Cedar Fair Posts Q1 Loss Amid Merger Integration, But Maintains FY25 EBITDA Outlook

The merger of Cedar Fair and Six Flags, completed in July 2024, has entered its first full fiscal year, but the early results are uneven. In Q1 2025, the combined Six Flags Entertainment Corporation reported a net loss of $220 million, driven by integration costs, event timing shifts, and legacy debt. However, the company reaffirmed its full-year 2025 Adjusted EBITDA guidance of $1.08 billion–$1.12 billion, citing cost-cutting progress and early signs of stabilization.

Mixed Financials Reflect Merger Challenges

The Q1 results were marked by stark contrasts between the two legacy companies. Legacy Six Flags contributed $111 million to the $202 million in net revenues but reported a $134 million net loss, while legacy Cedar Fair saw a $11 million revenue decline due to the delayed Boysenberry Festival at Knott’s Berry Farm. Overall, the combined company posted an Adjusted EBITDA loss of $171 million—a $74 million deterioration from Q1 2024—due to higher interest expenses ($87 million vs. $34 million in 2024) and merger-related severance costs.

Attendance totaled 2.8 million guests, but legacy Cedar Fair parks saw a 100,000 drop in visits, as the festival was pushed to Q2. Meanwhile, season pass sales rose 6% in early April, a positive sign for recurring revenue.

Operational Hurdles and Strategic Adjustments

The merger’s integration has introduced complexity. Legacy Six Flags parks operated 15 fewer days in Q1 due to operational adjustments, while Cedar Fair faced lower in-park spending (-2% on admissions, -5% on food/merchandise) linked to the festival delay. Cost of goods sold rose 290 basis points due to inventory standardization, a one-time adjustment to align Six Flags’ practices with Cedar Fair’s.

Management emphasized cost discipline:
- Headcount reductions and deferred maintenance cut expenses at Cedar Fair parks.
- Yield management is being expanded to optimize ticket pricing and in-park purchases.
- Capital projects, such as new rides at 11 major parks, aim to boost attendance and spending.

Why the FY25 EBITDA Guidance Remains Intact

Despite Q1’s struggles, the company reaffirmed its $1.08B–$1.12B EBITDA target, citing:
1. Peak season potential: Summer months (Q2–Q3) historically drive 85% of annual revenue. Early April attendance rose 1%, and season pass sales are strong.
2. Synergy realization: $70 million in remaining cost savings are expected in 2025, targeting a 4% reduction in operating costs. Total synergies since 2024 now exceed $120 million.
3. Balance sheet resilience: Liquidity stands at $241 million, and deferred revenues hit $374 million, reflecting strong demand for multi-visit passes.

Risks and the Road Ahead

The path to profitability remains fraught with risks:
- Debt burden: Net debt of $5.21 billion looms over the company, which must balance interest payments ($87 million in Q1) with reinvestment.
- Economic uncertainty: Consumer spending on discretionary items like theme parks could weaken if inflation or unemployment rises.
- Weather and timing: Easter’s shift to Q2 and delayed events may continue to distort quarterly results.

CEO Richard Zimmerman acknowledged these challenges but expressed confidence in the company’s “resilient business model,” citing a 42-park portfolio and plans to leverage Six Flags’ brand (e.g., Looney Tunes-themed attractions) to drive attendance.

Conclusion: Betting on Summer and Synergies

Six Flags Entertainment’s Q1 results underscore the merger’s growing pains, but the reaffirmed EBITDA guidance suggests management’s confidence in peak season performance and cost controls. With season pass sales up 6% and attendance stabilizing, the company appears positioned to capitalize on its expanded footprint.

Crucially, the 2025 EBITDA target represents a 28% increase from the $875 million reported in 2024, a stretch that hinges on summer execution. If the company can deliver on its yield-management strategies and ride investments—while managing its debt—investors may see a turnaround. However, with $5.2 billion in net debt and a reliance on seasonal demand, the path to sustained profitability remains narrow.

For now, the jury is out. But with the critical summer months ahead, Six Flags’ ability to turn Q1’s mixed results into a full-year win will define its future.