Paramount Global ((PARA)) has held its Q1 earnings call. Read on for the main highlights of the call.
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In the recent earnings call, Paramount Global presented a mixed sentiment with notable achievements in subscriber growth and film entertainment success, counterbalanced by challenges in digital advertising and TV media affiliate revenue. The company showcased a strong performance in certain areas, yet acknowledged the potential impacts of macroeconomic uncertainties.
Paramount+ Subscriber Growth
Paramount+ reported a significant milestone, ending the quarter with 79 million global subscribers, marking an 11% increase year-over-year. The platform added 1.5 million new subscribers during the quarter, with global watch time per user increasing by 17% year-over-year. Additionally, churn improved by 130 basis points, highlighting the platform’s growing appeal and retention.
Film Entertainment Success
The film segment of Paramount Global saw remarkable success, with “Sonic the Hedgehog 3” achieving nearly $500 million in box office sales, setting a new franchise record. “Gladiator 2” also made history by becoming the number one movie in Paramount+ history, underscoring the company’s strength in delivering blockbuster hits.
Strong Performance in TV Media
The CBS network experienced a positive quarter, with its audience growing by 3% compared to the previous year, bolstered by events like the Super Bowl. Excluding sports, the network’s audience grew by 12%, and CBS is on track to win a record-setting 17 consecutive seasons as the most-watched broadcast network.
Improved D2C OIBDA
Paramount Global reported an improvement in Direct-to-Consumer (D2C) OIBDA, which increased by $177 million, reducing the loss to $109 million. This improvement was driven by healthy subscription revenue growth and effective expense management, showcasing the company’s strategic focus on enhancing profitability.
Digital Advertising Revenue Decline
Despite the successes, Paramount Global faced a 9% decline in D2C advertising revenue, influenced by an 800-basis point headwind from the previous year’s Super Bowl comparison. Pluto TV’s monetization was softer than anticipated due to an influx of supply, highlighting challenges in the digital advertising space.
TV Media Affiliate Revenue Decline
The company reported an 8.6% decline in TV media affiliate revenue, primarily attributed to subscriber declines and the impact of recent renewals. This decline poses a challenge as the company navigates changes in the media landscape.
Potential Impact of Macroeconomic Uncertainty
Paramount Global acknowledged the potential impact of macroeconomic uncertainty, particularly in advertising, which could affect results later in the year. The company is focusing on cost efficiencies to mitigate these challenges and maintain financial stability.
Forward-Looking Guidance
Looking ahead, Paramount Global provided an optimistic outlook for the fiscal year, with total company revenue increasing by 2% year-over-year, excluding the Super Bowl. The company plans to continue focusing on key investments while streamlining non-content expenses to navigate the dynamic macro environment. Paramount+ is expected to maintain its growth trajectory, supported by its differentiated content strategy.
In summary, Paramount Global’s earnings call reflected a balanced sentiment with significant achievements in subscriber growth and film success, tempered by challenges in advertising and affiliate revenues. The company’s strategic focus on enhancing profitability and navigating macroeconomic uncertainties positions it for continued growth in the evolving media landscape.