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AMC Networks Sees 23% Drop In U.S. Advertising Revenue; Adds Streaming Subs; Stock Takes A Hit

AMC Network posted a 23% drop in advertising for the fourth quarter as total revenue fell 30% to $679 million. The stock is down over 8% in pre-market trade after the numbers.

The company saw streaming revenue up 4% to $145 million on a stronger subscriber base and a 3% increase in streaming subscribers from the previous quarter — to 11.4 million.

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AMC said the dip in ad revenues, to $158 million, was due to anticipated linear ratings declines, a challenging ad market and fewer original programming episodes within the quarter — partly offset by digital and advanced advertising revenue growth.

Total operating losses narrowed to $11 million. Free cash flow of $66 million was down sharply from $134 million in the 2022 fourth quarter. The domestic business recorded a $42 million impairment charge for the BBCA joint venture.

Domestic distribution and other revenues decreased 35% to $423 million.

Content licensing revenues fell 68% to $96 million due to the timing and availability of deliveries in the period. The prior year period included deliveries of Silo, an AMC Studios produced series for a third party, and the early delivery of certain episodes of The Walking Dead and Fear the Walking Dead. Revenues related to deliveries of Silo in the prior year period were $126 million.

Subscription revenues were down 8% to $327 million due to declines in the linear subscriber universe, partially offset by streaming revenue growth.

Affiliate revenues declined 16% due to basic subscriber declines including the 4% revenue impact of a strategic non-renewal that occurred at the end of 2022.

“In the fourth quarter and across 2023, we continued to see success in the areas that will drive this company forward – programming, partnerships and profitability. I’m encouraged that this year we were able to grow streaming revenue and strengthen our subscriber base, expand our consolidated AOI margin to 25%, and meaningfully grow our free cash flow,” said CEO Kristen Dolan.

“Nearly a year since joining AMC Networks as CEO, I am proud of the progress we have made in a fast-changing environment, and the new and innovative ways we are engaging with viewers and our commercial and creative partners.”

She’ll be on a call with analysts at 8:30 ET

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