EARNINGS PRESS RELEASE | April 29, 2024
PARAMOUNT REPORTS Q1 2024 EARNINGS RESULTS
- Paramount+ Increased Revenue 51% Year-Over-Year and Reached More Than 71 Million Global Subscribers
- Direct-To-ConsumerAdjusted OIBDA Improved Year-Over-Year for the 4th Consecutive Quarter
- Total Advertising Revenue Rose 17%; Total Company Revenue Increased 6%
- Generated $260 Million of Net Operating Cash Flow and $209 Million of Free Cash Flow in Q1
STATEMENT FROM NAVEEN CHOPRA, EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER
The team delivered another quarter of strong operational and financial performance - including significant growth in total company earnings and free cash flow - despite the dynamic environment we continue to operate in. It was a record-setting quarter for Paramount+ in engagement and revenue, and in the DTC segment as we continued to substantially narrow streaming losses. And CBS dominated with its powerful combination of sports and the return of a delayed fall slate that launched to massive audiences. As we look ahead, we remain focused on execution and transforming our cost base to best position Paramount for the future.
$ IN MILLIONS, EXCEPT PER SHARE AMOUNTS
GAAP
Three Months Ended March 31
2024 2023 B/(W)%
Revenue | $ | 7,685 | $ | 7,265 | 6 % | |
▪ | TV Media | 5,231 | 5,193 | 1 % | ||
▪ | Direct-to-Consumer | 1,879 | 1,510 | 24 % | ||
▪ | Filmed Entertainment | 605 | 588 | 3 % | ||
▪ | Eliminations | (30) | (26) | (15)% | ||
Operating loss | $ | (417) | $ | (1,226) | 66 % | |
Diluted EPS from continuing operations attributable to Paramount | $ | (.88) | $ | (1.81) | 51 % | |
Non-GAAP† | ||||||
Adjusted OIBDA | $ | 987 | $ | 548 | 80 % | |
Adjusted diluted EPS from continuing operations attributable to Paramount | $ | .62 | $ | .09 | 589 % |
† Non-GAAP measures are detailed in the Supplemental Disclosures at the end of this release.
*Simon & Schuster, which was sold in October 2023, has been presented as a discontinued operation in the companyʼs consolidated financial statements. B/(W) - Better/(Worse)
Q1 2024 EARNINGS - SEGMENTS
DIRECT-TO-CONSUMER
OVERVIEW
DTC Adjusted OIBDA improved year-over-year driven by a continued focus on engagement, revenue and operating leverage.
Q1 FINANCIALS
- Revenue increased 24% year-over-year.
- Subscription revenue grew 22%, driven by subscriber growth and pricing increases for Paramount+.
- Advertising revenue rose 31%, driven by growth from Pluto TV and Paramount+, including the benefit of Super Bowl LVIII.
- Paramount+ revenue grew 51%, reflecting subscriber growth and ARPU expansion.
- Paramount+ subscribers reached more than 71 million, with 3.7 million net additions in the quarter.
- Paramount+ global ARPU expanded 26% year-over-year.
- Adjusted OIBDA increased 44% year-over-year, led by improvement in Paramount+ domestic profitability.
$ IN MILLIONS | Three Months Ended March 31 | |||||||
2024 | 2023 | $ B/(W) % | ||||||
Revenue | $ | 1,879 | $ | 1,510 | $ | 369 | 24 % | |
▪ | Advertising | 520 | 398 | 122 | 31 | |||
▪ | Subscription | 1,359 | 1,112 | 247 | 22 | |||
Expenses | 2,165 | 2,021 | (144) | (7) | ||||
Adjusted OIBDA | $ | (286) | $ | (511) | $ | 225 | 44 % |
A Gentleman in Moscow | Halo |
Source: Antenna
*We calculate average revenue per subscriber ("ARPU") as total Paramount+ revenues during the applicable period divided by the average of Paramount+ | 2 |
subscribers at the beginning and end of the period, further divided by the number of months in the period. |
Q1 2024 EARNINGS - SEGMENTS
TV MEDIA
OVERVIEW
TV Media revenue and earnings in the quarter benefited from the most watched Super Bowl of all time. Notably, CBS is poised to claim the #1 spot in broadcast for the 16th straight season and is home to the top three new series on broadcast in Tracker, Elsbeth and NCIS: Sydney.
Q1 FINANCIALS
- Revenue grew 1% to $5.2 billion.
- Advertising revenue increased 14%, reflecting a 23-percentage point benefit from CBS' broadcast of Super Bowl LVIII.
- Affiliate and subscription revenue decreased 3%, driven by subscriber declines, partially offset by pricing increases.
- Licensing and other revenue decreased 25%, including the impact from 2023 labor strikes on content available for licensing.
- Adjusted OIBDA was $1.4 billion - an 11% increase - driven by the benefit from the broadcast of Super Bowl LVIII.
