United Parks PRKS Q1 2026 Earnings Transcript

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Date

Monday, May 11, 2026 at 9 a.m. ET

Call participants

• Chief Executive Officer — Marc Swanson
• Interim Chief Financial Officer and Treasurer — James Forrester

Takeaways

• Total Revenue -- $278.3 million, down $8.7 million compared to 2025, attributed primarily to attendance declines.
• Attendance -- Decreased by 171,000 guests, with 140,000 fewer due to adverse weather and 80,000 fewer from international visitation declines.
• Total Revenue Per Capita -- Rose 2.1%, led by a 5.3% increase in in-park per capita spending, reaching a record $40.62.
• Admission Per Capita -- Fell 0.5%, cited as a result of lower realized pricing and admissions product mix changes.
• Operating Expenses -- Increased by $10 million, primarily due to $3.7 million in non-cash self-insurance adjustments and $3.3 million from one-time, nonrecurring consulting and related costs.
• Selling, General, and Administrative Expenses -- Increased $3.9 million, mainly from a $3.1 million non-cash rise in technology amortization related to the new ERP system.
• Net Loss -- Reported at $34.1 million, compared to a net loss of $16.1 million in 2025.
• Adjusted EBITDA -- $58.0 million, a decline of $9.5 million from the prior year.
• Share Repurchases -- 2.6 million shares bought back during the quarter for $92.7 million; an additional 1.8 million shares repurchased after quarter-end for $64.8 million.
• Deferred Revenue -- Balance of $203.8 million as of March, up 4.1% compared to March 2025.
• Paid Pass Sales -- Increased approximately 10% in the quarter and 12% through April 30, 2026.
• Advanced Bookings -- Discovery Cove and group business bookings outpacing 2025 levels, with Discovery Cove bookings up by a double-digit percentage.
• Sponsorship Revenue -- Over $15 million expected for 2026; two sponsorship agreements signed in Q1; management reiterated a longer-term target of at least $30 million in coming years.
• Cost Savings Target -- Company remains committed to $50 million in gross cost savings for 2026.
• Capital Expenditures -- $69.6 million spent, including $62.7 million on core CapEx and $7.0 million on expansion/ROI projects; full-year guidance remains $105 million-$200 million for core and $50 million for growth/ROI.
• Strategic Real Estate Process -- Management engaged advisers and received multiple, recent formal proposals on real estate portfolio utilization, with evaluation ongoing.
• International Business and IP Partnerships -- Ongoing discussions continue, with management expecting updates on partnerships and new IP initiatives later in 2026 and beyond.
• Marketing Initiatives -- A major national SeaWorld brand campaign launching in late May; ongoing media mix and strategy changes cited, with management expecting enhanced results during the year.
• Technology Investments -- Deployment of AI-powered cameras, autonomous cleaning robots, digital kiosks, and automated parking/entry tools aimed at revenue generation, cost reduction, and experience improvement.

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Risks

• Attendance Declines -- Weather and international travel headwinds reduced guest traffic by a combined 220,000 in the quarter, contributing to lower revenue and net loss expansion.
• Operating Cost Inflation -- Non-cash self-insurance reserves, ERP-related IT amortization, and cold weather damages resulted in $10 million higher operating expenses and $3.9 million higher SG&A versus the prior year.
• Net Loss Widening -- "We reported a net loss of $34.1 million for the first quarter compared to a net loss of $16.1 million in 2025," underscoring pressure on bottom-line results.
• Admitted Execution Hiccups -- CEO Swanson said, "Admittedly, we have had some hiccups in our execution across some of the parks and in corporate as we transition to a more dynamic and ultimately more effective media and marketing model."

Summary

In the first quarter, United Parks & Resorts (NYSE:PRKS) experienced declines in revenue and attendance, primarily due to unfavorable weather conditions and lower international visitation. The company saw a clear positive inflection in deferred revenue and continued strong growth in paid pass sales and in-park per capita spending, reflecting improved forward indicators. Management emphasized substantial ongoing share repurchases, continued strategic real estate exploration, and a commitment to launching significant marketing and technology initiatives throughout the year.

