FISCAL 2023 FOURTH QUARTER AND FULL YEAR KEY FINANCIAL HIGHLIGHTS

  • Fourth quarter revenues were $2.43 billion, compared to $2.67 billion in the prior year, reflecting the absence of the extra week in the prior year and the negative impact from foreign currency fluctuations
  • Net loss in the quarter was $(32) million, inclusive of $166 million related to higher non-cash write- downs and restructuring charges, compared to net income of $127 million in the prior year, which included a $149 million tax benefit
  • Fourth quarter Total Segment EBITDA was $341 million, compared to $315 million in the prior year
  • Digital revenues accounted for over 50% of total revenues for the full year, marking a key inflection point in the transformation of the Company
  • The success of the Professional Information Business has transformed Dow Jones. Segment EBITDA rose 25% for the fourth quarter and 14% for the full year, bolstered by the addition of CMA and OPIS and robust growth in Risk & Compliance revenues
  • At the Subscription Video Services Segment, Foxtel Group saw streaming revenue growth more than offset broadcast declines for the fourth quarter and full year, as total paid streaming subscribers reached nearly 3.1 million
  • Foxtel Group is nearing completion of its external debt refinancing which is expected to provide a pathway for repayment of News Corp’s shareholder loans

News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months and fiscal year ended June 30, 2023 (includes 13 and 52 weeks, respectively, compared to 14 and 53 weeks in the three months and fiscal year ended June 30, 2022, respectively).

Commenting on the results, Chief Executive Robert Thomson said:

“News Corp's Fiscal 2023 results highlighted the durability and depth of our revenue streams and the impact of stringent cost controls as we navigated challenging macro conditions, supply chain pressures and currency headwinds. We achieved full year Fiscal 2023 revenues of $9.9 billion and profits of over $1.4 billion - the second highest profitability ever recorded by the Company. Our results showed marked improvement in the second half, so with inflation abating, interest rates plateauing and incipient signs of stability in the housing market, we have sound reasons for optimism about the coming quarters.

For the first time, digital accounted for over 50% of News Corp's revenues for the full year, marking a profound transformation during the past decade. That momentum is surely gathering pace in the age of generative AI, which we believe presents a remarkable opportunity to create a new stream of revenues, while allowing us to reduce costs across the business. We are already in active negotiations to establish a value for our unique content sets and IP that will play a crucial role in the future of AI.

Dow Jones posted its highest profitability for both the quarter and the full year since we acquired the company - helped, in particular, by impressive results in the burgeoning professional information business. Not only has Dow Jones doubled its profitability over the past four years but it is also nearing a landmark moment with our lucrative B2B offerings expected to be the largest contributor to profitability in Fiscal 2024 and a key driver of future growth.

At Subscription Video Services, while revenues and profit were impacted by foreign currency headwinds, we achieved growth for the fourth quarter and full year on an adjusted basis – a remarkable turnaround from the recent past and a tribute to the team in Australia. And that turnaround is underscored by Foxtel's imminent completion of a refinancing, which is expected to facilitate repayments of our outstanding shareholder loans beginning in fiscal 2024.”

FOURTH QUARTER RESULTS

The Company reported fiscal 2023 fourth quarter total revenues of $2.43 billion, a 9% decrease compared to $2.67 billion in the prior year period, including the absence of the $110 million, or 4%, benefit from the additional week in the prior year quarter and the $72 million, or 3%, negative impact from foreign currency fluctuations. The decline was largely driven by lower revenues at the Book Publishing segment primarily due to lower book sales and lower revenues at the Digital Real Estate Services segment driven by continued challenging housing market conditions in the U.S. and Australia. The decline was partially offset by higher revenues at the Subscription Video Services segment on a constant currency basis. Adjusted Revenues (which excludes the foreign currency impact, acquisitions and divestitures as defined in Note 2) were down 7% compared to the prior year. Adjusted Revenues does not exclude the impact from the additional week in the prior year.

