National CineMedia (NCMI) Wedbush Securities AdTech Conference summary

Industry positioning and advertising strategy

• Cinema advertising commands premium CPMs due to high attention from a young, captive audience, outperforming most media except major sports events.

• Significant investment in data enables outcome-based advertising, proving ad effectiveness and attracting new categories like pharma and travel.

• Performance guarantees are now offered, tying ad buys to measurable outcomes such as awareness or traffic, and have been successful in winning new business.

• Programmatic buying is a major focus, with rapid adoption bringing in new advertisers and improving efficiency, especially for local campaigns.

• AI is used to streamline ad creation for local advertisers, reducing costs and increasing production speed.

Market trends and business outlook

• The cinema ad market is benefiting from the decline of linear and cable TV, with CPMs stable or rising and a diversified advertiser mix.

• 2025 is expected to be a strong year for theatrical releases, with some analysts projecting a 20% box office increase.

• The business has shifted from being solely a reach vehicle to also delivering measurable outcomes, enhancing its value proposition.

• Local advertising, historically 20% of revenue, is expected to rebound with programmatic and additional sales staff.

• The company is now bought from multiple ad budgets, including premium video, AVOD, and digital out-of-home, increasing flexibility and reach.

Corporate structure and financial strategy

• Post-restructuring, the company is fully owned by public shareholders, with a new, independent board focused on shareholder interests.

• Headcount has been reduced by more than half since pre-COVID, driving operational efficiency.

• The balance sheet is strong, with no net debt and $50–$60 million in cash; a $100 million share repurchase program is underway.

• Capital allocation is focused on shareholder value, with ongoing evaluation of growth and return strategies.

• The company aims to appeal to both growth and dividend investors, considering a range of options for future capital deployment.