Six Flags Entertainment Corp (FUN) 2025 Q4 法說會逐字稿

Good morning, everyone. My name is Ellie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Six Flags Entertainment Corporation 2025 fourth-quarter earnings call. (Operator Instructions) I will now turn the call over to the Six Flags management for opening remarks. Please go ahead.

Good morning, everyone, and thank you for joining us to discuss Six Flags Entertainment Corporation's 2025 fourth-quarter and full-year results. My name is Michael Russell, I'm Corporate Director of Investor Relations for the company. Earlier this morning, we issued our earnings release, which is available on the Investor Relations section of our website.

Before we begin, I'd like to remind you that today's comments include forward-looking statements within the meaning of the Federal Securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings for a discussion of those risks.

Joining me today are President and Chief Executive Officer, John Reilly; and Chief Financial Officer, Brian Witherow. John will kick things off with his observations of the business since joining the company late last year. Brian will provide a review of our financial and operating results, then John will close things out with his outlook for the business and how we are approaching the 2026 season. We'll then take your questions.

With that, I'd like to turn the call over to John.

Thanks, Michael, and good morning, everyone. Thank you for joining us for our fourth-quarter earnings call and my first earnings call as CEO of Six Flags. On today's call, I will start by providing some background information on my experience in the industry, why I jumped at the opportunity to become Six Flags next CEO, and my initial observations after spending the past two months on the ground.

First, a little bit about me. I started out in the regional theme park business many years ago, selling popcorn as a teenager before working my way up to the executive positions in two of the world's largest regional amusement park companies. One based here in the US and the other based in Europe.

Theme parks are in my blood. And I'm very proud of the work I've done at each career stop to deliver exceptional experiences for our guests, to provide a fun and dynamic work environment for our team members, and to drive higher profits for our owners.

So what excited me about the opportunity to join Six Flags? First, I love this industry. The regional theme park is a resilient and growing industry with high barriers to entry leading to limited supply, resilient performance during recessions, and consistent demand when parks are well managed. In addition, Six Flags has a dominant position within the industry as the largest regional theme park player in the world.

Second, Six Flags parks are located in some of the largest and fastest-growing markets in North America. There are more than 200 million people living within easy driving distance to our parks, providing a huge opportunity to increase our penetration and to grow attendance over time.

And finally, this company has tremendous assets and significant earnings potential. Throughout my career and particularly as I've assumed executive level positions over the past decade, I have often been tasked with turning around underperforming assets. I can tell you this: there's no better feeling than unleashing the potential of a talented team of people to revise strategy and to improve execution, all with the goal of delivering sustained earnings growth over time.

I'm not here to spend time on the past. I'm here to build a disciplined operating culture that consistently delivers reliable, fun, and memorable guest experiences, as well as dependable financial outcomes and to earn credibility with our guests and investors quarter-by-quarter. This role is personal for me. Growing up in the theme park industry, I know what great looks like.

Over the past several weeks, I've been spending time in our parks, a lot of time, walking in the midways, meeting with park leadership teams, conducting focus groups with guests, and engaging with our frontline associates. Those visits have been invaluable, and they've reinforced my conviction about the underlying strength of our company.

What I've seen reinforces two things. The underlying demand is there and the biggest value creation opportunity is through better execution. Let me just share a few examples from our park visits because I believe they highlight the kind of high return work that can change consumer perception and quickly improved results.

At Six Flags Magic Mountain, I visited the park's maintenance shops during my tour. And from my interactions there, it was clear, the maintenance team took great pride in their efforts this past year to restore coaster trains and put them back into service, driving better ride-up time, more rides for guests, and higher guest satisfaction.

With a fleet of more than 60 coaster trains, we'll benefit from their hard work and our investments even more so going forward. We're already seeing positive signs of this work and investment in guest KPIs in 2025 and early in the 2026 season. We expect to see significantly increased ride up time and throughput at Magic Mountain and in other parks.

Important work like this is going on in all operating areas across our parks. On the food and beverage front, we placed executive chefs in the park to elevate food quality and improve guest satisfaction. During my tour of Carowinds, Irraj, our Executive Chef there, show me how innovations are expanding the park's menu offerings this year.

And he and his team explained how they are more efficiently approaching food preparation during varying demand levels with monitored holding times to ensure guests are getting the freshest and best quality food. The placement of chefs has been fully deployed already and now, with the right resources in place, we are positioned to reliably deliver higher-quality food across our parks.

