AMCX - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the AMC Networks Fourth Quarter 2020 Earnings Call. At this time, all participant lines are in a listen-only mode. [Operator Instructions] After the presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference maybe recorded. I'd now like to hand the conference over to your host today Nick Seibert, Head of Investor Relations.

Nick Seibert

you. Thank welcome earnings Networks conference and full quarter the XXXX year call. to morning, fourth AMC and Good

Joining us Ed this Officer. team: Officer; Josh morning Chris are members President and Chief of and Executive Chief Officer; Spade, Carroll, Operating Sapan, Chief Financial our executive

a fourth and XXXX the full call for company's open we will the of questions. discussion year Following quarter results,

Securities may amcnetworks.com. to Investors risks If contain future following; involve Private statements available on performance any is the are Litigation earnings release, cautioned forward-looking results you it and the forward-looking results and of Reform constitute uncertainties do Act not XXXX. that such the of website statements or have Please at are that of statements a not today's could meaning note of copy discussion guarantees of actual that today's the take cause our within with update the for obligation performance. The to to refer a Please your this discussed non-GAAP statements of call. of during we'll operations company's the company results non-GAAP risks and of discussion Commission company's differ. Securities uncertainties. useful We appropriate concerning you information. with the may is in that and filings Further, presentation provides supplemental company's and ongoing be Exchange any forward-looking believe the information disclaims financial the discuss the evaluation

information like footnotes please For to non-GAAP press we information which call GAAP for over related I a refer to would and With further to of on and turn that, now refer to to details, release this will reconciliation GAAP the Josh. the call.

Josh Sapan

for Networks, transform report that environment. for joining of as you we operating while I'm uniquely uncertain XXXX strong navigating our and and has successfully company, to year to everybody what been challenging pleased morning, thank Good continued was a AMC a performance us.

targeted the the as businesses. streaming our reflect in grow streaming is worldwide strength AMC Networks now and continue sustainable linear and we significant opportunities there believe our streaming of are strategy us. platforms leader results and both and to we Our validate our before

more with million doubled targeted paid three ahead across new expectations that we Over well XXXX our the of our That than a to six year, offering. as services full AMC+ is end shared our subscribers years last as streaming we than premium with subs the in four earlier aggregate more you.

longer revenue to the run subscription at of approximately further by XXXX approximately the streaming paid fees anticipate million on Our of to then. based year now at XXXX end rate ahead gross subscribers million XX December's looking XXXX increased admittedly in by year subscribers and end range of a anticipate $XXX nine paid million million million annualized. from being company's end the $XXX XX over XXXX to paid share the much month We horizon. of We

we growth significant it horizon. our most the now will company our is streaming that and longer revenue largest become So expect of area segment within

Importantly, our distributors streaming now efforts. are supported by with our strong relationships very these

Over which call. in the of agreements on AT&T's renewed our DirecTV, renewals affiliate we've with several mentioned our third eight two XXXX, major we past years including quarter

our as partners well channel us. to business the and and side valuable the as linear linear of very services streaming affiliate stable our our underscoring encompass remains now to portfolio, renewals Our that is

ad-supported over and to to the continue strong FAST and year our not platforms elements the linear platforms called. create the desirable next foundation opportunities and we've they channels we that foundational the streaming strategy and curate of content of only strategy; newer today, advertising our pillars free of those strength, results our growth are to across our content across is company underlying content contributing several over built of as variety ad or a as commercial-free platforms, great us selectively continue including this AVOD We to strong The and pipeline are commercial-free monetize highly allowing they affiliate streaming the years. next digital our our and streaming, digital feed content the to and reconstitute successfully

audiences strategy areas and targeting been grow. our known about particularly content passionate Now; rebranded reminder, services or that crime rather mysteries formerly with ALLBLK ALLBLK we to month. highly don't has we Movie thrive our and complement Sundance approach; dramas distinct By documentaries streaming -- general audiences, which with our compete in with TV; UMC, can these we editorial horror Channel identify black offerings we areas, them. As This British-focused drama targeting includes as streaming Urban Shudder; and who last with service larger Acorn entertainment to suspense and a and targeted true are

on to them show addition that to they offerings to relate general can't our services not specific highly several quality allows purchase provide but price subscribers a of services. of these or the depth in areas rather specific and value anywhere because entertainment and one a our level basis and of content in at that we the else film, Our get

SVOD require set which engaged fundamentally high to As about in streaming and order from do with selective a economics. that pipelines uniquely enjoy attractive to focused content developing the each in are apart the providing and specialized massive be that into premium acquiring services consequence, us the talked quite our that attractive in a strategy, entertainment translates satisfy member content, with content household. streaming and and churn relatively lower services us model This financially really much engagement of enables and wars does us general