• Swanson said, "our advanced bookings revenue for Discovery Cove and our group business are both currently outpacing 2025 levels, with Discovery Cove bookings up a double-digit percentage."
• Swanson confirmed expansion pipeline momentum, stating, "interest of the various parties and have recently received the latest round of comprehensive formal proposals from multiple parties. We are."
• Forrester highlighted, "Our deferred revenue balance as of March was $203.8 million. Deferred revenue increased approximately 4.1%," marking the first positive year-over-year inflection in approximately 18 months, according to management commentary.
• Swanson affirmed strategic optimism: "Despite the headwinds in the first quarter, we are encouraged by our forward indicators and remain committed to delivering strong financial performance and growth in revenue and adjusted EBITDA in 2026."

Industry glossary

• Deferred Revenue: Customer payments received in advance for products or services (such as season passes or group bookings) that are recognized as revenue once the service is delivered or the visit occurs.
• Per Capita Spending: Average spending per guest, segmented into admission and in-park (food, retail, experiences) categories, key for analyzing yield independent of attendance fluctuations.
• ERP (Enterprise Resource Planning): Integrated information technology system adopted for automating and managing key business operations, such as finance, supply chain, and human resources.

Full Conference Call Transcript

Marc Swanson, Chief Executive Officer, and James Forrester, Interim Chief Financial Officer and Treasurer. This morning, we will review our first quarter financial results, and then we will open the call to your questions. Before we begin, I would like to remind everyone that our comments today will contain forward-looking statements within the meaning of the federal securities laws. These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward-looking statements, including those identified in the Risk Factors section of our Annual Report on Form 10-Ks and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

These risk factors may be updated from time to time and will be included in our filings with the SEC that are available on our website. We undertake no obligation to update any forward-looking statements. In addition, on the call, we may reference non-GAAP measures and other financial metrics such as adjusted EBITDA and free cash flow. More information regarding our forward-looking statements and reconciliations of non-GAAP measures to the most comparable GAAP measure is included in our earnings release available on our website and can also be found in our filings with the SEC. Now, I would like to turn the call over to our Chief Executive Officer, Marc Swanson. Marc?

Marc Swanson: Thank you, Matthew. Good morning, everyone, and thank you for joining us. Our first quarter results fell short of our expectations primarily due to unfavorable weather and a decline in international attendance. As many of you likely experienced yourselves, the weather was unfavorable in San Diego and Florida in January and February, and again in Florida and Texas during their peak spring break periods. Our international attendance decline was consistent with the broader United States international tourism declines resulting from geopolitical and other dynamics. Attendance in the first quarter was negatively impacted by approximately 140,000 guests due to weather, and approximately 80,000 guests due to declines in international visitation.

Adjusting for these impacts, attendance would have increased more than 1% for the quarter. We delivered another strong quarter of in-park execution, growing our in-park per capita and producing another quarter of record results. We also saw strong pass sales performance during the quarter with paid pass sales up approximately 10% during the quarter and up approximately 12% through 04/30/2026. Looking ahead, our advanced bookings revenue for Discovery Cove and our group business are both currently outpacing 2025 levels, with Discovery Cove bookings up a double-digit percentage. We continue to strongly believe our stock is materially undervalued and, as such, continued to repurchase shares in the first quarter, buying approximately 2.6 million shares for nearly $93 million.

This action emphasizes the strong cash flow generation of this company, our longstanding commitment to returning excess cash to our shareholders, and our belief that our shares are materially undervalued. As a reminder, for 2026, we have a truly outstanding lineup of new rides, shows, and attractions, an updated events calendar, an expanded concert lineup, and new and upgraded food and retail locations. All this is supported by a revamped and enhanced marketing plan and strategy. We are confident these planned investments will drive attendance and guest spending across our parks.

Despite the headwinds in the first quarter, we are encouraged by our forward indicators and remain committed to delivering strong financial performance and growth in revenue and adjusted EBITDA in 2026. I want to thank our ambassadors whose preparation and hard work are vital as we soon enter the busy summer period. I also want to be sure to communicate that we are well aware of and acknowledge the current reality of geopolitical and macro uncertainties and the current level of gas prices in particular, and the potential impact on consumers.

