Participants

Shane Kleinstein; Investor Relations; Qurate Retail Inc

David Rawlinson; President, Chief Executive Officer, Director; Qurate Retail Inc

Bill Wafford; Chief Administrative Officer and Chief Financial Officer; Qurate Retail Inc

Gregory Maffei; Executive Chairman of the Board; Qurate Retail Inc

Ben Oren; Executive Vice President and Treasurer; Qurate Retail Inc

Jenna Giannelli; Analyst; Morgan Stanley

Robert Rigby; Analyst; BofA Global Research

Karru Martinson; Analyst; Jefferies

Hale Holden; Analyst; Barclays

Presentation

Operator

Welcome to the QVC Group 2024 Q4 earnings call. (Operator Instructions) As a reminder, this conference will be recorded February 27. I would now like to turn the call over to Shane Kleinstein, Senior Vice President, Investor Relations. Please go ahead.

Shane Kleinstein

Thank you, and good afternoon. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Form 10-K filed by our company and QVC with the SEC.
These forward-looking statements speak only as of the date of this call, and QVC Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in QVC Group's expectations with regard thereto or any change in events, conditions or circumstances upon any such statement is based. Please note that we have published slides to accompany the earnings release.
On today's call, we will discuss certain non-GAAP financial measures, including adjusted OIBDA, adjusted OIBDA margin, free cash flow and constant currency. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary notes and Schedules 1 and 2, can be found in the earnings press release issued or our earnings presentation, which are available on our website.
Today speaking on the call, we have QVC Group President and CEO, David Rawlinson; Group CFO, Billy Wafford; and QVC Group Executive Chairman, Greg Maffei. Now I'll hand the call over to David.

