Pursuit Attractions and Hospitality, Inc. (PRSU) Q2 2025 Earnings Call Transcript

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Overview

The earnings call reveals strong financial performance, with a 15% revenue increase and significant EBITDA growth. Positive factors include optimistic guidance for 2025, a strategic buyback program, and successful acquisitions. The Q&A reinforces confidence in the company's strategy and market positioning, despite some uncertainty regarding specific investments and buyback details. Overall, the positive aspects outweigh the negatives, suggesting a likely stock price increase.

Key Financial Performance

Revenue $116.7 million in Q2 2025, up approximately 15% year-over-year. Growth driven by continued momentum in guest demand and the compelling value of experiences.

Net Income Attributable to Pursuit $5.6 million in Q2 2025, compared to $29.3 million in the prior year. The year-over-year change was primarily driven by the sale of GES in 2024.

Income from Continuing Operations $4.5 million in Q2 2025, compared to a loss of $0.4 million in the prior year. Growth reflects higher adjusted EBITDA and operational improvements.

Adjusted Net Income $10.1 million in Q2 2025, compared to $0.2 million in the prior year. Growth primarily reflects higher adjusted EBITDA.

Adjusted EBITDA $29.7 million in Q2 2025, up nearly 50% year-over-year. Growth driven by significant revenue growth with strong margin flow-through, supported by a favorable mix of higher-margin attraction revenue and continued cost discipline.

Attraction Ticket Revenue $53.2 million in Q2 2025, reflecting a 22% year-over-year increase. Growth driven by higher effective ticket prices and increased visitors.

Lodging Room Revenue $26 million in Q2 2025, reflecting a 6% year-over-year increase. Growth driven by higher ADRs and occupancy levels.

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Operating Highlights

Tabacon Thermal Resort & Spa acquisition: Acquired on July 1, 2025, this Costa Rican destination includes geothermal hot spring attractions, a luxury hotel, a renowned spa, and culinary experiences. It spans 570 acres and is expected to drive long-term growth and geographic diversification.

Growth Mountain Lodge renovation: A project in Whitefish, Montana, near Glacier National Park, to renovate 73 guest rooms, corridors, and pool area, and add a wedding/events pavilion. Completion is expected in 2026.

Ice Odyssey vehicles: Invested in two new all-terrain vehicles to expand premium tours on the Athabasca Glacier at the Columbia Icefield attraction.

Costa Rica market expansion: The acquisition of Tabacon Thermal Resort & Spa positions the company to build a broader collection in Costa Rica, leveraging the country's strong tourism demand and stability.

North American market: Continued investments in high-demand areas like Glacier National Park and Jasper National Park to enhance offerings and attract affluent leisure travelers.

Revenue growth: Achieved $116.7 million in Q2 2025 revenue, a 15% year-over-year increase, driven by higher ticket prices and visitor numbers.

Adjusted EBITDA growth: Increased by nearly 50% year-over-year to $29.7 million, supported by cost discipline and higher-margin attraction revenue.

Room revenue growth: Lodging room revenue grew 6% year-over-year, with strong performance in U.S. and Canadian properties.

Refresh, Build, Buy strategy: Focused on reinvesting in existing businesses, building new experiences, and acquiring unique attractions to drive long-term growth.

Share repurchase authorization: Board approved a $50 million share repurchase program, reflecting confidence in the company's growth trajectory.

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Risk or Challenges

Market Conditions: Potential risks from economic uncertainties and exchange rate fluctuations, which could impact revenue and profitability.

Competitive Pressures: The company operates in high-demand, iconic destinations with high barriers to entry, but competition from other global tourism and hospitality brands remains a challenge.

Regulatory Hurdles: Expansion into new geographies, such as Costa Rica, may face regulatory and compliance challenges.

Supply Chain Disruptions: Renovations and new projects, such as the Grass Mountain Lodge and Forest Park Hotel, could face delays or cost overruns due to supply chain issues.

Economic Uncertainties: Potential risks from global economic downturns that could reduce consumer spending on travel and leisure.

Strategic Execution Risks: Challenges in integrating new acquisitions like Tabacon Thermal Resort & Spa and achieving projected EBITDA growth within the expected timeline.

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Guidance & Outlook

Full Year Guidance: The company is raising its full-year guidance, expecting stronger double-digit growth in both revenue and adjusted EBITDA.

2025 Adjusted EBITDA: The company now expects full-year adjusted EBITDA of $108 million to $118 million, an increase of $10 million from the prior guidance range. This represents substantial adjusted EBITDA growth of $31 million to $41 million relative to 2024.

Revenue Growth Drivers: The significant year-over-year growth is expected to be driven by continued strong demand and execution across operations, the recovery of leisure travel to Jasper, and contributions from recent acquisitions.

Organic Growth Investments: The company plans to invest between $38 million and $43 million in organic growth projects in 2025, including renovations at the Forest Park Hotel in Jasper and the Grass Mountain Lodge in Montana, as well as new Ice Odyssey all-terrain vehicles for the Athabasca Glacier.

Costa Rica Expansion: The acquisition of Tabacon Thermal Resort & Spa in Costa Rica is expected to drive near-term growth through operational enhancements and recent investments, with a targeted adjusted EBITDA multiple below 9x by year 3. The company is also evaluating additional investments in Costa Rica to build a broader collection.

