incentive compensation. We believe our existing cash and expected cash flows from operations will be sufficient to meet our working capital, capital expenditures, and known contractual obligations for the next twelve months and beyond.
Cash provided by operating activities was $156.8 million for Holdings and $164.4 million for CUSA for the six months ended June 30, 2025, compared with cash provided by operating activities of $162.2 million for Holdings and $164.9 million for CUSA for the six months ended June 30, 2024. The decrease in cash provided by operating activities was primarily driven by the timing of payments to vendors for expenses partially offset by the level of revenue earned during each period.
Investing Activities
Investing activities have been principally related to the development, remodel and enhancement of theaters, which historically have been financed with cash flow from operations and debt financings. Cash used for investing activities was $45.2 million and $46.4 million for the six months ended June 30, 2025 and 2024, respectively. The decrease in cash used for investing activities was primarily due to the sale of a land parcel and one of our owned theater properties during the six months ended June 30, 2025, partially offset by an increase in capital expenditures.
Below is a summary of capital expenditures, disaggregated by new and existing theaters, for the six months ended June 30, 2025 and 2024 (in millions):
| Six Months Ended June 30, 2025 | 2024 | |
|---|---|---|
| New theaters | $11.6 | $2.8 |
| Existing theaters | 40.6 | 44.4 |
| Total capital expenditures | $52.2 | $47.2 |
We operated 497 theaters with 5,647 screens worldwide as of June 30, 2025. Theaters and screens opened and closed during the six months ended June 30, 2025 were as follows:
| U.S. (42 states) | January 1, 2025 | Built | Closed | June 30, 2025 |
|---|---|---|---|---|
| Theaters | 304 | 1 | (1) | 304 |
| Screens | 4,255 | 10 | (16) | 4,249 |
| International (13 countries) | ||||
| Theaters | 193 | — | — | 193 |
| Screens | 1,398 | — | — | 1,398 |
| Worldwide | ||||
| Theaters | 497 | 1 | (1) | 497 |
| Screens | 5,653 | 10 | (16) | 5,647 |
46
As of June 30, 2025, we had the following signed new build and expansion commitments:
| Remainder of 2025 | Theaters (1) | Screens (1) | Estimated Remaining Investment (2) |
|---|---|---|---|
| U.S. | — | — | $— |
| International | — | 2 | 4.9 |
| Total | — | 2 | $4.9 |
| Subsequent to 2025 | |||
| U.S. | 3 | 24 | $51.3 |
| International | 1 | 9 | 15.2 |
| Total | 4 | 33 | $66.5 |
| Total commitments at June 30, 2025 | 4 | 35 | $71.4 |
(1) Based on the venue’s expected opening date.
(2) Approximately $17.6 million is expected to be paid during the remainder of 2025 and $23.8 million, $27.6 million and $2.4 million is expected to be paid during 2026, 2027 and 2028, respectively. The timing of payments is subject to change in the event of construction or other delays.
Actual expenditures for the continued development of venues and remodels can vary based on such factors as the type of venue, the amenities being built or remodeled within the venue and the timing for completion of a project. Actual expenditures are also subject to change based upon the availability of attractive opportunities and the impact of tariffs. During the next twelve months and the foreseeable future, we plan to fund capital expenditures for our continued development projects with cash flow from operations and, if needed, borrowings under our senior secured credit facility, proceeds from debt issuances, sale leaseback transactions and/or sales of excess real estate.
Financing Activities
Cash used for financing activities was $246.3 million for Holdings and $27.6 million for CUSA for the six months ended June 30, 2025, compared with $168.1 million for Holdings and CUSA for the six months ended June 30, 2024. The increase in cash used for financing activities for Holdings reflects the repurchase of common stock through the Company’s share repurchase program as discussed below, the payment of quarterly cash dividends of $0.08 per share of common stock in the first and second quarters of 2025, and an increase in restricted stock withholdings for the payment of payroll taxes on equity awards that vested during the period, partially offset by the redemption of the remaining 8.75% secured notes during the six months ended June 30, 2024. The decrease in cash used for financing activities for CUSA was driven by the redemption of the remaining 8.75% secured notes during the six months ended June 30, 2024, partially offset by an increase in restricted stock withholdings for the payment of payroll taxes on equity awards that vested during the period.
