United Parks & Resorts Inc. (PRKS): A Theme Park Giant Poised for Growth

Published on March 08, 2025 | Ticker: PRKS

Business Overview: A Legacy of Thrills and Conservation

United Parks & Resorts Inc. (PRKS) is a leading theme park and entertainment company that owns and operates a diverse portfolio of award-winning theme parks across the United States. With a rich history spanning over 60 years, the company has evolved into a powerhouse in the industry, boasting a lineup of iconic brands such as SeaWorld, Busch Gardens, Aquatica, Discovery Cove, and Sesame Place.

United Parks & Resorts' origins can be traced back to the early 1960s when the company's founders opened the first SeaWorld park in San Diego, California in 1964. Over the decades, the company has expanded its footprint, acquiring and developing additional theme parks, each with its own unique identity and offerings. Today, the company operates a total of 12 theme parks, strategically located in key markets across the United States.

The company's theme parks showcase a diverse array of thrilling rides, educational presentations, and immersive animal experiences, catering to a wide range of guest demographics. United Parks & Resorts has also established a strong reputation for its commitment to animal conservation and environmental stewardship, with many of its parks featuring extensive zoological collections and educational initiatives.

In the early 2010s, the company faced significant challenges, including controversies around the treatment of animals at its parks and a decline in attendance. This led to a period of restructuring, with the company rebranding from SeaWorld Entertainment to United Parks Resorts Inc. in 2021. As part of this transition, the company worked to address animal welfare concerns, shifted its focus towards more educational and conservation-focused experiences, and invested in new rides and attractions to drive attendance.

Throughout its history, United Parks & Resorts has demonstrated a strong commitment to animal welfare and conservation efforts. The company has helped over 41,000 animals in need through its animal rescue and rehabilitation efforts, solidifying its position as a leader in wildlife conservation within the theme park industry.

In 2023, United Parks & Resorts continued to receive industry recognition for its parks and attractions. SeaWorld Orlando was voted as the number three nation's best amusement park by USA TODAY readers, while Busch Gardens Williamsburg was named the world's most beautiful theme park for the thirty-fourth consecutive year. These accolades underscore the company's ongoing commitment to providing exceptional guest experiences and maintaining high-quality park environments.

Financial Performance: Weathering Challenges, Poised for Growth

United Parks & Resorts' financial performance has shown resilience in the face of challenges. For the fiscal year 2024, the company reported revenue of $1.73 billion and net income of $227.5 million. In the most recent quarter (Q4 2024), revenue was $384.4 million, representing a 1.2% decrease year-over-year, while net income was $27.9 million, a 30.4% decrease compared to the same period in the previous year.

The company's revenue is primarily derived from two main segments: Admissions Revenue and Food, Merchandise and Other Revenue. For the first nine months of 2024, Admissions Revenue stood at $726.77 million, down 0.9% compared to the same period in 2023. This decrease was due to a 1% decline in attendance, partially offset by a 1% increase in admission per capita, which reached $43.61. Food, Merchandise and Other Revenue for the same period was $614.15 million, up 1.7% year-over-year, driven by a 1.5% rise in in-park per capita spending to $36.85.

United Parks & Resorts has faced some challenges in recent years, including the impact of the COVID-19 pandemic and unfavorable weather conditions affecting attendance. Despite these headwinds, the company has demonstrated resilience, implementing cost-saving measures and adapting its business model to navigate the uncertain environment.

The company's attendance patterns show significant seasonality, with approximately two-thirds of annual attendance and revenues generated in the second and third quarters. Changes in school calendars, holidays, and weather conditions can impact attendance and per capita spending.

Looking ahead, the company is optimistic about its growth prospects. In its latest quarterly report, United Parks & Resorts highlighted several strategic initiatives, including the development of new attractions, the expansion of its international footprint, and the exploration of real estate monetization opportunities. The company's management team has also expressed confidence in its ability to drive increased attendance and expand its per capita spending, leveraging its portfolio of iconic brands and ongoing investments in the guest experience.

Risks and Challenges: Navigating Industry Dynamics

As with any theme park operator, United Parks & Resorts faces a range of risks and challenges that could impact its future performance. These include:

1. Weather and Seasonality: The theme park industry is highly seasonal, with a significant portion of revenue and attendance typically generated during the summer months and school breaks. Unfavorable weather conditions can adversely affect attendance and operations, as evidenced by the company's recent performance.