Our much plays selective strength to a as a approach very we historical curator. have content

may track and a Streaming that company in growing these internationally. with shows and become and cultural though definitive authoritative long that revenue, highly developing editorial begin total are drive and say a quite films and particular popular it's can content areas record think I conversation they domestically to which and now focus. component successful have fair and identifying of a specific is we

and continue to the with just spend streaming minutes growth to new we tap a we've size. into our a is economics of over will very, about last streaming grow only company of our our evolve begun expansion a in of international company for manner believe the I'd AMC+ very The platform, couple year. we like We can that accelerate to will our something offering. meaningful for talking

including both world it ad-free partners. gate. For done Killing in Saul, Eve, on and we on familiar Unlimited linear to AMC+ And Dead overall video Films several of those with mitigate our the history be scripted available so every as allows of our currently addressable and that strengthening and quite million universe reach economically of inhabit our the the It media streaming subscribers to with Mad AMC that and offering premium service prestige others the IFC likes Better out Now, us is The BBC of IFC two content but that of the is America, roughly addition such targeted TV some in of you an and landscape well relationship to the allows Universe, not and future. first the of as in focus with expand US AMC XX extends from Sundance in only we AMC+ a months by Walking cutting, to not channel, areas the other its Sundance is home the have best streaming impact those now Men and of broadband focus traded air. Call has a Happily the Shudder, content cord the AMC+ excelled areas epic the AMC+ our is dramas, expanding, growth in. includes cable material a or One the and our And the us distribution brand partners. from the business to market total with in US

upfront year. substantially additional to availability affiliates quarter, and most if Comcast, planned our with Roku we with while cable making on with QX this is and TV delays to our scatter to launches of our tied AMC+ back in as MVPD And partners in MVPDs channels, for By Following this offset streaming for as on channels we in rate a to addition wholesale the Touching well losses with Amazon summer strong in them come inventory maintaining held distribution expanded QX. moment, anticipated our fourth helping production materialize ambitions, in Sling, later work continues customers. may. with an partners the circumstances. strategically launches, in basic our to are did their advertising I key for market multiple as deliver Prime AT&T's Apple at we cost-effective DIRECTV, DISH channels that options the due alive COVID-related We for to

initiatives for key digital are for future. that we advertising, have our As several priorities

Amazon's TV, VIZIO linear, library TV, are channels, others. on reaching content among fans on commercial-free Plus AVOD FAST Pluto and and new we deploying by TV viewers that TV, only Sling not own and our We also but streaming and Samsung SmartCast IMDb

just These addition and we our first-to-market two elements we addressable our targeted of us our seeing in well innovate two areas continue completed national linear are inventory. are across advertising represent increasingly and channels, allowing as video maximize digital our having increasing as to on-demand key deliver effective networks our in strategy opportunity. which on linear yield on to ad TV, In linear and campaigns advanced around advertising

Turning content, may. to our I if

ability epic Our prestige this ecosystem earlier. key include, ecosystem in content content, allowed scripted to streaming mentioned high-quality as winning to to ability has is to way drama need evolve. a in editorial reputation on expand That the these areas continues home we to our as in I to successful curate linear and We believe that the delivery. the and be media's us particular world win now

was brands that our hit built not the with Discovery includes returning each the us Our series come fourth growth. maximize discovering of second on to to adept very a to season. that continuation intellectual later course, to and extend season and that of of the day called us of property, helping will debuted and multiple recently, content new a that a power stream this content its flagship this and team sleeper development a Also, platforms. on as targeted XXth quarter, year, each series Gangs across Dead currently-owned And a attention is of the of weekend, London captures impact this strong is our Witches to base popular spend steady providing material with strong Walking extraordinarily and very Universe linear called the that only our Now AMC+ our for which our power program AMC+ show continues Most is Sundance but AMC streaming of at week. the enabling The in

in Fear With include these as than a Dead The with Walking to and Dead XX from Dead ability because keep new more the AMC+. with episodes The the XXXX Sunday of season franchise ahead on Walking the on Universe, new look the the production last and episodes series The The of Walking all Fear Dead fall, Beyond on will to now nights we Walking on Walking well Walking newest track World second access of Dead: our that AMC early Dead,

for the wonderful and So it fans a of is bonanza of franchise, epic proportion.

making sustainable behind that's and This content around Acorn Acorn's long-term US to We the strategic it shows. enables investment and involves also in and when that advantage. titles, One into Shaftesbury. expand biggest that we be a property. continue valuable the the comes to more intellectual underlying several them on some a most entered house viewed partnership us called and investments a us develop to owning secure of TV's globe of company production opportunistic equity, example give with It's to Canadian recent

