AMC Networks Q4 2025 Earnings Call - Streaming Now Largest Domestic Revenue Source, FCF Beat

Conference Operator: Good day and thank you for standing by. Welcome to the AMC Networks fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, we’ll open up for questions. To ask a question during the session, you need to press star 11 on your telephone. You’ll then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today’s conference is being recorded. I would like to hand it over to your first speaker, Nick Seibert, Senior Vice President, Corporate Development and Investor Relations. Please go ahead.

Nick Seibert, Senior Vice President, Corporate Development and Investor Relations, AMC Networks: Thank you. Good afternoon and welcome to the AMC Networks fourth quarter and full year 2025 earnings conference call. Joining us today are Kristin Dolan, Chief Executive Officer; Patrick O’Connell, Chief Financial Officer; Kim Kelleher, Chief Commercial Officer; and Dan McDermott, Chief Content Officer and President of AMC Studios. We’ll begin with prepared remarks, and then we’ll open the call for questions. Today’s call may include certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ. Please refer to AMC Networks’ SEC filings for a discussion of risks and uncertainties. The company disclaims any obligation to update any forward-looking statements. On this call, we will discuss certain non-GAAP financial measures.

The required definitions and reconciliations can be found in today’s press release available on our website at amcnetworks.com. With that, I’d like to turn the call over to Kristin.

Kristin Dolan, Chief Executive Officer, AMC Networks: Thanks, Nick, and thanks everyone for joining us. AMC Networks had a successful 2025. We used our unique strengths and advantages to drive the company forward in a time of change. This year, we strengthened our balance sheet and achieved a meaningful inflection point in our business. Streaming is now our largest single source of domestic revenue. This is a validation of our strategy and an important milestone in our business transformation. We generated $272 million in free cash flow, a key priority for us, well ahead of our previously increased forecast. We expect that 2026 will represent another solid year on this front and anticipate free cash flow of at least $200 million for the full year. Our streaming strategy is simple and distinct. We offer fans of specific genres unmatched curation and depth through our targeted services.

We window content efficiently, keep prices low, and deliver clear value to our subscribers and wholesale partners through which we reach the vast majority of our viewers. We also operate all our services through unified technology that delivers an excellent viewing experience efficiently and with predictable costs. In November, we launched our newest targeted streaming service called All Reality, bringing viewers the best in unscripted content, including our most popular reality franchises. It’s currently available through Amazon Prime Video and Roku, with more platforms coming soon. At last month’s Sundance Film Festival, we relaunched Sundance Now as the definitive streaming home for independent film. The service features more than 1,000 hours of distinguished programming sourced from our independent film company, RLJE Films, and Shudder.

Building on decades of expertise and credibility, Sundance Now gives fans a window into the world’s most important film festivals and access to the most acclaimed titles. Our anime service, HIDIVE, has achieved strong growth since we acquired it four years ago, the result of the increasing popularity of the genre and our team’s expert curation. Acorn TV had a very active and successful 2025. We will continue the momentum with returning favorites and new originals, including You’re Killing Me, starring and executive produced by Brooke Shields. We will also bring fans second installments of two popular programming events, An Autumn to Die For and Murder Mystery May, which drove record viewership last year. We have significantly reoriented our advertising business, embracing viewership changes and opportunities that have come with streaming, FAST, and AVOD. In 2025, we saw growth in each of these areas.

This is so important as the market shifts away from traditional reporting metrics and age-based demos to driving business outcomes. We’ll be showcasing our advanced advertising capabilities and the unique value we deliver at a series of partner events in the coming months. In the fourth quarter, we completed a transaction that gives us full ownership of RLJ Entertainment. This includes Acorn TV, ALLBLK, RLJE Films, and a substantial investment in Agatha Christie Limited, which manages and monetizes Agatha Christie’s valuable IP worldwide. Content remains at the center of everything we do, and we’re excited to bring a dynamic slate of strong programming to AMC and AMC+ this year. Our critically acclaimed sports docuseries, Rise of the 49ers, was the most-watched new AMC original since The Walking Dead: The Ones Who Live.

