Versant Media Group, Inc.

Previous wording

The following discussion of our financial condition and results of operations should be read in conjunction with our interim condensed consolidated and combined financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q. For more information about our company’s operations, see “Item 1. Business” in our Annual Report on Form 10-K. The following discussion and analysis includes forward-looking statements. These forward-looking statements are based on our current expectations and are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed in our Annual Report on Form 10-K, as well as those discussed below and elsewhere in this report, particularly in “Special Note About Forward Looking Statements” and “Item 1A. Risk Factors.”

Current wording

The following discussion of our financial condition and results of operations should be read in conjunction with our interim condensed consolidated and combined financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q. For more information about our company’s operations, see “Item 1. Business” in our Annual Report on Form 10-K. The following discussion and analysis includes forward-looking statements. These forward-looking statements are based on our current expectations and are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed in our Annual Report on Form 10-K, as well as those discussed below and elsewhere in this report, particularly in “Special Note Regarding Forward Looking Statements” and “Item 1A. Risk Factors.”

Previous wording

•Revenue of $1.69 billion and $1.71 billion for the three months ended March 31, 2026 and 2025, respectively.

Current wording

•Revenue of $1.64 billion and $1.71 billion for the three months ended June 30, 2026 and 2025, respectively, and $3.33 billion and $3.41 billion for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

•Adjusted EBITDA of $704 million and $757 million for three months ended March 31, 2026 and 2025, respectively. Adjusted EBITDA is a financial measure not defined by GAAP. See “Non-GAAP Financial Measures” below for additional information, including our definition and use of Adjusted EBITDA and for a reconciliation from net income attributable to Versant to Adjusted EBITDA.

Current wording

•Adjusted EBITDA of $624 million and $685 million for the three months ended June 30, 2026 and 2025, respectively and $1,328 million and $1,442 million for the six months ended June 30, 2026 and 2025, respectively. Adjusted EBITDA is a financial measure not defined by GAAP. See “Non-GAAP Financial Measures” below for additional information, including our definition and use of Adjusted EBITDA and for a reconciliation from net income attributable to Versant to Adjusted EBITDA.

Previous wording

•Cash flows from operations of $585 million and $478 million for three months ended March 31, 2026 and 2025, respectively.

Current wording

•Cash flows from operations of $967 million and $1,113 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

•Advertising. We derive significant revenue from selling advertising on our networks, and have experienced in recent years, and expect to continue to experience, declines in advertising revenue caused by changes in advertiser priorities primarily due to increased competition for the leisure time of viewers and increased audience fragmentation primarily from greater use of streaming and digital platforms (all of which we expect will continue in the foreseeable future), as well as by cyclical factors, such as election cycles and the timing of sporting events and macroeconomic conditions. In addition, lower audience ratings and reduced viewership, which our networks have experienced, and likely will continue to experience, affect pricing and the willingness of advertisers to purchase advertising.

Current wording

•Advertising. We derive significant revenue from selling advertising on our networks, and have experienced in recent years, and expect to continue to experience, declines in advertising revenue caused by changes in advertiser priorities primarily due to increased competition for the leisure time of viewers and increased audience fragmentation primarily from greater use of streaming and digital platforms (all of which we expect will continue in the foreseeable future), as well as by cyclical factors, such as election cycles and the timing of sporting events and macroeconomic conditions. In addition, lower audience ratings and reduced viewership, which our networks have experienced, and likely will experience in the future, affect pricing and the willingness of advertisers to purchase advertising.

Previous wording

Linear distribution revenue decreased in three months ended March 31, 2026 primarily due to continued declines in subscribers, partially offset by contractual rate increases. We expect to experience continued declines in the number of subscribers and linear distribution revenue, as further discussed in “Key Factors Affecting Our Business.”

Current wording

We expect to experience continued declines in the number of subscribers and linear distribution revenue, as further discussed in “Key Factors Affecting Our Business.”

Previous wording

Advertising revenue decreased in three months ended March 31, 2026 as compared to the corresponding prior year period, primarily due to decreases at our networks as a result of ratings declines, partially offset by incremental revenue from a new acquisition. Ratings for the three months ended March 31, 2026 continued to be negatively impacted by trends in linear advertising.