$ IN MILLIONS | Three Months Ended March 31 | |||||||
2024 | 2023 | $ B/(W) % | ||||||
Revenue | $ | 5,231 | $ | 5,193 | $ | 38 | 1 % | |
▪ | Advertising | 2,582 | 2,256 | 326 | 14 | |||
▪ | Affiliate and subscription | 1,998 | 2,067 | (69) | (3) | |||
▪ | Licensing and other | 651 | 870 | (219) | (25) | |||
Expenses | 3,786 | 3,887 | 101 | 3 | ||||
Adjusted OIBDA | $ | 1,445 | $ | 1,306 | $ | 139 | 11 % |
Super Bowl LVIII | NCIS: Sydney |
Tracker | Elsbeth |
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Q1 2024 EARNINGS - SEGMENTS
FILMED ENTERTAINMENT
OVERVIEW
Filmed Entertainment generated significant revenue in the quarter with Mean Girls and Bob Marley: One Love each debuting #1 at the domestic box office and together generating over $275 million at the global box office to date.
Q1 FINANCIALS
- Revenue increased 3%.
- Theatrical revenues grew 20%, driven by the strong performances of Mean Girls and Bob Marley: One Love, and Miramax's release of The Beekeeper.
- Licensing and other revenue decreased 1%.
- Adjusted OIBDA improved $96 million, reflecting the timing and mix of theatrical releases in each year.
$ IN MILLIONS
Three Months Ended March 31
2024 | 2023 | $ B/(W) % |
Revenue | $ | 605 | $ | 588 | $ | 17 | 3 % | |
▪ | Advertising | 1 | 5 | (4) | (80) | |||
▪ | Theatrical | 153 | 127 | 26 | 20 | |||
▪ | Licensing and other | 451 | 456 | (5) | (1) | |||
Expenses | 608 | 687 | 79 | 11 | ||||
Adjusted OIBDA | $ | (3) | $ | (99) | $ | 96 | 97 % | |
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ABOUT PARAMOUNT
Paramount (NASDAQ: PARA; PARAA) is a leading global media, streaming and entertainment company that creates premium content and experiences for audiences worldwide. Driven by iconic consumer brands, its portfolio includes CBS, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+ and Pluto TV. The company holds one of the industry's most extensive libraries of TV and film titles. In addition to offering innovative streaming services and digital video products, Paramount provides powerful capabilities in production, distribution and advertising solutions.
For more information about Paramount, please visit www.paramount.com and follow @ParamountCo on social platforms.
PARA-IR
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This communication contains both historical and forward-looking statements, including statements related to our future results, performance and achievements. All statements that are not statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements reflect our current expectations concerning future results and events; generally can be identified by the use of statements that include phrases such as "believe," "expect," "anticipate," "intend," "plan," "foresee," "likely," "will," "may," "could," "estimate" or other similar words or phrases; and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause our actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: risks related to our streaming business; the adverse impact on our advertising revenues as a result of advertising market conditions, changes in consumer viewership and deficiencies in audience measurement; risks related to operating in highly competitive and dynamic industries, including cost increases; the unpredictable nature of consumer behavior, as well as evolving technologies and distribution models; risks related to our ongoing changes in business strategy, including investments in new businesses, products, services, technologies and other strategic activities; the potential for loss of carriage or other reduction in or the impact of negotiations for the distribution of our content; damage to our reputation or brands; losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and content; liabilities related to discontinued operations and former businesses; risks related to environmental, social and governance (ESG) matters; evolving business continuity, cybersecurity, privacy and data protection and similar risks; content infringement; domestic and global political, economic and regulatory factors affecting our businesses generally; disruptions to our operations as a result of labor disputes; the inability to hire or retain key employees or secure creative talent; volatility in the prices of our common stock; potential conflicts of interest arising from our ownership structure with a controlling stockholder; and other factors described in our news releases and filings with the Securities and Exchange Commission, including but not limited to our most recent Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. There may be additional risks, uncertainties and factors that we do not currently view as material or that are not necessarily known. The forward-looking statements included in this communication are made only as of the date of this communication, and we do not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.
