National CineMedia (NASDAQ:NCMI) reported a third-quarter loss as cinema advertising revenue fell despite higher theater attendance, and said Chief Executive Officer Tom Lesinski plans to retire at the end of the year.
The cinema advertising company reported revenue of $61.4 million, including $2.6 million from Captivate, the office and residential advertising network it acquired on September 18. Excluding Captivate, revenue fell approximately 7% from a year earlier to $58.8 million.
Net loss was $17.2 million, or $0.18 per diluted share, compared with net income of $1.6 million, or $0.02 per diluted share, in the third quarter of 2025. Adjusted operating income before depreciation and amortization, or OIBDA, fell to $3.3 million from $10.2 million.
Lesinski said the results fell below expectations because strong theater attendance arrived later in the quarter, after the peak period for advertiser demand, while the FIFA World Cup drew spending away from cinema campaigns. The company estimated that shifts among six major national advertisers alone reduced cinema advertising commitments by approximately $9 million.
Attendance Growth Fails to Lift Cinema Revenue
Attendance across National CineMedia’s cinema network, excluding Spotlight, increased 16% to 125.5 million. Including Spotlight, attendance reached 135.2 million. Chief Financial Officer Ronnie Ng said the performances of “The Odyssey” and “Spider-Man: Brand New Day” helped drive the increase later in the quarter, when advertising demand was seasonally softer.
Meanwhile, total cinema advertising revenue declined 7% to $55.3 million. Advertising revenue per attendee fell approximately 25% to $0.41, reflecting lower inventory utilization and higher attendance.
National cinema advertising revenue fell 8% to $46.1 million, while local cinema advertising revenue declined 5% to $9.1 million. Ng said the local decline primarily reflected a large film-specific campaign in the prior-year quarter that did not recur. Excluding that campaign, local advertising revenue rose approximately 17%.
Higher attendance also increased costs. Theater access fees rose 24% to $40.2 million, contributing to an operating loss of $21.6 million, compared with a loss of $1.8 million a year earlier.
Captivate Integration and Cost Savings
Captivate contributed approximately 14 days of operations to National CineMedia’s third-quarter results. For its full third quarter, Captivate generated $15 million in revenue, up 2.7% year over year, Ng said.
Lesinski said Captivate adds more than 27,000 screens across more than 11,000 buildings in over 170 U.S. and Canadian markets. The acquisition gives National CineMedia a combined network of approximately 48,000 digital screens across theaters, office buildings and residential properties.
The company expects to begin rolling out a combined local sales strategy in the first half of 2027. Lesinski said the company is also identifying overlapping advertisers and opportunities to package inventory across the two networks.
National CineMedia remains on track to achieve more than $3.5 million in annual run-rate acquisition cost synergies within the first year after closing and has already realized more than 60% of that target, Ng said. Separately, the company raised its estimate for 2026 savings from operational transformation initiatives to more than $7.5 million, from a previous target of $6 million. It continues to expect approximately $11 million in annualized run-rate savings once those initiatives are fully realized.
Fourth-Quarter Outlook and Leadership Transition
For the fourth quarter, National CineMedia forecast consolidated revenue of $117 million to $124 million and adjusted OIBDA of $42 million to $48 million. The outlook includes the first full quarter of Captivate’s contribution.
Lesinski said Captivate’s fourth-quarter bookings were pacing more than 30% ahead of the same point a year earlier, while the cinema network was tracking in line with the prior year. Ng said the guidance implies relatively flat year-over-year revenue for the cinema business and does not include Captivate revenue synergies.
Ng also said the outlook reflects higher expected attendance, which would pressure margins through attendance-related costs if cinema revenue remains relatively flat.
At quarter-end, the company had approximately $35.8 million in cash, cash equivalents and restricted cash, including approximately $8 million in restricted cash. Its trailing 12-month net leverage ratio was approximately 4.4 times, including the pro forma effect of anticipated cost savings. National CineMedia is targeting a long-term net leverage ratio of 2.5 to 3 times.
Lesinski, who joined the company’s board in 2014 and became CEO in 2019, said his anticipated retirement date is December 31. The board has retained executive search firm Korn Ferry to assist in finding his successor. Lesinski said integrating Captivate and realizing opportunities between the two businesses should be a priority for the next leader.
About National CineMedia (NASDAQ:NCMI)
National CineMedia, Inc. (NASDAQ: NCMI) is a media and advertising company focused on cinema-based marketing in the United States. Through its network of movie theaters, the company sells advertising opportunities that allow brands to reach audiences before feature films and throughout the theater environment. Its primary product is the Noovie pre-show, a branded entertainment and advertising program shown on theater screens before movies. National CineMedia also offers on-screen advertising, lobby and other in-theater placements, digital and experiential campaigns, and related marketing solutions designed to connect advertisers with moviegoers.