Current wording

Advertising revenue decreased for the three and six months ended June 30, 2026 as compared to the corresponding prior year periods, as decreases at our networks were partially offset by incremental revenue from a new acquisition. These results reflect improvements in recent trends including favorable ratings at our networks.

Previous wording

Platforms revenue increased for the three months ended March 31, 2026, primarily due to increased revenue related to movie ticket purchases through our platform resulting from underlying box office performance, video-on-demand transactions, and incremental revenue from a new acquisition. The increase was also due to higher transactional volumes related to services provided to golf courses, including on-site payment facilitation services.

Current wording

Platforms revenue increased for the three and six months ended June 30, 2026 as compared to the corresponding prior year periods, primarily due to increases at Fandango and GolfNow. The increased revenue at Fandango primarily related to movie ticket purchases through our platform, which reflect underlying box office performance, and video-on-demand transactions, as well as incremental revenue from our new cinema operating platform. The revenue growth at GolfNow was primarily due to higher transactional volumes related to services provided to golf courses, including tee time reservations and on-site payment facilitation services. These increases in revenue were partially offset by the impact of our divestiture of SportsEngine during the second quarter of 2026. Platforms revenue related to SportsEngine totaled $12 million and $29 million for the three months ended June 30, 2026 and 2025, respectively, and $46 million and $62 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Content licensing and other revenue increased for the three months ended March 31, 2026, primarily due to timing of content licensing agreements, which includes the impact of a large licensing agreement recognized in the current period.

Current wording

Content licensing and other revenue was constant for the three months ended June 30, 2026 and increased for the six months ended June 30, 2026 as compared to the corresponding prior year period, primarily due to the impact of a large licensing agreement recognized during the first quarter of 2026.

Previous wording

Programming and production costs decreased for the three months ended March 31, 2026, primarily due to allocated costs from Comcast in the prior year period, which were higher than our actual costs incurred following the Separation, as well as reductions in costs for licensed and owned entertainment programming, partially offset by costs related to a large content licensing agreement recognized during the three months ended March 31, 2026.

Current wording

Programming and production costs decreased for the three and six months ended June 30, 2026, as compared to the corresponding prior year periods, primarily due to allocated costs from Comcast in the prior year period, which were higher than our actual costs incurred following the Separation, as well as reductions in costs for licensed and owned entertainment programming. These declines were partially offset by increased costs related to new sports rights agreements. In addition, the decrease in costs for the six months ended June 30, 2026 was offset in part by costs related to a large content licensing agreement recognized during the first quarter of 2026.

Previous wording

Other costs of revenue increased for the three months ended March 31, 2026, primarily due to higher transactional volumes related to our digital platforms, and increased costs from a new acquisition.

Current wording

Other costs of revenue increased for the three and six months ended June 30, 2026, as compared to the corresponding prior year periods, primarily due to higher transactional volumes related to our digital platforms, partially offset by decreased costs as a result of our divestiture of SportsEngine during the second quarter of 2026.

Previous wording

Selling, general and administrative expense increased for the three months ended March 31, 2026, primarily driven by incremental costs related to operating as an independent public company with standalone corporate administrative, facilities and support functions following the Separation, as well as costs associated with our commercial agreements with NBCUniversal following the Separation, primarily relating to the sale of advertising. Prior to the Separation, our combined financial statements reflected direct costs, and allocations of indirect costs for administrative functions and services performed on our behalf by centralized functions within Comcast and allocations of costs for the use of shared assets, allocated on a pro rata basis using an applicable measure based on revenue applied to the relevant pool of costs. As such, our historical costs were not representative of our operating costs as a standalone company following the Separation.

Current wording

Prior to the Separation, our combined financial statements reflected direct costs, and allocations of indirect costs for administrative functions and services performed on our behalf by centralized functions within Comcast and allocations of costs for the use of shared assets, allocated on a pro rata basis using an applicable measure based on revenue applied to the relevant pool of costs. As such, our historical costs were not representative of our operating costs as a standalone company following the Separation.

Previous wording

Depreciation and amortization expense increased for the three months ended March 31, 2026, primarily due to an adjustment related to assets held-for-sale, the impact of new acquisitions, and incremental depreciation expense on facilities and related assets, which were transferred to Versant in connection with the Separation. These increases were partially offset by amortization expense in the prior year period related to certain intangible assets that did not transfer to Versant following the Separation.

