# United Parks & Resorts Inc. (PRKS) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-27  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/PRKS/thesis · /stocks/PRKS/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: PRKS
company: United Parks & Resorts Inc.
step: 04
title: Financial Snapshot & Adversarial Sweep
created: 2026-05-27
---

### Step 04 — Financial Snapshot & Adversarial Sweep: United Parks & Resorts Inc. (PRKS)

#### Key Findings
- **Net assessment: Mixed** — PRKS generates strong operating cash flows ($380M in FY2025) but carries a heavily leveraged balance sheet ($2.15B net debt, negative equity -$436M) that is the primary financial risk. Earnings quality is reasonable though Adj EBITDA adds back a substantial $239M in non-cash/non-recurring items.
- The adversarial sweep identifies two key concerns: (1) animal welfare litigation risk is ongoing and under-discussed in financial press, (2) the aggressive buyback program at elevated debt levels has concentrated financial risk if earnings don't recover.
- No material accounting fraud or restatement risk identified. Financial quality is adequate for investment analysis.

#### Implications for Thesis and Valuation
The negative book equity (-$436M) and 3.5x net leverage are not immediate solvency concerns given $625M Covenant EBITDA coverage and no debt maturities until 2029. However, the combination of limited financial flexibility and competitive pressure from Epic Universe means execution risk is elevated. A 15-20% EBITDA decline from current levels would materially strain covenant compliance.

#### Objective
Assess statement quality, earnings adjustments, balance sheet adequacy, and perform the Adversarial Research Sweep.

#### Narrative Analysis

##### Income Statement Quality

**Revenue Recognition:** PRKS recognizes admissions revenue based on attendance (visits used). Season/annual passes are recognized over the period of use. Monthly pass installments create deferred revenue that is recognized as visits occur. This is standard and conservative — no revenue pull-forward concern identified. [S1]

**Adj EBITDA Adjustments — Scrutiny:**
FY2025 Adj EBITDA adds $239.1M back to GAAP EBITDA ($540M) to get $605M Adj EBITDA. [S3]

| Add-back Category | FY2025 ($M) | FY2024 ($M) | FY2023 ($M) | Assessment |
|------------------|-------------|-------------|-------------|------------|
| Equity-based comp | 17.8 | 14.6 | 18.0 | Recurrent — should be treated as cost |
| Asset disposal/non-cash | 29.0 | 33.4 | 31.6 | Includes $17.5M self-insurance adjustments; recurrent |
| Business optimization | 15.1 | 18.4 | 33.9 | Declining but recurrent 3yr; quality concern |
| COVID/legal/other | 2.8 | (3.0) | 9.1 | Noisy; COVID-era reversals |
| Other adjustments | 0.7 | 6.5 | 5.2 | Assorted |

**Quality concern:** Asset disposal ($29M) and business optimization ($15M) add-backs have been recurring for 3+ years — these are not truly one-time. Adjusted for these, "true" normalized EBITDA may be closer to $560-580M — a more conservative view than management's $605M Adj EBITDA.

**SBC $17.8M (FY2025):** Real economic cost; excluded from Adj EBITDA per industry convention. As a % of total revenue: 1.1% — relatively modest.

**D&A vs. Maintenance CapEx:** D&A is $174.5M; "Core" CapEx (maintenance + ride upkeep) is $182.4M. These are roughly in line, suggesting D&A is adequate to reflect the true economic cost of asset consumption. [S1]

##### Balance Sheet Quality

**Negative Equity (-$435.8M at Dec 31, 2025):** Not a solvency indicator in isolation — caused by aggressive share buybacks ($1,988M in treasury stock at cost). Assets ($2,616M) > Liabilities in terms of economic value, but GAAP book is negative due to accumulated treasury shares. This is a common structure for levered-buyout-originated companies with aggressive buyback programs. [S1]

**Intangible Assets:** ~$117M in the balance sheet from indefinite-lived tradenames (SeaWorld, Busch Gardens, Discovery Cove). No amortization, no impairment taken in FY2023-2025. No red flag. [S1]

**Deferred Revenue ($143.3M at Dec 31, 2025):** From season pass and multi-visit ticket sales. This is a liability representing future park visits already paid — i.e., a quality liability (creates attendance). Up from $152.7M at Dec 31, 2024 — slight decline, potentially reflecting slightly lower advance pass sales in 2025. Q1 2026 deferred revenue: $203.8M (up 4.1% vs. March 2025) — good leading indicator. [S1][S8]

