Six Flags (FUN) Q1 2026 Earnings Call Transcript

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DATE

Thursday, May 7, 2026 at 8:00 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — John Reilly
• Chief Accounting Officer — David Hoffman
• Former Chief Financial Officer — Brian Witherow
• Vice President, Investor Relations — Michael Russell
• Operator

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TAKEAWAYS

• Attendance Growth -- Attendance increased 4%, with growth attributed to improved operating conditions and higher consumer demand.
• Per-Capita Spending -- Per-capita guest spending rose 6%, reflecting increased conversion rates and migration toward higher-value pass products.
• Net Revenue -- Net revenue increased 12%, with improvement attributed to higher attendance and elevated in-park spending.
• Admissions Revenue per Capita -- Admissions per capita increased 3%, primarily driven by pricing actions and trade-up to premium pass tiers.
• In-Park Product Spending per Capita -- In-park product per capita spending grew 10%, supported by improved offerings and higher park utilization.
• Adjusted EBITDA -- Adjusted EBITDA improved by $48 million, reflecting disciplined cost management and revenue growth.
• Operating Costs -- Operating costs declined meaningfully, with reductions stemming from portfolio changes and ongoing efficiency initiatives.
• Regional Pass Uptake -- Uptake of the new regional pass product increased, with management noting greater cross-park visitation and product upgrades.
• Portfolio Rationalization -- Six parks were sold in the U.S., with the pending sale of Montreal expected in the second quarter; management confirmed no additional sales in 2026.
• Capital Expenditures -- CapEx for the year is expected to total $425 million to $450 million, with Q1 CapEx lighter due to project timing.
• Cash Interest -- Cash interest is projected at $300 million to $320 million, incorporating refinancing impacts.
• Cash Taxes -- Cash taxes are estimated at $25 million to $30 million for the year, excluding a potential income tax refund.
• Park Operating Days -- Net addition of 20 operating days is planned for the calendar year, with 24 days reduced in Q1, 16 days to be removed in Q2, and 60 days to be added in the remainder of the year.
• Seasonality of Results -- Management noted the first quarter typically represents 6% to 8% of annual attendance and revenues, with most parks closed and operations at a seasonal loss.
• No Earnings Guidance -- Management reiterated it is not providing formal full-year earnings guidance or long-term targets at this time.
• Operational Focus -- Emphasis placed on capital deployment toward high-return parks, localized park presidents, and ongoing procurement initiatives targeting cost efficiencies.
• Key Capital Projects -- Notable additions include "Tormenta" at Six Flags over Texas, the return of MonteZOOMa at Knott’s Berry Farm, a new boardwalk at Six Flags Great Adventure, and Looney Tunes Land at Six Flags Magic Mountain.

SUMMARY

Leadership changes at Six Flags (NYSE:FUN) were announced, with the chief accounting officer assuming interim finance leadership amid the CFO transition. Management stated the newly introduced regional pass structure is driving increased customer engagement and cross-park activity. Park portfolio rationalization was completed with six park sales finalized and another pending, enabling resource concentration on larger, higher-return properties. The capital program will prioritize major park enhancements intended to broaden guest demographics and lengthen engagement, including immersive experiences and expanded entertainment offerings. Initiatives in procurement and park-level autonomy were positioned as catalysts for further efficiency gains and margin improvement, with procurement outreach extended to over 400 vendors.

• Management asserted, "we are not providing formal earnings guidance or long-term targets at this time," underscoring the company's focus on execution over forward projections.
• The new marketing strategy incorporates digital enhancements, dynamic pricing, and additional merchandising capabilities, directly supporting product mix improvements and higher trade-up rates among park passes.
• Reallocation of capital expenditure following park disposals is aimed at maximizing returns on remaining properties rather than altering aggregate spending levels in the near term.
• Labor market conditions were described as stable, with hiring rates above 90% of targets for the ramp into the core operating season and localized agility available for staffing challenges.
• Event and attraction launches—including seasonal festivals and family-focused areas—are expected to increase off-season visitation and utilization of pass products according to management.

