Good afternoon, and welcome to the Vail Resorts Fiscal 2025 Year-End Earnings Conference Call. Today's conference is being recorded. I will now turn the call over to Angela Korch, Chief Financial Officer of Vail Resorts. You may begin. Angela K

Thank you, operator. Good afternoon, and welcome to our fiscal 2025 fourth quarter earnings conference call. Joining me on the call today is Rob Katz, our Chief Executive Officer. Before we begin, let me remind you that some information provided during this call may include forward-looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties as described in our SEC filings and actual future results may vary materially. Forward-looking statements in our press release issued this afternoon, along with our remarks on this call, are made as of today, September 29, 2025 and we undertake no duty to update them as actual events unfold. Today's remarks also include certain non-GAAP financial measures. Reconciliations of these measures are provided in the tables included with our press release, which along with our annual report on Form 10-K, were filed this afternoon with the SEC and are also available on the Investor Relations section of our website at www.vailresorts.com. I would now like to turn the call over to Rob for some opening remarks.

Thank you, Angela. Good afternoon, everyone. Thanks for joining us. Before we discuss our results and fiscal 2026 guidance, I want to share my perspective on where the business stands today and where I see opportunities for future growth after being back in the CEO role for the past 4 months. I want to start by acknowledging that results from the past season were below expectations, and our season-to-date past sales growth has been limited. We recognize that we are not yet delivering on the full growth potential that we expect from this business in particular, on revenue growth in both this past season and in our projected guidance for next year. That said, I am confident that we are well positioned to return to higher growth in fiscal year 2027 and beyond. At the heart of our underperformance is that the way we are connecting with guests has not kept pace with the rapidly evolving consumer landscape. We have not fully capitalized on our competitive advantages nor have we adopted our execution to meet shifting dynamics. For years, e-mail is our most effective channel for reaching and converting guests, leveraging data to deliver efficient and targeted communications. However, as consumer preferences have changed, particularly over the last few years, e-mail effectiveness has significantly declined, but we did not make enough progress in shifting to new and emerging marketing channels. Compounding this, we historically have prioritized transactional call-to-action messaging with our guests and missed the opportunity to tap into the strong emotional connection our guests have with the Epic brand and our individual resorts. This approach was successful during a time period where we were rapidly adding resorts and innovating our past product portfolio. But over the last few years, where we have not benefited from those types of positive news events and instead have dealt with actually some moments where we did not deliver on the operational front, our approach has not been reaching a broader array of guests in order to amplify brand awareness, attract new guests and increase guest loyalty. We've also not had enough focus on our lift ticket business. Again, this made sense as we were rapidly growing our past business, but as we dramatically increased pass penetration, we have not pivoted to bring the same level of focus, creativity and resources to engaging with guests who for whatever reason, we're not yet ready to purchase a pass before the season. Finally, while we have made great strides in developing and improving our My Epic app. The app does not have native commerce and we have not been set up to accept either Google Pay or Apple Pay. However, we are seeing guest engagement dramatically increase in the app and on mobile, yet purchase conversion within both are significantly lower than what we would see on our websites, and below its potential. I'm fully committed to course correcting and executing a multiyear strategy that unlocks the full potential of our business. The strategy is rooted in leveraging our strong competitive advantages to drive sustained and profitable growth. We own and operate 42 resorts across almost all regions in North America and Australia and we have the strongest brands and most popular resorts. By owning and operating our resorts, we are able to collect extensive data from our guests across all our lines of business throughout the entire network, giving us tools we can leverage in every marketing channel, and used to inform mountain and technology investments in the highest return areas across all our resorts. We can also leverage our integrated model and data to optimize every aspect of our product and pricing approach across all lift access products, passes and lift tickets at each resort as well as ancillary revenue, which will continue to be a larger focus for the company going forward. Finally, we are well positioned to leverage the new technologies that are defining the current market environment. However, our immediate priority is increasing guest visitation to our resorts and essential driver of revenue and ultimately free cash flow. We will continue to invest in our resorts and our employees consistent with our long-standing focus on delivering exceptional guest experiences. At the same time, we are taking decisive steps that we believe will rebuild lift ticket visitation, evolve our guest engagement approach to better reach and convert guests and reaccelerate growth of our pass program, all of which are critical to strengthening our long-term financial performance. On the first item, we are focused on rebuilding lift ticket visitation, an essential driver of revenue and long-term growth. We are strategically enhancing lift ticket offerings, pricing strategies and our marketing approach aimed at bringing in new guests to our resorts in ways that complement our pass program. In August, we introduced Epic Friend Tickets, a new benefit for the 2025, 2026 Epic Pass holders giving them the ability to share discounted lift tickets with family and friends. This not only celebrates the social side of skiing and riding, but it also drives lift ticket sales for new guests that would be attracted to visiting our resorts with their friends and family. Importantly, the full value of the ticket can be applied towards a future pass purchase, making it a powerful tool for future pass conversion. At the same time, we're evolving our lift ticket pricing strategy with more targeted adjustments by resort and by time period. This allows us to balance guest access and value while optimizing demand, particularly in off-peak periods without compromising the strength of our pass program. We are also increasing our media investment with a focus on top of funnel awareness of our resorts to help us reach new audiences and drive incremental visitation throughout the winter and intend to continue to innovate our lift ticket product offering as we get into the upcoming ski season. Beyond the expected immediate impact on visitation, lift ticket guests represent a high conversion population for future pass sales, which supports our past growth in FY '27 and beyond. Second, we're evolving our guest engagement strategy to better connect with skiers and riders and drive stronger performance. Our focus is on broadening our reach and modernizing how we engage across channels. We plan to increase our exposure within digital and social platforms and expand our influencer partnerships. We believe this shift will allow us to reach guests where they are and to fully utilize our guest data to create content that resonates with our guests and drives action. We're also aiming to elevate the individual brands of our resorts by tapping into the emotional connection guests have with each destination. We believe this is an important differentiator in a competitive landscape. Third, we continue to see meaningful opportunities to expand advanced commitment and grow our pass business. The pass price reset ahead of the 2021, 2022 season exceeded our expectations in the initial years. And despite some modest declines recently, pass units are expected to be up over 50% in fiscal 2026 compared to fiscal 2021. And the same is true for our Epic and Epic Local Pass products, which despite recent modest declines, we expect to be up approximately 20% in units since the 2020/2021 season. And importantly, we have delivered this strong growth in those products despite significantly expanding other pass options for guests, including our Epic Day Pass products. This growth in our pass program has significantly strengthened our financial resilience and stability. We're focused on driving long-term guest loyalty, which means ensuring we're optimizing the pass offering and continue to drive retention and conversion of new guests to the program. Toward that end, while driving lift ticket sales, Epic Friend Tickets is also a new benefit for unlimited pass holders. We're also investing in personalized media and influencer channels to better target and convert prospective pass buyers. Because passes were already on sale during the CEO transition, our ability to influence fiscal 2026 pass results was limited. Looking ahead to fiscal 2027, we will be evaluating all aspects of our pass portfolio, including the product offering, pricing and benefit in conjunction with our lift ticket products and pricing with a focus on driving conversion to our highest value, highest frequency products and optimizing our overall lift access revenue growth. We are also actively searching for a new leader of our marketing organization and have retitled the role as a Chief Revenue Officer, reflecting the clear focus for this leader on driving all aspects of revenue for the company and are looking for an executive with strong P&L ownership and overall leadership experience. Finally, we will continue to invest in our people and our resorts to ensure we are delivering an experience of a lifetime. We are uniquely positioned to capitalize on investments in new technologies and processes that make it easier for our guests to engage with each aspect of the physical and digital experience we provide, driving both more value for our guests and revenue opportunities for the company. Vail Resorts has delivered incredible stability and has an extraordinary foundation to execute on these opportunities and generate stronger long-term sustainable growth. We have irreplaceable resorts an owned and operated business model and robust data infrastructure that enables a sophisticated approach to product and pricing decisions across our resorts. We continue to execute against our growth strategies of growing the subscription model, unlocking ancillary, transforming resource efficiency, differentiating the guest experience and expanding the resort network. In addition, we have a resilient business model with demonstrated financial stability and strong free cash flow generation and a track record of disciplined capital allocation and consistent innovation. Coupled with our passionate and talented teams, we believe we are well positioned to succeed in the future. These actions taken together with the continued success of our Resource Efficiency Transformation Plan gives me confidence in our ability to deliver long-term sustainable growth and long-term value for our shareholders, our guests, our communities and our employees in the years ahead. With that, I will turn it over to Angela to further discuss our financial results and fiscal 2026 outlook.

