ITV PLC (LSE:ITV), the UK's largest commercial broadcaster, expects its Studios division to deliver margins at the lower end of its 13% to 15% target range this year, reflecting a shift in revenue mix even as the unit posts good top-line growth.
The company said revenue, margin and profit at ITV Studios would be weighted to the second half, driven by the phasing of large scripted deliveries and high-margin licensing deals.
The update came as ITV reported a mixed first quarter, with group total external revenue up 1% in the three months to 31 March but total revenue flat year on year.
ITV Studios was the standout performer, delivering total revenue growth of 4% on the back of an 8% jump in external revenue.
That was driven by deliveries to global streaming platforms, including Skyscraper Live for Netflix, Rivals series two for Disney+, and Love Island US: Beyond the Villa series two for Peacock.
Internal revenue at the Studios arm fell 7%, reflecting a lower volume of soaps and daytime content following previously announced scheduling and production changes.
The Media & Entertainment (M&E) division saw revenue decline 2%, though 12% growth in digital revenue largely offset weaker linear advertising.
Digital advertising revenue rose 14%, supported by what ITV described as a record-breaking start to the year for its ITVX streaming platform, with total streaming hours up 13%.
Total advertising revenue fell 1.5% in the first quarter, better than the company's own guidance.
ITV expects a significant improvement in the current quarter, forecasting total advertising revenue up around 10% in Q2 and a strong July, buoyed by demand around the men's football World Cup.
Chief executive Carolyn McCall said ITV was monitoring the difficult geopolitical environment but remained focused on what it could control.
The broadcaster reiterated it was in active discussions with Sky regarding a possible sale of the M&E business, following its announcement in November 2025, and would update the market in due course.
ITV said it remained on track to deliver its full-year guidance of good revenue growth in Studios and strong profitable digital revenue growth in M&E.