AMCX Q3 Deep Dive: Streaming Momentum Offsets Linear Declines, Margin Pressures Continue

Television broadcasting and production company AMC Networks (NASDAQ:AMCX) reported Q3 CY2025 results beating Wall Street’s revenue expectations, but sales fell by 6.3% year on year to $561.7 million. Its non-GAAP profit of $0.18 per share was 47.4% below analysts’ consensus estimates.

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StockStory’s Take

AMC Networks’ third quarter results drew a positive market response as the company’s streaming revenue growth helped offset declines in its traditional linear business. Management emphasized strategic partnerships, such as the expanded licensing agreement with Netflix and new distribution deals with DirecTV and Cox, as key to supporting subscription stability. CEO Kristin Dolan noted that the company reached an inflection point with streaming set to become its largest revenue source in the domestic segment, while content licensing and targeted streaming services also contributed. The quarter saw continued investment in original content, successful promotional events, and a focus on maximizing free cash flow, with the company reiterating its commitment to a nimble, technology-driven operating model.

Looking forward, AMC Networks’ guidance relies on further streaming acceleration and disciplined cost management, amid persistent headwinds in linear advertising and affiliate revenues. Management expects the company’s ongoing shift to streaming, targeted content curation, and scalable technology platform to drive improved efficiency. CFO Patrick O’Connell highlighted that margin expansion will depend on maintaining strong free cash flow while investing in premium programming, stating, “We continue to expect consolidated revenue of approximately $2.3 billion, reflecting continued linear headwinds, partially offset by streaming and content licensing strength.” The company’s focus remains on expanding digital ad inventory, leveraging strategic partnerships, and navigating evolving consumer viewing habits.

Key Insights from Management’s Remarks

Management attributed third quarter performance to streaming revenue gains, expanded content licensing, and new distribution partnerships, while acknowledging ongoing profit margin challenges due to continued declines in the linear TV business.

• Streaming revenue growth: Streaming subscriber growth and price increases led to streaming becoming the largest domestic revenue source for the first time, offsetting affiliate revenue declines.
• Expanded content licensing: Renewed and broadened content licensing with Netflix, including new international rights, boosted licensing revenue and provided promotional benefits for AMC’s franchises.
• Distribution partnerships: New agreements with DirecTV and Cox expanded the availability of AMC Networks’ programming across linear, streaming, and FAST (Free Ad-Supported Streaming TV) channels, supporting subscriber acquisition and retention.
• Digital advertising momentum: Management reported a 40% increase in digital advertising commitments during the upfront selling period, driven by a larger digital presence and new ad-supported streaming packages, such as the Charter Spectrum partnership with over 850,000 AMC+ opt-ins.
• Margin pressures from linear declines: Operating margins contracted as linear ad and affiliate revenues continued to drop, with management focused on balancing investment in premium content with generating free cash flow and operational efficiency.

Drivers of Future Performance

AMC Networks’ outlook centers on continued streaming growth, digital ad expansion, and the need to manage linear business erosion while investing in content and technology.

• Streaming acceleration: Management believes further streaming subscription and advertising growth—supported by new bundles, expanded FAST channels, and international expansion—will be critical to offsetting declines in linear revenue streams.
• Cost discipline and technology: The company aims to control costs through a scalable content delivery platform and targeted voluntary workforce reductions, while continuing to invest in high-value, efficiently produced original content.
• Advertising innovation: AMC Networks expects digital advertising to become a larger revenue contributor, leveraging dynamic ad insertion, cross-platform inventory, and new interactive features that connect FAST viewers directly to subscription services. Management acknowledged, however, that a full turnaround in advertising growth remains dependent on broader market conditions and continued digital adoption.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be closely tracking (1) the pace of streaming subscriber and revenue growth as new bundles and international FAST channels launch, (2) stabilization or improvement in digital advertising revenue as ad-supported packages expand, and (3) progress on margin management through cost discipline and content efficiency. Additional key signposts include execution of new content launches and the impact of evolving distribution partnerships.

AMC Networks currently trades at $7.45, up from $7.24 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).

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