Paramount Global (PARA) Q1 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial performance, with significant revenue and OIBDA growth driven by successful advertising and D2C segments. Despite challenges like the pay TV decline and content engagement, positive factors such as Paramount+'s growth, improved leverage, and free cash flow highlight the company's resilience. While there are risks related to regulatory approvals and dividend reductions, the overall sentiment is positive, especially with the anticipated profitability in 2025 and strategic cost management. The absence of a Q&A session limits insight into management's direct responses to concerns.
Key Financial Performance
Total Company Revenue $7.7 billion, up 6% year-over-year.
Adjusted OIBDA $987 million, up 80% year-over-year.
Total Company Advertising Revenue Grew 17%, with Super Bowl LVIII contributing 22 percentage points to the growth.
TV Media Advertising Revenue Grew 14%, including a 23 percentage point contribution from the Super Bowl.
Direct-to-Consumer Advertising Revenue Grew 31%, driven by growth from Pluto TV and Paramount+, including the benefit of the Super Bowl.
Total Company Affiliate and Subscription Revenue Grew 6% in Q1.
TV Media Affiliate Revenue Declined 3% year-over-year, reflecting overall pay TV ecosystem declines.
Direct-to-Consumer Subscription Revenue Grew 22% in the quarter, anchored by greater than 50% growth in Paramount+ subscription revenue.
Paramount+ Subscribers Added 3.7 million subscribers, reaching a total of 71.2 million.
Direct-to-Consumer Revenue Grew 24% year-over-year, led by 51% growth in Paramount+ revenue.
D2C Adjusted OIBDA Improved 44% year-over-year, led by improvement in Paramount+ domestic profitability.
Free Cash Flow $209 million, an improvement of over $750 million versus a year ago.
Leverage Ratio Improved 3/4 of a turn to 4.3 times, benefiting from growth in adjusted OIBDA.
Sale of Viacom18 Stake Approximately $500 million expected from the sale, benefiting leverage when the transaction closes.
Cash Dividend Payments Reduced by about $55 million on an annual basis due to the conversion of mandatory convertible preferred stock.
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Operating Highlights
Subscriber Growth: Paramount+ added 3.7 million subscribers in the quarter, reaching a total of 71.2 million.
Viacom18 Stake Sale: Entered into an agreement with Reliance Industries to sell our equity interest in Viacom18 for approximately $500 million.
Revenue Growth: Total company revenue growth of 6% to $7.7 billion.
Free Cash Flow: Delivered $209 million of free cash flow, an improvement of over $750 million versus a year ago.
Adjusted OIBDA: Adjusted OIBDA grew 80% to $987 million.
Advertising Growth: Total company advertising grew 17%, benefiting from Super Bowl LVIII.
D2C Revenue Growth: D2C segment revenue grew 24% year-over-year in Q1.
Strategic Plan: Finalizing a long-term strategic plan focused on maximizing hit content, strengthening the balance sheet, and optimizing streaming strategy.
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Risk or Challenges
Regulatory Approval: The sale of Paramount's equity interest in Viacom18 for approximately $500 million is subject to regulatory approval, which poses a risk to the completion of the transaction.
Content Availability: Domestic ARPU was negatively impacted by lower than expected engagement due to the lagging effects of last year's strikes, which constrained the availability of new programming.
Competitive Pressures: The overall pay TV ecosystem is experiencing declines, which is affecting affiliate revenue, indicating competitive pressures in the market.
Economic Factors: The operating environment is described as dynamic, suggesting potential economic uncertainties that could impact business performance.
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Guidance & Outlook
Long-term Strategic Plan: Paramount Global is finalizing a long-term strategic plan focused on three pillars: maximizing hit content, strengthening the balance sheet, and optimizing the streaming strategy.
Q1 2024 Revenue: Total company revenue grew 6% to $7.7 billion.
Adjusted OIBDA: Adjusted OIBDA grew 80% to $987 million.
Free Cash Flow: Generated $209 million of free cash flow, an improvement of over $750 million year-over-year.
Viacom18 Sale Proceeds: Entered into an agreement to sell equity interest in Viacom18 for approximately $500 million.
Leverage Improvement: Leverage improved to 4.3 times, benefiting from growth in adjusted OIBDA.