Our scale provides us with a clear mandate to constantly improve efficiency. As I've traveled to parks and conducted leadership town halls, I'm encouraged that our park teams are not only embracing the challenge, but taking pride in driving efficiency. They are committed to do this work the right way, always protecting the guest experience.

When I visited Kings Island, our maintenance team shared their idea how we could save thousands by purchasing certain equipment we're currently renting. I can assure you this is something they are digging into further.

During my stop at Canada's Wonderland, Ravindra, our Workforce Director, proudly explained how his efforts ensured labor is being scheduled according to forecasted demand levels so that park labor is deployed at the right time and the right place throughout our entire enterprise. Effectiveness in this area helps reduce costs and ultimately helps drive improved guest spending.

The workforce management program was deployed across the portfolio last year, and now we stand to benefit from the resources and systems that are in place to drive efficiency and increase reliability in our business. Having been through this process a number of times, I can assure you this, the best ideas and highest return innovations come from the people closest to the work. At Six Flags, that's our ride operators, our maintenance teams, food and retail leaders, call center teams, finance and accounting staff, among others.

Therefore, we've recently created a formal feedback channel for associates to submit their ideas for innovation at all our parks. So far, we've received more than 300 proposals from our parks alone, recommending projects to create efficiencies and automate workflows.

These submissions are currently under evaluation as we look to activate the ideas with the highest paybacks. We want to recognize great ideas, reward them and scale what works across our entire park portfolio.

Everyone should expect a faster operating cadence and higher accountability across the board. We are committed to the operations levers that drive our guest experience in our business: reliability, throughput, cleanliness, value, and fun events and experiences. By mastering these, we will fuel demand and increase guest spending. Moving forward, we will simplify our processes and remain highly disciplined about where we invest to ensure maximum returns.

For our employees, my commitment to you is to provide clear standards, to remove obstacles to progress and to make decisions quickly, so you can do your best work. For our guests and fans, when you come to our parks, your entertainment experience each visit should meet or exceed your expectations. We want you back, so we plan to earn your trust to ensure that happens.

With that, I'll turn it over to Brian to walk through the quarter and full-year results in more detail. I'll then share some thoughts on our initial areas of focus. Brian?

Thanks, John, and good morning, everyone. I'll begin with a recap of our fourth-quarter and full-year results before providing an update on select balance sheet items as well as early performance indicators for the season ahead. For the fourth quarter, we are in the middle of our guidance range, delivering adjusted EBITDA of $165 million, an attendance of 9.3 million guests, and revenues of $650 million.

Two dynamics impacted the quarter. First, results for the quarter were up against a record performance in October of 2024, which we discussed on our last earnings call. Secondly, operating days in the winter holiday calendar mattered a lot. We operated 779 days in the fourth quarter of 2025 versus 878 days last year.

As was expected and as we discussed last quarter, a significant portion of the decline in operating days reflects our decision not to operate winter holiday events at four parks, a decision that was made earlier in the year. In hindsight, that decision did not optimize profits at every part the way we needed it to. Those events can be meaningful demand drivers and removing them created a self-inflicted headwind in terms of both the tenants and operating leverage.

We're taking that learning directly into our planning for 2026, and we will rethink the winter holiday strategy with a tighter returns-driven approach market-by-market rather than applying a broad brush. And while weather created variability in the quarter with 15 park closure days versus 3 last year, the more significant impact on demand was our decision to eliminate the winter holiday events, which created an attendance headwind of approximately 425,000 visits.

At the same time, during the quarter, spending by guests visiting our parks was strong. Our capital spending was up year-over-year, supported by higher guest spending on admissions and on in-park products. That matters because it reinforces that when guests get through the gate, there is clear opportunity to drive revenue and profitability through better execution, including higher throughput, better staffing alignment, efficient food and beverage operations, and overall guest flow.

For the full year, we produced net revenues of $3.1 billion and adjusted EBITDA of $792 million, while entertaining 47.4 million guests, and delivering per capita spending of $61.9. Similar to the quarter, the year reflects a mix of strong guest spending and execution gaps that impacted attendance and operating efficiency, particularly around the operating calendar. We're using those outcomes as inputs into a tighter operating plan for the upcoming season with a focus on consistency and repeatability across the portfolio.

As we noted on our last earnings call, this past season a lot. It proved to be a tale of two cohorts. Our best-performing parks overcame their operating challenges. And in several instances, parks delivered record or near record years.