Net loss for the quarter was $(32) million compared to net income of $127 million in the prior year, primarily due to higher income tax expense driven by the absence of a $149 million tax benefit from an adjustment to valuation allowances in the prior year, higher losses from equity affiliates as a result of a non-cash write-down of REA Group’s investment in PropertyGuru of approximately $81 million and higher impairment and restructuring charges, partially offset by higher Other, net and higher Total Segment EBITDA, as discussed below.

The Company reported fourth quarter Total Segment EBITDA of $341 million, an 8% increase compared to $315 million in the prior year primarily due to cost savings across the businesses related to the previously announced headcount and other cost reductions and lower costs at the Other segment due in part to the absence of one-time legal settlement costs of $20 million recognized in the prior year. The increase was partially offset by lower revenues, as discussed above, and higher sports programming rights costs at Foxtel. Adjusted Total Segment EBITDA (as defined in Note 2) increased 2%. Adjusted Total Segment EBITDA does not exclude the impact from the additional week in the prior year.

Net (loss) income per share attributable to News Corporation stockholders was $(0.01) as compared to $0.19 in the prior year.

Adjusted EPS (as defined in Note 3) were $0.14 compared to $0.37 in the prior year.

FULL YEAR RESULTS

The Company reported fiscal 2023 full year total revenues of $9.88 billion, a 5% decrease compared to $10.39 billion in the prior year, including a $494 million, or 5%, negative impact from foreign currency fluctuations and the absence of the $110 million, or 1%, benefit from the additional week in the prior year. The decrease was driven by lower revenues at the Book Publishing segment primarily due to lower book sales and lower revenues at the Digital Real Estate Services segment primarily due to continued challenging housing market conditions in the U.S. and Australia. The decline was partially offset by growth at the Dow Jones segment, which includes the acquisitions of OPIS and Chemical Market Analytics (“CMA”), and at the Subscription Video Services and News Media segments on a constant currency basis. Adjusted Revenues decreased 2%.

Net income for the full year was $187 million, a 75% decrease compared to $760 million in the prior year. The decrease reflects lower Total Segment EBITDA, as discussed below, higher equity losses of affiliates mainly as a result of a non-cash write-down of REA Group’s investment in PropertyGuru of approximately $81 million, higher income tax expense driven by the absence of a $149 million tax benefit from an adjustment to valuation allowances in the prior year, lower Other, net and higher impairment and restructuring charges.

Total Segment EBITDA for the full year was $1.42 billion, a 15% decrease compared to $1.67 billion in the prior year primarily driven by lower revenues, as discussed above, an $80 million or 5% negative impact from foreign currency fluctuations, higher costs at the Dow Jones segment, higher sports programming costs and higher newsprint pricing. The results also include one-time costs related to the professional fees incurred by the Special Committee and the Company in connection with evaluating the proposal from the Murdoch Family Trust, as well as the fees related to the potential sale of Move. The decline was partially offset by cost savings across the businesses due to headcount and other cost reductions and lower costs at the Digital Real Estate Services segment due to lower broker commissions at REA Group and lower discretionary and employee costs at Move, as well as the absence of legal settlement costs at the Other segment. Adjusted Total Segment EBITDA decreased 15%.

Diluted net income per share attributable to News Corporation stockholders was $0.26 as compared to $1.05 in the prior year.

Adjusted diluted EPS were $0.49 compared to $1.20 in the prior year.

