AMC Networks faced a setback in the second quarter, with a 17% decrease in domestic advertising revenue. This decline, along with lower affiliate and 25/7 Media production services revenue, caused the company to fall short of Wall Street’s revenue expectations. Despite these challenges, AMC Networks saw a total revenue slip of 8% from the same quarter last year, amounting to $679 million.
The drop in advertising revenue was attributed to various factors, including anticipated linear ratings declines, softness in the ad market, and fewer original programming episodes within the quarter. However, the company did experience growth in digital and advanced advertising revenue.
On a positive note, AMC Networks reported a significant increase in free cash flow, reaching $147.6 million compared to $30.7 million in the same period last year. Additionally, streaming revenue saw a 13% increase, with the total number of subscribers rising by 6% to 11 million. Although there was a decline of 200,000 subscribers from the first quarter, the company attributed this to its focus on higher-value subscribers and promotional roll-off. Furthermore, a change in the definition of a streaming subscriber resulted in the exclusion of 300,000 estimated subscriber conversions from the total count.
Unlike its competitors, AMC Networks operates a portfolio of niche services such as AMC+, AcornTV, Shudder, and Allblk. This unique approach sets them apart in the media industry.
While Wall Street analysts had anticipated total quarterly revenue of $706.5 million and earnings of $1.60, AMC Networks has been facing significant challenges due to cord-cutting, ad market softness, and uncertainty surrounding streaming economics. The company has undergone operational changes, including the appointment of CEO Kristin Dolan, who took over from interim CEO Matt Blank and former CFO Christina Spade. As part of the restructuring, around 20% of U.S. employees were laid off.
Dolan expressed confidence in the company’s ability to adapt and thrive in the ever-changing media landscape. She highlighted the team’s dedication to producing high-quality content and making it available across various platforms. Despite industrywide uncertainty, AMC Networks is seeing the positive impact of its strategic approach in its financial results.
Overall, AMC Networks is navigating through challenges while capitalizing on opportunities for growth and innovation in the media industry.