At the same time, there were other parks in our portfolio that weren't as well positioned to withstand the operating challenges. The stark difference in park performance reinforces the notion that some of the profitability challenges we faced in 2025 were episodic and execution-related rather than structural or systemic in nature. This distinction matters as we strategize our path forward.

Turning briefly to the balance sheet. In early January, we completed a significantly oversubscribed refinancing of our April 2027 notes at attractive rates. It's an important step in strengthening our capital structure and increasing financial flexibility as we focus on execution and performance. We have substantial covenant cushion, extended maturities, and a clear deleveraging framework. Our leverage reflects 2025 depressed EBITDA, not structural over indebtedness.

Touching quickly on our longer lead indicators. At year-end, deferred revenues were up approximately 1%, driven primarily by higher advanced sales of single-day tickets and increased deposits from our group business channel. More importantly, sales trends of season passes and memberships have accelerated since year-end, supported by our new season pass architecture that includes guest access to multiple parks via newly designed regional pass products.

While this represents a small sample size, the improved sales from the past few weeks are an indication that the strategic changes we've made are resonating with consumers. We're entering the most important part of the selling season with improving momentum, clear offerings, and a stronger platform to convert demand into park visits, a dynamic John will speak to in more detail in just a moment.

Lastly, while we are not issuing formal guidance, our internal plans for the season ahead are built around improving revenue and cash flow relative to 2025. With that, let me turn the call back to John.

Thanks, Brian. Let me build on that with how we're approaching the business as we plan for 2026. While demand was pressured this past year, spending by guests who did visit remain solid. That and the early strong response to changes we've made to our past programs that Brian just mentioned tells me something important: the revenue engine is intact.

This is not a broken model, but one that requires sharper execution, clearer focus, and tighter alignment between commercial strategy and operations. The opportunity is to run this portfolio with greater consistency, more disciplined decision-making, and a refined playbook to convert demand into durable earnings and stronger cash generation.

I'm early in my tenure, and I won't pretend to have every answer, but I've spent my career in this industry, and I know what high-performing parks look like. And what I see across this portfolio are very addressable opportunities that can unlock meaningful upside under disciplined execution.

First, we're evaluating how we go to market. We operate powerful regional brands, and we must deploy them with greater precision. Our guests are not identical market to market, and our marketing strategy should not be either.

Over the past year, we saw the same promotion produce very different outcomes across regions. This is not a demand problem. It's an opportunity for us to better tailor our efforts to our local communities by applying tighter test-and-learn discipline. Marketing then becomes a demand lever, not just a traffic driver.

Pricing is part of that same reset. Our architecture must be simpler, clearer, easier to communicate across ticket types, passes, and add-ons with fewer and stronger offers that improve conversion and yield; better alignment between promotional timing, operating calendar, staffing levels not simply to produce more demand but more profitable demand.

Second, we're driving consistency of execution and margin expansion. This business rewards operational excellence. A portfolio of our size should benefit from scale, and our guests should experience reliability everywhere; parks open on time, rides operating consistently, clean park environments, energized teams. To deliver that, we have tightened our operating procedures, established clear standards, defined measurable KPIs, and developed protocols for rapid follow-through.

A critical lever in this effort is throughput. How efficiently we move guests through every touch point. I've spent time observing where friction occurs, entry gates, parking flow, food service, retail counters, and ride operations. Throughput directly influences guest satisfaction, in-park spending, and improved cost efficiency.

Third, we're applying disciplined ROI standards to our business decisions. Every investment must answer a simple question. Does it enhance the guest experience in a way that drives profitable demand, reduces cost or strengthens free cash flow? And does it do so at returns that justify the investment? That discipline applies to events, rides, and attractions at every level.

Our experience with several winter holiday events this past year provided valuable lessons. We will approach seasonal programming with market-specific rigor, clear ROI thresholds, and test and scale methodology. It applies equally to capital investment. Safety and ride reliability are non-negotiable.

Beyond that, discretionary investments will prioritize projects that attract incremental visitors, improve throughput, enhance guest value, and generate measurable returns. And some of the highest ROI opportunities are operational improvements, reducing downtime, eliminating inefficiencies, and standardizing systems that allow our teams to perform at their best. Taken together, these actions are designed to accelerate attendance recovery, deepen guest engagement, and restore durable earnings power.

