AMC Networks reported its second-quarter 2023 earnings Friday, revealing it had lost 500,000 more subscribers across its portfolio of niche streamers and was down 17% in U.S. ad sales for the April 1-June 30 period.
AMC Networks lost 300,000 subscribers across its streaming services in Q1, falling from 11.8 million at the end of 2022 to 11.5 million by March 31. In Q2, that decline continued with streaming subs down to 11 million at the end of June, per AMC Networks’ Friday earnings results. (It should be noted that in AMC Networks’ press release, it states streaming subscribers totaled 11.2 million at the end of Q1, which contradicts its previously given Q1 results.)
AMC Networks’ streaming platforms includes AMC+ (which AMC Networks plans to launch an ad-supported option for in October), Acorn TV, Shudder, Sundance Now, ALLBLK and HIDIVE. Those digital offerings are in addition to the company’s linear channels AMC, BBC America (a joint venture with BBC Studios), IFC, SundanceTV, WE tv and IFC Films.
The company previously forecast that by the end of this year, it would make it halfway to its larger goal of having 20-25 million streaming subs in 2025.
Domestic operations revenue fell 6.3% from Q2 2022. Content licensing increased 12% and subscription revenue was down 4%. Streaming revenue rose 13% and affiliate sales dropped 12.7%. Ad sales were down the above-mentioned 17%.
Turning to AMC Networks’ “International and Other” segment — which includes AMC Networks International (its international programming business) and 25/7 Media (its production services business) — revenue fell 21%. Distribution and “other” revenues were down 24% and ad sales dropped 6%.
Wall Street forecast earnings per share (EPS) of $1.60 on $706.5 million in revenue, according to analyst consensus data provided by Refinitiv. AMC Networks reported adjusted EPS of $2.02 ($1.60 diluted EPS) on $679 million in revenue.
Operating income was $105.7 million for the quarter, with free cash flow at $148 million.
“Six months into my tenure as CEO, I am impressed with our team’s ability to do what this company has always done best: produce high-quality content and make it available to viewers across an expanding array of platforms,” CEO Kristin Dolan said in a letter to shareholders. “We accomplish this through a measured, opportunistic and disciplined strategy that drives free cash flow. Even during a period of industry-wide uncertainty and change, we are seeing the benefits of our strategy play out in our financial results, which for the second quarter include year-over-year increases in free cash, streaming subscribers, and streaming revenue, as well as healthy margins. It’s clear we have the programming, the platforms and the partners necessary to continue to operate a very profitable business that delivers long-term shareholder value.”
AMC Networks stock closed Thursday at $12.28 per share. The regular U.S. stock markets will reopen Friday at 9:30 a.m. ET.
Dolan and other AMC Networks executives will host a conference call at 8:30 a.m. ET to discuss the quarter in greater detail.
More to come…