Six Flags Entertainment (FUN) Q2 2026 earnings call transcript

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 Riley, President and Chief Executive Officer, and Ash Willia, 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.

With that, 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 EVADI increase 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 EVADI increase approximately 63%, or $56 million, and trailing 12 month adjusted EVADI 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 EVADI and better margins at these parks. We are seeing disciplined execution is producing better financial outcomes and reinforcing our convictions in the opportunity.

One of the first steps we took earlier this year was restoring experienced park presidents and 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 Paul's recently joined Six Flags as Chief Operating Officer, and in June, Amy Martin Zigenfuss joined as Chief Marketing Officer after leading marketing for Carnival Cruise Line. Together with Ashwalia, 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 passover, 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 and 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 deep in engagement, strengthen recurring revenue, and improve visibility into future demand.

On average, a passover visits approximately four times per year, creating multiple opportunities to purchase student beverages, merchandise, games, parking, and premium experiences.

As attendance shifts toward pass holders, admissions revenue per visit may decline because pass revenue is recognized across multiple visits. We do that as an attractive trade when the guest pays more upfront, 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, and ride availability is one of its most important drivers. Ride-up time 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 reduce downtime, and 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 tormento rampaging run at Six Flags over Texas, Phantom Theater at King's 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, Ashwalia, who joined us in mid-June. It 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 the 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 of 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 season 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, ex-search other attractions, and our other in-park experiences.

Let's move to expenses. Second quarter, operating days declined 3%. Most of our parks 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. Even with that, sixth and semaphysics cost structure, our park teams manage strong cost discipline, allowing us to retain a meaningful portion of the quarter's incremental revenue. As a result, second quarter, same park adjusted EBITDA increase approximately 7% to 249 million, demonstrating that the operational initiatives John discussed are translating into improved financial performance.

Turning to the balance sheet, we continue to strengthen our financial position during the quarter. We use proceeds from the portfolio transaction together with improved operating cash flow and discipline capital spending to reduce outstanding borrowings while maintaining substantial liquidity. Deferred revenue increased on a current operating portfolio basis, reflecting continued growth in membership and advanced sales. We ended the quarter with approximately 135 million of cash, total liquidity of approximately 837 million, and a net debt of approximately 4.9 billion.

With that, I'll turn the call back to John.

Thanks, Ash. Let me turn to our outlook. Excluding the seven parks sold in the portfolio transaction and the park we closed following the 2025 operating season, trailing 12-month adjusted EBITDA was $801 million, compared with $745 million for the full year 2025.

Building on that progress, we expected adjusted EBITDA to continue to grow year-over-year in the second half of 2026. That expectation incorporates two headwinds at the start of the third quarter. The unfavorable July 4 calendar shift and wildfire-related air quality disruptions. We expect to grow despite these factors. Importantly, on days in July that were not affected by these disruptions, we saw very healthy performance, which included delivering our highest summer attendance day over the last five years on a same park combined basis.

These results provide compelling evidence that underlying demand among our guests remains strong despite the calendar shift and wildfire-related air quality disruptions affecting the month overall. For modeling purposes, we planned 2,133 operating days in the quarter, 66 more than last year's third quarter, primarily because the timing of the week of summer operations at several northern and midwestern parks.

On August 7, we will launch our 2027 passes with a new best-priced guarantee, enhanced benefits, and new flexible dining plan options. That launch in our seasonal events will be supported by larger active pass-based, broader membership availability, more targeted marketing, and continued work on ride-up time and throughput. We will maintain the same expense discipline that benefited the first half.

Our fourth quarter plan adds several demand drivers when we launch America's biggest Halloween party with 448 Halloween themed experiences from coast to coast. We'll host visitors at 107 haunted mazes, immersing guests into some of the world's most iconic horror franchises with 11 new ones in 2026. Our commercial team is improving upon our Halloween event of sell experiences.

We're also restoring holiday in the park at two of the parks where it was not offered in 2025, including Six Flags Over Georgia and Six Flags Great Adventure in New Jersey. Our efforts to operate more efficiently and expand margins to our potential will continue as a high priority, boosted by new resources and approaches in workforce deployment, now led by Mark Paul's, and in supply chain value creation where Ash brings considerable experience to us.

Beyond the fourth quarter, construction is underway on our 2027 attraction pipeline, including Bakunawa at Six Flags Great Adventure, Werewolf Gorge at Six Flags Fiesta, Texas, Ripbrough and Falls at Carolwinds, and the reintroduction of Georgia Gold Rush at Six Flags Over Georgia. And just this morning, we announced that for 2027, Six Flags Great America in Chicago will debut Camp Timber Trail, featuring nine attractions and experiences, making it one of the largest family-focused investment in great America's history.

