Paramount Global

Thank you. Good day, everyone. 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 DiClemente. Please go ahead, sir.

Good morning, everyone. Thank you for taking the time to join us for our second 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. I want to 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.

Good morning, and thank you for joining us today. I'm pleased to report that ViacomCBS once again delivered in the second quarter of 2021. The company's continued momentum is evident, from robust revenue growth in advertising and affiliate sales to the phenomenal content-driven trajectory of our flagship streaming services, Paramount+, Showtime OTT, and Pluto TV. which clearly demonstrates that our streaming strategy across pay, premium, and free is working. And we expect this momentum to continue in the second half of the year. On today's call, I'll cover three topics. First, I'll briefly discuss ViacomCBS's strong Q2 results, where we reported operating strength and year-over-year revenue improvement. Second, I'll highlight the company's momentum in streaming and the underlying content drivers. And finally, I'll discuss our go-forward global streaming expansion. Then I'll hand it over to Naveen to provide additional financial and operational details before opening it up for Q&A. Let me start with the company's second quarter results, where we achieved another quarter of solid performance as total company revenue grew 8% year over year to $6.6 billion. Here, I want to highlight a few important items from an operating standpoint. In advertising, which remember excludes streaming, revenue grew 24%, benefiting from the return of a range of sports programming, a material improvement in the ad market, and strong execution. Q2 2021 obviously looks very different than Q2 of 2020, and we were happy with our ability to convert this into strong revenue performance. Speaking of advertising, I'm pleased to say we saw very strong demand in the upfront, which led to historic levels of linear price increases, plus an ability to drive a significant volume towards our premium digital video inventory. The upfront was a perfect platform for ViacomCBS to unlock value from its leadership position. A position underpinned by premium content and a robust client-centric approach to ad solutions, combined with offerings spanning both linear and IQ, our premium digital video advertising platform. And the results speak for themselves. In affiliate, which also excludes streaming, revenue grew 9% for the quarter. And since the close of Q2, we've renewed and expanded multi-year distribution deals with both Charter Communications and Cox Communications. Our recent agreements demonstrate how these affiliate relationships have evolved to become more modernized and include streaming elements as well. These recent deals, along with others ViacomCBS has executed, including Dish, Verizon, YouTube TV, and Hulu, further demonstrate the demand for our content and brands and the strength of our company. And in theatrical, revenue reached $134 million, thanks to theaters reopening and the success of A Quiet Place Part II. which is also now streaming on Paramount+. Speaking of streaming, we saw impressive global growth, with revenue almost doubling year over year to nearly $1 billion, with strong performance across all metrics. Streaming advertising revenue more than doubled year over year, reaching $502 million in the second quarter. This growth was led by Pluto TV, where global monthly active users grew to over 52 million and revenue more than doubled year over year for the fourth consecutive quarter. The growth is remarkable, and we now in fact expect Pluto TV to comfortably generate more than $1 billion in revenue this year. The power of Pluto TV is unquestionable. More consumers are spending more time with Pluto than ever, enjoying the now over 200,000 hours of content available on the platform in the U.S., which has doubled in the past year. And its integration into our advertising portfolio is compelling to our clients and the agencies that represent them. So it's no surprise Pluto TV continues to be the leading free ad-supported streaming television service in the market. Streaming subscription revenue also accelerated. growing 82% year over year, driven by strong subscriber growth fueled by Paramount+. In the quarter, we added 6.5 million global streaming subscribers, our largest number yet, bringing our total global streaming subscribers to over 42 million. These results further demonstrate the strength of our diverse content portfolio and the universal appeal of Paramount+. It's clear Paramount Plus is resonating with consumers both in the U.S. and internationally, and that's because it's a differentiated product with real competitive advantages. It has something for everyone, and we saw a strong subscriber acquisition and engagement across a variety of different genres. For kids and young adults, we saw tremendous viewership for the new iCarly series, which was a leading acquisition driver in the quarter and which was just renewed for season two. We also saw continued strength from a range of kid-favorite Nickelodeon franchises, including SpongeBob, Rugrats, Paw Patrol, and more. In film, Infinite, starring Mark Wahlberg, premiered exclusively on Paramount Plus in June, and was one of the top engagement drivers. Additionally, we saw a nice uptick in overall film engagement with users, as we added over a thousand movies to our extensive film library. In sports and news, the UEFA Champions League was a top acquisition driver, while news, including CBSN, continues to generate meaningful engagement. In scripted, Why Women Kill, Evil, and NCIS drove significant acquisition, engagement, and consumption this quarter. NCIS, in particular, continues to perform well, now a top five driver of both engagement and consumption on the platforms. And finally, unscripted has growing momentum where shows with strong and devoted fan bases like RuPaul and the Challenge did very well in driving new subscribers and consumption respectively. Add it up and you see our strategy of building a multi-genre, broad content offering is clearly working. And as the breadth of content expands, the average age on Paramount Plus continues to get younger. decreasing two years since last quarter to 35. In fact, this diverse array of content often appeals to multiple people in the same household and can therefore be a powerful tool to not only drive subscribers, but also reduce churn over time. In short, by putting the full power of ViacomCBS behind Paramount+, we're beginning to see the massive potential this service has. Also in June, we launched the ad-supported Paramount Plus Essential Plan. This version of Paramount Plus has a lower