SEGMENT REVIEW

 

For the three months ended

June 30,

For the fiscal years ended

June 30,

 

 

%

 

 

%

2023

2022

Change

2023

2022

Change

(in millions)

Better/

(Worse)

(in millions)

Better/

(Worse)

Revenues:

 

 

 

 

 

 

Digital Real Estate Services

$

369

 

$

443

 

(17

)%

$

1,539

 

$

1,741

 

(12

)%

Subscription Video Services

 

501

 

 

524

 

(4

)%

 

1,942

 

 

2,026

 

(4

)%

Dow Jones

 

546

 

 

565

 

(3

)%

 

2,153

 

 

2,004

 

7

%

Book Publishing

 

446

 

 

513

 

(13

)%

 

1,979

 

 

2,191

 

(10

)%

News Media

 

571

 

 

629

 

(9

)%

 

2,266

 

 

2,423

 

(6

)%

Other

 

 

 

 

%

 

 

 

 

%

Total Revenues

$

2,433

 

$

2,674

 

(9

)%

$

9,879

 

$

10,385

 

(5

)%

 

 

 

 

 

 

 

Segment EBITDA:

 

 

 

 

 

 

Digital Real Estate Services

$

108

 

$

121

 

(11

)%

$

457

 

$

574

 

(20

)%

Subscription Video Services

 

78

 

 

81

 

(4

)%

 

347

 

 

360

 

(4

)%

Dow Jones

 

133

 

 

106

 

25

%

 

494

 

 

433

 

14

%

Book Publishing

 

16

 

 

47

 

(66

)%

 

167

 

 

306

 

(45

)%

News Media

 

45

 

 

33

 

36

%

 

156

 

 

217

 

(28

)%

Other

 

(39

)

 

(73

)

47

%

 

(201

)

 

(221

)

9

%

Total Segment EBITDA

$

341

 

$

315

 

8

%

$

1,420

 

$

1,669

 

(15

)%

Digital Real Estate Services

Fourth Quarter Segment Results

Revenues in the quarter decreased $74 million, or 17%, compared to the prior year, reflecting a $15 million, or 4%, negative impact from foreign currency fluctuations and the absence of the $14 million, or 3%, benefit from the additional week in the prior year period. Segment EBITDA in the quarter decreased $13 million, or 11%, compared to the prior year, primarily due to the lower revenues and a $7 million, or 6%, negative impact from foreign currency fluctuations. The decline was partially offset by lower discretionary and employee costs at Move and lower broker commissions at REA Group driven by the valuation adjustment related to expected trail commissions. Adjusted Revenues and Adjusted Segment EBITDA (as defined in Note 2), which do not exclude the impact from the additional week, decreased 14% and 5%, respectively.

In the quarter, revenues at REA Group decreased $27 million, or 11%, to $223 million, driven by a $15 million, or 6%, negative impact from foreign currency fluctuations, lower Australian residential revenues due to the decline in national listings, most notably in Sydney and Melbourne, and lower financial services revenues due to a decrease in settlement activity. The decline was partially offset by price increases, increased penetration of Premiere Plus, favorable depth penetration and higher revenues from REA India. Australian national residential buy listing volumes in the quarter declined 18% compared to the prior year, with listings in Sydney and Melbourne down 17% and 16%, respectively.

Move’s revenues in the quarter decreased $47 million, or 24%, to $146 million, primarily as a result of lower real estate revenues and the absence of the $14 million, or 7%, benefit from the additional week in the prior year period. Real estate revenues, which represented 79% of total Move revenues, decreased $47 million, or 29%, driven by the continued impact of the macroeconomic environment on the housing market, including higher mortgage rates, which has led to lower lead and transaction volumes. Revenues from the referral model, which includes the ReadyConnect Concierge℠ product, and the traditional lead generation product decreased due to these factors, partially offset by improved lead optimization. The referral model generated 25% of total Move revenues in the quarter compared to 31% in the prior year. Based on Move’s internal data, average monthly unique users of Realtor.com®’s web and mobile sites for the fiscal fourth quarter declined 20% year-over-year to 74 million. Lead volume declined 14%, which was an improvement from the prior quarter.

Full Year Segment Results

Fiscal 2023 full year revenues decreased $202 million, or 12%, compared to the prior year, reflecting a $74 million, or 5%, negative impact from foreign currency fluctuations. Segment EBITDA for fiscal 2023 decreased $117 million, or 20%, compared to the prior year, primarily due to the lower revenues, a $34 million, or 6%, negative impact from foreign currency fluctuations and higher costs at REA India, partially offset by lower broker commissions at REA Group due to the valuation adjustment related to expected trail commissions and lower settlements and lower discretionary and employee costs at Move. Adjusted Revenues and Adjusted Segment EBITDA decreased 8% and 15%, respectively.