On March 6, 2025, Holdings’ Board of Directors approved a share repurchase program (the “Program”). Under the Program, Holdings was authorized to repurchase up to $200 million of its outstanding stock, before direct costs associated with the share repurchases. This Program commenced on March 11, 2025 and continued until the authorized repurchase amount was reached on March 27, 2025. Repurchases under the Program were funded using cash on hand.
During the first quarter of 2025, Holdings’ Board of Directors approved a reinstatement of the Company’s dividend at $0.32 per common share per annum, or $0.08 payable quarterly. Holdings, at the discretion of its Board of Directors and subject to applicable law, anticipates paying regularly quarterly cash dividends on its common stock. The amount of the dividends to be paid in the future, if any, will depend upon our then available cash balances, anticipated cash needs, overall financial condition, loan agreement restrictions as discussed below, and future prospects for earnings and cash flows, as well as other relevant factors. The following table summarizes the quarterly dividends paid during the six months ended June 30, 2025. See Note 6 to the condensed consolidated financial statements for further information about the dividends paid.
| Declaration Date | Record Date | Payable Date | Amount per Share of Common Stock | Total (1) |
|---|---|---|---|---|
| 2/18/2025 | 3/5/2025 | 3/19/2025 | $0.08 | $10.1 |
| 5/15/2025 | 5/29/2025 | 6/12/2025 | 0.08 | 9.4 |
| Total | $0.16 | $19.5 |
(1) Of the total dividends recorded during the three and six months ended June 30, 2025 $0.2 million and $0.4 million, respectively, were related to outstanding performance and restricted stock units and will not be paid until such units vest. See Note 9 to the condensed consolidated financial statements.
On May 15, 2025, as required by the indenture to the 4.50% Convertible Senior Notes, the Company provided irrevocable notice to the holders of the 4.50% Convertible Senior Notes of its election to settle all conversion obligations with respect to any 4.50% Convertible Senior Notes that are converted on or after May 15, 2025 by means of Combination Settlement as defined in the indenture to the 4.50% Convertible Senior Notes. Under the Combination Settlement, the Company will repay the $460.0 million outstanding principal amount of the 4.50% Convertible Senior Notes on their August 15, 2025 maturity date, using cash on hand. Amounts owed above the $460.0 million principal amount of the 4.50% Convertible Senior Notes will be settled in shares. If any conversion would result in the issuance of fractional shares, the Company will pay cash in lieu of such fractional shares.
The estimated number of shares to be issued by the Company to settle amounts owed above the principal amount would be approximately 17.0 million shares based on the closing price of Holdings’ common stock on June 30, 2025. Concurrently with its issuance of shares to the convertible noteholders to settle the amount owed above the principal amount on August 15, 2025, the Company expects to receive an equal and offsetting number of shares, or approximately 17.0 million shares based on the closing price of Holdings’ common stock on June 30, 2025, from the hedge counterparties. See “4.50% Convertible Senior Notes” below.
The Warrants expire 1/80th per trading day between November 15, 2025 and March 12, 2026. The Company may settle the Warrants in cash or shares. If the Company elects to settle the Warrants by issuing shares, it would issue approximately 8.8 million shares, based on the closing price of Holdings’ common stock on June 30, 2025. See “4.50% Convertible Senior Notes” below.
We may, from time to time, seek to retire or repurchase our outstanding debt securities through cash purchases or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on the availability and prices of such debt securities, prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Contractual Obligations
There have been no material changes in the contractual obligations previously disclosed in “Liquidity and Capital Resources” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed February 19, 2025.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
4.50% Convertible Senior Notes
On August 21, 2020, Holdings issued $460.0 million of 4.50% convertible senior notes (the “4.50% Convertible Senior Notes”). The 4.50% Convertible Senior Notes will mature on August 15, 2025. Interest on the notes is payable on February 15 and August 15 of each year.