**Working Capital:** Theme parks have negative working capital (pass holders pay upfront; deferred revenue is current liability). Net current assets excluding cash and deferred: approximately -$200M. This is normal for the business model. [S1]

##### Cash Flow Quality

**Operating Cash Flow ($380M FY2025 vs. $480M FY2024):** The $100M decline is concerning. Driver: "changes in working capital" per filing — primarily higher cash interest payments (floating rate debt impacted earlier quarters before Dec 2025 refinancing lowered rate to 5.72%) and higher income taxes. Not a structural concern but a watch item for FCF trajectory. [S1]

**CapEx Quality:**
- Core CapEx ($182.4M): Park maintenance, ride replacements, infrastructure. Represents ~11% of revenue — in line with industry.
- Growth CapEx ($35.1M): New attractions with defined ROI projects.
- 2026 Guidance: ~$225M total ($175M core + $50M growth). [S1][S3]

---

#### ADVERSARIAL RESEARCH SWEEP

##### Finding 1 — Blackfish Legacy and Animal Welfare Litigation Risk
**Source:** Industry press, SEC risk factors [S6]
**Severity: MODERATE-HIGH**

The 2013 Blackfish documentary created lasting reputational damage to SeaWorld's orca operations. While the company eliminated theatrical orca shows in 2016-2018 and has since pivoted to conservation-focused messaging, the regulatory and litigation risk has not disappeared. Key ongoing vectors:
- California Legislature has periodically considered bills to restrict dolphin-swim interactions (which would directly impact Discovery Cove operations in any California expansion and set precedent for regulatory risk nationwide)
- PETA and other groups periodically file complaints with USDA/APHIS regarding animal treatment — creating regulatory scrutiny and media attention
- Federal Marine Mammal Protection Act continues to evolve; permits for public display of marine mammals face ongoing legal challenges from activist groups

**Financial impact if Discovery Cove swim-with-dolphin program is restricted:** ~$30-50M revenue impact estimate (Discovery Cove ultra-premium experience is the highest per-capita product in portfolio).

##### Finding 2 — Aggressive Buybacks at Elevated Leverage
**Source:** 10-K FY2025, 8-K earnings [S1][S3]
**Severity: MODERATE**

PRKS repurchased $157M in FY2025 and $93M in Q1 2026 (through March) while carrying $2.15B net debt and generating only $163M in FCF for FY2025. This means buybacks significantly exceeded FCF — the gap was funded by revolving credit (note: PRKS drew $80M on revolving facility post-YE 2025 per filing disclosure). [S1]

- Net leverage: ~3.5x (FY2025 Adj EBITDA)
- Debt covenants: Covenant EBITDA ($625M) must stay above levels that maintain required ratios; if Adj EBITDA falls to $550M, leverage would reach ~3.9x — approaching discomfort zone
- Board and Hill Path are explicitly approving buybacks, suggesting confidence in earnings recovery — but the financial math is tight

##### Finding 3 — Operating Schedule Changes and "Execution Failures"
**Source:** Q4 2025 earnings release [S3]
**Severity: MODERATE**

Management explicitly acknowledged in the Q4 2025 press release: "we should have delivered better results, particularly on the cost side of the income statement" and referenced "less than optimal execution." This candor is noteworthy — the 2025 EBITDA decline was attributed to both external factors (weather, international tourism) and internal factors (operating schedule changes, cost management). This creates investor uncertainty about whether management can achieve its FY2026 recovery targets.

##### Finding 4 — Sesame Workshop IP Concentration Risk
**Source:** 10-K FY2025 risk factors [S1]
**Severity: LOW-MODERATE**

Sesame Place parks (Philadelphia and San Diego) depend on the Sesame Street IP license from Sesame Workshop. If the license is not renewed or materially renegotiated, the concept value of these parks would be impaired. License terms not fully disclosed; no history of non-renewal concerns. The risk is real but low probability based on long-standing relationship.

