Cineplex Posts Record CAD 440.2 Million Quarter as EBITDAaL Doubles

Cineplex (TSX:CGX) generated CAD 440.2 million in third-quarter revenue, up 26.2% year over year, its highest quarterly figure on record, while adjusted EBITDAaL more than doubled to CAD 70.7 million from CAD 33.3 million. Chief Financial Officer Gord Nelson delivered the numbers on the earnings call, joined for the first time by Chief Executive Officer Bill Walker.

Theater attendance climbed 23.1% to 14.8 million guests, and adjusted free cash flow more than tripled to CAD 52.9 million. The company also cut its simple leverage ratio (net debt relative to EBITDAaL) to 2.9 times, moving inside its target range.

What drove the record quarter?

The Film Entertainment and Content segment posted its highest-ever quarterly adjusted EBITDAaL, up 115.6% to CAD 72.9 million. Box office revenue rose 35.2%, and theater food service revenue gained 27%.

Box office revenue per patron exceeded CAD 14 for the first time, Nelson said. Premium-priced formats accounted for 51.4% of box office revenue, with demand for "The Odyssey" regularly selling out Cineplex's eight IMAX 70MM auditoriums. Food service revenue per patron increased 3.5%, supported by pricing initiatives and record merchandise sales — the "Spider-Man: Brand New Day" program became the company's most successful to date.

The CFO highlighted the exhibition business's operating leverage (the effect where fixed costs stay flat while volumes grow): roughly 2.8 million additional guests produced CAD 39.1 million in incremental segment adjusted EBITDAaL, or about CAD 14 per added guest.

How did the other segments perform?

Media revenue was roughly flat, a comparison Nelson said was distorted by elevated pharmaceutical advertising a year earlier and by clients shifting spend into the first half of 2026 around the Olympics and FIFA World Cup. The segment still delivered CAD 15.1 million in adjusted EBITDA at a 79.5% adjusted EBITDAaL margin. Looking ahead, Nelson said advertiser budgets remain weighted to the first half, tariff uncertainty continues to weigh on spending, and the prior-year fourth quarter benefited from pharmaceutical advertising, including weight-loss drug campaigns.

Location-based entertainment revenue slipped 1.7% to CAD 34 million on cautious discretionary spending, yet segment adjusted EBITDAaL rose to CAD 4.8 million from CAD 4.6 million through operational efficiencies. Walker said a new Playdium location in Vaughan is performing well, and Cineplex is investing in attractions at its entertainment venues to drive repeat visits.

What does the strategic review mean for capital allocation?

Walker confirmed the previously announced strategic review remains ongoing, with any alternative weighed against the value Cineplex could create by executing its strategy independently. Pressed by an analyst, he said the review covers a broad range of options but declined to give a timeline or progress update.

Nelson said reaching the target leverage range gives the company more flexibility on capital allocation. Asked about dividends or additional buybacks during the review, he said Cineplex will keep evaluating its options and choose the most appropriate path.

The quarter ended with CAD 137.3 million in cash and no drawings on the CAD 100 million revolving credit facility. Net capital spending was CAD 12 million, full-year capex guidance held at CAD 50 million, and Nelson expects further deleveraging by year-end, helped by box office momentum and seasonal working capital from holiday gift card sales.

Is the momentum sustainable?

October box office revenue jumped 42% year over year, lifted by the documentary "You Can See Everything." Year-to-date box office revenue is up 25% against 21% growth for the domestic industry, Walker said.

He voiced optimism about the 2027 film slate, citing releases in every quarter and carryover from late-2026 openings, while cautioning that individual films can surprise in either direction. Cineplex operates 169 movie theatres and location-based entertainment venues across its Film Entertainment and Content, Amusement and Leisure, and Media businesses.