Good day everyone and welcome to the Viacom Conference Call. Today’s call is being recorded. At this time I would like to turn the call over to Executive Vice President of Investor Relations, Mr. Anthony DiClemente. Please go ahead sir.

Good morning everyone and thank you for taking the time to join us for our first quarter 2021 earnings call. Joining me for today’s discussion are Bob Bakish, our President and CEO and Naveen Chopra, our CFO. Please note that in vision to our earnings release we have trending schedules containing supplemental information available on our website. We also have a slide a presentation for your to follow along with our remarks. Want to refer you to the second slide in that presentation and remind you that certain statements made on this call are forward-looking statements that involve risks and uncertainties. These risks and uncertainties are discussed in more detail in our filings with the SEC. Some of today's financial remarks will focus on adjusted results. Reconciliations of these non-GAAP financial measures can be found in our earnings release or in our trending schedules, which contain supplemental information, and in each case, can be found in the Investor Relations section of our website. Now I will turn the call over to Bob.

Thanks Anthony. Good morning everyone and thank you for joining us. It's been about 10 weeks since we laid out our streaming strategy and goals at our investor event. Since then we have successfully launched Paramount+ in March and I'm thrilled with where we are in streaming and overall. On today’s call I'll cover three topics. First, ViacomCBSs strong Q1, a quarter with clear operating strength and sequential improvement in key financial metrics. Second, the company's momentum in streaming. Momentum which is clearly visible in the metrics across fee, pay, and premium. And momentum which gives us even more confidence in our strategy. And third, a path forward, an overview of the content we have coming and our plan to build on the early success of Paramount+ by leaning even more. Then I will hand it over to Naveen to provide additional financial and operational detail before opening it up to take your questions. I'll start with Q1 2021 results. Well I am pleased to say we achieved another quarter of year-over-year growth in revenue, adjusted OIBDA, and adjusted EPS further demonstrating the strength of ViacomCBS and our related recovery from COVID’s impact on the business. It all starts with the power of our content and its enduring popularity with audiences. In Q1 ViacomCBS had the number one share of viewing in the U.S. across key demos. As part of that CBS currently ranked number 1 among all broadcasters and we'll finish the 2020-2021 season as America's most watched network in primetime for the 13th straight season. We also own the most top 30 cable networks among persons 2 plus and persons 18-49 in the quarter. And SHOWTIME had the top two scripted shows on premium cable. In social, ViacomCBS was the number one company among broadcast, cable, radio, and…

Thank you, Bob. Good morning, everyone. As Bob mentioned, we had very strong financial results in the first quarter of 2021 across revenue, adjusted OIBDA, adjusted EPS, and adjusted free cash flow. Our results reflect robust growth in streaming where we saw record subscriber additions and revenue growth of 65%, as well as solid performance in our linear business. Our first quarter streaming results are evidence of the early positive response we have seen from the launch of Paramount+ and continued momentum in Pluto TV and Showtime OTT. We added 6 million global streaming subscribers in Q1, marking a record quarter of subscriber growth and taking us to 36 million global streaming subscribers as of quarter end. The significant majority of new subscribers were from Paramount+ and of those the significant majority were domestic customers. The combination of subscriber growth and increased engagement helped streaming subscription revenue grow 69% to 388 million. These results include the impact of subscribers whose free trials extended beyond quarter-end and international subscriber growth, where ARPUs are generally lower relative to domestic subscriptions. Turning to streaming and advertising, the largest driver of growth came from Pluto TV, where we added 6.4 million global Pluto TV MAUs in Q1, and now reached nearly 50 million MAUs globally. Pluto TV engagement also continues to improve. Average monthly watch time for domestic user increased 28% year-on-year in the first quarter. The increased engagement combined with domestic sell through rates that were up 600 basis points drove significant improvements in Pluto's domestic ARPU. The evolution of Pluto's domestic business also gives us confidence that a similar pattern of international monetization growth can be unlocked as we scale globally. Overall Pluto TV revenue more than doubled in Q1 on a year-over-year basis for the third consecutive quarter. The strong advertising…

Thank you. [Operator Instructions]. Our first question comes from the line of Michael Morris with Guggenheim. Please proceed with your question.

