• Total Revenue Decline: 6% decrease in Q4.
• QxH Revenue Decline: 8% decrease due to lower unit volume and average selling price.
• QVC International Revenue: Flat performance.
• Adjusted OIBDA Margin Expansion: 10 basis points for QxH and 170 basis points for QVC International.
• Cornerstone OIBDA Decline: $22 million decrease, contributing to 3/4 of the consolidated OIBDA decline.
• Gross Margin Expansion: 120 basis points year-over-year in 2024.
• Operating Expenses Reduction: 8% decrease.
• SG&A Cost Reduction: 9% decrease.
• Free Cash Flow Improvement: Over $500 million improvement from 2022 to 2024, excluding insurance proceeds.
• Net Debt: $4.6 billion as of December 31, 2024.
• Leverage Ratio: 3.1x as of December 31, 2024.
• Customer Count Decline: 9% decrease in Q4.
• Streaming Business Growth: Monthly average users up 80%, minutes watched up 27%, attributed revenue up 19%.
• Debt Reduction: $442 million reduction in gross debt.
• CapEx for 2024: $199 million.
• Projected CapEx for 2025: Approximately $230 million.

• Warning! GuruFocus has detected 4 Warning Signs with QVCGA.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• QVC International was the best-performing segment in Q4, with OIBDA increasing 12% year-on-year.
• The company successfully completed Project Athens, achieving over $500 million in run rate OIBDA improvement.
• QVC Group Inc (NASDAQ:QVCGA) expanded OIBDA margins by 220 basis points and improved free cash flow by over $500 million from 2022 to 2024.
• The company reduced gross debt by $442 million and extended its debt maturity profile.
• QVC Group Inc (NASDAQ:QVCGA) drove strong growth in its streaming businesses, with monthly average users up 80% and attributed revenue up 19%.

Negative Points

• Total revenue declined 6% in the fourth quarter, with significant pressure from linear television declines.
• QxH TV minutes viewed declined 4%, while the TV industry saw an increase in news and information programming viewership.
• Cornerstone's OIBDA declined $22 million, contributing significantly to the consolidated OIBDA decrease.
• Total customer count declined 9% in Q4, with a 17% decline in new customers.
• The company recognized a $1.5 billion noncash impairment charge related to goodwill and trade names at QxH.

Q & A Highlights

Q: In terms of the 3-year plan and as it pertains to 2025, how should we think about the cadence of that playing out over the next few years? Should we expect any revenue growth this year, do you think, or at least in the second half? And is the flat EBITDA margin -- OIBDA margin, excuse me, the goal for this year as well? A: David Rawlinson, President and CEO: 2025 will be a transition year with stronger acceleration of social and streaming revenue. We expect revenue from growing parts of the business to start overcoming declines in core US video commerce as we progress through 2025 into 2026. We aim to maintain double-digit OIBDA margins throughout the 3-year strategic period.

Q: International outperformed pretty notably. What were some of the key differences there, and is there anything you can leverage in the Americas? A: David Rawlinson, President and CEO: The biggest difference is the delayed impact of technology transitions like cord-cutting in international markets compared to the US. Our international markets are less competitively intense, and we have strong local brand presence. We plan to leverage our social shopping capabilities in international markets, which face similar growth opportunities.

Q: Could you touch on your plans for the St. Petersburg facility? If you plan to sell it, what will the proceeds be used for? A: Gregory Maffei, Executive Chairman: The St. Petersburg facility will be decommissioned this year, with content production consolidated at Studio Park. We plan to sell the facility, but the timing and use of proceeds are yet to be determined.

Q: Regarding tariffs, can you quantify your exposure to China and your ability to shift sourcing? A: Gregory Maffei, Executive Chairman: We've reduced our sourcing from China since 2018. While we don't control the total exposure, it's significant. We're working with suppliers to evaluate product pricing and sourcing from different countries.

Q: Could you provide the RCF borrowing today or pro forma for the '25 note pay down? A: Ben Oren, Executive Vice President and Treasurer: We haven't shared specifics, but we used cash to pay down the revolver and will continue to do so. We'll provide more details in our Q1 results.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.