Six Flags Entertainment Corporation 2026 Third Quarter Earnings Call - SIX FLAGS ENTERTAINMENT CORPORATION

Explicit Guidance:

• Q4 2026 Adjusted EBITDA: Expect to generate approximately $140–$150 million on a same-park basis, down from $166.9 million in Q4 2025. The shortfall is primarily attributed to the impact of the Six Flags Over Georgia incident and Hurricane Isis in October.
• Full Year 2026 Performance: Guidance remains to grow same-park adjusted EBITDA for the full year compared to 2025.
• Operating Days: Expect approximately 4,868 operating days for the full year, which is 46 days more than 2025.
• Q4 2026 Operating Days: Anticipate 60 more operating days in Q4 compared to the prior year, driven by holiday in-park events.
• Cost Savings: On track to deliver $70–$80 million of gross cost savings for the full year (net of inflation and cost pressures estimated at $36–$46 million).
• Long-Term Financial Targets: Target adjusted EBITDA margins in the mid-30s and net leverage of approximately 4x over the long term.
• Liquidity: Expect to end 2026 with sufficient liquidity to fully fund the $370 million potential purchase of the remaining Six Flags Over Georgia partnership units in January 2027.

Business-Segment Outlook:

• Passbase Growth: Active passbase is growing; projected to be slightly up or flat relative to prior forecasts as the 2027 pass program launches later in the year to avoid "skip-level" behavior. Year-to-date active passes are up 7% versus the prior year.
• Visit Patterns: Cross-park visitation is running 5x last year's levels. Regional passes are expanding catchment areas, with guest mix shifting toward a higher proportion of passholders (approx. 61% of quarterly attendance).
• Per Capita Spending: Expect continued growth in per capita spending, driven by premium offerings (e.g., Fastlane) and dining plans, with pricing strategies to optimize revenue.
• Park Portfolio Strategy: Actively reviewing parks and real estate for non-core asset sales to unlock value and reduce debt; discussions on further optimization are underway post-season.
• Specific Park Events: Six Flags Great Adventure (NJ) and Six Flags Great America (Chicago) have programs underway to enhance family-friendliness and amenities. Magic Mountain is scheduled for a major refurbishment. Knott's Berry Farm food and beverage events are considered successful models for deployment in other parks during off-peak periods.
• Maryland Asset: The sale of the Maryland asset is still targeted for late 2027, currently awaiting the buyer's entitlement process.
• Richmond Asset: The company is in a process to evaluate bids for the Richmond park.

Market and Competitive Outlook:

• Demand Trends: Management views recent softness in October as temporary and specific to the incident/weather, not a reflection of underlying demand or long-term earning power.
• Resilience: Brand research indicates Six Flags remains the number one name in the category with 96% awareness; historical industry data suggests recovery from incidents typically occurs over months, not years.
• Capacity: Significant excess capacity exists in parks, allowing for expansion of events (e.g., Halloween, shoulder season) and extended operating hours into September or earlier/later holidays to capture demand.
• Competitive Positioning: Strategy focuses on converting single-day ticket buyers to passholders to increase total revenue and guest lifetime value, despite a temporary reduction in single-day ticket volume.

Macro / Industry Outlook:

• Inflation & Labor: Cost savings strategies are designed to fully offset inflationary pressures (wages, insurance) to protect margins; inflation is treated as an ongoing input rather than a temporary headwind.
• Weather: Weather remains an uncontrollable variable; recent wildfires and Hurricane Isis caused temporary disruption but are not expected to alter the long-term operational plan.
• Interest Rates: Approximately 70% of debt is fixed-rate with no immediate maturities; management is focused on deleveraging in a higher-rate environment.
• Insurance: Higher costs in Q3 reflect claims experience and actuarial estimates prior to the Georgia incident; expected to have no material impact on liquidity given the $100 million general liability coverage above retention levels.

Strategic Initiatives:

• Portfolio Optimization: Reviewing parks for potential sales to reduce leverage; proceeds from sales will be directed primarily to paying down debt.
• Georgia Acquisition: Management is in active dialogue with partners regarding the $370 million buyout; potential for partners to roll over units to defer payment and reduce cash requirements.
• Capital Allocation: Re-sequencing the capital pipeline to prioritize highest-return investments; growth capital is increasingly directed toward guest experience (rides, attractions, comfort). Maintenance CapEx constitutes 20–30% of total CapEx.
• Organizational Restructuring: Shifting to a model where park presidents hold full P&L accountability; reducing corporate layers to accelerate decision-making.
• Marketing Technology: Upgrading marketing infrastructure to enable more targeted, personalized messaging and persona-based marketing to drive both single-day and pass growth.

Risks and Headwinds to Outlook:

• Incident Impact: The Georgia tragedy and resulting ride closures (specifically X2 at Magic Mountain) caused softness in October; future impact on pass sales or attendance is monitored but management does not expect long-term damage.
• Weather Variability: Unfavorable weather patterns (e.g., Hurricane Isis, wildfires) remain a key driver of quarterly volatility.
• Asset Sale Execution: Progress on Maryland and Richmond sales depends on external processes (entitlement, bidder evaluation).
• Georgia Partnership Dynamics: Actual cash outflow for the Georgia purchase depends on partner decisions to roll over units versus take cash.
• Execution Risk: The path to mid-30% margins relies on successful execution of cost savings and revenue growth; progress is described as "early" with no guarantee of a straight line.

Management Tone on the Future:

• Confidence: Management expresses high confidence in the company's turnaround, citing an 11% YTD EBITDA increase and margin expansion.
• Strategy Validation: The new strategic pillars (accountability, guest experience, commercial optimization, capital discipline, performance culture) are viewed as working, evidenced by rising passbase and cross-park visits.
• Safety Priority: Safety is declared the "most fundamental commitment"; confidence is described as something that must be "earned through action" via comprehensive safety reviews and ride inspections.
• Forward Outlook: Management is "energized by what's ahead," maintaining the long-term ambition to build a premier regional entertainment platform despite short-term noise.

Miscellaneous:

• Share Count/Dividends: No specific guidance provided for share count changes or dividends in this transcript.
• Tax Rate: No specific guidance provided.
• Q&A Updates: Management declined to provide specific Q4 attendance or pass sales data to avoid speculation, attributing October softness to the incident and weather.