“I’m very happy with the start of 2023 from both an operational and financial perspective,” said Wade Davis, CEO of TelevisaUnivision, the world’s biggest Spanish-language multimedia company.
He has an influx of Mexican Pesos to thank for the positive first quarter fiscal report.
While total revenue for the privately held TelevisaUnivision increased by 6% to $1.07 billion in the first three months of 2023, it was a 12% revenue gain in Mexico to $331.8 million from $297.2 million that propelled the company.
In the U.S., total revenue was also up, and that’s the revenue driver for the company. Domestic revenue rose 4% to $739.1 million, from $713.4 million.
While that revenue growth fueled the revenue for TelevisaUnivision, total operating expenses on a pro-forma basis increased by 17% to $709.9 million, from $609 million.
Throw in a small non-cash impairment loss of $200,000, and TelevisaUnivision swung to a net loss of $3 million, compared to Q1 2022 net income of $36 million.
At the same time, TelevisaUnivision’s total liabilities increased to $12.86 billion from $12.62 billion as the cash on hand dipped to $370.4 million from $556.3 million.
The non-GAAP measure of adjusted OIBDA, popular with several media companies, saw dollars move downward to $361 million from $366.2 million.
BEHIND THE DOLLARS
Why did the company swing to a net loss in Q3?
Total operating expenses grew 17% to $710 million, reflecting investments in its OTT platform ViX. This includes new original premium content, sports rights, marketing and technology.
“These investments led Adjusted OIBDA to decrease 10%, driven by increased costs related to ViX which had not yet launched in the year-ago quarter,” the company explained.
As TelevisaUnivision seeks to reduce its expenses, it can relish on a 6% advertising revenue increase.
In the U.S., advertising revenue increased 2%, or 5% excluding political and advocacy. “This reflects continued momentum in streaming and increased pricing as the company leverages its new ad formats and its proprietary Hispanic Household data graph,” the company said in prepared remarks on Tuesday morning.
In Mexico, advertising revenue increased 14%, or 4% excluding the impact of foreign exchange (18 Pesos to $1), and was driven by strong linear and streaming growth. Additionally, Q1 2023 benefitted from the 2023 calendar year Upfront, where TelevisaUnivision secured “record” volume commitments, the company said.
Subscription and licensing revenue increased 7%, and this was primarily driven by the launch of heavily promoted ViX’s premium subscription streaming tier.
In the U.S., growth of 5% also reflected subscriber declines in traditional MVPDs, partially offset by virtual MVPDs. In Mexico, growth of 13%, or 4% excluding the impact of foreign exchange, was also driven by modest growth in linear subscribers as well as pricing growth.
Still, TelevisaUnivision was pleased that it grew revenue “across all lines of business and all geographies.”
Davis noted that in the U.S., ad sales continues to outpace the market, “reflecting growing advertiser appreciation of the power and value of our audience as they shift share away from overspent general market,” he said.
With Upfront Week less than one month away, TelevisaUnivision and Davis are excited to carry this momentum into the U.S. In particular, Davis said ViX “continues to be an engine of growth,” and that he is “very pleased with the significant increases in engagement and consumption on the platform as well as the continued narrowing of losses as we progress towards profitability.”