The initial conversion rate was 69.6767 shares of Holdings’ common stock per one thousand dollars principal amount of the 4.50% Convertible Senior Notes. On February 18, 2025, Holdings’ Board of Directors declared a cash dividend of $0.32 per common share per annum, $0.08 payable quarterly. As a result of the dividends paid to stockholders on March 19, 2025 and June 12, 2025, the conversion rate was adjusted to 70.0752 shares of Holdings’ common stock per one thousand dollars principal amount of the 4.50% Convertible Senior Notes. This adjustment was implemented effective June 17, 2025, which was the first day of the observation period for settlements of conversion of the 4.50% Convertible Senior Notes at maturity. The conversion rate may be subject to further adjustment upon the occurrence of certain events. If a make-whole fundamental change as defined in the indenture governing the 4.50% Convertible Senior Notes occurs prior to the maturity date, Holdings will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 4.50% Convertible Senior Notes in connection with such make-whole fundamental change.
Holders of the 4.50% Convertible Senior Notes may convert their 4.50% Convertible Senior Notes at any time on or after May 15, 2025. On May 15, 2025, as required by the indenture to the 4.50% Convertible Senior Notes, the Company provided irrevocable notice to the holders of the 4.50% Convertible Senior Notes of its election to settle all conversion obligations with respect to any 4.50% Convertible Senior Notes that are converted on or after May 15, 2025 by means of Combination Settlement as defined in the indenture to the 4.50% Convertible Senior Notes. Under the Combination Settlement, the Company will repay the $460.0 million outstanding principal amount of the 4.50% Convertible Senior Notes in cash on their August 15, 2025 maturity date. Amounts owed above the $460.0 million principal amount of the 4.50% Convertible Senior Notes will be settled in shares. If any conversion would result in the issuance of fractional shares, the Company will pay cash in lieu of such fractional shares. The estimated number of shares to be issued to settle the amounts owed above the principal amount would be approximately 17.0 million shares based on the closing price of Holdings’ common stock on June 30, 2025. The settlement of the conversion obligations will occur on August 15, 2025, the maturity date of the 4.50% Convertible Senior Notes.
Concurrently with the issuance of the 4.50% Convertible Senior Notes, Holdings entered into privately negotiated convertible note hedge transactions (the “Hedge Transactions”), with one or more of the initial purchasers of the 4.50% Convertible Senior Notes or their respective affiliates (the “Option Counterparties”). The Hedge Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the 4.50% Convertible Senior Notes, the number of shares of Holdings’ common stock that will underlie the aggregate amount of the 4.50% Convertible Senior Notes, which gives Holdings the option to purchase approximately 32.0 million shares of its common stock at a price of $14.35 per share, which was adjusted to approximately 32.2 million shares at a price of $14.27 per share as a result of the dividends paid to stockholders on March 19, 2025 and June 12, 2025, as discussed above. The Hedge Transactions are generally expected to reduce potential dilution to Holdings’ common stock upon any conversion of the 4.50% Convertible Senior Notes and/or offset any cash payments we may be required to make in excess of the principal amount of converted 4.50% Convertible Senior Notes, as the case may be. On May 15, 2025, the Company provided notice to the Option Counterparties of its election that the counterparties are to settle the hedges by Net Share Settlement, as defined in the call option confirmations. The Company expects to receive an equal and offsetting number of shares as delivered to the convertible noteholders, or approximately 17.0 million shares based on the closing price of Holdings’ common stock on June 30, 2025, from the hedge counterparties. The settlement of the hedges will occur on August 15, 2025, concurrent with the settlement of the 4.50% Convertible Senior Notes.