As a reminder, we operate a resilient business that offers incredible value to our visitors and we have a long track record of successfully navigating through uncertain and volatile times, including when there is financial pressure on consumers. Because I am sure it is on many of your minds, what I can tell you today is that we cannot obviously see a material slowdown or other issues with our consumers' interest and willingness to spend, especially with the growth in our in-park per cap. We are closely monitoring conditions and are prepared to adjust our plans if we see any changes.

For 2026, along with our new rides and attractions, we just recently announced an exciting summer entertainment lineup across several of our parks, including exciting new drone shows, new nighttime animal presentations, and other fun. We believe these additions will be well received and popular with our guests. We are also thrilled to note that Discovery Cove has just been named Newsweek's number one best theme park for 2026 in the publication's Reader's Choice Awards, placing the Orlando destination among the country's top summer travel experiences as voted by Newsweek readers nationwide. Congratulations to Discovery Cove. Now let me give you a brief update on some of our strategic initiatives.

On real estate, as discussed on our last call, we have received a number of inbounds on our real estate portfolio. During the first quarter, we enlisted the help of advisers to assist us in managing the interest of the various parties and have recently received the latest round of comprehensive formal proposals from multiple parties. We are currently evaluating these proposals along with the advisers and will update you as and when there is more information to share. On sponsorships, during Q1, we entered into two sponsorship agreements with high-quality brands. Based on our current pipeline, we expect to enter into several more in the coming months and expect to realize over $15 million in sponsorship revenue in 2026.

As previously discussed, we expect this business to be at least a $30 million line of business in the coming years. On international, we continue to be in discussions with multiple partners and expect to be able to share more news in the coming quarters. On IP partnerships, we are in multiple active discussions to bring compelling and well-recognized IP into our parks in innovative and exciting ways and with different global partners. Later this year, we expect to have some exciting announcements related to these opportunities in 2026, and in 2027 and beyond. On marketing, we have been making significant changes and enhancements to our plans and strategies.

Admittedly, we have had some hiccups in our execution across some of the parks and in corporate as we transition to a more dynamic and ultimately more effective media and marketing model. We have been testing, learning, and making fundamental changes to our media mix, channel and geography allocation, creative, and partners. We expect to improve considerably in our execution over the course of the year and are excited to launch a dedicated SeaWorld brand national campaign across key markets later this month. Please be on the lookout for this first meaningful national campaign from us in many years. We are very excited about this.

On cost, we continue to be committed to and make progress on our $50 million gross cost savings target for 2026 that we discussed last quarter. On the technology front, we are actively pursuing various initiatives including implementing AI-powered camera technology, autonomous cleaning robotic technology, more digital ordering kiosks in our food and beverage locations, automated front turnstiles, and automated parking tools to help us deliver more revenue, reduce costs, and improve guest experience. Regarding capital allocation, we continue to benefit from a strong balance sheet and the flexibility to invest in and grow our business and to opportunistically allocate capital with the goal to maximize long-term value for shareholders.

Given where our public shares currently trade, we find very compelling value in purchasing our shares and we expect to do so as long as our stock trades at levels we find attractive. When and if we hit a limit on share repurchases, we and our board will consider other forms of capital return including regular and/or special dividends, debt pay down, and other investment opportunities. During the first quarter, we repurchased 2.6 million shares for an aggregate total of approximately $92.7 million. Subsequent to the end of the quarter, we have repurchased an additional 1.8 million shares for an aggregate total of approximately $64.8 million.

I am truly excited about the significant investments we are making and the many initiatives we have underway across our business that we are confident will improve the guest experience, allow us to generate more revenue, and make us a more efficient and more profitable enterprise. We are building an even stronger and more resilient business that we expect going forward will deliver improved operational and financial results and increases in value for our stakeholders. With that, James will discuss our financial results in more detail.