Let me wrap up with these closing thoughts. Our near-term priorities are clear: improving profitability, strengthening the balance sheet, concentrating our time and resources on the assets and initiatives that generate the highest returns. Six Flags is a company with unique assets and significant earnings potential. Together, our teams are working to further our progress on elevating the guest experience, realizing the benefits of our incomparable scale to improve efficiency and margins, correcting missteps in marketing and operations, and continuing to create financial flexibility through deleveraging and disciplined capital allocation.

We will be transparent about where we are. We will move decisively on what we can fix, and we will earn credibility and your trust the way it should be earned through execution and results. The opportunity in front of us is meaningful. I'm energized by what I've seen across the parks. I'm confident in our path forward and excited about what we can deliver together.

With that, operator, please open the line for questions.

(Operator Instructions) James Hardiman, Citi.

John, certainly, welcome aboard. I think in your prepared remarks, I think you said something along the lines that you're not here to spend time in the past. But I wanted to maybe take a minute and just get your thoughts on 2025 in its totality, maybe do a brief postmortem here in an effort to diagnose some of the problems that you're going to be looking to solve for in 2026.

And maybe specifically, and this is a question I get a lot, I'm sure a lot of other people get this question a lot, like how do we put the various issues into buckets, right? Clearly, there are some cyclical pressures here. Clearly, there were some weather issues in 2025. I think you guys have spoken to maybe some unforced errors along the way.

And then there's this secular piece, right, that I think a lot of people struggle to identify, much less quantify. But ultimately, is there changing consumer behavior here at play? I think one of the other statements you made is that you think this is a resilient and growing industry. And so maybe you don't think that there is meaningful changes there. But maybe help us put some of the issues into these categories so that we can get a better framework for the business going forward?

Yeah. Thanks for the question, James. So when we say we're not here to dwell in the past, it doesn't mean we aren't taking the lessons that we've learned from 2025 and correcting missteps and addressing other opportunities as we see them.

So first, if you look at the consumer, we launched products in markets, as we said, that weren't sufficiently localized and in some markets that produced some abrupt changes as we were integrating. And in those markets, the consumers were used to different messaging.

In some cases, they were confused about their benefits on passes, for example. In some cases, they were paying more for a pass than they felt they had paid in the past. And so we are looking at all of those opportunities and then looking to address that misstep.

So Brian mentioned on the pass program, we recently, I think, two weeks ago, launched a regional pass. This is a really powerful product and we're in the very early stages, but we see opportunity here and we see increased cross-visitation. We see people in markets where we have membership moving to membership.

So in terms of the consumer, no, we don't think this is a consumer problem. We think we can address this through improving our execution and through addressing some missteps and learning from what was done last year.

And then also, I'd say, in terms of performance, we have a clear mandate to do margin work. And our scale gives us that mandate. And you see in the numbers, we closed out at 27% and we need to do better than that. And I'm encouraged by what I'm seeing internally that the team is embracing this challenge and doing it the right way. So we see opportunity on that front, and we're working to execute a number of initiatives there.

The other thing I would say about 2025, James, since joining the company, I've been surprised -- I could see the performance from the outside, but since I've joined the company, I've been surprised at the level of foundational work that was done in the integration. So in parks, bringing coaster trains up to full capacity as we had discussed. Improvements in parks, our tech stack; a lot of that work is behind us.

So as you look forward at our capital spending, it will be less in terms of IT and technology going forward. We have ERP systems in place. And then the condition of the parks has been a positive indicator for me. I've been to 14 so far. So I'll qualify that to say I haven't been everywhere. And we have opportunities like any park chain, but it's better than I expected.

So I think in terms of the consumer, we don't see any sign there's an issue with the consumer. We think we can address that through our own behavior through our own plans. In terms of margins, we're working clearly on that. And then I think a lot of the foundational work, especially in terms of the parks themselves, has been laid, which should help us as we go forward.

That's a really good outline. And maybe to the latter point about cost and margins, just curious to hear your philosophy as it relates to cost. Obviously, there's a fine line between streamlining the cost structure and impairing the customer experience and by extension the demand of the business along the way. So maybe speak to how you've operationalize some of those cost savings at previous stops? And then

Brian, I think we've maybe lost a little bit of a threat in terms of the cost savings that were previously outlined. Maybe give us an update what's been completed, how much is left for 2026 and if there's anything incremental that's been identified?