In the fiscal year, REA Group’s revenues decreased $92 million, or 9%, to $937 million, primarily driven by a $74 million, or 7%, negative impact from foreign currency fluctuations. Lower Australian residential revenues due to the decline in national listings, most notably in Sydney and Melbourne, and lower financial services revenues due to declines in settlement activity and the adverse impact from a valuation adjustment related to expected trail commissions, were partially offset by price increases, increased depth penetration in the Australian residential products due to the contribution of Premiere Plus, increased depth penetration for commercial products and higher revenues from REA India. Move’s revenues in the fiscal year decreased $110 million, or 15%, to $602 million, primarily due to lower real estate revenues and the absence of the $14 million, or 2%, benefit from the additional week in the prior year, partially offset by 11% growth in advertising revenues. Move’s real estate revenues, which represented 82% of total Move revenues, declined 20%, primarily due to declines in both the traditional lead generation product and the referral model. Lead volumes declined 29%.

Subscription Video Services

Fourth Quarter Segment Results

Revenues of $501 million in the quarter decreased $23 million, or 4%, compared with the prior year, due to a $37 million, or 7%, negative impact from foreign currency fluctuations. Adjusted Revenues of $538 million increased 3% compared to the prior year. Higher revenues from Kayo and BINGE, driven by increases in both volume and pricing, were partially offset by the impact from fewer residential broadcast subscribers. Foxtel Group streaming subscription revenues represented approximately 29% of total circulation and subscription revenues in the quarter, as compared to 23% in the prior year.

As of June 30, 2023, Foxtel’s total closing paid subscribers were over 4.6 million, a 5% increase compared to the prior year, primarily due to the growth in streaming subscribers driven by BINGE and Kayo, partially offset by lower residential broadcast subscribers. Broadcast subscriber churn in the quarter improved to 11.1%, the lowest level since Fiscal 2016, compared to 13.8% in the prior year. Broadcast ARPU for the quarter increased 2% year- over-year to A$84 (US$56).

 

As of June 30,

 

2023

 

2022

 

(in 000's)

Broadcast Subscribers

 

 

Residential

1,341

1,481

Commercial

233

242

Streaming Subscribers (Total (Paid))

 

 

Kayo

1,411 (1,401 paid)

1,312 (1,293 paid)

BINGE

1,541 (1,487 paid)

1,263 (1,192 paid)

Foxtel Now

177 (170 paid)

201 (194 paid)

 

 

 

Total Subscribers (Total (Paid))

4,723 (4,650 paid)

4,529 (4,413 paid)

Segment EBITDA of $78 million in the quarter decreased $3 million, or 4%, compared with the prior year, due to the $6 million, or 8%, negative impact from foreign currency fluctuations. Adjusted Segment EBITDA of $84 million increased 4% compared to the prior year, primarily due to higher revenues in constant currency and lower marketing, employee and transmission costs, partially offset by higher sports programming rights costs, driven mainly by contractual increases across AFL and NRL.

Full Year Segment Results

Fiscal 2023 full year revenues declined $84 million, or 4%, compared with the prior year, due to a $157 million, or 8%, negative impact from foreign currency fluctuations. Adjusted Revenues increased 4% compared to the prior year. Higher streaming revenues, primarily from Kayo and BINGE, higher commercial revenues and higher advertising revenues in constant currency more than offset the revenue declines from lower residential broadcast subscribers. Foxtel Group streaming subscription revenues represented approximately 27% of total circulation and subscription revenues in the fiscal year compared to 20% in the prior year.

