HMTV - Earnings call transcript Q3 2021 | Hemisphere Media Group Inc

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Operator

Good morning, ladies and gentlemen. And welcome to the Hemisphere Media Group, Inc.’s Third Quarter 2021 Financial Results Conference Call. My name is Stephanie, 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

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

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

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

measure. over understanding was results reconciliation our to release, call earlier information believes During earnings will Accepted is financial in Accounting morning. is of call, now refer which important this issued is will which that turn Principles, GAAP business. non-GAAP to addition included of our in investor’s information today’s A non-GAAP to that Alan. this I accordance the in to Management non-GAAP discussing a we calculated to are with Generally adjusted EBITDA,

Alan Sokol

for building everyone. Danielle. strong another an first our year. Good exceptional you, was This of the half Thank business, on morning, quarter

fees, as The as third revenues, political. saw in advertising excluding well subscriber growth quarter

given the ad growth revenue XXXX, QX midst pandemic. in delivered of the especially performance is of in Our industry-leading revenue that impressive, we ad

both a well perform is when represented acquired XX XXXX. Spanish grossing we top QX results on million third the tremendous to of language leader and XX% market-leading end increase a subs this Pantaya subscription Pantaya, hit are the major the March Our very quarter one Spanish expected our as in We XXst. space. a a and subscribers in and continues clear ad revenue language platform on million over business by app million quarter, goal entertainment X.X our confident we Android, X to iPhone streaming the of XXXX. milestone of in

XXXX, to investment production XXXX, in in subscriber or which As we growth drive previously XX to marketing and post-production. currently are series. of many and both will retention. seven we are original series increasing programming original indicated, This In we increase in premiered

most America, original the upcoming original Senorita and During producer the the quarter, entered we prolific first Traziende coproduction some including Spanish Films, several agreements de with Fabula, major Club series, and producers XX language of producers the leading in Fremantle Latin Netflix’s of also Cuervos. series, of Pantaya’s and

juego in highlighted series de Pantaya of Our of third successful by X llaves, quarter El of one the to-date. las of Season release was most Pantaya’s programming September

September in single the history fact, for TV series of record number in viewers of set in and In Pantaya’s a second month. highest viewing unique a

the Peligro the in we the movie acquisition, released produced on mirada, service program highly We our of tu for en also most the first since August. was Hemisphere Pantaya close viewed by which

Pantaya’s with in offering. advanced on Pantaya’s and negotiations we launched Pantaya YouTube Ricans several to TV expanding millions Gap] reach September, Importantly, exposed create YouTube awareness Puerto [Audio Pantaya are other TV of of the and subscribers in to

Max. number through ahead October HBO Rico entertainment of Netflix, Hulu was on Pantaya result, one XX, downloaded the Disney+, a Android, Puerto and As most app X June from in

XX%. by during fact, period, In this its download five-month grew total Pantaya

we a Turning of growth, quarter impressive revenues XXXX. XXXX. this networks. quarter the In QX given in year, of XX% performance to ad third revenue QX of We strong our our delivered grew updated especially by of over

strong front. driven declines. subscriber Puerto has and business The with defied progress Puerto consumer on which growth grew the in retransmission its both also made U.S. economic trends by fees Rico, We activity has trends remaining Rico subscriber strong with year-over-year, minimal continued tremendous island recovery robust. vaccination

advertising and for the highest activity spending dollars following ever funds rebuilding should should the station programming. of a has I vaccination ratings funds has exceeded that dispersion In international year normalized its period month. fact, prestigious is that XXXX another economy return market, Puerto had nominated been the periods for seen and commercial Rico in to the comparable holding growing and extraordinary has year-to-date in for facilitated years the Year-to-date, sales activity yet in when tourism cement in levels. which number proud key market a Puerto WAPA August, last and airport level The be its first XXXX compared years. federal these XXXX compared Award, it’s were of from quality the XXXX Rico The be and The to up tens metrics WAPA first the in Emmy the has of and and in growth. consumer quarter, In very island economic was positively. to to outstanding XX% growth The billions announce are to the economic nine TV consecutive our tremendous nominated. coming Auto economy compared same XXXX hurricanes. than hospitality the fourth have to rate now am XXXX in through hurricane continue occupancy and position trending Puerto has the through months the of maintained Puerto rate to Rico the many channel share the than at with innovation fuel the Rican market. level highest exceeded more continued of Most sales strong. benefit were performing dispersed. strong the and of recovery reflecting seen one doubled and very federal U.S., sector to higher in passenger XXXX, August XX% traffic sales