I'll start over, and then I'll turn it over to Brian, James. In terms of the line between the guest experience and cost savings, I think the thin line you mentioned, I'd say it's a red line. And that's what I've learned in doing this cost work in other chains, you have to protect the guest experience. It has to be a guardrail. Every initiative has to be weighed and measured, and you have to be willing to reverse if you do something that ends up with an unintended consequence.

What really works here, we gave some examples on the call, but we have these 300 ideas that were under evaluation. And maybe just some specific anecdotes will give you an idea of the power of this. We have a suggestion from Magic Mountain where they're renting an air compressor for $32,000 a year. It will cost us $35,000 to buy one and take that rental out of the P&L forever.

At Knott's Berry Farm, it will cost them $14,000 to buy a forklift that we can capitalize. It costs us $19,000 a year to rent it. And then there's a lot of ideas like that where there are just one-offs from parks, and we can scale them across the enterprise. We haven't begun to do that work yet.

So storage units for events or in the event business in a big way, we're going to be in the event business as we go forward, but we're renting equipment that we could buy for the same price that -- for the same price we could purchase it for. And in automation, parking lots, automated entry at tolls, other things. Those can actually improve the guest experience while creating efficiency.

There are a lot of studies that show that guests actually prefer that type of frictionless entry. So I'm confident that we'll do the cost work the right way. I've done this before. We will renew the initiatives because at the same time, we're working to improve the guest experience.

Yeah, James. And then as it relates to your follow-up, in terms of the original gross cost synergies that were part of the merger, we've effectively delivered on 100% of those by the end of '25. But as John just outlined, we're not satisfied or stopping there.

We're going to continue to look for more meaningful opportunities to offset other cost pressures, other inflationary pressures that are in the business, whether that's through more efficiency initiatives, a few of which John just gave some examples to, additional and further standardization procedures and policies. And then as you are fully aware, right, labor is our largest single cost, more labor productivity improvements in the system.

So we're not going to put a specific number on it at this point in time. A lot of work is in motion, and there's more to be done, but we're confident that we can get more efficiencies wrung out of the system over the course of 2026.

Arpine Kocharyan, UBS.

John, it is very clear you know and understand this business well. If you look at the performance for 2025, it was clear to even someone that's not an operator, right, that decremental margin on some of the underperforming parks was very large.

So my question is, do you feel like you have a good handle on capturing that this year regardless of demand? In other words, a leaner organization that is more flexible to adapting to demand levels? Or do you think it can take some time to get to that leaner organization?

Yeah. What I can tell you is that the work is underway to improve the margin, to work on these initiatives that we mentioned, both in workforce deployment, in efficiency, automation, and in other efficiency initiatives that we have underway in the company. I don't have a timeline today to get to a specific target. I'm just joining here.

But as I said before, 27% gives us a mandate. And I've been quite encouraged by our team members who are embracing that and embracing -- doing it the right way. So we have to do it the right way. The work is underway. We believe there is considerable opportunity over time.

And then the last thing, I think that you mentioned in terms of the organization, getting the organization to do that -- the what we're doing is important, but I think the why, the how, is also very important. We believe strongly in pushing more decisions back with local input to the parks.

We believe strongly in simplicity. We need more urgency in the organization, more localization and more accountability, quite frankly. So we're working -- while we work on the initiatives, we're working in the spirit of more accountability, more localization, and more urgency and execution to get it done.

Okay. Helpful. And then a quick follow-up. I was curious how you think about asset optimization and it could be early still to you, as you said, you just got there. It is clear there are at least maybe six to eight parks that generate less than 5% of EBITDA in this portfolio.

At the same time, it seems to me it's not as straightforward to even decide what can be pruned because there will be underperforming parts that are worth investing in to improve operations and maybe there are assets that is not quite worthwhile to invest in. How do you think about that?

Yeah, we approach asset evaluation through a disciplined return framework. We have rigorous work underway on that front in terms of assessing. But our highest ROI parks represent the core of the portfolio. And certainly, as you mentioned, there's -- they're done right.

This could benefit leverage to optimize the portfolio but, really, one of the opportunities that we're looking at is the strategic focus it gives us in order to be able to dedicate management time, expertise, know-how, capital investments, resource allocation. And I think that has, in the longer term, the potential to be the greater benefit.

Steve Wieczynski, Stifel.

John, welcome in. So I guess my first question is around guidance or lack of guidance for this year. And Brian, you touched on this in your prepared remarks. But maybe wondering what drove the decision not to give formal guidance?