Segment EBITDA for fiscal 2023 decreased $13 million, or 4%, compared to the prior year, due to the $29 million, or 8%, negative impact from foreign currency fluctuations. Adjusted Segment EBITDA increased 4%. Higher sports programming costs due to contractual increases across AFL, NRL and Cricket Australia and higher entertainment programming costs were more than offset by the revenue drivers discussed above, as well as lower transmission and marketing costs.

Dow Jones

Fourth Quarter Segment Results

Revenues in the quarter decreased $19 million, or 3%, compared to the prior year, including the absence of $40 million, or 7%, from the additional week in the prior year period and a $13 million contribution from CMA, which was acquired in June 2022. Digital revenues at Dow Jones in the quarter represented 79% of total revenues compared to 76% in the prior year. Adjusted Revenues decreased 6%, which does not exclude the impact from the additional week in the prior year.

Circulation and subscription revenues decreased $2 million, which reflects the absence of a $31 million, or 7%, benefit from the additional week in the prior year and the contribution from the acquisition of CMA. Circulation revenue declined 6%, primarily due to the absence of a $17 million, or 7%, benefit from the additional week in the prior year period, lower print volume and lower revenues from IBD, partially offset by the continued growth in digital-only subscriptions, primarily at The Wall Street Journal. Excluding the absence of the benefit from the additional week in prior year, circulation revenues would have improved 1% compared to the prior year. Professional information business revenues grew 10%, primarily driven by the acquisition of CMA and growth in Risk & Compliance products, partially offset by the absence of a $14 million, or 8%, benefit from the additional week in the prior year. Revenues from the Risk & Compliance products grew 10%, despite being impacted by the absence of the additional week in the prior year. Digital circulation revenues accounted for 70% of circulation revenues for the quarter, compared to 68% in the prior year.

During the fourth quarter, total average subscriptions to Dow Jones’ consumer products reached over 5.2 million, a 7% increase compared to the prior year. Digital-only subscriptions to Dow Jones’ consumer products grew 12%. Total subscriptions to The Wall Street Journal grew 6% compared to the prior year, to over 3.9 million average subscriptions in the quarter. Digital-only subscriptions to The Wall Street Journal grew 10% to 3.4 million average subscriptions in the quarter, and represented 86% of total Wall Street Journal subscriptions.

For the three months ended June 30,

 

2023

 

2022

 

% Change

(in thousands, except %)

 

 

 

 

Better/(Worse)

The Wall Street Journal

 

 

 

Digital-only subscriptions

3,406

3,095

10 %

Total subscriptions

3,966

3,749

6 %

Barron’s Group

 

 

 

Digital-only subscriptions

1,018

848

20 %

Total subscriptions

1,168

1,038

13 %

Total Consumer

 

 

 

Digital-only subscriptions

4,510

4,029

12 %

Total subscriptions

5,242

4,898

7 %

Advertising revenues decreased $16 million, or 14%, primarily due to 18% and 10% declines in print and digital advertising revenues, respectively, driven primarily by the absence of a $9 million, or 8%, benefit from the additional week in the prior year period and continued weakness in print advertising, primarily driven by lower technology spending. Excluding the absence of the benefit from the additional week in the prior year, advertising would have decreased 6% compared to the prior year. Digital advertising accounted for 60% of total advertising revenues in the quarter, compared to 58% in the prior year.

Segment EBITDA for the quarter increased $27 million, or 25%, which includes a $5 million contribution from the acquisition of CMA. The growth reflects lower employee and marketing costs and the absence of $2 million in transaction costs related to the acquisition of CMA in the prior year, partially offset by the lower revenues discussed above. Adjusted Segment EBITDA increased 17%.

Full Year Segment Results

Fiscal 2023 full year revenues increased $149 million, or 7%, compared to the prior year, which includes the $97 million and $68 million impacts from the acquisitions of OPIS and CMA, respectively, as well as growth in Risk & Compliance products and digital circulation revenues. The revenue growth was partially offset by the absence of a $40 million, or 2%, benefit from the additional week in the prior year, lower advertising revenues and an $18 million, or 1%, negative impact from foreign currency fluctuations. Adjusted Revenues were flat compared to the prior year. Digital revenues at Dow Jones represented 78% of total revenues compared to 75% in the prior year.

