AMC Global Media Inc.

05/08/2026 | Press release | Distributed by Public on 05/08/2026 15:29

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
This Management's Discussion and Analysis of Financial Condition and Results of Operations contains statements that constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. In this Management's Discussion and Analysis of Financial Condition and Results of Operations there are statements concerning our future operating results and future financial performance. Words such as "expects," "anticipates," "believes," "estimates," "may," "will," "should," "could," "potential," "continue," "intends," "plans" and similar words and terms used in the discussion of future operating results and future financial performance identify forward-looking statements. You are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties and that actual results or developments may differ materially from the forward-looking statements as a result of various factors. Factors that may cause such differences to occur include, but are not limited to:
•the level of our revenues;
•market demand, including changes in viewer consumption patterns, for our programming networks, our subscription streaming services, our programming (including our owned original programming and our film content) and our production services;
•demand for advertising inventory and our ability to deliver guaranteed viewer ratings;
•the highly competitive nature of the cable, telecommunications, streaming and programming industries;
•the cost of, and our ability to obtain or produce, desirable content for our programming services, other forms of distribution, including digital and licensing in international markets, as well as our film distribution businesses;
•the loss of any of our key personnel or artistic talent;
•the impact and lingering effects of strikes, including those related to the Writers, Directors, and Screen Actors guilds;
•the security of our program rights and other electronic data;
•breaches or failures of our or our vendors' information technology systems or products, including by cyber-attack, malware, data leakage, unauthorized access or theft, or other cybersecurity incidents;
•our ability to maintain and renew distribution or affiliation agreements with distributors;
•economic and business conditions and industry trends in the countries in which we operate, including fluctuations in inflation rates, recession risk, the impacts of tariffs, U.S. federal government shutdowns, and uncertainty regarding the foregoing;
•fluctuations in currency exchange rates and interest rates;
•changes in domestic and foreign laws or regulations under which we operate;
•changes in laws or treaties relating to taxation, or the interpretation thereof, in the United States or in the countries in which we operate;
•the impact of existing and proposed federal, state and international laws and regulations relating to data protection, privacy and security, including the European Union's General Data Protection Regulation ("GDPR"), the California Consumer Privacy Act ("CCPA") and other similar comprehensive privacy and security laws that have been or may be enacted in other states;
•our substantial debt and high leverage, as well as our liquidity;
•reduced access to, or inability to access, capital or credit markets, or significant increases in costs to borrow;
•the level of our expenses;
•changes in our business strategy;
•future acquisitions and dispositions of assets;
•our ability to successfully acquire new businesses and, if acquired, to integrate, and implement our plan with respect to businesses we acquire;
•problems we may discover post-closing with the operations, including the internal controls and financial reporting process, of businesses we acquire;
•the outcome of litigation, arbitration and other proceedings or investigations;
•whether pending uncompleted transactions, if any, are completed on the terms and at the times set forth (if at all);
•financial community and rating agency perceptions of our business, operations, financial condition and the industry in which we operate;
•impairment charges related to our goodwill and other intangible assets;
•the impact of pandemics or other health emergencies on the economy and our business;
•the direct and indirect impact of events that are outside our control, such as geopolitical conditions (including international war or conflicts), political unrest in international markets, terrorist attacks, natural disasters and other similar events; and
•the factors described under Item 1A, "Risk Factors" in our 2025 Annual Report on Form 10-K (the "2025 Form 10-K"), as filed with the Securities and Exchange Commission.
We disclaim any obligation to update or revise the forward-looking statements contained herein, except as otherwise required by applicable federal securities laws.
Introduction
Management's Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, is a supplement to and should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere herein and our 2025 Form 10-K to enhance the understanding of our financial condition, changes in financial condition and results of our operations. Unless the context otherwise requires, all references to "we," "us," "our," "AMC Global Media" or the "Company" refer to AMC Global Media Inc., together with its subsidiaries. The MD&A is organized as follows:
Business Overview. This section provides a general description of our business and our operating segments, as well as other matters that we believe are important in understanding our results of operations and financial condition and in anticipating future trends.
Consolidated Results of Operations. This section provides an analysis of our results of operations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Our discussion is presented on both a consolidated and segment basis. Our two segments are: (i) Domestic Operations and (ii) International.
Liquidity and Capital Resources. This section provides a discussion of our financial condition as of March 31, 2026, as well as an analysis of our cash flows for the three months ended March 31, 2026 and 2025. The discussion of our financial condition and liquidity also includes summaries of (i) our primary sources of liquidity and (ii) our contractual obligations that existed at March 31, 2026 as compared to December 31, 2025.
Critical Accounting Policies and Estimates. This section provides an update, if any, to our significant accounting policies or critical accounting estimates since December 31, 2025.
Business Overview
Financial Highlights
The tables presented below set forth our consolidated revenues, net, operating income and adjusted operating income ("AOI")1, for the periods indicated.
