Paramount Global

Good day, everyone, and welcome to the Viacom conference call. Today's call is being recorded. At this time, I'd like to turn the call over to Executive Vice President of Investor Relations, Mr. Anthony DiComente. Please go ahead, sir.

Good morning, everyone, and thank you for taking the time to join us for our first quarter 2021 earnings call. Joining me for today's discussion are Bob Backish, our President and CEO, and Naveen Chopra, our CFO. Please note that in addition to our earnings release, we have trending schedules containing supplemental information available on our website. We also have a slide presentation for you to follow along with our remarks. I want to refer you to the second slide in that presentation and remind you that certain statements made on this call are forward-looking statements that involve risks and uncertainties. These risks and uncertainties are discussed in more detail in our filings with the SEC. Some of today's financial remarks will focus on adjusted results Reconciliations of these non-GAAP financial measures can be found in our earnings release or in our trending schedules, which contain supplemental information, and in each case can be found in the investor relations section of our website. Now I will turn the call over to Bob.

Thanks, Anthony. Good morning, everyone, and thank you for joining us. It's been about 10 weeks since we laid out our streaming strategy and goals at our investor event. Since then, we successfully launched Paramount Plus in March, and I'm thrilled with where we are in streaming and overall. On today's call, I'll cover three topics. First, ViacomCBS's strong Q1, a quarter with clear operating strength and sequential improvement in key financial metrics. Second, the company's momentum in streaming, momentum which is clearly visible in the metrics across fee, pay, and premiums. and momentum, which gives us even more confidence in our strategy. And third, our path forward, an overview of the content we have coming, and our plan to build on the early success of Paramount Plus by leaning in even more. Then I'll hand it over to Naveen to provide additional financial and operational detail before opening it up to take your questions. I'll start with Q1 2021 results. where I'm pleased to say we achieved another quarter of year-over-year growth in revenue, adjusted OIVDA, and adjusted EPS, further demonstrating the strength of ViacomCBS and our related recovery from COVID's impact on the business. It all starts with the power of our content and its enduring popularity with audiences. In Q1, ViacomCBS had the number one share of viewing in the U.S. across key demos. As part of that, CBS currently ranks number one among all broadcasters and will finish the 2020-2021 season as America's most watched network in primetime for the 13th straight season. We also own the most top 30 cable networks among persons 2 plus and persons 18 to 49 in the quarter. And Showtime had the top two scripted shows on premium cable. In social, VodConCBS was the number one company among broadcast, cable, radio, and film properties in global social news. And, as you'll hear momentarily, streaming consumption is on a powerful growth trajectory. That performance translated into total revenues of $7.4 billion, a 14% increase year over year, driven by strength across key revenue types, including advertising, affiliate, and streaming. In advertising, which now excludes streaming, revenue grew 21%. The big picture here is that underlying advertising demand is strong and trending in a positive direction as the reopening of the economy gains momentum. And of course, we clearly benefited from our broadcast of the Super Bowl and NCAA tournament games. In affiliate, which now also excludes streaming, we're seeing the power of the combined company manifest itself as revenue grew 5%, benefiting from successful renewal activity, incremental carriage, and price increases. And since our last call, 14 ViacomCBS cable networks, including Comedy Central, MTV, Nickelodeon, and BET, went live on Hulu's VMVBD platform. We also completed a new distribution deal with Frontier, further demonstrating our valuable partnerships and must-have content. And we've seen robust growth in global streaming revenue, which is up 65% year over year. I'll dig into this momentarily. On top of that, we have substantially strengthened our financial position, benefiting from the $1.7 billion of adjusted free cash flow we generated in the quarter and fortified by the $2.7 billion of capital we raised from our equity offering in March. Now, I'd like to spend some time on our strategy and execution in streaming. Starting with free, where Pluto TV is the largest free ad-supported streaming service across all metrics, monthly active users, total viewing hours, and revenue. This based on all publicly disclosed information. Clearly, the top of funnel continues to be robust, particularly as Pluto TV added 6 million MAUs in the quarter, bringing the total globally monthly active users to nearly 50 million, reflecting continued domestic growth and international expansion. And that user growth is translating into strong advertising performance. Across all our streaming advertising businesses, we saw a 62% surge in year-over-year growth in streaming advertising revenue, reaching $428 million in the first quarter. That growth was led by Pluto TV, where revenue more than doubled year-over-year. High-value connected TV usage accounts for the overwhelming majority of Pluto TV