Concurrently with entering into the Hedge Transactions, Holdings also entered into separate privately negotiated warrant transactions with Option Counterparties (the “Warrant Transactions”), whereby Holdings sold to Option Counterparties warrants to purchase (subject to the net share settlement provisions set forth therein) up to the same number of shares of Holdings’ common stock, subject to customary anti-dilution adjustments (the “Warrants”). The Warrants could separately have a dilutive effect to the extent that the market value per share of Holdings’ common stock exceeds the strike price of the Warrants on the applicable expiration dates unless, subject to the terms of the Warrants, Holdings elects to cash settle the Warrants. The Warrants give the Option Counterparties the option to purchase approximately 32.0 million shares at a price of $22.08 per share, adjusted to approximately 32.2 shares at a price of $21.95 per share as a result of the dividends paid to stockholders on March 19, 2025 and June 12, 2025. The economic effect of these transactions is to effectively raise the strike price of the 4.50% Convertible Senior Notes to approximately $21.95 per share of Holdings’ common stock. Holdings received $89.4 million in cash proceeds from the Warrant Transactions, which were used, along with proceeds from the 4.50% Convertible Senior Notes, to pay approximately $142.1 million to enter into the Hedge Transactions. The cash proceeds from the Warrant Transactions were recorded as additional paid-in-capital in the Company’s Consolidated Statement of Equity. The Warrants expire 1/80th per trading day between November 15, 2025 and March 12, 2026. The Company may settle the Warrants in cash or shares. If the Company elects to settle the Warrants by issuing shares, it would issue approximately 8.8 million shares, based on the closing price of Holdings’ common stock on June 30, 2025.
Together, the Hedge Transactions and the Warrants are intended to reduce the potential dilution from the conversion of the 4.50% Convertible Senior Notes. The Hedge Transactions and Warrants are recorded in equity and are not accounted for as derivatives, in accordance with applicable accounting guidance.
The 4.50% Convertible Senior Notes are effectively subordinated to any of Holdings’, or its subsidiaries’, existing and future secured debt to the extent of the value of the assets securing such indebtedness, including obligations under the Credit Agreement. The 4.50% Convertible Senior Notes are structurally subordinated to all existing and future debt and other liabilities of our subsidiaries, including trade payables, and including CUSA’s 5.25% Senior Notes due 2028 and its 7.00% Senior Notes due 2032, or, collectively, CUSA’s senior notes (but excluding all obligations under the Credit Agreement, as defined below, which are guaranteed by Holdings). The 4.50% Convertible Senior Notes rank equally in right of payment with all of Holdings’ existing and future unsubordinated debt, including all obligations under the Credit Agreement, which is guaranteed by Holdings, and senior in right of payment to any future debt that is expressly subordinated in right of payment to the 4.50% Convertible Senior Notes. The 4.50% Convertible Senior Notes are not guaranteed by any of Holdings' subsidiaries.
Senior Secured Credit Facility
On May 26, 2023, CUSA amended and restated its senior secured credit facility (the “Credit Agreement”) to provide for an aggregate principal amount of $775.0 million, consisting of a $650.0 million term loan with a maturity date of May 24, 2030 and a $125.0 million revolving credit facility with a maturity date of May 26, 2028. The term loan and revolving credit facility are subject to a springing maturity date of April 15, 2028 if CUSA’s 5.25% Senior Notes due 2028 have not been paid or refinanced as required under the Credit Agreement prior to such date, as more specifically described in the Credit Agreement.
On June 30, 2025, CUSA amended and restated its Credit Agreement to reduce the rate at which the term loan bears interest by 0.50% and reset the 101% soft call for another six months (the “2025 Amendment”). See below for additional discussion of interest rates on the term loan, and Note 7 to the condensed consolidated financial statements for additional information on the 2025 Amendment.
Under the Credit Agreement, quarterly principal payments of $1.6 million are due on the term loan through March 31, 2030, with a final principal payment of the remaining unpaid principal due on May 24, 2030.
