Six Flags (FUN) Q4 2025 earnings review
Merger Honeymoon Over: Impairment and Attendance Drop Spook Investors
Six Flags (formerly Cedar Fair/Six Flags combined) ended 2025 with a thud. Q4 Revenue fell 5% to $650M, missing the prior year's $687M, while Adjusted EBITDA plunged 21% to $165M. The company blamed weather (15 closed days) and the cancellation of winter events for a massive 13% drop in attendance. While Per Capita spending rose 8%, suggesting pricing power, the volume decline crushed margins. The headline shocker was a $1.5 billion non-cash impairment charge for the full year, signaling that the merger's projected value is largely unrealized. CEO John Reilly cites 'strengthened foundations,' but the financials show a business shrinking in both volume and profitability.
🐂 Bull Case
Despite lower volume, per capita spending jumped 8% to $66.41. Guests who do visit are spending significantly more on admissions (+5%) and in-park products (+11%), validating the strategy to target higher-value customers.
The company successfully refinanced its 2027 notes in January 2026. With $623M in liquidity and a focus on paying down debt, the immediate liquidity crisis risk is managed.
🐻 Bear Case
The company took a staggering $1.5 billion non-cash impairment charge on goodwill/intangibles for FY25. This is a direct admission that the legacy Six Flags assets or the combined entity is worth significantly less than carried on the books.
Adjusted EBITDA fell 21% on a 5% revenue drop. The business model relies on high fixed-cost leverage; when attendance drops 13% (1.4M fewer visits), profitability collapses disproportionately.
⚖️ Verdict: 🔴
Bearish. The $1.5B impairment is a major red flag regarding the merger's quality. While weather played a role, a 13% attendance drop suggests the pricing strategy may be alienating the core customer base too aggressively. The 21% drop in EBITDA confirms negative operating leverage.
Key Themes
Attendance Cliff
Attendance plummeted 13% (1.4 million visits) in Q4. While management cited 15 weather-closed days and the cancellation of winter events at four parks (accounting for ~425k visits), the decline is steep. This marks a sharp reversal from Q3's stability (+1%) and suggests the 'active season pass base' is shrinking (down in Q4).
SG&A Bloat Amidst Revenue Decline
Despite revenue falling, SG&A expenses rose by $18 million (+20% YoY) to $107M. Drivers included a $20M spike in wage costs (equity comp and severance) and higher tech costs. Growing overhead while sales shrink is unsustainable.
Premiumization Strategy Working
In-park product per capita spending grew 11% to $31.10. Guests are buying more food, merchandise, and premium add-ons like Fast Lane/Flash Pass. This confirms that the guests who *do* show up are less price-sensitive and willing to upgrade.
Debt Load and Interest Expense
Net interest expense rose $11M YoY to $89M in Q4. With Net Debt at $5.11 billion and FY25 Adjusted EBITDA at $792M, the leverage ratio is approximately 6.4x. This leaves little room for error if the 2026 season faces headwinds.
Goodwill Impairment Shock
The company recorded a $1.5 billion non-cash impairment charge on goodwill and intangibles for FY25. This effectively wipes out a massive portion of the equity value created on paper during the merger, admitting that the long-term cash flow assumptions for the combined entity were too optimistic.
Operational Efficiency
Operating expenses (excluding SG&A) actually decreased by $5M despite inflation, driven by labor management ($8M reduction in seasonal labor). This shows the park-level operations team is reacting to lower attendance, though not fast enough to save the quarter.
Other KPIs
Decelerating. Down $43M (21%) YoY. The margin compressed to 25.5% from 30.4% in the prior year, driven by the 'negative leverage' of lost attendance and fixed cost increases in property tax and utilities.
Stable/Improving. An improvement over the $264M loss in 24Q4, but primarily due to tax benefit swings ($15M benefit vs $210M provision LY) rather than operational health. Pre-tax loss actually widened to -$108M from -$55M.
Down 11%. The company operated 99 fewer days than the prior year, citing weather (15 closed days vs 3) and the strategic elimination of winter holiday events at four parks.
Guidance
The release text did not contain specific numeric guidance for FY26 revenue or EBITDA. Management referenced 'heavy investment' in 2026 attractions and a focus on 'restoring profitable growth,' but failed to quantify targets in the press release.
Key Questions
Impairment Charge Specifics
A $1.5B impairment is massive less than two years post-merger. Which specific legacy assets (Six Flags vs Cedar Fair) triggered this write-down, and does this signal a permanent reset in long-term margin expectations?
Season Pass Sales Trend
With the active season pass base cited as 'smaller' in Q4, what are the current 2026 sales trends year-to-date? Are you seeing volume resistance to the +5% pricing strategy?
Expense Rigidity
Revenue fell $37M, but SG&A rose $18M. How much of the 'integration costs' and 'severance' are truly one-time, and when will SG&A align with the new revenue reality?