Thank you guys. Good morning, a couple of questions on the streaming business. First one on Paramount+, appreciate all the detail on signups and engagement. There's a lot in there, hoping to dig a little bit more on trend. I know we're only a couple of months into Paramount+, but we do have some good historic data on -- with all access. So I'm curious if you can talk about how engagement churn has sort of trended with the new product availability, the expanded product and if anything, on the content side in particular has maybe surprised you compared to what you were anticipating and how that might inform some of those investment decisions going forward? And then also on Pluto, I think ad revenue growth is outpacing that sort of combination of usage and per engagement growth -- engagement per user growth. Is that accurate, there's a couple of moving parts in there, and can you kind of provide any context for what the upside is for Pluto maybe compared to how you monetize your linear audiences? Thank you.

Sure. Yeah, thanks Mike. A nice meaty two part to open here. So in terms of your first question, we are super excited about what we're seeing with Paramount+ and I'd say, it started with the overwhelming learning from what we've seen is that our content strategy is working. There's no question that consumers are embracing a service spanning live sports, breaking news, and a mountain of entertainment. We can see that in the sub numbers. As we mentioned, we added 6 million pay subs in the quarter globally, but the overwhelming piece of that was from peak Paramount+ domestic. And importantly that includes adding younger subs with an average age of new subs down six years. Second point is Paramount+ is showing great lines in terms of engagement. In fact, the percent of our daily subs, which are active, actually the percent of our total subs I should say, which are active on a daily basis is up sequentially and up year-over-year. And we see strong double-digit growth in hours per active user. In fact, that's up about 17% in March versus the prior year. When you look under that in terms of content, which is obviously the key driver, we continue to see the power of what worked before. That includes sports, where we obviously benefited from the Super Bowl, the NCAA, Golf, and WAFA as we said. It includes originals, including The Stand, Star Trek and others, and includes CBS content. Live content is strong as our shows like MCIS and Hawaii Five-0. But the real news is it's now broader. Nickelodeon in particular is turning into a powerful driver of subs and engagement probably more quickly than we would have thought. It's a clear sub driver since the relaunch and it now accounts for a strong…

Thanks a lot Mike. Operator, let's take our next question.

Thank you. Our next question comes from the line of Brett Feldman with Goldman Sachs. Please proceed with your question.

Thanks and two if you don't mind. So just following-up a little bit, as you had noted the quarter-end global subscriber number would include anyone that was still in a free trial period and with Paramount+ having launched in early March, anyone who signed up after the launch would have been in their free trial at the end of the quarter. So, you're now two months past the launch, many of those customers have gone through the free month, some of them have gone through a paid month, can you give us any insight into what the free to paid conversion is looking like and maybe how that has compared to what you historically saw with CBS all access? And then Naveen thank you for the color around sort of the four areas you're looking to sort of lean in with your investment on streaming. Can you give us any context, are certain of those a little more front burner than others, you said we might start to see that in the financials next year, what does that mean? And then really the more important question is if you're investing more, how should we think about seeing that payoff, do you think you can meet your long-term targets sooner, do you think there's upside, any further insight there would be greatly appreciated?