Circulation and subscription revenues increased $173 million, or 11%, which includes higher contributions from the acquisitions of OPIS and CMA. The results also reflect the negative impact from the absence of a $31 million, or 2%, benefit from the additional week in the prior year and an $18 million, or 2%, negative impact from foreign currency fluctuations. Circulation revenues were flat compared to the prior year, reflecting continued strong growth in digital-only subscriptions at The Wall Street Journal, offset by lower print volumes and the absence of an additional week in the prior year. Professional information business revenues grew 31%, driven by the acquisitions of OPIS and CMA as well as 11% growth in Risk & Compliance products, which reached over $250 million in revenues in fiscal 2023, despite the negative impact of foreign exchange fluctuations and the absence of an additional week from the prior year. Digital circulation revenues accounted for 69% of circulation revenues for the year, compared to 67% in the prior year.

Advertising revenue decreased $36 million, or 8%, primarily due to a 12% decrease in print advertising and a 5% decrease in digital advertising, which include the absence of the benefit from the additional week in the prior year. Digital advertising revenues accounted for 61% of total advertising revenues for the year, compared to 59% in the prior year.

Segment EBITDA for fiscal 2023 increased $61 million, or 14%, compared to the prior year, primarily due to higher revenues, as noted above, and the absence of $25 million of OPIS and CMA-related transaction costs incurred in fiscal 2022, partially offset by higher employee costs primarily related to the OPIS and CMA acquisitions. Adjusted Segment EBITDA decreased 4%.

Book Publishing

Fourth Quarter Segment Results

Revenues in the quarter decreased $67 million, or 13%, compared to the prior year, primarily driven by lower book sales due to lower consumer demand industry-wide, weak frontlist performance, which contributed to higher returns, and the absence of a $20 million, or 4%, benefit from the additional week in the prior year period. Key titles in the quarter included Magnolia Table, Volume 3 by Joanna Gaines, Demon Copperhead by Barbara Kingsolver and Remarkably Bright Creatures by Shelby Van Pelt. Adjusted Revenues decreased 13%. Digital sales declined 10% compared to the prior year primarily due to lower e-book sales. Digital sales represented 25% of Consumer revenues for the quarter compared to 24% in the prior year. Backlist sales represented approximately 59% of total revenues in the quarter.

Segment EBITDA for the quarter decreased $31 million, or 66%, compared to the prior year, primarily driven by the lower revenues discussed above and increased expense from higher levels of royalty write-offs. The decrease was also due to higher costs resulting from ongoing supply chain challenges and inventory and inflationary pressures on manufacturing, freight and distribution costs, partially offset by lower marketing and employee costs. Adjusted Segment EBITDA decreased 70%.

Full Year Segment Results

Fiscal 2023 full year revenues decreased $212 million, or 10%, compared to the prior year, primarily driven by lower book sales due to lower consumer demand industry-wide, weak frontlist performance and Amazon’s reset of its inventory levels and rightsizing of its warehouse footprint, which was mostly reflected in the first half. The decline also reflects a $58 million, or 3%, negative impact from foreign currency fluctuations and the absence of the $20 million, or 1%, benefit from the additional week in the prior year. Adjusted Revenues decreased 8% compared to the prior year. Digital sales decreased 5% compared to the prior year, driven by lower e-book sales. Digital sales represented 22% of Consumer revenues for the year compared to 21% in the prior year. Backlist sales represented approximately 60% of total revenues in the year.

Segment EBITDA for fiscal 2023 decreased $139 million, or 45%, from the prior year primarily due to lower revenues, as discussed above, and higher manufacturing, freight and distribution costs related to ongoing supply chain challenges and inventory and inflationary pressures, partially offset by lower costs due to lower sales volumes and lower employee costs. These supply chain challenges and inventory and inflationary pressures are expected to continue to impact the business in the near term, but are expected to moderate in fiscal 2024. Adjusted Segment EBITDA decreased 44%.