Thank you. As Rob mentioned, while our financial results in fiscal 2025 do not reflect the full potential of the company, the results do highlight the stability of the business model and early success of the Resource Efficiency Transformation plan. The company generated $844 million of resort reported EBITDA in fiscal 2025, which represents 2% growth compared to prior year, despite total skiers visits declining 3% across our North American resorts. The results were within the original guidance range for fiscal 2025 per resort reported EBITDA provided in September 2024. And excluding the CEO transition costs and changes in foreign exchange rates, the result was within 1% of the midpoint of the original resort reported EBITDA guidance range. Results for our fourth quarter, fiscal quarter 2025 were slightly ahead of our expectations with strong cost management, solid demand for our North American summer operations and improved visitation in Australia relative to the prior year. Now turning to our outlook for fiscal 2026. In fiscal year 2026, we expect net income attributable to Vail Resorts to be between $201 million and $276 million and resort reported EBITDA to be between $842 million and $898 million. The guidance includes an estimated $14 million in onetime costs related to the Resource Efficiency Transformation Plan. We anticipate growth in fiscal 2026 to be driven by price increases, ancillary capture, incremental efficiencies related to the resource efficiency transformation plan and normalized weather conditions in Australia in the first fiscal quarter of 2026, partially offset by lower pass unit sales, which are expected to have a negative impact on skier visits relative to the prior year and cost inflation. Season pass sales through September 19, 2025, for the upcoming North American ski season decreased approximately 3% in units and increased approximately 1% in sales dollars as compared to the prior year period through September 20, 2024. The season-to-date trends through September 19, 2025, were generally consistent with the spring selling period with the decline in units driven by less tenured renewing guests, those that had a path for just 1 year and fewer new pass holders. Renewals are up for our more loyal pass holders, those that have had a pass for more than 1 year. As we enter the final period for season pass sales, we expect our December 2025 season-to-date growth rates to be relatively consistent with our September 2025 season-to-date growth rates. The Resource Efficiency Transformation Plan continues to generate strong results for the company, and we expect to exceed the $100 million in annualized cost efficiencies by the end of fiscal year 2026. Our fiscal 2026 guidance assumes that we will deliver $38 million of incremental efficiencies before onetime costs, contributing to the achievement of an expected $75 million of cumulative efficiencies since we announced the plan in September 2024. Finally, in fiscal 2026, we anticipate cash tax payments to be between $125 million to $135 million. As Rob noted, while our guidance for fiscal 2026 reflects growth over prior year, it does not reflect the full potential of the company. We are committed to positioning the company to unlock stronger and sustainable long-term growth moving forward. Turning to our capital allocation priorities. We remain committed to a disciplined and balanced approach as stewards of our shareholders' capital. Our capital allocation priorities remain consistent: First, prioritize investments that enhance our guest and employee experience and generate strong returns; and second, maintain flexibility to pursue strategic acquisition opportunities. After those top priorities, we return excess capital to shareholders. In support of reinvestment in our resorts, in calendar year 2025, we expect to spend approximately $198 million to $203 million in core capital before $46 million of growth capital investments at our European resorts and $5 million of real estate-related capital projects. In addition to this year's significant investments, we are pleased to announce some select projects from our calendar year 2026 capital plan with the full capital investment announcement planned for December of 2025, including a core capital plan consistent with the company's long-term capital guidance. At Park City, we are continuing the multiyear transformation of the Canyons Village to support a world-class luxury-based village experience. Vail Resorts, in partnership with the Canyons Village Management Association, is replacing the open-air Cabriolet transport lift with a modern 10-passenger gondola, which will improve the guest experience, reduce weather-related disruptions and complement the Canyons Village parking garage, a new covered parking structure with over 1,800 spaces being developed by the developer of the Canyons Village. In addition, we plan to resubmit for permits to replace the Eagle and Silver load lift at Park City Mountain to continue our investment in the on-mountain experience, which if approved, would be upgraded for the 2027, 2028 North American ski season. Planning of additional investments at Park City Mountain across the Mountain is underway and additional projects will be announced in the future. The company also remains committed to the multiyear transformation of Vail Mountain and in calendar year 2026, we will continue to invest in real estate planning to develop the West Lionshead area into the fourth best village in partnership with the Town of Vail and developer, East West Partners. In addition, the company plans to build on the success of its calendar year 2025 lodging investment at the Arrabelle at Vail Square, with plans to renovate guestrooms at the Lodge at Vail in calendar year 2026. In addition to further enhance the guest experience across our resorts, the company will be investing in technology enhancements and new functionality for the My Epic App, including new in-app commerce functionality and payment platform integrations to improve mobile conversion enhanced by My Epic assistant functionality and expansion of the new ski and ride school technology experience. In addition, the company will make technology investments to enhance the integration of My Epic Gear guest experience. Turning to the second priority. Our balance sheet remains strong and is positioned to enable future strategic acquisition opportunities. As of July 31, 2025, the company's total liquidity as measured by total cash plus revolver availability and delayed draw term loan availability was approximately $1.4 billion and the company's net debt was 3.2x its trailing 12 months total reported EBITDA. On July 2, 2025, the company completed its offering of $500 million aggregate principal amount of [ 5.5% ] notes due in 2030. We used a portion of the proceeds from the offering to repay seasonal borrowings under our revolving credit facility in addition to the $200 million of share repurchases completed during the quarter. We intend to use the excess proceeds from the bond issuance, together with the $275 million delayed draw term loan for the repurchase or repayment of our outstanding 0% convertible senior notes due 2026 at or prior to their maturity on January 1, 2026. After these priorities, we focus on returning excess capital to shareholders. In the current environment, we look to balance our approach between share repurchases and dividends. The company declared a quarterly cash dividend on Vail Resorts common stock of $2.22 per share. The dividend will be payable on October 27, 2025, to shareholders of record as of October 9, 2025. Current dividend level reflects the strong cash flow generation of business with any future growth in the dividend dependent on material increases in future cash flows. We also maintain an opportunistic approach to share repurchases based on the value of the shares. As mentioned in the quarter, we repurchased approximately 1.29 million shares or 3% of outstanding shares at an average price of approximately $156 per share for a total of $200 million. We continue to evaluate the highest return opportunities for capital allocation. Now I'd like to turn the call over to Rob.

