NEW YORK, Nov. 08, 2024 (GLOBE NEWSWIRE) — AMC Networks Inc. (NASDAQ: AMCX) today reported financial results for the third quarter ended September 30, 2024.
Chief Executive Officer Kristin Dolan said: “As we manage this business within a complex and changing environment, we remain focused on our key strategic pillars – programming, partnerships and profitability. During the quarter, we made significant advancements across all three areas. We have generated $293 million of free cash flow year to date and are well on our way to delivering our stated goal of approximately half a billion dollars in cumulative free cash over two years. We also entered into new and enhanced partnerships with major companies like Charter, Netflix, Amazon and others which are driving our company forward as we continue to provide distinctive, high-quality programming to customers across an expanding array of platforms.”
Operational Highlights:
- Renewed several major affiliate agreements, including an early renewal with Charter which includes the ad-supported version of AMC+ being bundled to Charter video customers at no additional cost to the customer.
- Launched prior seasons of 13 AMC series on Netflix. Branded “The AMC Collection,” the shows delivered strong initial performance on Netflix and viewership and acquisition gains for new seasons on AMC+.
- Continued momentum in FAST with launch of 15 AMC Networks’ FAST channels on Amazon Platforms.
- Launched a promotional content sampling arrangement with AMC+ and MGM+, bringing first seasons of nine AMC+ series to MGM+ and first seasons of nine MGM+ series to AMC+, for the next two months.
- Expanding key AMC Studios franchises including start of production of the third season of The Walking Dead: Daryl Dixon and the third series in the Anne Rice Immortal Universe, The Talamasca.
- Completed a transaction with BBC Studios to acquire the remaining 50.1% of the BBC America joint venture, providing 100% ownership and full operational control of the iconic BBC America network, while maintaining a commercial relationship with BBC Studios to support the continued strength of the brand and programming.
Financial Highlights – Third Quarter Ended September 30, 2024:
- Net cash provided by operating activities of $62 million; Free Cash Flow(1) of $54 million, with $293 million generated year to date.
- Operating income of $94 million in the third quarter; Adjusted Operating Income(1) of $131 million, with a margin of 22%.
- Net revenues of $600 million decreased 6% from the prior year. Excluding $20 million of revenues in the prior year related to 25/7 Media (which we divested on December 29, 2023), net revenues decreased 3%.
- Streaming revenues of $152 million increased 7% from the prior year.
- Diluted EPS of $0.76; Adjusted EPS(1) of $0.91.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| Dollars in thousands, except per share amounts | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||
| Net Revenues | $ | 599,614 | $ | 636,954 | (5.9 | )% | $ | 1,822,009 | $ | 2,033,029 | (10.4 | )% | |||||||||||
| Operating Income | $ | 93,653 | $ | 120,850 | (22.5 | )% | $ | 214,619 | $ | 399,855 | (46.3 | )% | |||||||||||
| Adjusted Operating Income | $ | 131,476 | $ | 177,268 | (25.8 | )% | $ | 433,407 | $ | 569,808 | (23.9 | )% | |||||||||||
| Diluted Earnings Per Share | $ | 0.76 | $ | 1.44 | (47.2 | )% | $ | 1.21 | $ | 5.40 | (77.6 | )% | |||||||||||
| Adjusted Earnings Per Share | $ | 0.91 | $ | 1.85 | (50.8 | )% | $ | 3.27 | $ | 6.49 | (49.6 | )% | |||||||||||
| Net cash provided by operating activities | $ | 62,235 | $ | 106,092 | (41.3 | )% | $ | 317,507 | $ | 131,139 | 142.1 | % | |||||||||||
| Free Cash Flow | $ | 53,941 | $ | 99,150 | (45.6 | )% | $ | 293,255 | $ | 102,747 | 185.4 | % | |||||||||||
| (1) | See page 5 of this earnings release for a discussion of non-GAAP financial measures used in this release. This discussion includes the definition of Adjusted Operating Income, Adjusted EPS and Free Cash Flow. |
Segment Results:
(dollars in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||||||
| Net Revenues: | |||||||||||||||||||||||
| Domestic Operations | $ | 530,243 | $ | 541,198 | (2.0 | )% | $ | 1,592,760 | $ | 1,734,871 | (8.2 | )% | |||||||||||
| International | 73,706 | 97,598 | (24.5 | )% | 239,406 | 304,974 | (21.5 | )% | |||||||||||||||
| Inter-segment Eliminations | (4,335 | ) | (1,842 | ) | (135.3 | )% | (10,157 | ) | (6,816 | ) | (49.0 | )% | |||||||||||
| Total Net Revenues | $ | 599,614 | $ | 636,954 | (5.9 | )% | $ | 1,822,009 | $ | 2,033,029 | (10.4 | )% | |||||||||||
| Operating Income (Loss): | |||||||||||||||||||||||
| Domestic Operations | $ | 129,978 | $ | 161,627 | (19.6 | )% | $ | 374,730 | $ | 523,645 | (28.4 | )% | |||||||||||
| International | 8,702 | 7,985 | 9.0 | % | (26,484 | ) | 10,422 | n/m | |||||||||||||||
| Corporate / Inter-segment Eliminations | (45,027 | ) | (48,762 | ) | 7.7 | % | (133,627 | ) | (134,212 | ) | 0.4 | % | |||||||||||
| Total Operating Income | $ | 93,653 | $ | 120,850 | (22.5 | )% | $ | 214,619 | $ | 399,855 | (46.3 | )% | |||||||||||
| Adjusted Operating Income (Loss): | |||||||||||||||||||||||
| Domestic Operations | $ | 150,189 | $ | 185,011 | (18.8 | )% | $ | 467,856 | $ | 589,205 | (20.6 | )% | |||||||||||
| International | 13,542 | 13,067 | 3.6 | % | 56,207 | 53,390 | 5.3 | % | |||||||||||||||
| Corporate / Inter-segment Eliminations | (32,255 | ) | (20,810 | ) | (55.0 | )% | (90,656 | ) | (72,787 | ) | (24.5 | )% | |||||||||||
| Total Adjusted Operating Income | $ | 131,476 | $ | 177,268 | (25.8 | )% | $ | 433,407 | $ | 569,808 | (23.9 | )% | |||||||||||
Domestic Operations
Third Quarter Results:
- Domestic Operations revenues decreased 2% from the prior year to $530 million.
