The paragraph outlines the introduction to Paramount Global's Q4 2024 Earnings Conference Call. The conference operator, Nadia, welcomes participants and explains the procedure for the call, including the muting of lines to prevent background noise and instructions for the question-and-answer session. Jamie Morris, EVP of Investor Relations, introduces himself and notes the presence of co-CEOs Brian Robbins, Chris McCarthy, and George Cheeks, along with CFO Naveen Chopra. He mentions that supplemental financial information and forward-looking statements, which involve risks and uncertainties, are available on their website. Lastly, Brian Robbins begins the discussion for the earnings call.

The article discusses the financial success of Paramount in 2024 as highlighted by co-CEOs Brian Robbins, George Cheeks, and Chris McCarthy. The company demonstrated substantial progress in its long-term goals, especially in improving direct-to-consumer (D2C) profitability and strengthening its balance sheet. Paramount's total adjusted OIBIDA grew by 30% to $3.1 billion, with significant improvements in net leverage and free cash flow. The growth was mainly driven by Paramount+, which gained 10 million new subscribers, especially strong in Q4 with 5.6 million additions. This growth was fueled by increased global watch time, reduced churn, and a notable revenue increase of 33%, supported by a robust mix of returning and new content.

Paramount+ achieved significant growth by becoming the second most-watched domestic SVOD for original series, while Pluto also saw increased global watch time. Overall, their Direct-to-Consumer (DTC) segment improved profitability by $1.2 billion, boosting confidence in achieving domestic profitability by 2025. The company continues its strength in producing blockbuster films. George Cheeks highlighted successful distribution deals in 2024, including renewals with Comcast and YouTube TV, and a new multi-year agreement with Nielsen. Paramount is transitioning from linear to digital advertising, with a notable 18% increase in D2C ad revenue in 2024, expanding its advertising client base among small and mid-sized businesses.

The paragraph highlights Paramount Pictures' investment in data, technology, and identity frameworks to enhance their competitive position in the social media budget space. Brian Robbins discusses the success of Paramount's Q4 movie releases, including "Smile 2" and "Gladiator 2," contributing to nearly $900 million at the global box office. The focus on franchise growth has paid off, notably with "Sonic the Hedgehog 3" becoming a high-grossing film. The "Sonic" franchise has surpassed $1.2 billion globally, and the "Knuckles" series on Paramount+ has been highly successful. Paramount's strategy involves cultivating fan bases and expanding their reach across films, series, and streaming with franchises like "Yellowstone" and "NCIS."

The paragraph highlights Paramount+'s strategic focus on fewer, bigger series featuring major movie stars, which distinguishes it in the competitive streaming space. It mentions the success of blockbuster series like "Landman," "Tulsa King," and "Lioness," which have performed exceptionally well both domestically and internationally. The paragraph also notes the successful launch of two new Showtime series, "Dexter: Original Sin" and "The Agency." As a result, Paramount+ ranked as the second highest domestic SVOD for hours watched in Q4. Additionally, it highlights the ongoing success of "Yellowstone" and "South Park" as key drivers of engagement and subscriptions. Looking forward to 2025, the company anticipates another exciting slate of content.

The paragraph highlights the successful launch and performance of new and returning shows on Paramount+ and CBS. Season 3 of "Yellow Jackets" saw a significant viewership increase, and "Yellowstone 1923" became the most-watched original premiere on Paramount+. Upcoming series like "MobLand" and "Happy Face" are expected to further strengthen Paramount+'s offerings in 2025. On CBS, shows like "Tracker" and "Matlock" are leading in viewership, while sports broadcasts, particularly the NFL and UEFA coverage, have achieved significant growth in both audience size and streaming on Paramount+. This success underscores the continued relevance of broadcast TV and its integration with streaming platforms.