Yeah, sure Brett. So look, to your first question, we like what we're seeing in general with respect to conversion and churn. Unpacking that a bit, conversion rates from trial to pay are consistent with what we've seen historically with all access. And that's despite the fact that we've ramped sub growth pretty significantly and so we're not seeing any kind of degradation in quality as we widen the subscriber net. That's a good thing. And particularly a good thing, given that we had the Super Bowl this year, which clearly brought in a bunch of folks for the Super Bowl, but as with the broader sub-base, they're sticking around for more, again for this broader Paramount+ offering. On the churn side, again remains in the same range as prior year, despite the massive growth in the sub-base. Specifically, to your question of the 30-day free trial which we did for launch, I'd highlight two points. One is, believe it or not the conversion rate was actually marginally above our historical trial conversion rates. So we are happy about that. And second that particular program, the 30-day free trial ended on March 31st, and is no longer in the market. By the way, a little look forward past the end of the quarter, both conversion and churn improved in April, both versus prior year and versus March. So net-net, we feel great about what we're seeing in this area. I'm going to flip it to Naveen in a second for the second part of your question, but I do want to say, he highlighted the four investment areas. Probably the biggest investment area when push comes to shove, we'll be more originals. We're very excited about what we have in the pipeline on the series side and we see our studios be that Paramount, be that Nickelodeon, be that MTV Entertainment, ramping original studios as part of this capital raise and we're working on that. And of course we talked about movies and how we're ramping that, and really excited about moving to an exclusive original movie per week as we get part of the way into 2022. So a lot going on there in terms of our plans to deploy that capital. Naveen?

Yeah. So let me try to add a little color in terms of how we see the deployment of that capital playing out. You heard Bob talk today about some of the ways in which we're already starting to deploy that capital, which as reminder it's things like the addition of Serie A Football on Paramount+, the Infinite movie being released on Paramount+, a significant acceleration of our international expansion plans, and starting to ramp up to getting an original movie each week on Paramount+. So those things will allow us to start deploying some of the incremental cash. As I said in the second half of 2021, that being said we're obviously not going to spend $2.7 billion overnight. So the bulk of the investment will happen over a multi-year period of time. And we are continuing to be diligent in evaluating a variety of different investment options against one another and we're very focused on the ROI of those across all of the different buckets that we articulated. So I would expect that as we commit to some of those specific plans we'll look to share more about the expense magnitude, the timing of the cash versus the expense which could be different by the way, and I think perhaps most importantly, how those investment plans affect our goals for subscriber and revenue growth, which is obviously the intent, the motivation behind any of those investments is to try to exceed some of the goals that we've already set for ourselves. One other point that I think is important just to be aware of from a timing perspective, as I said, we are starting to fund some of those -- these early initiatives this year. Though I'd note that our expectations for full year OIBDA and free cash flow really haven't changed materially because of the over performance in Q1. So that is hopefully helpful to you in terms of thinking about some of the timing elements of this.

Thanks a lot Brett. Operator, let’s take our next question.

Thank you. Our next question comes from the line of Ben Swinburne with Morgan Stanley. Please proceed with your question.

Good morning. Bob, can you talk a little bit more about what we should be expecting with the June product, and if you call it a relaunch or the new tier, anything to add on distribution partners or kind of marketing push? And then Naveen, I'd like to just take another swing at one of the topics from the Investor Day, which is your content spending company-wide post the capital raise sitting here today. Can you -- is there any way to help us think about how you think about the overall growth in content investment for ViacomCBS over the course of the sort of forecast period you talked about at Investor Day? Thanks, both.

Yeah. So we'll take this sequentially Ben. So on the 499 product, we're really excited about it. It obviously brings live sports, breaking news, and amount of entertainment including this expanded original slate to the market at a lower price point. That's great from a consumer perspective. For us, it also has cost advantages, which improve margins versus the legacy 599 product, which we will be discontinuing from a new subscriber standpoint. If you step back from it, we believe two tiers of Paramount+ really maximizes its ability to drive the total addressable market. Obviously this lower price point at 499 is good for the more cost sensitive consumer and thus helps maximize total subscribers for Paramount+. It also adds another important asset for us in terms of advertising inventory. It will become part of IQ and because there's so much opportunity in high-quality premium streaming, digital advertising, we see the product actually generating higher ARPUs over time than the 999 product. So, it really is quite exciting there. I'd also point out that adding this to our quiver broadened the portfolio we have to work with distributors to meet their objectives, really strengthens our position as a supplier of choice. We add that to our existing offerings, both in free with Pluto TV and the Paramount and Showtime OTT and BET+ paid products. Obviously it's at the lower end of the price point, so it could work for a subset of their consumer base. It also related to the cost structure gives us more flexibility on promotions and so that's something we're excited to deploy. And lastly, I'd note, it will launch in early June with broad distribution. So very excited about the 499 product and how it will continue to drive Paramount+. Naveen.

