Television broadcasting and production company AMC Networks (NASDAQ: AMCX) fell short of the market’s revenue expectations in Q2 CY2026, with sales falling 8.8% year on year to $547.5 million. Its non-GAAP loss of $0.28 per share was significantly below analysts’ consensus estimates.

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StockStory’s Take

AMC Networks’ second quarter was marked by continued revenue declines and a sharp drop in operating margin, missing Wall Street’s expectations. Management attributed the underperformance primarily to a combination of persistent declines in affiliate fees, softness in advertising, and the timing of major content licensing deals. CEO Kristin Dolan acknowledged that the company’s streaming subscriber growth lagged internal hopes, citing “geopolitical events and high-profile sports programming” as factors drawing attention away from AMC’s offerings. The addition of a new CFO and the resolution of a system integration issue in advertising were also highlighted as operational milestones during the quarter.

Looking ahead, AMC Networks’ guidance is shaped by the recently announced global co-exclusive licensing agreement with Netflix for The Walking Dead universe and an emphasis on monetizing owned intellectual property. Management expects this deal to deliver significant high-margin licensing revenue and bolster engagement on AMC’s own streaming platforms. CFO Hozefa Lokhandwala cautioned that the timing of licensing revenue and associated cash flows will introduce volatility in quarterly results, stating, “IP licensing delivers a contracted stream of defined cash payments with high cash margins, providing us clarity and confidence into the longer-term cash generation potential of the business.”

Key Insights from Management’s Remarks

Management pointed to several operational and strategic factors behind the quarter’s results, with an explicit focus on content licensing and distribution partnerships.

• Walking Dead licensing deal: AMC secured a global co-exclusive streaming agreement with Netflix for all 371 episodes of The Walking Dead universe, underscoring the value of its owned intellectual property (IP) and providing multiyear high-margin licensing revenue.
• Streaming subscriber dynamics: Subscriber acquisition was slower than anticipated, which management attributed to geopolitical events and strong competition from major sports programming, but noted improved retention and engagement on AMC’s streaming services after price increases.
• Affiliate renewals and hard bundles: The company renewed carriage agreements with four of the five largest U.S. distributors—including Comcast and YouTube—expanding AMC+’s reach via bundled offerings, which management believes will stabilize affiliate revenue declines in the second half of the year.
• Advertising trends: Domestic advertising revenue saw a mid-single-digit decline (excluding a one-off technical issue), pressured by lower ratings and pricing, partially offset by growth in digital ad sales and improved viewership for certain original programs.
• International operations: International revenue grew modestly, helped by local sports programming and advertising outperformance, but was partly offset by the wind-down of a joint venture in Poland and Africa.

Drivers of Future Performance

AMC Networks’ outlook is driven by monetizing its content library, new licensing agreements, and ongoing shifts in affiliate and subscriber trends.

• Content licensing ramp: The Walking Dead licensing deal is expected to provide $200 million to $225 million in high-margin revenue annually in 2026 and 2027, with management emphasizing the ability to recognize a significant portion of this revenue upfront. Strategic focus remains on leveraging other owned IP for additional licensing opportunities.
• Distribution and subscriber stabilization: Management expects that new affiliate agreements and bundled streaming offerings will slow the rate of decline in affiliate revenue and drive improved subscriber retention, though overall subscription revenue is forecast to decrease modestly for the year.
• Advertising and macro risks: While digital advertising and original programming show promise, management cited continued uncertainty around advertising trends due to macroeconomic factors and shifting consumer preferences, as well as potential impacts from industry consolidation and large media transactions.

Catalysts in Upcoming Quarters

In the quarters ahead, the StockStory team will watch (1) the impact of The Walking Dead’s Netflix launch on both licensing revenue and AMC+ engagement, (2) the effectiveness of new affiliate agreements in slowing revenue declines, and (3) the trajectory of digital advertising growth amid continued linear softness. Additionally, operational execution in international markets and progress on new content licensing deals will serve as key indicators of AMC Networks’ ability to adapt within a changing media landscape.

AMC Networks currently trades at $9.93, down from $10.25 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

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