It also drove the biggest day of signups to AMC+ direct-to-consumer platforms since the season two premiere of The Walking Dead: Dead City last spring. Dark Winds returns for its fourth season next week and was just renewed for season five. This remarkable series has established itself as one of the best noir crime dramas in the history of television. It is also one of the most-watched shows on AMC+. We’re very excited about a new prestige drama set in the world of Silicon Valley called The Audacity. It has all the elements of a classic AMC series: great story, unforgettable characters, a talented cast, and something to say. We can’t wait to preview it at South by Southwest next month and bring it to viewers on AMC and AMC+ on April 12th.

We just kicked off a new partnership with TNA Wrestling, bringing a 2-hour block of live TV to our schedule every week. We have significantly expanded TNA’s television audience. The Thursday night show is also attracting younger viewers to AMC who have a clear affinity for our Walking Dead, Anne Rice, and Shudder content, a connection we will leverage in the months ahead. Industry consolidation is highlighting the value of studio assets and powerful IP. Our dynamic mix of content across a wide range of platforms underscores our strength as a studio-based programmer able to build franchises and engage fans. It’s worth noting that the streaming rights to all 177 episodes of The Walking Dead, the biggest franchise in the history of cable television, returned to AMC Networks in less than a year.

Still beloved, the original series generated nearly 500 million hours of viewership on Netflix over the last six months of 2025. Over the course of 2025, we successfully renewed more than a third of our affiliate footprint in the U.S. and Canada on favorable terms, including long-term agreements with DirecTV, NCTC, Filo, and EastLink, among others. Many of these larger agreements include bringing video customers access to the ad-supported version of AMC+ at no additional cost. More than 1.1 million Spectrum TV customers have activated the ad-supported version of AMC+ that is now bundled into their video service. Charter’s recent results included video subscriber growth for the first time in almost six years, which management directly connected to their strategy of bundling streaming value into their video product. We see this as a hopeful sign for the industry and the entire pay TV ecosystem.

Three years into this role leading AMC Networks, I can say without reservation that I believe in our strategy, our people, and the opportunities we see for this company. Our independence is a source of strength in a changing time. Our studio engages viewers by populating our platforms with high-quality and efficiently produced IP that we own. We have the strongest and most mutually beneficial partner relationships in the industry, and advanced technology powers everything that we do. It’s clear to me that we’re only scratching the surface of what this company can achieve. I’d like to take a moment to thank our CFO, Patrick O’Connell, who has been a great partner and colleague and will be stepping down next month to take on a new role outside our industry. We appreciate his contributions and will be cheering him on in his new endeavor.

Now I’d like to turn the call over to Patrick.

Patrick O’Connell, Chief Financial Officer, AMC Networks: Thank you for the kind words, Kristin. It’s been a pleasure to work with you and the entire team at AMC Networks. We’ve accomplished a lot over the past few years, and I’d like to thank the Dolan family and the board of directors for the opportunity. 2025 was a productive year for AMC Networks. We’re proud of the progress we’ve made, including reconstituting our revenue mix towards streaming, investing in valuable IP, reorienting the business around free cash flow, and the actions we’ve taken to strengthen our balance sheet. We generated healthy free cash flow, exceeding our increased outlook, and we once again delivered on our financial guidance. We believe our strong free cash flow outperformance in 2025 sets the stage for another year of robust cash generation. For 2026, we expect to generate free cash flow of at least $200 million.

Moving on to our full year results. Consolidated revenue was $2.3 billion. Consolidated adjusted operating income was $412 million, with a margin of 18%. We converted approximately two-thirds of our AOI to cash and delivered full year free cash flow of $272 million. Onto our segment results. Domestic operations revenues decreased 5% to $2 billion for the full year and decreased 1% to $515 million for the fourth quarter. Subscription revenue meaningfully stabilized in 2025 with a decrease of less than 1% for the full year and flat in the fourth quarter. In a first for AMC Networks, full year streaming revenue represented the largest single source of revenue in the segment. While affiliate revenue declined 13% for both the year and the fourth quarter, we are encouraged by the improvement in video results that we’ve seen so far from the major cable operators in this earnings cycle.

For the full year, linear affiliate revenue headwinds were almost entirely offset by streaming growth of 12%, and in the fourth quarter, streaming growth of 14% more than fully offset linear declines. We ended the year with 10.4 million streaming subs. Subscribers were flat as compared to the prior quarter and prior year period. In 2025, we repriced the entire subscriber base, and we are pleased with what we are seeing in terms of engagement and retention. 2025 represented the most-watched year ever across our portfolio of streaming services in terms of total viewing hours. In the fourth quarter, we also saw sequential improvement in retention. Content licensing revenue was $272 million for the full year and $75 million for the fourth quarter. Licensing revenue reflected the availability of deliveries. Looking ahead, we see continued demand for our high-quality content.