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challenges who and invent our to team, last outstanding forward work this posed together to absolutely time. seamlessly an year and disruptive during adjusted have and confidently We during the the decisively business drive

that environment streaming in. as those at detailed you Showtime businesses fortunate very recently senior Chris we're Financial know Many who results. successful well from Spade we of Chief as the may over and new Officer. the transforming turn have at as to our we time CBS her Our management Chris for includes her companies team in now and building Chris call welcomed to a I'll to operating are more our adapting now financial look

Chris Spade

Thank earnings today first you you, am delighted good Josh and morning, call. everyone. Networks my to I join AMC for

continued be moment XXXX to it especially for and performance is to I that entertainment Networks. a a review AMC the take current our like with to XXXX, I'm thriving for Networks. the able and I join would environment evolution, be vision say financial long-term energizing team I pleased to The with a part expectations for AMC to Before the for and of pivot is be platforms growth. part forward of growth the future the clear am streaming to driving a honored company to

to original mix after of AMC been and continue has sought As Call I in original Saul. Breaking The consumer, my flourish has my media many programming a asset favorite its premium like AMC Better Walking to place IP. shows right and creating of evolving Networks Dead, world-class believe the Bad go-to legacy for the ecosystem and Networks

flow turn market Networks had marketplace. uncertainty universe performance for a results. in supported the year strong healthy were results free year significant and Liquidity the advertising. growth. QX offset of facing inventory subscriber cash $XXX let's the sheet. is performance scatter Full by and in year Now quarter pressures revenue in XXXX full evidenced strong million while AMC fourth by subscriber by XXXX Strong generation the for linear a XXXX of balance to streaming full continued declines and pandemic-related and global company

programming impairment our to operations, streamlining which occurred As $XXX in $XX the my the charges expense I'd items and the of reflected mostly summarize like AMC of second of fourth which the remarks fourth of which of restructuring occurred $XX $XX write-downs that XXXX related singular million are related recognized quarter; results, Networks which million quarter. include a quarter; in million to I our go charges today, million we International, through in to in few

million. to declined For the billion. was revenues cash X% adjusted full company year Free operating flow $X.X XXXX, was $XXX million. total income company Total $XXX

we the from services, the to with in us in along momentum. While with year realize revenue by growing platform additional AMC+ of beyond. The quarter and was uncertainty, XXXX the XXXX positions streaming fourth successful launch ended impacted targeted streaming and October well growth our

include by declined so productions revenues, billion. revenue from revenues, component improved This was of marketing AMC+ of For subscription special quarter marketing National the revenue strategic investment when production we the was $XXX fourth exhibited a operating full pandemic. in licensing. the substantial primarily operating and benefiting top a the Adjusted of stability XXXX, XX% performance stability primarily revenues, similar portion $X.X from to increased Over a timing Take declined to Subscription Fourth exhibited events strong, quarter XX% revenue expense Best to universe adjusted million. XXXX growth the accelerating fourth support of income of ad the quarter, of revenues licensing revenue which to ramped year to delays from representing Ever related favorable to to segments, the total to higher AOI Who Networks' beyond. performance decreased caused before it, Content and due up income decline the the decline. million such line company Total air the and for $XXX X% company With contributed our management be subscription will impact our streaming Doctor licensing respect investments programming X%. that Christmas decline operating due has subscriber declines. investments. recognized as launch licensing growth scatter content In and and and

Turning to advertising.

due result was production original of the programming offset lower partly to decreased the XX% full by by inventory delays CPMs. $XXX in timing in pandemic resulting shifts a revenue million. the For as This caused largely increased of to year, advertising

licensing due in the partly World Advertising the For In of inventory, X%. to decreased Walking declines quarters. full on National prior sequential driven the rate X% reflects more by $XXX at the decrease a revenues international originals scatter in quarter, subscriber quarter, year This prior level timing licensing by healthy lower significantly in the increased a resulting X% revenue the largely Fear Networks' primarily revenue the to offset Dead. decreased due revenue Again, from universe than this and decline same normalized with distribution quarters Beyond content of fourth shifts compared million pricing. dynamics. from basis to moderated reflects to CPMs

Moving to profitability metrics.

lower For costs National lower expenses expenses. of programming Networks' was expenses, partly $XXX year, marketing the reflects strategically the largely offset million. personnel operating results full by down This and from decreases reflect impact adjusted income XX% XXXX reorganization. to operating revenues, in

of and reflected fits strategy As longer wrote million programming in AMC $XX identified which $XX.X future that down for I already also Networks million we quarter. the fourth no of our programming with mentioned, is

