National CineMedia, Inc.
For the period ended Jul 2, 2026. Filed Aug 11, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 2, 2026 · Filed Aug 11, 2026
NCMI$1.58-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-04-02; filed 2026-05-12.
0001193125-26-219502
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-02; filed 2026-08-11.
0001193125-26-344956
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 69 previous paragraphs and 85 current paragraphs.
33 unchanged; 34 reworded; 12 added; 2 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 8 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Second Quarter of 2026 and Second Quarter of 2025.
Current report
National advertising revenue. National advertising revenue increased by $3.7 million, or 9.0%, from $41.2 million for the second quarter of 2025 to $44.9 million for the second quarter of 2026. The increase in national advertising revenue was primarily due to a 19.3% increase in network attendance and an 11.2% increase in CPMs, partially offset by a 7.2% decrease in national advertising utilization, as well as decreased revenue associated with the Courtesy segment of The Noovie®Show in the second quarter of 2026, as compared to the second quarter of 2025.
Current report
Network operating costs. Network operating costs increased $0.5 million, or 15.6%, from $3.2 million for the second quarter of 2025 to $3.7 million for the second quarter of 2026. The increase was primarily related to a $0.3 million increase in severance, transition and retention related compensation incurred in conjunction with the 2026 Transformation Initiative and a $0.2 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider in the second quarter of 2026, as compared to the second quarter of 2025.
Current report
Non-operating income. Total non-operating income increased $1.6 million, or 123.1%, from $1.3 million for the second quarter of 2025 to $2.9 million for the second quarter of 2026. The following table shows the changes in non-operating income for the second quarter of 2026 and the second quarter of 2025 (in millions):
Current report
The increase in non-operating income was primarily due to a $1.5 million increase in gain on the re-measurement of the payable under the tax receivable agreement largely due to the subsequent decrease in the forecast during the second quarter of 2026, as compared to the original forecast, as well as a $0.3 million increase in other non-operating income related to the Company's equity method investments in the second quarter of 2026, compared to the second quarter of 2025.
Current report
Six months ended July 2, 2026 and June 26, 2025
Current report
Revenue. Total revenue increased $5.8 million, or 6.7%, from $86.6 million for the six months ended June 26, 2025 to $92.4 million for the six months ended July 2, 2026. The following is a summary of revenue by category (in millions):
Current report
Local and regional advertising revenue. Local and regional advertising revenue increased by $2.7 million, or 24.1%, from $11.2 million for the six months ended June 26, 2025 to $13.9 million for the six months ended July 2, 2026. The increase in local and regional advertising revenue was primarily due to the sale of a higher percentage of premium inventory at higher CPMs, as well as an increase in contract activity and size within the retail and apparel, gaming, entertainment, wireless and travel categories for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025. These increases were partially offset by a decrease in contract activity and size within the government, education and healthcare categories for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025.
Current report
Operating expenses. Total operating expenses increased $9.6 million, or 7.8%, from $122.5 million for the six months ended June 26, 2025 to $132.1 million for the six months ended July 2, 2026. The following table shows the changes in operating expense for the six months ended July 2, 2026 and June 26, 2025 (in millions):
Current report
Theater exhibition fees. Theater exhibition fees increased $9.5 million, or 18.1%, from $52.6 million for the six months ended June 26, 2025 to $62.1 million for the six months ended July 2, 2026. The increase was primarily related to a $5.7 million increase due to the 17.6% increase in network attendance partially driven by the acquisition of Spotlight, a $2.5 million increase driven by contractual rate increases within our exhibitor agreements and a $1.4 million increase corresponding to the increase in platinum revenue for the six months ended July 2, 2026, compared to the six months ended June 26, 2025.
Current report
Selling and marketing costs. Selling and marketing costs decreased $1.2 million, or 5.9%, from $20.4 million for the six months ended June 26, 2025 to $19.2 million for the six months ended July 2, 2026. The decrease in selling and marketing costs was primarily due to a $1.7 million decrease in selling related expenses driven by the timing of our periodic company-wide sales meeting during the first quarter of 2025 and the cancellation of certain contracts in relation to the 2026 Transformation Initiative, a $0.9 million decrease in personnel related costs due to the 2026 Transformation Initiative and a $0.3 million decrease in variable partnership costs for the six months ended July 2, 2026 compared to the six months ended June 26, 2025. These decreases were partially offset by a $0.6 million increase in severance expense and a $0.5 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider in conjunction with the 2026 Transformation Initiative, $0.2 million increase in barter expenses, a $0.2 million in transformation costs incurred in conjunction with the 2026 Transformation Initiative and a $0.2 million increase in production related expenses for the six months ended July 2, 2026, compared to the six months ended June 26, 2025.
Current report
Administrative and other costs. Administrative and other costs increased $0.6 million, or 2.6%, from $23.5 million for the six months ended June 26, 2025 to $24.1 million for the six months ended July 2, 2026. The increase is primarily due to a $4.6 million increase in transition related administrative expenses and severance, transition and retention expenses incurred in conjunction with the 2026 Transformation Initiative, a $0.5 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider in conjunction with the 2026 Transformation Initiative and a $0.2 million increase temporary transition costs incurred during the integration of Spotlight into the Company's processes. These increases were partially offset by a $1.7 million decrease in legal and professional fees related to the Chapter 11 Case and Cineworld Proceeding, a $1.3 million decrease in stock-based compensation due to the completion of the amortization of the expense associated with the 2024 management equity incentive plan in 2025, a $0.7 million decrease in other administrative expenses partially related to disciplined cost management, a $0.6 million decrease in personnel related expenses due to the 2026 Transformation Initiative and a $0.3 million decrease in lease related expenses for the six months ended July 2, 2026, compared to the six months ended June 26, 2025.
