AMC Networks reported a net loss of $29.2 million as the company recorded impairments and other charges of $97 million in the second quarter of 2024.
The loss included a $68 million goodwill impairment related to the write-down of the international business, which was identified in a valuation of the unit triggered by a decline in the company’s stock price. The loss also included a $29 million impairment of fixed assets at BBC America.
Ongoing challenges in linear television also weighed on the company’s results. Declining linear ratings and a difficult advertising market led to U.S. advertising revenues falling 11% year-over-year to $149 million. However, this was partially offset by growth in digital and advanced advertising revenues.
Here are the key findings:
Net loss: A loss of $29.2 million compared to a profit of $70.2 million in the previous year.
Earnings per share: A loss of 66 cents per share. Adjusted for certain items, earnings per share were $1.24, compared to analysts surveyed by Zacks Investment Research who had expected earnings of $1.38 per share.
Revenue: $625.9 million, down 7.8% year over year, compared to the $601.26 million estimated by analysts surveyed by Zacks Investment Research.
Subscribers: The number of streaming subscribers increased by 5% year-on-year to 11.6 million.
Operating profit fell 89.8% year over year to $10.79 billion. Adjusted operating profit fell 13.6% to $152.8 million. Net cash flow from operating activities fell 33.7% to $104 million, while free cash flow fell 35.5% to $95 million.
“AMC Networks continues to find opportunities in a strategic plan based on programming, partnerships and profitability. Key to our plan is creating and curating acclaimed films and series and delivering them to audiences
everywhere, including through an exciting new branded content licensing agreement with Netflix,” said Kristin Dolan, CEO of AMC Networks, in the company’s earnings release. “In the first half of 2024, we made significant progress on our strategic priority of generating strong free cash flow and are on track to achieve our full-year free cash flow guidance.”
Domestic revenues fell 7% year-on-year to $538 million.
Subscription revenue decreased 3% year-over-year to $323 million, primarily due to a linear decline in subscribers, partially offset by an increase in streaming revenue.
Streaming revenue increased 9% to $150 million, driven by year-over-year subscriber growth and price increases.
Content licensing revenue decreased 18% to $67 million due to supply availability during the period. The prior period included $20 million of revenue related to the return of rights from Hulu, resulting in an acceleration of revenue previously expected in 2024. Excluding the prior period’s revenue related to the return of rights from Hulu, content licensing revenue increased 10%.
Operating profit decreased 36.8% to $103 million, including a $29 million impairment charge on long-term assets related to the BBC America joint venture. On an adjusted basis, operating profit decreased 16% to $155 million, primarily due to lower revenues, partially offset by continued cost management actions.
International revenue fell 9% year over year to $90 million. The prior-year period included $19 million in content licensing and other revenue related to 25/7 Media, which the company divested in December.
In addition, advertising revenues for the quarter included revenues of $13 million related to a one-time adjustment payment. Excluding revenues related to
to 25/7 Media and the one-time adjustment payment, international revenue decreased 4%. Subscription revenue decreased 13% to $50 million, primarily due to the non-renewal of an AMCNI distribution agreement in the UK, which occurred in the fourth quarter of 2023.
Content licensing and other revenues decreased 86% to $3 million due to the sale of the Company’s interest in 25/7 Media. Advertising revenues increased 84% to $38 million due to a one-time adjustment payment of $13 million and new
Streaming services in the UK. Excluding the one-off adjustment payment, advertising revenue increased by 18%.
The segment reported an operating loss of $44 million, which included a change in goodwill impairment of $68 million related to AMCNI. On an adjusted basis, operating income increased 53% to $29 million, primarily due to the one-time adjustment payment. 25/7 Media generated adjusted operating income of $1 million in the second quarter of 2023. Excluding the one-time adjustment payment, international adjusted operating income was $16 million.