North America Projects: The company is undertaking a makeover of the Grass Mountain Lodge in Montana, with completion expected in 2026, and exploring future projects like reimagining the Apgar Village properties in Glacier National Park and refreshing the Jasper SkyTram.

Future Investment Pipeline: Over $200 million in Refresh and Build investments have been identified for execution over the next 5 years, focusing on high-performing experiences and transformational projects.

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Shareholder Return Plan

Share Repurchase Authorization: The Board recently approved a new share repurchase authorization for up to $50 million of Pursuit's common stock. This decision reflects the company's confidence in its long-term growth trajectory and its intention to use its strong balance sheet to opportunistically buy back shares if the market undervalues the company.

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Key Q&A

Q:What was the reason for the $10 million guidance revision?

A:The $10 million guidance revision was split into $7 million for FX impact and $3 million contribution from Tabacon. Operating trends have been in line with expectations on a constant currency basis, with about $2 million of the $7 million FX impact realized year-to-date.

Q:What is the Board's rationale for authorizing a new buyback program?

A:The Board believes the company is undervalued and sees the buyback program as an opportunistic approach. It is not a pivot from the Refresh, Build, Buy strategy but rather a complement to it. The program provides flexibility to step in when the market undervalues the company.

Q:What is the expected pro forma run rate effective tax rate?

A:The expected pro forma run rate effective tax rate for FY '25 is around 31% to 35%. This is higher than statutory tax rates due to a smaller U.S. operational footprint and valuation allowances for deferred tax assets in the U.S.

Q:What drove the strong ETP growth in the quarter?

A:The strong ETP growth was driven by a relentless focus on guest experiences and yield growth, with the Sky Lagoon being a significant contributor due to its Turf House expansion. Strong performance in attractions led to high flow-through to EBITDA and cash.

Q:How is the company performing in the current leisure travel and consumer spending environment?

A:The company is performing exceptionally well despite a mixed broader environment. Factors include perennial demand, iconic locations, barriers to entry, and a focus on improving guest experiences. Strong results were seen in Banff and Jasper, with broad RevPAR gains across the lodging portfolio.

Q:What is the significance of the Costa Rica acquisition?

A:The Costa Rica acquisition fits the company's criteria of iconic locations with perennial demand and barriers to entry. It is seen as a foundational acquisition to build a collection in Costa Rica. The property has significant growth potential, including expanding attractions and lodging.

Q:How is the group travel business performing compared to 2019?

A:The group travel business has been building back since 2022 and is performing well. While Chinese travelers are below 2019 levels, other countries like Japan and South Korea are compensating. The business benefits from Canada's favorable currency exchange and international appeal.

Q:What is the company's long-term strategy for increasing margins?

A:The company focuses on attractions first, with vertically integrated hospitality, retail, and food. Long-term margin expansion comes from scale, depth within markets, and leveraging high operating margins in attractions. Growth levers include market tailwinds, guest satisfaction, pricing, cost discipline, organic growth, and acquisitions.

Q:What is the company's approach to acquisitions?

A:The company balances between larger acquisitions in new markets and smaller bolt-on acquisitions to improve scale and depth. It has a robust pipeline and evaluates opportunities based on strategic fit and shareholder value. Current pro forma net leverage is 1.5x, with a target of 2.5 to 3.5x.

Q:Review of Unclear Management Responses

A:Management avoided providing specific dollar amounts or velocity for the buyback program, citing it as opportunistic and nuanced. They also did not detail specific investments planned for the Costa Rica acquisition, stating they are still in the listening and learning phase.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

PRSU Transcript

Pursuit Attractions and Hospitality, Inc. (PRSU) Q3 2025 Earnings Call Transcript

Positive11-6

The earnings call reveals strong financial performance, with significant revenue and EBITDA growth, driven by strategic acquisitions and organic investments. Positive guidance and expansion plans, including the Costa Rica acquisition, bolster future growth prospects. The Q&A session supports this with confidence in continued demand and strategic investments. The raised guidance and robust financial health, coupled with strategic growth initiatives, suggest a strong positive outlook for the stock price over the next two weeks.

Pursuit Attractions and Hospitality, Inc. (PRSU) Q2 2025 Earnings Call Transcript

Positive8-7

Pursuit Attractions and Hospitality, Inc. (NYSE:PRSU) Q1 2025 Earnings Call Transcript

Unknown5-10

The earnings call summary presents a mixed picture. Basic financial performance shows a slight EPS improvement but remains negative, indicating potential instability. Product development and market strategy appear positive with strategic acquisitions and growth guidance reaffirmed. However, financial health concerns and lack of shareholder returns counterbalance this. Q&A insights reveal challenges in acquisition integration and currency impact, with management providing vague responses on some issues. Overall, the sentiment is neutral, as positive growth guidance and market positioning are offset by financial and operational risks.

Pursuit Attractions and Hospitality, Inc. (PRSU) Q1 2025 Earnings Call Transcript

Unknown5-10

The earnings call presents mixed signals: while there's optimism in revenue growth and EBITDA guidance, financial performance shows a net loss and declining adjusted EBITDA due to inflation and seasonal losses. The Q&A reveals strong demand and positive sentiment for attractions, but concerns remain about competitive pressures, regulatory changes, and currency impacts. Lack of shareholder return announcements and management's avoidance of specific currency impact answers further temper enthusiasm. Overall, these factors suggest a neutral sentiment, with potential for modest fluctuations in stock price.

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