AMC Networks Takes $97 Million Hit to Balance Sheet in Q2 on Devaluation of International Busi

 Posted on September 2, 2024  |  5 minutes  |  930 words  |  Martina Birk

AMC Networks reported its second-quarter 2024 earnings Friday, disclosing a $97 million hit to its balance sheet, including a $68 million goodwill impairment charge at the international division following the sale of 25/7 Media and a $29 million long-lived asset impairment charge at BBC America, a joint venture with BBC Studios.

In some good news for AMC Networks: As of the end of the quarter ended June 30, the company has already achieved its full-year guidance for free cash flow just six months into the year at $239 million, with FCF coming in at $95.2 million for Q2.

“It is a complex and dynamic time in media,” CEO Kristin Dolan said on a call with analysts Friday. “Even as much larger players are facing existential challenges, AMC Networks is successfully pursuing a strategy built on our proven ability to make great shows, to meet viewers wherever they are and to find new ways to support and monetize our content in a fragmented world.”

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The quarter also saw U.S. ad sales drop 11% to $149 million, but a slight increase in streaming subscribers to AMC Networks’ platforms from 11.5 million at the end of the previous quarter to 11.6 million.

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AMC Networks’ streaming platforms include AMC+, Acorn TV, Shudder, Sundance Now, ALLBLK and HIDIVE. Those digital offerings are in addition to the company’s linear channels AMC, BBC America, IFC, SundanceTV, WE tv and IFC Films.

Content licensing revenues were down 18% year over year at AMC Networks to $67 million. Subscription revenue dropped 3% overall, while streaming revenue jumped 9% to $150 million with a price increase.

International revenues fell 9% to $90 million in Q2. That figure adjusts to a drop of 4% when excluding comparisons to revenues related to 25/7 Media. International subscription sales were down 13% to $50 million. Content licensing plunged 86% to $3 million. Ad sales jumped 84% with a one-time adjustment payment of $13 million; excluding that payment, advertising revenue increased 18%.

Wall Street analysts forecast earnings per share of $1.52 on $601 million in revenue, according to data provided by LSEG, formerly Refinitiv. AMC Networks reported adjusted EPS of $1.24 on $625 million in revenue.

The earnings results come on the heels of the July announcement of a new licensing agreement between AMC Networks and Netflix that will see hits “Anne Rice’s Interview With the Vampire,” “The Walking Dead: Daryl Dixon” and a handful of other AMC shows that were previously exclusively streaming on their own service now offered on Netflix as well.

“AMC Networks continues to find opportunities in a strategic plan built around programming, partnerships and profitability,” Dolan said in a letter to shareholders. “Key to our plan is the creation and curation of celebrated films and series, and making them available to audiences everywhere, including through an exciting new branded content licensing agreement with Netflix. In the first half of 2024, we’ve made significant progress against our strategic priority of generating strong free cash flow, and we’re well on our way to achieving our free cash flow guidance for the full year.”

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