consumption. with domestic monthly watch time per user increasing 28% year on year, making it a very desirable advertising platform for our clients. To build on this growth, Pluto TV continues to substantially scale its content offering. During the quarter, Pluto TV launched 19 new channels, including Major League Baseball, Smithsonian, and Paramount Plus Picks. All in, Pluto TV now has over 150,000 hours of content from 250 active U.S. partners. And this week, we launched Pluto TV en Español, a bold new update and expansion, essentially doubling Pluto TV's U.S. Hispanic offerings to nearly 50 channels and 20,000 hours of content. This, alongside the existing English offering, makes it ideal for bilingual audiences as well. Internationally, we also continue our expansion of Pluto TV. During the quarter, we launched in France and are now in 25 markets spanning Latin America, including Brazil, the UK, Germany, and Spain. Bottom line, Pluto TV has seen robust global growth in usage, monetization, and sell-through, benefiting from a strong set of underlying drivers and over-delivering across all metrics. In premium streaming, Showtime OTT had its strongest quarter ever, delivering another record-setting quarter in signups while generating unprecedented viewership. In fact, it was the best quarter ever for streams and hours watched on the service. Viewers were highly engaged, driven by hits like Shameless and Your Honor. And looking forward, the content lineup for Showtime over the next year looks really strong. And then, there's Paramount+. As I said in our investor day, Paramount Plus comes to the streaming space with real competitive advantages and with a strategy that's unique to the marketplace. As a result of the strong launch of Paramount Plus on March 4th and the continued momentum in our other streaming services, we added 6 million new global streaming subscribers in the quarter, bringing our total global streaming subscribers to 36 million. Needless to say, we're thrilled with these early results. We're clearly seeing the benefit of putting the full power of ViacomCVS behind Paramount+. The service benefited from a dramatically expanded and diversified content slate communicated through a robust multi-platform marketing campaign. March was our biggest month ever for signups, and consumption was strong, with watch time per active subscriber up 17% year over year. The broadening of the service is clearly working. In fact, almost half of subscriber engagement came from originals as well as content from Paramount and our cable network. And our diversified content mix, including kids content, content from MTV, and sports like soccer, reduced the average age of new subscribers by six years in the quarter. Looking ahead, we're excited about the ad-supported Paramount Plus 499 tier. which will be coming in early June. Paramount Plus joins Pluto TV's premium digital inventory as anchors of our ViacomCBS IT advertising offering, providing us with another powerful tool to showcase the full advertising power of ViacomCBS and our ability to satisfy the growing demand among advertisers in the category. Internationally, we launched Paramount Plus in Latin America, Nordics and Canada, and these markets are also showing strong initial performance when it comes to both subscriber and engagement trends. And as part of the international rollout, we're expanding our distribution and awareness of Paramount Plus by signing creative partnerships with leading MVPDs and e-commerce platforms. For example, in April, Paramount Plus launched on Megacabra, one of the largest cable operators in Mexico. Also in April, Paramount Plus partnered with Mercado Libre, the largest e-commerce ecosystem in Latin America, with recent launches in Brazil and Mexico. Another international transaction I want to highlight is our agreement to acquire Chile Vision, the leading broadcast network in Chile. This deal will strengthen and expand our presence in the southern cone of Latin America and help accelerate our streaming strategy in the region, by expanding our already substantial Spanish language library and production capabilities. Together with Telefe in the South Cone, Chile Vision will contribute to ViacomCBS International Studios becoming one of the largest content creators of Spanish language globally. And it's a great promotional asset for our streaming product offerings as well. Stepping back from this, it's clear our unique strategy across free, premium, and paid is working, which is why we're leaning in even more. As you know, we completed a $2.7 billion capital raise in March. Naveen will speak about this in greater detail in a few minutes. But know that we did this transaction because we saw an attractive opportunity to raise capital to fund incremental content and other investments to further drive our streaming ambition. And we've already begun to move on a few early opportunities in this regard. I want to finish by speaking a bit more of what's to come, particularly from a content perspective. In February, we laid out a content strategy for Paramount+. A strategy focused on key pillars that differentiate the service in the market. Sports, news, kids, unscripted and reality, scripted and movies. And since launch, that content has already started to scale and show real momentum. There's no question that live sports and breaking news clearly differentiates Paramount+. And Q1 saw a series of important events in this lane, including the Super Bowl, UEFA, the NCAA Men's Tournament, the PGA Tour, and