Over time, we believe this business can deliver adjusted e-bodem margins in the mid-30% range while reducing leverage toward our long-term objective of approximately four times. Over the past several months, we have assembled the management team needed to execute this plan. Mark Paul's recently joined us as chief operating officer, completing a leadership team with the experience and accountability to execute at a higher level.

The second quarter was an encouraging step in Six Flags transformation. Our priorities remain clear, strengthen park level accountability, improve the guest experience, build our commercial capabilities and allocate capital with discipline. Together, these actions are producing stronger financial performance and building long-term shareholder values.

Before we take your questions, I want to thank our team members across the company. Their commitment, energy, and dedication makes this business successful.

We are encouraged by our progress, confident in our direction, and excited about the opportunities ahead. Operator, that concludes our prepared remarks. We'd be happy to take questions.

Hey Steve, good morning. Thanks for the question. So if it helps, while we aren't giving guidance for the 3rd quarter or the year, what we will say is we expect to grow adjusted EBITDA in the balance of the year. And so let me take you through a few points about July and then the balance of the year that might be helpful for your modeling.

So first of all, I'd note, if you look at the trailing 12 months, our adjusted EBITDA again on a same park basis is $801 million, and that's compared to $745 million in full year 2025. We expect to grow upon that $801 million in the back half. We have some positives and some negatives. So in July, there are some negative factors.

And we don't want to dwell on any short run negative factors because we believe there's a lot of potential in this business that's within our control over time. And over time, as I said, we expect to grow. However, the 4th fell on a Saturday, which does affect some people who like to bridge a holiday into a longer period versus prior year where it was on a Friday.

And then we had some disruption from wildfire quality, air quality issues really across the Great Lakes and from Toronto down to Virginia over various periods of time and even caused some park closures for air quality. What encourages us in July is as we move through the month, it's one of the points that we made earlier, is that we had a day where our cumulative attendance total was the best we've seen in five years. So we're seeing demand come back when we have positive conditions, and that's our expectation for the business over time.

And again, where we are in attendance year to day where we are on our past base gives us positive indications as we go forward. When you look at the 6% pass in membership base growth, that's a positive indicator as we go forward in Q3 and Q4. We have more folks in our membership programs, our membership programs, or our higher per-cap programs, and they have more importantly, almost they have higher renewal rates.

And we'll have more and more guests renewing over the back two quarters than we had last year. So that's another positive factor. We have an extra week of summer essentially with Labor Day, and that's driving along with the new holidays in December, that's driving the additional operating days that we referenced. And then the other thing that I would mention that we're really encouraged by is Halloween. We just went through some of the factors on it. In about two weeks, we're going to be announcing some of the IPs that we're expanding to, including for pretty new and exciting ones. When you look at the scope of what we have in Halloween, no one's doing anything in this kind of scope and this kind of geographic range and with this many attractions.

So we're really excited about Halloween, about the programming that we have coming in. So when you take that all into effect, we expect to grow in Q3 and Q4, and in the back half of the year, the opportunities with Halloween and Holiday in the Parks probably provide the greatest opportunity for Q4 relative to Q3.

Sure. So as we've said, our goal over time is to get to a 4.0 net leverage debt to EBITDA. And we, our confidence remains that we can get there. We have the liquidity to manage the Georgia payments. And so we were in a position to do that when that comes due. So we feel still feel good about our program going forward.

We're judicious in our capital expense. We feel like we're addressing all the needs. We should be in a 400 to 425 range. But over time, we still feel good about getting the net leverage down to where it should be.

What I would say about July relative to the rest of the third quarter is that what we have coming ahead are, again, this expanded pass and membership base. We have the the favorable calendar in terms of where Labor Day is falling. We have additional days to drive that business. We also will have people, as we said, in terms of membership, other revenue initiatives driving us forward. That said, the opportunity for growth is, is bigger than Q for, and we expect more towards the end of the, the end of the half Q for.

Sure, James. I mean, we would, we would refer you back to the table that, that you all can find in the queue one earnings report where we gave, you know, the balance of the year by quarter, the attendance impacts for the specified parks versus the consolidated company.

Number. And so, you know, in Q for the numbers are there for attendance and revenue of what we modeled and then in Q. You know, Q three and I'm sorry in Q two and in Q three and Q four. It's about a 66 million. EBITDA impact for the balance of the year, but we refer everybody back to that table.

Yeah, we feel good about the flow through that we've been able to generate. And if you look at Q two, we picked up about 1.2 points 120 basis points in margin on a same park basis. And, you know, we could we could walk through that at a later time, but, but, but we picked up margin. We had strong flow through through the quarter as we've had for half one.