For income fourth trends SG&A largely partly higher from cost the decreased I just revenue expenses from the X% discussed lower expenses with operating adjusted National quarter, along Networks' control. by programming offset

to on and International Other. Moving

at build conditions. compared throughout muted subscription venue AMC revenue fees normal For year million. and this the streaming at growth Levity $XXX approximately annualized. end X% expect increased end subscription million closures contributed month of to $XXX revenue and segment, the revenue based increased growth the would rate Networks International at Streaming the we what Streaming additions streaming XX%. of International revenues pandemic-related a the growth company's XXXX. continued paid strong of to revenue in share Offsetting grew the XXXX Other from XXXX and to million at subscriber Run rate to to ad December's lower $XXX of on somewhat revenues full under

the forma Excluding rate been revenue have segment's pro Levity would XX%. of growth the impact approximately

$XXX from International quarter. XX% to experiencing adjusted are of the in pandemic-related full growth subscription the and On an year the component of our This X% by marketing company metrics Club revenue. Compared and primarily Other profitability at our the rate the accelerating million. grew in it operating growth year Comedy for investments we Networks revenues impacted revenues. of in increase quarter, the at operating loss growth Other streaming larger a as International driven Streaming was the prior strength streaming AMC grew X%, adjusted business, by become year the closures a Levity. and million shows the total of $X For full International support to was to income revenue streaming growth revenue for decrease

our quarter investments the the of reflects the loss For impact of primarily drive growth to AMC+. million adjusted marketing $XX which operating was

cash to tax EPS $X.XX for for on The Moving consolidated increase quarter. tax in expense $X.XX tax the EPS and for the Adjusted tax full metrics. effective rate flow of XX%. rate related $XXX valuation allowances deferred foreign our year, was increase an assets. for an primarily representing year in was full million Income the and to was effective

approximately Going $XXX forward taxes year the Cash be to mid-XX% we million. the were area. expect in for

the flow and capital cash quarter activities of Working which net to for the million fourth productions year from to strength had is in the programming related mentioned quarter impairment had other For reflected higher $XX lower free streamlining management. primarily XXXX. of of to full capital International expenditures most cash recognized of due reflected results. primarily impairment charges operating second as million. $XXX AMC full strategic we Free We flow we XXXX. million the in XXXX $XXX flow our in charges Free was by XXXX delays, were related recognized cost COVID related restructuring provided Networks cash reduced cash primarily of the year already of and our charges operations which of

year. to of finance compared sheet, debt the balance we the and year net $X Looking with billion ended at the approximately in $X.X prior as billion leases

year completed profile compared we of repurchased leverage million. ago. consolidated no This auction XXXX. ratio. fixed the the that maturity net the in as now million financing at our $XXX $XXX comfortable was leverage a XXXX, due million rates leverage-neutral maturities X.Xx our lower In of secured ratio remain stock shares end for XXXX, to tender significant In modified and fall. includes series completed XX.X a We of X.Xx February Our year we until with of was common current our the transactions. We lengthened with Dutch

XXXX For share. $XX.XX the of our full year repurchase per average price was

of basis. monetized XXXX and on buybacks will to evaluate our cash-on-cash $XX gross January We continue fully Xx of return. opportunistic representing stake realized cash proceeds an We in million an FuboTV share in approximate

capital remains policy Our allocation unchanged.

the organically we provide in growth that shareholders invest on streaming our to attractive businesses. look return-based will to includes projects and both This in new returns our our First, services. core of investment

maintain outlook. leverage our appropriate we business is Second, will that for

Third, fourth, disciplined and to capital strategic opportunistic and of return M&A opportunistic shareholders.

already the of XXXX, strong have into points of distribution. to ahead proof from success Looking our we pivot XXXX streaming

driven enhancements we revenue we by the is our low in services. linear over market marketing expect to subscribers and revenue in subscriber subscribers. dynamics platform by of XXXX, It streaming programming note platform streaming in Streaming by million will the single nine company streaming strong growth with support will aggregate that XXXX. growth supported To end the investments. and marketing growth to XXXX For streaming total targeted the from targeted offset important XXXX AMC+ growth programming the slate will drive invest digits in for and be incrementally

expect adjusted mid-single operating XXXX. As in we to decrease digits income by such

investments we along linear for open for content are pipeline and to come. streaming support that free platforms positioned create the international With from XXXX compelling programming in XXXX. will streaming flow of $XXX this our occur expect XXXX as In delayed growth free in years and and the the for to with investments further For content operator revenue ability line please cash cash production our questions. million. of the across investments to approximate consideration well to grow value to XXXX monetization extremely maximize flow incremental With we stakeholder

