Aug 08, 2019

By Stuart Winchester
Plus adjusted diluted EPS⁽²⁾ grew 3% year over year—which marks the sixth consecutive quarter of growth.⁽³⁾

Quick Takeaways

Ad revenue uptick: Domestic ad revenue climbed 6% thanks to the continued evolution of Viacom’s Advanced Marketing Solutions. This is domestic ad sales’ first quarterly growth in 20 quarters. 

Paramount profitability: Paramount Pictures delivered its 10th consecutive quarter of year-over-year adjusted operating income improvement. It’s on track to deliver full year profitability in fiscal 2019.

Pluto TV momentum: Monthly active users have increased 50%, to 18 million, since Viacom announced the acquisition in January.

Financial Highlights⁽³⁾: Year-over-year adjusted diluted earnings per share⁽²⁾ grew 3% in the quarter and 6% year-to-date. Adjusted operating income grew 2% year-to-date.

  1. See earnings release for information regarding our use of non-GAAP financial measures and forward-looking statements.
  2. From continuing operations.
  3. Presented on a constant currency basis.

Viacom’s domestic ad sales returned to growth, one of many indicators in its third-quarter earnings results, released this morning, that the company’s strong execution and investments are driving top-line growth.

“Viacom delivered another strong quarter, as our core businesses and investments in strategic priorities fuel our growth and evolution,” said Viacom President and CEO Bob Bakish. “As this quarter shows, Viacom’s brands are strong, our strategy is delivering, and our investments continue to position us well for the future.”

Advanced Marketing Solutions Drives Domestic Ad Sales

Viacom projects its domestic ad sales growth to continue, with full-year growth anticipated when the company wraps its fiscal 2019. Per comments from Bakish on the earnings call, this "represents a significant milestone” and “ushers in a new era of advertising growth.”

Advanced Marketing Solutions (AMS)—which includes digital-first companies Vantage, Awesomeness, WhoSay, and Pluto TV, as well as its advanced advertising capabilities—is credited with driving the growth.

AMS revenue shot up 84% year-over-year in Q3, and Viacom expects the business to nearly double overall in fiscal 2019, representing nearly 20% of domestic ad sales. The demand for these products was instrumental in driving an uptick in volume and strong pricing coming out of this year’s upfront advertising commitments.

A Bigger Free Streaming Footprint

Pluto TV expanded its audience and programming slate this quarter.

Since Viacom announced the acquisition in January, monthly active users grew 50% to 18 million. This quarter, Viacom announced new distribution for Pluto TV on Cox Communications’ Contour platform and integration into Comcast’s Xfinity X1.

Pluto TV launched 28 new channels in the quarter, and launched Pluto TV Latino in the U.S. with 11 Spanish- and Portuguese-language channels.

The Top Cable Group for Young and Diverse Audiences

Viacom maintained its No. 1 share of U.S. basic cable viewing among kids, teens, 18-to-34s, 2- to-49s and African-Americans, and its networks collectively had more top 20 original cable series than any other cable family.

At the networks, Comedy Central recorded its ninth straight quarter of share growth, while Paramount Network grew its share for the third straight quarter as its hit Yellowstone debuted as the No. 1 summer series on cable.

Studio Production Continues to Expand Worldwide

Viacom’s studio production model, which creates premium content for third-parties using original or Viacom IP, continued to grow. The studio model—which Viacom introduced last year as an outgrowth of success at Paramount Television and Viacom-owned Argentinian broadcaster Telefe—includes Viacom International Studios (VIS), Awesomeness, and in-house production arms of MTV, Nickelodeon, and Comedy Central.

Paramount TV recently earned seven Emmy nominations. It has 26 series ordered to or in production, including an adaptation of Telefe’s hit 100 Days to Fall in Love for Showtime.

For more detailed information, see the full press release.