Six Flags Entertainment Corporation 2026 Q2 Earnings Call

Please go ahead. Good morning, and welcome to Six Flags Entertainment Corporation's second quarter 2026 earnings conference call.

I'm Michael Russell, Six Flags Head of Investor Relations. On the call today with me are John Reilly, President and Chief Executive Officer, and Ash Walia, Chief Financial Officer. Before we begin, I would like to remind everyone that certain statements made during this call may be forward-looking statements. These are subject to risks and uncertainties that could cause actual results to differ materially from those described. Please refer to our earnings release and SEC filings for a discussion of these risks. I'll turn the call over to John.

Thank you, Michael, and good morning, everyone. Thank you for joining us. In the second quarter, we made meaningful progress against the strategic priorities we established at the beginning of the year, improving our operating performance through the first half. Before reviewing those results, I want to clarify the basis of comparison we will use today. As defined in our earnings release, same-park basis refers to the parks we operated during the full second quarter of 2026. Unless otherwise noted, our year-over-year comparisons measure those parks against the same parks in the second quarter of 2025. We believe this provides the clearest view of the business we manage today. On that basis, attendance increased 4% despite 44 fewer operating days in the second quarter. Net revenues increased more than 2%, adjusted EBITDA increased 7%, and our active pass base grew 6% entering the peak summer season.

Looking beyond that quarter and excluding the seven parks sold in the portfolio transaction and the park we closed following the 2025 operating season, first half adjusted EBITDA increased approximately 63% or $56 million, and trailing 12-month adjusted EBITDA totaled $801 million, compared with $745 million for the full year 2025. We also completed a deep dive into the group we described on our third quarter 2025 call as the underperforming parks. That analysis confirmed meaningful upside relative to their historical performance. In the second quarter, stronger local leadership, clearer accountability, focused resources, and improved commercial execution produced higher adjusted EBITDA and better margins at these parks. We are seeing disciplined execution is producing better financial outcomes and reinforcing our conviction in the opportunity.

One of the first steps we took earlier this year was restoring experienced park presidents at our largest parks, because our business performs best when decisions are made closest to our guests. These leaders are on the ground every day, responding quickly to changing conditions and empowering their teams. They now have clear accountability for the guest experience, revenue generation, labor deployment, ride uptime, and throughput, together with full responsibility for their park-level P&L. They have a strong voice in the long-range plans we are establishing for each site. We have also strengthened leadership across our central park support teams. Mark Pauls recently joined Six Flags as Chief Operating Officer, and in June, Amy Martin Ziegenfuss joined as Chief Marketing Officer after leading marketing for Carnival Cruise Line.

Together with Ash Walia, who joined as Chief Financial Officer in mid-June, these appointments complete a refreshed C-suite with deep operating, financial, and commercial experience, a strong bias for accountability, and genuine enthusiasm for the opportunity ahead. Our customers are not one uniform audience. A family considering its first visit has different motivations from a thrill-seeking teenager, an active passholder, a lapsed guest, or someone considering a premium experience. We are developing more precise segmentation and tailoring the message, product, and value proposition for each audience. We are also improving the pacing and allocation of marketing investment in measuring the incremental attendance, revenue, and contribution generated by individual campaigns and channels, not simply impressions, clicks, or gross ticket sales. Our unified ticketing, CRM, and first-party data capabilities support more precise offers, stronger acquisition efficiency, better renewal rates, cross-park visitation, and in-park spending.

Our season pass and membership strategy is another source of confidence. During the quarter, season pass sales increased. Our active pass base grew 6%. Membership participation expanded. Demand for higher-tier products remained strong. Importantly, both our single day and our combined season pass and membership products yielded higher average prices. In June, we expanded our membership offering to six additional parks. Cross-park visitation also continued to grow as guests used the flexibility of our multi-park products to visit more parks during the season. These benefit-rich choices deepen engagement, strengthen recurring revenue, and improve visibility into future demand. On average, a passholder visits approximately four times per year, creating multiple opportunities to purchase food and beverages, merchandise, games, parking, and premium experiences. As attendance shifts toward passholders, admissions revenue per visit may decline because pass revenue is recognized across multiple visits.

We view that as an attractive trade when the guest pays more up front, visits more often, and generates incremental in-park spending. Our objective is to maximize the total seasonal and lifetime value of each guest relationship while ensuring those incremental visits remain profitable. The guest experience remains the foundation of our strategy. Ride availability is one of its most important drivers. Ride uptime improved in the quarter and year to date, although performance remains uneven across parks. We incurred higher repair and maintenance expense at certain parks as we reduced downtime. We will not compromise on safety. Our continuing work on uptime and throughput delivers more attraction experiences per guest, rebuilds guest trust, supports repeat visitation, and strengthens long-term pricing power. Capital investment is also essential to the strategy. Every project must compete for capital, enhance the guest experience, and deliver an attractive long-term return.

While our multi-year plans responsibly address guest amenities and comfort. This year's lineup includes Tormenta Rampaging Run at Six Flags Over Texas, Phantom Theater at Kings Island, the reimagined Looney Tunes Land at Magic Mountain, and Shoreline Pier at Six Flags Great Adventure, together with locally tailored America 250 programming. These investments give guests new reasons to visit, encourage repeat visitation, and support stronger returns on the capital we deploy. We also simplified our portfolio. The sale of seven smaller non-core parks lets us concentrate leadership, operating resources, and capital on the properties with the greatest long-term potential to operate more consistently, to allocate capital more effectively, and reduce leverage. With that, I'd like to introduce our new Chief Financial Officer, Ash Walia, who joined us in mid-June and is already having a positive impact on our company.

Ash will review our second quarter financial results, expense performance, and balance sheet.

Ash? Thank you, John, and good morning, everyone.

It's a pleasure to be with you, and I look forward to meeting many of you in the quarters ahead. Before discussing the quarter in more detail, I'd like to address our year-over-year comparisons. As noted in our earnings release, reported second quarter 2025 results included eight parks that are no longer part of our operating portfolio. Those parks contributed approximately $86 million of revenue in last year's second quarter. My remarks will focus primarily on our current operating portfolio, which provides the clearest view of the business we manage today. On a same-park basis, net revenue increased 2% to approximately $864 million, despite 44 fewer operating days. Attendance increased approximately 449,000 visits, or 4%, driven by continued strength in season pass visitation and the commercial initiatives John discussed.

Per capita spending declined modestly by less than 1%, primarily because seasons pass and membership visits represented a larger share of attendance. This is a mix and revenue recognition effect, not weaker pricing. As John noted, like-for-like pricing increased across our admission products. Guest spending remained healthy across food and beverage, extra charge attractions, and our other in-park experiences. Let's move to expenses. Second quarter operating days declined 3%. Most of our park level expenses base is fixed or semi-fixed. We incur substantial labor, maintenance, utilities, insurance, and overhead costs regardless of the precise number of days the parks are open. When we reduce operating days, these costs are allocated over fewer days, so expense per operating day may increase mechanically. Investors, therefore, should not expect expense per operating day or total quarterly expenses to decline at the same percentage as the operating days.