Thanks, Angela. In closing, we greatly appreciate the loyalty of our guests this past season and the continued loyalty of our pass holders that have already committed to next season. With our Australia winter season coming to a close, I would like to thank our frontline team members for their passion and dedication to delivering an incredible experience to our guests. I would also like to thank all of our team members that are working to welcome skiers and riders back to the mountain this coming winter season. We are looking forward to a great upcoming winter season in the U.S., Canada and Switzerland. At this time, Angela and I would be happy to answer your questions. Operator, we are now ready for questions.

[Operator Instructions] We'll take our first question from Shaun Kelley with Bank of America.

Rob or Angela, maybe I just wanted to start with kind of the broad backdrop for visitation for this upcoming season. So Rob, in the prepared remarks, you talked a lot about some very, I think, interesting initiatives to start to address the visitation -- some of the visitation challenges and some of the opportunities you see there. Obviously, the Epic Friend Tickets being a piece there. And I imagine you expect utilization on those to be pretty good. So can you help us just kind of think about that underlying backdrop and what you're doing on marketing and with Epic Friends and contrast that with kind of in the bridge for the year on the financial side, it seemed like the implication was that the expectation given the pass units are down a little bit was that maybe visits are down, but I might be misreading that. So just wondering kind of how you expect really this season to play out from a visitation standpoint, given some of the initiatives in play.