David Rawlinson

Thank you, Shane, and good afternoon to all. Thank you for joining us and for your interest in the QVC Group. I'll begin today with the recap of fourth quarter results then speak to the conclusion of 2024 and Project Athens before going deeper into our growth strategy announced at Investor Day.
Total revenue declined 6% in the fourth quarter. Our top line performance saw continued volume pressure, similar to the third quarter, driven by linear television declines, a cautious consumer environment and meaningful distractions in our TV viewership due to headline grabbing events like hurricanes and the election. These events affect our sales far more than other retailers as a video-driven commerce platform with the need for people to tune into our programming in order to drive sales.
QxH TV minutes viewed declined 4%, while across the TV industry, the number of hours watched for news and information programming increased 11%. QVC International had flat revenue and cornerstone and continued to experience sales pressure due to a soft housing sector in the fourth quarter.
Volume pressures led to sales deleverage in Q4. We continue to actively manage costs which partially offset some of the sales leverage in the quarter, with total company operating expenses and SG&A declining 9% and 6%, respectively. At our core businesses, QxH and QVC International, we expanded adjusted OIBDA margin 10 and 170 basis points, respectively. QVC International was our best-performing business in Q4 with OIBDA increasing 12% year-on-year.
Cornerstone had a disproportionate impact to the QVC Group's consolidated OIBDA in the fourth quarter. While there was only 10% of total company revenue, Cornerstone's OIBDA declined $22 million, where consolidated company total OIBDA decreased $28 million or 8% year-over-year. Cornerstone made up 3/4 of the decline. Total company OIBDA margin contracted slightly, which included approximately 85 basis points of sales deleverage.
Looking at the full year, we achieved several milestones. Importantly, we successfully completed Project Athens, through 2024, we generated more than $500 million of run rate OIBDA improvement compared to the objective of $300 million to $600 million. We expanded OIBDA margins 220 basis points and improved free cash flow, excluding insurance proceeds over $500 million from 2022 to 2024. We took action to manage our costs while facing challenges from revenue headwinds in 2024, resulting in the second consecutive year of adjusted OIBDA growth.
On a reported basis, including Zulily, we expanded gross margins 120 basis points year-over-year in 2024 due to product margin gains. We also reduced operating expenses by 8% and SG&A cost by 9% from lower commissions. We also reduced outside services and personnel costs. QVC International had a solid year, delivering stable revenue and adjusted OIBDA margin up 70 basis points.
We drove strong growth in our streaming businesses with monthly average users up 80%, minutes watched increasing 27% and attributed revenue up 19%. We shifted our IT model to a managed services approach to improve productivity, increase innovation and generate savings. We improved the balance sheet and reduced gross debt $442 million while also extending our maturity profile. And importantly, in mid-November, we introduced our social shopping strategy, which I'll discuss in more detail momentarily.
Looking at industry data, we were in line with the discretionary market in the first half of 2024. Our revenue performance decelerated, particularly at QxH in the second half of 2024 compared with the first half, in part, because of both anticipated and unanticipated headline-grabbing events, leading to meaningful distractions in our TV viewership. Also, Cornerstone had continued challenges in the business, which led to an outsized margin impact on our consolidated results in 2024. Ultimately, these top line pressures were more than anticipated and led to approximately 80 basis points of sales deleverage through the P&L for the full year and on a 2-year basis.
Looking at QxH customers. On a quarterly basis, Total customer count declined 9% in Q4, reflecting a 7% decrease in existing and reactivated customers as well as a 17% decline in new customers. We reduced performance marketing spend and promotions, particularly for gaming products.
As you can see on Slide 8 in our presentation, on a 12-month basis, count was down 3% for the 12 months ending December 31 compared to the 12 months ended September 30. This reflects the challenges I mentioned earlier, declining linear TV, changes in consumer media consumption and the disruption of our TV viewership from events in the second half of the year. While count decline, QxH existing customers continue to purchase at healthy levels, spending on average $1,650 and purchasing 32 items in 2024.
At QVC, our best customers, who buy 20 or more items annually, also continue to purchase at very attractive levels. In 2024, they spent $3,980 on average and bought 76 items. From a QxH merchandise perspective, we were pleased to expand product margins more than 100 basis points in 2024 despite the volume pressures. These gains were driven by Project Athens initiatives, including strategic pricing and product mix actions as well as steps to improve product COGS.
Before I review our go-forward strategy, let me reflect on the company during my tenure as CEO thus far. The business has been affected by a number of factors, the tragic fire at our Rocky Mount, North Carolina fulfillment center cost QxH an estimated 1 million customers and $500 million in revenue. Cord-cutting has reduced the number of linear homes we reach. Comparing 2024 to 2018, QVC and HSN's main channel reached 44% and 47% fewer homes, respectively.
Through Project Athens, we took action to improve the cost structure, operating discipline and cash flow capabilities of the company. We enhanced the portfolio with the divestiture of Zulily while we also successfully improved the profitability under Athens. We did not, however, achieve stable revenue, and that is where we are increasing the focus going forward. In mid-November, we introduced a new strategy aimed at returning the company to growth over the next 3 years. We are moving faster to become a live social shopping company with a focus on balancing top line growth with margin and cash flow discipline.
