Six Flags Entertainment Corporation (FUN) Income Statement

The reported revenue trajectory is highly erratic, with 2026Q2 showing a 43.3% decline from the prior year quarter, likely due to the merger's timing and divestitures. The 2025Q3 peak of $1.3B suggests strong summer demand, but the subsequent quarters show significant contraction, indicating that the combined entity's revenue base is still stabilizing. Investors should monitor whether the decline is a one-time adjustment or a trend, as the lack of guidance limits visibility.

The gross margin figures are highly volatile and often negative, which is atypical for a theme park operator. The 100% gross margin in 2026Q2 with zero COGS appears to be an accounting artifact, possibly due to cost reclassifications or non-recurring adjustments. The negative gross margins in 2025Q1 and 2026Q1 indicate that COGS exceeded revenue, which may reflect inventory write-downs or merger-related charges. These distortions obscure the true operating leverage of the parks, and analysts should adjust for these items to assess normalized margins.

The operating income data shows extreme volatility, with 2025Q3 achieving a 33.1% operating margin, indicating strong operating leverage during peak season. However, 2026Q2's margin of 16.8% is lower than the prior year's 10.3% (2025Q2), suggesting that cost synergies may not yet be fully realized. The negative operating income in off-peak quarters (2025Q1, 2026Q1) highlights the high fixed-cost structure, but the positive margins in peak quarters indicate that the parks can generate substantial cash flow when attendance is high. The challenge is whether the company can sustain these margins as integration costs subside.

SG&A expenses have not scaled proportionally with revenue, with 2025Q3 showing only $92.8M SG&A on $1.3B revenue, a 7% ratio, which is efficient for a large operator. However, 2026Q2's SG&A of $130.7M on $527.4M revenue (24.8% ratio) suggests that fixed overhead is not being fully absorbed during off-peak periods. The merger appears to have created some SG&A synergies, but the variability indicates that management is still adjusting the cost structure. The lack of R&D expenses is typical for this industry, but the high fixed costs of park operations remain a key challenge.

The third quarter of 2025 appears to be the operational peak for the combined entity, with strong attendance and per-capita spending driving revenue. The operating margin of 33.1% demonstrates the inherent profitability of the parks during peak season. However, the massive net loss in that quarter suggests that the company incurred significant one-time charges, possibly from debt refinancing or asset impairments. This inflection point underscores the divergence between operational performance and GAAP net income, and investors should expect normalized earnings to improve as these charges fade.