AMC Networks Posts Weak Second-Quarter Results

AMC Networks reported a challenging second quarter, with revenue declining 8.8% year over year to $547.5 million, falling short of Wall Street expectations. The company also posted a non-GAAP loss of $0.28 per share, reflecting pressure across several areas of its business.

Management attributed the weaker performance to ongoing declines in affiliate fees, softer advertising demand, and the timing of major content licensing agreements.

Chief Executive Officer Kristin Dolan said streaming subscriber growth was slower than anticipated, citing geopolitical developments and heightened competition from major sporting events that diverted audience attention during the quarter.

Netflix Licensing Agreement Becomes Strategic Centerpiece

The company’s most significant strategic development was the announcement of a global co-exclusive licensing agreement with Netflix covering all 371 episodes of The Walking Dead universe.

Management views the agreement as a major validation of AMC’s extensive library of owned intellectual property and expects it to generate substantial high-margin licensing revenue over multiple years.

Chief Financial Officer Hozefa Lokhandwala noted that while licensing revenue may create quarterly fluctuations due to accounting timing, it provides greater long-term visibility into cash generation.

Management expects the agreement to contribute approximately $200 million to $225 million annually in licensing revenue during 2026 and 2027, with a significant portion eligible for upfront revenue recognition.

Streaming Business Faces Mixed Trends

While subscriber additions fell short of internal expectations, AMC reported encouraging trends in customer retention and engagement.

Management indicated that recent subscription price increases did not materially weaken customer loyalty, and viewing activity improved across the company’s streaming services.

The company also continues expanding distribution through bundled offerings with major platform partners.

During the quarter, AMC renewed carriage agreements with four of the five largest U.S. television distributors, including Comcast and YouTube, moves that management believes will help stabilize affiliate revenue during the second half of the year.

Advertising Remains Under Pressure

Advertising revenue continued to face headwinds.

Domestic advertising declined by a mid-single-digit percentage, excluding the impact of a previously disclosed technical integration issue. Lower television ratings and softer advertising pricing remained the primary challenges.

However, digital advertising posted growth during the quarter, while several original programming releases attracted stronger audience engagement, partially offsetting weakness in traditional linear television advertising.

International Business Shows Resilience

International operations delivered modest revenue growth supported by stronger local sports programming and improved advertising performance.

Those gains were partially offset by the winding down of joint venture operations in Poland and Africa, limiting overall international growth.

Management continues to evaluate international opportunities while focusing investment on markets capable of generating stronger long-term returns.

Content Monetization Drives Future Strategy

AMC Networks is increasingly repositioning itself as an owner and licensor of premium entertainment franchises rather than relying primarily on traditional television distribution.

Management indicated that additional licensing opportunities involving its content library remain a strategic priority, using the success of The Walking Dead agreement as a model for future partnerships.

The company also expects recently signed affiliate agreements and bundled streaming offerings to moderate subscription revenue declines while improving customer retention.

Outlook

AMC Networks is navigating the industry’s transition away from traditional cable television by placing greater emphasis on monetizing its intellectual property through global licensing partnerships. The landmark Netflix agreement for The Walking Dead franchise is expected to become a significant driver of cash flow over the next several years, helping offset ongoing pressure from declining affiliate fees and advertising revenue. While near-term results remain challenged by shifting consumer viewing habits and macroeconomic uncertainty, management believes its growing library of owned content and expanding distribution partnerships position the company for more stable long-term revenue generation.