-- Delivered Strong Results Across Key Financial Metrics, with Year-over-Year Increase in Consolidated Revenues, as well as Reported and Adjusted Diluted Earnings Per Share
-- Returned Domestic Advertising Revenue to Growth, up 6% Year-over-Year, Driven by Continued Acceleration in Advanced Marketing Solutions
Achieved Tenth Straight Quarter of Year-over-Year Improvement in Paramount Adjusted Operating Income
-- Continued to Expand Pluto TV, with the Launch of 28 New Channels and Pluto TV Latino; Monthly Active Users Advanced to 18 Million in July
NEW YORK--Viacom Inc. (NASDAQ: VIAB, VIA) today reported financial results for the quarter ended June 30th, 2019.
Statement from Bob Bakish, President & CEO
“Viacom delivered another strong quarter, as our core businesses and investments in strategic priorities fuel our growth and evolution. Importantly, we returned Domestic Advertising Revenue to growth, which is a direct result of the strategy we have been executing for the last two years and the significant progress we have made in scaling Advanced Marketing Solutions. Paramount’s momentum also continues, keeping us on track to deliver full year profitability. As this quarter shows, Viacom’s brands are strong, our strategy is delivering, and our investments continue to position us well for the future.”
FILMED ENTERTAINMENT
Paramount delivered its tenth consecutive quarter of year-over-year adjusted operating income improvement. Revenue growth was driven by strong licensing and home entertainment results.
-- Adjusted OI increased by $41 million YOY – nearly doubling from the prior year quarter.
-- Licensing revenue increased 29% driven by monetization of the library and growth in TV production.
-- Home entertainment revenue grew 35%, primarily benefiting from last quarter’s release of Bumblebee.
-- Theatrical revenue reflected the strong performance of Rocketman and Pet Sematary, which was more than offset by the performance of A Quiet Place in the prior year quarter.
Operational Highlights
-- Paramount benefited from the successful releases of Rocketman and Pet Sematary in the fiscal third quarter.
− Rocketman was a global success, generating over $185 million at the global box office.
− Pet Sematary drove over $110 million at the global box office.
-- Current quarter releases include:
− Crawl, which received great reviews and is performing well in theaters.
− Dora and the Lost City of Gold, a live action film based on Nickelodeon’s Dora the Explorer franchise, premieres in August, rekindling this beloved Nickelodeon franchise.
-- Paramount’s fiscal 2020 film slate is now at 16 films, and includes Gemini Man, Terminator: Dark Fate, and the sequel to Top Gun.
-- Paramount Television continues its momentum, with 26 shows ordered to or in production.
− Third season of 13 Reasons Why premiering on Netflix in the second half of 2019.
− New series ordered include Shantaram for Apple, Made for Love and Station Eleven for HBO Max, When the Street Lights Go On for Quibi and Sexy Beast for Paramount Network.
− Also producing The Angel of Darkness, the sequel series to the highly praised limited series The Alienist for TNT, as well as a second season of Boomerang for BET.
Viacom delivered strong results across key financial metrics.
MEDIA NETWORKS
Viacom Media Networks benefited from strong advertising performance, as domestic ad sales returned to growth.
-- Domestic advertising revenue rose 6% in the fiscal third quarter, driven by accelerating growth in Advanced Marketing Solutions (AMS).
-- Domestic affiliate revenue declined 1%.
− Performance driven by subscriber declines, partially offset by higher contractual rates and OTT and studio production revenues.
− From a timing perspective, certain revenue shifted from FQ3 to FQ4.
-- Viacom International Media Networks delivered strong constant currency results † :
− International advertising revenue increased 9% driven by strong growth in Argentina and the U.K.
− Affiliate revenue increased 8% benefitting from growth in linear, as well as SVOD and other OTT deliveries.
-- Adjusted OI declined 6% impacted by marketing for current and upcoming original programming launches, as well as investments in key growth initiatives.
Domestic advertising revenue rose 6% in the fiscal third quarter, driven by accelerating growth in Advanced Marketing Solutions (AMS).
Operational Highlights
-- Domestic Media networks continued to grow audience share as total portfolio share increased by 1% YOY.
− Comedy Central delivered its ninth consecutive quarter of share growth – up 6% YOY.
− Paramount Network earned its third straight quarter of share growth – up 11% YOY – and its largest P18-49 share gain in 5 years.
− Viacom owned more top 20 original cable series in the quarter than any other cable family among key demos.
-- Internationally, Telefe remained #1 in ratings for 19 straight months, while Channel 5, Comedy Central and Paramount Network International all grew share YOY in the quarter.
-- Studio production continued to expand worldwide with premieres of The Perfect Date and Trinkets on Netflix, and season 2 of Light as a Feather on Hulu in July.
-- In June, Viacom announced a joint venture with Tyler Perry to launch BET+, a premier subscription video-on-demand service focused on the African American audience.
-- Viacom Digital Studios extended its video consumption growth, placing 7th in Tubular’s Media & Entertainment ranking in June, up from 13th a year ago.
− Video views grew 17% YOY to 5.9B and watch time increased by 85% YOY with 9.6B minutes viewed.
- Viacom’s live events drew close to a million fans in the fiscal quarter, with attendance at BETX up, sold out shows at JoJo Siwa’s D.R.E.A.M Tour, Clusterfest, Slime City and several new Bellator events.
AMS continued to scale in the quarter, with revenue increasing 84% YOY.
