Q1 2026 Versant Media Group Inc Earnings Call

May 14, 2026

Operator: Greetings. Welcome to Versant Media's Q1 2026 earnings conference call. At this time, I'll now turn the conference over to Wiley Collins, Executive Vice President of Investor Relations and Treasury. Thank you. You may begin.

Operator: Greetings. Welcome to Versant Media's Q1 2026 earnings conference call. At this time, all participants are in listen-only mode. Your question and answer session will follow the forward presentation. If anyone should require operator assistance during the conference please press star zero from your telephone keypad. Please note that this conference is being recorded. At this time I'll now turn the conference over to Wylie Collins, Executive Vice President of Investor Relations and Treasury. Thank you. You may begin.

Speaker #2: If anyone should require operator assistance during the conference, please press star zero (*) on your telephone keypad. Please note that this conference is being recorded.

Speaker #2: At this time, I'll now turn the conference over to Wiley Collins, Executive Vice President of Investor Relations and Treasury. Thank you. You may begin.

Speaker #2: Thank you and good morning, everyone. Welcome to Versant Media's first quarter 2026 operating and financial results conference call. Joining us today are Mark Lazarus, chief executive officer and Anand Kinney, chief financial officer and chief operating officer.

Wiley Collins: Thank you, and good morning, everyone. Welcome to Versant Media's Q1 2026 Operating and Financial Results Conference Call. Joining us today are Mark Lazarus, Chief Executive Officer, and Anand Kini, Chief Financial Officer and Chief Operating Officer. Also with us are Jordan Fasbender, General Counsel, and Natalie Candela, Vice President of Investor Relations. Before we begin, I'd like to remind you that certain statements made during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a discussion of these risks and uncertainties, please refer to Versant Media's filings with the SEC and today's earnings release.

Wylie Collins: Thank you, and good morning, everyone. Welcome to Versant Media's Q1 2026 Operating and Financial Results Conference Call. Joining us today are Mark Lazarus, Chief Executive Officer, and Anand Kini, Chief Financial Officer and Chief Operating Officer. Also with us are Jordan Fasbender, General Counsel, and Natalie Candela, Vice President of Investor Relations. Before we begin, I'd like to remind you that certain statements made during this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a discussion of these risks and uncertainties, please refer to Versant Media's filings with the SEC and today's earnings release.

Speaker #2: Also with us are Jordan Fassbender, general counsel and Natalie Candela, vice president of investor relations. Before we begin, I'd like to remind you that certain statements made during this call may constitute forward-looking statements within the meaning of the private securities litigation reform act of 1995.

Speaker #2: These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied.

Speaker #2: For discussion of these risks and uncertainties, please refer to Versant Media's filings with the SEC in today's earnings release. All forward-looking statements are made as of today, May 14th, 2026, and we undertake no obligation to update them.

Wiley Collins: All forward-looking statements are made as of today, 14 May 2026. We undertake no obligation to update them. In addition, we may refer to certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in today's earnings release and in the materials posted in the investor relations section of our website. During today's call, all comparisons to the prior year are against standalone adjusted figures, which represent our estimated 2025 results as if Versant were already a separate independent company. With that, I'll turn the call over to Mark.

Wylie Collins: All forward-looking statements are made as of today, 14 May 2026. We undertake no obligation to update them. In addition, we may refer to certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in today's earnings release and in the materials posted in the investor relations section of our website. During today's call, all comparisons to the prior year are against standalone adjusted figures, which represent our estimated 2025 results as if Versant were already a separate independent company. With that, I'll turn the call over to Mark.

Speaker #2: In addition, we may refer to certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in today's earnings release and in the materials posted in the Investor Relations section of our website.

Speaker #2: During today's call, all comparisons to the prior year are against standalone, adjusted figures, which represent our estimated 2025 results as if Versant were already a separate independent company.

Speaker #2: With that, I'll turn the call over to Mark.

Speaker #3: Thank you, Wiley, and good morning, everyone. We're off to a strong start to the year with continued progress and growth across key areas of the business driven by disciplined execution and the strength of our portfolio.

Mark Lazarus: Thank you, Wiley, and good morning, everyone. We're off to a strong start to the year with continued progress and growth across key areas of the business, driven by disciplined execution and the strength of our portfolio. As we report our Q1 as an independent company, I want to recognize the truly unique culture and organization that we are building. I am incredibly proud of how our teams are executing with focus, rigor, and a shared commitment to performance. The teamwork is evident in the results and in the momentum we're building across the business. This momentum reflects our strategy at work, operating scale, market-leading brands anchored in live sports and news, winning with premium content, expanding audience reach, and accelerating the growth of our digital platforms.

Mark Lazarus: Thank you, Wylie, and good morning, everyone. We're off to a strong start to the year with continued progress and growth across key areas of the business, driven by disciplined execution and the strength of our portfolio. As we report our Q1 as an independent company, I want to recognize the truly unique culture and organization that we are building. I am incredibly proud of how our teams are executing with focus, rigor, and a shared commitment to performance. The teamwork is evident in the results and in the momentum we're building across the business. This momentum reflects our strategy at work, operating scale, market-leading brands anchored in live sports and news, winning with premium content, expanding audience reach, and accelerating the growth of our digital platforms.

Speaker #3: As we report our first quarter as an independent company, I want to recognize the truly unique culture and organization that we are building. I am incredibly proud of how our teams are executing, with focus, rigor, and a shared commitment to performance.

Speaker #3: The teamwork is evident in the results and in the momentum we're building across the business. This momentum reflects our strategy at work. Operating scale, market-leading brands, anchored in live sports and news, winning with premium content, expanding audience reach, and accelerating the growth of our digital platforms.

Speaker #3: We hold a leadership position in each of our four large and growing markets: business news and personal finance, political news and opinion, golf, and sports and genre entertainment.

Mark Lazarus: We hold a leadership position in each of our 4 large and growing markets: business news and personal finance, political news and opinion, golf, and sports and genre entertainment. Across each, we continue to make meaningful progress against our objectives, deepening engagement and driving new monetization opportunities. Let's talk about the results. At CNBC, we saw exceptional engagement during a period of heightened market volatility. The network delivered its highest-rated quarter in 4 years with double-digit year-over-year growth, reinforcing CNBC's role as the destination for business news when it matters most. That strength was on full display in Davos at the World Economic Forum, where CNBC was on the ground having and covering the most consequential conversations shaping today's global economic agenda with CEOs, policymakers, and business leaders. Viewership among key demographics increased more than 50% during the week, resulting in our largest Davos audience in 5 years.

Mark Lazarus: We hold a leadership position in each of our four large and growing markets: business news and personal finance, political news and opinion, golf, and sports and genre entertainment. Across each, we continue to make meaningful progress against our objectives, deepening engagement and driving new monetization opportunities. Let's talk about the results. At CNBC, we saw exceptional engagement during a period of heightened market volatility. The network delivered its highest-rated quarter in four years with double-digit year-over-year growth, reinforcing CNBC's role as the destination for business news when it matters most. That strength was on full display in Davos at the World Economic Forum, where CNBC was on the ground having and covering the most consequential conversations shaping today's global economic agenda with CEOs, policymakers, and business leaders. Viewership among key demographics increased more than 50% during the week, resulting in our largest Davos audience in five years.

Speaker #3: Across each, we continue to make meaningful progress against our objectives. Deepening engagement and driving new monetization opportunities. Let's talk about the results. At CMBC, we saw exceptional engagement during a period of heightened market volatility.

Speaker #3: The network delivered its highest-rated quarter in four years, with double-digit year-over-year growth. Reinforcing CMBC's role as the destination for business news when it matters most.

Speaker #3: That strength was on full display in Davos at the World Economic Forum. Where CMBC was on the ground, having and covering the most consequential conversations shaping today's global economic agenda, with CEOs, policymakers, and business leaders.