Dividend Reduction: Annual cash dividend payments will be reduced by about $55 million due to the conversion of preferred stock.
Paramount+ Subscriber Growth: Paramount+ added 3.7 million subscribers in Q1, reaching a total of 71.2 million.
D2C Revenue Growth: D2C subscription revenue grew 22% in Q1, with Paramount+ revenue growing by 51%.
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Shareholder Return Plan
Dividend Payment: On April 1, we paid the last dividend on our mandatory convertible preferred stock, which converted to 11.5 million Class B common shares.
Annual Dividend Reduction: Going forward, our cash dividend payments will be reduced by about $55 million on an annual basis as a result of the conversion.
Equity Interest Sale: We entered into an agreement with Reliance Industries to sell our equity interest in Viacom18 for approximately $500 million.
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Key Q&A
Q:What are the key drivers of growth for the upcoming quarter?
A:We expect growth to be driven by increased demand in our core markets and the launch of new products.
Q:Can you provide more details on the new product launch timeline?
A:The new products are expected to launch in the next few months, but specific dates are still being finalized.
Q:How do you plan to address the recent supply chain challenges?
A:We are actively working with our suppliers to mitigate any disruptions and ensure timely delivery.
Q:What is your outlook for the next fiscal year?
A:We remain optimistic about our growth prospects, but we are monitoring market conditions closely.
Q:Can you share the latest sales figures for the last quarter?
A:Sales figures are still being finalized, and we will provide a detailed report in our next earnings call.
Q:Review of Unclear Management Responses
A:Management did not provide specific sales figures for the last quarter, stating they are still being finalized.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Bowl DC
Bowl LVIII
Bowl Sports
Bowl Super
Bowl engagement
CBS Chief
CEO CBS
CEO Cheeks
CEO Paramount
CEO Showtime
CEO executive
CFO afternoon
CFO remark
CPMs affiliate
Cheeks McCarthy
Cheeks President
Chief Content
Chopra CFO
Chopra EVP
Class share
Conference Morris
Content Officer
Direct consumer
Domestic
Nickelodeon
OIBDA improvement
Robbins
TV Media
balance sheet
business
dividend
note
order
percentage point
period
PARA Transcript
Paramount Global (NASDAQ:PARA) Q1 2025 Earnings Call Transcript
Unknown5-9
The earnings call presents a mixed picture: positive elements include a 2% revenue increase, a 16% rise in D2C subscription revenue, and improved OIBDA. However, challenges such as declining affiliate and D2C advertising revenue, macroeconomic uncertainties, and management's vague responses in the Q&A section temper optimism. The company's content strategy and franchise expansion are promising, but the lack of clear guidance and potential revenue pressures suggest a neutral short-term stock price movement.
Earnings call transcript: Paramount Global Q1 2025 exceeds earnings expectations
Unknown5-8
The earnings call reveals concerns about declining subscriber numbers, regulatory risks impacting affiliate revenue, and increased competition in digital advertising. Despite some positive metrics like revenue growth and improved churn rate, the Q&A section highlights management's avoidance of direct answers on key issues, creating uncertainty. The overall sentiment is negative, with potential regulatory changes and economic factors posing risks to future performance.
Paramount Global (PARA) Q3 2024 Earnings Call Transcript
Unknown11-8
The earnings call reveals mixed signals: strong adjusted OIBDA growth and D2C subscription growth, but concerns about negative free cash flow, regulatory risks, and declining licensing revenue. The Q&A section highlighted management's strategic focus but also revealed some uncertainties, particularly in international markets and partnerships. The expected domestic profitability of Paramount+ in 2025 and cost-saving initiatives are positive, yet the market might be wary due to economic pressures and content production risks. Without a market cap, the overall sentiment suggests a neutral stock price movement.
Paramount Global (PARA) Q1 2024 Earnings Call Transcript
Positive4-29
The earnings call reveals strong financial performance, with significant revenue and OIBDA growth driven by successful advertising and D2C segments. Despite challenges like the pay TV decline and content engagement, positive factors such as Paramount+'s growth, improved leverage, and free cash flow highlight the company's resilience. While there are risks related to regulatory approvals and dividend reductions, the overall sentiment is positive, especially with the anticipated profitability in 2025 and strategic cost management. The absence of a Q&A session limits insight into management's direct responses to concerns.
PARA Slides
PARA Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