INDUSTRY GLOSSARY

• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for items management considers non-core to the ongoing business.
• CapEx: Capital expenditures, representing funds used by the company to acquire, upgrade, and maintain physical assets such as parks and rides.
• Per Capita Spending: Average revenue generated per guest, typically segmented by admissions and in-park product categories.
• Regional Pass: A season or annual pass permitting access to multiple parks within a defined geographic region, a new offering for the company in 2026.

Full Conference Call Transcript

John Reilly: Thank you Michael and good morning. Before discussing the quarter I want to address the leadership changes we announced this morning. We have made targeted adjustments across key areas of our senior leadership team including finance administration and marketing to better align our organization with our strategic priorities going forward. We thank Brian for his many years of service and contributions to this company. Dave Hoffman our Chief Accounting Officer will step in on a temporary basis to lead the finance organization. I am confident Dave will help make this a smooth transition.

Since stepping into the role of CEO I've worked with the team to take deliberate actions to strengthen the company's strategic and financial positioning including the sale of noncore assets, monetization of excess land and refinancing of our balance sheet. These actions, together with the leadership actions we are implementing, position us to execute against our core operating objectives. Turning to the quarter. We delivered meaningful year-over-year improvement driven by higher attendance, increased guest spending and disciplined cost management. While the first quarter is seasonally limited with only a subset of parks open, including our parks in California, Mexico and Texas, the strong first quarter results demonstrate the resilience of our operating model and progress against our priorities.

Before getting into the drivers of the quarter, I do want to acknowledge that results benefited from the earlier timing of Easter and spring break as well as more normalized operating conditions in California relative to the disruption that we experienced in the prior year. While these factors helped, first quarter performance also reflects the cumulative impact of the foundational work we have put in place over the past year. This includes the integration of our ticketing platforms, enhancements to our digital and commercial capabilities, and operational improvements across our parks. Together, these efforts are driving measurable gains in consumer engagement and demand.

A key component of that progress has been our decision to allocate additional resources to our revenue management efforts, supported by enhancements to our consumer-facing digital platforms. As part of this initiative, we have embedded pricing and revenue management expertise into the organization and redesigned our platforms to better guide guests towards the best value for their needs. In the first quarter, we saw the benefits in higher conversion rates, improved capture and increased migration toward higher-value season pass products. New for 2026, we've introduced regional access benefits across select pass tiers, allowing guests to visit multiple parks within a defined region.

This new regional pass offering is gaining traction as guests are demonstrating a clear preference for greater flexibility and broader access, driving product upgrades and increased cross-park visitation. We are encouraged by the early response, including improved pass sales trends, a more favorable product mix and strong guest interest in visiting more than one park. The regional pass has also enabled us to enter the core of the season with a larger and more engaged pass and membership base, which we expect will support visitation and spending through the peak operating period.

Once guests arrive at our parks, we saw strong in-park spending trends during the quarter, reflecting the earlier timing of the Knott's Boysenberry Festival, a high per cap event as well as improved food and beverage offerings and higher park utilization driving incremental ancillary spend. To restore localized decision-making, we have reintroduced park presidents at our largest parks. We've done this to improve accountability, accelerate decision-making and drive greater consistency across the portfolio. We remain disciplined in our capital allocation. Our priority is to invest in parks that offer the highest returns, particularly at our larger properties with a focus on enhancing the guest experience through targeted investments in rides, food and beverage, and the overall environment.

Residual free cash flow will be directed toward operations and towards debt reduction. As an extension of this strategy, we have completed the sale of select parks and progressed on the sale of noncore land assets. These actions are expected to enhance margins, sharpen focus and improve returns to shareholders. With that, I'll turn the call over to Dave. Dave?

David Hoffman: Thanks, John. For the first quarter, attendance increased 4%, per capita spending increased 6% and net revenue increased 12% compared to the prior year. Through April, which normalizes for the Easter shift, trends in attendance and revenue remain positive. Our teams also delivered strong cost control with first quarter operating costs down meaningfully year-over-year. Taken together, we drove a $48 million improvement in adjusted EBITDA, reflecting improvements across demand, guest spending and cost discipline. Performance was driven by pricing and product structure changes, improved marketing and messaging and strong in-park operations. Consistent with John's remarks, we are seeing the impact of our pricing and revenue management initiatives contributing to improved pricing and product mix.

