Double-Digit Revenue Growth For TelevisaUnivision

As the first broadcaster out of the gate with second quarter financial results, TelevisaUnivision, the Spanish specialist, has set a bar high enough that few of its general market competitors are expected to clear it.

Total revenues grew 11% to $1.2 billion, with the U.S. up 6% to $794 million, while Mexico gained 22% to $426 million. CFO Carlos Ferreiro noted that the company benefitted from the strong peso, since most of its costs are in Mexico, while most of the revenue is in the U.S.

“Now, looking at advertising, consolidated revenue grew 10% [to $738 million],” the CFO told Wall Street analysts. “In the U.S. it grew 1% [to $453 million], or 4% if we exclude political and advocacy. The growth was driven by streaming, while linear revenues were roughly flat. The scatter market remains challenged, reflecting macro-driven softness that has proceeded for a few quarters now.” Ad revenues in Mexico grew 29% [to $285 million], or 14% excluding the impact of foreign exchange.

CEO Wade Davis noted that TelevisaUnivision’s ad sales outperformed the market in the US. “Our national business, which accounts for the majority of our U.S. advertising revenue, was strong this quarter, growing 7%, while the local business was roughly flat, excluding political and advocacy,” he said.

“Looking ahead, from a timing perspective, we’re progressing toward closing our U.S. upfront on the same timeline as the rest of the industry. The timeline is pretty much the only thing we’ll have in common with the rest of the industry in the upfront. Early data indicates that we’re going to have yet another year where we take meaningful share from English-language broadcasters.

“In addition, we expect to fare better than the market on pricing. We’re rectifying the pricing gap with the general market. That’s been a huge area of focus for us, and we’ve made significant progress,” Davis said.

The VIX streaming service continues to be a driver of growth for both advertising and subscription revenues. The company is sticking with its projection that VIX will achieve profitability in the second half of next year and Davis notes that it is pacing ahead of the internal numbers that are seen as the path to profitability.

In the Q&A session, Davis was asked about any impact from the dual writers and actors strikes.

“The first thing I would say is that I’m sad to see the conflict and we hope that this gets resolved favorably and quickly for all the parties involved. That said, it has zero impact on us. Nearly 100% of our production is outside the U.S. Nearly 100% of our content is original and produced by our content engine, which is vertically integrated,” the CEO told analysts.

“For our advertisers in the upfront, it matters a lot,” Davis added, because his company has a stable program offering. Meanwhile, he noted, buyers are trying to make deals in the general market without knowing what the coming broadcast year will look like.