James Forrester: Thank you, Marc. During the first quarter, we generated total revenue of $278.3 million, a decrease of $8.7 million when compared to 2025. The decrease in total revenue compared to 2025 was primarily a result of a decrease in attendance, partially offset by an increase in total revenue per capita spending. Attendance for 2026 decreased by approximately 171,000 guests when compared to the prior year quarter. The decrease in attendance was primarily due to unfavorable weather and a decrease in international visitation compared to the prior year quarter. As Marc noted, our attendance would have been up more than 1% adjusted for weather and international. In 2026, total revenue per capita increased 2.1%.

Admission per capita decreased 0.5% and in-park per capita spending increased 5.3% to a record $40.62. Admission per capita decreased primarily due to lower realized pricing on certain admission products, and the net impact of the admissions product mix when compared to the prior year quarter. In-park per capita spending improved primarily due to an increase in demand across many in-park offerings when compared to 2025. Operating expenses increased $10 million when compared to 2025. The increase in operating expenses is primarily due to an approximately $3.7 million increase in non-cash self-insurance adjustments and an approximate $3.3 million increase in one-time nonrecurring consulting and other costs when compared to 2025.

Selling, general, and administrative expenses increased $3.9 million compared to 2025. The increase in selling, general, and administrative expenses is primarily due to a non-cash $3.1 million increase in information technology costs, primarily related to the amortization of a new enterprise resource planning system when compared to 2025. We reported a net loss of $34.1 million for the first quarter compared to a net loss of $16.1 million in 2025. We generated adjusted EBITDA of $58.0 million, a decrease of $9.5 million when compared to 2025. The decline in EBITDA was driven by lower revenue and a modest increase in expenses. During the first quarter, we repurchased 2.6 million shares for an aggregate total of approximately $92.7 million.

Subsequent to the end of the quarter, we have repurchased an additional 1.8 million shares for an aggregate total of approximately $64.8 million. Of the $500 million stock repurchase authorization approved in 2025, the company has approximately $198 million remaining. Our deferred revenue balance as of March was $203.8 million. Deferred revenue increased approximately 4.1% when compared to March 2025, reflecting a healthy outlook for ticketing, our group business, and our ancillary products. As a reminder, our deferred revenue balance contains a number of products, including ticketing, vacation packages, annual and seasonal passes, group sales, and ancillary products. Through April 2026, our paid pass base, excluding any free passes, was up compared to April 2025.

As Marc mentioned, we are pleased to have seen paid pass sales up 12% so far this year through April 30. We believe we have our best pass benefits program ever and one of the best in the industry, and we expect we will continue to drive additional increases in pass sales and a strong pass base for the remainder of the year. We are especially pleased since we are in the peak advertising and selling season right now. We spent $69.6 million on CapEx in 2026, of which approximately $62.7 million was on core CapEx and approximately $7.0 million was on expansion and/or ROI projects.

For 2026, we expect to spend approximately $105 million to $200 million on core CapEx and approximately $50 million of CapEx on growth and ROI projects. Now let me turn the call back over to Marc, who will share some final thoughts.

Marc Swanson: Thank you, James. Before we open the call to your questions, I have some closing comments. In 2026, we came to the aid of 211 animals in need. Over our history, we have helped over 43,000 animals, including bottlenose dolphins, manatees, sea lions, seals, sea turtles, sharks, birds, and more. I am really proud of the team's hard work and their continued dedication to these important rescue efforts. Our 2026 road map is defined by a compelling lineup of new rides, attractions, and events; an updated events calendar; an expanded concert lineup; and upgraded food and retail locations, all supported by a revamped marketing plan designed to increase guest visitation and spending.

With very clear opportunities to grow attendance, revenue, and adjusted EBITDA, we are excited about the rest of 2026 and the years to come. We will now open the call for questions.

Operator: As a reminder, to ask a question, simply press star 1 on your telephone keypad. We do ask that you limit questions to one and one follow-up and then requeue. Our first question comes from the line of Steven Wieczynski with Stifel. Please go ahead.