This is reflected in the 3% increase in admissions per capita and the 10% increase in-park product per capita spending achieved alongside attendance growth, underscoring the quality of demand. We strengthened our balance sheet during the quarter through refinancing, improved liquidity and extending maturities. May and June are key selling periods for our season pass and membership products, and we expect greater visibility into full season trends as we move through those months. Finally, we completed the sale of select noncore parks during the quarter and have provided additional details within the earnings release to assist with modeling those disposals. As we think about the first quarter, it's important to keep a few factors in mind.

Results benefited from timing and more normalized operating conditions in California. It's also important to remember that only a portion of our parks are open in the first quarter. As such, the quarter represents approximately 6% to 8% of full year attendance and revenues, and the company usually operates at a loss in the first quarter because most of our seasonal parks are closed. As a result, we would caution against extrapolating first quarter performance to the full year. Lastly, we are not providing formal earnings guidance or long-term targets at this time. Instead, we are focused on consistent execution across the operating levers that drive long-term value.

We believe investors are best served by transparency around demand trends, per capita spending, cost discipline, liquidity and capital structure, areas where we have strong visibility and are already seeing progress. While we're not providing guidance, we remain committed to regular transparent communication. As the season unfolds and visibility improves, we will continue to provide clear qualitative context around performance trends, key initiatives and progress against our strategic priorities. With that, I'll turn the call back over to John.

John Reilly: Thanks, Dave. Before we move to closing remarks, I'll ask Brian to share a few brief comments.

Brian Witherow: Thanks, John. As this is my final earnings call, I want to say what an honor it has been to serve as the CFO of Six Flags and our predecessor company, Cedar Fair. Over the last 31-plus years, I've had the opportunity to work with an incredible group of colleagues, execute numerous M&A transactions, including the most important merger in our industry and lay the foundation for the future of the new Six Flags. I'm proud of everything we've accomplished during that time, and I'm confident that Six Flags is well positioned to continue to succeed and provide engaging and entertaining experiences for our guests for years to come. John?

John Reilly: Thank you, Brian. We appreciate your contributions, and we wish you our best. Turning to the quarters ahead. We are entering the most important part of our operating season with encouraging early momentum, particularly around consumer demand, and we're excited about our new park offerings. Our 2026 capital program was highlighted by the addition of Tormenta, the world's tallest dive coaster at Six Flags over Texas as well as the return of MonteZOOMa at Knott's Berry Farm, one of the park's iconic attractions.

Meanwhile, we're focused on the family market at Six Flags Great Adventure in New Jersey with the first phase of a new boardwalk area and at Six Flags Magic Mountain north of Los Angeles with the introduction of Looney Tunes Land, a fully reimagined themed area that will be the home of our Looney Tunes characters, including Bugs Bunny, Daffy Duck and others. These park enhancements are aimed at expanding our addressable audience and complementing the park's core thrill business. At Kings Island, our new Phantom Theater experience blends immersive storytelling, animatronics and multisensory effects to create a highly engaging indoor attraction.

And earlier this week, we announced plans to expand the entertainment offerings at 3 parks, including a reimagined lineup of summertime shows at Kings Dominion and the return of Holiday in the Park at Six Flags Great Adventure and Six Flags over Georgia. These are strategic decisions based on thorough analysis and consumer research. Strategically, these types of offerings broaden our reach. They allow us to attract guests who may not typically visit during our traditional operating season, while reinforcing the value of our season pass and membership programs by extending the number of meaningful use opportunities throughout the year.

As our seasonal parks have begun to open, we're encouraged by the positive trends we're seeing in both consumer demand and operational execution. While we are still early in the season, the momentum we are building reflects the actions we've taken across pricing, product design and park-level execution. As we move through the year, we're mindful of several dynamics, including more competitive comparisons related to last year's marketing activity, promotional cadence and early cost synergy benefits. These are factors we understand well and have planned for, and they are embedded in how we are managing the business going forward. Against this backdrop, we remain focused on disciplined execution.

We believe the underlying improvements we've made across demand generation, monetization and cost control position us well to navigate these dynamics and continue building momentum through the balance of the season. More importantly, we believe these actions are strengthening the foundation of the business in a way that supports sustainable growth, margin expansion and long-term value creation. Operator, that concludes our prepared remarks. Dave and I are ready for questions.

