Cineplex (TSE:CGX) reported its highest quarterly revenue on record in the third quarter of 2026, as stronger theater attendance and higher spending per guest helped adjusted earnings more than double from a year earlier.
Revenue rose 26.2% to CAD 440.2 million, while theater attendance increased 23.1% to 14.8 million guests, Chief Financial Officer Gord Nelson said on the company’s earnings call. Consolidated adjusted EBITDA after leases, or EBITDAaL, climbed to CAD 70.7 million from CAD 33.3 million a year earlier.
Adjusted free cash flow more than tripled to CAD 52.9 million. Cineplex also reduced its simple leverage ratio to 2.9 times, bringing it within the company’s target range, according to Chief Executive Officer Bill Walker, who joined his first Cineplex earnings call as CEO.
Attendance and premium formats drive results
Nelson said the Film Entertainment and Content segment recorded its highest quarterly adjusted EBITDAaL, rising 115.6% to CAD 72.9 million. Box office revenue increased 35.2%, while theater food service revenue rose 27%.
Box office revenue per patron exceeded CAD 14 for the first time, Nelson said. Premium-priced offerings accounted for 51.4% of box office revenue, supported by demand for “The Odyssey,” which he said regularly sold out across Cineplex’s eight IMAX 70MM auditoriums.
Food service revenue per patron increased 3.5%, helped by pricing initiatives and record merchandise sales. Nelson said merchandise tied to “Spider-Man: Brand New Day” was the company’s most successful merchandise program.
The CFO also pointed to operating leverage in the exhibition business: an increase of approximately 2.8 million guests produced CAD 39.1 million in incremental segment adjusted EBITDAaL, or roughly CAD 14 per additional guest.
Media steady as location-based entertainment revenue slips
Media revenue was relatively flat from the prior year. Nelson said the comparison was affected by elevated pharmaceutical advertising a year earlier and by some clients shifting spending into the first half of 2026 around the Olympics and FIFA World Cup. The segment reported adjusted EBITDA of CAD 15.1 million and an adjusted EBITDAaL margin of 79.5%.
Looking toward the fourth quarter, Nelson said advertiser budgets had been weighted toward the first half of the year, while uncertainty over tariffs continued to weigh on spending. He also noted that the prior-year fourth quarter benefited from pharmaceutical advertising, including spending related to weight-loss drugs.
Location-based entertainment revenue fell 1.7% to CAD 34 million, which Nelson attributed to broader industry trends and cautious discretionary spending. Segment adjusted EBITDAaL nevertheless rose to CAD 4.8 million from CAD 4.6 million as the business benefited from operational efficiencies and expense management.
Walker said a new Playdium location in Vaughan was performing well. He also said Cineplex was investing in attractions at its entertainment venues to encourage repeat visits.
Strategic review continues as leverage falls
Walker said Cineplex’s previously announced strategic review remains ongoing and that any alternative would be assessed against the value the company could create by continuing to execute its strategy independently. In response to an analyst’s question, he said the review covered a broad range of options but declined to provide a specific timeline or an update on its progress.
Nelson said reaching the target leverage range gives the company more flexibility as it considers its capital allocation options. Asked whether dividends or additional share repurchases could occur during the review, he said Cineplex would continue to evaluate its options and choose the most appropriate path.
The company ended the quarter with CAD 137.3 million in cash and no drawings under its CAD 100 million revolving credit facility. Net capital spending was CAD 12 million in the quarter, and full-year capital expenditure guidance remained at CAD 50 million. Nelson said Cineplex expects further deleveraging by year-end, supported by box office momentum and the seasonal working capital benefit from holiday gift card and certificate sales.
Management points to film slate momentum
Walker said Cineplex’s October box office revenue increased 42% from a year earlier, helped by the documentary “You Can See Everything.” Through October, the company’s year-to-date box office revenue rose 25%, compared with 21% growth for the domestic industry, he said.
Walker expressed optimism about the 2027 film slate, citing releases across every quarter and expected carryover from films opening in late 2026. He also cautioned that individual films can surprise in either direction, making it important for Cineplex to maximize each release.
About Cineplex (TSE:CGX)
Cineplex (TSX:CGX) is a top-tier Canadian brand that operates in the Film Entertainment and Content, Amusement and Leisure, and Media sectors. Cineplex offers a unique escape from the everyday to millions of guests through its circuit of 169 movie theatres and location-based entertainment venues. In addition to being Canada’s largest and most innovative film exhibitor, the company operates Canada’s favourite destination for ‘Eats & Entertainment’ (The Rec Room), complexes specially designed for teens and families (Playdium), and an entertainment concept that brings movies, amusement gaming, dining, and live performances together under one roof (Cineplex Junxion).