SPOTLIGHT ON DOMESTIC AD SALES, UPFRONT AND PLUTO TV
Viacom’s return to growth in domestic advertising was a milestone achievement in the company’s evolution.
DOMESTIC AD SALES
-- The return to growth in domestic ad sales is the result of the strategy Viacom began executing two years ago to launch AMS and help offset secular industry declines.
− Organically, the company introduced Vantage, one of the most sophisticated ad targeting platforms in the industry, and built key advanced marketing partnerships with MVPDs.
− Viacom also made strategic acquisitions, including AwesomenessTV, WhoSay and Pluto TV.
-- As a result, AMS now engages customers across linear and digital video, influencer and shopper marketing, branded content and Pluto TV.
-- AMS continued to scale in the quarter, with revenue increasing 84% YOY, more than offsetting linear headwinds and fueling domestic ad sales growth.
UPFRONT
-- Viacom delivered strong Upfront results, with high-single to double-digit price increases – the highest rate of change in over a decade – and doubled agency commitments across its digital, social and advanced advertising portfolio.
-- The strength of Viacom’s brands and demand for its AMS portfolio, especially Pluto TV, drove significant shifts to Viacom’s premium digital video inventory.
Pluto TV’s leadership in free streaming TV continues to grow, with monthly active users (MAUs) up 50% this calendar year.
PLUTO TV
-- Pluto TV’s leadership in free streaming TV continues to grow, with monthly active users (MAUs) up 50% this calendar year.
− Pluto TV is now integrated on Comcast’s Xfinity X1 and launching on Cox Communications’ Contour video and broadband platforms.
-- Pluto TV launched 28 new channels and continued to extend its international presence:
− In July, it launched Pluto TV Latino, a suite of 11 channels with 2,000-plus hours of programming in Spanish and Portuguese.
− Pluto TV was also added to UK on-demand platform My5.
BALANCE SHEET AND LIQUIDITY
-- Viacom continues to strengthen its balance sheet and improve free cash flow.
-- At June 30, 2019, gross debt outstanding was $8.96 billion. Adjusted gross debt was $8.31 billion.
-- For the nine months ended June 30, 2019, net cash provided by operating activities increased 11% to $1.1 billion.
-- For the nine months ended June 30, 2019, free cash flow increased 10% to $984 million, driven by an improvement in working capital management, partially offset by higher cash taxes.
About Viacom
Viacom creates entertainment experiences that drive conversation and culture around the world. Through television, film, digital media, live events, merchandise and solutions, our brands connect with diverse, young and young at heart audiences in more than 180 countries.
For more information about Viacom and its businesses, visit www.viacom.com. Viacom may also use social media channels to communicate with its investors and the public about the company, its brands and other matters, and those communications could be deemed to be material information. Investors and others are encouraged to review posts on Viacom’s Twitter feed (twitter.com/viacom), Facebook page (facebook.com/viacom) and LinkedIn profile (linkedin.com/company/viacom).
Cautionary Statement Concerning Forward-Looking Statements
This news release contains both historical and forward-looking statements. All statements that are not statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements reflect our current expectations concerning future results, objectives, plans and goals, and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause future results, performance or achievements to differ. These risks, uncertainties and other factors include, among others: technological developments, alternative content offerings and their effects in our markets and on consumer behavior; competition for content, audiences, advertising and distribution in a swiftly consolidating industry; the public acceptance of our brands, programs, films and other entertainment content on the various platforms on which they are distributed; the impact on our advertising revenues of declines in linear television viewing, deficiencies in audience measurement and advertising market conditions; the potential for loss of carriage or other reduction in the distribution of our content; evolving cybersecurity and similar risks; the failure, destruction or breach of our critical satellites or facilities; content theft; increased costs for programming, films and other rights; the loss of key talent; domestic and global political, economic and/or regulatory factors affecting our businesses generally; volatility in capital markets or a decrease in our debt ratings; a potential inability to realize the anticipated goals underlying our ongoing investments in new businesses, products, services and technologies; fluctuations in our results due to the timing, mix, number and availability of our films and other programming; potential conflicts of interest arising from our ownership structure with a controlling stockholder; and other factors described in our news releases and filings with the Securities and Exchange Commission, including but not limited to our 2018 Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. The forward-looking statements included in this document are made only as of the date of this document, and we do not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. If applicable, reconciliations for any non-GAAP financial information contained in this news release are included in this news release or available on our website at ir.viacom.com.
You can read Viacom's press release featuring the company's 3rd Quarter 2019 report in full, including tables of Viacom's statements and balance sheets, here on BusinessWire.com.
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During their Fiscal Third Quarter 2019 Earnings Call, Viacom revealed that:
-- After three months on-air, Ryan's Mystery Playdate has become the number-one show on TV for preschoolers! The show is #1 with K2-5 & Top 5 with K2-11, with 42% of show's viewers being new to Nick.
-- Viacom and Nickelodeon have been encouraged by the performances of Nick's All That and Are You Smarter Than A 5th Grader,both of which have been attracting new audiences to the network!
-- Nickelodeon will be debuting its latest ever slate of new content across its portfolio during Fall 2019!
-- Nickelodeon saw enormous success with the premiere of "SpongeBob’s Big Birthday Blowout", SpongeBob SquarePants' 20th anniversary special in July 2019!
More Nick: Nickelodeon Embarks on New Direction with its Biggest, Most Wide-Ranging Content Slate Ever!
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