Operator: [Operator Instructions] Our first question comes from the line of Ben Chaiken with Mizuho.

Benjamin Chaiken: Brian best of luck. It's been great. On the operating day strategy the operating days year-to-date down year-over-year I would imagine part of the strategy -- that's part of the strategy to help control costs. I guess how do you think about operating days for the remainder of the year and other opportunities to control costs? And then one quick follow-up.

John Reilly: Sure. Ben this is John and I'll start out here. So we approach this issue market by market and some of the efficiency we saw in January benefited us on the cost side and then we were pleased with the results the attendance per day as we talked about earlier. So we'll approach this with agility as we go forward. And even in Q1 for example we were adding days in Mexico City while we were adjusting the other way for some of the parks. Part of that dynamic in the first quarter is the loss of the winter events just to carry over the first week in January.

And then going forward I'll turn this over to Dave and he has the numbers for you for the year to go.

David Hoffman: Ben this is Dave. So you read the 24-day reduction in Q1. We expect to remove another 16 days in Q2 and then add 60 days in the balance of the year. So overall we expect to add 20 days to the calendar. You know that is subject to change as we get deeper into the year but that's what the plan is.

Benjamin Chaiken: Okay. That's very helpful. And then just one question on kind of the 1Q and the year-to-date. I know you mentioned in the prepared remarks that Easter I believe you said was a benefit to 1Q. I think just stepping back and thinking historically I would imagine that Easter being earlier was a marginal headwind to the year-to-date attendance numbers just given the seasonality around park openings I guess. Is that correct like that logic? And then if so how much can you give us to kind of have a ballpark or a round number of what that impact was on a year-to-date standpoint recognizing that you said it was a benefit to 1Q specifically?

John Reilly: Yes. We -- I don't know that we would characterize the timing of it as a headwind at all. I think it can be a headwind when it's very early like in March. But it just happened to be very late in 2025. So the April comparison give us comfort that we navigated through the March plus April comps favorably.

Operator: Next question comes from the line of Steve Wieczynski with Stifel.

Steven Wieczynski: So John, I want to ask about the cost structure. I mean that was a pretty big surprise in the quarter. And look, I understand there are gives and takes in terms of year-over-year comparability. But wondering if you can help us think about the longer-term margin opportunity in terms of what you kind of see as you work your way into that job, John, I would say, especially now with some of that -- the lower-margin parks removed from the portfolio.

John Reilly: Yes. Thanks, Steve. So the cost work that we've been able to execute on is part of a plan that we've implemented in the company, and we have various levers, including organizational changes in our corporate offices in Charlotte and in Arlington. We've made changes there while supplementing the parks. That's one key lever. We did benefit somewhat from changes that were made in '25 in Q1. And then we have since executed other changes, as I've said, reducing the overhead centrally and increasing the resources at the park level for a net reduction. We see considerable opportunity on the procurement front going forward.

We've engaged in calls and negotiations with our top 75 vendors, and then we have begun outreach to the next 400 vendors to really remind them of the scale of what we offer as North America's largest regional operator, the benefit of working with us on our contracts and asking them for help and efficiencies. The early returns have been encouraging. But we have a lot of -- we see -- we believe we have a lot of opportunity to mine on the procurement front. And then there's a number of other initiatives we talked in the last quarter about automation and efficiency and ideas from the field.

We are executing on those ideas now as well that should yield cost savings going forward. And I think also the structure where we have park presidents now is going to help accelerate the impact of those kinds of initiatives. And then to conclude, I would just go back up to something that we also said last quarter, look, in 2025, we finished at 27% EBITDA margin. Clearly, it was a difficult year. But to have the scale that we have and to be at 27%, we've said before, is not something that we accept, and we're working hard to improve upon it.

And you can see the comps in the industry, but certainly in the 30% ranges, 30-plus percent ranges are -- it's proven that regional operators can execute in that space. So we see opportunity. We're not going to put a number on it, but we're unhappy with 27%, and we have a plan to improve it over time.

