AMC Networks (AMCX) Q2 2024 earnings summary

Executive summary

• Q2 2024 net revenues were $626 million, down 8% year-over-year, with a net loss of $29.2 million and operating income of $11 million, impacted by $97 million in impairment and other charges.

• Adjusted operating income for Q2 was $153 million (24% margin), and free cash flow for the first half of 2024 was $239.3 million, reflecting strong cost management.

• Streaming revenues rose 9% to $150 million, with paid streaming subscribers up 5.4% year-over-year to 11.6 million.

• Entered a non-exclusive licensing deal with Netflix for prior seasons of 15 shows and expanded partnerships with Sky, Philo, and Optimum.

• AMC+ and targeted services achieved record viewership, with key series renewals and strong content performance.

Financial highlights

• Q2 consolidated revenue was $625.9 million, down 7.8% year-over-year; adjusted operating income declined 13.6% to $152.8 million.

• Subscription revenue fell 4.8%, with a 12% drop in affiliate revenue offset by 9% streaming growth; content licensing revenue dropped 33% due to fewer deliveries and absence of prior year one-time benefit.

• Advertising revenue declined 11% domestically but rose 84% internationally due to a one-time adjustment; digital advertising showed growth.

• Technical and operating expenses decreased 12.8% year-over-year, mainly from lower programming costs and divestitures.

• Impairment and other charges totaled $97 million, including $68 million goodwill impairment at AMCNI and $29 million in BBCA asset impairments.

Outlook and guidance

• Reiterated 2024 guidance: total revenue of ~$2.4 billion, AOI of $550–$575 million, and year-over-year free cash flow growth.

• Cumulative free cash flow of ~$500 million expected by end of 2025; cash programming spend for 2024 anticipated at ~$1 billion.

• Management expects continued linear subscriber declines and ongoing pressure on content licensing and advertising revenues.

• Cost management and disciplined investment in programming remain priorities to mitigate revenue headwinds.

• Liquidity is sufficient for the next twelve months, but refinancing will be needed for long-term debt maturities.