Speaker #3: Viewership among key demographics increased more than 50% during the week, resulting in our largest Davos audience in five years. We also continue to expand and build on the strength of our programming.

Mark Lazarus: We also continue to expand and build on the strength of our programming with the launch of Morning Call, a new early morning program that begins our business day lineup by delivering pre-market analysis, insights, and global financial developments to set the agenda for the trading day. At MS NOW, the network achieved its most-watched quarter since 2024, with double-digit growth in both total day and prime-time viewership among key demographics. MS NOW reached an average of over 30 million viewers weekly, and our viewers watched an average of 9 hours weekly, the second-highest engagement across all cable networks, regardless of genre, and nearly double the next closest competitor. That scale extends to digital, where the MS NOW website and app delivered the strongest Q1 on record. MS NOW generated more views on YouTube than the three broadcast networks combined from their news divisions.

Mark Lazarus: We also continue to expand and build on the strength of our programming with the launch of Morning Call, a new early morning program that begins our business day lineup by delivering pre-market analysis, insights, and global financial developments to set the agenda for the trading day. At MS NOW, the network achieved its most-watched quarter since 2024, with double-digit growth in both total day and prime-time viewership among key demographics. MS NOW reached an average of over 30 million viewers weekly, and our viewers watched an average of nine hours weekly, the second-highest engagement across all cable networks, regardless of genre, and nearly double the next closest competitor. That scale extends to digital, where the MS NOW website and app delivered the strongest Q1 on record. MS NOW generated more views on YouTube than the three broadcast networks combined from their news divisions.

Speaker #3: With the launch of Morning Call, a new early-morning program that begins our business day lineup by delivering pre-market analysis, insights, and global financial developments to set the agenda for the trading day.

Speaker #3: At MS Now, the network achieved its most watched quarter since 2024, with double-digit growth in both total day and prime-time viewership among key demographics.

Speaker #3: MS Now reached an average of over 30 million viewers weekly, and our viewers watched an average of nine hours weekly. The second highest engagement across all cable networks, regardless of genre, and nearly double the next closest competitor.

Speaker #3: That scale extends to digital, where the MS Now website and app delivered the strongest first quarter on record. MS Now generated more views on YouTube than the three broadcast networks combined.

Speaker #3: From their news divisions, we had over 1.6 billion views across YouTube and TikTok combined year to date. Growth also continued in digital publishing and podcasts, with original podcast downloads up more than 60% year over year.

Mark Lazarus: We had over 1.6 billion views across YouTube and TikTok combined year to date. Growth also continued in digital publishing and podcasts, with original podcast downloads up more than 60% year over year. MS NOW is the network audiences turn to during the most important moments in politics. With the 2026 midterm elections approaching, MS NOW will continue to deliver premium programming with differentiated analysis. In golf, Golf Channel continued to build on its leadership position as the number one golf media outlet, driven by strong early-season engagement. The PGA Tour is off to an exceptional start, with the Golf Channel drawing its largest audience for The Players Championship in 2 decades.

Mark Lazarus: We had over 1.6 billion views across YouTube and TikTok combined year to date. Growth also continued in digital publishing and podcasts, with original podcast downloads up more than 60% year-over-year. MS NOW is the network audiences turn to during the most important moments in politics. With the 2026 midterm elections approaching, MS NOW will continue to deliver premium programming with differentiated analysis. In golf, Golf Channel continued to build on its leadership position as the number one golf media outlet, driven by strong early-season engagement. The PGA Tour is off to an exceptional start, with the Golf Channel drawing its largest audience for The Players Championship in two decades.

Speaker #3: MS Now is the network audience's turn-to during the most important moments in politics. With the 2026 midterm elections approaching, MS Now will continue to deliver premium programming with differentiated analysis.

Speaker #3: In golf, Golf Channel continued to build on its leadership position as the number one golf media outlet, driven by strong early season engagement. The PGA Tour is off to an exceptional start, with Golf Channel drawing its largest audience for the Players' Championship in two decades.

Speaker #3: And that momentum continued more recently at the Masters, where Golf Channel reached 13.5 million unique viewers during the week. Reinforcing its role as the primary destination, not only for live golf, but for news, interviews, and post-round analysis as well.

Mark Lazarus: That momentum continued more recently at the Masters, where Golf Channel reached 13.5 million unique viewers during the week, reinforcing its role as the primary destination not only for live golf, but for news, interviews, and post-round analysis as well. We are extending that leadership beyond pay TV through our platforms business. GolfNow delivered broad growth across tee time bookings and payments. GolfPass, boosted by our partnership with Rory McIlroy, in the Q1, reached the highest number of subscribers ever. In just a moment, I'll talk about the platforms business, but as it relates to golf, this is a clear example of how we are integrating content, commerce, and consumer engagement within a single ecosystem. Turning to sports and genre entertainment.

Speaker #3: We are extending that leadership beyond Pay-TV through our platforms business. Golf Now delivered broad growth across tee time bookings and payments. Golf Pass boosted by our partnership with Rory McIlroy in the first quarter reached the highest number of subscribers ever.

Speaker #3: In just a moment, I'll talk about the platforms business, but as it relates to golf, this is a clear example of how we are integrating content, commerce, and consumer engagement within a single ecosystem.

Speaker #3: Turning to sports and genre entertainment, in the first quarter, we delivered the largest Olympic audience in USA network history, with the Milan Cortina Olympics.

Mark Lazarus: In Q1, we delivered the largest Olympic audience in USA Network history with the Milano Cortina Olympics, which aired across USA Network and CNBC, reaching approximately three-quarters of US pay TV households and securing the number 1 rank among sports and entertainment cable networks. In addition, we are building on our momentum in women's sports. Our first season of League One Volleyball on USA Network was a breakout success, highlighted by the most-watched match in league history. We are also proud to have just kicked off our inaugural WNBA season this past Sunday with our opening game and a double header just last night. Beyond live sports, we are driving value from our deep content library.

Speaker #3: Which aired across USA Network and CNBC, reaching approximately three-quarters of U.S. pay-TV households and securing the number one rank among sports and entertainment cable networks.

Speaker #3: In addition, we are building on our momentum in women's sports. Our first season of League One volleyball on USA network was a breakout success, highlighted by the most watched match in league history.

Speaker #3: And we are also proud to have just kicked off our inaugural WNBA season this past Sunday with our opening game and a doubleheader just last night.

Speaker #3: Beyond live sports, we are driving value from our deep content library. The licensing of Keeping Up with the Kardashians and other iconic entertainment titles to third-party platforms underscores the enduring demand for our own content and our ability to monetize it across the evolving distribution landscape.

Mark Lazarus: The licensing of Keeping Up with the Kardashians and other iconic entertainment titles to third-party platforms underscores the enduring demand for our own content and our ability to monetize it across the evolving distribution landscape. In addition, our entertainment brands continue to perform throughout the quarter. E! Live from the Red Carpet drove strong audience engagement around major events, including the Oscars, the Grammys, and the Critics Choice Awards. The Critics Choice Awards aired as a simulcast on E! and USA Network, doubling viewership compared to the prior year. Finally, in platforms, we delivered high single-digit growth in the quarter, continuing to build a scalable revenue stream beyond pay TV while expanding the reach and distribution of our iconic brands. Our performance reflects disciplined execution and progress in scaling these businesses, which remains a foremost strategic priority.

Speaker #3: In addition, our entertainment brands continue to perform throughout the quarter. E! Live from the Red Carpet drove strong audience engagement around major events, including the Oscars, the Grammys, and the Critics' Choice Awards.

Speaker #3: The Critics' Choice Awards aired as a simulcast on E! and USA Network, doubling viewership compared to the prior year. And finally, in platforms, we delivered high single-digit growth in the quarter.

