ITV Q2 Earnings Call Highlights

ITV reaffirmed its full-year outlook after first-half revenue growth in both divisions: Studios revenue rose 2% to £912 million, while Media & Entertainment advertising revenue increased 3% to £850 million. Studios EBITDA fell 9% because of the unit’s second-half earnings weighting, while M&E EBITDA climbed 37%. ITV plans to return cash to shareholders ahead of the proposed sale of its M&E business to Sky, including a £100 million share buyback and a £0.017 interim dividend. The transaction is expected to enable a potential £950 million net cash return, but regulatory reviews could delay completion until the second half of 2027. ITVX engagement strengthened , with viewing up 27% and monthly active users exceeding 20 million in June, supported by the World Cup. However, ITV expects total advertising revenue to decline about 5% in the third quarter amid economic uncertainty and potential shifts in ad spending. ITV LON: ITV reported first-half revenue growth across both its Studios and Media & Entertainment divisions, while reaffirming its full-year outlook and outlining plans to begin returning cash to shareholders ahead of the proposed sale of its M&E business to Sky. The company said the transaction, announced earlier this month, is expected to enable a £950 million net cash return to shareholders upon completion, excluding contingent consideration. ITV declared an interim dividend of £0.017 per share, unchanged from a year earlier, and announced a £100 million share buyback as an early portion of the anticipated cash return. Management said the sale would unlock the value of ITV Studios as a standalone global content business. The regulatory process has begun, with the Competition and Markets Authority launching its review. ITV said it expects the Secretary of State to issue a public-interest intervention notice because the deal is a media merger. If the transaction proceeds to a Phase 2 CMA review, completion would likely occur in the second half of 2027. Studios revenue rises as profit reflects second-half weighting ITV Studios generated £912 million in revenue during the first half, up 2% from the prior year and 3% on an organic basis. EBITDA declined 9% to £97 million, producing an 11% margin. Chris Kennedy, ITV’s COO and CFO, said revenue and margins in the Studios unit are weighted toward the second half, particularly the fourth quarter. The company cited a pipeline of scripted and unscripted productions scheduled for delivery later in the year. ITV maintained guidance for good full-year Studios revenue growth, with margins expected at the lower end of its 13% to 15% target range. Management highlighted the division’s production, ownership and distribution model, as well as its intellectual-property library and Zoo 55 digital distribution capabilities. The company said a successful creative property can generate revenue across multiple years, markets and channels. Programs scheduled for the second half include “The Gentleman in the Woods” for Netflix, “Guilty Creatures” for Apple TV+, a double season of “Hell’s Kitchen” for Fox in the U.S., and returning BBC series “Line of Duty” and “Vigil.” ITV also cited “I’m a Celebrity” among its upcoming programming. In response to an analyst question, management said streaming platforms represented around 30% of ITV Studios revenue, compared with 5% five years ago. It also pointed to further potential in unscripted programming and digital operations. Zoo 55 has a target to double revenue to £120 million by 2027, according to management. World Cup supports advertising and ITVX engagement Media & Entertainment total advertising revenue rose 3% year over year to £850 million. Digital revenue increased 13% to £307 million, while ITVX viewing climbed 27% in...