Pursuant to the 2025 Amendment noted above, interest on the term loan accrues, at CUSA's option, at either (i) a rate determined by reference to the secured overnight financing rate (“SOFR”) as published by CME Group Benchmark Administration Limited and identified by Barclay's Bank PLC (the Administrative Agent) as the forward-looking term rate based on SOFR for a period of 1, 3, or 6 months (depending upon the Interest Period (as defined in the Credit Agreement) chosen by CUSA) (the “Term SOFR Rate”), subject to a floor of 0.50% per annum, plus an applicable margin of 2.25% per annum, or (ii) for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Reserve Bank of New York Rate in effect on such day, plus 1/2 of 1.00% and (c) the Term SOFR Rate for a one month Interest Period, as published two U.S. Government Securities Business Days prior to such day (or if such day is not a U.S. Government Securities Business Day, the immediately preceding U.S. Government Securities Business Day), plus 1.00% (this clause (ii), the "Alternate Base Rate"), subject in the case of this clause (ii) to a floor of 1.50% per annum, plus, in the case of this clause (ii), an applicable margin of 1.25% per annum.
Interest on revolving credit loans accrues, at CUSA's option, at either (i) the Term SOFR Rate plus an applicable margin that ranges from 3.00% to 3.50% per annum, or (ii) the Alternate Base Rate, subject, in the case of this clause (ii) to a floor of 1.00% per annum, plus, in the case of this clause (ii), an applicable margin that ranges from 2.00% to 2.50%. The applicable margin with respect to revolving credit loans is a function of the Consolidated Net Senior Secured Leverage Ratio as defined in the Credit Agreement. As of June 30, 2025, the applicable margin was 3.00%, however, there were no borrowings outstanding under the revolving line of credit. In addition, CUSA is required to pay a commitment fee on the revolving line of credit that accrues at a rate ranging from 0.20% to 0.375% per annum of the daily unused portion of the revolving line of credit. The commitment fee rate is a function of the Consolidated Net Senior Secured Leverage Ratio and was 0.20% at June 30, 2025.
CUSA’s obligations under the Credit Agreement are guaranteed by Holdings and certain subsidiaries of Holdings other than CUSA (the “Other Guarantors”) and are secured by security interests in substantially all of Holdings’ and the Other Guarantors’ personal property.
The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on the ability of Holdings, CUSA and their subsidiaries to: merge, consolidate, liquidate, or dissolve; sell, transfer or otherwise dispose of assets; create, incur or permit to exist certain indebtedness and liens; pay dividends, repurchase stock and make other Restricted Payments (as defined in the Credit Agreement); prepay certain indebtedness; make investments; enter into transactions with affiliates; and change the nature of their business. At any time that CUSA has revolving credit loans outstanding, it is not permitted to allow the Consolidated Net Senior Secured Leverage Ratio to exceed 3.5 to 1.0. As of June 30, 2025, there were no revolving credit loans outstanding, and CUSA’s Consolidated Net Senior Secured Leverage Ratio was below zero.
The Credit Agreement also includes customary events of default, including, among other things, payment default, covenant default, breach of representation or warranty, bankruptcy, cross-default, material ERISA events, a change of control, material money judgments and failure to maintain security interests. If an event of default occurs, all commitments under the Credit Agreement may be terminated and all obligations under the Credit Agreement could be accelerated by the Lenders, causing all loans outstanding (including accrued interest and fees payable thereunder) to be declared immediately due and payable.
The Restricted Payments covenant, as defined in the Credit Agreement generally does not limit the ability of Holdings and its subsidiaries to pay dividends and make other Restricted Payments if the Consolidated Net Total Leverage Ratio (as defined in the Credit Agreement) is less than or equal to 2.75 to 1.00. If the Consolidated Net Total Leverage Ratio is greater than 2.75 to 1.00, but not greater than 5.00 to 1.00, Restricted Payments generally may be made in an aggregate amount not to exceed the Available Amount (as defined in the Credit Agreement), which is a function of CUSA’s Consolidated EBITDA minus 1.75 times its Consolidated Interest Expense (as such terms are defined in the Credit Agreement) and certain other factors as specified in the Credit Agreement. As of June 30, 2025, the Consolidated Net Total Leverage Ratio was 1.41 to 1.00 and the Available Amount was $1,023.4 million. In addition, the Credit Agreement contains other baskets that allow certain Restricted Payments in excess of the Applicable Amount.
