Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Zee Entertainment Enterprises Ltd (BOM:505537, Financial) reported a substantial reduction in Z5 losses, with a 50% decrease from the previous year.
- The company achieved a 7% increase in subscription revenue for FY25, driven by the implementation of NTO 3.0 and growth in digital subscriptions.
- The music business remains strong, with Zee Music Company being the #2 music channel, boasting over 164 million subscribers on YouTube.
- The company demonstrated effective cost management, leading to an 8% decline in overall operating costs and a 390 basis points improvement in EBITDA margin to 14.4%.
- Zee Entertainment Enterprises Ltd (BOM:505537) generated strong cash flow during the quarter, enhancing its liquidity and financial position with cash and treasury investments totaling 24.1 billion as of March 2025.
Negative Points
- Advertising revenues declined by 11% in FY25 due to a weak macro advertising environment and a busy sports calendar.
- The company experienced a dip in advertising revenue growth and a seasonal softness in the fourth quarter, impacting overall performance.
- Linear subscription revenue remained flat in Q4 FY25, affected by a slowdown in linear subscriptions.
- The viewership share dropped by 20 basis points year-over-year in Q4 FY25, partly due to a busy sports calendar.
- The company faces challenges in the linear ad spending environment, which continues to remain soft, especially for general entertainment.
Q & A Highlights
Q: Given the current softness in advertising revenues, how do you plan to achieve 8-10% revenue growth and 18-20% margins in FY26?
A: Punit Goenka, CEO, mentioned that re-entering the Free-to-Air (FTA) space and initiatives like mini-series and Z5 offerings will aid in achieving these growth targets.
Q: Can you provide an outlook on the movie production and distribution side of the business for the next year?
A: Punit Goenka, CEO, stated that they plan to produce 18 to 21 films next year, focusing on content that resonates with audiences, without requiring additional investments.
Q: What is the outlook for advertising revenue growth, considering the current market conditions?
A: Punit Goenka, CEO, expressed optimism that advertising revenue will grow, albeit modestly, in line with inflationary numbers, despite current market pressures.
Q: How do you plan to address the decline in linear subscription revenues?
A: Punit Goenka, CEO, explained that they are addressing churn in pay TV platforms through initiatives like OTT and other plans, though it is a work in progress.
Q: With the reduction in Z5 losses, what is the future strategy for this segment?
A: Punit Goenka, CEO, indicated that further reduction in losses will be driven by revenue growth, as there is limited scope for additional cost-cutting.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
