Versant Media has reported third-quarter earnings well ahead of analysts’ expectations and reaffirmed its full-year financial outlook, as growth in digital platforms helped offset weaker advertising and linear television revenue.
The company posted adjusted earnings before interest, tax, depreciation and amortisation of $353 million for the three months to September 30, beating the $305 million forecast by analysts. Earnings per share came in at 34 cents, against expectations of 5 cents.
Revenue was $1.59 billion, compared with an expected $1.57 billion and $1.66 billion in the same period last year. Versant said the latest figure reflected the acquisition of golf simulation company Full Swing and the sale of sports management software business SportsEngine.
Digital platforms generated $245 million in revenue, a rise of almost 10% year on year. Fandango recorded significant growth in ticketing revenue, reaching its highest quarterly level since the pandemic.
Advertising revenue fell 5.3% to $373 million, which Versant attributed mainly to the impact of last year’s Ryder Cup. Revenue from linear television declined 5.8% to $935 million amid continuing pressure from cord-cutting and falling subscriber numbers.
Versant Media points to digital growth and distribution deals
Versant’s portfolio includes CNBC, MS NOW, Golf Channel and other cable and digital properties. Its networks reached more than 120 million viewers a month during the quarter, while aggregate viewership increased by double digits compared with a year earlier.
The company also launched a direct-to-consumer product for MS NOW and an on-demand service through Fandango. CNBC is expected to launch its own direct-to-consumer product next year.
Versant completed four major distribution renewals during the year following its separation from Comcast’s NBCUniversal. Chief executive Mark Lazarus said 75% of the company’s network subscribers were now under contract into 2028 and beyond.
“We understood the questions raised at the time of the spin about our ability to secure attractive carriage renewals,” Mr Lazarus told analysts. “We’ve now answered that question: 75% of our network subscribers are now under contract into 2028 and beyond, so we have clear visibility going forward.”
Net income fell to $47 million, or 34 cents per share, from $80 million, or 56 cents per share, a year earlier. Versant said live sport remained a major source of audience engagement, with WNBA viewership on its USA Sports networks 25% higher than the previous year’s cable average.
The company maintained its full-year revenue forecast of between $6.2 billion and $6.45 billion, alongside an adjusted EBITDA outlook of $1.9 billion to $2.05 billion. It also said free cash flow was now expected to exceed the previous range of $1 billion to $1.2 billion.
Versant began trading as a standalone company on the Nasdaq in January after separating from Comcast. Executives have said they intend to diversify the business so that digital, platform, subscription, advertising-supported and transactional operations eventually account for half of revenue.
The company also announced a further $100 million accelerated share repurchase programme, due to begin on Wednesday and be completed during the fourth quarter.
