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Patrick O Connell

Thank you, Kristin. I'm pleased to report today that 2024 landed right where we said it would. As a nimble and innovative premium programmer, we've maintained focus on what is within our control despite a challenging linear environment. We are proud of the progress we've made over the last two years, including reorienting our business around free cash flow, investing in valuable world class IP and remaining focused on our balance sheet. We achieved our full year guidance for 2024.
Consolidated revenue was $2.4 million. On an apples to apples basis, excluding 2023 revenue from 25/7 Media, Silo, the Hulu return of rights and 2024 revenue related to the one time advertising revenue adjustments at AMC and I, consolidated revenue decreased 6%.
Consolidated operating loss was $40 million and included impairment and other charges of $400 million and restructuring charges of $49 million. Consolidated adjusted operating income was $563 million and most importantly, we delivered significant year-over-year free cash flow growth with free cash flow of $331 million.
For the fourth quarter, consolidated revenue was $599 million. Consolidated operating loss was $254 million and included impairment and other charges of $303 million and restructuring charges of $43 million. Adjusted operating income was $129 million and we generated free cash flow of $38 million.
I'll now discuss our segment results. Domestic operations revenues decreased 9% to $2.1 million for the full year and decreased 11% to $520 million for the fourth quarter. Subscription revenue decreased 5% for the full year and 4% for the fourth quarter. The decrease was primarily due to linear subscriber declines resulting in a 13% decline in affiliate revenue for both the year and the quarter.
This was partially offset by streaming revenue growth of 7% for the year and 8% for the quarter. We ended the year with 12.4 million streaming subs representing year-over-year increase of 8%. Domestic operations advertising revenue decreased 11% for the year and 12% for the fourth quarter. The decrease was primarily due to lower linear ratings and a challenging ad market for entertainment and was partially offset by continued digital growth. Digital advertising revenue, including addressable and revenue from our Fast and Avod offerings, continues to grow at a double digit rate.
And in 2024, this digital revenue represented approximately a quarter of our overall domestic operations ad revenue. Content licensing revenue was $277 million for the full year and $67 million for the fourth quarter.
There were a couple of items in 2023 that impacted the comparability of our 2024 results, including the final delivery of AMC Studios produced episodes of Silo to Apple and the early return of rights from Hulu, which resulted in $56 million and $20 million of one time revenue in 2023, respectively.
Excluding these items, our full year licensing revenue increased 4%. As our library grows every year, we have more SKUs to sell and while some of our bigger ticket shows like Fear the Walking Dead contributed less meaningfully toward 2024 results as compared to 2023, this was more than offset by new business including Netflix, Sky in The UK, and increased licensing volume from our targeted services.
Domestic operations AOI was $62 million for the full year and $152 million for the quarter. Margins for both the full year and fourth quarter were 29%. The year-over-year decrease in AOI for the full year was largely driven by continued linear revenue headwinds.
For the fourth quarter, the increase in AOI is primarily driven by lower expenses and streaming revenue growth, partly offset by linear revenue headwinds.
Moving to our International segment. International revenue included advertising revenue related to retroactive onetime adjustments reported by a third party of $21 million for the full year and $7 million for the fourth quarter. Excluding 25/7 Media, which we divested a year ago, and the onetime adjustments I just mentioned, international revenues decreased 3% for the full year and increased 2% for the quarter.
On an Apples-to-Apples basis, advertising revenues grew 16% and 12% for the full year and fourth quarter, respectively. This was largely the result of the strong performance of our AVOD offerings on the ITVX in The UK, as well as increased ratings and growth across our Central and Northern European advertising markets. Subscription revenues declined 11% for the full year and 5% for the quarter.
For the full year, the decrease in subscription revenue was attributable to the non-renewal of a distribution agreement in The UK that occurred in the prior year. For the quarter, the decrease was primarily driven by unfavorable FX.
Moving to international AOI. Excluding the onetime adjustments to advertising revenue, full year AOI was $45 million with a 15% margin and fourth quarter AOI was $1 million. On to the balance sheet. We ended the year with net debt of $1.6 million and a consolidated net leverage ratio of 2.8 times.
We remain focused on our balance sheet and we're pleased with the results of our efforts over the last 24 months. This includes gross debt reduction of approximately [$0.5 million] and the completion of a series of financings that extended our maturity profile, now with no bond maturities until 2029.
Additionally, we've maintained a healthy cash position and ended the year with approximately $1 billion in total liquidity. This includes $785 million of cash on the balance sheet and our undrawn $175 million revolver. We appreciate the flexibility and optionality of our meaningful cash balance and continue to expect that our capital structure will present attractive opportunities for us over time.