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Q1 2024 EARNINGS - FINANCIAL STATEMENTS
PARAMOUNT GLOBAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in millions, except per share amounts)
Three Months Ended March 31
2024 | 2023 | |||
Revenues | $ | 7,685 | $ | 7,265 |
Costs and expenses: | ||||
Operating | 5,036 | 4,964 | ||
Programming charges | 1,118 | 1,674 | ||
Selling, general and administrative | 1,662 | 1,753 | ||
Depreciation and amortization | 100 | 100 | ||
Restructuring charges | 186 | - | ||
Total costs and expenses | 8,102 | 8,491 | ||
Operating loss | (417) | (1,226) | ||
Interest expense | (221) | (226) | ||
Interest income | 45 | 35 | ||
Loss from investment | (4) | - | ||
Other items, net | (38) | (46) | ||
Loss from continuing operations before income taxes and equity in loss of | ||||
investee companies | (635) | (1,463) | ||
Benefit from income taxes | 172 | 381 | ||
Equity in loss of investee companies, net of tax | (90) | (75) | ||
Net loss from continuing operations | (553) | (1,157) | ||
Net earnings from discontinued operations, net of tax | 9 | 45 | ||
Net loss (Paramount and noncontrolling interests) | (544) | (1,112) | ||
Net earnings attributable to noncontrolling interests | (10) | (6) | ||
Net loss attributable to Paramount | $ | (554) | $ | (1,118) |
Amounts attributable to Paramount: | ||||
Net loss from continuing operations | $ | (563) | $ | (1,163) |
Net earnings from discontinued operations, net of tax | 9 | 45 | ||
Net loss attributable to Paramount | $ | (554) | $ | (1,118) |
Basic net earnings (loss) per common share attributable to Paramount: | ||||
Net loss from continuing operations | $ | (.88) | $ | (1.81) |
Net earnings from discontinued operations | $ | .01 | $ | .07 |
Net loss | $ | (.87) | $ | (1.74) |
Diluted net earnings (loss) per common share attributable to Paramount: (a) | ||||
Net loss from continuing operations | $ | (.88) | $ | (1.81) |
Net earnings from discontinued operations | $ | .01 | $ | .07 |
Net loss | $ | (.87) | $ | (1.74) |
Weighted average number of common shares outstanding: | ||||
Basic | 654 | 651 | ||
Diluted | 654 | 651 |
- Diluted net loss per common share ("EPS") for the three months ended March 31, 2024 and 2023, excludes the effect of the assumed conversion of our 5.75% Series A Mandatory Convertible Preferred Stock to shares of common stock since it would have been antidilutive. As a result, in the calculations of diluted EPS the weighted average number of diluted shares outstanding does not include the assumed issuance of shares upon conversion of preferred stock, and preferred stock dividends recorded during each of the three months ended March 31, 2024 and 2023 of $14 million are deducted from net loss from continuing operations and net loss.
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Q1 2024 EARNINGS - FINANCIAL STATEMENTS
PARAMOUNT GLOBAL AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except per share amounts)
At | At | |||
March 31, 2024 | December 31, 2023 | |||
ASSETS | ||||
Current Assets: | ||||
Cash and cash equivalents | $ | 2,384 | $ | 2,460 |
Receivables, net | 7,096 | 7,115 | ||
Programming and other inventory | 892 | 1,414 | ||
Prepaid expenses and other current assets | 1,511 | 1,677 | ||
Current assets of discontinued operations | 49 | 37 | ||
Total current assets | 11,932 | 12,703 | ||
Property and equipment, net | 1,612 | 1,666 | ||
Programming and other inventory | 13,420 | 13,851 | ||
Goodwill | 16,500 | 16,516 | ||
Intangible assets, net | 2,580 | 2,589 | ||
Operating lease assets | 1,117 | 1,183 | ||
Deferred income tax assets, net | 1,244 | 1,242 | ||
Other assets | 3,622 | 3,793 | ||
Total Assets | $ | 52,027 | $ | 53,543 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Liabilities: | ||||
Accounts payable | $ | 787 | $ | 1,100 |
Accrued expenses | 1,728 | 2,104 | ||
Participants' share and royalties payable | 2,625 | 2,702 | ||
Accrued programming and production costs | 1,994 | 1,842 | ||
Deferred revenues | 671 | 746 | ||
Debt | 1 | 1 | ||
Other current liabilities | 1,438 | 1,161 | ||
Total current liabilities | 9,244 | 9,656 | ||
Long-term debt | 14,607 | 14,601 | ||
Participants' share and royalties payable | 1,337 | 1,394 | ||
Pension and postretirement benefit obligations | 1,332 | 1,337 | ||
Deferred income tax liabilities, net | 273 | 503 | ||
Operating lease liabilities | 1,199 | 1,256 | ||
Program rights obligations | 204 | 204 | ||
Other liabilities | 1,494 | 1,542 | ||
Commitments and contingencies | ||||
Paramount stockholders' equity: | ||||
5.75% Series A Mandatory Convertible Preferred Stock, par value $.001 per share; | - | - | ||
25 shares authorized; 10 (2024 and 2023) shares issued | ||||
Class A Common Stock, par value $.001 per share; 55 shares authorized; | - | - | ||
41 (2024 and 2023) shares issued | ||||
Class B Common Stock, par value $.001 per share; 5,000 shares authorized; | 1 | 1 | ||
1,117 (2024) and 1,115 (2023) shares issued | ||||
Additional paid-in capital | 33,240 | 33,210 | ||
Treasury stock, at cost; 503 (2024 and 2023) shares of Class B Common Stock | (22,958) | (22,958) | ||
Retained earnings | 13,226 | 13,829 | ||