Steven Wieczynski: Yeah. Hey, guys. Good morning. So Marc, I guess I am interested in your comments that you guys think you can grow your EBITDA this year, especially with the first quarter results coming in below what you obviously were hoping for. So as we think about the rest of the year, I guess I am probably a little bit surprised you seem so comfortable giving that so-called, let us call it, guidance, given, you know, we still are not sure what weather is going to look like. Obviously, international visitation remains somewhat subdued, and there are obviously other potential headwinds out there as well.

So as we think about the last three quarters of the year, can you maybe just run through some of the gives and takes here? And maybe do you think the EBITDA, if there is growth year over year from here on out, is going to be more top-line driven? Or is it going to be more cost driven?

Marc Swanson: Yeah. Hey, Steve. I can take that question for you. I think about the year in a couple different ways here. First, we have a really good lineup of new rides and attractions, events, and new things coming to our parks that are largely still ahead of us. As a reminder, the vast majority of our year is still ahead of us. Even though we are here in April, the vast majority of our attendance and revenue is still ahead. So there is a really good lineup of new things to do in our parks that we believe will support more visitation and more spending in the parks.

We also, like you mentioned, with the weather component, recognize there are some favorable comparisons on a go-forward basis. We also recognize we do not control the weather, but to the extent weather does improve over last year, that should be a benefit for us. We will have to wait and see, obviously. And then we know we will start to lap some of the international decline that we have experienced here. If you remember, that was more of a second-half component last year. So those are some of the things. And really, my confidence is driven by all those things, but also a couple other things that you heard us mention.

One is the increase in the paid pass sales in the first quarter was pretty substantial, as you heard me and James say. You may not have caught it, but James also pointed out that our deferred revenue is now up 4% as of March, and it looks like it is retaining pretty close to that for April as well. And if you remember at the end of last year, that was down 4%. So a pretty substantial improvement in deferred revenue, which is another go-forward indicator, to go along with the increase in the Discovery Cove booking revenue and the group sales pacing ahead as well. So the group sales revenue is pacing ahead of last year.

So all those things taken together give us a good amount of confidence that, going forward here, we will see growth. I am really excited again about the attractions lineup, the things we are doing in marketing to put us in a better spot there, and certainly the pass sales. And we are just getting into that peak period as James mentioned. Hopefully, that gives you some color.

Steven Wieczynski: Yeah. It does. I appreciate that, Marc. And then the second question, I am not sure how much you are going to say here, but given the fact we are, what is it, May 11, we are essentially kind of halfway through the, we are almost through your second quarter. Wondering if you could give us high-level thoughts around what you witnessed in April and then maybe what you have seen so far in May. It seems like from our seat, weather was somewhat normal for the most part around most of the country in April and thus far in May.

So anything you can say just in terms of how the second quarter has kind of started, I think, would be helpful as well.

Marc Swanson: Sure. And, Steve, I wanted to add one more thing on your prior question. I did not mention the growth in the in-park per caps. You have seen that accelerate even in Q1 from where it had been in the prior quarters, and you have also seen the admissions per cap come back. Still slightly negative, but improving from prior quarters. So if we can continue to grow in-park and hopefully get admissions per cap to a better spot as well, that is another thing that contributes to growth going forward. As far as the month of April, remember that with the shift of Easter, you had certainly some Easter days shift out of Q1.

So that was an expected headwind in the month of April. That probably gives you some color on how we think about that month. Weather is a little bit mixed. We had some better weather in Williamsburg in April, but in Florida, a few days after Easter we had some poor weather. We have not had a ton of rain, but when it has rained, it was right after Easter for a couple of days. We will see how it balances out. Hopefully, it is a more normalized trend. May is such a back-loaded month that I do not know if we can get much read on things this early in the month.

Operator: Your next question comes from the line of Patrick Scholes with Truist. Please go ahead.

Patrick Scholes: Good morning. Thank you. You had briefly mentioned about $30 million or so expectations from a partnership. I wonder if you could give a little more granularity on how that impacted your per cap strength in the quarter. Is there a way to break that out? How much of the per cap growth came from an increase in sponsorship in 1Q? Thank you.