(In thousands) Three Months Ended March 31,
2026 2025
Revenues, net $ 542,127 $ 555,233
Operating Income $ 31,261 $ 64,197
Adjusted Operating Income $ 68,974 $ 104,485
Segment Reporting
We manage our business through the following two operating segments:
•Domestic Operations: Consists of our streaming services, our five programming networks, our AMC Studios operation and our film distribution business. Our streaming services consist of AMC+ and our targeted subscription streaming services (Acorn TV, Shudder, Sundance Now, ALLBLK, HIDIVE and All Reality). Our programming networks are AMC, We TV, BBC America, IFC, and SundanceTV. Our AMC Studios operation produces original programming for our programming services and third parties and also licenses programming worldwide. Our film distribution business consists of Independent Film Company. The operating segment also includes AMC Networks Broadcasting & Technology, our technical services business, which primarily services the programming networks.
•International: Consists of AMC Global Media International, our international programming businesses consisting of a portfolio of channels distributed around the world.
1 Adjusted Operating Income is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section in this MD&A for additional information, including our definition and our use of this non-GAAP financial measure, and for a reconciliation to its most comparable GAAP financial measure.
Domestic Operations
In our Domestic Operations segment, we earn revenue principally from: (i) subscription revenues in connection with the distribution of our programming through our streaming services and programming networks, (ii) the sale of advertising, and (iii) the licensing of our original programming to distributors, including the distribution of programming of Independent Film Company.
Substantially all of our subscription revenues are based on a per subscriber fee. The subscription revenues we earn vary from period to period, distributor to distributor and also vary among our streaming services and programming networks. Subscription revenues are generally based on the impact of renewals of distributor agreements and upon the number of each distributor's subscribers who receive our programming, referred to as viewing subscribers. Subscription fees for our services are generally paid by distributors and consumers on a monthly basis. In negotiating for additional subscribers or extended carriage, we have agreed, in some instances, to make payments to a distributor which we record as deferred carriage fees and which are amortized as a reduction of revenue over the period of the related affiliation agreement. We also may support the distributors' efforts to market our networks. We believe that these transactions generate a positive return on investment over the contract period.
Under affiliation agreements with our distributors, we have the right to sell a specified amount of national advertising time on our programming networks. Our advertising revenues are more variable than subscription revenues because the majority of our advertising is sold on a short-term basis, not under long-term contracts. Our arrangements with advertisers provide for a set number of advertising units to air over a specific period of time at a negotiated price per unit. Additionally, in these advertising sales arrangements, our programming networks generally guarantee specified viewer ratings for their programming. If these guaranteed viewer ratings are not met, we are generally required to provide additional advertising units to the advertiser at no charge. For these types of arrangements, a portion of the related revenue is deferred if the guaranteed ratings are not met and is subsequently recognized either when we provide the required additional advertising units or the guarantee obligation contractually expires. Most of our advertising revenues vary based on the timing of our original programming series and the popularity of our programming as measured by Nielsen. Our domestic programming networks have advertisers representing companies in a broad range of sectors, including the automotive, restaurants/food, health, technology and telecommunications industries. We seek to increase our advertising revenues by increasing the rates we charge for such advertising, which depend in part on the overall distribution and popularity of our programming, including among desirable demographic groups as measured by Nielsen, the penetration of our services across digital platforms, including AVOD and FAST services, and the integration of our advanced advertising products.
Content licensing revenue is earned from the licensing of original programming for digital, foreign and home video distribution and is recognized upon availability or distribution by the licensee, and, to a lesser extent, is earned through the distribution of AMC Studios produced series to third parties. Content licensing revenues vary based on the timing and availability of programming to distributors.
We continue to contract for and produce high-quality, attractive programming and remain disciplined in our marketing spend in our efforts to acquire and retain higher lifetime value subscribers. As competition for programming increases and alternative distribution technologies continue to emerge and develop in the industry, costs for content acquisition and original programming have increased. There is a concentration of subscribers in the hands of a few distributors, which could create disparate bargaining power between the largest distributors and us by giving those distributors greater leverage in negotiating the price and other terms of affiliation agreements. We also seek to increase our content licensing revenues by expanding the opportunities for licensing our programming through digital distribution platforms, foreign distribution and home video services.
Content expenses, included in technical and operating expenses, represent the largest expenses of the Domestic Operations segment and primarily consist of amortization of program rights, such as those for original programming, feature films and licensed series, as well as participation and residual costs. The other components of technical and operating expenses primarily include distribution and production related costs and program operating costs including cost of delivery, such as origination, transmission, uplink and encryption.
The success of our business depends on original programming, both scripted and unscripted, across all of our programming services. These original series generally result in higher ratings for our networks and higher viewership on our streaming services. Among other things, higher audience ratings drive increased revenues through higher advertising revenues. The timing of exhibition and distribution of original programming varies from period to period, which results in greater variability in our revenues, earnings and cash flows from operating activities. There may be significant changes in the level of our technical and operating expenses due to the level of our content investment spend and the related amortization of content acquisition and/or original programming costs. Program rights that are predominantly monetized as a group are amortized based on projected usage and viewership patterns, typically resulting in an accelerated amortization pattern and, to a lesser extent, program rights that are predominantly monetized individually are amortized based on the individual-film-forecast-computation method.
Most original series require us to make significant up-front investments. Our programming efforts are not always commercially successful, which has in the past resulted and could in the future result in a write-off of program rights. If events or changes in circumstances indicate that the fair value of program rights predominantly monetized individually or as a group is less than their unamortized cost, we will write off the excess to technical and operating expenses in the condensed consolidated statements of income (loss). Program rights with no future programming usefulness are substantively abandoned resulting in the write-off of remaining unamortized cost. There were no material program rights write-offs included in technical and operating expense for the three months ended March 31, 2026 and 2025.