Current wording

Depreciation and amortization expense increased for the three and six months ended June 30, 2026 as compared to the corresponding prior year period, primarily due to the incremental depreciation expense on facilities and related assets, which were transferred to Versant in connection with the Separation and the impact of new acquisitions, as well as the pre-tax losses of $20 million and $39 million, respectively, recognized in connection with the divestiture of SportsEngine. These increases were partially offset by amortization expense in the prior year periods related to certain intangible assets that did not transfer to Versant following the Separation.

Previous wording

Interest expense for the three months ended March 31, 2026 was primarily attributable to interest on our Senior Notes and Term Loans, which were issued in connection with the Separation. See Note 5 to our condensed consolidated and combined financial statements for additional information on our debt obligations.

Current wording

Interest expense for the three and six months ended June 30, 2026 was primarily attributable to interest on our Senior Notes and Term Loans, which were issued in connection with the Separation. See Note 5 to our condensed consolidated and combined financial statements for additional information on our debt obligations.

Previous wording

Investment and other income, net, for the three months ended March 31, 2026 was primarily comprised of interest income on cash and cash equivalents.

Current wording

Investment and other income, net, for the three and six months ended June 30, 2026 was primarily comprised of interest income on cash and cash equivalents.

Previous wording

Adjusted EBITDA is a non-GAAP financial measure and is the primary basis used to measure the operational strength and performance of our business as well as to assist in the evaluation of underlying trends in our business. This measure eliminates the significant level of noncash depreciation and amortization expense that results from property and equipment and intangible assets recognized in business combinations. It is also unaffected by our capital and tax structures, and by our investment activities, including the impacts of entities that we do not consolidate, as our management excludes these results when evaluating our operating performance. Our management and Board of Directors use this financial measure to evaluate our operating performance and to allocate resources. It is also a significant performance measure in our annual incentive compensation programs. Additionally, we believe that Adjusted EBITDA is useful to investors because it is one of the bases for comparing our operating performance with that of other companies in our industries, although our measure of Adjusted EBITDA may not be directly comparable to similar measures used by other companies.

Current wording

Adjusted EBITDA is a non-GAAP financial measure and is a key measure used to assess the operational strength and performance of our business, as well as to assist in the evaluation of underlying trends in our business. This measure eliminates the significant level of noncash depreciation and amortization expense that results from property and equipment and intangible assets recognized in business combinations. It is also unaffected by our capital and tax structures, and by our investment activities, including the impacts of entities that we do not consolidate, as our management excludes these results when evaluating our operating performance. Our management and Board of Directors use this financial measure to evaluate our operating performance and to allocate resources. It is also a significant performance measure in our annual incentive compensation programs. Additionally, we believe that Adjusted EBITDA is useful to investors because it is one of the bases for comparing our operating performance with that of other companies in our industries, although our measure of Adjusted EBITDA may not be directly comparable to similar measures used by other companies.

Previous wording

In connection with the Separation, we issued $3.0 billion of total debt, including the Senior Notes issued in October 2025 and borrowings under the Term Loans drawn upon the Separation. In addition, we entered into a $750 million Revolving Credit Facility in connection with the Separation, which remains undrawn. During the three months ended March 31, 2026, we entered into variable-to-fixed interest rate swaps totaling $1.0 billion, which effectively convert a portion of our variable-rate borrowings to fixed rates. As a result, as of March 31, 2026, approximately 67% of the aggregate principal amount of our total debt portfolio consisted of fixed-rate indebtedness, including the effect of interest rate swap agreements designated as hedges and approximately 33% remained variable.

Current wording

In connection with the Separation, we issued $3.0 billion of total debt, including the Senior Notes issued in October 2025 and borrowings under the Term Loans drawn at the time of the Separation. In addition, we entered into a $750 million Revolving Credit Facility in connection with the Separation, which remains undrawn. During the first quarter of 2026, we entered into variable-to-fixed interest rate swaps totaling $1.0 billion, which effectively converted a portion of our variable-rate borrowings to fixed rates. As a result, as of June 30, 2026, approximately 67% of the aggregate principal amount of our total debt portfolio consisted of fixed-rate indebtedness, including the effect of interest rate swap agreements designated as hedges and approximately 33% remained variable.