Removed paragraphs (2)
Previous report
First Quarter of 2026 and First Quarter of 2025.
Previous report
(1) Represents the total attendance within our advertising network, including the attendance within Spotlight's network subsequent to the acquisition on November 15, 2025.
Reworded paragraphs (34)
Previous wording
We also sell advertising on our lobby network (“LEN”), a series of strategically placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theater lobbies. In addition, we sell data and digital advertising through the NCMx™ suite of products and through our Noovie digital properties. We also sell advertising across a variety of complementary out of home venues. In combination, our multimedia advertising connects brands with audiences across all screens, both in theaters and beyond, before, during and after their moviegoing experience. We have long-term ESAs (approximately 15.4 weighted average years remaining) and multi-year agreements with our network affiliates, which expire at various dates between June 1, 2026 and July 13, 2033, with our largest affiliate agreement expiring on July 13, 2033. The weighted average remaining term of the ESAs and the network affiliate agreements is 11.6 years as of April 2, 2026. The ESAs and network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions. Our Noovie Show and LEN programming are distributed predominantly via satellite through our proprietary digital content network (“DCN”) and Media Director.
Current wording
We also sell advertising on our lobby entertainment network (“LEN”), a series of strategically placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theater lobbies. In addition, we sell data and digital advertising through the NCMx™ suite of products and through our Noovie digital properties. We also sell advertising across a variety of complementary out of home venues. In combination, our multimedia advertising connects brands with audiences across all screens, both in theaters and beyond, before, during and after their moviegoing experience. We have long-term ESAs (approximately 15.1 weighted average years remaining) and multi-year agreements with our network affiliates, which expire at various dates between August 31, 2026 and July 13, 2033, with our largest affiliate agreement expiring on July 13, 2033. The weighted average remaining term of the ESAs and the network affiliate agreements is 11.4 years as of July 2, 2026. The ESAs and network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions. Our Noovie Show and LEN programming are distributed predominantly via satellite through our proprietary digital content network (“DCN”) and Media Director.
Previous wording
Our operating results may be affected by a variety of internal and external factors and trends described more fully in the section entitled “Risk Factors” in our Annual Report on Form 10-K, filed with the SEC on February 26, 2026, for our fiscal year ended January 1, 2026 and in this Quarterly Report on Form 10-Q.
Current wording
Our operating results may be affected by a variety of internal and external factors and trends described more fully in the section entitled “Risk Factors” in our Annual Report on Form 10-K, filed with the SEC on February 26, 2026, for our fiscal year ended January 1, 2026 and in the Quarterly Report on Form 10-Q filed with the SEC on May 12, 2026 for the quarter ended April 2, 2026.
Previous wording
On March 31, 2026, the Company introduced a transformation initiative to increase operational efficiencies and allow for the ultimate automation of certain functions (“2026 Transformation Initiative”). The Company eliminated the positions of 9.3% of its workforce and is in the process of transitioning the positions of an additional portion of its workforce to an outsourced service provider. The 2026 Transformation Initiative is expected to be completed in the third quarter of 2026. For the quarter ended April 2, 2026, the Company recognized severance expense of $1.0 million related to the eliminated positions and will recognize additional severance and transition costs in the second and third quarter of 2026 related to the transitioning employees. In conjunction with this initiative, the Company reviewed all vendor relationships and is in the process of terminating its relationship with certain vendors resulting in an accrual of estimated termination fees of $2.6 million as of April 2, 2026. The Company also engaged the services of a third-party consultant to assist with the 2026 Transformation Initiative and recorded a charge of $1.1 million in the quarter ended April 2, 2026 related to these services.
Current wording
On March 31, 2026, the Company introduced a transformation initiative to increase operational efficiencies and allow for the ultimate automation of certain functions (“2026 Transformation Initiative”). The Company eliminated the positions of approximately 10.0% of its workforce and transitioned the positions of an additional portion of its workforce to an outsourced service provider. The 2026 Transformation Initiative is expected to be completed in the third quarter of 2026. For the three and six months ended July 2, 2026, the Company recognized severance expense and other incremental personnel costs of $1.7 million and $2.7 million, respectively, related to the eliminated positions and will recognize additional severance and transition costs in the third quarter of 2026 related to transitioning employees to the outsourced service provider. In conjunction with this initiative, the Company reviewed all vendor relationships and is in the process of terminating its relationship with certain vendors resulting in estimated termination fees of $0.5 million and $3.1 million for the three and six months ended July 2, 2026, respectively. The Company also engaged the services of third-party consultants to assist with the 2026 Transformation Initiative and recorded a charge of $0.5 million and $1.6 million in the three and six months ended July 2, 2026, respectively, related to these services.
Previous wording
On November 14, 2025, NCM LLC entered into a Membership Interest Purchase Agreement (“MIPA”) with Spotlight Cinema Networks (“Spotlight”), a niche cinema advertising company, whereby the Company acquired 100.0% of Spotlight. The acquisition of Spotlight added high-scale luxury screens and exhibitors that offer unique and engaging customer experiences to the Company’s platform, unlocking new advertising and preshow entertainment inventory. Spotlight’s exhibitor partners, including Cinépolis Luxury Cinema, Landmark Theatres, Flix Brewhouse and LOOK Dine-In Cinemas, complement NCM’s national theater network and extend NCM’s reach among culturally engaged premium audiences. The addition of Spotlight’s footprint increases NCM’s national market share by more than 6.0% and expands its theater presence by approximately 30.0% in the critical New York and Los Angeles markets. Spotlight was consolidated within the Company's financial statements as of November 15, 2025. Refer to Note 4—Business Combinations for more information regarding the acquisition and consolidation of Spotlight.
