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AMC Entertainment (AMC +3.5%) is trading higher today following its Q2 results this morning. This movie exhibition company reported its largest EPS beat in four quarters. Notably, breakeven EPS marks the first non-loss quarter in over five years. AMC also bounced back nicely following a 9% yr/yr decline in revenue last quarter to report its highest revenue growth in six quarters. Revenue soared 35.6% yr/yr to $1.40 bln, which was above expectations.

• Digging into the numbers, AMC's increase in revenue drove a 391.4% increase in adjusted EBITDA to $189.2 mln. With such a sizeable increase, net cash from operating activities surged to a positive $138.4 mln, a stark difference from the $38.5 mln used in operations in the year ago period. As a result, the company significantly narrowed its net loss to $4.7 mln from $32.8 last year.
• The results reflect a combination of a recovering industry-wide box office and AMC's efforts in its "AMC Go Plan". This is most evident in the 25.6% yr/yr increase in movie theater attendance, a sharp acceleration from the 10.1% decline in Q1. Another positive, AMC broke records in nearly every per patron metric. Consolidated revenue per patron was $12.14, topping $12 for the first time. Consolidated food and beverage revenue per guest jumped to $7.85 and total consolidated revenue per patron reached an "unprecedented" $22.26. Despite lower consumer confidence, this tells us its consumer is willing to spend at the theaters.
• What stands out to us is here is that, based on recent performance, management expects to capitalize on the industry's growth momentum, particularly in Q4 and extending deep into FY26. We think investors are pleased to hear AMC's bullish outlook for continued box office momentum a few quarters out.
• Finally, management noted that even before the industry's box office roar in Q2, its AMC Go Plan, which focuses on investments in laser projection, comfortable seating, and expanded offerings, had already driven increase theater attendance. AMC highlighted that its premium auditoriums operate at nearly three times the occupancy of a regular auditorium and command a healthy premium.

Overall, this was a strong report from AMC, particularly with the company breaking even when analysts had expected a loss. Another positive was the surge in top-line growth and adjusted EBITDA. The recovery in the global box office is clearly propelling AMC forward, and we think investors are encouraged by management's bullish commentary, which expects the momentum to extend deep into FY26.