AMC Networks reported its third-quarter 2022 earnings Friday, revealing it hit 11.1 million paid streaming subscribers by the end of Q3, a quarter that also saw its U.S. ad sales drop 10%.
That new figure is up 44% from the same July-September period last year, and a decent bump from the 10.8 million total customers AMC Networks reported it had at the end of Q2 across all of its targeted streamers: AMC+, Acorn TV, Shudder, Sundance Now, ALLBLK and HIDIVE, newly acquired with the purchase of anime content distributor Sentai. Those digital offerings are in addition to the company’s linear channels AMC, BBC America (a joint venture with BBC Studios), IFC, SundanceTV, WE tv and IFC Films.
According to AMC Networks’ previously given guidance, the company anticipates getting halfway to its larger goal of having 20-25 million streaming subs in 2025 by the end of this year.
Looking at domestic operations, revenue was down 14%. While U.S. ad sales were down 10% to $180 million in Q3, and content licensing revenue fell 63% from the same quarter last year, subscription revenue grew 8% and streaming sales jumped 41%.
In the “International and Other” segment — which includes AMC Networks International (its international programming business) and 25/7 Media (its production services business) — revenue fell 24%. Distribution and “other” revenues were down 22%, while ad sales dropped 31%.
Wall Street forecast earnings per share (EPS) of $1.77 on $786.78 million in revenue, according to analyst consensus data provided by Refinitiv. On Friday, AMC Networks reported adjusted EPS of $2.09 on $681 million in revenue.
The company attributes its lower-than-predicted net revenue figure, which is down 16% from Q3 of 2021, to the timing of content licensing deals, lower affiliate and ad sales during the quarter and international currency valuation, but partially offset by 41% streaming revenue growth.
AMC Networks’ operating income fell 20% year over year to $151 million. With some favorable adjustments, that rises to $194 million, which is still down 14% from the comparable adjusted figure last year.
Free cash flow is at $4 million with AMC Networks’ net cash operating at $19 million.
“Our strong content engagement is driving positive momentum throughout 2022,” AMC Networks CEO Christina Spade, who was promoted to the role from CFO in August when interim CEO Matt Blank exited, said in a prepared statement accompanying the financials. “Our focus to transform to a consumer-focused multi-platform premium content company is taking hold with strong digital distribution growth. We have 11.1 million paid subscribers as of the end of the third quarter, representing 44% growth from the prior year and streaming revenue growth of 41%. Our ability to break through the competition with our highly engaging content, as we further reconstitute our revenue mix, positions us well for long-term success and value creation.”
AMC Networks stock closed Thursday at $20.84 per share. The regular U.S. stock markets will reopen at 9:30 a.m. ET.
Spade and other AMC Networks executives will host a conference call at 8:30 a.m. ET to discuss the quarter in greater detail.