The paragraph discusses Paramount Global's financial and operational performance. Paramount delivered significant earnings growth in 2024, with adjusted OIBDA increasing by 30% to $3.1 billion, improved cash flow, and reduced net leverage. The direct-to-consumer (D2C) business particularly drove growth, with Paramount+ gaining 5.6 million subscribers in the fourth quarter, bringing the total to 77.5 million. Subscriber growth was boosted by strong content offerings, including originals and sports. Engagement levels were high, with increased watch time leading to reduced churn. Paramount+ also saw a 1% ARPU growth year-over-year in Q4, impacted by previous and recent price increases.

The paragraph discusses Paramount+'s financial performance, highlighting a 14% increase in subscription revenue due to subscriber growth, reduced churn, and improved ARPU, contributing to a 8% growth in the D2C segment. While the integration of Showtime temporarily affected revenue growth, it boosted D2C profitability by over $200 million in Q4. Despite a $286 million loss in the segment due to content slate seasonality, full-year D2C losses improved significantly by nearly $1.2 billion to $497 million. In TV Media, revenue fell 4% to $5 billion due to declines in affiliate and advertising revenue, influenced by fewer football games, softer ratings, and international advertising challenges. However, TV Media licensing revenue rose 3% due to secondary licensing growth.

The paragraph discusses the financial performance and strategic initiatives of a TV media and filmed entertainment company. Secondary TV media licensing saw strong growth domestically due to a normalized content slate, while international licensing grew more slowly. TV Media's operating income was $949 million, with expenses remaining flat due to cost-reduction efforts, despite increased content and compensation costs. Filmed Entertainment generated $1.1 billion in Q4 revenue but had a $42 million operating loss due to marketing costs for multiple film releases and the timing of "Sonic 3." Overall, the company reported $406 million in adjusted operating income for Q4, impacted by higher compensation expenses. Free cash flow was $56 million for the quarter and $489 million for the year, including restructuring payments. Looking ahead to 2025, the company aims to leverage its content assets, especially in light of the Skydance transaction, to adapt to the streaming era.

The paragraph outlines Paramount's strategic plans for growth, focusing on continued investment in sports, film, TV franchises, and streaming content to boost direct-to-consumer (D2C) growth. There is a shift from linear to digital advertising and a focus on achieving profitability for Paramount+ while exploring cost-reduction opportunities. Paramount anticipates another year of free cash flow and strong Operational Income Before Depreciation and Amortization (OIBDA) growth, though Q1 OIBDA will decline compared to the previous year due to the absence of the Super Bowl's impact. Despite this, they expect net growth in affiliate and subscription revenue due to a balance between traditional and streaming businesses, and improved ARPU from Paramount+. Advertising trends will remain similar to Q4, but growth will be affected by comparisons with the 2024 Super Bowl. Overall, OIBDA growth is expected to be stronger in the year's second half due to cost reductions and the Super Bowl timing.

The paragraph discusses Paramount’s financial outlook and operational successes. It mentions that despite lower free cash flow expected in Q1 due to cash restructuring payments and the impact of the Super Bowl, the company anticipates an increase in free cash flow for the full year 2025. This optimistic outlook is supported by significant growth in OIBDA, improved profitability in direct-to-consumer operations, increased full-year free cash flow, and reduced net leverage, alongside successful content investment. In a subsequent Q&A session, Robert Fishman from MoffettNathanson asks about Paramount+ and its ability to compete with larger streaming platforms, as well as plans for content spending. Chris McCarthy responds that the company is satisfied with Paramount+'s success and subscriber growth.

In Q4, the company experienced record engagement, which led to a 20% increase and significantly reduced churn. They ranked as the number 2 SVOD in original series spending, resulting in 33% revenue growth and improving their DTC segment profitability by $1.2 billion. The company is confident about reaching profitability by 2025, a record time for U.S. SVOD. They are open to exploring opportunities for further value but have no news to share. Content spending in 2025 is expected to be relatively flat compared to 2024, which indicates stability after years of fluctuating expenses. More content will be allocated towards streaming or shared between linear and streaming platforms.

