National Cinemedia ((NCMI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for National CineMedia (NCM) painted a mixed picture for investors and stakeholders. While the company showcased significant achievements such as robust growth in programmatic advertising and a promising outlook for the third quarter, it also faced challenges, including a decline in revenue and economic uncertainties affecting advertising budgets. Despite these hurdles, strategic initiatives and a strong start to the third quarter provide an optimistic view for the remainder of the year.
Programmatic Advertising Growth
NCM reported an impressive growth in programmatic advertising, with advertiser volume increasing by more than 50% quarter-over-quarter. Notably, approximately 70% of second-quarter programmatic advertisers were new to the company. NCM aims to triple its programmatic footprint by the end of the year, indicating a strategic push towards expanding this lucrative segment.
Self-Serve Platform Revenue Increase
The self-serve platform has seen a revenue increase of over 30% year-over-year, showcasing strong adoption as the company moves into the second half of 2025. This growth highlights the platform’s effectiveness in attracting advertisers seeking flexible and efficient advertising solutions.
Significant Audience Reach
NCM reached over 115 million individuals across its network in the second quarter, marking a 24% increase compared to the same period in 2024. This expansion in audience reach underscores the company’s ability to attract a larger viewer base, enhancing its appeal to advertisers.
Improved Third Quarter Outlook
The company has secured ad sales commitments for the third quarter that are pacing ahead of last year’s levels, providing improved visibility into the pipeline. This positive trend suggests a recovery in advertising demand and a potential uplift in financial performance.
New Advertisers and Campaign Success
NCM successfully onboarded 12 new advertisers who launched major cinema campaigns for the first time since the pandemic. A notable campaign by a national telecom brand using NCM’s new product resulted in double-digit gains in foot traffic, highlighting the effectiveness of NCM’s advertising solutions.
Share Repurchase Program
Year-to-date, NCM has repurchased 3.3 million shares at an average price of $5.78 per share, totaling approximately $18.8 million. This move reflects the company’s confidence in its long-term value and commitment to returning capital to shareholders.
Revenue Decline
NCM reported a total revenue of $51.8 million for the second quarter of 2025, which fell below the guidance range of $56 million to $61 million and represented a 5% decrease compared to the prior year period. This decline highlights the challenges the company faces in the current economic climate.
Adjusted OIBDA Decrease
Adjusted OIBDA for the second quarter was $0.7 million, down from $7.6 million in the prior year. This decrease was primarily attributed to weaker top-line results, reflecting the impact of economic uncertainties on the company’s financial performance.
Local and Regional Advertising Revenue Decline
Local and regional advertising revenue totaled $6.4 million, down from $9.8 million in the second quarter of 2024. This decline indicates cautious advertiser sentiment amid broader economic challenges.
Economic and Tariff-Related Challenges
The second quarter was marked by heightened volatility in advertiser budgets across key verticals such as automotive, consumer packaged goods, and government. This was driven by broader economic uncertainty and shifting public sector spending priorities, posing challenges to NCM’s advertising revenue.
Forward-Looking Guidance
Looking ahead, NCM provided guidance with a focus on improving third-quarter performance through increased ad sales commitments, which are pacing ahead of last year. The company anticipates third-quarter revenue to be between $62 million and $67 million, with adjusted OIBDA expected in the range of $7.5 million to $11.5 million. This optimism is fueled by strong box office momentum, improved advertiser commitment, and sustained theatrical strength. NCM plans to expand its programmatic offerings and enhance local market sales capabilities to maximize advertising recovery. The company expects continued box office momentum throughout 2025, supported by a robust film slate, including anticipated releases like Wicked for Good and Avatar: Fire & Ash.
In conclusion, National CineMedia’s earnings call revealed a mixed sentiment, with notable achievements in programmatic advertising and a positive third-quarter outlook, contrasted by revenue declines and economic challenges. The company’s strategic initiatives and strong start to the third quarter provide a hopeful outlook for the rest of the year, as it navigates through economic uncertainties and aims for recovery.