CNK

Business Context and Reporting Period

Cinemark Holdings, Inc. (Holdings) and its wholly-owned subsidiary, Cinemark USA, Inc. (CUSA), operate as a leading theatrical exhibition company. As of December 31, 2025, the company operated 496 theaters with 5,637 screens across the United States (303 theaters) and 13 Latin American countries (193 theaters). The company manages its business under two reportable segments: U.S. markets and International markets. This filing covers the fiscal year ended December 31, 2025.

Key Financial Metrics (Year Ended Dec 31, 2025)

Material Changes vs. Prior Period

• Revenue Growth: Total revenue increased 2.1% to $3.115 billion. U.S. revenue grew 2.7% while International revenue remained flat on a reported basis but grew 8.9% on a constant currency basis.
• Attendance Decline: Consolidated attendance decreased 4.0% to 193.0 million patrons. U.S. attendance fell 2.1% and International attendance fell 7.0%, attributed to a film slate that did not resonate as strongly year-over-year.
• Pricing Power: Average ticket price increased 5.7% to $8.00, and concession revenue per patron increased 6.7% to $6.36, driven by strategic pricing and higher merchandise mix.
• Profitability Pressure: Operating income declined 7.3% to $333.2 million. This was impacted by a $39.3 million loss on warrants related to the settlement of the 4.50% Convertible Senior Notes and increased operating costs (salaries, utilities, concession supplies) due to inflation.
• Debt Reduction: Long-term debt decreased significantly as the company repaid the $460.0 million principal of the 4.50% Convertible Senior Notes in August 2025.
• Impairment Charges: The company recorded $6.5 million in impairment charges related to 17 underperforming theaters (4 domestic, 13 international).

Guidance, Outlook, and Risks

• Capital Allocation: The company continues to prioritize reinvestment in existing theaters and new venue development. Capital expenditures increased to $218.9 million in 2025. As of year-end, there were $74.6 million in signed commitments for new builds and expansions.
• Dividends and Buybacks: The Board reinstated the dividend in Q1 2025 and increased it to $0.09 per share in Q4. A new $300 million share repurchase program was authorized in October 2025, with $75 million utilized by year-end.
• Key Risks:
  • Film Slate Dependency: Success is contingent on the volume and quality of new film releases. Contract expirations for WGA, DGA, and SAG-AFTRA are scheduled for 2026, posing a risk of work stoppages.
  • Streaming Competition: Reduced exclusive theatrical windows and the growth of streaming services may impact attendance.
  • Foreign Exchange: International operations are exposed to currency fluctuations, particularly in highly inflationary economies like Argentina.
  • Debt Covenants: The company must maintain specific leverage ratios to pay dividends and make restricted payments. As of Dec 31, 2025, the Consolidated Net Total Leverage Ratio was 2.51 to 1.00.

Investor Verification Checklist

• Warrant Settlement Impact: Verify the non-cash nature of the $39.3 million warrant loss and its impact on diluted EPS ($1.04) versus basic EPS ($1.18).
• 2026 Film Slate: Assess the strength of the 2026 release schedule (e.g., Avengers: Doomsday, Toy Story 5) to determine if attendance trends will reverse.
• Debt Maturity Profile: Review the maturity schedule of the remaining $1.897 billion in debt, specifically the 5.25% Senior Notes due 2028 and 7.00% Senior Notes due 2032.
• Argentina Exposure: Evaluate the impact of hyper-inflationary accounting and currency controls on the International segment's reported results.
• Capital Expenditure Execution: Monitor the $74.6 million in committed capital expenditures for new builds to ensure they generate expected returns.