Our capital allocation philosophy remains prudent and opportunistic. First, we look to support the business by creating and acquiring compelling programming that resonates with our audiences, while maintaining healthy levels of cash flow generation.
Second, we remain focused on continually improving our balance sheet by reducing gross debt and optimizing our capital structure. Lastly, M&A, share repurchases and dividends remain further down our priority list.
Moving on to our outlook for 2025. I'll start with our most important metric, free cash flow. As Kristin mentioned, on the heels of strong cash generation we delivered in 2024, we are pleased to update our outlook today for the two year period ending 2025.
We now expect to generate cumulative free cash flow of approximately $550 million by the end of 2025. This implies approximately $220 million of free cash flow for the full year 2025. Our outlook contemplates increased cash interest payments resulting from the recent refinancing activity as well as a year-over-year increase in cash taxes as we lap certain tax benefits recognized in 2024.
Looking at revenue for 2025, we expect total consolidated revenue for the full year 2025 to decrease approximately 5% as compared to 2024, implying total revenue of approximately $2.3 million. As it is still early in the year, the geography of certain revenue and expense items may shift as the year unfolds. Notwithstanding that, I'll unpack the current assumptions that underpin our outlook.
First, regarding domestic operations subscription revenue, we expect 2025 subscription revenue to be flat as compared to 2024. We anticipate that linear subscriber headwinds will persist and will result in slightly worse year-over-year affiliate revenue growth as compared to 2024. This will be offset by accelerated streaming growth.
Streaming revenue growth will be driven by price increases, expanded distribution of our offerings and discretionary marketing investments. As such, we expect streaming revenue growth in the low to mid-teens percent area as compared to 2024.
With respect to advertising revenue, as I mentioned earlier, digital advertising revenue growth remains robust and we're now growing off a more meaningful base. Notwithstanding that, the linear ratings environment and entertainment ad marketplace continues to be challenging. Therefore, we expect 2025 domestic advertising revenue to decline approximately 10% as compared to 2024.
Content licensing remains an important source of revenue for us and we continue to be innovative, progressive and disciplined regarding this important revenue stream. As you know, licensing revenues are often deal dependent and can be lumpy due to timing or shifting delivery schedules.
Today, across the many desirable titles in our library, we anticipate approximately $250 million of domestic operations content licensing revenue for 2025. For AMC Networks International, we expect revenue in the range of $290 million to $300 million for the full year 2025. As I discussed earlier, we recognized $21 million of onetime adjustments that benefited advertising revenue in 2024.
For 2025, excluding these 2024 adjustments, we expect year-over-year international advertising revenue growth. Additionally, we anticipate the subscription revenue will decrease year-over-year, largely owed to a recent non-renewal with Movistar in Spain. We expect that this non-renewal will represent a $15 million headwind to both revenue and AOI in the segment.
Moving to expenses. For 2025, we expect consolidated technical and operating expenses to increase as compared to 2024, driven by higher non amortization technical and operating expenses, including certain duplicate expenses related to our technology outsourcing transformation.
This will be partly offset by year-over-year decrease in programming amortization related to our 2025 slate timing and composition and programming write-offs that occurred in 2024. For SG&A, we anticipate a year-over-year increase in SG&A expense for 2025, primarily related to increased streaming related marketing investments focused on driving retention which we anticipate will drive profitable streaming growth.
In terms of consolidated adjusted operating income, while we see strong streaming and digital advertising revenue growth and expect our portfolio of streaming services will contribute to our consolidated AOI in 2025. The dynamics I just discussed, including continued linear revenue headwinds and year-over-year expense growth, remain the primary factors in driving our AOI outlook.
As such, we expect consolidated AOI for the full year to be in the range of $400 million to $420 million. Cash programming spend can vary quarter-to-quarter and year-to-year.
And for 2025, we expect a slight decrease in year-over-year cash programming spend due to the timing of our programming commitments. As Kristen said earlier, we take a long range view of the business and we're managing AMC Networks with a clear strategic plan centered around programming, partnerships and profitability.
As we enter our third year since reorienting the business, this strategy continues to animate our market approach. Our commitment to creating high quality content remains at the center of everything we do. As an independent, nimble and innovative premium programmer, we approach the marketplace a bit differently than others, including building out our library of powerful franchises, monetizing our content across an evolving distribution ecosystem and driving profitable outcomes.
We'll continue to preserve capital with a focus on our balance sheet and cash flow generation and balance appropriate levels of programming investment against the available monetization opportunities.
Operator, please open the line for questions.

