United Parks & Resorts Inc. Earnings Call Highlights

United Parks & Resorts Inc. ((PRKS)) has held its Q2 earnings call. Read on for the main highlights of the call.

United Parks & Resorts Inc. Reports Mixed Sentiments in Latest Earnings Call

The recent earnings call of United Parks & Resorts Inc. painted a mixed picture for the company. While there were positive developments such as increased attendance and strong forward bookings, these were offset by challenges like decreased revenue and rising operating expenses. The overall sentiment was one of cautious optimism, with strategic initiatives providing a hopeful outlook despite current hurdles.

Increase in Attendance and Visitation

Attendance at United Parks & Resorts increased by approximately 48,000 guests or 0.8% compared to the prior year quarter. This growth was primarily driven by international and group visitation, showcasing the company’s ability to attract a diverse audience despite challenging conditions.

Positive Forward-Booking Trends

The company reported encouraging forward-booking trends, particularly for group business and Discovery Cove, with bookings up mid- to high single digits for the remainder of the year. Additionally, 2026 bookings are showing strong trends, indicating sustained interest and potential revenue growth in the coming years.

Strong Financial Position

United Parks & Resorts maintains a robust financial position with a net total leverage ratio of 3.0x and approximately $883 million in total available liquidity, including $194 million in cash. This financial strength provides a solid foundation for future investments and strategic initiatives.

Share Repurchase Program

In a move that signals confidence in the company’s valuation, United Parks & Resorts announced a new $500 million share repurchase program. This initiative is expected to enhance shareholder value and reflects management’s belief in the company’s long-term prospects.

Sponsorship and International Opportunities

The company is projecting up to $20 million in annual sponsorship revenue and anticipates signing two Memorandums of Understanding (MOUs) for international partnerships by the end of the year. These opportunities are part of the company’s strategy to expand its global footprint and diversify revenue streams.

Decrease in Total Revenue

Total revenue for the quarter decreased by $7.4 million or 1.5% compared to the second quarter of 2024. This decline was primarily due to decreases in per capita spending, highlighting the challenges the company faces in maintaining revenue growth.

Challenges with Costs and Expenses

Operating expenses increased by $14.6 million or 7.7%, driven by a $9.6 million increase in noncash self-insurance adjustments and difficulties in managing labor and operating expenses during poor weather conditions. These rising costs present a significant challenge for the company moving forward.

Decrease in Deferred Revenue

Deferred revenue decreased by approximately $22.7 million compared to June 2024, partly due to a different mix of products and a downtrend in pass sales. This decline underscores the need for the company to adapt its product offerings to changing consumer preferences.

Forward-Looking Guidance

Looking ahead, United Parks & Resorts anticipates mid- to high-single-digit growth in group and Discovery Cove bookings for the remainder of the year and into 2026. The company also announced a $500 million share repurchase program and a cost reduction plan expected to save up to $15 million in the latter half of the year. Strategic initiatives, including sponsorship opportunities, international expansion, and digital transformation efforts, remain a focus as the company aims to enhance its competitive edge.

In conclusion, United Parks & Resorts Inc.’s latest earnings call reflects a balanced sentiment with both positive developments and significant challenges. While the company is making strides in attendance and strategic initiatives, it must address revenue declines and rising expenses to ensure sustainable growth. Investors will be keenly watching how these dynamics play out in the coming quarters.