PARAMOUNT REPORTS Q2 2024
EARNINGS RESULTS
★ Direct-To-Consumer Adjusted OIBDA Improved $450 Million Year-Over-Year to $26 Million
★ Paramount+ Increased Revenue 46% Year-Over-Year
★ Company Advances Strategic Plan, Including $500 Million in Annualized Cost Savings
★ Paramount-Skydance Agreement Announced on July 7, 2024
STATEMENT FROM GEORGE CHEEKS, CHRIS MCCARTHY & BRIAN ROBBINS, CO-CEOS:
"Our strong performance in Q2 demonstrates that we are delivering on our strategic priorities. We are
proud of our results, including significant earnings growth largely driven by our DTC segment. In fact,
for the fourth year in a row, Paramount+ is leading the industry in domestic sign-ups driven by our big
broad hit TV series and blockbuster films. DTC profit growth for the past four quarters has totaled
nearly $900 million and we are on track to reach domestic profitability for Paramount+ in 2025.
Looking ahead, we will continue to aggressively execute on our Strategic Plan which focuses on
transforming streaming to accelerate profitability, streamlining our organization — including at least
$500 million in annualized cost savings — and improving the balance sheet by growing free cash flow
and optimizing our asset mix. We are confident that our Plan will drive long-term value by leveraging
our broad hit content as we continue to transform Paramount for the future."
DIRECT-TO-CONSUMER
OVERVIEW
Year to date, Paramount+ leads the industry in domestic sign-ups for the fourth year in a row, driven by hit content like Knuckles from our Sonic the Hedgehog franchise — which broke the global record for the most-streamed original series on Paramount+ in its premiere week — and the latest season of The Chi, the most-streamed in the series.
Q2 FINANCIALS
- Revenue increased 13% year-over-year.
- Subscription revenue grew 12%, driven by year-over-year subscriber growth and pricing increases for Paramount+.
- Advertising revenue rose 16%, reflecting growth from Paramount+ and Pluto TV.
- Paramount+ revenue grew 46%, driven by year-over-year subscriber growth and ARPU expansion.
- Paramount+ subscribers decreased 2.8 million in the quarter to 68 million, principally reflecting the planned exit from a hard bundle agreement in South Korea.
- Paramount+ global ARPU expanded 26% year-over-year.
- Adjusted OIBDA increased $450 million year-over-year to $26 million, reflecting the revenue growth and lower costs for marketing and content.
TV MEDIA
OVERVIEW
CBS finished the 2023-2024 season #1 in primetime for the 16th year in a row, including 8 of the top 10 broadcast series. Additionally, on May 23, 2024, Paramount and Charter Communications announced a new multi-year agreement for distribution of Paramount’s linear networks, CBS owned-and-operated stations and direct-to-consumer streaming services.
Q2 FINANCIALS
- Revenue decreased 17% to $4.3 billion, primarily driven by fluctuations in licensing revenues.
- Advertising revenue decreased 11%, reflecting declines in the linear advertising market.
- Affiliate and subscription revenue decreased 5%, driven by subscriber declines and a 1-percentage point decrease from the absence of pay-per-view boxing events, partially offset by pricing increases.
- Licensing and other revenue decreased 48%, reflecting fewer availabilities, including the final season of Jack Ryan in 2023, and a lower volume of licensing in the secondary market.
- Adjusted OIBDA decreased 15% to $1.0 billion reflecting the revenue decline, partially offset by lower costs for content and marketing.
FILMED ENTERTAINMENT
OVERVIEW
Filmed Entertainment continued to deliver strong results at the box office, with IF debuting at #1 domestically and A Quiet Place: Day One recording a franchise best performance, grossing over $250 million at the global box office to date.
Q2 FINANCIALS
- Revenue decreased 18% to $679 million due to timing of releases in the quarter.
- Theatrical revenues decreased 40%, reflecting the comparison to the release of Transformers: Rise of the Beasts in the prior year.
- Licensing and other revenue decreased 9%, principally due to lower revenues from the licensing of film library titles.
- Adjusted OIBDA decreased $59 million year-over-year, reflecting the lower revenue, partially offset by lower content and marketing costs.
SKYDANCE TRANSACTIONS
As previously announced, on July 7, 2024, Paramount Global (“Paramount”), Skydance Media (“Skydance”) and other parties entered into a definitive transaction agreement (the “Transaction Agreement”) to form “New Paramount,” through a two-step transaction, which includes the acquisition of National Amusements, Inc., the controlling stockholder of Paramount, and the formation of a new holding company of which Paramount and Skydance will be subsidiaries.
The Transaction Agreement includes a 45-day go-shop period. Paramount does not intend to disclose
developments with respect to the go-shop process unless and until it determines such disclosure is appropriate or is otherwise required.
Completion of the Skydance transactions is subject to customary closing conditions, including regulatory approvals. The Skydance transactions are expected to close in the first half of 2025. Until then, Paramount continues to operate in the normal course of business.
Further information regarding terms and conditions contained in the Transaction Agreement are available in the Company’s Current Report on Form 8-K that was filed with the Securities and Exchange Commission (“SEC”) on July 11, 2024. Also, in connection with the Skydance transactions, a press release was issued on July 7, 2024, which is available on Paramount’s Investor Relations page.
ABOUT PARAMOUNT
Paramount (NASDAQ: PARA; PARAA) is a leading global media, streaming and entertainment company that creates premium content and experiences for audiences worldwide. Driven by iconic consumer brands, its portfolio includes CBS, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+ and Pluto TV. The company holds one of the industry’s most extensive libraries of TV and film titles. In addition to offering innovative streaming services and digital video products, Paramount provides powerful capabilities in production, distribution and advertising solutions.
For more information about Paramount, please visit www.paramount.com and follow @ParamountCo on social platforms.
PARA-IR
***
Notes:
- Top performing shows on Paramount+ this quarter include: Knuckles, The Chi, UEFA Champions League, and Mayor of Kingstown.
- CBS finished '23-24 season as the #1 broadcast network for the 16th consecutive season.
Stream a Mountain of Entertainment, including your Nickelodeon favorites on Paramount+! Try it FREE at ParamountPlus.com!
Originally published: August 09, 2024.
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