price point of $4.99 a month, appealing to more cost-conscious consumers, and thereby increasing the size of Paramount Plus's total addressable market. In addition, it provides advertisers with a new option to reach valuable consumers in a high-quality environment, something our recent upfront experience demonstrated was very compelling. While it's early days, Paramount Plus is clearly working, which is why we're continuing to invest to deliver on its promise and potential. To that end, looking ahead, we have amazing content coming to the service, and we will continue to scale volume across the range of genres that together differentiate Paramount Plus. Kids, sports, unscripted, scripted, and film. To give you a sense, Here are some examples of what's coming to the service between now and the end of the year. Right now in film, we're streaming A Quiet Place Part Two. This is the first title in our fast follow from theatrical strategy and it is doing very well. On August 20th, Paw Patrol the movie will premiere day and date in both theaters and on Paramount+. We're excited about a day and date strategy for this title and this audience in today's marketplace. and we're supporting it with a robust marketing campaign, which includes our consumer products presence at retail. In sports, we're thrilled that a new season of Serie A soccer, our first with the franchise, will begin in late August. And we've also recently added new seasons of compelling reality and docuseries to the service, including Big Brother, Love Island, and just last week, the return of the iconic Behind the Music series. Of course, in September, we have the return of the NFL, and the folks at CBS and Paramount Plus are gearing up for some amazing collaboration. Additionally, we have a great fall lineup on CBS, including the expansion of some key franchises like NCIS Hawaii, CSI Vegas, and FBI International, all of which are also streaming on Paramount Plus. And I'm thrilled to announce that we've extended our deal with Trey Parker and Matt Stone through 2027, bringing South Park to Comedy Central through season 30. In addition, Trey and Matt will be doing 14 South Park original movies exclusively for Paramount+, two of which will premiere this year, and then two more every year through the term of the deal. And later this year, we have big new scripted series premiering, like Taylor Sheridan's Y1883, the origin story of the number one scripted show on cable, Yellowstone, as well as Taylor's newest series, Mayor of Kingstown, and more. From a promotional standpoint, we'll leverage our linear platforms as subscriber acquisition vehicles. For example, Y1883 and Mayor of Kingstown will premiere on the Paramount Network behind Yellowstone for two episodes each, then move over exclusively to Paramount+. We will use this same strategy on CBS with SEAL Team. Turning to premium streaming, Showtime OTT had another strong quarter, delivering one of the best quarters for sign-ups while generating its second best quarter ever for streams and hours watched on the service. Viewers were highly engaged, driven by hits like the fourth season of The Chi the series finale of Shameless, and the Floyd Mayweather versus Logan Paul boxing event, among others. Looking forward, the content lineup for Showtime is strong. We have the premiere of Yellow Jackets, a dramatic show that is part psychological horror, part survival story. We also have the return of Dexter and Billions, both of which will have some creative product and marketing campaigns associated with these next seasons. In fact, Billion's promotional campaign will include availability on Paramount+, where we will have the first three seasons. In addition, we'll offer a bundle of Showtime and Paramount+, at a discounted price, to expand the reach of both services. That brings me to my third topic, global expansion. ViacomCBS has long been active outside of the United States, with operations on the ground all around the world. That global orientation now encompasses streaming, where we are leveraging our existing business footprint and relationships to enable rapid expansion of our streaming offerings. As an example, today, we're pleased to announce a new comprehensive and expanded deal with Sky covering the UK, Italy, Ireland, Germany, Switzerland, and Austria. This deal includes carriage renewals for our linear services, as well as renewals for our existing ad sales representation deals, plus robust launches of our streaming services to their sub-base in all the countries in 2022. This is a powerful deal. Not only does it extend important benefits and economics from our legacy business, but it's also a game changer for Paramount Plus in these markets. By unlocking previously exclusive to Sky content for use on Paramount Plus, and providing Paramount Plus with a very significant subscriber base at launch. In these markets, from a content perspective, Paramount Plus will be the exclusive home for new Showtime series and Paramount Plus originals. It will be the co-exclusive with Sky, home of Paramount Payone movies. The service will also be the exclusive streaming home of our most popular kid franchises, Paw Patrol and SpongeBob SquarePants. and it will have a very substantial library offering from across ViacomCBS. What excites me is our ability to work with a key partner, supporting both the traditional ecosystem and in transitioning consumers from linear to streaming in a way that is accretive to ARPU. Importantly, the deal preserves our ability to pursue D2C opportunities in these markets. Stepping back to the big picture, With our upcoming launch in Australia and New Zealand, I'm thrilled to report we've reached our goal of expanding Paramount Plus into 25 markets in 2021, and we're well on our way to 45 markets by the end of 2022. Simultaneously, we're continuing to drive Pluto's international growth. We recently launched on Clara Android in Brazil, a mobile service with an eligible user base of 32 million users. And in 2022, We expect Pluto TV to launch in additional markets, including the Nordics, Benelux, Canada, Poland, and more. We're thrilled with our international streaming progress and momentum in Q2. And we continue to see a massive opportunity to capitalize on our global content capabilities and infrastructure to further capture the global streaming opportunity. I know from my decade running our international business that every market is different and often requires different strategies and partnerships to succeed. We are executing with that in mind. And for sure, you will see us continue to lean in and allocate capital to what is a very large and high-growth total addressable market in streaming internationally. With that, I'll hand it over to Naveen to dive into our financials. Naveen?