Revenue Growth: Total company revenue increased by 6% to $7.7 billion.
Adjusted OIBDA Growth: An impressive 80% growth, reaching $987 million, reflecting improvements across all business segments.
Direct-to-Consumer Business: Demonstrated healthy top-line growth with improved operating leverage.
TV Media Operating Margins: Expanded year-over-year.
Filmed Entertainment Adjusted OIBDA: Improved by nearly $100 million compared to the previous year.
Advertising Growth: Total company advertising revenue grew by 17%. The Super Bowl LVIII contributed significantly to this growth, accounting for 22 percentage points of it.
Affiliate and Subscription Revenue: Grew by 6% in Q1, with D2C subscription revenue increasing by 22%.
D2C Segment Revenue: Grew by 24% year-over-year, with Paramount+ revenue growing by 51%.
D2C Adjusted OIBDA Improvement: Improved by 44% year-over-year.
Free Cash Flow: Delivered $209 million, an improvement of over $750 million from the previous year.
Leverage: Improved 3/4 of a turn to 4.3x.
Future Guidance
Leverage Reduction Focus: Paramount remains focused on reducing leverage, which is expected to further benefit from a 3/4 turn improvement to 4.3x.
Sale of Viacom18 Stake: Expected proceeds of approximately $500 million, which will benefit leverage upon closing at the end of 2024 or early in 2025.
Cash Dividend Payment Reduction: Anticipated reduction by about $55 million annually due to the conversion of mandatory convertible preferred stock.
Trends, Market Conditions, Sentiment
High Impact of Live Events on Advertising: The Super Bowl LVIII’s record-breaking viewership across multiple platforms underscored the significant impact of live events on advertising growth.
Direct-to-Consumer Growth: The notable increase in Paramount+ subscribers and revenue highlights the continuing shift towards direct-to-consumer business models in the entertainment industry.
Challenges in TV Media: Despite overall growth, the decline in affiliate revenue in the TV Media segment reflects the ongoing challenges in the Pay-TV ecosystem.
Recovery and Improvement in Filmed Entertainment: The near $100 million improvement in Filmed Entertainment’s adjusted OIBDA year-over-year signals a recovery phase and potential market gains in this segment.
Dynamic Operating Environment: Acknowledgement of a dynamic operating environment yet a focused execution strategy indicates adaptability and resilience amidst changing industry conditions.
Strategic Asset Disposition: The planned sale of the equity interest in Viacom18 demonstrates a strategic move to optimize the balance sheet while maintaining content monetization avenues.
Notable Quotes
”In Q1, we generated significant growth in earnings and free cash flow and improved our balance sheet."
"Total company advertising grew 17%, benefiting from Super Bowl LVIII…"
"Paramount+ added 3.7 million subscribers in the quarter, reaching a total of $71.2 million."
"We also remain focused on reducing leverage, which improved 3/4 of a turn to 4.3x."
"Selling our stake in Viacom18 provided an opportunity to exit our ownership position with an attractive financial return on our investment."
"Although the operating environment continues to be dynamic, we remain focused on execution."
"I’d like to take a moment to thank Bob for his leadership of the company through a period of immense change for us and the industry.”