Marc Swanson: I can help you. It is still a fairly small amount in the quarter. Some of the deals that we have signed have been more recent, so you would see those more on a go-forward basis. I would not call it a huge contributor to Q1, but we are excited about the go-forward there.

Patrick Scholes: And how are you thinking about the tailwinds this year from various holiday shifts, whether it is Juneteenth, July 4, and especially the Jewish holidays? When I look at hotel bookings in Orlando, it looks really strong. Curious your thoughts around that. Thank you.

Marc Swanson: Sure. As far as the operating calendar, there are always puts and takes. I mentioned last quarter that we had one less Saturday in March this year compared to last year, and that was a meaningful impact on the first quarter, and it partially offset some of the Easter days shifting into March. On a go-forward basis, we just had the Easter shift here with some Q2 days shifting into Q1. If you look at July 4, it is on a Saturday. Ideally, I would love to have that not on a Saturday because we are typically busy on Saturdays regardless, especially in July. Nonetheless, we should still get a three-day weekend out of that for a lot of people.

That is probably just a push compared to last year. Going forward, things move around a bit, but nothing significant stands out in my mind right now. We do get a little bit of a longer summer with an earlier Memorial Day-ish and Labor Day being a little bit later. It is a longer time between them than normal. But with so many schools not tied to those holidays anymore for when they get out or go back, I do not know that it is a significant impact.

Operator: Our next question is from Arpine Kocharyan with UBS. Please go ahead.

Arpine Kocharyan: Hi. Thanks very much for taking my question. OpEx was a bit higher than expected. Was there any timing factors for the quarter? I think you mentioned a couple of things in your prepared remarks. Mostly, I am trying to understand how we should be thinking about overall OpEx for 2026, that mid-single-digit sort of increase. Would you say you are in the low single-digit range for the full year or closer to that mid-single-digit for OpEx for this year?

James Forrester: Yes, Arpine. I think you have asked a good question about the inflation that we are seeing for our OpEx. If you look at our adjusted EBITDA, our expenses show very modest, roughly 1% growth, so you are probably now focused on what we are showing in our financial statements for OpEx and selling, general, and administrative costs. OpEx is being driven by a lot of non-cash or one-time items. We mentioned $3.7 million in the non-cash self-insurance reserve. There is also an amount related to taking care of the cold weather impacts to the Florida market and others—predominantly in Florida—for loss of plant material and repairs for damages from cold weather, freezing that we incurred in that February timeframe.

For selling, general, and administrative, you are going to see that increase almost exclusively related to the amortization of our new ERP that we implemented back in October that will be amortized over the length of the agreement. Again, that is non-cash in the first quarter and non-cash going forward.

Arpine Kocharyan: Yes. That makes sense. Thank you. That is helpful. And, going back to one-time items, I was looking at what you are adjusting back to EBITDA—something like $7 million for the quarter—and I think the footnote mentions a bunch of business optimization costs. Could you give a little bit more detail on what those are? Seems to be ongoing for several quarters here. Just trying to understand what makes those costs one-off. And then similarly, that $3.3 million that you are adjusting EBITDA back for, what are those costs for?

James Forrester: As I mentioned, the consulting costs might be related to areas in procurement where we continue to try to ensure we are minimizing costs and doing strategic sourcing, or having others who helped us in the implementation of that ERP system, or addressing our impacts from the cold weather.

Operator: Your next question is from the line of Ben Chaikin with Mizuho. Please go ahead.

Ben Chaikin: Hey, good morning. To follow up on the deferred revenue, if I am not mistaken, I think this is the first time in maybe 18 months that you are seeing a positive inflection here. Obviously, you highlighted the increase, but what do you think is driving this? What caused the inflection?

Marc Swanson: Hey, Ben. You are right. It had not been positive on a year-over-year basis in quite a while. There are a couple of things. As James mentioned, our deferred revenue has all our advanced products: season passes, ancillary products, tickets, and experiences in our parks. I do not know that there is necessarily just one thing dominating it, but having better sales of passes has helped, and our in-park performance includes a lot of in-park items we can sell in advance, and that sits in deferred until people come, that type of thing.

