Versant (NASDAQ:VSNT) reported second-quarter revenue of $1.64 billion, down 4% from the prior-year period, while adjusted EBITDA rose 3% to $624 million as growth in advertising and digital platforms helped offset continued pressure in linear television distribution.
Chief Executive Officer Mark Lazarus said the company’s portfolio of news, sports and entertainment brands reached more than 120 million monthly television viewers and posted aggregate double-digit audience increases across its networks. He also said the company recently completed multiyear distribution renewals with a large U.S. pay-TV partner and a Canadian partner.
Raised revenue and EBITDA outlook
For the full year, Versant raised its revenue outlook to a range of $6.2 billion to $6.45 billion, from a prior range of $6.15 billion to $6.4 billion. It also increased its adjusted EBITDA forecast to $1.9 billion to $2.05 billion, compared with previous guidance of $1.85 billion to $2 billion.
The company maintained its free-cash-flow outlook of $1 billion to $1.2 billion, citing expected quarterly variability from working-capital timing. Second-quarter free cash flow was $350 million, and the company ended the period with about $1.5 billion in cash.
Chief Financial Officer and Chief Operating Officer Anand Kini said the revised guidance reflected confidence in the broader portfolio rather than the recently completed Full Swing acquisition. He said the divestiture of SportsEngine and the addition of Full Swing were among several factors considered in the outlook.
Versant said adjusted EBITDA margins remained above 30%. However, Kini said adjusted EBITDA in the third and fourth quarters is not expected to grow year over year as sports-rights and programming expenses rise.
- Linear distribution revenue was $954 million, down 6%, as subscriber declines were partly offset by contractual rate increases.
- Advertising revenue was $423 million, down 0.6%, a significant improvement from the 13% decline reported in the prior-year quarter.
- Platform revenue rose to $225 million. Excluding the SportsEngine divestiture, platform revenue increased 9%.
- Content licensing and other revenue was flat year over year at $43 million.
- Programming and production costs declined 9% to $522 million, while selling, general and administrative expense fell 8% to $369 million.
Advertising and platforms support results
Kini attributed the improvement in advertising trends to broad-based demand across the company’s news, sports and live-event programming, supported by stronger ratings. He said the acquisition of Free TV Networks contributed to advertising revenue, but that underlying organic performance was the main driver of the improvement.
On the audience front, Lazarus said CNBC ranked among the top 10 cable networks during market hours for a fourth consecutive month and recorded its highest-rated quarter in more than five years. MS NOW reported a 14% increase in second-quarter viewership and its seventh consecutive month of television audience growth. The network generated nearly 3 billion combined YouTube and TikTok views year to date, according to the company.
Golf Channel delivered its most-watched second quarter since 2020, while USA Network remained a top-five entertainment network among key demographics, Lazarus said. The company also highlighted WNBA games, WWE programming and upcoming coverage of NASCAR and the Premier League.
Versant recently reached a five-year agreement for Bundesliga soccer rights. Beginning this season, the company plans to carry more than 300 live matches annually, including at least 30 premium matches on USA Network. Remaining matches will stream free on Fandango.
Direct-to-consumer and golf expansion
The company is preparing direct-to-consumer offerings for MS NOW and CNBC. Lazarus said MS NOW’s product is expected to launch before the midterm elections and will offer more than a streaming version of the television network. CNBC is developing a digital platform that will combine journalism, access to business leaders and AI-powered investing tools.
In response to analyst questions, Lazarus said the company intends to initially launch the services independently, while remaining open to bundling arrangements with multichannel video distributors and other industry partners.
Versant also is expanding Fandango into a broader entertainment platform that combines movie ticketing, home entertainment and a free ad-supported streaming service. Lazarus said Fandango and Rotten Tomatoes attract 50 million monthly consumers and that the company sees opportunities to monetize users through ticket purchases, rentals and purchases of films and television programming, and free streaming.
The company said Fandango’s advantages include its connected-TV distribution, first-party data, transactional businesses and sports programming such as Bundesliga matches.
Separately, Versant acquired golf technology company Full Swing, which provides simulator, launch-monitor, virtual-green, software and performance-data products. Lazarus said the principal synergy opportunity is revenue growth, including marketing Full Swing products through Golf Channel, GolfNow and GolfPass, as well as using GolfNow’s sales force to reach golf courses and commercial customers.
Capital returns and investment priorities
Versant repurchased $100 million of stock during the second quarter under a previously announced accelerated share repurchase program. Through Aug. 6, the company said it had returned $305 million to shareholders in 2026, including $200 million in share repurchases and $105 million in dividends.
The company also announced plans to begin an additional $100 million accelerated share repurchase program during the third quarter. Kini said capital allocation will continue to balance investment in growth initiatives, shareholder returns and a healthy balance sheet.
On acquisitions, Kini said the company would evaluate opportunities through a disciplined process and continue to use its stated leverage range of 1 times to 5 times as a “North Star,” with the expectation of returning to that range relatively quickly if it moved outside it.
About Versant (NASDAQ:VSNT)
Versant Corporation is a provider of data management software. The Company designs, develops, markets and supports database management system products that companies use to solve data management and data integration issues. It also provides related product support, training and consulting services to assist users of the Company’s products in developing and deploying software applications based on its products. The Company’s Versant Object Database product is used primarily by enterprises, which have data management requirements, such as technology providers, telecommunications carriers, Government defense agencies, defense contractors, healthcare companies and companies in the financial services and transportation industries.