- Subscription revenues decreased 5% to $316 million, primarily due to declines in the linear subscriber universe, partially offset by an increase in streaming revenues.
- Streaming revenues increased 7% to $152 million driven by year-over-year subscriber growth and price increases.
- Streaming subscribers increased 5% to 11.8 million as compared to 11.1 million subscribers as of September 30, 2023.
- Affiliate revenues decreased 13% to $164 million, primarily due to basic subscriber declines.
- Streaming revenues increased 7% to $152 million driven by year-over-year subscriber growth and price increases.
- Content licensing revenues increased 31% to $81 million due to availability of deliveries in the period, including deliveries related to AMC branded shows made in the period in connection with the new Netflix content licensing agreement.
- Advertising revenues decreased 10% to $133 million due to linear ratings declines and a challenging ad market, partly offset by digital and advanced advertising revenue growth.
- Subscription revenues decreased 5% to $316 million, primarily due to declines in the linear subscriber universe, partially offset by an increase in streaming revenues.
- Operating income decreased 20% to $130 million.
- Adjusted Operating Income decreased 19% to $150 million, with a margin of 28%. The decrease in Adjusted Operating Income was primarily driven by revenue headwinds in our linear business.
International
Third Quarter Results:
- International revenues decreased 24% from the prior year to $74 million. The prior period included $20 million of content licensing and other revenues related to 25/7 Media, which we divested on December 29, 2023. Excluding revenues related to 25/7 Media, International revenues decreased 6%.
- Subscription revenues decreased 14% to $49 million, primarily due to the non-renewal of an AMCNI distribution agreement in the U.K. that occurred in the fourth quarter of 2023.
- Content licensing and other revenues decreased 88% to $3 million due to the sale of our interest in 25/7 Media in December 2023.
- Advertising revenues increased 16% to $22 million due to new streaming offerings launched in the U.K. and growth in Central and Northern Europe.
- Operating income increased 9% to $9 million.
- Adjusted Operating Income increased 4% to $14 million. The increase in Adjusted Operating Income was primarily driven by advertising revenue growth and favorable corporate allocations. 25/7 Media generated $1 million of AOI in the third quarter of 2023.
Other Matters
BBC America Transaction
On November 1, 2024, the Company closed a transaction with BBC Studios in which the Company acquired the remaining 50.1% of the BBC America joint-venture that it had not previously owned for $42.0 million in cash. The Company now owns 100% of the BBC America business, with full operational control, and will continue to fully consolidate BBC America.
Assuming the transaction had closed on September 30, 2024, $132.9 million of redeemable noncontrolling interest related to BBC America, and reflected on the condensed consolidated balance sheet, would have been eliminated. Additionally, the Company’s future contractual programming commitments to BBC Studios would have been significantly reduced.
Going forward, AMC Networks will no longer be making any related cash distributions to non-controlling interests.
Partial Prepayment of Term Loan A Facility Borrowings
During the third quarter of 2024, the Company repaid $8.1 million of borrowings under the Term Loan A Facility in accordance with the terms of the amended agreement. Additionally, the Company also voluntarily prepaid $35.0 million of borrowings under the Term Loan A Facility.
Stock Repurchase Program & Outstanding Shares
As previously disclosed, the Company’s Board of Directors has authorized a program to repurchase up to $1.5 billion of the Company’s outstanding shares of common stock (the “Stock Repurchase Program”). The Stock Repurchase Program has no pre-established termination date and may be suspended or discontinued at any time. During the quarter ended September 30, 2024, the Company did not repurchase any shares. As of September 30, 2024, the Company had $135 million of authorization remaining for repurchase under the Stock Repurchase Program.
As of November 1, 2024, the Company had 32,636,371 shares of Class A Common Stock and 11,484,408 shares of Class B Common Stock outstanding.
Please see the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2024, which will be filed later today, for further details regarding the above matters.
About AMC Networks Inc.
AMC Networks (Nasdaq: AMCX) is home to many of the greatest stories and characters in TV and film and the premier destination for passionate and engaged fan communities around the world. The Company creates and curates celebrated series and films across distinct brands and makes them available to audiences everywhere. Its portfolio includes targeted streaming services AMC+, Acorn TV, Shudder, Sundance Now, ALLBLK and HIDIVE; cable networks AMC, BBC AMERICA (which includes U.S. distribution and sales responsibilities for BBC News), IFC, SundanceTV and We TV; and film distribution labels IFC Films and RLJE Films. The Company also operates AMC Studios, its in-house studio, production and distribution operation behind acclaimed and fan-favorite original franchises including The Walking Dead Universe and the Anne Rice Immortal Universe; and AMC Networks International, its international programming business.