Yes. Thanks, John. Yes, that's true. We do expect visitation in total for this year to be down slightly. I think that, that is primarily driven by the decline in pass sales to this point. And while we do think that we're going to make a portion of that up with lift ticket sales, it's not going to be enough to overcome, in our view, the decline in pass sales to this point. What I would say is that a lot of the things that I mentioned about what we need to do to correct how we engage with guests are things that are multiyear efforts. None of those things are things that happen right away. Even the Epic Friend piece will take time for our guests to understand what they have, for us to communicate with our guests for them to then increase their utilization to understand the change in terms for that and how they can use it and how they could turn it into a ticket the following year. So we expect to see some benefit from it this year, but obviously, additional benefit from it in future years. The same is true with our paid media investments. Again, I think if you're looking for top-of-funnel brand-building effort, that's not something that's going to happen in a month or 2. That's something that takes more time. The same is true for getting deeper and more skilled and more sophisticated in all the other marketing channels that we have. So what I would say is I think in the end of the day, we are starting to prepare for the fiscal 2027 season now, right? So we have work going on. We're obviously working on pass sales, but also working on other initiatives. So if you kind of back that up, you realize like, yes, from the time that some of this started, right, not possible to have a full impact on fiscal 2026.

Got it. Makes complete sense. And then just as my follow-up, and you kind of already touched on a little bit of it, just for the 2027 and beyond plan, some of the outline for maybe the Chief Revenue Officer and some of the opportunity. But just how big of a change is on the table here, Rob, just in terms of like, look, the big initiative done was to push for volume to push pass utilization up at the expense a little bit of price, right? That was sort of the compromise made back during the pandemic. Is something as fundamental as that shift on the table here as we think about moving forward, whether it be raising the pass price in its entirety to balance out that ecosystem differently? Or maybe think about it differently, just the possibly charging an add-on, which has been proposed at a major kind of high-value resort like Avail, like just to change the composition of price versus volume? Just how are you thinking about sort of that very fundamental idea as we turn the page to next year?

Yes. I think the way to think about it is I think what we did with the price reset was really kind of a right across the board approach because what we saw was that we felt like all of our pricing was too high in terms of getting the penetration that we wanted in pass. And I think that was the right move at the time, and I think it's driven actually good success. And obviously, as we highlighted, we're still well above where we were before that. But what I would say, though, is I think what we have not done is we have a lot of different pass products, right? So it's not just the Epic and Epic Local, right? We have a lot of different pass products for that, but then we have child pricing and college pricing and teen pricing and regional passes. And then all of those products really sit on top of all of our lip ticket products. And I think what you're hearing from us is I think what we can do is now, right, not take a kind of across-the-board approach to any of this, but actually a resort by resort or path product by path product approach. And there's technology now that's available that given our data and what we can put into it, right, where all of a sudden, we have a much higher level of confidence in terms of what we can drive with some of these individual moves. It's -- we have, I don't know, 200-plus pass products or something like that. We have thousands of lift ticket products. And those have largely been marching in lockstep where we think actually there's an opportunity for us to think much more strategically about it, again, using some of the tools that are out there that we all know about. And so what I'd say is, in a way, the big -- if we're cracking something open, it's not necessarily that we're looking to take price up or price down per se. It's that we're actually cracking this kind of connection that every single product has had to each other over the last 15 years.

We'll move next to David Katz with Jefferies.

With respect to the sort of single-day visitation or the walk-up window, one of the debates, I'm guessed you're having is on sort of that price, right? And whether any of the strategies around improving walk-up visitation includes adjusting some of the price schedules that are out there or some of the pricing strategies.

Yes. What I would say is I think we look at it, I mean, maybe a little bit more broadly. So right, at a top line level, we're looking at pass, right? So that's all the products that are sold before the season begins that are nonrefundable and then there's lift tickets. And within lift tickets, we have a lot of different lift tickets, some of which -- most of which candidly are advanced lift ticket. So there's something that you buy 3 days in advance, 7 days in advance. And so we do put a lot of business through that. And then yes, we do have people who walk up to buy tickets just that day. And so we are looking at all of those prices. But of course, I would say, yes, we're still going to be putting -- the Epic Friend Ticket is a 50% discount on the walk-up price. So that would perfectly fit for somebody who wants to make a decision that day. But we think there could be opportunities for us to be more creative about some of the other prices that we have and the kind of advanced windows that we have for them because of when people -- if you haven't made your decision by the past deadline, then it's a question of when do people start making decisions for their future trips. So in the end, some of this is like we're trying to kind of tailor this to how people make a decision. It's not that many people are deciding to go to Vail that day and then kind of flying out. So the question is like when can we shift price that makes the biggest impact on driving more visitation.

Understood. And interesting about the discussion around media channels. And historically, the company has always been particularly advanced at data gathering, how much of this strategy about sort of reaching customers through the right channels is also about data gathering that builds intelligence for the future? Or is it just the right connection channel?

Yes. I think I actually feel really good about the data that we have on our guests. We have extensive data. I think, though, that our -- we've had kind of a maybe not a singular focus, but close to around e-mail because it was obviously -- we could present the information, the offer, the communication to the guests in a great way. We could get in front of them, and we made a huge effort, right, to collect e-mails over the last 10 to 15 years. And that channel is still going to be important for us. But we can use that data now with all the tools that are available to go out and use tons of different paid media networks that do personalize, right? And we can go through other companies that we can kind of bump our list against their list and then make sure we're delivering the right ad to the right person. And then we can use look-alike modeling, right, even for prospects who we don't necessarily have in our database to make sure that we're targeting the right people. And this is true not only with digital -- traditional digital media, but TV, right? Tons of TV now is -- are things that -- where you can run ads that go down to the individual person, which is important for us because, obviously, we're not a mass market type item. And by the way, that's traditional media, then you add social media, you have influencers, boosting influencers, own posts about your product and then using that creative to actually just run it in those social media channels at the same time using TikTok, which historically we have really not been engaged. And again, all of these things made total sense for a lot of time because obviously, we did have a much better, more efficient communication channel. But as things shift, like we have to be out in front of those as well and take the same level of sophistication and data that we have and just leverage them in different ways.

