Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: On Paramount+, can you update us on whether the current programming slate is sufficient to compete with larger SVOD platforms? Also, any updates on Paramount+ partnerships in the US and internationally? A: Chris McCarthy, Interim Principal Executive Officer, stated that Paramount+ has seen significant success with its content, achieving record engagement and subscriber growth. The platform ranked as the number two SVOD for hours watched across all original series. While they are confident in reaching profitability by 2025, they remain open to exploring opportunities for further value.
Q: Can you clarify if the profitability guidance for 2025 is for the entire D2C segment or just Paramount+ domestic? Also, any insights on free cash flow expectations for 2025? A: Chris McCarthy clarified that the profitability guidance is specifically for Paramount+ domestic. Naveen Chopra, CFO, added that free cash flow is expected to grow in 2025, driven by stable content spend and improved cash conversion, despite restructuring expenses impacting conversion rates.
Q: The viewing growth metrics for DTC are impressive. Do you see this as a leading indicator for future revenue growth? Also, can you quantify the impact of the Super Bowl and political advertising on 2024 results? A: Naveen Chopra explained that increased viewership is indeed a leading indicator for potential revenue growth, as it helps reduce churn and supports ARPU growth. Regarding the Super Bowl and political advertising, these were significant contributors to 2024 results, and their absence will create a headwind in Q1 2025.
Q: Do you expect company-wide advertising growth in 2025, excluding the Super Bowl and political impacts? Also, what are your expectations for content licensing in 2025? A: Chris McCarthy noted that while linear TV faces challenges, streaming advertising is growing, with D2C ad revenue up 18% in 2024. Brian Robbins, CEO of Paramount Pictures, added that the licensing business remains strong, with internal licensing not reflected in reported results, and there is potential for innovation in windowing strategies.
Q: How is Paramount positioned in the linear space, especially with the decline in affiliate revenues? Any protections in distribution deals to mitigate risks? A: George Cheeks, CEO of CBS, emphasized the importance of CBS in sports bundles and mentioned ongoing discussions with distributors like DIRECTV. He highlighted that while skinny bundles are being explored, the full bundle still offers compelling value. Brian Robbins discussed a slate financing deal with Domain Capital, which will help spread production costs and has positive cash flow attributes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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