AMC Networks posted disappointing earnings results during the company’s third quarter of 2024. Net income per share came in at $0.93, a 35% drop from the $1.44 the company reported in 2023. Though the network saw gains in streaming and content licensing, a “challenging” advertising market and dropping affiliate revenues led to the results.
Revenue came in at $599.6 million, a 5.9% year-over-year decrease. Both the operating income and the adjusted operating income — values the company uses to measure its success — were down year over year. Operating income came in at $93.7 million, a 22% decrease compared to the third quarter in 2023. As for adjusted operating income, that came in at $131.5 million, a 25% decrease compared to this time last year.
Here are the top-line results:
Revenue: $599.6 million, down 5.9% year over, compared to an estimated $597.9 million expected by analysts surveyed by Zacks Investment Research.
Earnings per share: A loss of 76 cents per share. Adjusted for certain items, EPS came in at a 91 cents, compared to an estimated $0.88 per share expected by analysts surveyed by Zacks Investment Research.
Subscribers: Streaming subscribers increased 5% year over year to 11.8 million.
Compared to the third quarter of 2023, affiliate revenues decreased by 13%, dropping to $164 million. This was credited to a drop in basic subscribers, which continues to be a trend in this declining cable landscape. Though there were revenue gains in the streaming space that helped offset these results, the drop in affiliate led to subscription revenues ultimately decreasing by 5%, hitting $316 million. As for advertising revenues, those dropped 10%, coming in at $133 million. This was due to linear ratings declines as well as a challenging ad market but was partly offset by revenue growth in digital and advanced advertising.
There were some positives. Content licensing revenues increased 31% year over year and hit $81 million. This was connected to AMC branded shows being made available to stream on Netflix thanks to the licensing agreement between the two companies. Additionally, streaming revenues increased 7% to $152 million during this period due to year-over-year subscriber growth and price increases. Speaking of subscribers, AMC+ increased its subscriber base by 5% to 11.8 million total.
Those streaming increases were correlated to AMC’s deal with Netflix. In August, the network made 15 seasons of its originals on the streaming giant. CEO Kristin Dolan said the company was “very pleased” with the results of this partnership during the third quarter earnings call. Acquisition activity around Season 2 of “The Walking Dead: Daryl Dixon,” which is only available on AMC+, more than doubled compared to the pre-Netflix baseline. Additionally, AMC+ acquisitions driven by Season 2 of “Interview with the Vampire” was up nearly four times compared to the baseline.
“As we manage this business within a complex and changing environment, we remain focused on our key strategic pillars — programming, partnerships and profitability,” Kristin Dolan said in a statement included in the earnings report. “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.”
More to come …
