Spanish-language media giant TelevisaUnivision reported virtually unchanged U.S. revenue of $739.9 million in the first quarter of 2024, as a 4 percent drop in “other” revenue was offset by subscription and licensing revenue, as well as advertising revenue that rose minimally. It also touted that its streaming business, which had ended 2023 with more than 7 million subscribers, would turn profitable by the back half of 2024.
TelevisaUnivision CEO Wade Davis on a late morning analyst call predicted his company’s ViX streaming platforms would reach profitability in the second half of this year. “The only other company that has achieved this in the industry is Netflix,” he said.
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Growth in streaming was “offset by some softness in linear networks,” the company said about its $399.4 million in U.S. ad revenue for the latest period. In Mexico, quarterly advertising revenue jumped 19 percent to $249 million, “driven by private sector growth from both new and existing clients across linear and direct-to-consumer,” pushing the company’s total ad revenue for the latest period up 7 percent to $648 million.
Discussing subscription and licensing revenue trends in the first quarter, the media firm said that “growth in both the U.S. and Mexico was driven by ViX’s premium tier, while the linear platforms continued to experience subscriber losses.” TelevisaUnivision is planning to launch a new ViX Premium with Ads tier shortly. Management expects that to further help its streaming growth.
While no latest subscriber update was provided in the earnings report, streamer VIX remains a key focus, with the company saying: “ViX saw strong continued growth in overall audience and engagement with total streaming hours more than doubling versus a year ago.”
Davis said ViX will continue to “scale rapidly,” including with the cheaper ad-supported streaming option. “For us, we think the entire system we’ve built from an ad-sales standpoint will be able to continue to grow at above market rates as it has for the past three years as we continue to invest in and evolve both platforms together,” he argued of Televisa Univision with its varied platforms adjusting to an industry-wide decline in linear TV viewership as consumers pivot to streaming platforms.
Total company revenue in the first quarter grew 7 percent to $1.1 billion, “driven by growth in the company’s direct-to-consumer (DTC) business globally and linear networks in Mexico.” Operating expenses rose 16 percent to $820.5 million, weighing on the bottom line.
All in all, TelevisaUnivision’s quarterly adjusted operating income before depreciation and amortization (OIBDA), a key profitability metric, dropped 9 percent to $328.5 million, or 5 percent when excluding a bad debt reversal from a year ago.
Said TelevisaUnivision CEO Davis in a statement that accompanied his financial results: “2024 started strong with great revenue growth and continued progress across our most important strategic initiatives. Our DTC business is performing extremely well and is on track to be profitable in a few short months.”
During the analyst call, Davis also touted political spending on ViX to mobilize Latino voters during the current U.S. election year. “We’re confident that Democrats and Republicans understand Hispanic voters will be determinative of both the the Presidential (election) and control of Congress and that Univision is the platform to reach them,” he argued.
Davis added Univision has also expanded its overall news and current affairs coverage, including allowing both Democrats and Republicans to appear on his Spanish-language platform and express viewpoints to a Hispanic voter base likely to sway elections in key battleground states. “This is the swing audience. So many elections, so many down ballot issues have never been this close, or have issues that have such significant implications with the general electorate so polarized,” the CEO argued.
Davis in the latest financial results commentary also emphasized his team’s focus on debt reduction. The strong ad year “in combination with a profitable DTC business in the second half of the year and excellent execution across the rest of the business, will enable earnings before interest, taxes, depreciation, and amortization (EBITDA) growth and organic deleveraging – key to achieving our continued objectives of strengthening our balance sheet,” he said.