Oprah's interview special with Meghan and Harry. These events were key engagement and sign-up drivers. And looking forward, we're excited about our expanded soccer slate, the return of the NFL, college football, and more. Speaking of football, as you know, in March, we extended our partnership with the NFL for another decade. This is a partnership we're thrilled about, and streaming rights are a critical component of that deal. Among other things, Paramount Plus will have the flexibility to distribute NFL games on both the premiums here at $9.99 and the new $4.99 ad-supported tier. And as we announced in February, Inside the NFL will be exclusively available on Paramount Plus starting this fall. And we're continuing to build critical mass in soccer. CBS Sports and Paramount Plus recently acquired exclusive U.S. rights to Serie A, the premier Italian soccer league. It's another major step in us becoming the number one destination for soccer fans. with an unbeatable portfolio of now over 1,400 soccer matches each year, with teams including Juventus, Real Madrid, and Chelsea. This on top of all the other marquee CBS sporting events we deliver. Moving to kids, thanks to our Nickelodeon brand and massive library with renowned characters and global franchises, Subscribers are discovering new content or re-watching some of their favorite shows. Since the Paramount Plus launch, we've seen robust audience engagement with kids and family content. Nickelodeon originals like the SpongeBob movie Sponge on the Run, Camp Coral, as well as library content like Paw Patrol were some of the strong performers in the quarter, driving sign-ups and engagements. And we're excited for the upcoming launches of Rugrats in May and iCarly in June, new versions of two iconic Nick franchises that have fans buzzing in social. In Unscripted and Reality, the fastest growing genre in streaming, we saw solid early momentum. Exclusive original shows like MTV's The Challenge All Stars and Real World Homecoming, plus library shows like Ink Master, all had very strong engagement. And we continue to ramp up reality series on the platform, including new exclusive originals, starting with Cradle to the Stage, starring Dave Grohl later this month, a new RuPaul in June, and later in the year, the return of Behind the Music. And in scripted. Originals like The Stand, Younger, and Star Trek Discovery are performing extraordinarily well. By the end of the year, you'll start to see a substantially scale the volume of new exclusive originals, including new drama series like the first Yellowstone spinoff, Why 1883, female-led dramas like Why Women Kill and The Good Fight, comedies such as Inside Amy Schumer, Trevor Noah Weekly, and The Games, and original franchises like Star Trek Prodigy and the fourth season of Star Trek Discovery. In addition, we're expanding our global Paramount Plus pipeline. As a first step in this endeavor, we're adding a number of originals produced by Viacom International Studios. This will start as soon as this summer, with scripted content produced in Latin America and factual content produced out of the UK. Finally, turning to movies, where we are poised to dramatically enhance the scale of our offerings. In fact, we will shortly kick off a mountain of movies marketing campaign where we will highlight the thousands of new movies we're adding to Paramount+, including blockbuster hits and exclusive originals. We start by greatly expanding the depth of the film library on the service. 1,000 additional movies are going live in early June, with additional titles following through July, bringing the total to over 2,500. Hits like The Avengers and Skyfall will be available on the service soon, as well as a bunch of great Paramount films like Mission Impossible Ghost Protocol, Rocketman, Sonic the Hedgehog, and more. And I'm thrilled to announce that Infinite, a sci-fi thriller starring Mark Wahlberg, will premiere exclusively on Paramount Plus in June. That will be followed by the streaming premiere of A Quiet Place Part II after its 45-day theatrical run, and we will follow that with the Paw Patrol movie, a treat for families eagerly awaiting a feature-length version of the most popular preschool characters in the world. In addition, new original movies like Paranormal Activity and The In-Between will premiere on Paramount Plus by the end of 2021. And all of this is a preview to a substantial ramping up of original movies next year, where we expect to begin averaging an original movie a week in 2022. We'll have more on this in the months ahead. And finally, we're moving to accelerate Paramount Plus' global expansion. We have already established ourselves in Canada, the Nordics, and all of Latin America, including Brazil. Next up is Australia on August 11th. a launch that will include Paramount Movies, Showtime, and Paramount Plus Originals, in addition to a cross-section of product from our cable brands and Network 10. By the end of 2021, we'll have launched subscription streaming services led by Paramount Plus in 25 markets. And now, we plan to almost double that by the end of 2022, when our global streaming footprint will reach 45 markets, all in less than two years. Net-net, we're thrilled with the performance of Paramount Plus thus far. Our strategy is working. We're investing in content with a disciplined approach. We have a lot in the pipeline, and we look forward to what's to come. Now, I'll turn it over to Naveen to cover the quarter's financial performance in greater detail. Naveen?