And then maybe from a high-level perspective, Brian, if you could give us some color on maybe how you think the year could play out, whether that's from an operating days perspective, whether that's from an attendance perspective, anything there would be helpful?

And then, Brian, also, do you have a forecast for CapEx and interest this year as well?

Steve, it's John. I'll start and then I'll turn things over to Brian on the latter part that you mentioned. Look, in terms of guidance, I just got here. I've been on the ground just a little bit over two months. Now is not the time for me to come out with guidance. We're really early in the season.

We have some nascent signs of growth, but it's too early to go down that road. And we want to earn your trust with execution and results over time. And just for me, two months is not enough. We're confident, however, that we have the opportunity in volume, pricing, operating costs of the 2025 base to begin to deliver sequential improved results.

And I'll turn it over to Brian for the second part there.

Yes, Steve. In terms of operating days, as we alluded to in the prepared remarks, there is still work being done in the fields as we challenge our park leadership teams to ensure that we're optimized on the operating day front and the operating calendar. And so there's still an opportunity to see this move.

But if we look at our outlook for '26, sans the Sunset Park in Buy Maryland. I would say that the overall operating days right now are expected to be up slightly, maybe as much as 1%. That could change as we get further into the year and the opportunity to potentially add back a winter holiday event as an example or two. Those decisions will be made in the next several weeks. But that's the outlook on that front.

In terms of CapEx, we're still expecting that our spend is going to be in that $400 million to $425 million range for the calendar year 2026 versus a cash spend this past year of closer to $475 million. And interest is in the -- expected to be in the $135 million, $145 million range.

Okay. Got you. And then second question. Back to you, John. You mentioned in your prepared remarks, you have a history of working with so-called underperforming parks. So as you've kind of had the chance now to go through the portfolio, it sounds like you've been to about half of the portfolio at this point.

What would you say, as you think about the underperforming parks, what are some of the top two, three, four things that you can identify and potentially make changes to? I'm not sure that makes sense, but hopefully it does.

Yeah. I think it's a good question. So I'd say the top takeaway I have, as I've toured the parks and then as we've -- Brian and I and the teams in the parks and in the park support center here, is that the issues are not systemic. The issues are market-by-market, park-by-park. And for example, we have parks where price -- maybe price was an issue in terms of lost opportunity.

We have parks where attendance was an issue. And we have parks where cost was an issue. And then we have parks that -- where two of those factors were a factor. So I think the key for us is to approach these parks issue by issue and to address it that way. And so that's how we're approaching the 2026 plans for these parks. It's not systemic.

In some parks, we have opportunities. And for example, as I travel to Mexico. I mean this is a great park in a great market with great weather. And so for example, we think in Mexico, is a place to lean in and we're going to add over 20 operating days in Mexico. So it really is case by case. That's a different situation than many other parks. So it really varies by site.

(Operator Instructions) Thomas Yeh, Morgan Stanley.

I wanted to ask about the particular strength in per caps in 4Q. I know the shoulder season has some mix factors to it. But can you maybe just talk about the sustainability of that growth?

And Brian, I think you mentioned past uptake improvement, just recognizing it's still early in the cycle. Just relative to last year, can you share how units in pricing are pacing on a blended basis, given some of the uptake on the higher-priced regional passes?

Yeah. Maybe I'll start with the latter, Thomas, and then John can provide some color after that. But on the season pass side, we're not going to give specific metrics at this point in large part because it is a small sample size. And I think sometimes the law of small numbers, right, some of these percentage year-over-year variances can be a little less informative than not.

But we are encouraged not only by the volume and the pickup in that, but also with the reconstructive architecture of the past. As we talked about, even last year, moving over to a single unified ticketing platform is going to give us more opportunity, more flexibility around things like the regional pass. We're seeing folks migrate up to more higher-priced products, I guess, I'd say it that way. And that's certainly helping at certain parks in regards to that average price.

Now not all of our parks are in operation right now, as you know, Thomas. And so that you've got not only a small sample size in terms of window of time, but also in terms of the parks that are in play. So there's more work to be done, but the team is very encouraged by the early signs there.

In terms of per cap, again, very encouraging. Fourth quarter is not -- especially as you get deeper into the quarter, not nearly as meaningful in terms of the number of parks in operation or the total number of days let's say, the third quarter but seeing the impact of some of the late season changes we made around promotions and pricing benefiting the admissions per cap, as well as then seeing guests continuing to spend inside the park on those in-park products like food and beverage, extra charge attractions to name a couple, it's very encouraging. And I think it supports what John said before, which is we don't see a problem with the consumer or the health of the consumer. They are spending when they visit our parks. And our job is to just continue to find ways to improve that demand level.