Additionally, regional that any nominated nearly have and information WAPA the programming, network WAPA’s station Puerto been team of TV We success ensuring from choice. record rating an in status amazing quality XX a hours truly of and a for news, Emmy XX Rico. produces highest has as awards, the week entertainment unparalleled

XX key shows least This the quarter, top category. at WAPA in demographic aired XX of rated every

in XX viewership day on star analyst was WAPA competitors family. Jay year. the a Fonseca, quarter, basis. QX we and a XX only In broadcaster the announced between political joined the outdelivered WAPA adults Last island to radio QX host total and increase two this broadcast its WAPA combined to fact, on journalist, that its

Jay and afternoon both daily advertising from quarter, standpoint. successes a weekly This and prime-time show show, launched major ratings been of both have which

cable channels, performance our and our U.S. respective channels leaders to be Turning our solid continue to their was categories. in

our channel number channels among Spanish measured in rated Monday one be with on trainings. XX time, All top to was channels, And Friday three Spanish ranked cable based rated the Monday in to the Pasiones prime the cable continue of XX to coverage Friday. top

next, YouTube with to or growth. a expanded continue losses trends channels cord which later new agreements. networks, early should these launches for Three new are While TV launched coverage our our this impact will platform we and year mitigating provide on cutting of cable be

We are language in on which virtual their securing optimistic other have inclusion also Spanish platforms, launches MVPD of of lagged program.

Turning Canal are and Uno, improving declining. cases and to our COVID investment Colombia in is the economy

an overall has and of for closing, seen into the market. year, ratings, widely well-positioned we incredibly Pantaya business more distributed vaccines half exciting our solid into will see future are we the an market see country market becoming should share of advertising uptick Importantly, remainder an and and the stronger we In are year compelling in normalized more content pipeline beginning a Canal to the the clear activity. leader. which that are continued has Uno translate the next is as second year. optimistic improved have advertising momentum with

through performance market building have delivered environments. we are difficult the the We business transforming and strong on

We everyone. now value. current our that investment execution unlock and minimize will value Pantaya over and continued turn confident you, Craig. the call are market enhanced the will our in to over Thank I time in dislocation

Craig Fischer

and everyone. Alan, morning, you, good Thank

strong We second to into our half have are continued the performance of excited the year.

our Our over results particularly comps XXXX. industry-leading the were in third we quarter of results faced as impressive

market we COVID-related that an result in million revenues As was noted WAPA’s as call, advertising as $XX.X by we on same strong dominant the year’s were quarter quarter achieved third $XX.X Net the earnings primarily bolstered significant growth, well compared increase Rico period the Puerto XX%, performance. XXXX. for third million, of as of as stimulus, a for to prior revenue a

advertising benefited due the of million comparison in cable even year increased and revenues U.S. in increased decline revenue. new Subscriber results net $XX.X revenue cable as part by the to which in of our our our a well political prior primarily period, XX%, in networks, increases launches Pantaya, Excluding contractual as rate to Pantaya, strong offset from inclusion or subscribers.

growth year revenue fees. political retransmission or decreased our the Pantaya, period. in advertising subscriber Excluding by increased, in $XXX,XXX revenue X%, prior driven to Advertising revenue due

as the or and subscribers. advertising revenues launches due or $XXX.X revenue revenue the revenue part Excluding cable by million, in offset Puerto in for Pantaya, period revenue new of in contractual million Advertising to period. inclusion due as in market, million in to XXXX. prior increases advertising as period television XX%, year same an increased the X%. $XX.X cable growth of were networks, part Subscriber increase rate decline by primarily Rico our advertising political Net well offset $X.X the for increased U.S. a in XX%, the political, of nine-month primarily million $XXX.X compared to increased XX%,

the the in expenses, Pantaya. period, to $X three-month for million the XX%, $X.X for or the Turning nine-month or million, period nine-month primarily expenses increased revenues theatrically our $XX.X and increased XX%, the the elevated of de due Season primarily of cost of llaves due of El quarter, the increased to period of and inclusion million Pantaya. the the to were for expenses $XX.X for and In X SG&A inclusion increased part million three-month film. one promotion juego las series, released marketing due period to marketing hit of

due due million increases of to to will also postponement salary and Pantaya, reductions may period pandemic, compared cancellation the to as the of prior period the on of to the was marketing content be as in Adjusted vary quarter, were both year certain in tied and compared is and forward, was result periods implemented launch $XX.X spend in compensation the same to Adjusted the Going investment EBITDA to period Pantaya, period. The million voluntary cost the so the higher marketing of the and events, prior mode. $XX.X $XX.X third programming including nine-month XXXX. from growth stock-based reductions a retention. were or quarter-to-quarter. in million which costs inclusion EBITDA for year $X.X for employee as The million in decreases for sporting

