Paramount (US:PARA)2025-05-08 21:32Financial Data and Key Metrics Changes - Total company revenue grew 2% year over year, excluding the Super Bowl, reaching $7.2 billion [6][22] - Direct to Consumer (D2C) revenue increased by 9% year over year to $2 billion, with subscription revenue growing 16% [23] - Adjusted OIBDA improved to $688 million, reflecting year-over-year improvements in D2C and filmed entertainment [22][24] - Free cash flow was $123 million, including $108 million in restructuring payments [22] Business Line Data and Key Metrics Changes - D2C OIBDA improved by nearly $180 million year over year, with a loss of $109 million [6][23] - Filmed Entertainment revenue was $627 million, up 4% year over year, with OIBDA of $20 million compared to a loss of $3 million in the previous year [24][25] - TV Media advertising revenue, excluding the Super Bowl, was flat year over year, with OIBDA at $922 million [24] Market Data and Key Metrics Changes - Paramount Plus ended the quarter with 79 million global subscribers, an increase of 11 million year over year [7] - Global watch time per user on Paramount Plus increased by 17% year over year, and churn improved by 130 basis points [7] - CBS's network audience grew 3% in the quarter compared to last year, with a 12% increase without the Super Bowl comparison [17] Company Strategy and Development Direction - The company is focusing on driving profitable growth through a differentiated content strategy, emphasizing fewer but bigger original series [7][10] - Paramount is prioritizing key investments while streamlining non-content expenses in response to macroeconomic uncertainties [6][28] - The company plans to achieve domestic profitability for Paramount Plus in 2025, leveraging improvements in churn and ARPU [26][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite macroeconomic uncertainties, noting strong engagement and content-driven growth [6][28] - The company anticipates that supply-demand dynamics in digital advertising will stabilize over time, leading to improved monetization [30][34] - Management highlighted the importance of maintaining strong relationships with affiliates and securing valuable content partnerships [36] Other Important Information - The company is set to premiere several new series and franchise expansions, including new installments of Yellowstone and Dexter [10][11] - Pluto TV achieved its highest consumption ever, with global viewing time up 26% year over year, although monetization has been softer than expected [12] Q&A Session Summary Question: Advertising pressure on Pluto and digital advertising - Management acknowledged the impact of increased supply in digital advertising but expressed confidence that supply-demand dynamics will balance out over time [30][33] Question: Licensing strategy for library content versus original content - Management indicated that content licensing remains a growth area, but the focus will be on using valuable IP to enhance owned and operated assets [39][40] Question: Expectations for linear declines and streaming growth - Management noted that subscriber declines in linear TV are expected to continue, while streaming growth will be driven by subscriber growth, churn improvements, and ARPU [46][48] Question: Importance of Taylor Sheridan and potential acquisitions - Management emphasized the value of the partnership with Taylor Sheridan and the current model as optimal for maximizing value without pursuing acquisitions [52][54] Question: Interest in bundling and joint ventures - Management expressed openness to exploring bundling opportunities and partnerships but emphasized a disciplined approach to ensure value creation [60][62] Question: Current linear trends and guidance for full year OIBDA and free cash flow - Management reiterated that the fundamental drivers of earnings improvement remain in place, despite macroeconomic uncertainties impacting advertising revenue [70][71]