Current wording
On November 14, 2025, NCM LLC entered into a Membership Interest Purchase Agreement (“MIPA”) with Spotlight Cinema Networks (“Spotlight”), a niche cinema advertising company, whereby the Company acquired 100.0% of Spotlight. The acquisition of Spotlight added high-scale luxury screens and exhibitors that offer unique and engaging customer experiences to the Company’s platform, unlocking new advertising and preshow entertainment inventory. Spotlight’s exhibitor partners, including Cinépolis Luxury Cinema, Landmark Theatres, Flix Brewhouse and LOOK Dine-In Cinemas, complement NCM’s national theater network and extend NCM’s reach among culturally engaged premium audiences. The addition of Spotlight’s footprint increased NCM’s national market share by more than 6.0% and expanded its theater presence by approximately 30.0% in the critical New York and Los Angeles markets. Spotlight was consolidated within the Company's financial statements as of November 15, 2025. Refer to Note 4—Business Combinations for more information regarding the acquisition and consolidation of Spotlight.
Previous wording
On January 24, 2025, NCM LLC, as borrower, entered into a Loan and Security Agreement with U.S. Bank National Association, as lender (the “2025 Credit Facility”). The agreement provides for a $45.0 million senior secured revolving credit facility that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding and terminated all commitments under its Revolving Credit Facility 2023, and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. The 2025 Credit Facility has reduced the Company's overall interest expense, extends the maturity date to 2028 and is a cash flow-based revolving loan compared to the asset-based revolving loan of the Revolving Credit Facility 2023. As of April 2, 2026, NCM LLC has an outstanding balance of $12.0 million under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default.
Current wording
On January 24, 2025, NCM LLC, as borrower, entered into a Loan and Security Agreement with U.S. Bank National Association, as lender (the “2025 Credit Facility”). The agreement provides for a $45.0 million senior secured revolving credit facility that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding and terminated all commitments under its Revolving Credit Facility 2023, and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. The 2025 Credit Facility is expected to result in a meaningful reduction of the Company’s overall interest expense, extends the maturity date to 2028 and is a cash flow-based revolving loan compared to the asset-based revolving loan of the Revolving Credit Facility 2023. As of July 2, 2026, NCM LLC has an outstanding balance of $12.0 million under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default.
Previous wording
On March 18, 2024, the Board of Directors of the Company approved a stock repurchase program under which the Company is authorized to use assets of the Company to repurchase up to $100.0 million of shares of the Company’s Common Stock, exclusive of any fees, commissions or other expenses related to such repurchases, from time to time over a period of three years. Shares may be repurchased under the program through open market purchases, block trades, or accelerated or other structured share repurchase programs. There were 0.2 million and 1.5 million shares repurchased on the open market during the three months ended April 2, 2026 and March 27, 2025, respectively. In accordance with Accounting Standards Codification (“ASC”) 505 —Equity, these shares were retired and any excess over par value paid was recorded as a reduction to retained earnings of $0.8 million and $9.0 million for the three months ended April 2, 2026 and March 27, 2025, respectively. As of April 2, 2026, 6.8 million shares have been repurchased on the open market since the program's inception.
Current wording
On March 18, 2024, the Board of Directors of the Company approved a stock repurchase program under which the Company is authorized to use assets of the Company to repurchase up to $100.0 million of shares of the Company’s Common Stock, exclusive of any fees, commissions or other expenses related to such repurchases, from time to time over a period of three years. Shares may be repurchased under the program through open market purchases, block trades, or accelerated or other structured share repurchase programs. There were 0.1 million, 1.8 million, 0.3 million and 3.3 million shares repurchased on the open market during the three and six months ended July 2, 2026 and June 26, 2025, respectively. In accordance with Accounting Standards Codification (“ASC”) 505 —Equity, these shares were retired and any excess over par value paid was recorded as a reduction to retained earnings of $0.2 million, $9.9 million, $0.8 million and $18.8 million for the three and six months ended July 2, 2026 and June 26, 2025, respectively. As of July 2, 2026, 6.9 million shares have been repurchased on the open market since the program's inception.
Previous wording
Advisor and legal fees incurred in connection with the acquisition of Spotlight in the fourth quarter of 2025, as well as temporary transition costs incurred during the integration of Spotlight into the Company's processes during the first quarter of 2026.
Current wording
Advisor and legal fees incurred in connection with the acquisition of Spotlight in the fourth quarter of 2025, as well as temporary transition costs incurred during the integration of Spotlight into the Company's processes during the first and second quarters of 2026.
Previous wording
The results of operations data for the three months ended April 2, 2026 (first quarter of 2026) and March 27, 2025 (first quarter of 2025) were derived from the unaudited Condensed Consolidated Financial Statements and accounting records of NCM, Inc. and should be read in conjunction with the accompanying notes.
Current wording
The results of operations data for the three months ended July 2, 2026 (second quarter of 2026) and June 26, 2025 (second quarter of 2025) were derived from the unaudited Condensed Consolidated Financial Statements and accounting records of NCM, Inc. and should be read in conjunction with the accompanying notes.
Previous wording
Revenue. Total revenue decreased $0.9 million, or 2.6%, from $34.9 million for the first quarter of 2025 to $34.0 million for the first quarter of 2026. The following is a summary of revenue by category (in millions):
Current wording
Revenue. Total revenue increased $6.6 million, or 12.7%, from $51.8 million for the second quarter of 2025 to $58.4 million for the second quarter of 2026. The following is a summary of revenue by category (in millions):
Previous wording
The following table shows data on theater attendance and revenue per attendee for the first quarter of 2026 and 2025:
Current wording
The following table shows data on theater attendance and revenue per attendee for the second quarter of 2026 and 2025:
Previous wording
Local and regional advertising revenue. Local and regional advertising revenue decreased by $0.5 million, or 10.2%, from $4.9 million for the first quarter of 2025 to $4.4 million for the first quarter of 2026. The decrease in local and regional advertising revenue was primarily due to reduced contract activity and size within the government, education and healthcare categories for the first quarter of 2026, as compared to the first quarter of 2025. These decreases were partially offset by an increase in contract activity and size within the wireless and travel categories in the first quarter of 2026, as compared to the first quarter of 2025.