Turning of to had and approximately as million $XX the million September XXth, of debt cash. balance in we sheet, $XXX

Our revolver undrawn. currently is

times were times, includes leverage approximately acquisition. in since $X.X net ratios Pantaya’s and approximately gross Our $XXX,XXX which million X.X year. results expenditures were operating the and to quarter, for the the X.X Capital respectively, CapEx bringing

also $X.X total quarter, Uno in our in We to the funded $X.X funding million. year-to-date million Canal bringing the

Our we and production in in particularly of growth, investing year funding capital are of original content. business as our remainder investment the XXXX, and the the priorities, the allocation through Pantaya’s progress into

track third quarter our shareholders. promising look to future Puerto create value our for performance with and rebound to pleased continuing with finish the in on ongoing the together Pantaya’s is forward year are we Rico to are and strongly. We

now We the will call your open questions. to

Operator

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

Steven Cahall

some just cable or how subscriber into also we’ve curious your acquisition into. you of Any Craig XXXX. distribution Good and moving spend Thanks. that companies, framing costs those ideas strategy? factor what like partnerships peers lean about especially telco to might Pantaya can those that and of your for Alan. Pantaya, talked we up want And you’ve you as so content with on about seen by some might morning, look think Maybe investments start into take

Alan Sokol

Well, programming. with, from our intent me, all Steve. as investment morning, is Good in you our intent, along heard has which been consistent increase to

Netflix investment. that, We’re remember than important return a their in this series to growing to next -- deliver that are on year know seven we of expect production or Hulu significantly costs to year Disney production. XX from that significant our original It’s lower cost to and have or

of We’re a hour a fraction spending tiny spend. on per what basis they

with we lot So for get production. bang the a more buck our

I be, going ahead, I our on, question the still other to going Yes… historical, are sorry, in although go relatively a costs distribution. to And to level think, was increase comparison our there’s And so am vis-à-vis peers. Steve, low

Steven Cahall

Yeah.

Alan Sokol

with distributors opportunity conversations in a optimistic big there. very about telcos and We’re we of the bulk active potential feel a and other strike variety deal to

Steven Cahall

Great. the trend just last Rico, market, ad And sense Puerto folks just talked many QX, in Do so it’s on about, as caused been really you there? as look any chain weakening strong by to that supply curious seems then to going you’ve any as comments out that’s years.

Alan Sokol

I Yeah. some been as of calls, heard mean other we’ve theme. to we’ve sort the listening of a that

but seeing feel are very fourth our We we extent, optimistic to that a quarter, small about.

back spend supply big of cut and seeing a some that, we’re see chain hearing have across its will the were December how spend. some levels their notwithstanding Auto issues on advertising goes. result. on are of the that on has back advertising But We some But cut strong still advertising pretty we Board. as retailers having of

Steven Cahall

Great. in those. just launching on And saw what on weighted since I there? satellite any the yeah, was the cable or or sub But, you’re that any VMVPDs. domestic color improved guess not then it of sense to much improvement so you in cable quarter, declines particularly

Alan Sokol

We in MVPDs. the -- notable would I no there’s among changes would say, and the losses been of distribution Yeah. real gains how

still MVPDs. We’re gains with seeing certain

others material pretty somewhat. the losses and with trend overall, seeing has continued cadence We’re improved has that although

Steven Cahall

one And of for been Great. industry there’s then consolidation. last reports some me,

offer how you opportunity about might wondering industry any Just consolidation think and that you?

Alan Sokol

that rumors. business great about Well, good we in our this We to are out we our extent But the very on operate comment Steve, lane. because consider We don’t those. there. opportunities to will obviously feel clearly, ability own are swim independently,

different about and great a in position niche feel our leadership are our we space. within We

Steven Cahall

Great. Thank you.

Operator

it over Thank to to you. management. back like I would turn

Alan Sokol

a to Well, will everybody soon. happy wish Thank talk you that’s it and I weekend you. then

Operator

concludes today’s This conference. you. Thank

now disconnect. may You

Hemisphere Media (HMTV) 5 Nov 212021 Q3 Earnings call transcript