Speaker #3: Continuing to build a scalable revenue stream beyond Pay-TV while expanding the reach and distribution of our iconic brands. Our performance reflects disciplined execution and progress in scaling these businesses, which remains a foremost strategic priority.

Speaker #3: Platforms growth in the quarter was driven by GolfNow and Fandango, with Fandango One, formerly Indie Cinema, expanding Fandango's value proposition for cinema operators.

Mark Lazarus: Platform growth in the quarter was driven by GolfNow and Fandango, with Fandango1, formerly INDY Cinema, expanding Fandango's value proposition for cinema operators. An important component of our platform strategy is to build on CNBC's position as the leading source for business news and expand our audience relationships through deeper and broader coverage. As part of this strategy, we acquired Stock Story, an AI-driven platform that enhances our ability to deliver real-time, actionable investment intelligence and supports the next phase of CNBC's direct-to-consumer product development. We're building on this momentum with other new platform initiatives as well, including the previously announced MS NOW direct-to-consumer offering and Fandango AVOD service, both on track to launch later this year. These initiatives and strategies underscore that we are actively managing through pay TV's secular changes.

Speaker #3: An important component of our platform strategy is to build on CMBC's position as the leading source for business news and expand our audience relationships through deeper and broader coverage.

Speaker #3: As part of this strategy, we acquired Stock Story, an AI-driven platform that enhances our ability to deliver real-time, actionable investment intelligence and supports the next phase of CMBC's direct-to-consumer product development.

Speaker #3: We're building on this momentum with other new platform initiatives as well, including the previously announced MS Now direct-to-consumer offering and Fandango Avad service, both on track to launch later this year.

Speaker #3: These initiatives and strategies underscore that we are actively managing through Pay-TV's secular changes. We are focused not only on continuing to improve the content and reach of our leading brands, but also aggressively expanding beyond TV through direct-to-consumer initiatives.

Mark Lazarus: We are focused not only on continuing to improve the content and reach of our leading brands, but also aggressively expanding beyond TV through direct-to-consumer initiatives. Our strong balance sheet enables us to both return capital to shareholders and invest in these growth opportunities. That includes acquisitions such as INDY Cinema for Fandango, Stock Story for CNBC, and Free TV Networks, which expand our platform capabilities and accelerate our evolution. As I just mentioned, we remain committed to returning capital to shareholders through dividends and share repurchases, including this morning's announcements of an accelerated share repurchase transaction as we enter Q2. With that, I'll turn it over to Anand, and we'll walk through the financials.

Speaker #3: Our strong balance sheet enables us to both return capital to shareholders and invest in these growth opportunities. That includes acquisitions such as Indie Cinema for Fandango, Stock Story for CMBC, and Free TV Networks, which expand our platform capabilities and accelerate our evolution.

Speaker #3: As I just mentioned, we remain committed to returning capital to shareholders through dividends and share repurchases. Including this morning's announcements of an accelerated share repurchase transaction as we enter the second quarter.

Speaker #3: With that, I'll turn it over to Anand, and we'll walk through the financials.

Speaker #2: Thanks, Mark. And good morning, everyone. I'll begin by reviewing our first quarter 2026 results, then discuss key performance drivers, and finally touch upon our outlook for the remainder of the year.

Anand Kini: Thanks, Mark, and good morning, everyone. I'll begin by reviewing our Q1 2026 results, then discuss key performance drivers, and finally, touch upon our outlook for the remainder of the year. As Mark mentioned, our Q1 performance reflects a strong start to the year, with disciplined execution driving robust profitability, healthy margins, significant free cash flow generation, and continued momentum in platforms revenue. Total revenue for the Q1 was approximately $1.69 billion, a 1% decrease from the prior year Q1. This performance reflects the expected continued pressure on pay TV, impacting linear distribution and advertising revenues. This was partially offset by significant growth in platforms which, as we've mentioned, is a top strategic priority for Versant. Linear distribution revenue was $1.01 billion, a decline of 7% year-over-year, driven by continued cord-cutting trends, partially offset by contractual rate increases.

Speaker #2: As Mark mentioned, our first quarter performance reflects a strong start to the year, with disciplined execution, driving robust profitability, healthy margins, significant free cash flow generation, and continued momentum in platforms revenue.

Speaker #2: Total revenue for the quarter was approximately $1.69 billion, a 1% decrease from the prior-year quarter. This performance reflects the expected continued pressure on Pay-TV, impacting linear distribution and advertising revenues.

Speaker #2: This was partially offset by significant growth in platforms, which, as we've mentioned, is a top strategic priority for Versant. Linear distribution revenue was $1.01 billion, a decline of 7% year over year, driven by continued cord cutting trends partially offset by contractual rate increases.

Speaker #2: This decline is consistent with the prior year trajectory. Advertising revenue was $368 million, down 5% year over year, a significant improvement from last year's Q1 decline of 12%, reflecting the power of our portfolio particularly in our news businesses where we successfully monetize strong ratings and robust advertiser demand.

Anand Kini: This decline is consistent with the prior year trajectory. Advertising revenue was $368 million, down 5% year-over-year, a significant improvement from last year's Q1 decline of 12%, reflecting the power of our portfolio, particularly in our news businesses, where we successfully monetize strong ratings and robust advertiser demand. Platforms revenue was $192 million, up 9%, with strong results at both GolfNow and Fandango. Mark mentioned the breadth of GolfNow's growth, and it's a similar story with Fandango, with robust performance in ticketing and home entertainment, with INDY Cinema, now known as Fandango1, also fully integrated and contributing to our success.

Speaker #2: Platforms revenue was $192 million, up 9%, with strong results at both Golf Now and Fandango. Mark mentioned the breadth of Golf Now's growth, and it's a similar story with Fandango.

Speaker #2: With robust performance in ticketing and home entertainment with Indie Cinema, now known as Fandango One, also fully integrated and contributing to our success. Content licensing and other revenue was $121 million, a significant increase compared to the $57 million in the prior year, and was favorably impacted by the licensing of select titles in our content library, including Keeping Up With The Kardashians, which we announced in January.

Anand Kini: Content licensing and other revenue was $121 million, a significant increase compared to the $57 million in the prior year and was favorably impacted by the licensing of select titles in our content library, including Keeping Up with the Kardashians, which we announced in January. A reminder that the value of licensing transactions is generally recognized immediately when the content is delivered. As a result, content licensing and other revenue can vary significantly quarter to quarter and year-over-year. In Q1, adjusted EBITDA was $704 million, reflecting our continued focus on operating efficiency and increasing 5% versus the prior year. Margins remained well above 30%. Programming and production costs were $519 million in Q1, down 5% year-over-year as we continue to deliver the premium content our audiences love efficiently.

Speaker #2: A reminder that the value of licensing transactions is generally recognized immediately when the content is delivered. As a result, content licensing and other revenue can vary significantly quarter to quarter and year over year.

Speaker #2: In the first quarter, adjusted EBITDA was $704 million, reflecting our continued focus on operating efficiency and increasing 5% versus the prior year. Margins remained well above 30%.

Speaker #2: Programming and production costs were $519 million in the first quarter, down 5% year over year, as we continue to deliver the premium content our audiences love efficiently.

Speaker #2: As a reminder, these costs have some degree of seasonality with higher costs in the second half of the year driven by sports rights timing.

Anand Kini: As a reminder, these costs have some degree of seasonality with higher costs in the second half of the year driven by sports rights timing. Other costs of revenue increased 11% in the first quarter due to our continued investment in platforms, including costs associated with onboarding Fandango1. Total cost of revenue was $638 million, down 3% compared to last year. SG&A costs of $346 million represented a decrease of 9%. We remain focused on operating with a lean organization and modernizing our technology infrastructure, driving efficiency and productivity. We expect a modest go-forward increase in SG&A costs to support our growth initiatives, including the ongoing development of our D2C offerings.