Steven Wieczynski: Okay. And then second question, I want to ask about the entire park portfolio at this point. I mean, obviously, you guys have sold a number of parks over the past couple of months. And I'm wondering as you kind of look across the portfolio at this point, John, if you see other opportunities to whether sell or shut down underperforming parks. And then maybe help us think about what, in your mind, the optimal number of parks is eventually going to look like over the longer term.

John Reilly: Yes. Thanks. So the -- we executed on what we said we would, which is the sale of 6 parks that have been closed in the U.S. that were some of our smaller parks. And then we have Montreal that we expect to close in the second quarter. So we've executed on what we said. The first thing I think it's important to say that we've said to our consumers and our pass members and our prospective visitors is that we have no other plans in 2026. If you're buying a pass, if you're thinking about a pass, the portfolio is the portfolio, and we're focused on the summer and execution.

I think that's a very important message for people who want to come and experience the summer in our parks. That said, we are seeing the benefits of focus since the disposal of the 6 parks and the pending sale of Montreal. We're seeing the benefits of focus in our strategy. And we're really focused on execution, on demand generation, on pricing and operational execution. And the more we can focus that on the highest yield parks, the biggest parks, the better off we'll be. So we'll approach this with flexibility, and we'll be willing to look at it again in the future.

Operator: Next question comes from the line of James Hardiman with Citi.

James Hardiman: I wanted to start out by saying, Brian, it's been a pleasure working with you and learning from you through the years. I want to say you'll be missed and good luck with the next chapter. And then -- so following up on sort of the previous line of questioning, the slimmed down portfolio, it looks like from some of the disclosures here, you're losing about 10% to 11% of attendance, only about 6% of EBITDA.

Maybe help us think through the cash flow implications of that slimmed down portfolio, both quantitatively, if you can give us sort of updated numbers in terms of CapEx and interest and taxes, but then qualitatively, right, that renewed focus on the parts that really moved the needle. I'm assuming you can now dedicate more of the CapEx budgets to what's left and hopefully, what could get sort of those incremental returns and ideally drive incremental upside from what's left. But maybe walk us through some of those items.

John Reilly: So James, this is John. The -- we did provide a table in the earnings release that walks you through that quarter-by-quarter for the year, the revenue, the EBITDA impact quarter-by-quarter because we know that's something that will be important as you model our performance. The -- you're correct, and I think we had it on the earlier question, too, that it can help drive margin improvement because these are generally lower margin parks than our higher scaled parks. Additionally, with CapEx allocation, the way you characterized it, is, I think, generally accurate that this gives us more flexibility with CapEx toward parks with higher returns. So we see it in the same way.

If there's a specific, I guess, cash flow or tax question, I think Dave can take that.

David Hoffman: I guess I would just reiterate, it's really more about reallocating to higher return parks. So just kind of calling out some of the numbers, James. We're still expecting $425 million to $450 million of CapEx for the year. The first quarter CapEx was a little bit lighter than that, just given the cadence of some of the projects, but we still expect to get within that range. Cash interest is still expected to be $300 million to $320 million, and that includes the impact of the refinancing, of course.

And we expect cash taxes to be somewhere in the neighborhood of $25 million to $30 million for the year, and that's before consideration of a significant income tax refund that we claimed on the most recent tax return.

James Hardiman: Got it. That's all really helpful color. And then, I guess, specifically, as we think about the 2Q opportunity, looking back to last year, that's really when sort of the wheels fell off. Obviously, on the attendance side, you guys had impossibly difficult weather as we think about late May and into June. But also on the cost side, if memory serves, you really leaned into marketing with a significant amount of discretionary spending in the second quarter.

Is there a way to think about once we lap those 2 items -- obviously, we won't really know what the weather is until we get there, but is there a way to think about, I don't know, operating costs year-over-year in the second quarter or as a percentage of sales, however you guys think about it, what's the cost opportunity in 2Q? And where would you like to see the active pass base heading into the second half? Obviously, that was another big part of why the second half of last year was such a struggle just being so far behind in active pass base.

John Reilly: Sure. James, this is John, and I'll take that. So although we won't -- we aren't going to guide a cost number for Q2 or for remainder of the year, I'll make just a couple of points. Number one, we -- as we mentioned in the context of Q1, we have a cost savings program and efficiency program underway. I've been very encouraged by the receptivity of our team, by their execution, by their willingness to embrace targets with guardrails in specific areas. And so we're executing on that. We will continue to execute in Q2.