We'll take our next question from Jeff Stantial with Stifel.

Maybe just starting off on the initial fiscal '26 guidance, which is where we're getting the most questions this afternoon. Angela, you listed out some of the puts and takes that factored in. One that seems to be missing or at least that we didn't hear was sort of how you're thinking about lift ticket or window ticket sales this year. So is it your expectation that lift ticket unit sales are down year-on-year, again, similar to sort of what we saw this past season and 1 or 2 before that? Or is it your expectation that should stabilize on some of these efforts as quickly as fiscal '26? And then similarly, just how should we think about sort of the blended price growth or decline just given these changes to the Buddy Pass system and the more dynamic pricing strategy, maybe net of the typical price taking action that we've seen from you historically?

Yes. Thanks, Jeff, for the question. Yes, we did talk about just on visitation, what Rob was commenting on, we do expect some offset to the pass visitation to occur on growth on lift ticket visitation. And with our pricing actions, while we're taking some opportunities to introduce new products like Epic Friends and those, we still expect that to be slightly positive on lift ticket revenue. The -- I'll maybe go through some of the other kind of gives and takes that I tried to outline. On the midpoint of the guidance relative to last year, it's up about $26 million. And we called out, obviously, the resource transformation plan playing a big role in that of about $38 million, also the normalized kind of conditions within Australia being another $9 million. And on top of that, really coming from growth, both the pass price growth that we took, but also our lift ticket prices as part of that as well. And then improved ancillary, those are kind of the positives, right? And those are being offset by our pass unit sales, right, which will have a negative impact on visits and then normal just expense and labor inflation.

That's great. Angela. And then turning over to the Epic Friends changes to the structure there, Rob or Angela, can you just maybe start off by helping frame for us the materiality of Buddy Passes historically, whether in terms of total units, revenue contribution, just any metrics that you could provide there? And then as we think about sort of the overall return on this change, is it your expectation that onetime sort of pricing hit in year 1 can be recouped by higher volume of lift ticket sales? Or should we really think about this more as a longer-term investment where the return manifests over time through sort of long-term replenishment of that funnel for new sport and lap skiers and ultimately conversion over to pass sales? Just any extra color there would be great.

Yes, sure. So I would say -- so Buddy tickets historically are a material part of lift ticket sales. And Angela, have we disclosed that before?

Yes. There's a pie chart in our investor presentation where you can see, right, it's about 7% of total lift revenue, but right, it is 20% of paid lift ticket revenue that comes from those benefit tickets.

So yes, so it's material, and that gives you kind of a sizing of it. What I would say is I think our view is that it is something that we would expect to be a positive, right, to the year. We're not expecting it to be negative to the year. I think, obviously, it's something that will grow over time. But we do see that -- and in large part, it's because, of course, we're going to be giving a discount, an additional discount to some people who are already using the program but we're expecting, right, more people to use the program now that we're going to promote it in a much more significant way, now that the discount is just 50% across the board for everybody, now that we're giving the discount to pass holders in the fall, not just pass holders in the spring and obviously have been more clear about the ability to turn it into the following year for a pass. So in total, we just feel like, yes, we will ultimately add more visits, and that is something that is contributing to the lift ticket growth that we're expecting for this year, as we talked about earlier.

We'll move next to Stephen Grambling with Morgan Stanley.

A couple of follow-ups on the moving parts you ran through in the guidance for the year ahead. Do you generally anticipate that some of the efforts to communicate the new pricing and marketing will be incurred this year? Or is that more of a 2027 thing? So as we think about the potential for a recovery in visitation and top line in '27, will there also be a step-up in incremental costs?

Yes. I think 2 things. One is, I think there are opportunities actually to offset as we use more sophisticated technology in our marketing department to actually get more efficient with our overall cost, which I think is kind of an overall view that we have about the business going forward that we believe that there are continued opportunities for us to drive resource efficiency and marketing is one of those places. And our goal is to take those savings and obviously redeploy them into investments that we think can be more productive. So while we do see that there'll be additional investments that we have to make, both within our marketing group and of course, on the Mountain in our employees as we look to take the experience up, we also feel like there are other opportunities for us to take cost out of the business. So the investments that we want to make are not ones that we think should pull down the margin at all.

That's helpful. One other follow-up. How are you thinking about the net impact from the disruption at Park City last year versus this year? Is that a tailwind in your expectations or a headwind?

Yes, it's definitely a tail in our minds. Obviously, of course, there could be some guests that didn't have a good experience and are concerned about returning. But we see the experience was so challenging last year, and we think the tail from that likely was last season, where I feel like this year, we're going to be going in. And the team, I think, there has done a great job of preparing for the season. I think we're in a great spot to deliver a very high level of experience all season long. I think that's something that's going to come through, and we're seeing evidence of that in the broader market bookings as well in Park City. So for us, I think it's -- we're starting off in the right spot, and so we feel like it's a tailwind.

We'll move next to Laurent Vasilescu with BNP Paribas.

The March Investor Day laid out a vision, I think, on Slide 45 to have pass revenues go from 64% of the mix to over 75% over time. Rob, with the comments provided earlier on the lift tickets, where do you want that mix rate to go over time? Should it still go over to 75%? Or are you happy with that rate at 64% currently?