We have three interest rate swap agreements that are used to hedge a portion of the interest rate risk associated with the variable interest rates on the term loan outstanding under the Credit Agreement. See Note 7 to the condensed consolidated financial statements for discussion of the interest rate swaps.
As of June 30, 2025, there was $635.5 million outstanding under the term loan and no borrowings were outstanding under the $125.0 million revolving line of credit. The average interest rate on outstanding term loan borrowings under the Credit Agreement as of June 30, 2025 was approximately 5.8% per annum, after giving effect to the interest rate swap agreements.
7.00% Senior Notes
On July 18, 2024, CUSA issued $500.0 million aggregate principal 7.00% senior unsecured notes, at par (the “7.00% Senior Notes”). The notes will mature on August 1, 2032. Interest on the 7.00% Senior Notes is payable on February 1 and August 1 of each year, beginning on February 1, 2025. CUSA incurred debt issuance costs of approximately $8.7 million in connection with the issuance, which were recorded as a reduction of long-term debt on the Company’s consolidated balance sheet. Proceeds, net of fees, were used to repay CUSA’s 5.875% $405.0 million aggregate principal amount of Senior Notes due March 2026. The remainder of the net proceeds will be used for general corporate purposes.
The 7.00% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of CUSA’s subsidiaries, or its guarantors, that guarantee, assume or in any other manner become liable with respect to any of CUSA’s or its guarantors’ other debt. If CUSA cannot make payments on the 7.00% Senior Notes when they are due, CUSA’s guarantors must make them instead. The 7.00% Senior Notes and the guarantees are senior unsecured obligations and rank equally in right of payment with all of CUSA’s and its guarantor’s existing and future senior debt, including the 5.25% senior notes due 2028 and all borrowings under CUSA’s Credit Agreement. The notes and the guarantees will be structurally subordinated to all existing and future debt and other liabilities of CUSA’s non-guarantor subsidiaries. The notes and the guarantees will be structurally senior to the 4.50% convertible senior notes due 2025, and all future debt, if any, issued by Holdings that is not guaranteed by CUSA or any of its subsidiaries.
Prior to August 1, 2027, CUSA has the option to redeem all or a portion of the 7.00% Senior Notes at a price equal to 100.0% of the principal amount thereof, plus accrued and unpaid interest, if any, plus a make-whole premium. In addition, prior to August 1, 2027, CUSA may redeem up to 40% of the aggregate principal amount of the 7.00% Senior Notes with funds in an amount equal to the net proceeds of certain equity offerings at a redemption price equal to 107.0% of the principal amount of the 7.00% Senior Notes redeemed, plus accrued and unpaid interest, if any, as long as (i) at least 60% of the principal amount of the 7.00% Senior Notes outstanding issued under the indenture governing the 7.00% Senior Notes (including any additional notes) remains outstanding immediately after each such redemption and (ii) the redemption occurs within 120 days of the date of the closing of such equity offerings.
CUSA may redeem the 7.00% Senior Notes in whole or in part at any time on or after August 1, 2027 at redemption prices set forth in the indenture governing the 7.00% Senior Notes.
The indenture governing the 7.00% Senior Notes contains covenants that limit, among other things, the ability of CUSA and certain of its subsidiaries to (1) incur or guarantee additional indebtedness, (2) pay dividends or distributions on, or redeem or repurchase, capital stock and make other restricted payments, (3) make certain investments, (4) engage in certain transactions with affiliates, (5) incur or assume certain liens, and (6) consolidate, merge or transfer all or substantially all of its assets. Additionally, upon a change in control, as defined in the indenture governing the 7.00% Senior Notes, CUSA would be required to make an offer to repurchase all of the 7.00% Senior Notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase.
