Versant Q1 Earnings Call Highlights

Key Points

• Versant’s first quarter revenue fell 1% to about $1.69 billion as pay-TV weakness pressured linear distribution and advertising, but the company offset some of that decline with growth in platforms and content licensing.
• Profitability remained strong, with adjusted EBITDA rising 5% to $704 million and free cash flow reaching $558 million. Management also highlighted a solid cash position, a quarterly dividend, and share repurchases as part of its capital-return strategy.
• Versant is leaning into growth areas such as direct-to-consumer products, platforms, and sports/news engagement, including planned launches for an MS NOW subscription service and a Fandango AVOD offering later this year.

Versant NASDAQ: VSNT Media Group reported a modest revenue decline in its first quarter as an independent company, while management pointed to stronger profitability, growth in digital and platform businesses, and continued investment in direct-to-consumer offerings as key priorities for 2026.

Chief Executive Officer Mark Lazarus said the company was “off to a strong start to the year,” citing growth across several parts of the portfolio and what he described as disciplined execution. Chief Financial Officer and Chief Operating Officer Anand Kini said first-quarter results reflected “robust profitability, healthy margins, significant free cash flow generation, and continued momentum in platforms revenue.”

Revenue Slips as Pay TV Pressure Continues

Total revenue for the quarter was approximately $1.69 billion, down 1% from the prior-year period on a standalone adjusted basis. Kini said the decline reflected “expected continued pressure on pay TV” affecting linear distribution and advertising revenue, partially offset by growth in platforms and content licensing.

• Linear distribution revenue was $1.01 billion, down 7% year over year, driven by cord-cutting trends and partially offset by contractual rate increases.
• Advertising revenue was $368 million, down 5% year over year, an improvement from a 12% decline in the same quarter last year.
• Platforms revenue rose 9% to $192 million, supported by GolfNow and Fandango.
• Content licensing and other revenue increased to $121 million from $57 million, helped by licensing select titles including Keeping Up with the Kardashians.

Adjusted EBITDA rose 5% to $704 million, with margins remaining above 30%. Programming and production costs fell 5% to $519 million, while SG&A costs declined 9% to $346 million. Kini said the company expects a modest increase in SG&A going forward to support growth initiatives, including direct-to-consumer offerings.

CNBC, MS NOW and Golf Channel Drive Engagement

Lazarus highlighted audience gains across several core brands. CNBC delivered its highest-rated quarter in four years, with double-digit year-over-year growth during a period of market volatility. The network also recorded its largest Davos audience in five years during coverage of the World Economic Forum, with viewership among key demographics up more than 50% for the week.

MS NOW posted its most-watched quarter since 2024, with double-digit growth in total day and prime-time viewership among key demographics. Lazarus said the network reached an average of more than 30 million viewers weekly, while viewers watched an average of nine hours per week. He also said the MS NOW website and app delivered their strongest first quarter on record, and that MS NOW generated more YouTube views than the news divisions of the three broadcast networks combined.

Golf Channel continued to benefit from early-season engagement. Lazarus said the network drew its largest audience for The Players Championship in two decades and reached 13.5 million unique viewers during Masters week. GolfNow delivered growth in tee time bookings and payments, while GolfPass reached its highest subscriber level ever, helped by the company’s partnership with Rory McIlroy.

Sports, Entertainment and Platforms Remain Strategic Focus Areas

In sports and entertainment, Lazarus said Versant delivered the largest Olympic audience in USA Network history with the Milano Cortina Olympics, which aired across USA Network and CNBC and reached approximately three-quarters of U.S. pay TV households. He also cited the company’s first season of League One Volleyball on USA Network and the recent start of its inaugural WNBA season.

The company also continued to monetize its entertainment library through licensing deals. Kini said content licensing revenue can vary significantly from quarter to quarter because revenue is generally recognized when content is delivered. In response to an analyst question, he said the Keeping Up with the Kardashians deal was a multi-year licensing agreement and that content licensing is a “good margin business” for Versant.

Platforms remain a top strategic priority. Lazarus said Fandango One, formerly INDY Cinema, has expanded Fandango’s offering for cinema operators. He also pointed to the acquisition of StockStory, an AI-driven investment intelligence platform, as part of CNBC’s direct-to-consumer development plans.

Versant is preparing to launch an MS NOW direct-to-consumer subscription offering and a Fandango advertising-supported video-on-demand service later this year. Lazarus said the MS NOW service will feature content from the network’s reporters, contributors and anchors, along with a broader community-oriented offering. The Fandango AVOD service will be free with advertising and will use data from existing Fandango users to serve relevant ads.

Kini said the investment required for those launches is “not substantial,” noting that Versant can use existing video infrastructure at Fandango and CNBC. He said much of the spending will be tied to marketing and consumer awareness.

Capital Returns and Full-Year Outlook

Versant generated $558 million in free cash flow during the quarter, aided by timing-related items that management expects to normalize as the year progresses. The company ended the quarter with $1.2 billion in cash.

The board declared a quarterly cash dividend of $0.375 per share. Versant also repurchased $100 million of Class A shares during the first quarter and announced a $100 million accelerated share repurchase agreement expected to be completed in the second quarter. Kini said the buyback and dividend reflect the company’s capital allocation approach, which includes maintaining a strong balance sheet, investing in growth and returning capital to shareholders.

The company reaffirmed its full-year outlook for revenue of $6.15 billion to $6.4 billion, adjusted EBITDA of $1.85 billion to $2.0 billion, and free cash flow of $1.0 billion to $1.2 billion. Kini said results may fluctuate by quarter due to content licensing, working capital timing and higher programming costs in the second half of the year, particularly in the fourth quarter.

Versant also sold most of its SportsEngine business on May 1 after previously saying it would explore strategic alternatives. Kini said the transaction is not expected to materially change the company’s revenue or EBITDA trajectory.

Management Addresses Advertising, Bundles and Sports Rights

During the question-and-answer session, Lazarus said the advertising marketplace has been strong and that the company’s news, sports and live entertainment portfolio has remained resilient. He said the quarter’s advertising performance was not meaningfully helped by the Olympics, because NBC bought the advertising time from Versant for those broadcasts.

On skinny bundles, Lazarus said Versant is “well-positioned” and included in appropriate sports and news bundles. He added that the company is seeing stability in entertainment and is exploring flexible distribution approaches, including Oxygen’s availability in free over-the-air multicast.

Asked about future sports rights opportunities, Lazarus said rising NFL costs for competitors could lead those companies to make decisions on other content. He mentioned baseball, hockey, soccer and Premier League rights as examples of categories with future opportunities, while emphasizing that Versant would be selective and disciplined.

About Versant NASDAQ: VSNT

Versant Corporation is a provider of data management software. The Company designs, develops, markets and supports database management system products that companies use to solve data management and data integration issues. It also provides related product support, training and consulting services to assist users of the Company's products in developing and deploying software applications based on its products. The Company's Versant Object Database product is used primarily by enterprises, which have data management requirements, such as technology providers, telecommunications carriers, Government defense agencies, defense contractors, healthcare companies and companies in the financial services and transportation industries.

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