AMC's blockbuster quarter

Nicole Kidman has been telling moviegoers for years that they “came to this place for magic.” Today, investors have to agree.

Shares of AMC Entertainment surged 26.8% this afternoon after it reported a stellar quarter:

• The movie chain boasted record quarterly revenue of $1.6 billion, a 14% jump from last year and far above expectations of $1.47 billion.
• The company reported an all-time high adjusted EBITDA of $320.6 million, compared to $189.2 million last year. EBITDA measures how much a company’s core business earned—in this case showing movies—and cuts out interest expenses for a debt-laden company like AMC.
• US movie attendance rose 12% year over year, while attendance jumped 18% in international markets.

“In AMC’s entire 106-year history, there has never been a quarter like this one,” AMC CEO Adam Aron said on the company’s earnings call.

Blockbusters are back: After years of post-pandemic malaise, it feels like Hollywood is finally getting its mojo back. Major releases from household names like Toy Story 5 and The Super Mario Galaxy Movie were boons for AMC, as well as sleeper hits like Obsession and Backrooms. Christopher Nolan’s highly anticipated The Odyssey also premiered this past weekend and became Nolan’s best launch ever, grossing $124 million in its opening weekend, likely boosting AMC’s revenue in the current quarter.

From movies to memes

AMC’s road to today’s impressive announcement has been a kind of odyssey in itself. Although Covid-19 disrupted moviegoing six years ago, AMC never quite got fully back on its feet. While the stock is up 57.06% this year so far (partially thanks to today’s bump), over the past five years, AMC is still down a staggering 99.43%.

If you’ve had the displeasure of visiting r/WallStreetBets over the past few years, you might recognize AMC for its meme stock fame. Back in 2021, AMC reached an all-time high of $450 per share as it got swept up into meme madness—even while its actual business was still suffering post-pandemic. Although management took advantage of the meme mania to sell shares to raise cash and avoid bankruptcy, the move diluted existing shares, and the chain’s same old struggles continued.

In a statement released today, Aron acknowledged the company’s difficult road: “Finally, after some admittedly tough years as our industry recovered only slowly from the ravages of COVID-19 and its aftermath, the relentless focus of AMC on delighting our guests as we execute with all cylinders blazing is reflected in our record-setting second quarter financial results.”

While today’s earnings were sound, the company still faces challenges. The debt that management took out to prevent bankruptcy is still substantial, even while refinancing has put AMC’s balance sheet in a better position. And while moviegoing attendance has risen, it’s still below pre-pandemic levels, according to Reuters.

Only time will tell if AMC’s comeback is a fairytale ending, or one more plot point in a tragic tale.—LB