HMTV - Earnings call transcript Q2 2021 | Hemisphere Media Group Inc

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen. And welcome to the Hemisphere Media Group, Inc.'s Second Quarter 2021 Financial Results Conference Call. My name is Brandy, and I will be your conference operator today. Please be advised that today's conference is being recorded. I will now turn the call over to Danielle O'Brien. ahead. go Please

Danielle O'Brien

are firm. And forward-looking on everyone Act subject operator. and everyone. the in like about Investor may I'd with Securities or may our Thank Private certain from statements. within contain today's These XXXX. good the forward-looking conference welcome statements Relations outside Hemisphere's to U.S. of Financial changes that of Hemisphere uncertainty those such Litigation management to O'Brien, announcement Reform and expectations call. and to circumstance, current cause are and Edelman to the comments are you, of Hemisphere actual Communications, morning, Today's expressed the statements I'm I'm based of differ in Danielle statements which meaning implied results materially

these a complete statements our refer Please assumptions applicable Form XX-K public on to risk the a and annual on to based forward-looking to subject are factors our are report more number company. other that discussion for In of of statements change. and company's recent most addition, filings

as included statements the events are circumstances. subsequent to made publicly undertakes of to statements Forward-looking Hemisphere reflect date hereof, such or no obligation herein and update

are in over to to principles, Alan. During discussing today's [Technical accepted call The is measure. Difficulty] EBITDA, included addition in a generally results which we call, with that adjusted accordance refer to accounting will non-GAAP financial

Alan Sokol

Danielle. And you, Thank good everyone. morning,

following second quarters. to industry continue We quarter results our over strong the into three momentum leading the previous have

Pantaya. and excited our Pantaya. very was driven by our revenue by of acquisition results growth exceptional of results Our advertising early We're

platform, and the Spanish stake Pantaya, series. -language best acquired in As we subscription first the Lionsgate movies announced and in premium we leading featuring streaming March,

to for we XXXX, is XX first Hispanic With XX, begun quarter which us. scratch market, US have a following reached a expected beginning terrific just we acquisition, at million to As of X by and the large addressable million surface. June untapped subscribers, nearly just the after our grow

are that stated subscribers is can deep space. confident add subscribers Hispanic that advantage very premium and the achieve million attain X original content unparalleled and to goal office previously streaming X.X significant to mover we in first and million of library Pantaya Our we by XXXX, a objective.

Our We've XX% Pantaya the reality the was most our meaningfully Vacation, series, was of the series viewed as second and days investment in quarter period. producers season some XX increase America. which previous content. a watched the programming of total leading co-production by number of talent arrangements Best have key its increasing second day history, in highlighted drive hours in The a first entered And of we with hit in we helped Latin Pantaya's stated, XX during and Family into second are over previously deals

mirada, our is our upcoming September, excited schedule In [ph] production very be We released this pipeline, Peligro first by We're partners. en about several is agreement key up are as will Pantaya. of we with Hemisphere into Friday, date. hit confident Also, in X through in of also Juego series produced Llaves distribution. growing with our past with making content other de advanced ramping the close progress cast entered since that distribution has Pantaya's El all-star negotiations balance tu of distribution important We're thriller big to las an we successful most be for an Pantaya's the Season our year. and a YouTube movie the for will acquisition. great Pantaya Pantaya this TV releasing

promotion, terrific and have at help begun we've production distribution, the to growth We seen to already through Hemisphere portfolio drive leverage of results. assets Pantaya and

at Netflix, in further other of a major at we Puerto the July and assets Android number drive Hemisphere's Max. Amazon XXst, since WAPA, Pantaya With has growth. Disney+, one been and HBO to entertainment leveraging promotional the support are on Rico And campaign strategically on

delivered TV an of indicators of our over Puerto as over a In networks. growth, remain both XXXX, revenue to XX% consumer for turning second outstanding as Now XX% trends revenue including quarter well the increase quarter We and activity increase Rico, very XXXX. encouraging. an of economic business advertising