Ben Chaikin: That is helpful. And then going back to the comment you touched on in the first question regarding higher EBITDA year over year, you gave us the reasons you were constructive. But maybe we could unpack the variables somewhat. Is this top-line driven? And if so, where are you seeing the most traction? Is it attendance, pricing, or both? And then maybe why? Thanks.

Marc Swanson: Sure. I think it is some of the points I made to Steve. On a go-forward basis, I like the setup of our events, our attractions, the things that are still to come. I like the setup of hopefully having improved weather—we will have to see, but last year, especially the second half, the weather was not cooperative. Hopefully, we get a little bit better on weather. We are going to lap the international decline more in the second half of the year, and hopefully that is no longer a drag as we lap that. Supporting that is the growth in the in-park per caps, and in this quarter our total per cap was up.

Even if you had the exact same attendance—which is not what we are shooting for—but even if you did, if you can grow your per caps, that drives revenue growth, and we did a good job this past quarter of growing our overall per cap. So we put per cap in there, we put attendance, we put the sponsorship revenue, and then, obviously, costs—we have to continue to manage to a level that is acceptable, and James talked about that. That is how it all comes together on a go-forward basis.

Ben Chaikin: Just to follow up very quickly. The deferred revenue seems like quite an inflection, and you did not seem to obviously point to attendance. Is there a reason why plus 4% deferred revenue would not translate to slightly positive attendance for the year?

Marc Swanson: No. I was not suggesting we are not going to grow attendance. Certainly, that is our plan and our expectation. I was just pointing out some of the other drivers as well. But the lineup of things we have across our parks, we believe, will drive people to visit.

Operator: Your next question comes from the line of Elizabeth Dove with Goldman Sachs. Please go ahead.

Elizabeth Dove: Hi, good morning. Thanks for taking the question. Wanted to go back to cost for a second. You mentioned you are still targeting the $50 million of gross cost savings for this year, but you have had various wage headwinds. You mentioned the advertising campaign that you are ramping up. Anything you could share in terms of that gross-to-net translation this year and your ability to flow that through to the bottom line?

Marc Swanson: Let me start and then James can add anything he would like to add. As you know, we hold ourselves to a pretty high standard with cost. We have done a lot of work over the years, and if you look at the margin expansion, especially since 2019, we have done well in that area. More recently here, we need to do a better job, clearly. But we are keeping that EBITDA expense growth—the costs that sit between revenue and adjusted EBITDA—for this quarter under 1%, as James mentioned.

Our goal is to achieve the cost savings that we have set out to achieve, and in a lot of cases, they are going to offset other headwinds and inflationary pressures that we have. We want to manage to as low a growth as possible or realize savings. That is how we think about it holistically, and we hold ourselves to a pretty high standard.

James Forrester: I would just add that, reiterating the very modest growth we had, we did an exceptional job in managing our hourly labor and our theme park labor over the quarter in the face of some headwinds. We also have had a very focused effort on reducing claims and the introduction of technology to reduce labor costs. All of those are bearing fruit, and I think we will continue to see those pay off in the coming quarters as well.

Elizabeth Dove: Got it. I wanted to ask about capital allocation and leverage. You have been buying back stock pretty consistently. I appreciate 1Q is typically a lower cash flow generation quarter, but I think you closed out with a cash balance of around $29 million. How do you think about buybacks from here, taking on more leverage, and where you feel comfortable longer term from a leverage standpoint?

Marc Swanson: Sure. We are comfortable where the leverage ratio is now at the end of Q1—not to say we would not be comfortable with something higher or lower, and that is something we work with our board on. You already noted it: we are coming out of the trough of cash generation given the seasonality of our business. On a go-forward basis, we would expect cash to start to grow, and that will be the catalyst for growing cash and continuing to fund share repurchases. If you step back and look over the full year, we continue to generate a good amount of cash each year, and I expect we will continue to do that going forward.