Last Friday, we commenced our rebranding, changing our corporate name to QVC Group, Inc., bringing the household name we are known for back into our everyday language. On Monday, our equity securities began trading under their new ticker symbols. To succeed in social commerce, you not only need a social network and personalities, you also need the ability to create content, source merchandise, distribute product and provide an end-to-end customer experience at scale. QVC Group is well positioned.
Globally, we produce about 120 hours of live content daily which is over 40,000 hours of content annually. We have expertise around brand and merchandising with about 400,000 products in our ecosystem. QVC US and HSN present about 1,200 products per week on our live programming. And we have an established supply chain to distribute these large quantities of products. Across our businesses, we shipped more than 200 million units from 15 fulfillment centers to 13.5 million customers in 2024.
Social commerce is an attractive market and a natural extension of our core capabilities. The social commerce market in the US is projected to nearly double in the next 5 years based on research estimates. Behaviorally, there are a lot of core similarities between the QVC model and the way consumers engage with social content. Our today's special value is a daily discovery-based purchase that has inspired customers for decades.
Similarly, 68% of purchases on social selling platforms last year were made on impulse. In short, social scrolling is the new channel surfing, and we believe this behavior is very relevant for today's consumer.
We are enhancing our core capabilities on social, where we already have a strong presence. QxH has a combined 7 million followers across Instagram, Facebook, TikTok and YouTube. We are organizing our new strategy around 3 priorities to win in live social shopping.
WIN is an acronym. W means we are going to drive live shopping content whenever she shops, wherever she shops and spends their time. I stands for inspiring people and products by creating the world's leading live shopping content engine to inspire human connection with incredible merchandise. And N is about new ways of working to unlock efficiency and fund expansion on new platforms.
We are implementing our strategy and have taken a series of actions. We have recruited a Chief Growth Officer to extend our sales, content and celebrity expertise to the largest social platforms and to bolster our streaming app with our partners. This new leader will head up social streaming, digital, new business development and platform distribution for QVC US and HSN. We expect to announce more on this very soon.
We must build a world-class content engine to be successful in social commerce. Therefore, we are consolidating our QVC US and HSN operations into Studio Park in West Chester, Pennsylvania and closing the HSN campus in St. Petersburg, Florida. This will allow us to create efficiencies and better collaboration across common functions, content production, broadcasting, merchandising, operations, technology and people.
Importantly, we will maintain the distinct brand identities of QVC and HSN. We plan to activate this consolidated operation over the coming months, launching HSN Live broadcast from Studio Park by Q3. We anticipate our operations in St. Petersburg will wind down by the end of the year. We acknowledge this is a decision that affects many, but believe it is the right step to achieve success. I'd like to thank the St. Petersburg community for its support over many, many years.
At the end of January, we realigned our executive leadership team to work more efficiency, build new capabilities, create better customer experiences and pursue growth faster. Mike Fitzharris now also leads QVC US and HSN broadcast and content production teams as well as global operations, technology and people. Mike will also continue to serve as the President of the QVC US brand.
We are also consolidating our US merchandising leadership. Stacy Bowe now leads buying, planning, programming and brand marketing for QVC US and HSN. She also serves as President of the HSN brand.
Having realigned our executive leadership team, we are looking at the rest of the enterprise to fund and build the needed capabilities. We are pursuing $100 million of additional OIBDA opportunity by examining all areas of spending across the company. Headcount reductions while challenging decisions are necessary to fund new capabilities and drive growth. We are focusing this work on QVC US HSN and the global functions. Separately, QVC International is identifying additional cost efficiencies for 2025, and Cornerstone remains focused on this transformation journey.
In terms of the financial impact of our WIN strategy, we expect to generate $1.5 billion of run rate revenue from social and streaming within the next 3 years. While we work towards these revenue goals, we plan to sustain a stable double-digit adjusted OIBDA margin. And we commit to at least a 2.5x or better long-term leverage target.
In conclusion, we firmly believe that we have a once-in-a-generation opportunity to capture a fast developing and rapidly growing market and live social shopping. Social and streaming are the next frontier for entertainment and retail, and we are well positioned to compete and win in this space.
We have a long history of innovation. In the '80s we invented home shopping on cable TV. In the '90s, we launched our first website and today are an e-commerce leader. We were early adopters on mobile and social. We have built a successful streaming business. We are intently focused on achieving our objectives and positioning the company for future growth, and we look forward to updating you on our progress.
Now I'll turn the call to Bill to review the Q4 financial results of each of our businesses.