International
In our International segment, we earn revenue principally from subscription revenue in connection with the international distribution of programming and, to a lesser extent, the sale of advertising from our international programming networks. Subscription revenue consists of the fees paid by distributors to carry our programming networks. Our subscription revenues are generally based on either a per-subscriber fee or a fixed contractual annual fee, under multi-year affiliation agreements. Subscription revenues are derived from the distribution of our programming networks primarily in Europe, and to a lesser extent, Latin America.
Content expenses and programming operating costs primarily comprise technical and operating expenses. Content expenses represent the largest expense of the International segment and primarily consist of amortization of acquired content. Program operating costs include costs such as origination, transmission, uplink and encryption of our linear international channels as well as content hosting and delivery costs at our various on-line content distribution initiatives. Other components of technical and operating expense include costs of dubbing and sub-titling of programs. Our programming efforts are not all commercially successful, which has in the past resulted and could in the future result in a write-off of program rights. If events or changes in circumstances indicate that the fair value of program rights predominantly monetized individually or a group is less than its unamortized cost, we will write off the excess to technical and operating expenses in the condensed consolidated statements of income (loss). Program rights with no future programming usefulness are substantively abandoned, resulting in the write-off of remaining unamortized cost. There were no material programming write-offs included in technical and operating expense for the three months ended March 31, 2026 and 2025. For the three months ended March 31, 2025, $3.5 million of program write-offs were recorded to restructuring and other related charges, primarily related to the wind-down of a joint venture held by our U.K. business with operations in EMEA.
Similar to our Domestic Operations businesses, the most significant business challenges we expect to encounter in our International business include programming competition (from both foreign and domestic programmers), limited channel capacity on distributors' platforms, the number of subscribers on those platforms and economic pressures on subscription fees. Other significant business challenges unique to our international operations include increased programming costs for international rights and translation (i.e., dubbing and subtitling), a lack of availability of international rights for a portion of our domestic programming content, increased distribution costs for cable, satellite or fiber feeds, a limited physical presence in certain territories, and our exposure to foreign currency exchange rate risk. See also the risk factors described under Item 1A, "Risk Factors - We face risks from doing business internationally." in the 2025 Form 10-K.
Impact of Economic Conditions
Our future performance is dependent, to a large extent, on general economic conditions, which can impact, among other things, our ability to manage our businesses effectively and our relative strength and leverage in the marketplace, with both suppliers and customers. Additionally, macroeconomic and geopolitical risks, particularly high inflation and interest rates, as well as potential or implemented tariffs and changes to the U.S. and other countries' trade policies, the direct and indirect impacts of international war or conflicts, and uncertainty regarding further changes to any of the foregoing, may adversely impact our results of operations, cash flows and financial position or our ability to refinance our indebtedness on terms favorable to us, or at all.
Capital and credit market disruptions, as well as other events such as pandemics or other health emergencies, inflation, tariffs and changes to the U.S. and other countries' trade policies, international conflict and recession, have in the past caused and could in the future cause market volatility and economic downturns, which have led and may lead to lower demand for our products, such as lower demand for television advertising and a decrease in the number of subscribers receiving our programming services. Events such as these have in the past adversely impacted, and may in the future adversely impact, our results of operations, cash flows and financial position.
Consolidated Results of Operations
The amounts presented and discussed below represent 100% of each operating segment's revenues, net and expenses. Where we have management control of an entity, we consolidate 100% of such entity in our condensed consolidated statements of income (loss) notwithstanding that a third-party owns an interest, which may be significant, in such entity. The noncontrolling owner's interest in the operating results of consolidated subsidiaries are reflected in net income attributable to noncontrolling interests in our condensed consolidated statements of income (loss).
Three and Three Months Ended March 31, 2026 and 2025
The following table sets forth our consolidated results of operations for the periods indicated.
Three Months Ended March 31,
(In thousands) 2026 2025 Change
Revenues, net:
Subscription $ 351,644 $ 358,075 (1.8) %
Advertising 136,219 141,856 (4.0) %
Content licensing and other 54,264 55,302 (1.9) %
Total revenues, net 542,127 555,233 (2.4) %
Operating expenses:
Technical and operating (excluding depreciation and amortization)
283,180 267,346 5.9 %
Selling, general and administrative 201,925 197,975 2.0 %
Depreciation and amortization 21,423 20,926 2.4 %
Restructuring and other related charges 4,338 4,789 (9.4) %
Total operating expenses 510,866 491,036 4.0 %
Operating income 31,261 64,197 (51.3) %
Other income (expense):
Interest expense (41,345) (43,392) (4.7) %
Interest income 3,124 8,415 (62.9) %
Miscellaneous, net (16,942) 7,888 n/m
Total other income (expense) (55,163) (27,089) n/m
Income (loss) from operations before income taxes (23,902) 37,108 n/m
Income tax (expense) benefit 6,738 (14,955) n/m
Net income (loss) including noncontrolling interests (17,164) 22,153 n/m
Less: Net income attributable to noncontrolling interests (1,706) (4,104) (58.4) %
Net income (loss) attributable to AMC Global Media's stockholders
$ (18,870) $ 18,049 n/m
n/m - Absolute percentages greater than 100% and comparisons between positive and negative values or zero values are considered not meaningful.