2. Competition and Changing Consumer Preferences: United Parks & Resorts operates in a highly competitive industry, with other major theme park operators and alternative entertainment options vying for consumer dollars. Keeping up with evolving consumer preferences and offering a compelling value proposition is crucial for the company's continued success.

3. Regulatory and Legal Challenges: The company's operations are subject to various regulatory requirements, including those related to animal welfare and safety. Failure to comply with these regulations could result in legal and financial repercussions.

4. Workforce Management: Attracting and retaining skilled employees is essential for delivering a high-quality guest experience. Navigating labor market dynamics and managing labor costs can be a significant challenge for the company. United Parks & Resorts has faced labor shortages and hiring difficulties for certain positions and markets, which could impact operations and the guest experience.

Despite these risks, United Parks & Resorts has demonstrated its ability to navigate industry challenges and has outlined a strategic vision to drive long-term growth and value creation for its shareholders.

Financials

United Parks & Resorts' financial performance for the fiscal year 2024 shows resilience in a challenging environment. The company reported annual revenue of $1.73 billion and net income of $227.5 million. In the most recent quarter (Q4 2024), revenue was $384.4 million, representing a 1.2% decrease year-over-year, while net income was $27.9 million, a 30.4% decrease compared to the same period in the previous year.

The decreases in revenue and net income were primarily due to a 1.6% decrease in attendance, partially offset by a 0.4% increase in total revenue per capita. Despite these challenges, the company has maintained a strong focus on per capita spending, with record in-park per capita and near-record total revenue per capita achieved in Q4 2024.

United Parks & Resorts operates primarily in the United States, with the majority of its theme parks located in Florida, California, and Virginia. The company does not have significant international operations, which helps to mitigate currency risk but also limits geographical diversification.

Liquidity

As of December 31, 2024, United Parks & Resorts maintained a cash position of $115.9 million. The company's debt-to-equity ratio stood at -5.12, indicating a high level of leverage. However, the company has access to substantial liquidity through its $700 million Revolving Credit Facility, with $682.5 million available as of September 30, 2024.

The company's current ratio and quick ratio both stand at 0.28, suggesting potential short-term liquidity challenges. However, the availability of the credit facility provides a significant buffer for meeting short-term obligations and funding operational needs.

Future Outlook and Guidance

United Parks & Resorts has provided an optimistic outlook for the future, despite recent challenges. For the full year 2024, the company delivered near-record revenue, record in-park per capita, and record total revenue per capita, despite unfavorable weather during the year. The company has now grown in-park per capita for 18 of the last 19 quarters and total revenue per capita for 7 straight years, demonstrating consistent improvement in guest spending.

Looking ahead to 2025, United Parks & Resorts expects meaningful growth and new records in revenue and adjusted EBITDA, assuming no worse weather than experienced in 2024. The company plans to invest approximately $225 million in capital expenditures, with $175 million allocated to core CapEx and $50 million to expansion and ROI-driven projects.

In addition, United Parks & Resorts has identified approximately $75 million in cost efficiency and reduction initiatives, with $50 million of realized cost savings expected in 2025. This focus on operational efficiency, combined with strategic investments, is expected to drive improved financial performance.

The company believes its business has the potential to generate between $1 billion to $1.2 billion in adjusted EBITDA if attendance returns to 2019 levels or reaches the 2008 historical peak, while continuing to grow total per capita revenue and realizing cost savings.

Industry Trends

While specific industry CAGR information was not provided, United Parks & Resorts noted that the Orlando theme park market has seen significant growth in visitation over the past 25 years, increasing from approximately 40 million visitors to 75 million visitors annually. This trend suggests a generally positive outlook for the theme park industry, particularly in key markets where the company operates.

Conclusion: A Promising Future for United Parks & Resorts

United Parks & Resorts' rich history, diverse portfolio of iconic brands, and commitment to innovation and sustainability position the company for continued success in the theme park industry. While the company has faced recent challenges, including weather-related impacts and labor market difficulties, its strategic initiatives, strong liquidity position, and proven management team suggest a promising future ahead.

As the company continues to execute on its growth plans, investors should closely monitor United Parks & Resorts' ability to drive increased attendance, expand its per capita spending, and capitalize on emerging opportunities, such as real estate monetization and operational efficiencies. With a focus on delivering exceptional guest experiences and driving long-term shareholder value, United Parks & Resorts remains a theme park powerhouse worth considering in the entertainment industry landscape.

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