fact, In stronger the is in than it been has years. economy many

to these will benefit we flowing improved for yet and federal the In level confidence a consumer to such drive still sectors Rico's well-positioned strength many of Key of metrics to faster and at reinforce that which have impact pace. recovery factors be growth. significant improving combined have Puerto expect to from are billions Rico addition in years, dispersed, economic the funds coming should now related a stimulus start COVID, hurricane economic in new and picture. The Puerto we

airport revenue has the auto And rebuilding XXXX ministry as was doubled sales the and network Cement from when XX% maintained the position. XXXX. privatization through and XXXX both during periods have We passenger WAPA, highest growth New more Maria. June remain to of seen island for of compared first than following higher half June remarkable turnaround. XXXX. since saw same the a in dominant than up the the outstanding are another Airport in the was traffic XXXX Hurricane, tourism its quarter to sales long-standing of

least retransmission category. XX remains every market, the demographic WAPA As both measuring with one in quarter key of and advertising has in out case revenues. WAPA shows since at experienced strong for station Nielsen every growth the the XX fee been the number began top

While organic with had continues see losses. subscriber been US to declines, once again quarter Puerto subscriber and Rico no has the very a stable

audience in were Our QX. outstanding share both and ratings advertising

Rico Rico. Puerto in was a the an single Pageant of WAPA, delivered as the XX the as television past testament continued years, highest X audiences broadcast are Universe apparel These the and key well rated Puerto strength the in on of XX% to Miss May of outstanding of airing overall demographics. in results Our the of in

popular Jay and and host on of with will [ph] WAPA's successful shows political growth. signed has very Porseka is commentator. advertising have we that and as drive journalist, a top Instagram the that a the radio Facebook We're further news million and ratings Jay member analysts XXX,XXX record announce to fans followers. island, X of family, a thrilled are confident host WAPA We a track massively competitor on and as Jay over

to our Turning US cable channels.

rated XX to Our Monday are the strong. in solid channels respective Pationes, Friday, be rated All performance cable Friday. to was And coverage the four grew continue revenue we the our ratings, top including channels channel leaders their with the in growth. Monday four the top two channels to our as major categories, number in XX of Spanish among advertising

for announce expected agreement an of TV, Pasiones, YouTube to carry year that excited We're we're we accelerate launch WAPA our with that launch line is this the launch, to our distribution, time major Cinelatino, mitigate will reached have new with end. before and on Regarding optimistic recent virtual organic channels, launches América the with YouTube encouraged We're MVPD. help subscriber other together declines. three that [ph] launches also

beginning to to and start off the optimistic and back a growth growth the have second closing, past the and the to becoming profile a to business is creation the are market a Uno normalized all and at I'll we to see challenged The and of for both COVID year Colombia XXXX, language in these are to continued our In to that the see lower more Canal remainder space. our as cases challenges, our meaningful great a Vaccines and for Spanish more an to though streaming continuing market. advertising [ph] quarters. is stakeholders. seen well-positioned Canal quarter, of stronger investment look our to the more Uno strong return. now exciting you, thrilled will are in continued are turn we're Craig. widely market at strong than in the leader forward several normal distributed, Turning year. comparison value call remains We the rate very beginning heightened delivered Pantaya momentum and to XXXX advertising in overall in to the activity cautiously Thank half committed of Despite robust everyone. we're off transform over advertising we growth by