Revenues, net
Subscription revenues decreased 2.6% in our Domestic Operations segment primarily due to a decline in affiliate revenues from basic subscriber declines, partially offset by an increase in streaming revenues primarily due to the impact of price increases across our services. Subscription revenues increased 3.7% in our International segment primarily due to the favorable impact of foreign currency translation, partially offset by lower revenues primarily from the wind-down of a joint venture held by our U.K. business with operations in EMEA. We expect linear subscriber declines to continue in our Domestic Operations segment, consistent with the declines across the cable ecosystem.
Advertising revenues decreased 5.4% in our Domestic Operations segment primarily due to lower marketplace pricing, partially offset by digital advertising growth. Advertising revenues increased 3.4% in our International segment primarily due to the favorable impact of foreign currency translation, partially offset by lower ratings primarily in the U.K. We generally expect advertising revenue to continue to decline as the advertising market gravitates toward other distribution platforms.
Content licensing and other revenues decreased 2.1% in our Domestic Operations segment primarily due to the timing and availability of deliveries in the period. We expect content licensing revenues to vary in 2026 based on the timing and availability of our programming to distributors.
Technical and operating expenses (excluding depreciation and amortization)
Technical and operating expenses primarily consist of content expenses, which include the amortization of program rights, such as those for original programming, feature films and licensed series, and participation and residual costs. Technical and operating expenses also include other direct programming costs, such as distribution and production related costs and program delivery costs, such as transmission, encryption, hosting, and formatting.
There may be significant changes in the level of our technical and operating expenses due to original programming costs and/or content acquisition costs. As competition for programming increases, costs for content acquisition and original programming are expected to increase.
Technical and operating expenses (excluding depreciation and amortization) increased 6.2% in our Domestic Operations segment primarily due to higher program rights amortization, including increases for The Walking Dead Universe portfolio of shows as well as higher other direct programming costs. Technical and operating expenses (excluding depreciation and amortization) increased 7.8% in our International segment due to higher program rights amortization, driven by the unfavorable impact of foreign currency translation, partially offset by lower other direct programming costs.
Selling, general and administrative expenses
Selling, general and administrative expenses for our operating segments primarily consist of sales, marketing, research and advertising expenses, employee related costs (excluding share-based compensation), costs of non-production facilities, and an allocation of certain corporate overhead costs. Selling, general and administrative expenses on a consolidated basis also include share-based compensation and executive management and administrative support services not allocated to our operating segments, such as executive salaries and benefits costs, costs of maintaining our corporate headquarters, facilities and common support functions.
There have been and may continue to be significant changes in the level of our selling, general and administrative expenses due to the timing of promotions and marketing of original programming series.
Selling, general and administrative expenses decreased 0.3% in our Domestic Operations segment primarily due to lower marketing expenses associated with lower media spend, partially offset by an increase in legal fees in the first quarter of 2026. Selling, general and administrative expenses increased 16.0% in our International segment primarily due to the unfavorable impact of foreign currency translation.
Unallocated corporate overhead costs increased 3.2% to $30.2 million primarily due to higher employee related costs, including higher bonus expenses.
Restructuring and other related charges
Restructuring and other related charges were $4.3 million for the three months ended March 31, 2026, with $2.6 million related to the Company's voluntary buyout program for U.S. employees, which was announced in October 2025, and $1.7 million associated with the Company's ongoing restructuring plan in its International segment ("International Plan"), which for the quarter consisted primarily of office closures in Latin America.
Restructuring and other related charges were $4.8 million for the three months ended March 31, 2025, primarily related to the planned wind-down of a joint venture held by our U.K. business with operations in EMEA as part of its International segment, as well as the commencement of the International Plan in Southern Europe.
Operating income
The decrease in operating income was primarily attributable to a $13.1 million decrease in revenues, net, a $15.8 million increase in technical and operating expenses and $4.0 million increase in selling, general and administrative costs.
Interest expense
The decrease in interest expense was primarily due to the impact of lower outstanding balances under our Term Loan A facility under our credit agreement (the "Term Loan A Facility") and 4.25% Senior Notes due 2029 (the "Senior Notes"), partially offset by an increase in average interest rates associated with the July 2025 issuance of our 10.50% Senior Secured Notes due 2032, (the "2032 Notes") and the March 2026 issuance of additional 2032 Notes relating to the private exchange offer (the "Exchange Offer") with respect to our outstanding 10.25% Senior Secured Notes due 2029 (the "2029 Notes").
Interest income
The decrease in interest income was primarily attributable to lower average cash balances and lower interest rates for our money market fund accounts.
Miscellaneous, net
The decrease in miscellaneous, net was primarily related to third-party fees specifically attributable to the Exchange Offer of $16.7 million and the impact of foreign currency fluctuations.
Income tax expense
In general, we are required to use an estimated annual effective rate to measure the tax benefit or tax expense recognized in an interim period. The estimated annual effective rate is revised on a quarterly basis.
For the three months ended March 31, 2026, income tax benefit was $6.7 million, representing an effective rate of 28%, as compared to the federal statutory rate of 21%. The effective rate differed from the federal statutory rate primarily due to state and local income tax expense and tax expense related to non-deductible compensation, partially offset by tax benefit related to foreign-derived deduction eligible income.