But we're in the early stages on this, and we believe we have considerable growth. And we've mentioned, we've mentioned before that there are plenty of proof points and given the scale of the, given the scale of the company. We have the potential to get to the mid 30s over time. That remains our goal. I mean, especially encouraged by the team members that have just joined us. I mean, Ash first and in finance has extensive supply chain experience and ashes already, you know, starting to make an impact, but he's just arrived.

And then Mark Paul's in operations has extensive experience, both improving the guest experience and doing it very efficiently, so including with our labor deployment. So we're encouraged by the skills that we brought on. I think we have a, we have a good proof point in terms of expanding it, expanding our margins in Q one and Q two on a same park basis.

And we expect to be able to over time accelerate that and get to the get to the mid 30s as we said.

Sure. And good question. And if you remember for the Q four of 2025. And I believe for Q one of 2026. We mentioned that, you know, there was, there was a bit outside per cap growth and that that extrapolate that for the full year. And when you look at, you look at Q two, this is an intentional strategy that we've been talking about to grow our past and membership base.

And if you look at the past plus membership category of tickets, the average ticket sold was sold at a higher price. Then in the previous previous comparable period same park. And the same goes for what we call demand tickets or single day tickets, which includes our group and single day demand tickets that are that are sold for the parks.

That category also increased on an average price basis versus the same period same park basis. Q two 2025. So we feel good about our ability to continue to expand the past and membership program. You may see mix effects as a result of that ticket mix effects. But we're building total revenue per customer and total lifetime customer value.

So that's that's part of an intentional strategy in the quarter. You did have some also park mix within the same park portfolio. We had some parks out performing. And so you have some natural park mix shifts going forward in the quarter. Just to give you a little bit of color again, we have the some membership impacts that will help us as we move forward.

We also have some strong initiatives on in park, including on our queuing programs and including on some per capita expansion for for Halloween.

Yeah, great, great question. And it is a deliberative strategy that we have in the company. One of the one of the folks that's been promoted in our recent leadership initiatives across the company is Chris Meiring, who is heading up commercial for the group. And we're also working with external experts that have worked in the field a lot in terms of pricing. And we're really building on our capabilities.

We have made some changes in some ancillary product initiatives under Chris's leadership. One would be fast lane where we tested different approaches from each of the legacy companies in parks. And now we have an optimal way going forward that will help us particularly in 2027. The other thing that we've done, Chris, is made some changes to our dining programs.

You know, this is a huge program, a huge satisfied for many of our guests. It drives a lot of attendance and a lot of football. And we, our commercial team has research tested and now deploying today with our, with our past launch new dining program options that give guests more flexibility for both limited plans. And all season plans.

And on the all season plans, we did feel that we were under priced. And so, so we've taken those up, but we've given people really also very affordable plans with certain limits. And I would say the early returns because we did launch a few parks in the last week or two are that we're seeing a double digit growth in attachment rate so far, but, but very early returns.

Yeah, it's a good question. And as we mentioned, we're launching our past, our 20, 27 past program in most parts today this afternoon. And, you know, one of the, one of the great drivers for past is event, our event series, and we do very well with Halloween and we do well with Christmas period events holiday in the parks and winter fest.

But we have a great case study within our own portfolio of a food and beverage event with the boys and very event and not very farms. And it's a fantastic event, drives very high per caps, very high visitation and very high past renewal. And so we'll be launching more food and beverage events across the portfolio next year. And, you know, we believe events are a very efficient way to deploy capital as we go forward.

So the, you know, relative to the strength of the consumer, we'll probably characterize this answer the way we did on the last call as well. Look, we're finding consumers to be responsive.

We're putting out strong values and working very hard to improve the experiences in the parks. And we see consumers respond. You see the attendance increase at 4% and the pass based increasing at 6%. So we believe there's a lot in our power to drive. Visitation and consumer spending, including per capita spending as we go forward. And when we have well researched products and an effective marketing to convert people to those products.

We're seeing the potential. I mentioned fast past our queuing programs. Initiatives we have there are dining program has huge appeal to our visitors. And we expect that will continue and even expand with new flexible programs. We're launching new concepts in in F&B new new refresher beverage concepts and other things that are that are getting good early returns.

So we see when we do the right things, we're able to move the the in park spending per capita.

Yeah, I'd say we're in the early stages, right? It was just introduced and a couple of proof points that that have us very encouraged when it was introduced. Our past sales went on a much stronger trajectory. And some of that we credit to better product architecture better merchandising better conversion rates on our website from from people shopping to people buying.

So there's a lot happening to drive it, but but but clearly it coincided with the introduction of the multi park visits at a on a regional basis. And we're seeing the usage of the past follow the same pattern. We're seeing people within regions visiting that very healthy rates on cross parks. And I just want to let sort of example would be in Los Angeles. I mean, we have, you know, two of the greatest parks in the world with not very farm and and magic mountain. And we're seeing lots across visitation and we're seeing people in greater Los Angeles and Orange County respond very strongly with with the value of buying one pass at their home park.