Current wording
Local and regional advertising revenue. Local and regional advertising revenue increased by $3.1 million, or 48.4%, from $6.4 million for the second quarter of 2025 to $9.5 million for the second quarter of 2026. The increase in local and regional advertising revenue was primarily due to the sale of a higher percentage of premium inventory at higher CPMs, as well as an increase in activity within the retail and apparel, gaming and entertainment categories for the second quarter of 2026, as compared to the second quarter of 2025. These increases were partially offset by a decrease in activity within the government category in the second quarter of 2026, as compared to the second quarter of 2025.
Previous wording
ESA Party beverage revenue. ESA Party beverage revenue decreased by $0.5 million, or 19.2%, from $2.6 million for the first quarter of 2025 to $2.1 million for the first quarter of 2026. The decrease in ESA Party beverage revenue was primarily due to a decrease in the length of the on-screen advertising purchased by an ESA party in accordance with its underlying beverage concessionaire agreement in the first quarter of 2026, as compared to the first quarter of 2025. This decrease was offset by a 4.4% increase in ESA Party attendance in the first quarter of 2026, as compared to the first quarter of 2025, as well as contractual rate increases.
Current wording
ESA Party beverage revenue. ESA Party beverage revenue decreased by $0.2 million, or 4.8%, from $4.2 million for the second quarter of 2025 to $4.0 million for the second quarter of 2026. The decrease in ESA Party beverage revenue was primarily due to a decrease in the length of the on-screen advertising purchased by an ESA party in accordance with its underlying beverage concessionaire agreement in the second quarter of 2026, as compared to the second quarter of 2025. This decrease was offset by a 12.6% increase in ESA Party attendance in the second quarter of 2026, as compared to the second quarter of 2025.
Previous wording
Operating expenses. Total operating expenses increased $2.1 million, or 3.6%, from $58.8 million for the first quarter of 2025 to $60.9 million for the first quarter of 2026. The following table shows the changes in operating expense for the first quarter of 2026 (in millions):
Current wording
Operating expenses. Total operating expenses increased $7.4 million, or 11.6%, from $63.8 million for the second quarter of 2025 to $71.2 million for the second quarter of 2026. The following table shows the changes in operating expense for the second quarter of 2026 and the second quarter of 2025 (in millions):
Previous wording
Theater exhibition fees. Theater exhibition fees increased by $2.9 million, or 13.4%, from $21.7 million for the first quarter of 2025 to $24.6 million for the first quarter of 2026. The increase was primarily related to a $1.9 million increase in fees related to the 15.0% increase in network attendance due in part to the acquisition of Spotlight, $0.8 million increase driven by contractual rate increases within our exhibitor agreements and a $0.1 million increase related to the number of active screens in the first quarter of 2026, as compared to the first quarter of 2025.
Current wording
Theater exhibition fees. Theater exhibition fees increased by $6.7 million, or 21.7%, from $30.9 million for the second quarter of 2025 to $37.6 million for the second quarter of 2026. The increase was primarily related to a $3.8 million increase due to the 19.3% increase in network attendance partially driven by the acquisition of Spotlight, a $1.8 million increase driven by contractual rate increases within and renegotiations of our exhibitor agreements and a $0.9 million increase corresponding to the increase in platinum revenue in the second quarter of 2026, as compared to the second quarter of 2025.
Previous wording
Selling and marketing costs. Selling and marketing costs decreased by $1.2 million, or 11.2%, from $10.7 million for the first quarter of 2025 to $9.5 million for the first quarter of 2026. This was primarily due to a $1.2 million decrease in selling related expenses primarily driven by the timing of our periodic company-wide sales meeting during the first quarter of 2025, a $0.4 million decrease in commission expenses in line with the decrease in local revenue and a $0.2 million decrease in variable partnership costs in the first quarter of 2026, as compared to the first quarter of 2025. This decrease was partially offset by a $0.6 million increase in severance expenses due to the 2026 Transformation Initiative during the first quarter of 2026 and $0.3 million increase in barter costs in the first quarter of 2026, as compared to the first quarter of 2025.
Current wording
Selling and marketing costs. Selling and marketing costs decreased by $0.2 million, or 2.0%, from $9.8 million for the second quarter of 2025 to $9.6 for the second quarter of 2026. This was primarily due to a $1.3 million decrease in selling related expenses due to the 2026 Transformation Initiative, primarily caused by the cancellation of certain contracts as well as decreased personnel related costs. These decreases were partially offset by a $0.3 million increase in commission expense driven by the increase in revenue in the second quarter of 2026, as compared to the second quarter of 2025, a $0.3 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider, a $0.3 million increase in other transition costs incurred in conjunction with the 2026 Transformation Initiative and $0.2 million increase in bad debt expense in the second quarter of 2026, as compared to the second quarter of 2025.
Previous wording
Administrative and other costs. Administrative and other costs increased $0.4 million, or 3.1%, from $12.9 million for the first quarter of 2025 to $13.3 million for the first quarter of 2026. The increase was primarily due to a $3.6 million increase in expenses due to the 2026 Transformation Initiative. This increase was partially offset by a $1.7 million decrease in legal and professional fees related to the Chapter 11 Case and Cineworld Proceeding, a $1.2 million decrease in performance related compensation primarily related to stock-based compensation and the completion of the amortization of the expense associated with the 2024 management equity incentive plan in 2025 and a decrease in bonus expense due to the decrease in the Company's projected performance compared to targets in the first quarter of 2026, as compared to the first quarter of 2025.