Domestic operations advertising revenue decreased 15% for the year and 10% for the fourth quarter, primarily due to linear ratings declines and lower marketplace pricing. Domestic operations AOI of $490 million for the full year and $128 million for the quarter reflected continued linear revenue headwinds. Moving to our international segment. Recall that in 2024, international revenue included advertising revenue related to retroactive adjustments reported by a third party of $21 million for the full year and $7 million for the fourth quarter. Excluding retroactive adjustments in the prior period and favorable effects in the current period, international revenue decreased 4% for both the year and the quarter. On an apples-to-apples basis, advertising revenues grew 6% for the full year and 4% for the fourth quarter, primarily driven by strong advertising performance in the UK and Ireland.

Subscription revenues excluding FX declined 8% for the full year and 6% for the quarter. The decrease in subscription revenue was related to a non-renewal that occurred in the fourth quarter of last year. International AOI for the full year was $43 million, and fourth quarter AOI was $7 million. We remained focused on our balance sheet and were pleased with the results of our efforts over the last year. To recap, in 2025, we executed a series of transactions that reduced gross debt by almost $600 million, captured approximately $140 million in discount, extended the majority of our revolving credit facility to 2030, and opened a 2032 maturity window through the issuance of new, longer-dated senior secured notes. Overall, we’ve meaningfully extended our maturity profile, now with only $83 million of remaining term loan due by April 2028 and no bond maturities until 2029.

We ended 2025 with net debt of approximately $1.3 billion and a consolidated net leverage ratio of 3.1x. Despite lower AOI in 2025, our net leverage ratio remained relatively stable, increasing by less than a third of a turn from the 2.8x we reported at the end of 2024. As we look forward, our focus remains on further reducing gross debt and extending maturities. We’ve maintained a healthy cash position and ended the year with approximately $675 million of total liquidity. This includes approximately $500 million of cash on the balance sheet, as well as our undrawn $175 million revolver. As a reminder, we believe it’s prudent to capitalize the business with a minimum cash balance of approximately $200-$250 million. In the fourth quarter, we repurchased approximately 850,000 shares of our Class A common stock for approximately $7.5 million.

As of December 31st, we had $117 million remaining on our share repurchase authorization. Additionally, as Kristin mentioned, in the fourth quarter, we acquired Bob Johnson’s 17% stake in RLJ Entertainment for $75 million in cash. This transaction provides us with increased operating clarity and simplifies our business structure. Moving on to capital allocation, our philosophy remains consistent. First, we look to support the business by creating and acquiring compelling programming that resonates with our audiences while maintaining healthy levels of free cash flow generation. Second, we remain focused on reducing gross debt and extending debt maturities. And lastly, acquisitions and share repurchases will be opportunistic and measured. Moving on to our outlook. We expect consolidated revenue for 2026 to be approximately $2.25 billion. As it is still early in the year, the geography of certain items may shift as the year unfolds.

Notwithstanding that, I’ll now unpack the current assumptions that underpin our revenue outlook. We anticipate that streaming revenue growth and linear subscription revenue headwinds will result in stable domestic operations subscription revenue as compared to 2025. We continue to be innovative, aggressive, and strategic with regard to content licensing and anticipate approximately $260 million of domestic operations content licensing revenue for 2026, reflecting our current rate of production and market dynamics. We continue to make great strides in the evolution of our advertising business. That said, we anticipate that linear revenue declines will outpace digital growth in 2026 and expect that domestic advertising revenue will decrease in the low double-digit % area as compared to 2025.

We anticipate that the underlying dynamics in the many international markets that we operate in will remain relatively consistent year over year and expect total international segment revenue for 2026 to be between $290 million-$300 million. Linear revenue headwinds continue to impact AOI. Therefore, for the full year 2026, we anticipate that consolidated AOI will be approximately $350 million. AOI will also be weighted towards the back half of the year due to the cadence of series deliveries, streaming rate events, and the timing of expenses, including programming amortization. Moving on to our most important financial metric, free cash flow. We continue to convert the majority of our AOI to free cash flow, and for 2026, we expect to generate free cash flow of at least $200 million.