Craig Fischer

Thank you, Alan. And morning, everyone. good

Net as six XX% year for Puerto continued were $X.X performance $XX.X respectively, due quarter XX, revenue growth primarily which due Rico as increased in in the compared million coupled second to periods or $X in XX% as television ago for periods compared increases to to of to launches the were and increase the well Advertising XX. revenue US periods. or by XXXX. to contractual XXXX, same are advertising Net inclusion as XX% in month increase June a period respectively, million, on primarily revenues XX% XX%, increases March Pantaya, due revenue in $XX.X $XX.X were of the year the our were new an million Pantaya, market, of both The share with subscribers. increased The and subscriber for part for periods as company to $XX.X of three of $XX WAPA's months excited the The revenue, the decline acquired and month in six year compared rate second quarter. Subscriber the networks, million million increase as and to or market. million the for our the the large in an as as to inclusion part prior have million, higher period. in well in three increases the We strong XX%, million ended for an compared six or to offset revenues increases $XX.X periods. the into and the due prior advertising cable were growth

our in an saw we increase Additionally, at networks. cable revenue advertising

acquisition. the the primarily quarter and three XXXX, comparable related decreases million year Other assets pandemic, the of million employee were and commissions largely retention incurred reflected connection to were the compared period million were prior to year revenue of six to XX% of higher the of The impacted expected $XX.X revenue, million period. quarter, to expenses credits. as million, XX% the period the second compared by advertising amortization due sales the the The a of were inclusion X% expenses increases result current second programming decrease to $X.X intangible decrease and Operating Pantaya. million comparable were expected for $XX.X increase second the a Pantaya the period licensing reduction respectively, $X.X events, also a for was periods. compared the well were of was of cancellation increased as period. to expenses as the due including increase $XX.X temporary the in in as Adjusted month of with an postponement XX%. $XX.X of period, month for Operating and as of The advertising an or to $XX.X in driven of increased six As compared in revenue an quarter XX% acquisition six to EBITDA reductions and sporting million $XX.X $XX.X XXXX. Pantaya. result for inclusion period certain as content. year as and compared Operating Adjusted compared the the increase for in period. of same million, the The as higher of the prior periods EBITDA decreased for $XX million cost month million, timing salary prior cost was by for the as

the to sheet. balance Turning

we debt As $XXX million of had and approximately June cash. in million $XX XX, of

undrawn. currently is revolver Our

Canal net ratio as were funded we leverage acquisition. X.X the since leverage and in was was the approximately the its turns manages the year, expenditures which gross cash and million turns, Capital operating Uno first $X million of approximately $X.X half Our results ratio Pantaya's X.X the year-to-date reflects prudently channel in approximately flow.

in pleased execution are first with off quarter. year our start a the for strong the are and performance half of the to third We and

growth now rebounding of economy, year for Puerto and and your a the of beyond. Pantaya we the open Rico the remain the With to optimistic questions. We'll remainder call

Operator

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

Steven Cahall

a Alan, first, the it deal done. YouTube Maybe to took get Thanks. while

to just was particularly of And to a on to I some if mentioned little Is other versus content, content? language key accelerate sticking were So just why the could digital might being a networks? longer digital rates speak this congratulations that. points, Or them this taken distributors the with loads with other have you advertising distributors. conversations affiliate slower aggregate wondering on some little networks? there board or you the your Spanish how like come

comment So could on was if I wondering you expand as that well.

Alan Sokol

Sure. Steve. morning, Good

or I think nothing really it the market. do with has to us with

a the higher think just is And got the push a channel other with push while own to and all our we finally ultimately their realized you MVPD, for we able just of try them. lot virtue should a floodgates Hispanic it we're with the try all focused think as was and took through this know, opportunity I market. will with the break they to priorities. it, and priority And so to to - that through it YouTube, virtual all [ph] open the Hispanic similarly obviously,

Steven Cahall

it Yeah. a is as in market state the we're which left a And I unfortunately cyclical, volatility? it has more there a legs to goes company. it? is as Or strong it's of before this Puerto of you where couple steady was period like is and seems like more state, been structural this like think little more Do ad about sort the to should historically then of we some back since feel of Rico maybe followed quarters a entering a as

Alan Sokol

that we since and Puerto occurring very we Rico in think healthy, We projects over And acquired All as given about WAPA the next months. infrastructure for impact the feel the a think long-term to sustainable, in island. The major this economy, are felt think positive metrics the I have Rico impending extent, is down. will that XXXX. have will I Puerto the good is economy start a is structural we large positive. as unemployment XX

feel So it. about very we good

way things good and that on health operating foreseeable been feel the official now, Rico feel done where the about a island we right long good we efficient Puerto the not the though, in are On But will run has of way of government before. future. depend for