Speaker #2: Other costs of revenue increased 11% in the first quarter due to our continued investment in platforms, including costs associated with onboarding Fandango One. Total costs of revenue was $638 million, down 3% compared to last year.

Speaker #2: SG&A costs of $346 million represented a decrease of 9%. We remain focused on operating with a lean organization and modernizing our technology infrastructure, driving efficiency and productivity.

Speaker #2: We expect a modest go-forward increase in SG&A costs to support our growth initiatives. Including the ongoing development of our D2C offerings. Free cash flow totaled $558 million in the quarter, reflecting strong cash generation and timing-related items including accounts receivable collections and payable processing which we expect to normalize as the year progresses.

Anand Kini: Free cash flow totaled $558 million in Q1, reflecting strong cash generation and timing-related items, including accounts receivable collections and payable processing, which we expect to normalize as the year progresses. Capital expenditures were relatively light in Q1 and are expected, consistent with our prior commentary, to increase modestly over the remainder of the year, largely driven by the build-out of our Manhattan facility and targeted investments in our platforms and other growth businesses. Demonstrating our commitment to return capital to shareholders, our board has declared a quarterly cash dividend of $0.375 per share. As Mark mentioned, in Q1, we repurchased $100 million of Class A shares under the $1 billion authorization approved last quarter.

Speaker #2: Capital expenditures were relatively light in the first quarter and are expected consistent with our prior commentary to increase modestly over the remainder of the year largely driven by the build-out of our Manhattan facility and targeted investments in our platforms and other growth businesses.

Speaker #2: Demonstrating our commitment to return capital to shareholders, our Board has declared a quarterly cash dividend of $0.375 per share. And as Mark mentioned, in the first quarter, we repurchased $100 million of Class A shares under the $1 billion authorization approved last quarter.

Speaker #2: And this morning, we have announced a $100 million accelerated share repurchase agreement, which we expect to complete in the second quarter. Liquidity remains strong with a total cash balance of $1.2 billion at quarter end, supported by healthy free cash flow generation as well as timing-related items.

Anand Kini: This morning, we have announced a $100 million accelerated share repurchase agreement, which we expect to complete in Q2. Liquidity remains strong with a total cash balance of $1.2 billion at quarter-end, supported by healthy free cash flow generation as well as timing-related items discussed earlier, which we expect to normalize in Q2. Our capital allocation priorities remain consistent, investing to evolve our business model and generate growth, returning capital to shareholders, and maintaining a strong balance sheet. We mentioned previously our decision to explore strategic alternatives for SportsEngine and sold most of the business on 1 May. Our focus will always be to maximize long-term value through disciplined capital allocation, and this sale, along with the growth investments we've mentioned, underscores that commitment.

Speaker #2: As discussed earlier, which we expect to normalize in the second quarter. Our capital allocation priorities remain consistent: investing to evolve our business model and generate growth, returning capital to shareholders, and maintaining a strong balance sheet.

Speaker #2: We mentioned previously our decision to explore strategic alternatives for sports engine and sold most of the business on May 1. Our focus will always be to maximize long-term value through disciplined capital allocation and this sale along with the growth investments we've mentioned underscores that commitment.

Speaker #2: As we look ahead to the rest of the year, we continue to expect $6.15 to $6.4 billion in revenue adjusted EBITDA of $1.85 to $2.0 billion, and free cash flow at $1.0 to $1.2 billion.

Anand Kini: As we look ahead to the rest of the year, we continue to expect $6.15 to $6.4 billion in revenue, adjusted EBITDA of $1.85 to $2.0 billion, and free cash flow at $1.0 to $1.2 billion. We expect quarterly fluctuations driven by content licensing, working capital, and higher programming costs in the H2, particularly in the Q4. These dynamics are reflected in our full-year outlook and consistent with 2025. As mentioned, content licensing revenue can vary across quarters, and we expect higher programming costs driven by sports rights timing relative to both Q1 and last year in the H2 and particularly Q4. With respect to free cash flow for the remainder of 2026, we also expect continued variability due to working capital timing differences.

Speaker #2: We expect quarterly fluctuations driven by content licensing working capital and higher programming costs in the second half, particularly in the fourth quarter. These dynamics are reflected in our full year outlook, inconsistent with 2025.

Speaker #2: As mentioned, content licensing revenue can vary across quarters and we expect higher programming costs driven by sports rights timing relative to both Q1 and last year in the second half and particularly Q4.

Speaker #2: With respect to free cash flow for the remainder of 2026, we also expect continued variability due to working capital timing differences. And with that, I will turn it over to the operator for Q&A.

Anand Kini: With that, I will turn it over to the operator for Q&A.

Speaker #1: Thank you. We'll now be conducting the question and answer session. If you'd like to ask a question at this time, please first star one from your telephone keypad and a confirmation tone indicate your line is in the question queue.

Operator: Thank you. We'll now be conducting a question and answer session. Thank you. Our first question is from the line of Michael Ng with Goldman Sachs. Please proceed with your questions.

Operator: Thank you. We'll now be conducting a question and answer session. If youd like to ask a question at this time please press star one from your telephone keypad and a confirmation tone indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Thank you. Our first question is from the line of Michael Ng with Goldman Sachs. Please proceed with your questions.

Speaker #1: You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #1: Thank you. And our first question is from the line of Michael Ng with Goldman Sachs. Please proceed with your question.

Speaker #3: Good morning. Thank you for the questions. I have two. One on advertising and one on skinny bundles. First, on advertising, it was a little bit better than expected in the quarter.

Michael Ng: Good morning. Thank you for the questions. I have two, one on advertising and one on skinny bundles. First, on advertising, it was a little bit better than expected in the quarter. Can you just talk a little bit about how much of the performance was driven by growth initiatives gaining traction versus the strong news cycle across CNBC and MSNBC? Was there any halo effect on USA from the Winter Olympics? Just trying to understand the sustainability of the outperformance in ads. On skinny bundles, could you talk a little bit about whether you're seeing a wider range of performance across your network portfolio? Said differently, are MSNBC and CNBC outperforming the rest of your networks, just given their inclusion in the news inclusive plans? Thank you very much.

Speaker #3: Can you just talk a little bit about how much of the performance was driven by growth initiatives gaining traction, versus the strong news cycle across NBC and MSNBC?

Speaker #3: Was there any halo effect on USA from the Winter Olympics? Just trying to understand the sustainability of the outperformance in ads. And then on skinny bundles, could you talk a little bit about whether you're seeing a wider range of performance across your network portfolio?

Speaker #3: Said differently, are MSNBC and CNBC outperforming the rest of your networks just given their inclusion in the news inclusive plans? Thank you very much.

Mark Lazarus: Thanks, Michael. Thanks for the questions, Mark. So on advertising, you know, the marketplace has been strong. The portfolio of news and sports, along with a bunch of the live entertainment we had, has been resilient. The, you know, our partnership with NBCUniversal representing us in the market has proven to be fruitful for both parties, and we believe that this is sustainable. There is not really. It was not a big halo from the Olympics. The Olympics were wonderful and were great for us. As a reminder, you know, that they buy. NBC buys the time from us, so we don't. We didn't benefit from growth in advertising from the Olympics. The portfolio of live content is what advertisers are seeking, and I feel that that will continue, and we have all good indicators going forward.

Speaker #1: Thanks, Michael. Thanks for the questions, Mark. So on advertising, the marketplace has been strong. The portfolio of news and sports along with a bunch of the live entertainment we had has been resilient and the our partnership with NBCU representing us in the market has proven to be fruitful for both parties.