For the three months ended March 31, 2025, income tax expense was $15.0 million, representing an effective rate of 40%, as compared to the federal statutory rate of 21%. The effective rate differed from the federal statutory rate primarily due to state and local income tax expense, tax expense related to non-deductible compensation, tax expense for shortfalls related to share-based compensation and tax expense for an increase in the valuation allowance for foreign tax credits and losses.
Segment Results of Operations
Our segment operating results are presented based on how we assess operating performance and internally report financial information. We use segment adjusted operating income as the measure of profit or loss for our operating segments. See the "Non-GAAP Financial Measures" section below for our definition of Adjusted Operating Income and a reconciliation from Operating Income to Adjusted Operating Income on a consolidated basis. The segment financial information set forth below, including the discussion related to the individual line items, does not reflect inter-segment eliminations unless specifically indicated.
Domestic Operations
The following table sets forth our Domestic Operations segment results for the periods indicated.
Three Months Ended March 31,
(In thousands) 2026 2025 Change
Revenues, net:
Subscription $ 305,282 $ 313,373 (2.6) %
Advertising 112,847 119,248 (5.4)
Content licensing and other 52,558 53,686 (2.1)
Total revenues, net 470,687 486,307 (3.2)
Technical and operating expenses (excluding depreciation and amortization)(a)
246,078 231,723 6.2
Selling, general and administrative expenses(b)
135,915 136,263 (0.3)
Majority-owned equity investees AOI 3,567 5,603 (36.3)
Segment adjusted operating income $ 92,261 $ 123,924 (25.6) %
(a) Technical and operating expenses exclude cloud computing amortization
(b) Selling, general and administrative expenses exclude share-based compensation expenses and cloud computing amortization
Revenues, net
Subscription revenues decreased primarily due to a 15.9% decline in affiliate revenues, partially offset by a 10.7% increase in streaming revenues. Affiliate revenues decreased primarily due to basic subscriber declines, while streaming revenues increased primarily due to the impact of price increases across our services. Revenues related to the Company's streaming services were $173.8 million and $157.1 million for the three months ended March 31, 2026 and 2025, respectively. Streaming subscribers were 10.1 million at March 31, 2026 and 10.2 million at March 31, 2025.
Advertising revenues decreased primarily due to lower marketplace pricing, partially offset by digital advertising growth.
Content licensing and other revenues decreased primarily due to the timing and availability of deliveries in the period.
Technical and operating expenses (excluding depreciation and amortization)
Technical and operating expenses (excluding depreciation and amortization) increased primarily due to higher program rights amortization, including increases for The Walking Dead Universe portfolio of shows as well as higher other direct programming costs.
Selling, general and administrative expenses
Selling, general and administrative expenses decreased primarily due to lower marketing expenses associated with lower media spend, partially offset by an increase in legal fees in the first quarter of 2026.
Segment adjusted operating income
The decrease in segment adjusted operating income was primarily attributable to the continued revenue declines in our linear businesses and an increase in technical and operating expenses (excluding depreciation and amortization).
International
The following table sets forth our International segment results for the periods indicated.
Three Months Ended March 31,
(In thousands) 2026 2025 Change
Revenues, net:
Subscription $ 46,362 $ 44,702 3.7 %
Advertising 23,372 22,608 3.4
Content licensing and other 2,529 2,636 (4.1)
Total revenues, net 72,263 69,946 3.3
Technical and operating expenses (excluding depreciation and amortization)
37,861 35,125 7.8
Selling, general and administrative expenses(a)
28,965 24,970 16.0
Segment adjusted operating income $ 5,437 $ 9,851 (44.8) %
(a) Selling, general and administrative expenses exclude share-based compensation expenses
Revenues, net
Subscription revenues increased 3.7% primarily due to the favorable impact of foreign currency translation. Excluding the impact of foreign currency translation, subscription revenues decreased 5.3% primarily from the wind-down of a joint venture held by our U.K. business with operations in EMEA.
Advertising revenues increased 3.4% primarily due to the favorable impact of foreign currency translation. Excluding the impact of foreign currency translation, advertising revenues decreased 4.6% primarily from lower ratings mainly in the U.K.
Technical and operating expenses (excluding depreciation and amortization)
Technical and operating expenses (excluding depreciation and amortization) increased 7.8% due to higher program rights amortization driven by the unfavorable impact of foreign currency translation. Excluding the impact of foreign currency translation, technical and operating expenses (excluding depreciation and amortization) decreased 2.1% primarily due to lower other direct programming costs.
Selling, general and administrative expenses
Selling, general and administrative expenses increased 16.0% primarily due to the unfavorable impact of foreign currency translation. Excluding the impact of foreign currency translation, selling, general and administrative expenses increased 5.3%.
Segment adjusted operating income
Segment adjusted operating income decreased 44.8% primarily due to lower subscription and advertising revenues, excluding the impact of foreign currency translation.
Liquidity and Capital Resources
Our operations typically generate positive net cash flow from operating activities. However, each of our programming businesses has substantial programming acquisition and production expenditure requirements.