Current wording
Administrative and other costs. Administrative and other costs increased $0.2 million, or 1.9%, from $10.6 million for the second quarter of 2025 to $10.8 million for the second quarter of 2026. The increase was primarily due to $1.2 million in transition related administrative expenses and severance, transition and retention expenses incurred in conjunction with the 2026 Transformation Initiative and a $0.4 increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider. These increases were partially offset by a $0.5 million decrease in personnel related costs due to the 2026 Transformation Initiative, a $0.4 million decrease in stock-based compensation due to the completion of the amortization of the expense associated with the 2024 management equity incentive plan in 2025, a $0.2 million decrease in cloud computing expenses and a $0.1 million decrease in lease expense in the second quarter of 2026, as compared to the second quarter of 2025.
Previous wording
Depreciation expense. Depreciation expense increased $0.4 million, or 36.4%, from $1.1 million for the first quarter of 2025, to $1.5 million for the first quarter of 2026. The increase was primarily due to assets placed in service in late 2025 related to the completion of certain leasehold improvements.
Current wording
Depreciation expense. Depreciation expense increased $0.4 million, or 36.4%, from $1.1 million for the second quarter of 2025, to $1.5 million for the second quarter of 2026. The increase was primarily due to assets placed in service in late 2025 related to the completion of certain leasehold improvements.
Previous wording
Amortization expense. Amortization expense decreased $1.3 million, or 14.0%, from $9.3 million for the first quarter of 2025 to $8.0 million for the first quarter of 2026. The decrease was primarily due to the reduction in and extension of the useful life of the intangible asset related to the ESA Parties following the 2025 AMC Agreement in the second quarter of 2025 as further discussed in Note 5—Intangible Assets and Note 8—Income Taxes.
Current wording
Amortization expense. Amortization expense decreased $0.2 million, or 2.4%, from $8.2 million for the second quarter of 2025 to $8.0 million for the second quarter of 2026. The decrease was due to the reduction in and extension of the useful life of the intangible asset related to the ESA Parties following the 2025 AMC Agreement in the second quarter of 2025 as further discussed in Note 5—Intangible Assets and Note 8—Income Taxes.
Previous wording
National advertising revenue. National advertising revenue increased by $0.1 million, or 0.4%, from $27.4 million for the first quarter of 2025 to $27.5 million for the first quarter of 2026. The increase in national advertising revenue was primarily due to a 21.2% increase in national advertising utilization and a 15.0% increase in network attendance in the first quarter of 2026, as compared to the first quarter of 2025. In order to increase utilization and better monetize attendance, the Company strategically decreased national advertising CPMs by 21.6% in the first quarter of 2026, as compared to the first quarter of 2025.
Current wording
National advertising revenue. National advertising revenue increased by $3.7 million, or 5.4%, from $68.6 million for the six months ended June 26, 2025 to $72.3 million for the six months ended July 2, 2026. The increase in national advertising revenue was primarily due to a 3.1% increase in national advertising utilization, as well as a 17.6% increase in network attendance in the six months ended July 2, 2026, as compared to the six months ended June 26, 2025. These increases were partially offset by a 3.0% decrease in national advertising CPMs, as well as decreased revenue associated with the Courtesy segment of The Noovie®Show in the six months ended June 26, 2025, as compared to the six months ended July 2, 2026.
Previous wording
Network operating costs. Network operating costs increased $0.9 million, or 29.0%, from $3.1 million for the first quarter of 2025 to $4.0 million for the first quarter of 2026. The increase was primarily related to a $0.6 million increase in personnel related costs, primarily due to severance expense recognized in conjunction with the 2026 Transformation Initiative, a $0.1 million increase in temporary duplicative costs incurred during the transition from satellite to broadband delivery during 2026 and a $0.1 million increase in temporary transition costs incurred during the integration of Spotlight into the Company's processes in the first quarter of 2026, as compared to the first quarter of 2025.
Current wording
Network operating costs. Network operating costs increased $1.5 million, or 24.2%, from $6.2 million for the six months ended June 26, 2025 to $7.7 million for the six months ended July 2, 2026. The increase was primarily related to a $0.5 million increase in severance, transition and retention related compensation incurred in conjunction with the 2026 Transformation Initiative, a $0.4 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider, a $0.2 million increase in annual licensing costs, a $0.1 million increase in network delivery costs due to temporary duplicative costs incurred during the transition from satellite to broadband delivery during 2026 and $0.1 million incurred during the integration of Spotlight into the Company's processes for the six months ended July 2, 2026, compared to the six months ended June 26, 2025.
Previous wording
Non-operating expense. Total non-operating expense decreased $5.1 million, or 75.0%, from $6.8 million for the first quarter of 2025 to $1.7 million for the first quarter of 2026. The following table shows the changes in non-operating expense for the first quarter of 2026 and the first quarter of 2025 (in millions):
Current wording
Non-operating (income) expense. Total non-operating income increased $6.6 million, or 120.0%, from $5.5 million of expense for the six months ended June 26, 2025 to $1.1 million of income for the six months ended July 2, 2026. The following table shows the changes in non-operating (income) expense for the six months ended July 2, 2026 and June 26, 2025 (in millions):
Previous wording
The decrease in non-operating expense was primarily due to a $3.6 million decrease in loss on the remeasurement of the payable under the TRA largely due to the addition of one new forecasted year in 2026 to replace the completed prior year within the calculation and the subsequent decrease in the forecast during 2025, as compared to the original forecast, as well the inclusion of the AMC Termination Agreement within the calculation in 2026 and a $1.8 million decrease in loss on debt extinguishment in the first quarter of 2026, compared to the first quarter of 2025. These decreases were partially offset by a $0.4 million decrease in interest income in the first quarter of 2026, compared to the first quarter of 2025.