In closing, as an independent, nimble, and innovative premium programmer, our commitment to creating high-quality content remains at the center of everything we do. We approach the marketplace a bit differently than others, including building out our library of powerful franchises and monetizing our content across an evolving distribution ecosystem. We’ll continue to preserve capital with a focus on cash flow generation and the health of our balance sheet, and we’ll balance appropriate levels of programming investment against the available monetization opportunities. With that, I’ll hand the call back to Nick.

Nick Seibert, Senior Vice President, Corporate Development and Investor Relations, AMC Networks: Thanks, Patrick. Operator, let’s open the session for Q&A, please. Thank you.

Conference Operator: Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of Steven Cahal from Wells Fargo. Your line is open.

Steven Cahal, Analyst, Wells Fargo: Yeah, thanks. Good evening. And Patrick, we’ll certainly miss having you on these calls. Wanted to kick off with an advertising question. It was a little worse in 2025 than it was in 2024. I think it came in a little below your expectations. So can you just help us think a little more about what’s within the low double-digit guidance for 2026, the puts and takes? I know you’ve done a lot of work on the dynamic side of things, so would love to frame your confidence in that outlook. And then The Walking Dead rights coming back is pretty exciting for the company. Just wondering when you start to think about having conversations in the market about what that could be worth and kind of what those bids look like. When we look at this, it could be a $150 million opportunity.

It could be 2x that or even bigger. So just trying to sort of frame expectations for what can happen to those rights as we get towards the end of the year. Thank you.

Kristin Dolan, Chief Executive Officer, AMC Networks: Hi, Steven. It’s Kristin. We’ll miss Patrick too. I’m going to answer The Walking Dead question, then I’ll let Kim speak to advertising. We’ve had a great relationship with Netflix for well over a decade, since 2011, in carriage of The Walking Dead. The rights come back to us, as we said. It’s a consistent top performer on streaming. And as you noted, the rights are very valuable. I can’t say a lot right now, but we are in conversations now, preparing for the rights coming back and for finding a home for them in the future. So there’s more to report. We’re just not ready to speak about it now, but we are in conversations, and we’re very optimistic about the value of the content and our opportunity to monetize it going forward.

Kim Kelleher, Chief Commercial Officer, AMC Networks: Hi, Steve. It’s Kim. On your advertising question, I think the whole industry saw what we at the top half of 2025, we saw a huge influx of digital inventory hit the marketplace, driven by the shifting viewership. And I think that it drove down pricing, and we saw a lot of impact across the board for that. We reacted as quickly as we could and went into the upfront with a very streaming-first approach that I think we started seeing the impact from with the tides turning for us in Q3 and then continued momentum into Q4 with improvements. It really reflected the team’s successful upfront strategy that we looked to take into 2026. We’re growing in all the most important areas: streaming, FAST, AVOD, and really looking to mitigate losses on the linear side.

Steven Cahal, Analyst, Wells Fargo: Thank you.

Nick Seibert, Senior Vice President, Corporate Development and Investor Relations, AMC Networks: Thanks for the question, Steve. Operator, we’ll go to the next question.

Conference Operator: Our next question will come from the line of David Joyce from Seaport Research Partners. Your line is open.

David Joyce, Analyst, Seaport Research Partners: Thank you. Another kind of advertising question. Granted, you still have the linear challenges there, but how should we think about the ad contribution from the streaming side and from fast channels? Just wondering, are advertisers buying across all those platforms, or are they kind of picking and choosing?

Nick Seibert, Senior Vice President, Corporate Development and Investor Relations, AMC Networks: Hey, David. It’s Patrick. I’ll take a first crack at it, and Kim can add some subtle commentary. Listen, digital advertising is a meaningful portion of our business. It was a big part of the strength in the fourth quarter. Obviously, we’re subject to some of the vicissitudes in the marketplace, which we saw at the top half of 2025. But as Kim mentioned, tactically, we’re able to move quickly. Scatter was pretty strong in Q4. We demonstrated that we could sort of build brand sponsorships around certain events, including Best Christmas Ever, etc. So we’re really nimble, we’re really fast. The digital business was frankly, the industry broadly was challenged in the first half of 2025. That’s now reversed fields. That’s a nice kind of growth area for us. It’s not a majority of the revenue, but it’s a substantial portion of our revenue.