As of March 31, 2026, our cash and cash equivalents balance of $552.1 million included approximately $126.5 million held by foreign subsidiaries. Of this amount, approximately $7.3 million is expected to be repatriated to the United States with the remaining amount continuing to be reinvested in foreign operations. Tax expense related to the expected repatriation amount has been accrued in prior periods and we do not expect to incur any significant, additional taxes related to the remaining balance.
Our primary source of cash is cash flow from operations. Sources of cash also may include, subject to market conditions, access to capital and credit markets. On May 6, 2026, we notified JPMorgan Chase Bank N.A., pursuant to the Credit Agreement, that we would repay the $80.0 million remaining balance under the Term Loan A Facility and terminate the Revolving Credit Facility on May 12, 2026. As a public company, we may have access to capital and credit markets, although adverse conditions in the financial markets have in the past impacted, and are expected in the future to impact, access to those markets.
We believe that a combination of cash-on-hand, cash generated from operating activities, availability under our accounts
receivable monetization program and proceeds from the issuance of new debt will provide sufficient liquidity to service the principal and interest payments on our indebtedness, along with our other funding and investment requirements over the next twelve months and over the longer term. However, we do not expect to generate sufficient cash from operations to, combined with cash-on-hand, repay the entirety of the outstanding balances of our debt at the applicable maturity dates. As a result, we will be dependent upon our ability to access the capital and credit markets in order to repay, refinance, repurchase through privately negotiated transactions, open market repurchases, tender offers or otherwise, or redeem the outstanding balances of our indebtedness.
On February 23, 2026, we received requisite consents from holders of our 2032 Notes related to the effectiveness of amendments to the indenture governing the 2032 Notes to (1) amend the covenant that limits restricted payments in order to permit buybacks, purchases, redemptions, retirements or other acquisitions of AMC Global Media's equity interests in an aggregate amount not to exceed $50.0 million; (2) revise the covenant that limits transfers or licenses of certain trademarks to unrestricted subsidiaries to only permit transfers of non-exclusive licenses; and (3) restrict investments in unrestricted subsidiaries made pursuant to the definition of "Permitted Investments" to certain specified clauses in such definition.
Additionally, on February 23, 2026, we commenced the Exchange Offer and related consent solicitation (the "Consent Solicitation") with respect to our outstanding 2029 Notes. Pursuant to the Exchange Offer, we offered to issue additional 2032 Notes in exchange for any and all of the $875 million aggregate principal amount of 2029 Notes held by eligible holders. In addition, pursuant to the Consent Solicitation, we solicited consents from eligible holders to amend certain of the covenants in the indenture governing the 2029 Notes. For 2029 Notes tendered and not validly withdrawn before 5:00 p.m., New York City time, on March 6, 2026 (the "Early Tender Time"), eligible holders received the "Total Consideration" of $1,065 in aggregate principal amount of 2032 Notes (including an early tender premium of $50 in principal amount of 2032 Notes) for each $1,000 principal amount of 2029 Notes validly tendered and accepted for exchange by the Company. For 2029 Notes tendered after the Early Tender Time and on or before 5:00 p.m., New York City time, on March 23, 2026 (the "Expiration Time"), eligible holders received the "Exchange Consideration" of $1,015 in aggregate principal amount of 2032 Notes for each $1,000 principal amount of 2029 Notes validly tendered and accepted for exchange by the Company. The Total Consideration and Exchange Consideration, as applicable, were reduced by an amount equal to the result of (x) the aggregate amount of accrued and unpaid interest due on the 2032 Notes issued to eligible holders from and including the last interest payment date for the original 2032 Notes to but not including the applicable settlement date less (y) the aggregate amount of accrued and unpaid interest due on the 2029 Notes validly tendered and accepted by the Company from and including the last interest payment date for such 2029 Notes to but not including the applicable settlement date.
On March 13, 2026, we completed the early settlement of the Exchange Offer. As of the Early Tender Time, approximately $830.6 million in aggregate principal amount of outstanding 2029 Notes had been validly tendered and not validly withdrawn. In connection with early settlement of the Exchange Offer, we issued approximately $884 million in aggregate principal amount of the 2032 Notes.
On March 25, 2026, we completed the final settlement of the Exchange Offer. As of the Expiration Time, an additional approximately $30.7 million in aggregate principal amount of 2029 Notes was validly tendered in the Exchange Offer. In connection with the final settlement of the Exchange Offer, we issued approximately $31.1 million in aggregate principal amount of 2032 Notes. All 2029 Notes exchanged were cancelled. Following such cancellation, approximately $13.7 million in aggregate principal amount of 2029 Notes remained outstanding as of March 31, 2026.
On April 6, 2026, we redeemed of all of our remaining outstanding 2029 Notes, totaling approximately $13.7 million in aggregate principal amount. The 2029 Notes were redeemed at a redemption price equal to 105.125% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the redemption date.
We are currently evaluating our liquidity profile in connection with our consideration of our funding and investment needs. Depending on market conditions, we may purchase, redeem, prepay, refinance, amend, exchange, extend or otherwise retire any amount of our outstanding indebtedness at any time and from time to time, in open market or privately negotiated transactions with the holders of such indebtedness or otherwise. We may decide not to proceed with any such transactions in light of market conditions or other relevant factors and, if we do proceed, the terms of any such transaction would be subject to market and other conditions.