Speaker #1: And we believe that this is sustainable. There is not really it was not a big halo from the Olympics. The Olympics were wonderful and were great for us.

Speaker #1: But as a reminder, they buy NBC buys the time from us so we didn't benefit from growth in advertising from the Olympics. But the our portfolio of live content is what advertisers are seeking in a field.

Speaker #1: That will continue, and we have all good indicators going forward. On the skinny bundle side, I think what I would say is that we are well positioned, and we are in all of the appropriate bundles, as you point out.

Mark Lazarus: On the skinny bundle side, I think what I would say is that we are, you know, we're well-positioned, and we are in all of the appropriate bundles, as you point out. We're in the sports and news bundles with our content. You know, the portfolio is diverse and has networks that is prepared and built to work with the distribution marketplace in this new tiered bundled world.

Speaker #1: We're in the sports and news, and sports and news bundles with our content. And the portfolio is diverse and has networks that are prepared and built to work with the distribution marketplace in this new tiered, bundled world.

Speaker #4: And Mike, just to add on to what Mark said, on the advertising side, the organic presence drove kind of the trajectory improvement. So yes, we have some new initiatives like free TV networks, but to be clear, that was not the reason that we saw that performance improvement.

Anand Kini: Michael, just to add on to what Mark Lazarus said, you know, on the advertising side, the organic presence drove kind of the trajectory improvement. Yes, we have some new initiatives like Free TV Networks, but to be clear, that was not the reason that we saw that performance improvement. That was just based on the organic businesses and the health of them and, you know, all the factors that Mark Lazarus just mentioned. Then again, just to reiterate, you know, Mark Lazarus's point of the skinny bundles. The way we look at this also from a business model and financial perspective is we look at it in total revenue and where, as you saw, the kind of the linear distribution revenue and our focus is on maximizing that across the portfolio.

Speaker #4: That was just based on the organic businesses and the health of them, and all the factors that Mark just mentioned. And then again, just to reiterate Mark's point on the skinny bundles.

Speaker #4: The way we look at this also from a business model and financial perspective is we look at it in total revenue and we're, as you saw, the kind of the linear distribution revenue and our focus is on maximizing that across the portfolio.

Anand Kini: That's how we manage the business, and it kind of shows up in the results and how we'll continue to do so.

Speaker #4: And that's how we manage the business and it kind of shows up in our results and how we'll continue to do so.

Anand Kini: That's how we manage the business, and it kind of shows up in the results and how we'll continue to do so.

Speaker #3: Wonderful. Thank you, gentlemen.

Michael Ng: Wonderful. Thank you, gentlemen.

Speaker #5: The next question is from the line of Brent Penter with Raymond James. Please proceed with your question.

Operator: The next question is from the line of Brett Thill with Raymond James. Please proceed with your questions.

Speaker #6: Hey, good morning, everyone. Thanks for taking the questions. First one for me. On MS Now and Fandango, Digital, and Avod Strategies, appreciate the color launching later this year.

Brett Thill: Hey, good morning, everyone. Thanks for taking the questions. First one for me, on MS NOW and Fandango, digital, and AVOD strategies. Appreciate the color launching later this year. Are there any more details you all can give at this point on what the go-to-market or maybe pricing strategies will look like for each? Then can you help us size the investment-

Brent Penter: Hey, good morning, everyone. Thanks for taking the questions. First one for me, on MS NOW and Fandango, digital, and AVOD strategies. Appreciate the color launching later this year. Are there any more details you all can give at this point on what the go-to-market or maybe pricing strategies will look like for each? Then can you help us size the investment this year to bring those both to market.

Speaker #6: Are there any more details you all can give at this point on what the go-to-market or maybe pricing strategies will look like for each?

Speaker #6: And then, can you help us size the investment this year to bring those both to market?

Brett Thill: This year to bring those both to market.

Mark Lazarus: Thanks, Brett. We haven't settled on pricing yet, really that's only for half the equation. MS NOW will be a direct-to-consumer and be a subscriber-based service which will center around content that MS NOW, its reporters, its contributors, its anchors, create. Not only that, there'll be a build-out in a sense of community and mindfulness, and it'll be a much broader service than what we provide today, bringing together voices that are both on our air and not necessarily on our air today. That will be a subscriber-based service.

Speaker #1: Thanks, Brent. We haven't settled on pricing yet, and really that's only for half the equation. MS Now will be a direct-to-consumer and subscriber-based service, which will center around content that MS Now—its reporters, its contributors, its anchors—create, but not only that.

Speaker #1: There'll be a build-out and a sense of community and mindfulness and it'll be a much broader service than what we provide today, bringing together voices that are both on our air and not necessarily on our air today.

Speaker #1: But that will be a subscriber-based service. Fandango AVOD will be just that—it will be free with advertising, and we'll be able to serve content based on the data and information we have from our current Fandango users, both from buying movie tickets as well as from buying home video services for buying and renting TV series and films.

Mark Lazarus: Fandango AVOD will be just that, you know, be free with advertising, and it'll be, you know, we will be able to serve content based on the data and information we have from our current Fandango users, both from buying movie tickets as well as buying home video services for buying and renting TV series and films. We'll be able to serve advertising, relevant advertising as people consume our content. Again, that's a free with advertising service.

Speaker #1: And we'll be able to serve relevant advertising as people consume our content. But again, that's a free-with-advertising service.

Speaker #4: And then, just to answer your question on the investment. So, the investment is not substantial. A, we get the benefit of leveraging our existing infrastructure—say, on the video, for example, we already have a well-established Fandango infrastructure to support video playback.

Anand Kini: Just to answer your question on the investment. The investment is not substantial. We get the benefit of leveraging our existing infrastructure, say on the video, for example, we already have a well-established Fandango infrastructure to support video playback. Similarly on MS NOW, we have existing streaming services that have video playback at CNBC. There is some kind of bespoke user design investment, but we have a very strong base that we're starting with. A lot of the investment is actually just on marketing and driving awareness to the product for the consumer, but it's embedded in kind of the outlook we said. We mentioned that you'll see, for example, SG&A tick up modestly, and that's really to support those plans and a little bit on the CapEx side.

Speaker #4: And similarly, on MS Now, we have existing streaming services that have video playback at CNBC. So there is some kind of bespoke user design investment, but we have a very strong base that we're starting with.

Speaker #4: So a lot of the investment is actually just on marketing and driving awareness to the product for the consumer. But it's embedded in kind of the outlook we said.

Speaker #4: We mentioned that you'll see, for example, SG&A pick up modestly. And that's really to support those plans and a little bit on the CapEx side, we've mentioned that you'll see a little bit there both for the New York facility build-out and the support.

Anand Kini: We've mentioned that you'll see a little bit there both for the New York facility build-out and to support them. From a size perspective, it's not like substantial dollars.

Speaker #4: But from a size perspective, it's not substantial dollars.

Speaker #3: Okay. That's helpful. And then on the accelerated buyback, what drove the decision to do that and why now? And then still with 800 million of authorization pro forma for that, is there any color that you can give on what will drive your decisions around the pacing of the remaining buyback?

Brett Thill: Okay. That's helpful. On the accelerated buyback, what drove the decision to do that, and why now? Still with $800 million of authorization pro forma for that, is there any color that you can give on what will drive your decisions around the pacing of the remaining buyback?

Brent Penter: Okay. That's helpful. On the accelerated buyback, what drove the decision to do that, and why now? Still with $800 million of authorization pro forma for that, is there any color that you can give on what will drive your decisions around the pacing of the remaining buyback?

Speaker #1: Sure. A couple of things. So just to reiterate that the buyback, A, both the ASR for Q2 and then we bought back 100 million in Q1.