Previous wording

Our Term Loan A Facility and the Revolving Credit Facility contain a financial covenant that require us to maintain a maximum consolidated first lien net leverage ratio, as defined in the credit agreement governing the Term Loan A Facility and the Revolving Credit Facility, of not greater than 3.50:1.00, beginning with our third quarter of 2026. As of March 31, 2026, no events of default occurred in connection with our debt obligations. See Note 5 to the condensed consolidated and combined financial statements for additional information relating to our debt obligations.

Current wording

Our Term Loan A Facility and the Revolving Credit Facility contain a financial covenant that requires us to maintain a maximum consolidated first lien net leverage ratio, as defined in the credit agreement governing the Term Loan A Facility and the Revolving Credit Facility, of not greater than 3.50:1.00, beginning with our third quarter of 2026. As of June 30, 2026, no events of default occurred in connection with our debt obligations. See Note 5 to the condensed consolidated and combined financial statements for additional information relating to our debt obligations.

Previous wording

We believe that our available cash and cash flows from our operating activities, along with our borrowing capacity and access to capital markets, taken as a whole, will provide adequate liquidity to meet our current and long-term obligations when due, including our third-party debt, and to fund capital expenditures, while also providing flexibility to fund investment opportunities that may arise. However, there can be no assurances that we will be able to obtain debt or equity financing on acceptable terms in the future.

Current wording

We believe that our available cash and cash flows from our operating activities, along with our borrowing capacity and access to capital markets, taken as a whole, will provide adequate liquidity to meet our current and long-term obligations when due, including our third-party debt, and to fund capital expenditures, while also providing flexibility to fund investment opportunities that may arise, including the acquisition of Full Swing in August 2026. However, there can be no assurances that we will be able to obtain debt or equity financing on acceptable terms in the future.

Previous wording

Net cash provided by operating activities increased for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to a net favorable change in operating assets and liabilities, which was partially offset by decreases in net income and due to deferred income taxes. The change in operating assets and liabilities was primarily due to increases in accounts payable and other operating assets and liabilities resulting from liabilities incurred as a standalone entity, including income taxes payable, compared to periods prior to the Separation, during which we were allocated costs and participated in Comcast’s centralized cash management processes. These increases were partially offset by an increase in accounts receivable due to lower collections in the current year primarily as a result of Comcast retaining advertising sales receivables following the Separation.

Current wording

Net cash provided by operating activities decreased for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily due to a net unfavorable change in net income after noncash adjustments, partially offset by an increase related to operating assets and liabilities. The increase related to operating assets and liabilities was primarily due to increases in accounts payable and other operating assets and liabilities resulting from liabilities incurred as a standalone entity, including income taxes payable, compared to periods prior to the Separation, during which we were allocated costs and participated in Comcast’s centralized cash management processes. These increases were partially offset by an increase in accounts receivable due to lower collections in the current year primarily as a result of Comcast retaining advertising sales receivables following the Separation.

Previous wording

As described above, prior to the Separation, we have historically participated in Comcast’s centralized cash management process, and as a result, our results as a standalone company during the three months ended March 31, 2026 are not comparable to the amounts and timing of operating receipts and payments for the three months ended March 31, 2025. In addition, operating assets and liabilities in our combined statements of cash flows generally fluctuate based on the timing of amortization and related payments for our content costs and the timing of collections of receivables.

Current wording

As described above, prior to the Separation, we participated in Comcast’s centralized cash management process, and as a result, our results for thesix months ended June 30, 2026 are not comparable to the amounts and timing of operating receipts and payments for thesix months ended June 30, 2025. In addition, operating assets and liabilities in our combined statements of cash flows generally fluctuate based on the timing of amortization and related payments for our content costs and the timing of collections of receivables.

Previous wording

Net cash used in investing activities increased during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to cash spent for business acquisitions and investments during the three months ended March 31, 2026. In addition, capital expenditures increased for the three months ended March 31, 2026, due to increased spending required to operate as a standalone company.

Current wording

Net cash used in investing activities increased during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily due to cash spent for business acquisitions and investments during the six months ended June 30, 2026. These increases were partially offset by proceeds from the sale of our SportsEngine business.