And I'd say -- this is John again. The -- as we said, the solid spending that we saw is a sign that the revenue engine is intact, along with the regional path that we've laid out. But I would -- I'm taking the fourth quarter in-park per caps with a bit of caution because there's a lot of change in there, with the reduction of the events, with the reduction of the operating days, with the change in both the mix of visitors by ticketing category because of the loss of the events and the mix of parks because of the loss of events. So as we look at 2026, we expect growth in our in-park spending, but I think we're going to be careful about modeling what we saw in Q4 going forward because of that noise in the quarter.

Okay. Understood. That's very helpful. And then one last one, just on the point about optimizing the investment structure. I wonder if you could just drill down a bit more on planned marketing spend? Last year, I think you leaned into areas that didn't stimulate as much demand as you desired.

Just maybe any insights on unpacking the right level for that. Was it an allocation issue or was it just marketing into a weather situation that was the problem? How would you approach taking that into the new season?

Yeah. So I'd look at a couple of factors when we look at our marketing spending. I would look at, number one, the timing of the spend is something that's under evaluation. So we need to be sure that we're putting it in the right period of year that gives us the highest return on the ad spend. So that's one thing that's under review.

We also have to look at the -- in terms of the power of the return on marketing, we have to look at the quality of creative. So the team is doing a lot of work to address some creative that they don't feel was as effective as it should have been in last year.

And then finally, in terms of our marketing spend, just more in a general sense, we have to look at our mix of awareness versus conversion spend. And one of the really great things about these parks is we have very high unaided awareness in our markets, but we're doing a lot of awareness marketing. And we think there's an opportunity to move more of our spend into dedicated conversion. So those are just three more general factors if it helps that are some of the work underway.

Adam (technical difficulty), Truist Securities.

This is Adam on for Patrick Schulz. Just wondering if there's anything -- going back to the park optimization efforts, if there's anything you can share about Enchanted Park Holdings in particular?

Yeah, Adam, we don't have anything to share today on that front.

Anthony Berni, Jefferies.

This is Anthony on for David Katz. The first one is, can you talk a little bit about your capital allocation priorities? How should we weigh deleveraging versus CapEx spend? And on CapEx, can you provide any ROIC targets that you have for that spending?

This is John. I'll start out. First, what I would say is we have sufficient flexibility in our CapEx spend. Once we look at what's required for maintenance, which we would always do, the remainder -- there's a lot of discretion in terms of attraction investments and other investments.

I'd say in terms of a change in focus or an accelerated change in focus would be CapEx tied to efficiency and automation that we talked about early but we feel, overall, we have a good amount of flexibility in the plan even when we address the maintenance CapEx as a given.

Yeah. I think, Anthony, just maybe adding on to that. As we been very clear in addition to continuing to reinvest in the parks and to drive growth, to mine more of those cost efficiencies, as John just mentioned. We're looking to -- those projects, we're going to focus those on our highest and best ROI, certainly looking to exceed our weighted average cost of capital in any of those investments.

But our priority, in addition to growing the business through the right level, and we think that the $400 million to $425 million for plan for 2026 includes a very attractive and comprehensive capital program. Beyond that, it's continuing to funnel all of our excess free cash flow back towards paying down debt until we get net leverage back inside of 4 times on a sustained level.

Okay. Very helpful. And just a quick follow-up. D&A was a little elevated this quarter. It seems it was due to some changes in accounting. Should we expect this to be the new run rate for D&A? Or was this a one-time change?

Yeah. I would say you're right. I mean it is a little bit of accounting noise related to some purchase price adjustments on some of the legacy Six Flags parks as well as an accounting change related to the Cedar side -- the legacy Cedar side of the ledger. I think at this point in time, sans any significant change in the asset base that that's the normalized run rate for the go forward.

That concludes today's question-and-answer session. I will now turn the call back to Mr. Michael Russell for closing remarks.

Thanks again, everybody, for joining us today. Our next earnings call will be in early May when we will report our financial results for our 2026 first quarter. Ellie, that concludes our call today. Thanks, everyone.

Thank you for attending today's call, you may now disconnect. Goodbye, everyone.