Cinemark, the third-largest U.S. cinema chain, posted annual revenue of more than $3 billion for 2024, helping the company to earmark $225 million this year to invest in its real estate portfolio, including new development.
The Plano, Texas-based movie theater chain reported its fourth quarter and full-year 2024 earnings Wednesday, delivering a record fourth quarter with total revenue of $814 million — a 27% increase year over year — and a 3% increase compared with the fourth quarter of 2019. Cinemark Holdings reported total revenue of more than $3 billion in fiscal 2024, despite headwinds from the 2023 Hollywood Guild strikes that ended in fall 2023, compared to a flat fiscal 2023.
The company's record quarterly results signal a recovery on the horizon for the cinema chain with plans for a "bounce back" this year, Cinemark President and CEO Sean Gamble told investors during the company's earnings call.
"We had thought that potentially 2024 would be a year we'd see volume creep back to pre-pandemic levels, and then clearly the six months of work stoppage in Hollywood impacted that," Gamble said during the earnings call. "We're looking this year at continuing to bounce back somewhere between 2023 and where 2019 was."
Cinemark, which ended 2024 with nearly 500 locations in the United States, South America and Central America, has outperformed its peers in a struggling movie theater industry in the aftermath of the pandemic. Cinemark's domestic box office results last year surpassed the North American industry performance by 300 basis points in fiscal 2023 and 900 basis points in fiscal 2019, the company said.
Cinemark, which had been on a hiatus from new development and scrutinizing its real estate, is entertaining new real estate projects with plans to open its first Gamescape by Cinemark in El Paso, Texas, this week. Cinemark hopes to replicate the family entertainment concept elsewhere, Gamble said. The $20 million project is expected to include seven movie auditoriums, 18 bowling lanes, arcade gaming, rock climbing and rope courses, laser tag and a bar and restaurant.
"We have reactivated our new build pipeline," Gamble said, adding that new projects will play a role in "optimizing" Cinemark's portfolio over time. "That whole pipeline was put on a bit of pause during the pandemic. But we're encouraged by what we see in terms of future opportunities."
Gamble declined to share more details on new projects that could emerge this year, but said there are "projects in motion" as the industry continues to recover.
However, a state work permit shows there is a Gamescape location in the works by Cinemark in Greenville, Texas, a city about 53 miles northeast of downtown Dallas. The $14 million project that is expected to include movie theaters, bowling, games and restaurants is being built in a retail development known as KB Crossing with construction scheduled for completion in November, according to the permit. Cinemark didn't immediately respond to an email for more information about the Gamescape in Greenville.
New investment
To secure Cinemark's long-term success, Chief Financial Officer Melissa Thomas told investors the company is seeking to up the ante when it comes to capital expenditures.
With the anticipated box office recovery, Cinemark has earmarked $225 million in capital expenditures for fiscal 2025, up from last fiscal year's $151 million budget, Thomas said. About half of the funds will help tackle some deferred maintenance of its existing theaters, as well as conversions of laser projectors, she said, with the remaining being set aside for new builds and other theater enhancements, such as recliners, floor mats and food and beverage upgrades.
Thomas said Cinemark plans to make sure its capital allocation strategy maintains "sufficient flexibility" while being able to "capture opportunities that are right in front of us."
The strength of Cinemark's balance sheet helps set the movie theater chain apart from its rivals. The company ended the year with $1.1 billion in cash on its balance sheet, with executives telling investors it expects to carry an elevated cash balance ahead of paying down pandemic-related debt that matures in August with the cash it has on hand.
Cinemark's larger rivals AMC and Cineworld have billions of dollars of debt on their balance sheets.
Cinemark's belief in its strong balance sheet and the recovery of the industry had the company reinstating its annual cash dividend of $0.32 per share, marking what Gamble said was "another major milestone in our recovery from the pandemic."
Despite the rise of streaming services, Cinemark continues to entertain millions of moviegoers, with the company entertaining 51 million guests in the fourth quarter of 2024 and over 201 million guests in fiscal 2024. Those numbers have yet to reach what the company reported in fiscal 2019, with more than 63 million guests in the fourth quarter of that year and nearly 280 million patrons during the year.