Bill Wafford

Thank you, David, and good afternoon, everyone. Unless otherwise noted, my comments compare financial performance for the 3 months ended December 31, 2024, for the same period in 2023.
Starting with QXH. Revenue fell by 8% due to lower unit volume, average selling price and shipping and handling revenue. From a category perspective, home revenue decreased 8%, driven by reduced demand for culinary and floor care products. partially offset by growth in seasonal items.
Our apparel revenue grew 2% due to gains from age of possibility brands, including Kim Gravel, Jennie Garth, Stacy London and Susan Graver, as well as celebrities Christie Brinkley, Christian Siriano, and Johan Sebastian Grey at HSN. These gains were partially offset by lower demand for outerwear. Beauty revenue fell 9% due to lower demand for skin care and Bath & Body products.
Electronics declined 16% due to lower demand for gaming and computers. We reduced online promotions for gaming items and shifted focus to higher-margin products such as audio and portable power, where we experience gains.
Adjusted OIBDA margin expanded 10 basis points. Gross margin declined 40 basis points with higher product margins mitigated by fulfillment pressure. Product margins increased by approximately 90 basis points due to higher initial margins from private label penetration and improved product costs.
Fulfillment expenses were unfavorable 130 basis points due to higher wages and freight rates and sales deleverage. Operating expenses decreased 11% and were favorable by 25 basis points due to lower commissions, expenses declined 10% and were favorable by 20 basis points, reflecting lower marketing, personnel and outside services expenses, partially offset by sales deleverage.
Before moving on to QVC International. As noted in our earnings release, we conducted an annual impairment assessment and recognized a $1.5 billion noncash impairment charge at QxH related to goodwill and trade names. This is included in operating loss but excluded from adjusted OIBDA.
Moving to QVC International. My comments will focus on constant currency results. Revenue was flat, reflecting 1% growth in units shipped and favorable returns, offset by lower average selling price.
From a category perspective, QVC International experienced constant-currency growth in home, accessories and apparel with a decline in beauty. QVC Germany and UK grew 8% and 1%, respectively, while Japan declined mid-single digits. Germany experienced sales growth in home, apparel and accessories and electronics categories. Adjusted OIBDA increased 12% and adjusted OIBDA margin expanded 170 basis points.
Gross margin decreased 20 basis points due to higher fulfillment costs, partially offset by product margin gains. Some costs increased due to higher freight rates and fulfillment center wages as well as increased units shipped. Product margin strength was due to favorable returns and improved sourcing costs. SG&A was favorable by approximately 190 basis points due to lower personnel expenses and cost for outside services.
Moving to Cornerstone. Revenue declined 7% in the quarter as we experienced soft demand for -- and competitive promotional pressure in our home brands and continued challenges in the home sector. Adjusted OIBDA margin decreased due to costs for outside services related to the transformation plan Cornerstone is implementing, higher personnel costs and sales deleverage.
Looking to 2025. Let me briefly comment on the recent tariff actions. As most US-based discretionary retailers, we are also exposed to import tariffs. And while receipt levels from both Mexico and Canada are negligible, we do source a significant percentage of our QxH goods from China. Like other retailers, we are taking action to mitigate the impact to our business, including working with our product suppliers, evaluating our pricing and product mix, and assessing the opportunity to change the country of origin for our goods.
Turning to full year cash flow and the balance sheet. In 2024, free cash flow was a source of $238 million compared to a source of $297 million last year, excluding insurance proceeds related to the Rocky Mount Fire. The decrease in cash flow, net of insurance proceeds was primarily due to lower cash from operations, partially offset by lower payments for TV distribution rights and capital expenditures.
In 2024, we spent $37 million on renewals of our TV distribution contracts and $199 million on capital expenditures. Reminder that our TV distribution payments can fluctuate year-over-year depending on renewal cycles. We expect the 2-year average to be approximately $70 million to $80 million. Additionally, for 2025, we anticipate CapEx to be approximately $230 million.
Looking at the QVC Group, Inc. debt profile. As of December 31, 2024, net debt was $4.6 billion. As of year-end, the QVC revolver had $1.2 billion was strong and $1.6 billion in available capacity.
In terms of cash balances, QVC Group had total cash of $905 million, of which $297 million was at QVC Inc., $204 million was at Liberty Interactive LLC and $269 million was at QVC Group, Inc. Our leverage ratio as of December 31, 2024, as defined by the QVC revolving credit facility, was 3.1x compared to our maximum covenant threshold of 4.5x. Please note that covenant OIBDA includes adjusted OIBDA of QVC, Inc. and Cornerstone.
This February, we paid off the remaining $585 million of QVC Inc.'s 4.45% 2025 senior notes at maturity, funded with our revolver and cash on hand. We affirm that our debt level is manageable and our current cushion is sufficient in relation to the 4.5x maximum net leverage covenant threshold stipulated in our credit facility.
Finally, as previously mentioned, we received a noncompliance notice from Nasdaq in June 2024 due to our closing bid price trading below Nasdaq's minimum requirement of $1. On December 2, 2024, we transferred our stock from the Nasdaq Global Select Market to the Nasdaq capital market and an additional 180-day calendar period began to regain compliance. As part of this extension, we have committed to effect a reverse stock split, if necessary, to remain on Nasdaq after the 108-day period.
Now I'll turn the call over to Greg.

Gregory Maffei

Thanks, Bill. So in 2024, we had a successful execution of many elements of the balance sheet. Just to reiterate a couple of Bill noted already or David as well. We reduced debt by $442 million during the year, including the repayment of the QVC 2024 notes. After year-end, we also repaid the 2025 notes.
And we tendered for 89% of the '27, '28 notes, which was partially funded with new 2029 notes. These actions extended our debt maturity profile and help support our anticipated revolving credit facility extension.
It's great work from the team in achieving higher margins and free cash flow under Athens. OIBDA was up 4%, including the elimination of Zulily and flat without Zulily. This is pretty solid given the challenging backdrop of accelerated cord cutting and though is short of our targeted OIBDA growth rate when we set out for Project Athens is still admirable given these conditions.
We do recognize the macro pressures of cord cutting and discretionary retail. And we have seen the massive growth in live social shopping and the clear change and consumer behavior, which is continually shifting towards digital. Accordingly, we're moving our business towards this opportunity.
As our audiences increasingly go on to social, a growing market and they become increasingly comfortable transacting on social, we believe QVC is set up well to win in this space with our content production, our brands and the knowledge of the market. We believe we can balance the growth in this market with maintaining profitability going forward.
And with that, operator, I'll open up the line for questions.