Question and Answer Session

Operator

Thank you. (Operator Instructions)
Thomas Yeh, Morgan Stanley.

Thanks so much. I wanted to ask about the free cash flow outlook in the context of your cash spending comments. The $930 million of cash spend you put up, I think, in this year ended up being a little bit lower than the [$1 billion] you guided to and you spoke to further decreases in 2025. How much of that is timing versus just an increased focus on efficiency and your outlook updated in terms of how you see the potential opportunity for putting new content to work in the system?

Patrick O Connell

Sure, great. Hey, Thomas, this is Patrick. Thanks for the question. Our strategy remains the same, right, which is bouncing investments in our programming with driving profitability in the business. Obviously, programming is our largest expense category.
We're extraordinarily focused on maintaining a portfolio of super high quality scripted programming across linear streaming etcetera. We continue to do that even as others have pulled back from the market and frankly the differentiator in many of our affiliate conversations. So the strategy has not changed. In terms of the specifics, free cash, the cash programming spend came in a little bit lighter in 2024 than we had initially guided to. This is us just being prudent.
We're able to produce on a per episode basis a little bit better than we expected. We've got some fantastic people internally who are taking it available or taking advantage of all the tools available to produce efficiently. So we've been the beneficiary of that.
And we have also instituted a program where we're sharing more content across channels, platforms, etcetera, that's allowed us to sort of program the broader company a bit more efficiently. But we obviously remain committed to similar levels of cash programming spend going forward.
So I would say efficiency was kind of the other reason for the B quote unquote in 2024. Slight reductions in volume going forward, but not significant. We're producing at similar volumes going forward into 2025. The slight sort of decrease that I expect in cash programming for 2025 has to do with sort of those two factors, I would say. One, modest reductions in volume, but not anything dramatic.
And then two, and you might appreciate this, there is a lag in our receipt of certain tax credit receivables and those are going to there's a bunch of them they're going to hit in 2025. So those net out against our cash programming expenses and that's driving part of the reduction in the year-over-year decline.

Kristin Dolan

And just wanted to reiterate and we were pretty specific about it in the script that the quality of the content that Dan and team continue to produce is it's very reassuring to see the attention we got on Netflix, the Oscar nod, for memoir and just overall the response that we have and engagement that we have to the shows that we're producing.
And we've really been able to capitalize in Wind shows like Daryl Dixon, where we're filming in Spain or in France on tax efficiencies. We have some shows planned in Canada. We do a lot in Ireland. So we're really optimizing without in any way compromising the integrity and the quality of what's coming out of our shop.

Okay, understood. That's helpful. And some nice momentum in the streaming subscriber growth continued into 4Q. It sounded like bundled partnerships helped, but also the Netflix licensing deal was a contributor as well. Can you maybe just tease out the balance of the contribution between those two and how we kind of see the outlook being supported in 2025 from a volume perspective in AMC plus and maybe the future of the targeted streaming services?
And then if I could just squeeze one last one in that same kind of context. Just a clarification on the guide, is the Charter deal showing up in some allocated form between affiliate and streaming in terms of the subcomponents, Patrick, that you provided? Thank you.

Patrick O Connell

Yes, sure. Great. Thanks, Thomas. Yes, listen, on the streaming subs, listen, we continue to have pretty good momentum across all of our services. And when you look at it across the entire business, we had sort of the lowest churn or we had year-over-year declines in churn on a consolidated basis across the portfolio.
So obviously retaining subscribers kind of helps drive the numbers. We've also, as you pointed out, been the beneficiary of some fantastic kind of bundled arrangements as Kristin has talked about a lot. We are very nimble, very flexible. We love to partner with others. We're highly complementary.
We think it adds value into the ecosystem. It's great for consumers. It's obviously great for us in terms of being able to distribute product with a little bit less kind of hard marketing dollars. So those are very efficient go to market channels for us. As we look forward into 2025, we're expecting really healthy streaming revenue growth that will be driven by a lot of price action, but also kind of unit volume as well.
So we're really excited about this momentum. And I'd point out for folks that if you unpack the guide, you'll notice that we've called out sort of flat subscription revenue year-over-year. So that implies almost $100 million of incremental streaming revenue here, which is going to essentially offset some of the secular declines in the business. So super excited about that. In terms of the specific geography on the guide in terms of revenue, you should assume that that charter deal is baked into the specific revenue line items that we gave.
More to come on, end up with that importantly that deal doesn't kick in until Q1. So we'll have more to say in terms of the details in terms of subscribers, but you should just take the guidance face value at this point. Charter deals baked in.