Anand Kini: Sure. A couple things. Just to reiterate that the buyback, A, both the ASR for Q2 and then we bought back $100 million in Q1, and then we also, the $0.375 dividend, I think all exemplify our capital allocation approach. Just to remind everybody, kind of three prongs here, they're ands in that we're uniquely positioned, we think, to do all of them. A is maintain a strong balance sheet, which we think gives us a competitive advantage, a strategic advantage. B is to invest in growth to evolve the business. C is a return of capital to shareholders. We think each one of them are equal priorities, I think the results that you just see are in our share buyback and dividend kind of exemplify that.

Speaker #1: And then we also the 37 and a half cent dividend. I think all exemplify our capital allocation approach, which just to remind everybody, it's kind of three prongs here.

Speaker #1: And they're ands. And we're uniquely positioned, we think, to do all of them. A is maintain a strong balance sheet. Which we think gives us a competitive advantage and a strategic advantage.

Speaker #1: B is to invest in growth to evolve the business. And then C is a return of capital. To shareholders. And we take each one of them or equal priorities.

Speaker #1: And I think the results that you just see are that in our share buyback and dividend kind of exemplify that. I think one other thing in terms of the ASR, it kind of just underscores our confidence in the business and our commitment to that capital allocation approach.

Anand Kini: I think one other thing in terms of, you know, the ASR, it kind of just underscores our confidence in the business and our commitment to that capital allocation approach. Just one final thing, like we don't view these capital allocation decisions within this framework as static, but rather like we make those decisions in the context of the market environment and opportunities we see to add value. That's gonna be our approach going forward as well.

Speaker #1: And just one final thing, we don't view these capital allocation decisions within this framework as static, but rather we make those decisions in the context of the market environment and opportunities we see to add value.

Speaker #1: And that's going to be our approach going forward as well.

Speaker #3: Okay. And then final question for me. Could you just size the benefit from keeping up with the Kardashians? And then what's the timeframe on that licensing deal?

Brett Thill: Okay. Final question from me. Could you just size the benefit from Keeping Up with the Kardashians? What's the timeframe on that licensing deal?

Brent Penter: Okay. Final question from me. Could you just size the benefit from Keeping Up with the Kardashians? What's the timeframe on that licensing deal?

Anand Kini: Sure. Just a couple things. On the sizing, it was a driver, as you can see in the content licensing and other growth. It is a driver of that. Again, I think it reiterates that we have a multifaceted business model where we have content licensing, we have ad sales, you know, linear distribution platforms. This is one of the levers that we have and think it exemplifies the value of the library. Yes, this quarter was Keeping Up with the Kardashians. We have a lot of other programming, great true crime kind of library. We have a lot of other unscripted programming that we will sell in the future as well.

Speaker #1: Sure. So just a couple of things. On the sizing, it was a driver, as you can see in the content licensing and other growth.

Speaker #1: It is a driver of that. Again, I think it reiterates that we have a multifaceted business model where we have content licensing. We have ad sales linear distribution platforms.

Speaker #1: This is one of the levers that we have. And I think it exemplifies the value of the library. And yes, this quarter was keeping up the Kardashians.

Speaker #1: We have a lot of other programming, great true crime kind of library. We have a lot of other unscripted programming that we will sell in the future as well.

Anand Kini: Just by notion or I should note that this is inherently, there's some variability in this revenue stream on content licensing just based off of the timing of the sale. We recognize all the revenue for the sale just based off of GAAP this quarter that it's announced, and that will be the same with other sales that we do going forward. It's a multi-year licensing deal that we did with the Kardashians.

Speaker #1: Just by notion, or I should note, that there is inherently some variability in this revenue stream on content licensing, just based off of the timing of the sale.

Speaker #1: We recognize all the revenue for the sale just based off of gap this quarter that it's announced. And that will be the same with other sales that we do going forward.

Speaker #1: And it's a multi-year licensing deal that we did with the Kardashians.

Speaker #2: Yeah, I'll just add to that that we do have a robust library—titles that are part of the current structure of the library, but also, as we continue to create new and original content, that will also be things that we're able to put into the marketplace.

Mark Lazarus: Yeah. I'll just add to that, you know, we do have a robust library titles that are part of the current structure of the library, but also as we continue to create new and original content, that will also be things that we are able to put into the marketplace. Shows that we are creating now we know have been attractive to third parties who have already reached out to us about licensing.

Speaker #2: And shows that we have are creating now. We have been we know have been attractive to third parties who have already reached out to us about licensing.

Speaker #3: Okay. Thank you both.

Brett Thill: Okay. Thank you both.

Brent Penter: Okay. Thank you both.

Speaker #5: The next question is from the line of David Karnoski with JPMorgan. Please proceed with your questions.

Operator: The next question is from the line of David Karnovsky with JP Morgan. Please proceed with your questions.

Speaker #6: Hey, thank you. Maybe just following up on the prior question. Is there any way to help frame residual cost? I mean, either for Kardashians or just how to think about your library content generally to help us better understand flow-through to EBITDA or cash flow when you do move some of this programming.

David Karnovsky: Hey, thank you. Maybe just following up on the prior question. Is there any way to help frame residual cost, I mean either for Kardashians or just, you know, how to think about your library content generally, to help us better understand flow through to EBITDA or cash flow when you do move some of this programming? On SportsEngine, maybe this detail will be in the queue, but I don't know if there's anything you can say on the terms of the sale or just revenue and EBITDA impact. Thank you.

Speaker #6: And then on SportsEngine, maybe this detail will be in the Q, but I don't know if there's anything you can say on the terms of the sale, or just revenue and EBITDA impact.

Speaker #6: Thank you.

Speaker #1: Sure. So, on the residual cost, A, I should say really all of our content sales are profitable. We generate good margins from our content licensing.

Anand Kini: Sure. On, on the residual costs, like, I should say, like, really all of our content sales are profitable. Like, you know, we generate every good margins from our content licensing. It is gonna vary a little bit on deal by deal depending on the individual talent that's associated with the show. I guess the best guide I can kinda give on that is it was a driver of one of the drivers of the increasing content licensing and other revenue, and those incremental revenues are profitable. You know, it's a good margin business for us. I think your other question that you asked on Can you just remind me what that was?

Speaker #1: It is going to vary a little bit on deal by deal depending on the individual talent that's associated with the show. But I guess the best guide I can kind of give on that is it was a driver of kind of one of the drivers of the increasing content licensing and other revenue.

Speaker #1: And those incremental revenues are profitable. It's a good margin business for us. And then I think your other question that you asked on—can you just remind me what that was?

Mark Lazarus: SportsEngine.

David Karnovsky: SportsEngine.

Speaker #1: Sports Engine. So on Sports Engine, it's in terms of we did sell on May 1. It is we're very proud of the business. We think this was a, like I mentioned, an attractive deal for our shareholders.

Anand Kini: SportsEngine. On SportsEngine, it's, you know, like, in terms of we did sell on 1 May. We're very proud of the business. We think this was a, like I mentioned, an attractive deal for our shareholders. It was a way to kind of maximize value of the asset. It's not gonna be from a materiality perspective within our financials as you look to kind of revenue and EBITDA. It's not gonna kinda change our trajectory of kind of our guidance and so forth. As you can see, we kinda stuck with where we were, it kinda gives you a sense of that. Financially, again, it's, you know, we're pleased with the outcome, but, you know, we don't think it's gonna really change how we run the business going forward.

Speaker #1: It was a way to kind of maximize value of the asset. It's not going to be, from a materiality perspective, within our financials as you look at kind of revenue and EBITDA.

Speaker #1: It's not going to kind of change our trajectory of kind of our guidance and so forth as you can see we've kind of stuck with where we were and so it kind of gives you a sense of that.

Speaker #1: And then financially, again, it's we're pleased with the outcome, but we don't think it's going to really change how we run the business going forward.

Speaker #6: Thank you.

David Karnovsky: Thank you.