I would say, right now, I think my primary focus is on overall visitation to the resorts and overall lift revenue. And I think -- but I would say that I do think there's -- yes, there's some pullback that is maybe to be expected given the kind of rapid growth that we saw over the last 4 years. But I actually feel that, yes, there's continued opportunity, just like we talked about with Epic Friends tickets and moving people through lift tickets, those are all opportunities for us to ultimately convert them into a pass. And so we absolutely are going to continue to march forward as we get right, new visits from every source to convert them and drive our pass business up. It's ultimately, it's the best deal. It's the cheapest per day price. And as people get more comfortable and more willing to commit in advance, we think we can transition them into those products. But again, yes, it starts with visitation growth, overall visitation growth.

Okay. Very helpful. And then tonight's press release outlines that you expect the December 2025 season day growth rate to be comparable to what you saw for the month of September. Can you maybe comment a bit more about this? What gives you the confidence that the trends remain consistent going forward for the next few months?

What I would say is every time we put out some color commentary on that, we use the trends we're seeing, how they're shifting. And it is true that as we go into the last deadlines, it is more heavily weighted to new than renew. So there's always a little bit more uncertainty. At the same time, obviously, a lot of the selling season is behind you. So we take all of those things into, yes, an estimate, right? We use forecasting to come up with what we see going forward. And it doesn't mean we're going to be precisely accurate each time, but we try and give people kind of our best assessment of every piece of data that we have at the moment.

We'll move next to Patrick Scholes with Truist Securities.

I'd like to talk about the dividend coverage. When I run some back of the envelope numbers, and certainly, I could be off in my assumptions here, at the low end of the guide, it looks like the dividend is not fully covered by the free cash flow. Assuming I'm not completely wrong in my calculations. My question is, how comfortable are you taking on some debt, assuming you come in at the lower end of the guide to maintain that dividend? And along that line, at what net leverage ratios are you comfortable with?

Yes. We're very comfortable with the current leverage ratios that we have. We think they provide a lot of room for the company, especially given the stability of the business. So that has given us comfort on our dividend levels. And yes, we're certainly comfortable if it means that, yes, leverage goes up a little bit given where we're starting from. That said, I think we've been really clear that to show an increase in our current dividend, yes, we need to see a material improvement in free cash flow. But in terms of the current dividend, yes, we're comfortable with that.

Okay. So would take on a little bit of leverage if needed to be in that scenario. Next -- or my follow-up question here. Curious as to in your past sales, what have been the trends for international guests? I know you've got probably a lot of moving parts there when we say international, kind of depends what country wants to visit us at this moment and what doesn't. How is that looking, say, Mexico versus Europe versus Canadians? What are trends you're seeing? And has sort of the negative rhetoric, has that been, I guess, a negative for you because you did see some deceleration in pace since your May update?

Yes. I think what I'd say is the -- yes, the certainly no trend there that's material enough to affect kind of the overall results that we're talking about. I think we -- yes, we've not seen any specific evidence of a shift per se in future international visitation. Now I would say international visitation has gone down, if you look back over the last 5, 7, 8 years for a whole variety of reasons, some of which was the dollars, some of which was some of the rhetoric and stuff like that in the past are concerned about visas or that. But yes, at this point, we don't see that as a major issue one way or the other as we go into next season.

We'll take our next question from Arpine Kocharyan with UBS.

I was wondering if you could give a little bit more color where you're seeing most weakness in your consumer base and maybe where you're seeing more sort of a resilient customer? And anything else you would highlight on destination versus regional resorts that you saw in past sales trends. You also talked about less tenured pass holders maybe not renewing at the same rate as last year. Anything else you would highlight that you saw in past purchase trends that we should be aware of getting into the season here? And then I have a quick follow-up.

Yes, sure. I think one of the things I would say is that the results that we're seeing are fairly consistent between, yes, a lot of different guest demos, geos, pass type, new renew. I mean, yes, we do -- we obviously have lower renewal rate for 1 year or less pass holders, that's true. But I'd say broadly that maybe the takeaway from the results is this broad-based result in performance, which is one of the reasons why, yes, we peg -- sometimes if we're seeing -- we have so many different pass products and so many different resorts that, yes, if there's an issue with one resort or an issue with a region or an issue with a guest group, we would typically then see that show up. But when you see it, so broad-based, it says 1 or 2 things, either there's just a broad potentially like, again, we grew the market dramatically. Icon was growing dramatically. And now you're seeing kind of like maybe a maturation or stability of the overall market. Even if you just look at the NSAA National Ski Areas Association data over the last couple of years, it's the first couple of years in a long time where pass visits have actually declined and lift ticket visits have actually increased. That's where the growth that you saw actually came from. And so there's probably some market maturity, right, because of the rapid growth of the last couple of years. And then it's also why when we talk about our marketing effort and why we're not connecting because obviously, we're using -- even though the content is not the same for each guest group, a lot of our marketing approaches are consistent and why, in my mind, it highlights, right, that, that's an opportunity for us as we go forward. But yes, no, there's nothing that I can call out specifically about some group or another.

One thing I'll just add on the consumer piece on renewals is we're not seeing any change in kind of that net migration behavior as well, right? We're continuing to see about the same amount of trade-up as trade down as we've seen over the last few years. So you're not seeing the renewal base be kind of a [ broad ] people pulling back because of pricing or trading down. We're not seeing that dynamic within our renewals.