To give you some comfort, if we ever got to a situation where our leverage was really getting up there as we look at our use of cash, we are careful to take the leverage ratio into account before making decisions. We are comfortable now, and we expect that to improve going forward as we enter a traditionally busier time of the year.

Operator: Your next question comes from the line of James Hardiman with Citigroup. Please go ahead.

Sean Wagner: Hi, this is Sean Wagner on for James. You had mentioned that weather should improve, particularly in the back half of the year, but also in 2Q last year, you had characterized it as among the worst weather you had seen in the second quarter. Obviously, a lot depends on how weather turns out this year. Assuming more normal weather, do you get any operating days back because of closures last year, or are operating days expected to be relatively flat this year?

Marc Swanson: I think they will be fairly consistent. We might pick up a day or two, mainly in water parks that may have closed last year. A lot of times with weather, we are able to open, but a lot of people may not come if it has been raining or it rains in the afternoon or early in the morning. That can have an impact. We will see where that shakes out. I am generally optimistic about weather every year, so hopefully this is the year it gets better for us. We did have fewer operating days in the first quarter.

Our park in California, our Sesame park, did not open in January and February and into March, so we lost some operating days there. And we had some days where, given the cold in Florida, our water park was closed.

Sean Wagner: Okay. That is fair. And on your last call, you indicated that there is some pricing headroom in many markets and that admissions per caps should grow over time. We did see that improve sequentially from the declines we have seen for a handful of quarters now, but how should we think about that going forward? Do you have any expectations on when that inflects positively? Or should we think about comparisons with some of the promotions or pricing that you ran last year?

Marc Swanson: Our goal and expectation is to grow pricing over time, and we certainly recognize there is room to do that in a lot of our markets. But we are always going to defer to driving total revenue. The good news is, as you noted, the admissions per cap has improved to where it is down less than it has been in prior quarters. We are making progress there, and I expect we will continue to do that going forward. There might be times where we do an offer that could be at odds with per cap; we are really focused on driving total revenue. But we have demonstrated movement in the right direction with admissions per cap.

Operator: Our next question is from the line of Chris Woronka with Deutsche Bank. Please go ahead.

Chris Woronka: Marc, you have talked in the last couple of years about how some of your marketing programs are being modernized. Are you seeing any real tangible impacts from that yet, or are those still more to come? Thanks.

Marc Swanson: Chris, you said marketing programs, right? Look, as all of you know, there are more ways than ever to market to people now, and it is changing rapidly with all the ways that people consume media and get information. It is something you have to be on top of, and as I mentioned, we could have done things better and had some hiccups. But as we look at how we allocate our spend, the mix, where we advertise, what locations, and what platforms, there are tweaks there. The good news is we test and learn and try to optimize going forward. We are going to continue to do that.

We have had a lot of discussions around this area in recent weeks and months. We are confident in the plan going forward, but obviously aware that things are always changing, so we are trying to stay ahead of it.

Chris Woronka: Appreciate that. And then, Marc, on the land sales, for the potential buyers you are looking at, how important is their intended usage if these are land parcels near your parks? Is there a chance that what they would do is either complementary or perhaps non-complementary to the surrounding park?

Marc Swanson: As far as intended uses—hotel, entertainment district, housing, some of the things we have mentioned in the past—the goal is to find something that would complement our offering in the sense that people stay longer at our parks, come for more days, that sort of thing, similar to what you see others in the industry doing with their hotels. It is meant to complement the spend and the stay by our guests. That is what we would look for, and there are probably different ways you could execute on that. Certainly, we think it would be a component of how we could benefit from that land being used to benefit our parks as well.

Operator: With no further questions in queue, I now hand the call back over to Marc Swanson for closing remarks.

Marc Swanson: On behalf of James and the rest of the management team here at United Parks & Resorts Inc., I want to thank you for joining us this morning. As you heard today, we are confident in our long-term strategy, which we believe will drive improved operating and financial results and long-term value for stakeholders. We invite everyone to join us at our parks this summer to experience the energy and excitement we are offering. Thank you, and we look forward to speaking again next quarter.

Operator: Thank you again for joining us today. This does conclude today's presentation. You may now disconnect.

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