Yeah, so on the content expense, as you will remember Ben from our Investor Day, we highlighted the fact that we expect streaming content expense to increase materially between 2020 and 2024. And I'd say that our plan for this year 2021 does incorporate some rapid progress in ramping up streaming content. In fact, streaming content expense in 2021 I think will more than double relative to 2020. Now it's important to remember that not all of the expense and cash impact is incremental to total company spend because we do expect to continue to reallocate content from linear to either a shared context where it's doing double duty on both linear and streaming or exclusively on streaming. That being said, we do expect that what we've described as sort of roughly $15 billion of total company content expense to increase modestly over the next few years. So not the entire amount of the increase of streaming investment will not be incremental to the total company, but there will be some increase. Now that's all pre-capital raise. With the additional capital, we now have the ability to invest more aggressively and so I would expect that streaming content expense and total company expense should be somewhat higher, but very importantly over time generate return in the form of incremental subs and they use streaming revenue. And as I said earlier, most of that impact will really start to be seen in 2022 and beyond. And the piece that we're funding in 2021 as I said earlier, I think is largely offset by some of the over performance we've seen in Q1.

Great, thanks Ben. Operator, next question, please.

Thank you. Our next question comes from the line of Alexia Quadrani with J.P. Morgan. Please proceed with your question.

Thank you. Just staying on Paramount+, we've seen some of your competitors experience a pull forward and growth in subs on their streaming platforms during the pandemic, and then Q1 you had the benefit of substantial marketing push and the rebranding which accelerated subscriber growth. I'm curious how you're thinking -- how we should think about growth in subs at Paramount+ over the next couple quarters? And then my follow-up question is just sort of circling back to your comments on international expansion also on Paramount+, you highlight a bunch of markets, you gave us some great color which I really appreciate. I'm curious, where you see the biggest opportunity, what markets, and outside of Spanish language are you ramping up in local language like your peers as well?

Yeah, sure Alexia, let me take both of those. So actually I don't think a comparison to peer services and how they did or didn't pull forward subscriber growth with COVID is really the right question for us. And that's simply because Paramount+ just launched and it's in a bit of a different situation. With Paramount+ we're ramping up product for new consumers and so we're focused on generating awareness to those consumers and obviously converting them into subscribers. To that end we're focused on executing against the content strategy that I articulated, the specific content additions that we talked about coming in particular as 2021 continues to play out as really the primary driver of growth. And I'd remind you that the good news on that tip is that we have a really exciting content slate coming. Whether you look at the kids' space, things like new version of Rugrats, new version of iCarly, both of which are in the current quarter. And then of course, Star Trek Prodigy later in the year and those are just examples. Scripted space where I'm super excited about the first Yellowstone spinoff. That's something -- that franchise has a big fan base and so bringing a new version exclusively to Paramount+ late in year will be great. And that joins a whole bunch of other scripted shows. Some that are coming back like Why Women Kill and Star Trek Discovery. Reality, really a wheelhouse for us. And related to that, the music space, which is more general unscripted. I am this Cradle to Stage show, we have with Dave Grohl is cool. RuPaul has a huge fan base, so a new version of RuPaul coming, etcetera. And we got comedies, we talked about movies, our movies push starting in June is massive.…

Thanks Alexia. Operator, next question.

Thank you. Our next question comes from the line of Rich Greenfield with LightShed Partners. Please proceed with your question.