Accumulated other comprehensive loss | (1,615) | (1,556) | ||
Total Paramount stockholders' equity | 21,894 | 22,526 | ||
Noncontrolling interests | 443 | 524 | ||
Total Equity | 22,337 | 23,050 | ||
Total Liabilities and Equity | $ | 52,027 | $ | 53,543 |
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Q1 2024 EARNINGS - FINANCIAL STATEMENTS
PARAMOUNT GLOBAL AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
Three Months Ended | ||||
March 31 | ||||
2024 | 2023 | |||
Operating Activities: | $ | (544) | $ | (1,112) |
Net loss (Paramount and noncontrolling interests) | ||||
Less: Net earnings from discontinued operations, net of tax | 9 | 45 | ||
Net loss from continuing operations | (553) | (1,157) | ||
Adjustments to reconcile net loss from continuing operations to net cash flow | ||||
provided by (used for) operating activities from continuing operations: | ||||
Depreciation and amortization | 100 | 100 | ||
Programming charges | 1,118 | 1,674 | ||
Deferred tax benefit | (231) | (436) | ||
Stock-based compensation | 47 | 39 | ||
Loss from investment | 4 | - | ||
Equity in loss of investee companies, net of tax | 90 | 75 | ||
Change in assets and liabilities | (315) | (778) | ||
Net cash flow provided by (used for) operating activities from continuing operations | 260 | (483) | ||
Net cash flow provided by operating activities from discontinued operations | - | 105 | ||
Net cash flow provided by (used for) operating activities | 260 | (378) | ||
Investing Activities: | ||||
Investments | (88) | (43) | ||
Capital expenditures | (51) | (71) | ||
Other investing activities | 11 | 25 | ||
Net cash flow used for investing activities | (128) | (89) | ||
Financing Activities: | - | 35 | ||
Proceeds from issuance of debt | ||||
Repayment of debt | - | (32) | ||
Dividends paid on preferred stock | (14) | (14) | ||
Dividends paid on common stock | (35) | (166) | ||
Payment of payroll taxes in lieu of issuing shares for stock-based compensation | (17) | (16) | ||
Payments to noncontrolling interests | (94) | (89) | ||
Other financing activities | (27) | (30) | ||
Net cash flow used for financing activities | (187) | (312) | ||
Effect of exchange rate changes on cash and cash equivalents | (21) | 3 | ||
Net decrease in cash and cash equivalents | (76) | (776) | ||
Cash and cash equivalents at beginning of year | 2,460 | 2,885 | ||
Cash and cash equivalents at end of period | $ | 2,384 | $ | 2,109 |
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Q1 2024 EARNINGS - Supplemental Disclosures
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES
(Unaudited; in millions, except per share amounts)
Results for the three months ended March 31, 2024 and 2023 included certain items identified as affecting comparability. Adjusted operating income before depreciation and amortization ("Adjusted OIBDA"), adjusted earnings from continuing operations before income taxes, adjusted provision for income taxes, adjusted net earnings from continuing operations attributable to Paramount, adjusted diluted EPS from continuing operations, and adjusted effective income tax rate (together, the "adjusted measures") exclude the impact of these items and are measures of performance not calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP"). We use these measures to, among other things, evaluate our operating performance. These measures are among the primary measures used by management for planning and forecasting of future periods, and they are important indicators of our operational strength and business performance. In addition, we use Adjusted OIBDA to, among other things, value prospective acquisitions. We believe these measures are relevant and useful for investors because they allow investors to view performance in a manner similar to the method used by our management; provide a clearer perspective on our underlying performance; and make it easier for investors, analysts and peers to compare our operating performance to other companies in our industry and to compare our year-over-year results.
Because the adjusted measures are measures of performance not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, operating income (loss), earnings (loss) from continuing operations before income taxes, (provision for) benefit from income taxes, net earnings (loss) from continuing operations attributable to Paramount, diluted EPS from continuing operations, and effective income tax rate, as applicable, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies.
The following tables reconcile the adjusted measures to their most directly comparable financial measures in accordance with GAAP.
Three Months Ended March 31 | ||||
2024 | 2023 | |||
Operating loss (GAAP) | $ | (417) | $ | (1,226) |
Depreciation and amortization | 100 | 100 | ||
Programming charges (a) | 1,118 | 1,674 | ||
Restructuring charges (a) | 186 | - | ||
Adjusted OIBDA (Non-GAAP) | $ | 987 | $ | 548 |
(a) See notes on the following tables for additional information on items affecting comparability.
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Paramount Global published this content on 29 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2024 20:04:01 UTC.