Current wording
The increase in non-operating (income) expense was primarily due to a $4.9 million increase in (gain) loss on the re-measurement of the payable under the tax receivable agreement largely due to the addition of one new forecasted year in 2026 to replace the completed prior year within the calculation, the subsequent decrease in the forecast during the six months ended July 2, 2026, as compared to the original forecast and the inclusion of the AMC Termination Agreement within the calculation in 2026. The increase was also due to a $1.8 million decrease in loss on debt extinguishment incurred in the six months ended July 2, 2026, compared to the six months ended June 26, 2025. The increase is also due to a $0.4 million increase in other operating income in the six months ended July 2, 2026, compared to the six months ended June 26, 2025. These increases were partially offset by a $0.3 million decrease in interest income and a $0.2 million increase in interest expense in the six months ended July 2, 2026, compared to the six months ended June 26, 2025.
Previous wording
Beverage revenue—Under the ESAs, up to 90 seconds of The Noovie®Show program can be sold to the ESA Parties to satisfy their on-screen advertising commitments under their beverage concessionaire agreements. In 2025, Cinemark purchased 60 seconds of on-screen advertising time and AMC purchased 30 seconds to satisfy their obligations under their beverage concessionaire agreements. In 2026, one ESA party began purchasing less on-screen advertising time for nine months of the year in accordance with its beverage concessionaire agreement. This change in the ESA party's obligation, in conjunction with changes in the fee structure of the other ESA party's beverage agreement that are expected to be implemented later in 2026, will result in lower beverage revenue in 2026, as compared to 2025. The price for the time sold will increase at a fixed rate of 2.0% each year.
Current wording
Beverage revenue—Under the ESAs, up to 90 seconds of The Noovie®Show program can be sold to the ESA Parties to satisfy their on-screen advertising commitments under their beverage concessionaire agreements. In 2025, Cinemark purchased 60 seconds of on-screen advertising time and AMC purchased 30 seconds to satisfy their obligations under their beverage concessionaire agreements. In 2026, one ESA party began purchasing less on-screen advertising time for nine months of the year in accordance with its beverage concessionaire agreement. This change in the ESA party's obligation will result in lower beverage revenue in 2026, as compared to 2025. The price for the time sold will increase at a fixed rate of 2.0% each year.
Previous wording
Theater exhibition fees—In consideration for the Company’s access to the ESA Parties’ and network affiliate theaters for on-screen and LEN advertising and lobby promotions, the ESA Parties and network affiliates receive access fees based either upon number of attendees, a revenue share or a combination, including a minimum revenue guarantee per attendee. Many of these agreements contain annual increases to the respective fee structures or guaranteed minimums, either per patron, per theater and/or per digital screen. The payments under the ESA Parties' agreements and network affiliate agreements are recorded within ‘Theater exhibition fees’ in the unaudited Condensed Consolidated Statement of Operations.
Current wording
Theater exhibition fees—In consideration for the Company’s access to the ESA Parties’ and network affiliate theaters for on-screen and LEN advertising and lobby promotions, the ESA Parties and network affiliates receive access fees based either upon number of attendees, a revenue share or a combination, including a minimum revenue guarantee per attendee. Many of these agreements contain annual increases to the respective fee structures or guaranteed minimums, either per patron, per theater and/or per digital screen. In May 2026, the Company implemented changes in the fee structure of an ESA party's beverage agreement which will result in increased theater exhibition fees in 2026, as compared to 2025. The payments under the ESA Parties' agreements and network affiliate agreements are recorded within ‘Theater exhibition fees’ in the unaudited Condensed Consolidated Statements of Operations.
Previous wording
On January 24, 2025, NCM LLC, as borrower, entered into the 2025 Credit Facility with U.S. Bank National Association, as lender. The agreement provides for a $45.0 million senior secured revolving credit facility that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding, as of December 26, 2024, and terminated all commitments under its Revolving Credit Facility 2023 (as defined below), and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. As of April 2, 2026, NCM LLC has an outstanding balance of $12.0 million under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default.
Current wording
On January 24, 2025, NCM LLC, as borrower, entered into the 2025 Credit Facility with U.S. Bank National Association, as lender. The agreement provides for a $45.0 million senior secured revolving credit facility that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding, as of December 26, 2024, and terminated all commitments under its Revolving Credit Facility 2023 (as defined below), and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. As of July 2, 2026, NCM LLC had an outstanding balance of $12.0 million under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default.
Previous wording
Included in cash, cash equivalents and marketable securities as of April 2, 2026, January 1, 2026 and March 27, 2025, was $39.1 million, $23.8 million and $26.9 million, respectively, of cash held by NCM LLC that is not available to satisfy dividends declared by NCM, Inc., income tax, TRA payments and other obligations.
Current wording
Included in cash, cash equivalents and marketable securities as of July 2, 2026, January 1, 2026 and June 26, 2025, was $36.7 million, $23.8 million and $18.2 million, respectively, of cash held by NCM LLC that is not available to satisfy dividends declared by NCM, Inc., income tax, TRA payments and other obligations.
Previous wording
The 2025 Credit Facility portion of NCM LLC’s total borrowings that is available, subject to certain conditions, for general corporate purposes of NCM LLC in the ordinary course of business and for other transactions permitted under the senior secured credit facility, and a portion is available for letters of credit. NCM LLC’s total capacity under the 2025 Credit Facility is $45.0 million as of April 2, 2026, January 1, 2026 and March 27, 2025. As of April 2, 2026, January 1, 2026 and March 27, 2025, the amount available under the 2025 Credit Facility in the table above is net of letters of credit of $0.6 million, $0.6 million and 0.6 million.