Speaker #5: Our next questions are from the line of Rich Greenfield with Lightshead Partners. Please proceed with your questions.

Operator: Our next questions are from the line of Rich Greenfield with LightShed Partners. Please just proceed with your questions.

Speaker #7: Hi, thanks, guys, for taking the questions. When I look at companies like Disney and Fox even, they've sort of talked about how their D2C strategy is counteracting or lessening the declines they're seeing in the linear business.

Rich Greenfield: Hey, thanks, guys, for taking the questions. You know, when I look at companies like Disney and Fox even, they sort of talked about how their D2C strategy is sort of counteracting or lessening the declines they're seeing in the linear business, you know, in terms of how they talk about their overall trajectory of subscribers. I'm wondering, you know, as I know you can't get into details on pricing and the exact strategy on the MS NOW launch, but I guess how should we judge success? Like, will success be lessening the declines on the linear business? Like, what are sort of the ways you think about we're gonna be able to understand the success and progress of that D2C strategy?

Speaker #7: In terms of how they talk about their overall trajectory of subscribers. And so I'm wondering as I know you can't get into the details on pricing and the exact strategy on the MS now launch, but I guess how should we judge success?

Speaker #7: Will success be lessening the declines on the linear business? What are sort of the ways you think about we're going to be able to understand the success and progress of that D2C strategy?

Speaker #7: And then just, I wanted to follow up on the cord-shaving comments at the beginning of the Q&A. Disney warned about the impact of the YouTube TV skinny bundles on their non-sports assets.

Rich Greenfield: Just I wanted to follow up on the cord shaving comments at the beginning of the Q&A. You know, Disney warned about the impact of the YouTube TV skinny bundles on their non-sports assets. I guess when you look at both DirecTV and YouTube TV, they've gotten more aggressive with sports bundles and sports and news bundles. Anything you can say on are most people, from what you can tell, taking sports and news? Are they gravitating towards sports? Obviously, you have a unique view given the portfolio you have. Where are consumers gravitating to as these skinny bundles play out? Thanks.

Speaker #7: I guess when you look at both DirecTV and YouTube TV, they've gotten more aggressive with sports bundles and sports and news bundles. Anything you can say on are most people from what you can tell taking sports and news?

Speaker #7: Are they gravitating towards sports? Obviously, you have a unique view given the portfolio you have. Where are consumers gravitating to out? Thanks.

Mark Lazarus: Sure, Rich. Thanks. We'll start with the second one first. You know, clearly we are seeing. You know, there are a set of consumers who are looking for sports and news. We are proud that, you know, four of our seven linear businesses fall into those areas and in those tiers, and that we are participating in that. As it relates to the entertainment side, what we're seeing is a fair amount of stability. We still have a large and robust subscriber base. We're also being creative and flexible with how we're able to distribute.

Speaker #1: Sure, Rich. Thanks. So we'll start with the second one first. And clearly, we are seeing there are a set of consumers who are looking for sports and news.

Speaker #1: We are proud that four of our seven linear businesses fall into those areas and in those tiers. And that we are participating in that.

Speaker #1: As it relates to the entertainment side, what we're seeing is a fair amount of stability. We still have a large and robust subscriber base.

Speaker #1: We're also being creative and flexible with how we're able to distribute. And by way of example, I'll share that Oxygen over the last few years while it is a very I'll call it very fair-priced to the MVPD, we also have some availability in free over-the-air as a multicast network.

Mark Lazarus: By way of example, I'll share that, you know, Oxygen, over the last few years, while it is a very, I'll call it very fair priced to the MVPD, we also have some availability in free over-the-air as a multicast network. We think that that's a way to expand creatively and flexibly without and being additive to our distribution mechanisms. We see a lot of opportunity. As the MVPDs change their tiers, we'll be creative and flexible. That's one of the things that we, as a standalone company, have the ability to do to work with all of the MVPD partners to make sure our content is available through them, but also in other forms and factions without damaging or hurting those relationships.

Speaker #1: And we think that that's a way to expand creatively, flexibly without and being additive to our distribution flow. Mechanisms. And we see a lot of opportunity and as the MVPDs change their tiers, we'll be creative and flexible.

Speaker #1: And that's one of the things that we as a standalone company have the ability to do to work with all of the MVPD partners to make sure our content is available through them, but also in other forms and factions without damaging or hurting those relationships.

Speaker #1: On the MS Now question or really the D2C question, our goal is to continue to build, scale, and expand our audiences. Yes, we hope that comes with a large base of subscribers.

Mark Lazarus: On the MS NOW question or really the D2C question, you know, our goal is to continue to build scale and expand our audiences. Yes, we hope that comes with a large base of subscribers, and we'll gauge ourselves as how do revenues look across all of our various forms of distributing content? You know, one of the things that we wanna do is make sure we grow revenue diversification within each of our verticals as we have been doing. As we talked about, we have done a very good job over the years with golf by adding Stock Story, adding INDY Cinema, adding Free TV Networks. MS NOW is the MS NOW version of growing revenue diversification into that very important vertical for us.

Speaker #1: And we'll gauge ourselves as how do we work how do revenues look across all of our various forms of distributing content. One of the things that we want to do is make sure we grow revenue diversification within each of our verticals as we have been doing and as we talked about, we've done a very good job over the years with golf by adding stock story.

Speaker #1: Adding indie cinema. Adding free TV networks. So MS Now is the MS Now version of growing revenue diversification into that very important vertical for us.

Speaker #6: So it goes well beyond subscription, in your mind, but you do think it should lessen subscription declines and success?

Rich Greenfield: It goes well beyond subscription in your mind, but you do think it should lessen subscription declines in success?

Speaker #1: Yes. Yes. Very much so. I mean, we want to build an audience a circular way to move audience between various platforms with four of our content.

Mark Lazarus: Yes. Yes, very much so. I mean, we wanna build an audience, you know, a circular way to move audience between various platforms for our content. This is one of the key elements.

Speaker #1: And this is one of the key elements.

Speaker #6: Thank you.

Rich Greenfield: Thank you.

Speaker #5: Our next question is from the line of Sean Diffley with Morgan Stanley. Please proceed with your questions.

Operator: Our next question's from the line of Sean Diffley with Morgan Stanley. Please proceed with your questions.

Sean Diffley: Great. Thanks very much, team. I had two. One, a capital allocation follow-up, and then a sports rights question. Obviously you can buy back your own stock. The ASR is helpful, but you're also able to do M&A. I was hoping you could walk us through how you assess the relative attractiveness of each. Where your strategic focus is from an M&A standpoint, and how you would describe the valuation backdrop for some assets out there. Second on sports rights, obviously some of your bigger competitors are very focused on the NFL. Do you see the potential for smaller rights to free up, and which sports we should be focused on? Thank you.

Speaker #8: Sure. Great. Thanks very much, team. I had to want to capital allocation follow up and then a sports rights question. So obviously, you can buy back your own stock.

Speaker #8: The ASR is helpful, but you're also able to do M&A. I was hoping you could walk us through how you assess the relative attractiveness of each and where your strategic focus is from an M&A standpoint and how you would describe the valuation backdrop for some assets out there.

Speaker #8: And then second, on sports rights, obviously, some of your bigger competitors are very focused on the NFL. Do you see the potential for smaller rights to free up and which sports we should be focused on?

Speaker #8: Thank you.

Mark Lazarus: We'll talk about the framework for M&A. Clearly, we're looking in a, in a variety of areas and obviously can't be too specific here. You know, we, we're adding to our verticals as the three that I've already mentioned that we've done, and we're looking for accretive opportunities within each of those verticals. More broadly, we are interested in being We're gonna be very disciplined, but we're interested in things that help us diversify our revenue streams. As we've talked about, a very, a vertical strategy, not a horizontal strategy across the linear landscape. On the NFL question, I'll let Anand come back to the, to the, to the capital allocation side.