Operator

first Thomas comes [Operator Morgan Instructions] the Yeh line of Stanley. with from question Our

Thomas Yeh

about level Can were taking barring the increased on revenues And kind expand new think the quarter changes what affiliate improvement trends? the for Networks? thanks in then That's the Hi, on about in recent and questions that? visibility? any of the Chris you drivers sequential the Is major that bit to subscriber the XXXX? role. major right at And renewals for which second, of share updated I either exclusive investment the on the adoption any your profitability. wider or just more know expenses Has just guided marketing streaming was over more and services changed Thank hoping you informs investments you XXXX appropriate I of you. levels to the increasing on views you content on maybe a these congrats of the could major the is path greater profitability in color profitability? erosion view time? there around Given National towards the there thoughts

Josh Sapan

This Sure is Tom. Josh.

may important are of I linear-only fundamentally. if to them streaming linear nature had relationship. think relationship -- dynamics in a now I you're have affiliate and I a thing past changing in aware our the on We the relationship. we focus think most with the very Whereas base our with

together at our table things new MVPD we growing streaming. sit with they we engage down include So consider and to linear our on and digital now them and partners, the array with when of -- and partners discuss and have multiple

very harmony form them. multiple we're some So shelves. now -- the of wonderful and of new go with frankly We we in these services on them input a of that have with products streaming MVPDs their our developed

content we very they're of carrying now So, strength. them and which provides cable have opportunity. propriety linear extraordinarily services as the manage to And channels gives retailer lower-priced a that strong multiple linear make streaming a them well and each margin have we our read streaming

to retailer services. subscribers in their streaming a MVPDs activity two to our forms of our with allows as engage broadband-only and us reach So, of it

profitability. on and my we that So, if you'll in occurring this our I critical operate that general think just see your really our a most than quite I'll really broadly was streaming the dynamic important are And and general affiliate as I different quite is streaming and second in that for as interest see is area it forward. the important a you'll we go -- that services. world. services question remarks, that's everyone streaming thing comment, something in In history may, of the prepared

with in horror-oriented of of to areas really interest or each of epic British-oriented editorial Shudder I have in make find who AMC+. We individuals them or and chosen and to as them the discrete Acorn AMC worlds that and in either by on want associate mentioned part comment be appeal content prestige content

and our a gives spend across than gargantuan frankly, content economic spend into sub worldwide market leveraged us to a fundamentally As different multiple spend and being of race products are consequence some having for that, and costs number a significantly a that profile share. and

So, in we're world and model, economic really different quite a business a really in that's and an attractive. model

Thomas Yeh

That Thank makes you much. sense. so

Operator

question next from Guggenheim. Our Michael Morris with comes

Michael Morris

you. thanks topics. questions two I morning have and for information. Good all the two Thank guys or

the content The first is is on then Josh, on in on and the and particular AMC+ which windowing. the the discovery in year the of you referenced availability linear later channel. of first

to investment, licensing of guidance the long-term windowing so talk could of little the can forward and then that that And about content then your also And my is goes you that the making I a the you decisions, about if be bit thinking can streaming do at what source as are for more question provided content timeframe? are National subscribers much revenue you Networks? that think is provide how sales on some content? side When detail just And internal you And you on where about sort also how what expect businesses? very you to we how you streaming helpful. look

size an market You it's Thanks share you the total like contribution rollouts in ambitions looks the terms that well. a of referenced would that or be as of great. the any more international international to path Can whether what about growth lot.

Josh Sapan

Sure Mike.

that not a is one-pattern-fits-all So, at it I would on really first your windowing, all. on say question

streaming. know We and have well our you now linear multiple products as

we there And instances linear some absolute with in second. there'll we'll be So, other and go first instances, other second and and streaming instances, be propriety not streaming will between streaming and window. linear will go first In in linear overlap.

there really streaming. approach a So, what is to we're one-size-fits-all-like not doing in

linear are Value is for We on something they guided consumer channels a it. are to to of that a paying it streaming marry increasingly is the we'll so our lot who these important business by from like that patterns. affiliate fair our paying different MVPDs our forward. as get the and be valuable. we an and they feel fees value maximize combination value will part in advertising the price us associated And frankly, of and And we go play utilization

is your dials licensing part where. it content what on hands revenue relates your news have of to goes question, second we the the the our of is which As nice that

cases with So, arrangements made some are incumbent we life series. our we've third-parties which in have position of for of

of will commitments as have we and that time material into them they will we honor contracts we them that have course, ago. some to So, with entered

new it of much So, are. in I'll determinations where to what into about give we're well-developed keep of third your we're license part what of How model a in that material product And any say, geographies that a has Mike US really States. not of for amount strong it for part we be opportunity. United talked and for go to best. show to part how a the we streaming will you want the for your limited segues is we not might in the make let's could couple range business the I quick that think let's But But license that. how of this variables that -- want instance, a And a part of just with don't new our go time about. globe for? globe the the we for which And there's of service? will because the question, our recap that a X do third-party is we're international and forgoing for it's we the of As where we well-developed

to mine gone the international just have We opportunity.

