AMC Global Media Inc.

Good day, and thank you for standing by. Welcome to the AMC Network's fourth quarter and full year 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will 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 now like to hand the conference over to your speaker today, Nick Siebert, Vice President of Corporate Development and Investor Relations. Please go ahead.

Thank you. Good morning and welcome to the AMC Network's fourth quarter and full year 2023 earnings conference call. Joining us this morning are Kristen Dolan, Chief Executive Officer, Patrick O'Connell, Chief Financial Officer, Kim Kelleher, Chief Commercial Officer, and Dan McDermott, President of Entertainment and AMC Studios. Today's press release is available on our website at amcnetworks.com. We will 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 Network's SEC filings for a discussion of risks and uncertainties. The company disclaims any obligation to update any forward-looking statements made on this call. Today, we will discuss certain non-GAAP financial measures. The required definitions and reconciliations can be found in today's press release. With that, I'd like to turn the call over to Kristen.

Thanks, Nick, and good morning, everyone. It's been nearly a year since I joined AMC Networks as CEO, and I'm proud of the progress we've made in a fast-changing and challenging environment, both internally and in the way we engage with viewers and our commercial and creative partners. In the fourth quarter and across 2023, we continue to see success in the areas that will drive this company forward, programming, partnerships, and profitability. I'm encouraged that we were able to grow streaming revenue, strengthen our subscriber base, and expand our consolidated AOI margin to 25%, while meaningfully growing our free cash flow. In a moment, Patrick will provide a detailed look at our financial results for the most recent quarter and the full year, including our enthusiasm for the free cash flow potential of this business going forward. There has long been a saying in this industry that content is king. We believe that if content is king, cash is queen, and we are on a path that prioritizes both. In discussions around media and content companies these days, it's hard to miss the fascination with scale. From our perspective, we see strength in being nimble and independent and value the flexibility this provides us in the marketplace. We have opportunities that are frankly not possible for non-vertically integrated programmers who are tied to broadcast networks or large distribution businesses. We truly can dance with anyone and are enthusiastic about using the structural advantage that comes with this independence to better serve viewers and our commercial partners. With the introduction late last year of an ad-supported version of AMC+, we now have a fully ad-supported distribution ecosystem that includes our five linear networks, several targeted streaming services, and programming carriage of approximately 100 channel feeds on partner fast and CTV platforms. Our presence in all of these places is important for several reasons. Number one, we're able to reach viewers and make our content available wherever and however they might choose to watch. Secondly, and very much in line with that first objective, we use viewership insights and library management to window our shows and films across these brands and unique audiences to expand viewership and engagement in a cost-effective and responsible way. And third, we seamlessly work with our commercial partners across all of these platforms, which delivers value and functional benefits that wouldn't be possible if our presence was limited either to just linear or just streaming. We continue to be very bullish on new offerings like Zumo from Comcast and Charter that converge linear and streaming consumption at scale with dedicated customer service and technical support for viewers. The companies behind this new offering are some of our most important and long-standing commercial partners. We're pleased to have been with them on Zuma from the beginning and see great opportunity as they continue to roll out this new offering. In other affiliate news, we recently completed an agreement with Philo that will launch early this year. It will make the ad-supported version of AMC Plus part of Philo's base video offering. Just another example of how the ad-supported tier gives customers additional flexibility, but also boosts our commercial revenue partnerships and potential for bundling while getting our shows and films in front of more viewers. It's early days, but we are very pleased with the response to the ad-supported version of AMC Plus, and we have an established runway for growth as more partners add the option this year. We still put high quality original shows on AMC every Sunday night of the year, an increasingly rare approach that drives value for our traditional affiliate partners. But importantly, this is not the only place we put these shows or the only way we work with our partners. Yes, we ended the year with five of the top 20 dramas on cable and three of the top six new cable dramas. But just as importantly, The cable companies that are seeing the benefits of that linear performance also carry AMC Plus on their own systems as an integrated offering to their customers. We drive viewership in both places. We were happy with the results of our content partnership with Max late last year. Our shows performed well on their platform, and we saw associated viewership increases on AMC Plus as well. We remain in discussions with a wide variety of potential partners and believe we will see additional bundling activity in the future. Across the industry, we really do need to make things easier and more