Our Credit Agreement generally requires us and our restricted subsidiaries on a consolidated basis to comply with a maximum total net leverage ratio of 5.75:1.00 from April 9, 2024 through March 31, 2026, after which the maximum total net leverage ratio changed to 5.50:1.00. As of March 31, 2026, the total net leverage ratio was approximately 5.11:1.00. In addition, the Credit Agreement requires a minimum interest coverage ratio for us and our restricted subsidiaries on a consolidated basis, of 1.50:1.00, with a step-up to 1.75:1.00 for fiscal quarters ending on or after December 31, 2028. As of March 31, 2026, the interest coverage ratio was approximately 1.85:1.00. All borrowings under the Credit Agreement are subject to the satisfaction of customary conditions, including the absence of a default and accuracy of representations and warranties.
We were in compliance with all of our debt covenants as of March 31, 2026.
Failure to raise significant amounts of funding to repay our outstanding debt obligations at their respective maturity dates would adversely affect our business. In such a circumstance, we would need to take other actions including selling assets, seeking strategic investments from third parties or reducing other discretionary uses of cash. For information relating to our outstanding debt obligations, refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Debt Financing Agreements" of our 2025 Form 10-K. In addition, economic or market disruptions could lead to lower demand for our services, such as loss of subscribers and lower levels of advertising. These events would adversely impact our results of operations, cash flows and financial position.
Our Board of Directors has authorized a program to repurchase up to $1.5 billion of our outstanding Class A Common Shares (the "Stock Repurchase Program"). The Stock Repurchase Program has no pre-established termination date and may be suspended or discontinued at any time. During the first quarter of 2026, the Company did not repurchase any shares of its Class A Common Stock. As of March 31, 2026, the Company had $117.4 million of authorization remaining for repurchase under the Stock Repurchase Program.
On May 8, 2026, we entered into an accelerated share repurchase agreement (the "ASR Agreement") with Citibank, N.A. to repurchase $30.0 million of our outstanding Class A Common Stock. See Part II, Item 5, Other Information, for additional information regarding the ASR Agreement.
Cash Flow Discussion
The following table is a summary of cash flows provided by (used in) operating, investing and financing activities for the periods indicated:
(In thousands) Three Months Ended March 31,
2026 2025
Net cash provided by operating activities $ 67,467 $ 108,805
Net cash used in investing activities (2,652) (14,620)
Net cash used in financing activities (11,820) (12,966)
Net increase in cash and cash equivalents from operations $ 52,995 $ 81,219
Operating Activities
Net cash provided by operating activities for the three months ended March 31, 2026 and 2025 amounted to $67.5 million and $108.8 million, respectively.
For the three months ended March 31, 2026, net cash provided by operating activities primarily resulted from $230.9 million of net income before amortization of program rights, depreciation and amortization, and other non-cash items, partially offset by payments for program rights of $167.7 million. Changes in all other assets and liabilities resulted in a net cash inflow of $4.3 million.
For the three months ended March 31, 2025, net cash provided by operating activities primarily resulted from $241.1 million of net income before amortization of program rights, depreciation and amortization, and other non-cash items, partially offset by payments for program rights of $169.6 million. Changes in all other assets and liabilities resulted in a net cash inflow of $37.3 million.
Investing Activities
Net cash used in investing activities for the three months ended March 31, 2026 and 2025 amounted to $2.7 million and $14.6 million, respectively, and consisted of capital expenditures.
Financing Activities
Net cash used in financing activities for the three months ended March 31, 2026 and 2025 amounted to $11.8 million and $13.0 million, respectively.
For the three months ended March 31, 2026, net cash used in financing activities primarily related to taxes paid in lieu of shares issued for equity-based compensation of $6.6 million, principal payments on the Term Loan A Facility of $2.8 million, and payments for financing costs associated with the consent solicitation to amend the indenture governing our 2032 Notes of $2.0 million.
For the three months ended March 31, 2025, net cash used in financing activities primarily related to principal payments on the Term Loan A Facility of $8.1 million and taxes paid in lieu of shares issued for equity-based compensation of $3.7 million.
Contractual Obligations
As of March 31, 2026, our contractual obligations not reflected on the condensed consolidated balance sheets decreased $25.6 million, as compared to December 31, 2025, to $473.4 million. The decrease was primarily related to payments for program rights and third-party service contracts, partially offset by additional program rights commitments.
Supplemental Guarantor Financial Information
The following is a description of the terms and conditions of the guarantees with respect to the notes outstanding as of March 31, 2026 for which AMC Global Media is the issuer.