we as countries well quite to increasingly on the performing it. one streaming that services deployed seen XX of of larger opportunity over I'll make library. may countries. back which the World we're past it, content we've course, of proof Mike I these thing based an have now that encouraged And if we just comes for all our points mention platforms And is in these They're the certain months. by in we the our So, several as and Rest very increasingly see

we can subscribers in we in circumstance new streaming. building make new are building a that building are which on material and we to So, and

have So, well-structured a system. smart and we think disciplined we fairly

Michael Morris

Josh. you, Thank Good.

Operator

with next Nathanson Our Michael MoffettNathanson. question from comes

Michael Nathanson

Thanks. Good Chris. congratulations and morning

and So, Josh for Chris. couple you for a one

you're It's volatility to how then just quarterly out up catching XXXX to you're a think in and I working deals? to about. is AVOD Thomas' the promote, Paramount how figure simply And clever from past FAST it first buy Paramount FAST to subscription click forward? cash AVOD-FAST I you Do on we it's lastly XXXX. to look on trying should fees your Two Chris lot to around four translate in figure have for a wonder one. they're pay-TV, for really quarters. Plus. to Day. We're buy? something just thanks. And, going maybe bounced the maybe in subscription XXXX? to in question you How is in So right? a we thinking in we're capital structuring delta trying think flow revenue to capital the your So, opportunity happened of working that if I maybe I Plus much that thought what use going connect click declines that that into the that's Investor growth within was in mid-single-digits guess, platforms out

Josh Sapan

Sure Mike.

over of may if affiliate significant at the last how I the a past and I did AVOD over may turn year. we're on we've in I I number echo to couple to if Ed before. may. our it if going looking years. try your I'm said So eight first linear agreements of opportunities selling address We and Michael, as what renewed and significant I'll I'll just question

partners. have general exactly and have in if now years. I it, They're question MVPD they a few many may in can that your granular say most terms with They that characteristics. know new And harmony you between years it answer have all increasingly important have different streaming -- we convey is As what's would I not them. our now

course, linear have pressures footprint. and video of broadband-only have, an on they they So increasing

if are our channels. value spectacular We the inhabit I to a may their for of able world basic now price at linear cable

and subscribers I deploying that and linear have for think single broadband-only we far. in industry in frankly and their they're material interested by the best And price carrying it. that it is is value for now they -- carrying very is it on are the deploying

can and the talk may we're about occurring to I'll convey outlooks. how to how in I is it all most thing relationships. Ed our I I over important which our of what and think in If So distribution manner, using that's the turn about marketing we're selling

Ed Carroll

Hi, Michael.

the AVOD inventory do up-sell to And major certainly a our it FAST channel our of to being our control on all yes we're services. strategy portion strategy is and with we platforms. of that So SVOD of part and happy

have platforms. And Now that sync do with to series a linear about we the our we channels. SVOD windowing before, Josh coming bit interesting, successful returning talked in back it's

running up is example, Sundance season Now, our we already Shudder very For of find to to throwing third we've ordered in and SVOD of season festivals show building on which our its is both on successful becoming a sampling second compelling is has third and SVOD season. new way of driving linear for that and Riviera, which by been what season to And we're platforms. a Now of Sundance and a the prior discovery the

So lean going we're into the and we continue to to strategy like it.

Chris Spade

for you great also you Thank this good your talk thank the question Chris. is for you this It's to Michael wishes. to morning. and

we this cash what visibility million we flow So lot to we working capital catching into today, in did for it Based give gave dynamics want a that cash capital the we up. working expect guidance the know to free of see for is XXXX, year. deliberate because $XXX flow on of

about were million. we free in where flow to XXXX, cash was back look $XXX you our If

continue see we So Thank terms to you. will return, also above zone. average -- when and again in we but working to you manage strength. of to capital you're a we will according XXXX that we commitment And what investment strong XXXX have

Michael Nathanson

Thank all. Okay. you

Operator

comes with Maral Markets. question Capital from next RBC Kutgun Our

Kutgun Maral

Thanks taking the Great. for questions.