Kristin Dolan

And just to add on the streaming equation, the partnerships that we're engaging in for bundles are important, but also our relationships with our wholesalers. So Amazon, Roku, Philo, other folks that we participate with in addition to the traditional MVPDs are really critical and they are great partners in giving us data and insights around our subscribers and our utilization.
So we're getting smarter and better at really identifying in a privacy compliant way, who's watching what and how to engage with them in addition to the communications that are coming from their subscription provider. So Amazon is talking to a customer, we know, but then we can supplement that conversation with specific sort of nods and suggestions to keep the engagement level high.
And then I'm particularly proud here of the team really learning and taking a page from sort of the cable vision playbook on triple play and retention marketing that we're getting really sophisticated and smarter about retaining customers as opposed to just going after and spending subscriber acquisition money to bring them on board. So we're learning a lot and heavily focused on retention, which obviously will pay for itself in the long run.

Operator

David Joyce, Seaport Research Partners.

Thank you. Could you please provide some more color on what kind of lift in viewership and linear ad revenue that you are interpolating is probably coming from licensing your content to Netflix. And given you did say there's double digit growth of digital advertising, just was wondering what it will take to get that whole segment, including linear, to get closer to matching the Connected TV ad growth? Thanks.

Kim Kelleher

Sure. David, this is Kim Kelleher. Thanks for your question. I'd just clarify that the Netflix partnership is not ad supported on platform even though our shows are distributed on both their ad tier and on their ad free tier if they are distributed in a no ad way. So there is well, I just want to clarify that one point.
But to your next question, I do believe we are making great progress. The innovation we're doing in advertising, which is really focused on three areas. It's to make our inventory more available to buy seamlessly, to use data, as Kristen just talked about, and targeting to make our inventory more valuable.
And then last, packaging our inventory in a cross platform way so that marketers can access our full scale of viewership at once regardless of how they watch TV. So we've mentioned on past calls, we've innovated with making our debut with industry first biddable programmatic buying capabilities embedded across our linear networks.
We have added AMC plus ad supported inventory to our cross platform solutions, and that's been incredibly well received by the marketplace. We're adding a shutter ad tier, as Patrick just talked about in Q1. So that will add inventory as well. Sorry, I meant to say in fall.
And then it's that way we package that inventory, like really delivering full genres to advertisers that are looking for targeted cohorts and audiences, really engaged fan communities, and it's working incredibly well.
Most recently, as Kristen talked about in her remarks at the top, we launched Outcomes, our new performance product that's built into our Audience plus insights and data targeting platform, and this allows advertisers to see campaign outcomes and optimize delivery in real time.
So what I'm saying is, cumulatively, we are making tracks towards leveling out the differential between the declining linear environment and the growth in our digital environment. It's just going to take a little bit of time.

Yes. Appreciate that. What I was looking for, I guess, was how are you interpolating your licensing to Netflix into what kind of incremental viewership you're attracting on your linear properties, like the new seasons of what you've put on to Netflix, for example?

Kristin Dolan

I think it's not so much, I guess, the direct correlation with linear, but I would say, what we're thrilled about is as we are launching the new seasons of these shows that were on Netflix prior, we're seeing significant increases in AMC plus acquisition based on people watching the earlier seasons on Netflix.
So we definitely see a strong correlation between they viewed it on the massive platform that is Netflix and then they're hungry for more, so they come back to us, and purchase AMC Plus to see that latest, which is exactly why we -- it's the Netflix effect that we talked about on the last call and that's definitely has worked really well for us.

Understood. And just one final thing, if I could please. On the content licensing, are there specific projects that are being sold to third parties like you did with Silo, Hulu? Or is everything still going to be for your -- before your services, the first?

Yes. David, this is Dan McDermott from the Studio side. Currently, we're producing pretty much exclusively for our AMC owned platforms right now. We do have a studio we are able to produce for third parties when it's beneficial to us and it makes financial sense. We do have a lot of interest in our studio content.
So we're going to be strategic and opportunistic as we go forward. And when it makes sense and we can generate revenue and it will be accredited to the business, we'll explore those opportunities. --

Patrick O Connell

And David, it's Patrick from the finance side. You'll recall the guide last year for 2024 was $225 million of run rate content licensing revenue. That was based on our current level of production. We're at $250 million this year, right? So I just wanted to did that help sort of contextualize the fact that one, we continue to produce that in a very healthy levels and two, the market continues to be extraordinarily receptive to the programming that we're producing. So it's a it was a net growth driver in 2024 and we think it's going to continue to be a tailwind at 2025.

Operator

Thank you. There are no further questions at this time. I'd like to turn the call back over to Nick Seibert for any closing remarks.

Nicholas Seibert

Thank you all for joining us today. Have a good day.

Operator

Thank you for your participation. This does conclude the program. You may now disconnect. Good day.