Current wording
The 2025 Credit Facility portion of NCM LLC’s total borrowings that is available, subject to certain conditions, for general corporate purposes of NCM LLC in the ordinary course of business and for other transactions permitted under the senior secured credit facility, and a portion is available for letters of credit. NCM LLC’s total capacity under the 2025 Credit Facility is $45.0 million as of July 2, 2026, January 1, 2026 and June 26, 2025. As of July 2, 2026, January 1, 2026 and June 26, 2025, the amount available under the 2025 Credit Facility in the table above is net of letters of credit of $0.6 million.
Previous wording
As of April 2, 2026, the weighted average remaining maturity of our debt facility was 1.8 years. As of April 2, 2026, NCM LLC has an outstanding balance of $12.0 million under the 2025 Credit Facility. All of our borrowings bear interest at variable rates and our net income and earnings per share could fluctuate with market interest rate fluctuations that could increase or decrease the interest paid on our borrowings.
Current wording
As of July 2, 2026, the weighted average remaining maturity of our debt facility was 1.6 years. As of July 2, 2026, NCM LLC has an outstanding balance of $12.0 million under the 2025 Credit Facility. All of our borrowings bear interest at variable rates and our net income and earnings per share could fluctuate with market interest rate fluctuations that could increase or decrease the interest paid on our borrowings.
Previous wording
Operating Activities. The $12.1 million increase in cash provided by operating activities for the three months ended April 2, 2026, as compared to the three months ended March 27, 2025, was due to (1) a $21.0 million increase in the change in deferred revenue, (2) an $11.0 million decrease in payments of accounts payable and accrued expenses and (3) a $0.4 million increase in the change in prepaid expenses. These increases in cash provided by operating activities were partially offset by (1) a $12.1 million decrease in accounts receivable collections, (2) a $6.3 million decrease in net loss adjusted for non-cash items, (3) a $1.6 million increase in the change in ESA amounts due to/from, net and (4) a $0.3 million decrease in ESA integration and other encumbered theater payments received for the three months ended April 2, 2026, as compared to the three months ended March 27, 2025.
Current wording
Operating Activities. The $15.5 million increase in cash provided by operating activities for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025, was due to (1) a $12.2 million increase in the change in deferred revenue, (2) a $6.6 million decrease in payments of accounts payable and accrued expenses, (3) a $6.1 million increase in accounts receivable collections, (4) a $0.5 million increase in the change in prepaid expenses and (5) a $0.3 million decrease in payments to the ESA Parties under the tax receivable agreement. These increases in cash provided by operating activities were partially offset by (1) a $7.8 million increase in net loss adjusted for non-cash items, (2) a $1.8 million increase in the change in ESA amounts due to/from, net and (3) a $0.6 million decrease in ESA integration and other encumbered theater payments received for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025.
Previous wording
Investing Activities. The $0.6 million decrease in cash used in investing activities for the three months ended April 2, 2026, as compared to the three months ended March 27, 2025, was primarily due to a $0.4 million decrease in purchases of property and equipment and a $0.2 million increase in proceeds received from an equity method investment for the three months ended April 2, 2026, as compared to the three months ended March 27, 2025.
Current wording
Investing Activities. The $1.3 million decrease in cash used in investing activities for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025, was primarily due to a $1.4 million decrease in purchases of property and equipment and a $0.3 million increase in proceeds received from an equity method investment for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025. These decreases were partially offset by a $0.4 million increase in purchases of intangible assets for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025.
Previous wording
Financing Activities. The $16.4 million decrease in cash used in financing activities for the three months ended April 2, 2026, as compared to the three months ended March 27, 2025, was primarily due to a $10.0 million decrease in repayments due to the repayment of the Revolving Credit Facility 2023 in the first quarter of 2025, a $7.8 million decrease in payments made to repurchase shares of NCM, Inc.'s common stock and a $1.5 million decrease in payments of debt issuance costs associated with the termination of the Revolving Credit Facility 2023 and commencement of the Credit Facility 2025 in the first quarter of 2025. These decreases in cash used for financing activities were partially offset by a $2.8 million increase in payment of dividends for the three months ended April 2, 2026, as compared to the three months ended March 27, 2025.
Current wording
Financing Activities. The $29.5 million decrease in cash used in financing activities for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025, was primarily due to a $17.5 million decrease in payments made to repurchase shares of NCM, Inc.'s common stock, a $10.0 million decrease in repayments under the Revolving Credit Facility 2023 due to the repayment of the outstanding balance in the first quarter of 2025, a $1.5 million decrease in payments of debt issuance costs associated with the termination of the Revolving Credit Facility 2023 and commencement of the Credit Facility 2025 in the first quarter of 2025 and a $0.5 million decrease in repurchase of stock for restricted stock tax withholding for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025.
Previous wording
NCM, Inc.’s primary source of liquidity and capital resources is the quarterly available cash distributions from NCM LLC as well as its existing cash balances, which as of April 2, 2026, were $48.6 million (including $39.1 million of cash held by NCM LLC). NCM LLC’s primary sources of liquidity and capital resources are cash provided by its operating activities, availability under the 2025 Credit Facility and cash on hand. The $39.1 million of cash at NCM LLC will be used to fund operations and strategic investments. Cash at NCM, Inc. is used to fund income taxes, payments associated with the TRA, stock repurchases and for future payment of dividends to NCM, Inc. stockholders if and when declared by the Board of Directors.