quick a one. first Just

trends, activity. in level renewal slowdown elevated follow-up of And in there of like Another was don't have coming follow-up. an fair but deals there's I to to assume XXXX affiliate seems want and it mischaracterize a core a then XXXX on XXXX? Would up I it bit fair be

Josh Sapan

-- with fair two and -- The the it terms the have to a years guess the last was what and had cadence in frankly we of affiliate fairly year services you is rich. in be that of in things part renewals of say it's fairly can rich as part I designed horizon nature It stability constant were it we've know. last Sure. of renewals that so that fairly now these We year linear. the business even and affiliate our changing to of this because in streaming done we way, and

say variations sensible that So a it I works year. year are With and quite well would that somewhat some said, there is to smooth. have calendar by

up always time the coming renewals and have We all will.

we So there renewals in I horizon little bit past always will that's what looks and months, a year be had a the richer our think but XX like.

Kutgun Maral

billion, passive you Second, sorry could there think basis, go profitability, guess about business, that to Thank kind I Understood. U.S. thinking longer-term just trend you revenue targets encouraging? And but about or well just blended substantial do it, share if million revenue mix? $XX in rate with ARPU missed again, anything So versus could just that $XX ARPU, a lastly, And I over your how the in a exiting just on that million Thank help as you. us of is us over international great the million look time? can you margin if talked I you but I figure? $X expect potential even stream know more you the I'm fairly to breakeven stable, terms about remains to of run that you assume are; on you. $XXX XXXX. largely the subscriber imply maybe SVOD, first, questions had XXXX If and of

Ed Carroll

Ed. So, is this

thinking some businesses lot the I'm me on a model efficient exceeded finding going and that have with we're color is and than expectations. holding model. the the give originally scale. what thought we our really we're about first Let try more efficiency we start targeted to The is just as

seeing the we're form only pleased -- content. the for So the a not represent, a viewers, Services destination very they community but with to momentum. we're around tend

stickiness ARPU the we think the begun confident of I in built And depth tap targeted question you gain churn share would expand we just subscribers. library feel as out we that to We because about feel areas to stack. these continue really levers. in also would don't and we've the that community the And on and so your point that's to or it. we've this space, we helpful continue quite imagine, or one no about has in on the

sort we of ahead. that think optimistic and So is all

of just just and and we're and color about this maybe expand outside a And would U.K. give On XX% was been the Acorn I Sundance piece Canada Australia. question a internationally. international year subscribers, U.S. the to a it, there have their roughly U.S. before, about the represents say more available outside little Now a little the in beginning mainly less. of

do days, we we're outside and U.S. opportunity progress. early but its see significant good we So the making think

Kutgun Maral

you, Thank both.

Operator

Macquarie. with comes question Tim from Nollen next Our

Tim Nollen

Good kind announcement my could I all an days obvious the your natural opportunity make Thanks. just it is, ago little managed what us on you saw advertising. that progression a efforts to fill to bit a procedure? parties guess, morning. campaigns such seems like more addressable a Because of in this I'd to question few in for involved. this ask about do. about like I your the in industry, standard it maybe good more you such Thanks. takes a is

Ed Carroll

Thanks, Tim.

takes it think and I them. we and strong have partnerships So relationships

campaigns. driven one of Just to Canoe by -- we question, of of with know, first November we fill couple running in, a that December addressable linear addressable that But and national announced the And campaigns Volkswagen. did people with Omnicom was completed really the which week this in we on probably our was Comcast with your you has, as and partnership to Charter. spots

it's about million homes. So covering XX

viewers recent targeting specifically who SUVs higher achieve able was campaign frequency interest Volkswagen than case, shown to was in this in had the and advertising. non-addressable reach So and

don't the else. we advertiser it's can ad an if not within something addressable of target, If does a the household piece serve client and from So they that footprint creative. match, interesting, see run household a the matches then specific they

encouraging. were this of results the So

were with Volkswagen Comcast, our it. Charter and at with were certainly, partners and pleased pleased Omnicom think Canoe And I it.

us takes bit the to but do, what now are conversations do was more. into and season it it we're upsides pre-upfront of for with as a more a work I coordination, having we're and takes that's going test So to advertisers. this apparent and good mean the

Tim Nollen

And business to Can upfronts? make wanted proportion total becoming of Is that of to is, ad standard it it become over in more up the a actually a more on Thanks. it point procedure. time? I just your follow discussion a meaningful

Ed Carroll

think, I it will.

I slowly. think, it will ramp up

Tim Nollen

Okay. Thank you.

Operator

with Our Creutz Cowen. next question comes from Doug

Doug Creutz

Thanks. Hey.