5.25% Senior Notes
On June 15, 2021, CUSA issued $765.0 million aggregate principal amount of 5.25% senior notes due 2028, at par value (the “5.25% Senior Notes”). Interest on the 5.25% Senior Notes is payable on January 15 and July 15 of each year. The 5.25% Senior Notes mature on July 15, 2028.
The 5.25% Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of CUSA’s subsidiaries that guarantee, assume or become liable with respect to any of CUSA's or a guarantor’s debt. The 5.25% Senior Notes and the guarantees will be CUSA’s and the guarantors’ senior unsecured obligations and (i) rank equally in right of payment to CUSA’s and the guarantors’ existing and future senior debt, including borrowings under CUSA's Credit Agreement and CUSA’s existing senior notes, (ii) rank senior in right of payment to CUSA’s and the guarantors’ future subordinated debt, (iii) are effectively subordinated to all of CUSA’s and the guarantors’ existing and future secured debt, including all obligations under the Credit Agreement, in each case to the extent of the value of the collateral securing such debt, (iv) are structurally subordinated to all existing and future debt and other liabilities of CUSA’s non-guarantor subsidiaries, and (v) are structurally senior to the 4.50% Convertible Senior Notes due 2025 issued by Holdings.
CUSA may redeem the 5.25% Senior Notes in whole or in part at redemption prices specified in the indenture.
Covenant Compliance
The indentures governing the 5.25% Senior Notes and the 7.00% Senior Notes ("the indentures") contain covenants that limit, among other things, the ability of CUSA and certain of its subsidiaries to (1) make investments or other restricted payments, including paying dividends, making other distributions or repurchasing subordinated debt or equity, (2) incur additional indebtedness and issue preferred stock, (3) enter into transactions with affiliates, (4) enter new lines of business, (5) merge or consolidate with, or sell all or substantially all of its assets to, another person and (6) create liens. As of June 30, 2025, CUSA could have distributed up to approximately $4.2 billion to its parent company and sole stockholder, Holdings, under the terms of the indentures, subject to its available cash and other borrowing restrictions outlined in the indentures. Upon a change of control, as defined in the indentures, CUSA would be required to make an offer to repurchase the 5.25% Senior Notes and the 7.00% Senior Notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase. The indentures allow CUSA to incur additional indebtedness if it satisfies the coverage ratio specified in the indenture, after giving effect to the incurrence of the additional indebtedness, and in certain other circumstances. The required minimum coverage ratio is 2 to 1 and our actual ratio as of June 30, 2025 was 6.7 to 1.
See discussion of dividend restrictions and the net senior secured leverage ratio under the Credit Agreement at Senior Secured Credit Facility above.
As of June 30, 2025, we believe we were in full compliance with all agreements, including all related covenants, governing our outstanding debt.
Market risk
As filed, 3,119 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
We have exposure to financial market risks, including changes in interest rates and foreign currency exchange rates.
Interest Rate Risk
The Company currently has variable rate debt. An increase or decrease in interest rates would affect its interest expense related to this variable rate debt. At June 30, 2025, we had an aggregate of $185.5 million of variable rate debt outstanding, after giving effect to the interest rate swaps. Based on the interest rates in effect on the variable rate debt outstanding at June 30, 2025, a 100 basis point increase in market interest rates would increase our annual interest expense by $1.9 million.
The tables below provide information about Holdings' and CUSA’s fixed rate and variable rate long-term debt agreements as of June 30, 2025. The Company has three interest rate swap agreements that are used to hedge a portion of the interest rate risk associated with the variable interest rates on the Company’s term loan debt. See Interest Rate Swap Agreements below. Holdings’ long-term debt agreements include fixed rate and variable rate long-term debt of CUSA, which is guaranteed by Holdings.