On the comments that we made at the beginning of the call to your marketing question for the second part is yes, there was a big spend in marketing last year and in Q2, and we've listed that as one of the factors that we need to sort out and we need to think about the comps going into Q2. So the -- and we'll be agile in terms of our approach to that. The other thing I would mention is we do have some pressure in maintenance costs. And I expect from the reviews that we're doing at a park level, we expect some maintenance cost pressure in Q2.

And it's an important spend for us because we're committed to do a better job with our ride uptime and with the number of trains and cars available on all of our rides. So that's something that we're going to -- when we see a need, we're going to execute against it. So I would mention the marketing and the maintenance that you mentioned are probably good factors to think about. The -- as we think about the summer and the active pass base, we continue to be encouraged by this Gold Pass, this regional pass that has been rolled out and really accelerated our sales since the rollout.

People are really enjoying the benefit of being able to cross-visit parks that has appeal for the sale and then also for additional attendance within regions like Texas or the East Coast or within California. So we're encouraged by that. As we think about the summer, we're going to continue focusing on the regional pass. We are also seeing a benefit from the reintroduction of membership and the higher renewal rates that we see on that, and that's part of the reason for the increased pass base that we talked about.

Operator: Next question comes from the line of Patrick Scholes with Truist Securities.

Charles Scholes: Question for you regarding pass sales. When I look at the comparable 1Q earnings release from a year ago, and I'm just trying to match things up sort of apples-to-apples to figure out how they're going. The KPI metric in a year-ago press release was that the 5-week period ending May 4, 2025, season pass sales were up 6%. I don't think when you say in this most recent quarter, active pass base up 6%, that's an apples-to-apples. Do you have an apples-to-apples metric that we can compare to that 5-week period that you said a year ago to help us understand how the pass sales are trending? And I apologize if it -- go ahead, sorry.

John Reilly: Yes. We don't have that prepared like a 5-week view on that for you. But what I would say is back to the issue -- back to the positive impact that we're seeing from both membership and the regional pass, the membership has a higher renewal rate, and that has an effect in growing our pass base. So the more we lap the reintroduction last year of membership, we should see more people staying in the fold. And so that's a combined factor along with the sales rate on season passes.

Charles Scholes: Okay. And then going back to the CapEx, correct me if I'm wrong, I think you said this year, not so much change. But how do we think about like a run rate here? I think you're running like $400 million. After this year, once those passes, you're not -- those parks are no longer being operated or being used by your pass members. How do we think about sort of the run rate again after this year CapEx?

John Reilly: Yes. So in terms of the pass, I think we mentioned we've guided to $425 million. It could be at $450 million for this year. We're not going to guide long range on it, but the visibility we have for now is in that $425 million range. And as Dave mentioned before, it would be a reprioritization, reallocation of the CapEx that would have gone to the parks that were sold to parks with higher and better returns.

Operator: Next question comes from the line of Lizzie Dove with Goldman Sachs.

Elizabeth Dove: I want to echo. Brian, it's been great to work with you. Really appreciated your help all the years. So good luck with the next chapter. In terms of -- I'd love to just touch on the consumer for a second. There's been a lot of cross-currents for the last few months. We've got higher gas prices for the consumer, yet your pickup trends have looked really good the last 2 quarters, but maybe some of that shoulder season comparability. So maybe it would be great just to hear from you what you're seeing there on the ground consumer-wise.

John Reilly: Yes. This is John, Lizzie. Thanks for the question. We're focused on what we can control, the levers in the business. And for us, we're not really able at this point to attribute performance trends to those kind of external factors. And the reasoning is we think there's a lot of opportunity in the business to execute. And so the work that we mentioned before that we're doing in our commercial area with revenue management, with pricing, with upgrading our visitors to higher pass products that have a lot more value to them, that's where we see the real opportunity. And our belief is to execute well against that, increase our capabilities going forward in that area.

That's some of the reason for the marketing changes that we mentioned today that the opportunity there is a good one for us. So our focus is execution, focusing on what we can change, what we can do, and we've got our heads in the business. And of course, we'll monitor external factors, and we'll be agile, and we have other levers in the business that we can go after if we need to. But our focus is on what we've laid out so far.