Question and Answer Session

Operator

(Operator Instructions) Jenna Giannelli, Morgan Stanley.

Jenna Giannelli

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?

David Rawlinson

Yes, I'll start on that, and then I'll let Bill jump in if he wants to. So I think what you, I think 2025 will be a real transition year. I think you'll see even stronger acceleration of social and streaming revenue than what we've had in the last couple of years. And I think you'll continue to see us experience cord-cutting related declines in some of the core US video commerce businesses.
I think you'll see the revenue build from the growing parts of the businesses start to overcome the rate of that decline as we go through 2025 and get into 2026. So I think it will be very much a year of transition while we grow into that into that revenue growth over the full 3-year period.
In terms of OIBDA margin, I would expect that we will maintain our basic margin levels of profitability comfortably sort of double-digit type OIBDA margins throughout the 3-year strategic period.

Jenna Giannelli

Excellent. And then I just had one follow-up, if I can. International outperformed pretty notably. I guess, maybe what were some of the key differences there are the drivers of that? And is there anything going on there specifically or structurally that you think you can pull back or leverage here in the Americas?

David Rawlinson

Yes, it's a great question. The biggest difference by far is they are just seeing -- they're seeing some of the same technology transitions that we're seeing in the US, but it's all much delayed. And so they're not seeing anything close to the type of cord cutting that we've seen in the US, which is just allowing us to make the technology and platform transition and a more balanced deliberate way, then I think we're going to have the luxury of being able to do in the United States.
I think it also helps. We have a very experienced team on that business. We have very strong local brand presence in each of those markets. I would say, on average, our international markets are slightly less competitively intense than what we tend to face on a daily basis in our US markets. And so that's helpful as well.
I will say a lot of the core disciplines that we are now reflecting especially in the social shopping space, in the US, we think are going to give us even greater competitive advantages and our international markets going forward. This year, the real concentration on building things like the content factory in gen, some of the other capabilities is focused on the US. But we're really very excited about what it's going to mean as we go through this year and into 2026 and bring some of those capabilities to some of the international markets, which are even if more slowly facing a lot of the same growth opportunities that are emerging here.

Operator

William Reuter, Bank of America.

Robert Rigby

This is Rob Rigby on for Bill. So first question from us. I was just wondering if you could touch on your plans for the St. Petersburg facility. And if your plan is to sell the facility, what proceeds would be used for?

Gregory Maffei

Yes. We're still -- I mean St. Petersburg, obviously, the team is still operating there and will be for a good portion of this year. And David mentioned that by Q3, we intend to having, consolidating all content production here in Studio Park, we'll work on decommissioning that facility this year. Eventually high likelihood, obviously, they will dispose the facility via a sale. Still remains to be seen in terms of what the exact timing of that is going to be and how we use the proceeds.

Robert Rigby

Got it. Understood. And then regarding tariffs, I was just wondering maybe if you could quantify in any way your exposure to China and your ability to potentially shift sourcing of certain goods.

Gregory Maffei

Yes. I mean we've taken sourcing a considerable amount of our source of supply out of China really since 2018 and the last time that you saw a significant tariff action. We don't -- the majority of our goods we source through our vendors where we're not the importer of record. We don't quote typically what and what our complete exposure is. And obviously, we don't control the total exposure, but it's significant on the business.
We're continuing to work with our suppliers as we evaluate product pricing and source of supply from country of origin going forward. And obviously, what our pricing situation is here in the US and if we have to pass that on to consumers.

Robert Rigby

Great. And then just one last one quickly. I'm not sure if I missed it, but did you touch on the timing of that $100 million of adjusted OIBDA savings?

Gregory Maffei

We're targeting that to have a run rate by the end of this year in terms of OIBDA opportunity improvement.

Operator

Karru Martinson, Jefferies Company.

