AMC’s Q3 2024 Earnings: Revenues Slip, Net Loss Widens, Cash Flow In The Red

AMC Entertainment Holdings (NYSE: AMC) posted its financial results for the third quarter of 2024, reporting total revenues of $1.35 billion, a slight decrease from $1.41 billion in Q3 2023, representing a 4.1% drop year-over-year. This decrease reflects a lingering downturn in admissions revenue, which fell from $797.7 million in Q3 2023 to $744.2 million this quarter, a 6.7% decline.

Although the company managed to achieve a record in admissions revenue per patron and set an all-time quarterly record for food and beverage revenue per customer, the overall decline in foot traffic dampened the impact of these gains. Attendance fell by 11.5% year-over-year, with domestic attendance down 8.9% and international attendance experiencing a sharper 17.6% drop.

CEO Adam Aron commented, “While we’re seeing positive trends in the industry-wide box office, some metrics are still behind last year’s performance. However, we remain optimistic due to a strong upcoming movie slate.”

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Operating expenses, excluding depreciation, were nearly flat year-over-year, amounting to $454.6 million in Q3 2024 compared to $449.8 million in Q3 2023. Rent expenses decreased slightly, totaling $216.4 million for the quarter, reflecting some cost control efforts. General and administrative expenses remained steady, highlighting a focused cost structure amid challenging macroeconomic conditions.

Capital expenditures were $155.8 million for the first nine months of 2024, showing an ongoing commitment to enhancing AMC’s theater network. However, ongoing cash burn remains an issue; net cash used in operating activities for Q3 2024 was $31.5 million, compared to net cash provided by operations of $65.9 million in Q3 2023.

Free cash flow remained deeply negative, with a free cash outflow of $92.2 million for Q3 2024, a stark contrast to the positive free cash flow of $8.4 million in Q3 2023. The substantial $100.6 million swing in cash flow highlights the challenges AMC faces in generating cash from operations amid declining revenues and elevated interest costs.

The company reported a net loss of $20.7 million in the latest quarter, a significant reversal from the net profit of $12.3 million posted in Q3 2023. This reflects a $33 million year-over-year swing, which can be attributed to continued operating expenses and a high interest burden. Operating income for Q3 2024 stood at $71.8 million, down from $99.4 million in the year-ago quarter.

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Adjusted EBITDA, a key performance metric, dropped from $199.9 million in Q3 2023 to $161.8 million this quarter. Despite this year-over-year decline, the company highlighted that its Q3 2024 Adjusted EBITDA was the second-best third-quarter performance in its history. Aron emphasized the impact of “financial and operational efficiencies” in maintaining this level of EBITDA, even as attendance remains approximately 25% lower than in pre-pandemic Q3 2019.

During Q3, AMC successfully pushed out the maturities of $2.4 billion of its long-term debt from 2026 to 2029 and 2030, significantly easing short-term refinancing pressures. To bolster liquidity, AMC has undertaken various transactions to reduce its debt by roughly $349 million this year through debt buybacks and equity exchanges, yet the company still faces high ongoing interest obligations, as evidenced by $109.6 million in interest expenses for the quarter.

As of September 30, AMC held cash and equivalents totaling $527.4 million, a decline from $752.3 million at the end of Q3 2023.

AMC faces a daunting array of challenges, including the shift towards digital and streaming platforms and the impact of 2023’s writers’ and actors’ strikes, which delayed some film releases. Despite these hurdles, AMC remains committed to a bullish outlook, betting on the recovery of the North American and global box offices and an anticipated two-year pipeline of high-profile film releases.

AMC last traded at $4.58 on the NYSE.

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