AMC Entertainment Holdings has reported a successful fourth quarter in 2024, showing significant financial growth despite ongoing industry challenges. The company achieved a record revenue of $1.31 billion, marking an 18% increase compared to the same period last year, and a beat on the $1.30 billion expected by the street.
On an earnings per share (EPS) basis however, the company failed to reach expectations, with the -$0.18 reported a $0.02 miss on consensus.
AMC's stock price (NYSE: AMC) initially responded with gains, as the stock saw more than a 5% increase on the print. The initial bullish sentiment has faded through the pre-market session, with this morning's latest price of $3.25 indicating a 0.61% drop from yesterday's close.
Moving back to the positives from the call, AMC's adjusted EBITDA saw strong growth, reaching $164.8 million, which is more than three times the previous year's figure. This highlights the company's effective cost management and operational excellence. Furthermore, AMC generated $203.6 million in cash from operating activities, contributing to a free cash flow of $113.9 million.
The period saw a substantial increase in attendance at AMC theaters, with the number of guests rising by 20% to 62.4 million. This surge in attendance helped push food and beverage revenue per patron to a record high of $7.15. Admissions revenue per patron was $11.56, making it the second highest for a fourth quarter.
Capital expenditures (CapEx) for AMC were substantial, with net CapEx at $83.9 million for the quarter and totaling $213.7 million for the year. Despite the financial growth, AMC reduced its theater footprint by 130 locations since December 2019, reflecting ongoing strategic adjustments.
The company also made significant progress in managing its debt, reducing the principal balance of debt and finance leases by $375.9 million in 2024. At the end of Q4 2024, AMC's cash and cash equivalents stood at $632.3 million.
CEO Adam Aron indicated that CapEx will maintain around $200 million until AMC can access additional growth capital. Aron is also in discussions with major studios to secure longer theatrical release windows, responding to changes in the industry where streamers like Apple and Amazon are engaging more with theatrical releases. He predicts a box office increase of $0.5 billion to $1 billion in 2025 compared to 2024, with further growth anticipated in 2026.
Despite some limitations, such as access to growth capital affecting expansion plans, AMC continues to strategically navigate its challenges. The company generated about $65 million from merchandise sales in 2024, maintaining a profit margin of approximately 50%.
Whilst revenue came in above expectations, the stock has not so much traded on fundamentals for some time, with sentiment and momentum having been a significant factor in recent years. It is positive to see things improving, yet there remains plenty to do in order to drive sustained profitability.