Karru Martinson

The anticipated revolver extension, where are we on that? Is that something that's near term here? Or is that closer to maturity?

Ben Oren

This is Ben Oren. I think the way we're thinking about that is October 2026 is the maturity, October 2025 is the go current, and so we are in active dialogue with the banks and hope to have something back to you in the next 1 to 2 quarters.

Karru Martinson

Okay. And then when you look at the headwinds with fulfillment 130 bps this quarter, what's the ability to kind of see some offsets to that? Is that just the deleveraging on the top line? And I guess how does that fit in with the maintaining a double-digit OIBDA margin?

Gregory Maffei

Yes. I mean I think you're a bit episodic in the quarter, right? I mean you've got a bit of deleverage in there, right, on your warehouse costs flowing through. I think you saw a little bit of things that were episodic in terms of small parcel and charges we had in the quarter impacting us. Also, when you looked at even the international business, kind of some of the tale of Red Sea disruption that we had that impacted freight and things like that, we don't anticipate that to be systemic going forward.
Outside of any of the potential tariff discussions that are going on, right, that are impacting product COGS. We don't see that being consistent going forward. We've done a very good job of managing that over the last couple of years and continue to be actively be doing that now. And one example is we just consolidated 2 of our distribution centers on the West Coast into one to be able to take some cost out of the equation.

Karru Martinson

Okay. And just lastly, I realize you don't give guidance, but we've talk with some other retailers saying, Hey, there are some storms, some weather, there was a slow start to the year. kind of balance that off what there haven't been as many onetime events. How is the consumer shaping up for 2025?

David Rawlinson

Yes. I think it's a little bit hard to read. I think if you look across the consumer sentiment measures, I think they're broadly stable but broadly down. But I don't see anything that suggests demand is collapsing. I think a lot of retailers have remarked that you're seeing value-seeking and deal-seeking behavior among the consumer.
I think we continue to see that gravitation towards deals, gravitation towards clearance when there's an opportunity with a good, better, best to choose down towards good or better and to choose away from best. So I think you're continuing to see some of those trends as we go into this year.
I think you still continue to see a lot of the income-related trends with buying behavior for upper milder class and greater being more stable than below, so -- but I think mostly, I see a relatively stable continuation of trends from '24 into '25 with perhaps a touch of softness in consumer sentiment, but nothing that feels like it's Charvar alarming.

Operator

Hale Holden, Barclays.

Hale Holden

I had two questions. The first one is when we think about sort of the effect of cord cutting. If that accelerates or as that accelerates, should we think about that as a straight-line decline or linear decline in the subcount? Or are they sort of unrelated?
And then for the fourth quarter specifically, I think you mentioned the pullback in promotions on electronics. And I was wondering if that also had an impact on the subcount or not? And then I have a follow-up.

David Rawlinson

That's great. We tend to look at us on kind of a year-over-year basis. There's so much variation in quarters. We tend to look at it on sort of a year-over-year or 12-month lagging trailing 12 basis. What I would say, and I think it's, we've seen relatively consistent losses over -- I think in my remarks, I talked about from 2018, the 2024. I think we've seen a relatively consistent declines in terms of households during that time.
I would say while it started out in the general market a little bit faster, it was slower to start for us because a lot of our customers were the last to cut the cord because some of our customers are older and more weighted to that platform. I would say what you're starting to see now is all customers are cutting the cord at roughly the same sort of roughly the same sorts of rates.
We have generally overperformed cord cutting. So if you were to do a correlation between our revenue performance and our US video commerce businesses versus a loss of households because we've been moving some of those customers to streaming and some of those customers, the digital channels. We haven't quite seen some of the reductions in revenue that you would be suggested by the level of cord cutting. But obviously, it has had a pretty direct impact.
In terms of spending in the fourth quarter on advertising, you caught that comment correctly. So we pulled some of our normal performance marketing in spending that we would normally have in the fourth quarter. Some of that we reprogrammed in the first 3 quarters and some of that, we just declined the spend in the fourth quarter.
Advertising, given -- advertising is always a little less effective because more people are in the market advertising in the fourth quarter. So it usually has a lower payoff with some of the election spending in this fourth quarter and had an even lower than normal a lower-than-normal payoff. And we did not see some of the opportunities around innovation in places like electronics, where we thought it was productive to push.
And then finally, we tend to see that our digital spending gets some significant tailwinds when our viewership is up, with viewership being down largely because of news and special events, we weren't going to have that tailwind, which was going to be a headwind to digital marketing efficiency. And so we made a pretty deliberate decision to pull back not to concentrate as much on new customers and new customer acquisition. Those tend to be at least in the early days, slightly less profitable customers. So I think this was the first time new customer count went down in the last 6 quarters.
I think we've been growing new customers, Bob, over the last 6 quarters. It went down this quarter, mostly because we made a deliberate decision to concentrate on our most profitable existing customers and not to concentrate as much on chasing the customer file. I think as we go back into 2025 now, you'll start to see us layer back in a more balanced approach to the customer file into new customer acquisition.