Holdings Debt
(in millions)
| Expected Maturity for the Twelve Months Ending June 30, 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | Fair Value | Average Interest Rate | |
|---|---|---|---|---|---|---|---|---|---|
| Fixed rate | $460.0 | $— | $— | $765.0 | $450.0 | $500.0 | $2,175.0 | $2,712.9 | 5.5% |
| Variable rate | 6.4 | 6.4 | 6.4 | 6.4 | 159.9 | — | 185.5 | 186.6 | 6.5% |
| Total debt (1) | $466.4 | $6.4 | $6.4 | $771.4 | $609.9 | $500.0 | $2,360.5 | $2,899.5 | 5.6% |
(1) Amounts are presented before adjusting for debt issuance costs.
CUSA Debt
(in millions)
| Expected Maturity for the Twelve Months Ending June 30, 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | Fair Value | Average Interest Rate | |
|---|---|---|---|---|---|---|---|---|---|
| Fixed rate | $— | $— | $— | $765.0 | $450.0 | $500.0 | $1,715.0 | $1,736.6 | 5.8% |
| Variable rate | 6.4 | 6.4 | 6.4 | 6.4 | 159.9 | — | 185.5 | 186.6 | 6.5% |
| Total debt (1) | $6.4 | $6.4 | $6.4 | $771.4 | $609.9 | $500.0 | $1,900.5 | $1,923.2 | 5.9% |
(1) Amounts are presented before adjusting for debt issuance costs.
Interest Rate Swap Agreements
All of the interest rate swap agreements qualify for cash flow hedge accounting. The fair values of the interest rate swaps are recorded on each of Holdings’ and CUSA’s condensed consolidated balance sheet as an asset or liability with the related gains or losses reported as a component of accumulated other comprehensive loss. See Note 7 to the condensed consolidated financial statements for further discussion of the interest rate swap agreements.
Foreign Currency Exchange Rate Risk
There have been no material changes in foreign currency exchange rate risk previously disclosed in “Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed February 19, 2025.
Controls and procedures
As filed, 1,719 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Evaluation of the Effectiveness of Disclosure Controls and Procedures
As of June 30, 2025, under the supervision and with the participation of Holdings’ and CUSA’s principal executive officer and principal financial officer, Holdings and CUSA carried out an evaluation required by the Exchange Act of the effectiveness of the design and operation of their respective disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act. Based on this evaluation, Holdings’ and CUSA’s principal executive officer and principal financial officer concluded that, as of June 30, 2025, each of Holdings’ and CUSA’s respective disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by each of Holdings and CUSA in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and were effective to provide reasonable assurance that such information is accumulated and communicated to Holdings’ and CUSA’s management, including
Holdings’ and CUSA’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.
Changes in Internal Control Over Financial Reporting
There have been no changes in Holdings’ and CUSA’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 that occurred during the quarter ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, Holdings’ and CUSA’s internal control over financial reporting.
Risk factors
As filed, 211 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
We believe there have been no material changes in our risk factors from those disclosed in “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed February 19, 2025.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2025-06-30. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Revenue | 3 months2025-04-01 to 2025-06-30 | $940.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months2025-01-01 to 2025-06-30 | $1.48bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Interest expense | 3 months2025-04-01 to 2025-06-30 | $39.4m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months2025-01-01 to 2025-06-30 | $77.9m | us-gaap:InterestExpenseNonoperating |
| Net income | 3 months2025-04-01 to 2025-06-30 | $93.5m | us-gaap:NetIncomeLoss |
| Net income | 6 months2025-01-01 to 2025-06-30 | $54.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months2025-04-01 to 2025-06-30 | $0.63 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months2025-01-01 to 2025-06-30 | $0.38 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2025-04-01 to 2025-06-30 | $0.81 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months2025-01-01 to 2025-06-30 | $0.46 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2025-04-01 to 2025-06-30 | 149,100,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months2025-01-01 to 2025-06-30 | 155,000,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
Source: SEC EDGAR, the filing index for accession 0000950170-25-101099. Last ingested by Listed: Oct 24, 2026, 15:12 ET. Listed shows no prices and gives no investment advice.