AMC Networks Q3 Earnings Call Highlights

Key Points

• Revenue grew 1% in Q3 2026, with streaming and content licensing gains offsetting declines in affiliate and advertising revenue. AMC maintained its full-year outlook of $2.4 billion–$2.45 billion in revenue and $410 million–$420 million in adjusted operating income.
• Free cash flow was negative $52 million, including an $85 million payment tied to The Walking Dead litigation; excluding the payment, it would have been $33 million. AMC still expects approximately $150 million in full-year free cash flow.
• AMC sold its profitable ALLBLK service and entered a Netflix partnership to license The Walking Dead and jointly fund new series, a model management says can reduce programming investment while retaining shared upside.

AMC Networks NASDAQ: AMCX reported 1% consolidated revenue growth for the third quarter of 2026, as gains in streaming and content licensing helped offset declines in affiliate and advertising revenue. The company maintained its full-year outlook after selling its ALLBLK streaming service and settling litigation related to The Walking Dead.

Chief Executive Officer Kristin Dolan said domestic affiliate and advertising revenue trends improved both sequentially and from a year earlier. Chief Financial Officer Hozefa Lokhandwala said third-quarter adjusted operating income was $70 million, while free cash flow was negative $52 million, reflecting an $85 million settlement payment.

Excluding that payment, quarterly free cash flow would have been $33 million, Lokhandwala said.

Streaming and licensing offset traditional TV declines

Domestic operations revenue rose 2% in the quarter. Subscription revenue fell 2%, reflecting a 4% increase in streaming revenue and an 11% decline in affiliate revenue. Excluding ALLBLK, streaming revenue increased 7% on a comparable basis, with growth reflecting price increases across the company’s services.

Dolan said customer retention, excluding ALLBLK, was consistent with the prior year despite rate increases across the services. Average viewing hours per active user rose sequentially and year over year, while total hours watched across the remaining streaming portfolio increased by a double-digit percentage from the prior quarter, she said.

Domestic content licensing revenue was $84 million, reflecting the timing of content deliveries. Lokhandwala reiterated that the company expects $460 million to $485 million in domestic content licensing revenue for the full year, with the majority recognized in the fourth quarter.

Domestic advertising revenue declined 7% because of a softer advertising market, partly offset by digital growth. President and Chief Commercial Officer Kim Kelleher said investments in programmatic advertising, audience targeting and data helped the company capture digital demand, including early political advertising in the third quarter.

Lokhandwala attributed the improved affiliate revenue trend to new agreements and contractual changes. He said the company expects the full-year rate of decline to look similar to 2025, without providing a breakdown between subscriber losses and pricing.

Settlement and ALLBLK sale

The company’s $120 million settlement of The Walking Dead litigation includes the $85 million paid in the third quarter and a $35 million advance against future participations due in January. Lokhandwala said the settlement payment does not affect adjusted operating income.

AMC also sold ALLBLK to MACRO during the quarter. The service had approximately 600,000 subscribers at the time of the sale, and the transaction included a multiyear content licensing agreement. Lokhandwala said ALLBLK was profitable but did not disclose transaction details.

The sale leaves the company with six targeted streaming services. Dolan said AMC is seeking distribution through wholesale, retail, direct-to-consumer and bundled offerings, and is preparing to relaunch AMC+ with more advanced capabilities.

Netflix partnership and content plans

AMC plans to bring the original The Walking Dead series to AMC+ for the first time as part of a January 7 launch featuring every episode across the franchise, along with specials and behind-the-scenes content. The move follows a global co-exclusive licensing agreement with Netflix for the franchise.

The companies also agreed to jointly fund and own new AMC Studios series for both platforms. The first project under that arrangement, the spy drama Bannerman, is expected to begin production in January and premiere later in the year, Dolan said.

Dan McDermott, chief content officer and president of AMC Studios, said the Netflix model reduces AMC’s programming cash investment while preserving shared long-term upside. After the initial license periods end, the partners can pursue additional licensing, with costs recouped and profits shared, he said.

Outlook and balance sheet

For 2026, AMC continues to forecast consolidated revenue of $2.4 billion to $2.45 billion and adjusted operating income of $410 million to $420 million. Lokhandwala said the company expects to meet that guidance despite the loss of ALLBLK’s contribution following the sale.

Management also continues to anticipate approximately $150 million in full-year free cash flow, including the after-tax impact of the $85 million settlement payment. Lokhandwala cautioned that the timing of cash receipts and payments can shift free cash flow between quarters.

The company ended the quarter with $440 million in cash and approximately $1.3 billion in net debt. In October, it completed a $30 million accelerated share repurchase covering 2.8 million shares. Lokhandwala said AMC continues to prioritize gross debt reduction over acquisitions and share repurchases.

About AMC Networks (NASDAQ:AMCX)

AMC Networks Inc is an entertainment company that develops, produces, and distributes television and digital media content. The company's portfolio includes the AMC, BBC America, IFC, SundanceTV, and WE tv networks, which offer scripted and unscripted programming, films, documentaries, and other entertainment content.

AMC Networks also operates a range of streaming and digital services, including AMC+, Acorn TV, Shudder, ALLBLK, and HIDIVE. These platforms provide on-demand access to original series, films, genre programming, international content, and offerings from the company's television brands.

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