News Media

Fourth Quarter Segment Results

Revenues in the quarter decreased $58 million, or 9%, as compared to the prior year, primarily driven by the absence of a $36 million, or 6%, benefit from the additional week in the prior year period and the $18 million, or 3%, negative impact from foreign currency fluctuations. Within the segment, revenues at News Corp Australia and News UK decreased 15% and 7%, respectively, as both were impacted by the absence of the additional week in the prior year and negative foreign currency fluctuations. Adjusted Revenues for the segment decreased 7% compared to the prior year.

Circulation and subscription revenues decreased $21 million, or 7%, compared to the prior year, primarily due to the absence of a $19 million, or 6%, benefit from the additional week in the prior year period, a $9 million, or 3%, negative impact from foreign currency fluctuations and lower print volume. The decline was partially offset by cover price increases and digital subscriber growth. Excluding the absence of the benefit from the additional week in the prior year and the impact of negative foreign currency fluctuations, circulation and subscription revenues would have increased 2%.

Advertising revenues decreased $40 million, or 15%, compared to the prior year, primarily due to the absence of a $15 million, or 6%, benefit from the additional week in the prior year period, lower print and digital advertising at News Corp Australia, lower print advertising at News UK and a $6 million, or 2%, negative impact from foreign currency fluctuations. The decline was partially offset by growth in digital advertising at News UK. Excluding the absence of the benefit from the additional week in the prior year and the impact of negative foreign currency fluctuations, advertising revenues would have decreased 7%.

In the quarter, Segment EBITDA increased $12 million, or 36%, compared to the prior year, driven by cost saving initiatives, the Company’s continued transition to digital products and approximately $7 million of lower costs related to TalkTV and other digital investments, mainly at News Corp Australia. The increase was partially offset by lower revenues, as discussed above, higher newsprint, production and distribution costs due to supply chain and inflationary pressures and a $2 million, or 6%, negative impact from foreign currency fluctuations. Adjusted Segment EBITDA increased 42%.

Digital revenues represented 36% of News Media segment revenues in the quarter, compared to 35% in the prior year, and represented 34% of the combined revenues of the newspaper mastheads. Digital subscribers and users across key properties within the News Media segment are summarized below:

  • Closing digital subscribers at News Corp Australia as of June 30, 2023 were 1,059,000 (943,000 for news mastheads), compared to 964,000 (882,000 for news mastheads) in the prior year (Source: Internal data)
  • The Times and Sunday Times closing digital subscribers, including the Times Literary Supplement, as of June 30, 2023 were 565,000, compared to 508,000 in the prior year (Source: Internal data). During the fourth quarter of fiscal 2023, News UK updated its methodology for counting subscribers receiving a print and digital bundle to begin allocating these subscribers between print and digital based on the number of print copies served during the week instead of wholly to print. This change resulted in a 59,000 and 63,000 increase to the closing digital subscriber number at June 30, 2023 and 2022, respectively
  • The Sun’s digital offering reached 159 million global monthly unique users in June 2023 (Source: Meta Pixel; prior year comparable statistic unavailable due to source change)
  • New York Post’s digital network reached 145 million unique users in June 2023, compared to 198 million in the prior year (Source: Google Analytics)

Full Year Segment Results

Fiscal 2023 full year revenues decreased $157 million, or 6%, compared to the prior year, which includes a $187 million, or 7%, negative impact from foreign currency fluctuations and the absence of a $36 million, or 1%, benefit from the additional week in the prior year. Within the segment, revenues at News Corp Australia and News UK decreased 8% and 7%, respectively, as both were impacted by negative foreign currency fluctuations and the absence of the additional week in the prior year, while the New York Post saw higher revenues of 4%. Adjusted Revenues for the segment increased 1% compared to the prior year.