And so we feel good about continuing to grow that to offset the obvious linear headwinds. Thank you.

Kim Kelleher, Chief Commercial Officer, AMC Networks: The only thing I would add, David, is I would say we are seeing the industry embrace cross-platform buying more and more, and we’re well set up to meet that need. We continue to grow our viewership across our digital distributions and have activated DAI across all of that. So it’s a very seamless transaction for the advertiser, and that’s been well met in the marketplace.

David Joyce, Analyst, Seaport Research Partners: Thank you.

Conference Operator: Thank you. As a reminder, to ask a question, that’s star 11. One moment for our next question. Our next question will come from the line of Thomas Ye from Morgan Stanley. Your line is open.

Steven Cahal, Analyst, Wells Fargo: Thanks so much. Patrick, you mentioned subscriber universe declines seeing an encouraging trend. I think there’s also a slew of new skinny bundles that are getting launched that might possibly cause some fragmentation as well in terms of which networks get carried or not. Can you maybe just talk about your positioning there and how you see that shaking out relative to your view about the broader affiliate revenue outlook that you laid out? And then on cash spend on content, I noticed it declined a decent amount this year, possibly due to timing. Within the framework of your guide for EBITDA and free cash flow for next year, can you maybe just help us think through what you’re thinking there from a cash spend perspective? Thanks.

Nick Seibert, Senior Vice President, Corporate Development and Investor Relations, AMC Networks: Sure. Hey, Thomas. So on the first, in terms of affiliate revenue, obviously, we’re encouraged by some of the green shoots that we see across the broader landscape. It plays very well into AMC’s partner-centric model, whereby we’re cutting deals with Charter and, frankly, others on innovative ways to avail a broader universe of broadband subscribers to either pay TV in the traditional format or via apps of our ad-supported AMC+. And it’s nice to see sort of other large MSOs, pay TV providers, seemingly following it in Charter’s footsteps. So we think that’s an encouraging sign. As it relates to sort of skinny bundles and whatnot, we have been extraordinarily successful in continuing to renew our affiliate agreements with full carriage across all of our channels. We continue to represent an incredibly strong value proposition for those distributors and, by extension, their viewers as well.

So I think, in that regard, the proof is in the pudding. And obviously, we’re hopeful that these trends will continue. And so we feel very good about those affiliate relationships. Secondly, in terms of cash content spend, it was down kind of slightly from 2024 levels, but we continue to invest extraordinarily heavily in premium programming. That is our signature. That is our focus. And that is the mandate that we have kind of from the board and our chairman to continue to invest in that manner and at those levels and, at the same time, produce healthy levels of free cash flow. So we think we’re doing both of those things at the same time.

As we roll forward into 2026, I would expect that from both a P&L perspective and a cash perspective, those levels are going to remain fairly constant, meaning we’re going to continue to invest heavily in that programming. I don’t know, Dan, if you want to comment any further. No, I think that’s right. I think it’s the most important and meaningful thing that we do. The one thing I would say is we have an extremely strong production team that takes advantage of tax incentives around the world and shooting in locations that get us the real bang for our buck, if you will. I mean, we’re very savvy about how we deliver the tentpole series that we deliver on the cash that we have. And so that’s been a real great situation in 2025, and we expect to continue that in 2026.

Kristin Dolan, Chief Executive Officer, AMC Networks: I’ll just finish up by saying that the caliber of the slate in 2025 and what we have planned for 2026 continues to either meet or outperform our expectations. So series like the 49ers, The Audacity that we spoke about, we had a Dark Winds premiere here in L.A. last night. It was amazing. So we’re putting a really good slate out on AMC but also on our streaming services as well. So we’re not just being efficient. We’re still producing the content that built the reputation that we have to this day. So we’re psyched about what we have.

Steven Cahal, Analyst, Wells Fargo: Gotcha. Thanks so much for the color.

Conference Operator: Thank you. With that, this concludes the question-and-answer session. I want to turn it back over to Nick for closing remarks.

Nick Seibert, Senior Vice President, Corporate Development and Investor Relations, AMC Networks: Thank you for joining us today. We look forward to having a dialogue. Thank you for your interest in AMC Networks.

Conference Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Everyone, have a great day.