##### Finding 5 — Tariff/Supply Chain Risk on New Ride Equipment
**Source:** 10-K FY2025 risk factors [S1]
**Severity: LOW**

PRKS's growth CapEx depends on procuring ride and attraction equipment from foreign manufacturers (European, Japanese coaster manufacturers). New US tariffs on imported goods (Trump administration tariffs, 2025-2026) could increase the cost of new attractions by 10-25% on the growth CapEx portion ($35-50M/year). On $50M growth CapEx, a 15% cost increase = ~$7.5M incremental cost. Manageable but directionally negative.

##### No Material Accounting or Fraud Concerns Identified
- No restatements in reviewed filing period
- No going concern language in auditor report
- Audit firm: Not explicitly identified in our data pull; major public company implies Big Four
- Material weakness: PRKS disclosed and remediated a previously identified material weakness in prior years; no active material weakness in FY2025 filing

#### Assumption Register Updates
- A17 (FCF $162.6M) confirmed [S1]
- A18 (net leverage 3.5x) computed

#### Tables and Calculations

##### Earnings Quality Bridge — GAAP vs. Adj EBITDA

| Item | FY2025 ($M) | FY2024 ($M) | Assessment |
|------|------------|------------|------------|
| GAAP EBITDA | 539.9 | 626.7 | Verifiable |
| + Equity comp (SBC) | 17.8 | 14.6 | Real cost; convention add-back |
| + Asset disposal/insurance | 29.0 | 33.4 | Partly recurrent |
| + Business optimization | 15.1 | 18.4 | Partly recurrent (3yr avg) |
| + COVID/legal/other | 3.7 | (3.0) | Noisy |
| **Adj EBITDA (mgmt)** | **605.1** | **700.2** | Per management definition |
| Less: recurrent "one-times" | (22.0) | (25.0) | Normalize recurrent add-backs |
| **Conservative EBITDA** | **~583** | **~675** | [Estimate, Judgment] |

##### Balance Sheet Summary (Dec 31, 2025)

| Asset | $M | Liability | $M |
|-------|----|-----------|----|
| Cash | 99.8 | Current debt | 15.4 |
| PP&E (net) | ~1,500 | Term B-3 Loans | 1,523.0 |
| Intangibles | ~117 | Senior Notes | 725.0 |
| ROU assets | ~200 | Lease liabilities | 148.9 |
| Other | ~700 | Deferred revenue | 143.3 |
| | | Other liabilities | 496.5 |
| **Total Assets** | **2,616** | **Total Liabilities** | **3,052** |
| | | **Stockholders Deficit** | **(436)** |

##### Adversarial Risk Summary

| Risk | Probability | Severity | Overall |
|------|------------|---------|---------|
| Animal welfare litigation (Discovery Cove) | Medium | High | Medium-High |
| Buyback-driven leverage creep | Medium | Medium | Medium |
| Execution/cost management failures | Medium-High | Medium | Medium-High |
| Sesame IP concentration | Low | Low-Medium | Low |
| Tariff/supply chain on CapEx | Low-Medium | Low | Low |

#### Open Questions and Data Gaps
1. Auditor identity and audit opinion in full filing (not extracted; assumed clean)
2. Exact insurance and litigation reserve amounts in balance sheet
3. Covenant financial ratio calculations (not fully extracted from Note 11)

#### Source Index
| Source Tag | Document | Section | Date | Notes |
|-----------|---------|---------|------|-------|
| [S1] | 10-K FY2025 | Financial Statements, MD&A, Risk Factors | 2026-03-03 | All balance sheet, income statement |
| [S2] | 10-K FY2024 | MD&A | 2025-03-03 | Comparative year data |
| [S3] | 8-K Q4 2025 | Adj EBITDA reconciliation | 2026-02-26 | Non-GAAP analysis |
| [S4] | DEF 14A | — | 2026-04-30 | — |
| [S5] | StockAnalysis.com | Balance sheet | 2026-05-27 | — |
| [S6] | Web search | Adversarial research | 2026-05-27 | Animal welfare, litigation |
| [S8] | 10-Q Q1 2026 | Balance sheet | 2026-05-11 | Deferred revenue update |

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/PRKS/fundamental

## Navigation

- Overview: /stocks/PRKS
- Financials (this page): /stocks/PRKS/financials
- Thesis: /stocks/PRKS/thesis
- Investment Memo: /stocks/PRKS/memo
- Coverage universe: /stocks