Note Guarantees
Debt of AMC Global Media as of March 31, 2026 included $13.7 million of 10.25% Senior Secured Notes due 2029, $276.7 million of 4.25% Senior Notes due 2029, $143.8 million of 4.25% Convertible Senior Notes due 2029, and $1,315.1 million of 10.50% Senior Secured Notes due 2032 (collectively, the "notes"). The notes were issued by AMC Global Media and are unconditionally guaranteed, jointly and severally, on an unsecured basis, by each of AMC Global Media's existing and future domestic restricted subsidiaries, subject to certain exceptions (each, a "Guarantor Subsidiary," and collectively, the "Guarantor Subsidiaries"). The obligations of each Guarantor Subsidiary under its note guarantee are limited as necessary to prevent such note guarantee from constituting a fraudulent conveyance under applicable law. A guarantee of the notes by a Guarantor Subsidiary is subject to release in the following circumstances: (i) any sale or other disposition of all of the capital stock of a Guarantor Subsidiary to a person that is not (either before or after giving effect to such transaction) a restricted subsidiary, in compliance with the terms of the applicable indenture; (ii) the designation of a restricted subsidiary as an "Unrestricted Subsidiary" under the applicable indenture; or (iii) the release or discharge of the guarantee (including the guarantee under the AMC Global Media credit agreement) which resulted in the creation of the note guarantee (provided that such Guarantor Subsidiary does not have any preferred stock outstanding at such time that is not held by AMC Global Media or another Guarantor Subsidiary).
Foreign subsidiaries of AMC Global Media do not and will not guarantee the notes.
The following tables present the summarized financial information specified in Rule 1-02(bb)(1) of Regulation S-X for AMC Global Media and each Guarantor Subsidiary. The summarized financial information has been prepared in accordance with Rule 13-01 of Regulation S-X.
Summarized Financial Information
Income Statement
(In thousands) Three Months Ended March 31, 2026 Three Months Ended March 31, 2025
Parent Company Guarantor Subsidiaries Parent Company Guarantor Subsidiaries
Revenues $ - $ 414,279 $ - $ 426,760
Operating expenses - 381,607 - 363,273
Operating income $ - $ 32,672 $ - $ 63,487
Income (loss) before income taxes $ (27,609) $ 14,781 $ 29,845 $ 74,732
Net income (loss) (18,870) 13,476 18,049 73,061
Balance Sheet March 31, 2026 December 31, 2025
(In thousands) Parent Company Guarantor Subsidiaries Parent Company Guarantor Subsidiaries
Assets
Amounts due from subsidiaries $ - $ 55,562 $ - $ 90,643
Current assets 37,718 1,010,823 19,639 1,001,691
Non-current assets 2,909,883 2,609,648 2,987,716 2,690,262
Liabilities and equity:
Amounts due to subsidiaries $ 42,109 $ - $ 39,155 $ 3,880
Current liabilities 99,372 573,008 123,550 548,661
Non-current liabilities 1,892,991 214,180 1,901,934 230,969
Critical Accounting Policies and Estimates
We describe our significant accounting policies in Note 2 to the Company's Consolidated Financial Statements included in our 2025 Form 10-K. There have been no significant changes in our significant accounting policies since December 31, 2025.
We discuss our critical accounting estimates in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our 2025 Form 10-K. There have been no significant changes in our critical accounting estimates since December 31, 2025.
Non-GAAP Financial Measures
Internally, we use AOI and Free Cash Flow as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators.
We evaluate segment performance based on operating segment AOI. We define AOI, which is a financial measure that is not calculated in accordance with generally accepted accounting principles ("GAAP"), as operating income (loss) before share-based compensation expenses or benefit, depreciation and amortization, impairment and other charges (including gains or losses on sales or dispositions of businesses), restructuring and other related charges, cloud computing amortization and including the Company's proportionate share of adjusted operating income (loss) from majority-owned equity method investees. From time to time, we may exclude the impact of certain events, gains, losses or other charges (such as significant legal settlements) from AOI that affect our operating performance.
We believe that AOI is an appropriate measure for evaluating the operating performance on both an operating segment and consolidated basis. AOI and similar measures with similar titles are common performance measures used by investors, analysts and peers to compare performance in the industry. AOI should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities and other measures of performance and/or liquidity presented in accordance with GAAP. Since AOI is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies.
The following is a reconciliation of operating income to AOI for the periods indicated:
Three Months Ended March 31,
(In thousands) 2026 2025
Operating income $ 31,261 $ 64,197
Share-based compensation expenses 6,097 5,757
Depreciation and amortization 21,423 20,926
Restructuring and other related charges 4,338 4,789
Cloud computing amortization 2,288 3,213
Majority owned equity investees AOI 3,567 5,603
Adjusted operating income $ 68,974 $ 104,485
We define Free Cash Flow, which is a non-GAAP financial measure, as net cash provided by operating activities less capital expenditures, all of which are reported in our Consolidated Statement of Cash Flows. We believe the most comparable GAAP financial measure of our liquidity is net cash provided by operating activities. We believe that Free Cash Flow is useful as an indicator of our overall liquidity, as the amount of Free Cash Flow generated in any period is representative of cash that is available for debt repayment, investment, and other discretionary and non-discretionary cash uses. We also believe that Free Cash Flow is one of several benchmarks used by analysts and investors who follow the industry for comparison of our liquidity with other companies in our industry, although our measure of Free Cash Flow may not be directly comparable to similar measures reported by other companies.
The following is a reconciliation of net cash provided by operating activities to Free Cash Flow for the periods indicated:
Three Months Ended March 31,
(In thousands) 2026 2025
Net cash provided by operating activities
$ 67,467 $ 108,805
Less: capital expenditures
(2,652) (14,620)
Free cash flow
$ 64,815 $ 94,185
Supplemental Cash Flow Information Three Months Ended March 31,
(In thousands) 2026 2025
Restructuring initiatives $ (10,981) $ (5,751)
Distributions to noncontrolling interests
- -
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