Hey, thanks for taking the questions. A couple of them; first, I want to just dig in a little bit deeper into the comments about what people are actually doing on Paramount+. It seems like Nickelodeon just looking at like sort of the top shows every day, seeing things like SpongeBob and Paw Patrol, it seems like they are driving a very substantial part of viewership and wondering, like, when you look at sort of the promotion you talked about sports and some of the stuff that you have and certainly it had some originals, but it looks like the kids' stuff is really driving viewership. I guess a big picture question is like, you said double-digits, like is it half the kids, like how substantial is kids' programming and how do you get more viewership of some of the adults skewing fair, I'd be curious how you're thinking about the marketing message because it seems like kids has been a very powerful force for you? And then I just want to follow up on two things; one, you said you haven't commented are Paramount+ subs higher today than 36 million, could you give us any clarity on that? And then I think you mentioned one movie -- one original movie a week in 2022, does that include the 45 day after movies that are coming out in theaters or is that a dedicated original movie every single week, I just wasn't clear of what you meant by that?

Sure, Rich, lot there. So on Paramount+ and kids, clearly kids is working for us. And no, it is not half of the consumption. Again, material double-digit percentages, but nowhere near half. What's driving that relative to the other call it genres and demographics is really the fact that we were able to at launch provide not only critical mass of library product, which we can do in other categories, but volume of exciting, exclusive, originals link to known franchises. And that in particular was the combination of the SpongeBob movie, which obviously was a theatrical movie, we chose to redeploy on Paramount+, and the new SpongeBob series Camp Coral. We had that ready to go because we had a movie for theaters and because we had a series that we were going to launch on Nickelodeon, call it linear. As you look forward, those kind of things start to happen in the other genres. I mean, I'm very excited about what's going on with reality. As you know, we launched with Real World New York, it was only a couple episodes, so it wasn't really volume. And MTV, The Challenge, there was a little more volume, but it's the first series. As the year plays out, we basically have one new exclusive original in the reality space and unscripted space every month. So that's more fuel for that tank and that should start converting that genre lane for Paramount+, and we will market that particularly leveraging our linear networks and social where we know those fan bases are. The other one I'd really highlight is movies. I mean, we have Paramount -- we have movies on Paramount+ today, but frankly not that many of them. That game changes dramatically in June, where we first dropped an additional 1000 and…

Yeah, I think he was asking about subs post the end of the quarter. We're not providing any numbers, but just remember that 36 is total global streaming subscribers rich, not just paramount+.

Thanks a lot Rich. Operator we have time for one last question.

Thank you. Our next question comes from the line of John Janedis with Wolfe Research. Please proceed with your question.

Thank you. Bob, a lot of questions have been coming up about the value of traditional linear networks and the historical pricing model breaking as direct-to-consumer rollouts accelerate. So I wanted to ask you to what extent do you see changes in pricing for TV or cable networks as Paramount+ scales into the 10s of millions domestically? And then separately how are you thinking about the go-to-market strategy and programming budget going forward for Showtime, is the range of 10 to 15 originals a year in the ballpark or does that need to be stepped up?

Yeah, sure John. So on your first question, I'd start with the fact that ViacomCBS is a critically important content supplier to the MVPD ecosystem. Why do I say that? We do have a number one linear portfolio on share and we do lead on a range of key demographics. Within that we have must have content including sports, including the NFL. Beyond that, we have a really broad opportunity to work with them to create value. And you see that, for example, as we deploy our assets in the advanced ad space and we have advanced ad partnerships with most of the large MVPDS at this point. And more recently, we've become a supplier to the app space, with both free and paid streaming products, and we supply those to both their set top box and their broadband only infrastructure, things like Flex. So that gives us even more to work with. And you look at 2020 and you look at through the first quarter of 2021 and you see that we're using that asset base to consistently close deals, deals with companies that are formidable, the likes of Comcast, Verizon, YouTube, Hulu. And when you take the contractual -- when you take that, and then you combine the contractual rate inclusive increases for deals that are in flight, you've seen that drive affiliate growth in incremental distribution in linear. So it's a powerful combination. As we look forward, including to a world as you described with did you see [ph] Paramount+ growing etc. We like our position, we are among the most important content suppliers in the industry, we know how to get deals done. The addition of streaming, including Paramount+ gives us even more to work with. And remember, that helps us drive value for those customers…

Thanks, Bob. And thank you all for joining us. That concludes our earnings call.

Thank you ladies and gentlemen. That concludes today's conference. You may now disconnect your lines and have a wonderful day.