Interesting. That's very helpful. Just to go back to the EBITDA bridge, you mostly covered this question earlier. But I was wondering what needs to happen for you to hit the upper end of your guidance range versus midpoint? You obviously talked about more nimble pricing in off-peak periods, maybe more targeted approach to driving window traffic. It sounds like that has the potential to impact lift volume as soon as this season. Is it just a matter of sort of the strategies working for you to hit the upper end of the guidance range?

Yes. I think the range -- usually, I mean, the biggest driver is always visitation, right, in terms of the range that we put out because that impacts everything, right? It impacts all of our ancillary and flows through at a very high rate. So yes, visitation is really the key for us on both ends of the spectrum of the guidance range.

Yes. So what needs to happen for you to hit the upper end of your visitation guidance?

I think -- I mean, I think in the end, there's obviously opportunity for us to outperform either on pass or on lift ticket visitation. We've got a number of assumptions that go into how we come up with guidance, and there's always going to be kind of up or down estimate around each one. And sometimes things will work earlier than you think. But of course, that's true. Sometimes things don't work as well as you think. So it's one of the reasons why we have a range. It's not possible for us to pinpoint exactly. But it's meant to say that, yes, that we feel when we are looking at the totality of the business that this is the most likely range that we'll wind up.

We'll take our next question from Ben Chaiken with Mizuho.

Rob, you mentioned evaluating the pass product offering in the release and the Q&A a few times. I guess just taking a different perspective, I guess, where do you see the largest holes with the past? So I'm not asking like the strategy necessarily, which I think is where the conversation has been, but what are you trying to solve for? Like where do you think Vail is lacking to the extent that you do? And what are the largest areas to improve?

Yes. I think we've got a pretty broad portfolio. So it's not that I feel like we're missing a particular product. But I'm not sure with this many products, I'm not sure that we are pricing these products in the optimal way, but either against each other or against kind of the need that we're looking for, for each segment. I also think there's opportunities for us to look at the benefits we provide on our passes, which again, largely have not changed that much over the years and who gets what and why and where and all of that. I mean, again, I think what you're seeing, it's a little bit like what we said about resource transformation for the company, which is we added a lot of resorts over a relatively short period of time and are now taking the opportunity to go back and say, okay, wait a minute, we can do things a lot smarter than we've been doing them when we were just in full acquisition mode. But the same is true for pass. We've added a lot of products over a very long period of time and have not really gone back to say, wait a minute, like how do we optimize each one of these price relationships or benefit relationships. So in our minds, that's -- it is a product and pricing piece, but it's not necessarily because we see some gaping obvious hole that we need to fill. I mean I think one of the things that we did identify was Buddy Tickets and skew with the friend tickets and benefit tickets. And we -- that was something that we have identified -- identified that it wasn't simple enough. It wasn't clear enough. It wasn't really moving the needle the way we wanted. And so yes, we certainly address that as you saw for this season.

Got it. That's helpful. And then just one quick follow-up. You've mentioned kind of benefits a few times. I guess what's your thought process on adding like additional member benefits or perks to the past and attempt to increase the year-round utility? I think there's a few passes out there to provide these other ancillary benefit to pass holders. I mean it would be great to get your take on that strategy.

Yes. I think that's something that we absolutely need to look at. I also want to make sure if we do something that it's not just like window dressing that it's something that really will move the needle. And that if we're going to -- certainly, if it's coming from our company, and we're going to put time and effort and our own energy to it, if it's a third-party benefit, then it has to be, yes, a partnership that we want to really get behind. So either one of those, I think in our minds, it's -- the primary benefit, obviously, is skiing. And so yes, then once we get beyond that, now it's -- we've got our Epic Mountain Rewards, right, which gives people the 20% discount on a lot of our ancillary lines of business. So once we start going beyond that, like, yes, it needs to be something that should make a difference. But also, I think we're in a good moment in time, I think, to start exploring all that.

We'll move next to Brandt Montour with Barclays.

So my first question is on the guidance. You guys gave the usual sort of normal weather implied in guidance. I just was hoping maybe, Rob, you could put a finer point on that. It was last year -- last year seemed like it was really good weather, but was that normal? Or was that better than normal? I know the years prior to that would be obviously firmly worse than normal, but maybe you can just give us a little bit of help with what you sort of baked in there.

Yes. Thanks, Brad. I would say last year, we had a pretty normal ramp across most of our regions where we were able to get terrain open kind of on a typical schedule. I actually finished for the year, right? Q3 actually had kind of a falloff on some of those conditions. But again, that doesn't usually drive as much of the overall impact as being able to get kind of open and terrain open ahead of some of those peak seasons. So we didn't see any unusual disruptions, I would say, like we've called out in some of the other 2 years. So it was much more of a typical pattern, though I wouldn't say it was like above-average snowpack or snowfall year by any means last year.

Okay. Great. And then on the lift ticket strategy and the discussion around that, I think it was -- I think the pitch was pretty clear. The message from you guys today that the optimization opportunity exists. When you think of -- when I'm absorbing this from you guys, and I don't want to say it sounds like discounting or anything like that, but smarter marketing, smarter pricing, is there a risk that as you improve the attractiveness of the lift ticket, you could cannibalize early commitment. I know that would be a little bit on a delay because you're marketing day tickets after the past selling season. But those same folks are probably going to overlap in terms of who you're reaching with that marketing. Is that a risk for the following year going down that road?