Elizabeth Dove: Got it. And then I appreciate you're not giving guidance at this point for the year, but high level, it would be great to just get a refresh on how you're thinking about the kind of building blocks for this year and in terms of particularly like the attendance, recapture opportunity and how you're kind of balancing that in terms of per caps.

John Reilly: So yes, demand generation is a real key for us, and we want profitable attendance in the parks. There's excess capacity in the business to grow attendance, but we want to do it profitably. And the initiatives we have underway thus far are working in that area. The regional pass with the access to parks, the increase in cross-park visitation, the appeal that has to sales, that's been a positive for demand generation. We believe there's further opportunity there and the leadership structure that we announced with the -- with having someone dedicated both to demand generation in our brand on the CMO side and then our commercial operation, which is conversion, price and yielding supporting that as well.

So we -- demand generation is important to us going forward as is pricing, which thus far, we're seeing good results there due to the trade-up in the past years.

Operator: Next question comes from the line of David Katz with Jefferies.

David Katz: Brian, I appreciate all the time and attention, and all the best. I wanted to dig just a little bit deeper into the regional pass, which is interesting in a good way, I mean, to ask. What data you've looked at or what trends you looked at? And can we potentially interpret this as a step in the direction of a more specific set of passes across the system over time?

John Reilly: Yes, this is John. I'll -- so in terms of the regional pass, the program in the future -- I think what I would say is the regional pass we have now available at what we're calling the gold level across the parks, there's considerable opportunity to further mine that. And we're also developing our membership program and other things. But the -- this has just been introduced, and we believe it's an opportunity to continue to mine going forward. When you think about it, we're seeing cross-park visitation much higher.

And if you look at the appeal of that, for example, a guest in San Antonio, who's a pass member, a Gold Pass member at Fiesta, Texas, can go ride Tormenta in Arlington this summer. The same thing with a pass member at Knott's can go see the new Looney Tunes area at Magic Mountain, and that has a tremendous appeal. There are implications for that in how we think about our catchment areas, our media spend, our pricing and other areas as we go forward. And of course, we're going to mine that, but we're really in the early stages and see considerable opportunity to continue to optimize that.

David Katz: Okay. And then one quick follow-up. The park presidents, can you just provide a little more color on those? Were those people who had worked with the parks before, people within the parks who were elevated? Did they come from other parks? I'm just curious. And I imagine the answer is some version of all of the above, but I'm curious just a little more color on that.

John Reilly: You're right. It's all of the above. We're really pleased with the talent level we have there at the parks with park presidents and also our parks with park managers. It's one of the things that I found to be very encouraging as we travel around, we visit the parks and we work with them on their plans. We have people who are committed, entrepreneurial and understand the imperative of execution right now. So in some parks, we have people who rejoined us. In some parks, we have people that have come over from a competitor. But in most cases, these were internal promotions and the talent level internally was very good to feed these promotions.

Operator: [Operator Instructions] Our next question comes from the line of Arpine Kocharyan with UBS.

Robert Henry: This is Rob Henry on for Arpine. I wanted just to go back to the pass product. It seems like you might have kind of turned the corner there with units up 6%. Can you just give any color on pricing and maybe mix shifts that you're seeing within the pass product?

John Reilly: If you look at the mix of the pass products, we have the Silver Pass, we have the Gold and then we have the Elite and we have membership. And we're -- as we've said, the real power we're seeing is a trade-up into Gold, but we also have people trading up into the premium categories. As we see that, we're constantly monitoring and adjusting where we need to in terms of price or promotional strategy to optimize the distribution across those tiers. But the real strength in the program right now, the power in the program right now is driven by 2 factors. One, the availability of visits to these sister parks that are nearby.

We're seeing people are willing to drive and to visit. But secondly, the improvements we've seen because we have revenue management expertise embedded in the organization and the combination of the experts and the talent we have on our team, like Chris Meyering, whose promotion we announced this morning. They're really delivering in terms of the conversion, the merchandising, the consideration and the conversion on our website. So we're seeing improvement in our website performance along with the appeal of the product architecture.

