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Revenue: Reported at $7,685 million, up 6% year-over-year, surpassing the estimated $7,731.88 million.
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Net Loss: Reported a net loss of $554 million, an improvement from a net loss of $1,118 million in the previous year, but still below the estimated net income of $226.07 million.
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Earnings Per Share (EPS): Adjusted diluted EPS was $0.62, significantly exceeding the estimated EPS of $0.36.
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Free Cash Flow: Generated $209 million, demonstrating a substantial recovery from a negative free cash flow of $554 million in the prior year.
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Direct-to-Consumer Segment: Revenue increased by 24% to $1,879 million, driven by a 22% growth in subscription revenue and a 31% rise in advertising revenue.
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TV Media Segment: Revenue slightly increased by 1% to $5,231 million, with advertising revenue benefiting from the broadcast of Super Bowl LVIII.
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Filmed Entertainment: Revenue grew by 3% to $605 million, bolstered by strong box office performances from “Mean Girls” and “Bob Marley: One Love.”
On April 29, 2024, Paramount Global (NASDAQ:PARA) disclosed its financial results for the first quarter of 2024 through its 8-K filing. The company reported a significant improvement in both revenue and earnings, demonstrating resilience and strategic adaptability in a dynamic market environment.
Paramount Global operates across three primary segments: TV Media, Filmed Entertainment, and Direct to Consumer, encompassing well-known brands such as CBS, Paramount Pictures, and the streaming service Paramount+. This diversified media conglomerate has shown a robust performance this quarter, particularly in its Direct to Consumer segment, which saw a 24% increase in revenue year-over-year.
Financial Performance Highlights
The company’s total revenue for Q1 2024 reached $7,685 million, marking a 6% increase from $7,265 million in the same quarter the previous year. This growth was primarily driven by a 51% increase in revenue from Paramount+, which now boasts over 71 million global subscribers. The Direct to Consumer segment’s adjusted OIBDA also improved significantly, reflecting a strategic reduction in streaming losses and enhanced operational efficiency.
Despite the positive revenue trends, Paramount reported a diluted EPS from continuing operations attributable to Paramount of -$0.88, which is an improvement from -$1.81 in Q1 2023. The adjusted diluted EPS from continuing operations was notably higher at $0.62, up from $0.09, showing a substantial 589% increase, which underscores the effective management and operational adjustments the company has implemented over the past year.
Segment-Wise Performance
The TV Media segment experienced modest revenue growth, up 1% to $5.2 billion, with a significant contribution from advertising revenue, which increased 14% due to the broadcast of Super Bowl LVIII. However, affiliate and subscription revenue saw a decline, affected by subscriber losses despite pricing increases.
The Filmed Entertainment segment reported a 3% revenue increase to $605 million, bolstered by successful theatrical releases like “Mean Girls” and “Bob Marley: One Love,” which performed strongly at the box office.
Challenges and Operational Focus
Paramount Global faces ongoing challenges, including competitive pressures in the streaming industry and the impacts of economic fluctuations on advertising revenues. The company’s strategic focus remains on enhancing its content portfolio and operational efficiency to maintain its competitive edge and profitability.
Financial Statements Insight
Paramount’s balance sheet reflects a stable financial position with total assets of $52,027 million as of March 31, 2024. The company generated $260 million in net operating cash flow and $209 million in free cash flow during the quarter, indicating healthy liquidity and financial flexibility.
In summary, Paramount Global’s Q1 2024 results demonstrate significant progress in revenue and subscriber growth, particularly in its streaming services. The company’s ability to adapt and strategically manage its diverse portfolio continues to play a crucial role in its financial performance amidst ongoing market challenges.
Management’s Outlook
Executive Vice President & Chief Financial Officer, Naveen Chopra, commented on the results:
The team delivered another quarter of strong operational and financial performance including significant growth in total company earnings and free cash flow despite the dynamic environment we continue to operate in. It was a record-setting quarter for Paramount+ in engagement and revenue, and in the DTC segment as we continued to substantially narrow streaming losses.
As Paramount Global moves forward, the focus will remain on strategic execution and cost management to sustain growth and enhance shareholder value.
Explore the complete 8-K earnings release (here) from Paramount Global for further details.
This article first appeared on GuruFocus.