I mean I think it's -- what I'd say is, yes, it's a risk in terms of -- it's something we pay a lot of attention to. But I think if you look at the differences between window, the walk-up window or advance lift ticket prices and the price you pay if you buy in advance, if you buy in a pass before the season, that gap has widened dramatically over the years, in particular, when we took pass pricing down. 4 years ago. So I think when you -- there's -- in our minds, there's plenty of room to be more aggressive and creative on list ticket pricing without necessarily sacrificing past business, but it is absolutely something we're very cognizant of and pay close attention to.

We'll take our next question from Chris Woronka with Deutsche Bank.

So I guess the first question I'm thinking about, Rob, is strategically, the idea to kind of go after more volume. You've talked about making ski more accessible to a wider range of people. Is this more about an age bucket or a certain demographic? I'm trying to kind of square like what you -- where those people are going now if they're not going skiing. And is price -- how confident are you -- I don't know if you've done survey work or other things around that. How confident are you that the investment in price, so to speak, and other things in the experience is going to get those folks to your mountains versus whatever else they're doing today?

Yes, sure. Well, I mean, one is I think, yes, we need to make sure that even within like whoever is going to ski next year, yes, that we're getting our fair share that's representative of the quality of our resorts, the quality of how we engage with them and to make sure that we've got the right price matrix, right, to optimize our overall lift revenue. And so that -- I mean, it does start with that. Now I would say, I think like this, one of the things that's important to understand about the ski industry is that it's constantly in flux. So there's a ton of people every year that go out of the ski industry and a ton of people every year that come in and then a ton of people every year that come back or take 2 years off or 3 years off, some people that take -- go for 2 days, then next year could go for 4, right? And so actually, even within like we took the total number of people in -- let's just start with the U.S. that know how to ski, so therefore, could take a ski vacation. Yes, like there's a lot of opportunity to move frequency, skier visits within that without necessarily kind of convincing somebody who never skis to ski, right? And so that is really our primary target. And that is a combination, right? It's not just price, right? It's like we've got to get the right message in front of them. We've got to make the right emotional connection to them, to their friends or family, to their kids, depending on who it is. And then, yes, you have to have the right overall mix of value, right, to move some of these folks. Obviously, they are the least committed skier. But again, it's not -- there's a huge percentage of the market each year that's going in and out, so to speak, and a huge percentage that's moving their frequency. And it's within all of that, right? It's not like we're selling soap and everybody is buying a bar of soap and never -- and now you're just trying to convince somebody who bought some other brand to buy yours. This is a product that is, yes, that is very much a discretionary vacation choice. And we think there's real opportunity for us to drive overall frequency up. And I would say when you look at -- I mean -- and Chris, you go back a long way. I go back a long way. It's like, yes, people have been talking about the fact that the ski industry never grows, but 2 years ago, right, we hit a record. Now people say, "Oh, well, that's COVID." But okay, that's fine, maybe. But in the end, right, it was still -- or it was 3 years ago, I guess that was a record. But in the end, right, it shows that there's enough people in the U.S. to actually do that, right? And so in the end, for us, it's not -- it's about getting people out and getting people to the resort and getting more days.

Yes. It makes sense. Super helpful. Just had a follow-up on CapEx. And the question is kind of almost like what you're solving for there. I know over time, you guys identify specific projects. There's a maintenance piece to it. But I guess, do you think CapEx -- is there a step function or CapEx do you think needs to jump up to try to -- is that part of your plan to get people back and adding new amenities or moving them along faster or whatever it might be? Or do you think, hey, capital plan is going to be what it's going to be year-to-year constraints based on where we are in EBITDA and that kind of thing? I'm really just trying to get at whether you think a bigger uptick in CapEx would actually help if it's necessary or if you plan to do it in the near future.

Yes. I guess I'd say, I think absolutely, we're always going to be upgrading lifts, and we announced the new lift for next year, obviously, and that's critical. But it can't -- I think we need to realize also as a company and as an industry that it can't just be about lifts. It's not the only thing that matters to people. And in our minds, like one of the things where I think we're kind of at the beginning of this, and we've made some initial forays, but like we think there's technology that can make a big difference. So how people use technology in the digital experience, how it makes it easier for them to rent skis, how it makes it easier for them to connect with their ski structure, how it makes it easier for them to get food, how it makes it easier for them to figure out how to book or get around a resort or overall book a vacation. I think these are all things that are critical that really speak to the entirety of the guest experience when they come to us. And those are things where we really have both a unique advantage, right, because obviously, we own and operate all our resorts. They're all on a common platform. And it's where you invest dollars that actually impact everyone's experience with all of our resorts rather than a singular lift, which affects one resort for some people who use that lift. Now that said, we have to keep investing in lift. When you look back historically, I think you've seen us, we have spent a lot of money on lifts over the last 4 years. So with that's continuing, we're still going to keep proposing lifts. But I think the differentiator is going to be in this other area, where I think it is actually not as capital intensive, right, as trying to replace every lift on Vail Mountain or something like that. And so it is where we're putting our focus. At this point, we're not making any changes to our long-term capital guidance. But to the extent that we saw opportunities that made sense to do it, of course, we'd come back to everybody and share that. But at this point, we're not seeing that.

This concludes the Q&A portion of today's call. I would now like to turn the call back over to Rob Katz for closing remarks.

Thank you. This concludes our fiscal year-end earnings call. Thanks to everyone who joined us today. Please feel free to contact Angela or me directly should you have any further questions. Thank you for your time this afternoon, and goodbye.

This concludes today's Vail Resorts Fiscal 2025 Year-end Conference Call and Webcast. You may now disconnect your line at this time. Have a wonderful day.