AMC Global Media Inc. Q2 FY2025 earnings call

• Strategic Execution: Executing a plan focused on programming, partnerships, and profitability. Streaming revenue growth accelerated in Q2, with $96 million of free cash flow generated. Raised full-year free cash flow outlook to ~$250 million.
• Streaming Services: Streaming revenue growth benefited from rate initiatives. Acorn had Murder Mystery May with biggest month for ownership and subscriber acquisition; Shudder's Clown in a Cornfield was a breakout success. HIDIVE shows strong growth potential. All streaming services priced below $10/month.
• FAST Channels: Have over 20 domestic FAST channels, launched 3 in U.K. and adding 3 more this month, with plans to launch in Central/Northern Europe, Iberia, and Latin America later this year.
• Content Licensing: Strong demand for content, including sale of music catalog and executive producer fees related to Apple TV+ Silo. Anticipate third quarter to be lowest licensing revenue quarter of the year, with recovery in fourth quarter.
• AI Partnership: Entered partnership with Runway to leverage AI in marketing and programming development for ideation and visualization.
• Comcast Collaboration: Worked with Comcast Technology Solutions to standardize and streamline back-office functions, expanding content delivery to digital distribution partners.

Domestic Operations: Revenue decreased 2% to $527 million. Subscription revenue decreased 1% due to a 12% decline in affiliate revenue, offset by 12% streaming revenue growth. Streaming subscribers grew 2% year-over-year to 10.4 million. Advertising revenue decreased 18% due to linear ratings declines and lower marketplace pricing. Content licensing revenue was $84 million. Domestic Operations AOI was $126 million, a decrease of 19%. International: Second quarter International revenues were $76 million. Subscription revenue decreased 9% due to nonrenewal with Movistar in Spain, advertising revenue increased 2%. International AOI was $15 million, a decrease of 15%.

• Raised full-year free cash flow outlook to approximately $250 million.
• Expect consolidated revenue of approximately $2.3 billion for 2025, reflecting linear headwinds partially offset by streaming growth.
• Anticipate consolidated AOI in the range of $400 million to $420 million for 2025.
• Anticipate approximately $250 million of Domestic Operations content licensing revenue for the year.
• Third quarter is expected to be the lowest licensing revenue quarter of the year, with revenue picking up in the fourth quarter. Fourth quarter AOI will benefit from accelerating streaming revenue growth and timing of content licensing revenues.

• Ad market remains challenging with lower digital CPMs and linear ratings declines.
• Timing variability in content licensing revenue due to delivery schedules and agreement timings.
• Uncertainties related to the rapidly evolving media distribution landscape.

Q: Can you dig into the source of the free cash flow upside a little bit more relative to the reiteration of revenue and EBITDA?

A: The largest factor is cash taxes. Offset by some incremental cancellation of indebtedness income on which tax is paid. Savings across some programming were modest. Cash tax savings will compound into '26 and '27.

Q: Given the strength you've seen in streaming, do you think subscription revenue growth can grow sustainably from here?

A: Feel good about acceleration on the streaming side in terms of price and units. Have had success with recent programming on Acorn and HIDIVE. Metrics continue to hold up well with nice pricing power, expecting streaming revenue to continue to accelerate into the back half of the year.

Q: Could you share any kind of incremental color on particular areas of success, whether verticals or particular shows or content style or platforms or audience segments that are kind of working best for you?

A: Saw real health in QSR and FAST casual category. Financial, food, and retail were up. Continue to watch categories. Expanding digital inventory with best-in-class targeting in national linear addressable space.

Q: I'm sure you all have noticed that some of the media peers have been looking to split up their cable distribution assets from their content assets. How are you thinking about that opportunity?

A: AMC is different with a studio and big streaming business. Streaming revenue will be largest revenue source in 2025. Have amazing portfolio of streaming products that work together. See continued opportunity to sell across platform and monetize IP around the world.