And having the ability to visit a very different kind of park and and have a very well rounded experience across the two. So we're in the early stages. Halloween will also be a good read on that as we have we just sent out CRM communications regionally inviting people to visit our other parks this summer will do the same for Halloween.

So we're in the early stages, but but but everything we see is is encouraging about the appeal to our guests.

We from the table that we had in in the queue. Two one earnings. We had 3 million in Q3 and 1 million in Q4. If I'm going to I'm going to give you one more decimal point. So that helps in your modeling. It's 2.9 million in Q3 and.

0.6 in Q4. Hopefully that helps.

I think you could expect modest growth in the cash costs over the balance of the year.

Hi, it's a good question and what I would say is the way we've presented and talked about. The per cap quarter over quarter year over year is on the same park basis. So it adjusts out. It adjusts out for the parks that we sold.

Would some of those with those parks likely have had a lower average? Potentially yes, a lower average per cap, but on the same part basis. It should be should be comparable for you.

Yeah, I think one of the one of the impacts there is is mix of parks. So I would, you know, we had we had strong growth, for example. In Canada and Mexico and that that's where like park of park mix can affect the overall number.

Those are the those are the major factors are I think I think you hit them as we mentioned on the Q1 call. We expected some of the savings in Q1 to pull forward in terms of maintenance costs. We saw that as we worked on right up time. Some of that materialized and then you're correct about marketing. But we feel good about the flow through that we've seen your today is very strong and in the quarter 1.2% better.

Plenty of opportunity for growth over time to get to our target in the mid 30s.

It's a good question. And for now, what I would say is that we don't expect any changes in our portfolio parks this year. As I mentioned, we're launching our past sales today. And our past launch last year was probably impacted by some of that discussion. So I think it's important for our consumers to know that we don't have any changes planned right now.

I would say that, of course, we'll always look to do what is best in terms of creating value in the business and creating value in our shareholders. So we wouldn't exclude any discussion in the future, but no current plan.

Yeah. So this gets back to the potential we have with our new marketing and commercial organization and some of the priorities that our new chief marketing officer have in the business. We have opportunities to further segment our offering and to speak to different audiences of guests. There's a good example with Magic Mountain relaunching Looney Tunes this year for kids in one of the world's greatest thrill parks, greatest coaster parks. We successfully launched a kids attraction and we're super pleased with that in Chicago, a great thrill park. We're launching a family and kids attraction for 2027. So we have a great offering across the portfolio for all kinds of audiences with our events, with our rides, with our thrill rides, our family rides and family attractions and entertainment.

And so the opportunity we have is to better segment our marketing through better data capabilities and speak to audiences that are out there. So I would say we have opportunity because our effort to target different segments is very limited at this point. We have opportunities to expand all over the consumer spectrum, whatever side of the K they might be coming from. So I see our opportunity as one to build our capability and we can appeal across segments.

Yeah, again, I, you know, we prefer to take up a bit of a longer view over quarters and over the year and in Q2 and early in the year. I mean, clearly we had better conditions in California and we should we should we should acknowledge that. And but in terms of spring break, we did have an impact from the pull forward of Easter and some of the spring break calendars relative to the prior year. And that cascaded into into some other things like not very far. We opened the boys and very festival was a very hyper cap high high high high price higher priced and higher attended event into more of it into into Q1.

So we saw those impacts. Certainly we would say, you know, in some regions like California. Yes, we saw improved conditions. We feel good about the traction. For our past sales program and when you look at the leading indicators of the growth of our base and what we believe will be the stickiness of the base for renewal and people moving into higher tiers and higher products.

That's that's the important leader leading indicator for us strategically. You know, we always want to do better than what we did. What we believe 4% and 6% on the past is a is a good sign that our initial initiatives are focused in the right area and we believe we can continue to yield them.

I'll start by reiterating the second part, which is important, you know, is important everybody for the asset sales that will be used to pay down debt. And we have the long term goal of 4 times. We have a biggest land sale initiative that we have happening is in Bowie, Maryland at the site of the former park there. We have a signed a contract to purchase agreement for the park.

The buyer is going through a due diligence process. You know, the window for that materializing is going to take some time. That might be late 2027 early 2028, but we made a lot of progress there. And then we're progressing well on the excess land in Richmond, Virginia, and we have some.

I would say we have strong interest and some bids under evaluation for the excess land. Thank you.

Thanks, Ellie and thanks to everyone for joining us today. Our next earnings call will be in early November when we report our third quarter at 2026 results. That concludes our call today, Ellie.