In the paragraph, Ben Swinburne from Morgan Stanley seeks clarification on profitability projections for Paramount+, inquiring if domestic profitability is expected by 2025. Chris McCarthy corrects his earlier statement, confirming that profitability for Paramount+ in the domestic market is indeed the target for 2025. Naveen Chopra discusses expectations for free cash flow growth in 2025, noting that restructuring costs have impacted cash flow figures. Despite the contributions from the Super Bowl and political events in 2024, Chopra expects significant improvement in free cash flow due to reduced cash content spending and better working capital management.

In the discussion, Jaime Morris asks about the discrepancy between the strong viewership growth metrics and revenue growth in the direct-to-consumer (DTC) segment, suggesting if increased viewership could indicate future revenue growth. Naveen Chopra responds that viewership often leads to monetization through ad sales and subscription revenue. He emphasizes that increased engagement helps reduce churn and supports price increases over time. The overall growth plan for the DTC business focuses on a mix of subscriber and average revenue per user (ARPU) growth, driven by sustained engagement, which ultimately enhances both advertising and subscription revenues.

The paragraph discusses expectations for OIBDA (Operating Income Before Depreciation and Amortization) in 2025, highlighting the significant impact of the Super Bowl in 2024, which created a headwind in Q1 due to its contributions to both the TV Media and D2C segments. Additional headwinds were noted from affiliate revenue, tied to deals made with major distributors since Q1 2024, making Q1 a critical period for assessing these renewals. It mentions that earnings for the full year will grow significantly if the Super Bowl and political impacts are excluded, but slightly decline if included. Jaime Morris then thanks Mike, and the operator introduces Steven Cahall from Wells Fargo, who inquires about expectations for company-wide affiliate and advertising growth in 2025, noting the challenges in linear television advertising and a slight slowdown in DTC (Direct-to-Consumer) in Q4.

In the paragraph, Chris McCarthy discusses the company's transition from linear to streaming, highlighting the growth in streaming through platforms like Paramount+ and Pluto, which has led to an 18% increase in direct-to-consumer advertising for the year. The linear side remains strong, especially with CBS and its successful sports broadcasts and primetime lineup. Despite pressures on the cable side, it represents a small portion of total ad revenue. Overall, the company feels positive about its momentum heading into 2025, with a strong content slate anticipated for the upfronts. Brian is expected to provide further updates on the content licensing market.

The article paragraph discusses positive feedback from advertising partners and a strong licensing business at the company. Brian Robbins highlights the internal licensing that doesn't show up in reported results but benefits the company's direct-to-consumer platforms. There's an emphasis on innovation in distribution strategies to maximize content value. Kutgun Maral from Evercore ISI asks about Paramount's positioning in linear distribution, particularly concerning affiliate revenue decline and new sports and news bundles. He inquiries about protective measures in distribution deals with platforms like YouTube TV to mitigate risks of customer downgrades. Additionally, he asks about the financial impact of a slate financing deal with Domain Capital. George Cheeks responds, stating the importance of their sports offerings, suggesting any viable sports bundle would need to include CBS.

The paragraph discusses two main topics. First, the company's strategy regarding distribution relationships, highlighting its inclusion in Comcast's Sports and News TV package and negotiations with DIRECTV for the MySports offering. It explains that while experimenting with "skinny bundles," the company remains cautious about their value compared to full bundles. Second, it mentions a long-term partnership between Domain and Paramount Pictures for slate financing across various film genres and budgets, noting that such deals are not new and are beneficial for production cash flow. The paragraph concludes with Chris McCarthy expressing satisfaction with their transformation into a streaming-first company and success in 2024, looking forward to 2025.

The paragraph expresses gratitude to the talented teams and creative partners for their contributions to the company's achievements. It concludes a call, with the operator thanking participants and instructing them to disconnect their lines.

This summary was generated with AI and may contain some inaccuracies.