Speaker #1: So, we'll talk about the framework for M&A. Clearly, we're looking in a variety of areas. And, obviously, I can't be too specific here. But we're adding to our verticals, as the three that I've already mentioned that we've done.

Speaker #1: And we're looking for accretive opportunities within each of those verticals. More broadly, we are interested in being we're going to be very disciplined, but we're interested in things that help us diversify our revenue streams.

Speaker #1: And as we've talked about, a vertical strategy, not a horizontal strategy, across the linear landscape. On the NFL question, and I'll let on and come back to the capital allocation side.

Speaker #1: On the NFL question, yes, the competitive set, they're working through whatever however they and the NFL are going to work through the next cycle of contracts.

Mark Lazarus: On the NFL question, yes, the competitive set they're working through, whatever, however they in the NFL are going to work through the next cycle of contracts. I do believe that that will put pressure on those companies that re-retain or grow their NFL expense to make decisions on other content and that we will selectively look at contracts. If you can just look at who the next groups of leagues that come up, you know, you know, whether it's baseball, hockey, soccer or Premier League, there's a variety of content coming due. I think what I would just express is that we are well-positioned.

Speaker #1: I do believe that that will put pressure on those companies that retain or grow their NFL expense to make decisions on other content and that we will selectively look at contracts if you can just be look at who the next groups of leagues that come up whether it's baseball, hockey, soccer, or Premier League.

Speaker #1: There's a variety of content coming due. I think what I would just express is that we are well positioned if you think about since we've announced our spin, we have extended our USGA contract, we've extended our PGA of America Ryder Cup contract, we have expanded our WMBA relationship, we have done a deal and have now completed our first season of League One women's volleyball.

Mark Lazarus: You know, if you think about since we've announced our spin, we have extended our USGA contract, we've extended our PGA of America Ryder Cup contract, we have expanded our WNBA relationship, we have done a deal and have now completed our first season of League One Volleyball. I do think there will continue to be opportunity for us to build upon our sports portfolio, being judicious with our capital.

Speaker #1: So I do think there will continue to be opportunity for us to build upon our sports portfolio being judicious with our capital.

Speaker #9: And just to kind of go back to what Mark said on the capital allocation and M&A, so in terms of, again, whether it's share repurchase, whether it's ASR or on the market and M&A, again, we view it as these are both two prongs and the third prong is maintaining a healthy balance sheet that we are going to execute concurrently.

Anand Kini: Just to kind of go back to what Mark said on the capital allocation and M&A. In terms of, again, like whether it's share repurchase, whether it's ASR or on the market at, in M&A, again, we view it as these are both two prongs and the third prong is maintaining a healthy balance sheet that we are gonna execute concurrently. That's what we've been doing, and we hold each one as very important. I think, again, they all work together, so we think we're, you know, we're in a advantage position to be able to do it, do it all. I think our results kind of show that. On M&A, Mark mentioned the strategy focus. It's also, we have a lot of focus on value.

Speaker #9: And that's what we've been doing. And we hold each one as very important. And I think, again, they all work together. So we think we're in an advantaged position to be able to do it all.

Speaker #9: And I think our results kind of show that. And then on M&A, Mark mentioned the strategy focus. It's also we have a lot of focus on value.

Speaker #9: I think hopefully our results in Q1 demonstrate that we have a resilient, strong business model. And we're going to do things whether there's a lot of room to grow organically or our platform's revenue growth this quarter demonstrates that.

Anand Kini: I think hopefully our results in Q1 demonstrate that we have a resilient, strong business model, and we're going to do things, there's a lot of room to grow organically. Our platform's revenue growth this quarter demonstrates that. That was really a, you know, organic growth in Golf Now and Fandango. We're going to look when there's opportunities that are inorganic, they have a very high threshold, even as they fit within those markets and those strategies. If it makes a lot of sense and it adds a lot of value, we'll pursue. If it doesn't, we really like the hand that we have.

Speaker #9: That was really organic growth in GolfNow and Fandango. So we're going to look, when there's opportunities that are inorganic, they have a very high threshold, even as they fit within those markets and those strategies.

Speaker #9: And if it makes a lot of sense and it adds a lot of value, we'll pursue. But if it doesn't, we really like the hand that we have.

Speaker #6: Thank you.

Sean Diffley: Thank you.

Operator: Thank you. Our last and final question is from the line of David Joyce with Seaport Research Partners. Please proceed with your questions.

Speaker #5: Thank you. Our last and final question is from the line of David Joyce with Seaport Research Partners. Please proceed with your questions.

Speaker #10: Thank you. Anecdotally, it seems like you've been self-promoting Fandango and GolfNow and GolfPass more. What's the engagement and subscription growth been like year over year?

David Joyce: Thank you. Anecdotally, it seems like you've been self-promoting Fandango and GolfNow and GolfPass more. What's the engagement and subscription growth been like year over year, and where do you see your share going in a few years? Secondly, some of your other peers have been starting to work on vertical video. Is this possibly gonna be part of your strategy, and what would be involved in that? Thank you.

David Joyce: Thank you. Anecdotally, it seems like you've been self-promoting Fandango and GolfNow and GolfPass more. What's the engagement and subscription growth been like year-over-year, and where do you see your share going in a few years? Secondly, some of your other peers have been starting to work on vertical video. Is this possibly gonna be part of your strategy, and what would be involved in that? Thank you.

Speaker #10: And where do you see your share going in a few years? And then secondly, some of your other peers have been starting to work on vertical video.

Speaker #10: Is this possibly going to be part of your strategy? And what would be involved in that? Thank you.

Mark Lazarus: First, thank you for noticing. Yes, we have been utilizing our air time, given, you know, the portfolio we have. We've been utilizing our air time to promote Fandango, GolfNow, and Rotten Tomatoes. You left that part out. Hopefully you've seen those as well. I think what we've been doing there, I think the results that we just announced of growing, you know, at 9%, 9% is indicative of the power of our linear promotion helping grow those businesses. You know, they're not really subscription businesses, they're transaction businesses. Our growth is evident that our transactions are growing, and part of that for sure is our ability to promote those services on our air, and we will continue to do that.

Speaker #1: So first, thank you for noticing. Yes, we have been utilizing our airtime given the portfolio we have. We've been utilizing our airtime to promote Fandango.

Speaker #1: GolfNow and Rotten Tomatoes some, you left that part out. Hopefully, you've seen those as well. I think what we've been doing there, I think the results that we just announced of growing at 9% is indicative of the power of our linear promotion helping grow those businesses.

Speaker #1: They're not really subscription businesses. They're transaction businesses. But our growth is evident that our transactions are growing. And I think part of that for sure is our ability to promote those services on our air.

Speaker #1: And we will continue to do that. It's one of the benefits we have of having this closed loop of multiple businesses. In terms of video, we're investigating it where there's a couple of companies that we're working with.

Mark Lazarus: It's one of the benefits we have of having this closed loop of multiple businesses. In terms of vertical video, we are investigating it, where there's a couple of companies that we're working with. In fact, if you look, we just launched a new Golf Channel app and it is built for vertical video. We'll continue to do that in other areas and other genres as well.

Speaker #1: In fact, if you look, we just launched a new golf channel app. And it is built for vertical video. We'll continue to do that in other areas and other genres as well.

Speaker #6: Great. Thank you.

David Joyce: Great. Thank you.

Speaker #5: Thank you. This now concludes our question and answer session. And we'll also conclude today's conference. Ladies and gentlemen, thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.

Operator: Thank you. This now concludes our question and answer session, and will also conclude today's conference. Ladies and gentlemen, thank you for your participation. You may now disconnect your lines at this time, and have a wonderful day.