Robert Henry: That's really helpful color. And then just kind of as a follow-up, on the specified parts, it looks like it's a bit of a tailwind here in Q1 given that there was a bit of a drag on EBITDA. It seems like given kind of the table that you've laid out, kind of the rest of the year might be a bit of a headwind with the lost EBITDA there. And so is that still kind of fair to think about in that way? Or how should we consider that as we move forward?

John Reilly: That cost is included in the Q1 results. I mean we've mapped out the impact for you over the course of the year. So the tailwind would presumably be in Q1 of 2027.

Operator: Next question comes from the line of Chris Woronka with Deutsche Bank.

Chris Woronka: Brian, I appreciate all the guidance and insights over the years. So all the best. I was hoping we could maybe talk for a minute about marketing. And I know that your plans are fluid and they're long term and you're going to adjust and adapt. But John, maybe just a thought or 2 on kind of where you are this year versus where you think you can get to in terms of reach and effectiveness of some of the marketing changes, things like going to more social media and bringing in some partners and some sponsors, like where you are in that process? And do we get more benefit this year or next year, do you think?

John Reilly: Yes. I would answer that by saying, one, we've applied learnings from lessons that we identified from 2025, including how we were presenting our retail message, how we were marketing our passes, how we're merchandising them on the website. And also in terms of our creative, we've made big changes in our creative. That said, this is the key growth lever for this company, at least in the near term in terms of demand generation, in terms of evolving our brands. And as you say, in terms of properly leveraging emerging channels to drive demand. And that's precisely the reason that we're bringing Amy Martin Ziegenfuss on board to work to evolve our marketing program. We're in the early innings.

Chris Woronka: Okay. Okay. That's great to hear, John. And then just as a follow-up, when we think about your properties, you've obviously gotten through a slug of noncore sales. You're working on some land parcels, it sounds like. But question is on hotels. You have 2, what I would think would be very core hotels at Knott's and Cedar Point. Then you have kind of a handful of other smaller hotels in the surrounding areas. Should we think about those as being core longer term or possibly not?

John Reilly: We like the synergy of the lodging business, especially in terms of bringing people in from drive markets. We have research that supports that. But even in regional parks, there's a market for people who want to come in from a longer drive. The model that we have, as you said, at Cedar Point and Knott's Berry Farm is very powerful. The hotels are fantastic. They're updated. They're modern. And that's working for us. So we don't see any reason to walk back from the lodging programs that we have elsewhere.

Operator: And our last question today comes from Eric Wold of Texas Capital Securities.

Eric Wold: I guess two questions. The first kind of going back on the question a couple ago on pricing. I know you mentioned that kind of the pricing on the passes and daily is kind of dynamic and kind of you're driving it based on demand. But as you start the season, can you give us a sense of kind of what's embedded in kind of the pricing of the daily and pass prices versus last year to start the season?

John Reilly: So the pricing versus last year, we're -- a lot of the growth that we're seeing is from the trade-up in the tiers and from the movement into membership because it's a higher yield product for us. So it's not necessarily an increase at the pass level. And we really want to bring people back into our parks. We're really focused on providing a good value, providing a suite of benefits that's compelling like the regional pass. And for that, as we said earlier, we want to grow profitable attendance. We want to grow profitable visitation to the parks, and that's the balance.

But the principal lift that we're seeing, Eric, is from the trade-up within the tiers or the membership.

Eric Wold: Got it. And then as you kind of enter the core season, maybe give us a sense of the hiring environment you're seeing out there in terms of availability, wage rate compared to last year and how that plays into your plan to staff appropriately as demand ramps?

John Reilly: Our team is doing an excellent job staffing the parks. As we move into Memorial Day weekend, our stats tell us where we need to be, 90-plus percent of target. So we don't see any significant headwinds in that area. Like many other things we've mentioned, we take an agile approach. And if there's one position like lifeguards in one park, we make an adjustment and we address that. But we don't see any global issue.

Operator: That concludes the question-and-answer session. I'll now turn it over to Michael Russell for closing remarks.

Michael Russell: We appreciate you joining us today. Our next earnings call will be in August when we report our financial results for the 2026 second quarter. That concludes our call today, Desiree. Thank you, everyone.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

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