Just want numbers. up of a line couple to

XX% you think I in QX. that revenues grew streaming said

that of the which than went run rate delta having the $XXX also a to year, $XXX of Thanks. of ads more December? the a obviously at there year from is lot million million last this growth lot reflection end quarter the just indicated XXX% rate. Is in you You a

Ed Carroll

looking of it Sorry, ads differently. having that ads? of very lot other. a I say When a you of is each We're subscriber of ads, -- all think lot sort at

Sorry.

now in driven December in a We're quarter. called it's to platform. being of as strong Creepshow the addressed a being question, the the exactly program off again. of did it new expectations. And ask we strong the platform, and growth. I surpassed Discovery no also you you episodes Dead haven't If right your That's number throughout the of on now our SVOD The yes, So, Walking coming on by first on the We're also portfolio. the the have seeing And A continued spirit to platforms. Witches aided a we Shudder. know, part that's on strength by I targeted can small But SVOD think start

Chris Spade

a it Doug, you. factor is Ed. agree, that. Thank of I

Operator

from with Wells of Cahall Fargo. the line [Operator question Instructions] Our comes Steven next

Steven Cahall

give a couple beat going it of I'm anyway. I'll horses to a Thanks. shot but dead here, probably

was QX X%. think down So, was talked I on about QX National subscription being QX. down trends XX%. quarter similar Networks' call, you the to third QX

anything trends? or there how just one-time today then of a more have profitable QX war that about you lot big Josh, the is much of than a talked improvement lot competitors. So you really the direct-to-consumer, number, And in a structurally business is streaming on

sense targets, substantially us than you give you can level, to AOI to the you any like? breakeven, you. better your long-term at going are Thank Are near breakeven? looks of you So what be or get when profitability that

Josh Sapan

Sure.

think So I of which a new we engaged I this distribution just have the leave range distributors. just harmony look, that where think, may on with we is and were it in side, renewals I we're

you As numbers small. down bit you know move or the one deal any into quarters a divide they can when things up get somewhat

So they move around bit. a little

we their that is I a on or important different our part. slightly harmony with them go and on point with with forward as have we is the that think most -- part our substantially different we're partners the MVPD point and engaging view of

is the side Shudder. profile of our -- the movie we services, are Globe attempted to developing. remarks, nominee On structural and on a as economic But on as have emphasize, it we and streaming fundamentally we've said prepared we've our Golden in

Golden fans who Globe's return as are For La those Llorona.

those expensive We Creepshow, Bob, of and you're is on Shudder. the sure he and in meter, is we wouldn't a They're with familiar who’s illustrative a the meaningful a anecdotes fan say show. which it I I'm developed show has It's not base. grids he -- it's television on have have -- central Joe drive on business. killing base most them. is On which Shudder, for say he monstrous targeted -- I what Shudder is it's

costs many, different doing follow than attempting dollars a economics a many, pattern. per And of and and many, so hour have many plot millions different to they show that

costs mining and frankly of created we know inherently that what economics by people think drama. from. the with of area plan was we like. next the we because profile engaged in We different margin that is it's generally know for five into occupying lower fans and pursued an British our characterized past come where as what And account SVOD had we for is We by landscape was we're taken So years than a who others. and we are our that we're somewhat content,

extraordinarily that's cetera. Murdoch see War, on Foyle's them they hit a or for cetera, when Mysteries sort and so of And pleased et they're Acorn, et

And a Networks. It's nature the different that's think the for our So cost business. has perfect has substantially better sustainability. frankly It It business. a AMC structure. adjunct we it's different of

Steven Cahall

ask if I follow-up. could And one Thanks. maybe

You Better you for didn't have year. big Call mention Saul shows release or in Eve are Killing pretty Those production. your resumed this press

be those as just might Thanks So, back well. a if lot. on wondering

Ed Carroll

Right.

still we to due production some our So delays shifting for have COVID around shows.

have and prepared had full some Walking As World back we mentioned in Universe Fear strength in shows of Dead remarks, the season Dead The our second Beyond. fuller Dead of Walking at back we've Walking than slate a we the The with

We'll likely right of That's think Better that Saul have quarter. we're we're a clear of we're review will Better Saul, the the a at -- first other schedule. timing does And point on way For really I look quarter sort shows seeing into Call move Call production XXXX. next it this now. it

Steven Cahall

Thanks.

Operator

question-and-answer Mr. concludes back I'd Seibert the for closing to to today's That remarks. session. call like turn

Nick Seibert

Thank you. We'd now end the call.

Operator

concludes you gentlemen, today's Ladies conference this Thank for and call. participating.

You may now disconnect.

AMC Networks (AMCX) 26 Feb 212020 Q4 Earnings call transcript