Current wording
NCM, Inc.’s primary source of liquidity and capital resources is the quarterly available cash distributions from NCM LLC as well as its existing cash balances, which as of July 2, 2026, were $43.1 million (including $36.7 million of cash held by NCM LLC). NCM LLC’s primary sources of liquidity and capital resources are cash provided by its operating activities, availability under the 2025 Credit Facility and cash on hand. The $36.7 million of cash at NCM LLC will be used to fund operations and strategic investments. Cash at NCM, Inc. is used to fund income taxes, payments associated with the TRA, stock repurchases and for future payment of dividends to NCM, Inc. stockholders if and when declared by the Board of Directors.
Previous wording
NCM LLC is required, pursuant to the terms of the NCM LLC Operating Agreement, to distribute its available cash, as defined in the NCM LLC Operating Agreement, quarterly to its members. The members are only able to receive available cash when they hold units. The available cash amount to the members of NCM LLC, for the three months ended April 2, 2026, was calculated as approximately negative $18.4 million, related entirely to NCM, Inc., as the only holder of NCM LLC units as of April 2, 2026. NCM, Inc. has the option to defer payment of any available cash distributions payable to NCM, Inc. at its discretion. Any negative amounts can only be offset against positive available cash within the second quarter of future years, in accordance with the agreement. As of April 2, 2026, NCM LLC owed NCM, Inc. $52.7 million in deferred available cash distributions.
Current wording
NCM LLC is required, pursuant to the terms of the NCM LLC Operating Agreement, to distribute its available cash, as defined in the NCM LLC Operating Agreement, quarterly to its members. The members are only able to receive available cash when they hold units. The available cash amount to the members of NCM LLC, for the six months ended July 2, 2026, was calculated as approximately negative $21.7 million, associated entirely with NCM, Inc., as the only holder of NCM LLC units as of July 2, 2026. NCM, Inc. has the option to defer payment of any available cash distributions payable to NCM, Inc. at its discretion. Any negative amounts can only be offset against positive available cash within the second quarter of future years, in accordance with the agreement. As of July 2, 2026, NCM LLC owed NCM, Inc. $52.7 million in deferred available cash distributions.
Previous wording
NCM, Inc. expects to use its cash balances and cash received from future available cash distributions (as allowed for under the 2025 Credit Facility) to fund payments associated with the TRA, stock repurchases and future dividends if and when declared by the Board of Directors. The Company made an estimated TRA payment in 2025 for the 2024 tax year and did not make a TRA payment in 2024 for the 2023 tax year. The Company expects to make a TRA payment in 2026 for the 2025 tax year. Deferred distributions from NCM LLC and NCM, Inc. cash balances should be sufficient to fund payments associated with the TRA, income taxes and any stock repurchases or declared dividends for the foreseeable future at the discretion of the Board of Directors. At the discretion of the Board of Directors, the Company will consider returning a portion of its free cash flow to stockholders. The declaration, payment, timing and amount of any future stock repurchases or dividends payable will be at the sole discretion of the Board of Directors who will take into account general economic and advertising market business conditions, the Company’s financial condition, available cash, current and anticipated cash needs and any other factors that the Board of Directors considers relevant.
Current wording
NCM, Inc. expects to use its cash balances and cash received from future available cash distributions (as allowed for under the 2025 Credit Facility) to fund payments associated with the TRA, stock repurchases and future dividends if and when declared by the Board of Directors. The Company made an estimated TRA payment in 2025 for the 2024 tax year and did not make a TRA payment in 2024 for the 2023 tax year. The Company made an estimated TRA payment in 2026 for the 2025 tax year. Deferred distributions from NCM LLC and NCM, Inc. cash balances should be sufficient to fund payments associated with the TRA, income taxes and any stock repurchases or declared dividends for the foreseeable future at the discretion of the Board of Directors. At the discretion of the Board of Directors, the Company will consider returning a portion of its free cash flow to stockholders. The declaration, payment, timing and amount of any future stock repurchases or dividends payable will be at the sole discretion of the Board of Directors who will take into account general economic and advertising market business conditions, the Company’s financial condition, available cash, current and anticipated cash needs and any other factors that the Board of Directors considers relevant.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
(1) Represents the total attendance within NCM LLC’s advertising network, including Spotlight subsequent to November 15, 2025.
Current report — wording carried from elsewhere
The following table shows data on theater attendance and revenue per attendee for the six months ended July 2, 2026 and June 26, 2025:
Current report — wording carried from elsewhere
(1) Represents the total attendance within NCM LLC’s advertising network, including Spotlight subsequent to November 15, 2025.
Current report — wording carried from elsewhere
ESA Party beverage revenue. ESA Party beverage revenue decreased $0.6 million, or 8.8%, from $6.8 million for the six months ended June 26, 2025 to $6.2 million for the six months ended July 2, 2026. The decrease in ESA Party beverage revenue was primarily due to a decrease in the length of the on-screen advertising purchased by an ESA party in accordance with its underlying beverage concessionaire agreement for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025. This decrease was offset by a 9.3% increase in ESA Party attendance, as well as contractual rate increases within the ESAs for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025.
Current report — wording carried from elsewhere
Depreciation expense. Depreciation expense increased $0.8 million, or 36.4%, from $2.2 million for the six months ended June 26, 2025 to $3.0 million for the six months ended July 2, 2026. The increase was primarily due to assets placed in service in late 2025 related to the completion of certain leasehold improvements.
Current report — wording carried from elsewhere
Amortization expense. Amortization expense decreased $1.6 million, or 9.1%, from $17.6 million for the six months ended June 26, 2025 to $16.0 million for the six months ended July 2, 2026. The decrease was due to the reduction in and extension of the useful life of the intangible asset related to the ESA Parties following the 2025 AMC Agreement in the second quarter of 2025, as further discussed in Note 5—Intangible Assets and Note 8—Income Taxes.