Hale Holden

Great. And my second question was really around Cornerstone that was the biggest delta miss on my part in terms of expectations. And I think needing for that market to turn, it hasn't, in terms of home furnishing. So I just wonder if there's any change in-strategy there? Or how do you make sure you don't flip OIBDA's negative in the meantime while we're waiting for it to improve?

David Rawlinson

Yes, it's a great question. I think we've been, I thank everybody in the market has been surprised to see the housing markets day at multiple decade lows in terms of moves and to an extent, new builds and those businesses are very highly correlated to the broader market.
What's encouraging to me about those businesses today is that this is giving us a lot of opportunity to run something like the program that we ran through Project Athens on QVC and HSN now on the Cornerstone brand. So a lot of the team that drove a lot of the increased profitability because of Athens is now working with Cornerstone brands. And so we know we have techniques that work that are going to help us with margin and profitability in that business over the next 12 to 18 months and those efforts are now sort of full steam ahead and fully stood up. And so we feel good about our ability to drive some bottom line margin and cost opportunities in that business.
In terms of when the -- when we get more out of the market itself in the macro, you'll recall is as good as mine. What I would just observe is that there does feel like there's real pent-up demand in the market and whenever the market gets unstuck. I would not be surprised for us to have a trend that looks to be very different for a sustained period of time. I think we will go into that -- into a market turn more profitable, more capable, having established a lot of new capabilities. And I think there's some potential to potentially over perform if we got back to an up market, given some of the work we're doing.
But it's certainly been -- the macro has been depressed for longer than we would have anticipated or than we would have liked.

Operator

Jacob (inaudible), JPMorgan Chase and Company.

This is Jacob on for Carla Casella. First question, you had an initiative to grow social sales about $1.5 billion. Could you just give us a sense for your progress in the quarter? Social sales grow sequentially, were there any callouts was working and what still needs to work on social? And how much lower are the margins on social versus linear?

David Rawlinson

Yes, great questions. So one conversation we're having internally that we'll get back to this community on is how to give you more insight into both social and streaming and so look for us to try to find ways to be more descriptive.
There, you're right to closed the $1.5 billion run rate goal. By the end of the 3-year period, we think that's very possible. We already today have hundreds of millions of dollars of revenue across social and streaming, and so we're growing from a not insubstantial base there. And we saw a very good performance in Q4 and for the full year in terms of growth year-over-year. And we expect further acceleration of that into 2025.
Both of those businesses have been growing very strongly now for a couple of years. 2025 is the year where we really put more into advertising capabilities, building partnerships, so we'll have a lot more to say on that. A lot more to say on that later. But everything we saw in the fourth quarter leads us to believe that it's exactly the right growth agenda to be pushing as we go into the next 3 years.

Great. And then also just wondering if you could provide the RCF borrowing today or pro forma for the '25 no pay down?

Ben Oren

I don't think we've shared what we've done there with respect to cash, but you saw that in between 9/30 and 12/31 as we build free cash flow, we did pay down some of that revolver. We'll continue to use cash to pay down the revolver and then draw to pay down debt. So we'll probably be out with the balance in our Q1 results.

Bill Wafford

Yes. We don't do the tendon, we don't go intra-quarter, yes.

Okay. What about cash that went Cornerstone and at the parent level?

David Rawlinson

Yes, I think we can get, I mean, it's in the press release, and I get quoted on the call. I can flip, I can shoot that over to you as well. Thank you.

Gregory Maffei

All right. Operator, I think with that, we are done for the day. Thank you all for joining on the QVC Group call, and we look forward to speaking with you next quarter, if not sooner.

David Rawlinson

Thank you, everyone.

Operator

Thank you, Greg. That concludes today's call. All parties can now disconnect. Thank you.