Steven Cahall

a deferred from to during at sort the movies you lot There services, is then of streaming bit. Pantaya for content lots stuff upcoming to seems up it talk in of And the half year could coming a pandemic. content back was about the that's the pipeline like making sports little of of that

feel you half pipeline year? do that gross how ads back the looks what So about churn the and of like for and kind of

Alan Sokol

Steve. optimistic, really and are production Pantaya we're ramp on we I Well, up mean, starting to acquisitions.

to distributors a the producers be set have top with relationships of impossible replicate. which Latin would unique America, in We and

market Pantaya's We promote use have unique of advantages Hispanic and and knowledge strategic the to as help the and depth experience otherwise we assets of our as in the drive growth. well content, Hemisphere

of we help on we growth about that language - market. also different accelerated content And different do in just swim great and that depth the those of Nobody we will So in at feel the we Spanish confluence the facts a drive nobody has that has that do, the Pantaya. content lane. focus singular premium

Steven Cahall

the of I that consolidation might And on you make got be of backdrop then view ago. for your a out a industry exploring you Press is weeks if moment? this wondering I through talk what company. at couple the about one reported that was us around commentary the sale lastly, any could or

Alan Sokol

speculation. we've comment don't consolidation. as we obviously, Steve, question, where seen consolidation, of on - good first company. feel And the I independent terms about think very are we market on it's in an Well, We rumors or

our we're a within good feel Although about major ability very in environment. our to we a not leverage continue large and to And company. space, this grow our company are we

Steven Cahall

you. Thank Great.

Operator

Your Guggenheim of next with line Curry the Baker Securities. question comes from

Curry Baker

audience with, out a market could wondering is advertising on metrics networks more Hey. US maybe color well to just if there? your then little and how color the maybe as pacing? you was could Good performance start And some I morning, cable you guys. provide just for

Alan Sokol

to your feel question, [Technical second had a And about We in Curry? Difficulty] XXXX good very below sorry, levels. the knowledge, my quarter I'm the our good Sure. We US.

Curry Baker

Just color and any audience you there? metrics, additional could share the ratings

Alan Sokol

also ratings of all are No, we're all amounts - noted, network. rated two - our is have ratings. insight number we XX. our Nielsen not Pantaya But into rated, networks ComScore they not and I top the of provide limited as of

position in about great feel occupy. space we we that leadership So our the

Curry Baker

Okay. you're trends networks, the any of getting give US indication front cable seeing what the And can us you at then kind sequentially better. on of subscriber

there? color incremental any Just

Alan Sokol

quarter better losses, results they terms think second were so I subscriber in this year positive. Look, of year a that's ago our were a Yeah. than

the future think launches, a that we're conversations subscriber will our for difficult mitigating I a go quarter of to continued also second be expansions industry. launches great way organic towards coverage and quarter recent tends future feeling And about declines. long any

Curry Baker

at of a Got guys kind it. about or think level? And kind profitability is help metrics map the us looks to like there then at you any what way of that high road can Pantaya, path

Alan Sokol

Yeah.

X of what XXXX, I we goal I X.X stated very is subscribers at that profitable. be to million can our million by will think say

is model who that programming. market dollars are not on the of than an different general millions hour guys Our spending

As I our said before, Difficulty] [Technical entire

Curry Baker

Okay. I had Thanks. all guys. That’s

Alan Sokol

Thank you.

Operator

turn I now the Mr. call Alan will for to Sokol you. back Thank over remarks. closing

Alan Sokol

I day. appreciate good a everybody's Nothing further. attendance. And have

Operator

conference today's concludes This call.

may You now disconnect.

Hemisphere Media (HMTV) 9 Aug 212021 Q2 Earnings call transcript