Previous wording

Net cash used in financing activities during three months ended March 31, 2026 primarily included a $2.25 billion cash payment to Comcast as consideration for assets that were contributed to us in connection with the Separation and our share repurchases, partially offset by net proceeds from the Term Loans of $1.97 billion and a $70 million payment we received from NBCUniversal at the time of the Separation. Net transfers to Comcast of $454 million in the prior year period primarily resulted from cash generated from operating activities and swept to Comcast, partially offset by increased capital expenditures funded through Comcast’s centralized cash management program.

Current wording

Net cash used in financing activities during the six months ended June 30, 2026 primarily included a $2.25 billion cash payment to Comcast as consideration for assets that were contributed to us in connection with the Separation, share repurchases of $200 million and dividends of $53 million, partially offset by net proceeds from the Term Loans of $1.97 billion and a $70 million payment we received from NBCUniversal at the time of the Separation. Net transfers to Comcast of $1.03 billion in the prior year period primarily resulted from cash generated from operating activities and swept to Comcast, partially offset by increased capital expenditures funded through Comcast’s centralized cash management program.

Previous wording

In May 2026, we announced that we expect to enter into a $100 million accelerated share repurchase agreement commencing on May 15, 2026, to repurchase $100 million of Class A common shares under our 2026 Share Repurchase Program. We anticipate completing the transaction during the second quarter of 2026.

Current wording

During the six months ended June 30, 2026, we repurchased 5,069,067 of our Class A common shares for approximately $200 million under our $1.0 billion share repurchase program authorized by our Board of Directors on March 3, 2026 (“2026 Share Repurchase Program”), through a combination of open market repurchases and a $100 million ASR program completed during the second quarter of 2026. As of June 30, 2026, the remaining repurchase availability under our share repurchase program was $800 million. In August 2026, we announced that we expect to enter into a $100 million ASR agreement commencing on August 7, 2026 to repurchase $100 million of Class A common stock under our 2026 Share Repurchase Program. We anticipate completing the transaction during the third quarter of 2026.

Previous wording

We repurchased 2,694,125 of our Class A common shares for $100 million during the three months ended March 31, 2026 under our new $1.0 billion share repurchase program authorized by our Board of Directors on March 3, 2026 (“2026 Share Repurchase Program”). As of March 31, 2026, the remaining repurchase availability under our share repurchase program was $900 million. Under the 2026 Share Repurchase Program, repurchases can be made using a variety of methods, which may include open market purchases, block trades, privately negotiated transactions, accelerated share repurchase programs and/or Rule 10b5-1 or other non-discretionary trading plans. The timing, manner, price, and amount of any common share repurchases under the 2026 Share Repurchase Program are determined by the Company in its discretion and depend on a variety of factors, including legal requirements, price, and economic and market conditions. The 2026 Share Repurchase Program does not obligate the Company to acquire any specific number of common shares, and the program may be suspended, extended, modified or discontinued at any time.

Current wording

Under the 2026 Share Repurchase Program, repurchases can be made using a variety of methods, which may include open market purchases, block trades, privately negotiated transactions, accelerated share repurchase programs and/or Rule 10b5-1 or other non-discretionary trading plans. The timing, manner, price, and amount of any common share repurchases under the 2026 Share Repurchase Program are determined by the Company in its discretion and depend on a variety of factors, including legal requirements, price, and economic and market conditions. The 2026 Share Repurchase Program does not obligate the Company to acquire any specific number of common shares, and the program may be suspended, extended, modified or discontinued at any time.

Previous wording

On March 3, 2026, our Board of Directors declared our first quarter dividend of $0.375 per share, which was paid on April 22, 2026. On May 14, 2026, our Board of Directors declared our second quarter dividend of $0.375 per share, payable on July 22, 2026 to shareholders of record as of the close of business on July 1, 2026.

Current wording

On April 22, 2026, we paid our first quarter dividend of $0.375 per share. On May 14, 2026, our Board of Directors declared our second quarter dividend of $0.375 per share, which was paid on July 22, 2026. On August 6, 2026, our Board of Directors declared our third quarter dividend of $0.375 per share, payable on October 22, 2026 to shareholders of record as of the close of business on October 1, 2026.

Previous wording

In May 2026, we entered into a new lease agreement for our corporate headquarters office location in New York City, New York. See Note 11 for additional information.

Current wording

In May 2026, we entered into an amended lease agreement for corporate offices in New York City, New York. See Note 6 for additional information.