VSNT 10-K & 10-Q changes, risk factors and insider trading

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 AboutRegarding Forward Looking Statements” and “Item 1A. Risk Factors.”

•Revenue of $1.69$1.64 billion and $1.71 billion for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $3.33 billion and $3.41 billion for the six months ended June 30, 2026 and 2025, respectively.

•Net income attributable to Versant of $286$211 million and $367$302 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $497 million and $669 million for the six months ended June 30, 2026 and 2025, respectively.

•Adjusted EBITDA of $704$624 million and $757$685 million for the three months ended MarchJune 31,30, 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.

•Cash flows from operations of $585$967 million and $478$1,113 million for threethe six months ended MarchJune 31,30, 2026 and 2025, respectively.

•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 continueexperience toin experience,the future, affect pricing and the willingness of advertisers to purchase advertising.

Linear distribution revenue decreased infor the three and six months ended MarchJune 31,30, 2026 as compared to the corresponding prior year periods, primarily due to continued declines in subscribers, which were 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.”

We expect to experience continued ratings declines atin ourthe networksnumber of subscribers and continuedlinear shiftsdistribution towardrevenue, digital advertising in future periods, and these trends areas further discussed in “Key Factors Affecting Our Business.”

Platforms revenue increased for the three and six months ended MarchJune 31,30, 2026,2026 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 platformplatform, resultingwhich fromreflect underlying box office performance, and video-on-demand transactions, andas well as incremental revenue from aour new acquisition.cinema operating platform. The increaserevenue growth at GolfNow was alsoprimarily 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.

Content licensing and other revenue increasedwas constant for the three months ended MarchJune 31,30, 2026,2026 and increased for the six months ended June 30, 2026 as compared to the corresponding prior year period, primarily due to timing of content licensing agreements, which includes the impact of a large licensing agreement recognized induring the currentfirst period.quarter of 2026.

Programming and production costs decreased for the three and six months ended MarchJune 31,30, 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,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 threefirst monthsquarter ended March 31,of 2026.

Other costs of revenue increased for the three and six months ended MarchJune 31,30, 2026, as compared to the corresponding prior year periods, primarily due to higher transactional volumes related to our digital platforms, andpartially increasedoffset by decreased costs fromas a newresult acquisition.of our divestiture of SportsEngine during the second quarter of 2026.

Selling, general and administrative expense increased for the three and six months ended MarchJune 31,30, 2026, as compared to the corresponding prior year periods, 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, which primarily relatingrelate to the sale of advertising. PriorThese toincreases were partially offset by transaction and transaction-related costs of $32 million and $44 million, respectively, recorded during the three and six months ended June 30, 2025 in connection with the Separation, ouras combinedwell financialas 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 operatingdecreased costs as a standaloneresult companyof followingour divestiture of SportsEngine during the Separation.second quarter of 2026.

Depreciation and amortization expense increased for the three and six months ended MarchJune 31,30, 2026,2026 as compared to the corresponding prior year period, 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.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 periodperiods related to certain intangible assets that did not transfer to Versant following the Separation.

Interest expense for the three and six months ended MarchJune 31,30, 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.

Investment and other income, net, for the three and six months ended MarchJune 31,30, 2026 was primarily comprised of interest income on cash and cash equivalents.

Our effective income tax rate was 28.1%34.6% and 26.4%26.0% for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and 31.0% and 26.2% for the six months ended June 30, 2026 and 2025, respectively. The decreaseincrease in income tax expense for the three months ended March 31, 2026 was primarily due to lower income before income taxes. The effective income tax rate for the three and six months ended MarchJune 31,30, 2026 wasis impactedlargely by the adjustment relateddue to assets$31 held-for-sale,million which had no correspondingof income tax benefit.expense Weassociated expect an increased effective tax rate inwith the secondSportsEngine quarterdivestiture, of 2026 due to a noncash income tax chargeprimarily resulting from the completiondifferences ofin the sale.book and tax basis for goodwill (see Note 9).

Adjusted EBITDA is a non-GAAP financial measure and is thea primarykey basismeasure used to measureassess the operational strength and performance of our businessbusiness, 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.

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 uponat 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 threefirst monthsquarter ended March 31,of 2026, we entered into variable-to-fixed interest rate swaps totaling $1.0 billion, which effectively convertconverted a portion of our variable-rate borrowings to fixed rates. As a result, as of MarchJune 31,30, 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.

Our Term Loan A Facility and the Revolving Credit Facility contain a financial covenant that requirerequires 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 MarchJune 31,30, 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.

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.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.

Net cash provided by operating activities increaseddecreased for the threesix months ended MarchJune 31,30, 2026 as compared to the threesix months ended MarchJune 31,30, 2025, primarily due to a net favorableunfavorable change in net income after noncash adjustments, partially offset by an increase related to operating assets and liabilities, which was partially offset by decreases in net income and due to deferred income taxes.liabilities. The changeincrease inrelated 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.

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 duringfor the threesix months ended MarchJune 31,30, 2026 are not comparable to the amounts and timing of operating receipts and payments for the threesix months ended MarchJune 31,30, 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.

Net cash used in investing activities increased during the threesix months ended MarchJune 31,30, 2026 as compared to the threesix months ended MarchJune 31,30, 2025, primarily due to cash spent for business acquisitions and investments during the threesix months ended MarchJune 31,30, 2026. InThese addition,increases capitalwere expenditurespartially increasedoffset forby proceeds from the threesale monthsof endedour MarchSportsEngine 31, 2026, due to increased spending required to operate as a standalone company.business.

Net cash used in financing activities during threethe six months ended MarchJune 31,30, 2026 primarily included a $2.25 billion cash payment to Comcast as consideration for assets that were contributed to us in connection with the SeparationSeparation, share repurchases of $200 million and ourdividends shareof repurchases,$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 $454$1.03 millionbillion 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.

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.

On MarchApril 3,22, 2026, ourwe Board of Directors declaredpaid our first quarter dividend of $0.375 per share, which was paid on April 22, 2026.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 JulyOctober 22, 2026 to shareholders of record as of the close of business on JulyOctober 1, 2026.

In May 2026, we entered into aan newamended lease agreement for our corporate headquarters office locationoffices in New York City, New York. See Note 116 for additional information.