cost-effective for our customers. The current environment is confusing, expensive, and essentially forces consumers to recreate the cable bundle on their own at twice the price. We saw an example of new thinking on bundling and partnerships just this week with the announcement from major industry players on a new sports bundle. I believe this industry will continue to find new approaches that will better serve consumers, distributors, and content companies. Turning to advertising, we've been very focused on driving new technology and capabilities that both benefit us and change how the industry does business. In the fourth quarter, we became the first programmer to enable programmatic ad buying on linear networks. This followed our first of its kind deployment of fully addressable spots in our national linear programming feeds. These advances make our linear and digital inventory much more valuable and effective. Going to market with a programmatic first approach and a fully converged linear and digital offering lets us enter into broader and more meaningful advertising partnerships. Some of the early advertisers using our programmatic linear capabilities are seeing conversion rates that are four or five times that of linear traditional campaigns, with significant boosts in incremental, unduplicated reach from their conventional ad buys. For the first time on linear television, advertisers can buy audience segments instead of broad demos tied to time slots. with custom attribution results delivered post-campaign. This is real differentiation we can bring to this year's Upfront and beyond. Another area of focus for us is a technological overhaul and consolidation of our back-end systems and shift to one platform supporting all of our streaming services. This development work will carry forward in 2024 and will improve our service to customers and maximize efficiencies. Leading this effort is Stephanie Michko, who recently joined the company as our head of global media operations and technology. Stephanie and I worked together at Cablevision, where she did award-winning work around content discovery and helped develop and deploy the industry's first cloud-based DVR. She then went on to become CTO and COO of Cadence, where she was immersed in the world of ad tech and most recently served as CTO of Charter. We're thrilled she is here with us and leading this important evolution. As always at AMC Networks, everything we do ties back to the shows and films we're able to make and put in front of viewers. I want to close my remarks today with some results from 2023 that demonstrate our strong audience momentum and also provide a look ahead at 2024. The fourth quarter of last year was our most watched quarter ever across our streaming portfolio, which, as you know, is designed to super serve fans of specific genres and content categories. AMC Plus and High Dive achieved their number one quarters ever in terms of viewership, and Shudder and Acorn TV also showed significant strength to close the year. Programming achievements included first season of The Walking Dead, Daryl Dixon, which is now the most watched season in the history of AMC Plus, and that includes the final season of The Walking Dead itself. VHS 85 is Shudder's most watched film ever. The Eminence in Shadow Season 2 is High Dive's most watched season ever, and Toya and Regine is All Black's number one new series of all time in both viewership and customer acquisition. We had a lot of success with our shows and films last year, and the year ahead looks just as exciting. Earlier this week, we brought a slate of new shows to the twice-annual meeting of the Television Critics Association, or TCA. Even in the wake of two strikes that shut down production for six months, I don't believe we've ever presented a more compelling and eclectic collection of shows than we did this week. These shows included Monster Spade, a critically acclaimed series starring Clive Owen as the immortal detective Sam Spade, Parrish, which is premiering at the end of March, with Breaking Bad and Better Call Saul's Giancarlo Exposito in a leading role, and the second season of the popular Anne Rice's Interview with the Vampire, which returns to AMC and AMC Plus on May 12th. The latest addition to our expanding universe around The Walking Dead, The Walking Dead, The Ones Who Live, premieres on February 25th and is focused on fan favorite characters Rick and Michonne. As we enter the final weeks of our promotional campaign, we're seeing enormous fan interest and anticipation in this continuing story. The final trailer for the series just dropped and generated 16 million plays in its first 24 hours and nearly 33 million plays in a single week. We're also bringing Rick and Michonne into Activision's blockbuster video game franchise, Call of Duty, proving the enduring allure of these beloved characters across the media landscape. This is meaningful indication of the continued fan's interest for this universe, which is important to us given that we have second seasons of the two other character-driven spin-offs, Dead City and Daryl Dixon, on the way. In a world in which a premiere is when a viewer first decides to watch something, as opposed to when a network first decides to show it, we see a very long tail and incredible value in this beloved and expanding franchise. As I look back on 2023, I'm proud of the progress our internal teams have made in transforming the company to adapt and thrive as this competitive and fast-changing environment continues to take shape. We entered 2024 very much focused on programming, partnerships, and profitability as our three principal drivers of the company and its continued success. And I'm energized by this work, our people, and the road ahead. And now I'll turn the call over to Patrick.