Circulation and subscription revenues decreased $68 million, or 6%, compared to the prior year, primarily due to a $93 million, or 8%, negative impact from foreign currency fluctuations, print volume declines and the absence of a $19 million, or 2%, benefit from the additional week in the prior year, partially offset by cover price increases, digital subscriber growth and higher content licensing revenues. Advertising revenues decreased $98 million, or 10%, compared to the prior year, driven by a $70 million, or 7%, negative impact from foreign currency fluctuations, lower print advertising at News UK, the absence of the additional week in the prior year and lower digital and print advertising at News Corp Australia, partially offset by growth in digital advertising at News UK.

Segment EBITDA for fiscal 2023 decreased $61 million, or 28%, compared to the prior year, driven by lower revenues, as discussed above, the impact of inflationary pressures on costs, primarily in newsprint, and higher costs related to TalkTV and other digital investments, primarily at News Corp Australia. The decline was partially offset by cost savings initiatives across the businesses, particularly News Corp Australia and News UK. Adjusted Segment EBITDA decreased 24% compared to the prior year.

CASH FLOW

The following table presents a reconciliation of net cash provided by operating activities to free cash flow and free cash flow available to News Corporation:

For the fiscal years ended June 30,

 

2023

 

 

 

2022

 

(in millions)

Net cash provided by operating activities

$

1,092

 

$

1,354

 

Less: Capital expenditures

 

(499

)

 

(499

)

Free cash flow

 

593

 

 

855

 

Less: REA Group free cash flow

 

(234

)

 

(279

)

Plus: Cash dividends received from REA Group

 

91

 

 

87

 

Free cash flow available to News Corporation

$

450

 

$

663

 

Net cash provided by operating activities of $1,092 million for the fiscal year ended June 30, 2023 was $262 million lower than $1,354 million in the prior year, primarily due to lower Total Segment EBITDA, as noted above.

Free cash flow in the fiscal year ended June 30, 2023 was $593 million compared to $855 million in the prior year. Free cash flow available to News Corporation in the fiscal year ended June 30, 2023 was $450 million compared to $663 million in the prior year. The decrease in both free cash flow and free cash flow available to News Corporation was primarily due to lower cash provided by operating activities, as mentioned above. Foxtel’s capital expenditures for the fiscal year ended June 30, 2023 were $152 million compared to $189 million in the prior year.

Free cash flow and free cash flow available to News Corporation are non-GAAP financial measures. Free cash flow is defined as net cash provided by operating activities, less capital expenditures, and free cash flow available to News Corporation is defined as free cash flow, less REA Group free cash flow, plus cash dividends received from REA Group.

The Company believes free cash flow provides useful information to management and investors about the Company’s liquidity and cash flow trends. The Company believes free cash flow available to News Corporation, which adjusts free cash flow to exclude REA Group’s free cash flow and include dividends received from REA Group, provides management and investors with a measure of the amount of cash flow that is readily available to the Company, as REA Group is a separately listed public company in Australia and must declare a dividend in order for the Company to have access to its share of REA Group’s cash balance. The Company believes free cash flow available to News Corporation provides a more conservative view of the Company’s free cash flow because this presentation includes only that amount of cash the Company actually receives from REA Group, which has generally been lower than the Company’s unadjusted free cash flow. A limitation of both free cash flow and free cash flow available to News Corporation is that they do not represent the total increase or decrease in the cash balance for the period. Management compensates for the limitation of free cash flow and free cash flow available to News Corporation by also relying on the net change in cash and cash equivalents as presented in the Company’s consolidated statements of cash flows prepared in accordance with GAAP which incorporates all cash movements during the period.

OTHER ITEMS

Dividends

The Company declared today a semi-annual cash dividend of $0.10 per share for Class A Common Stock and Class B Common Stock. This dividend is payable on October 11, 2023 to stockholders of record as of September 13, 2023.

COMPARISON OF NON-GAAP TO U.S. GAAP INFORMATION

Adjusted Revenues, Total Segment EBITDA, Adjusted Total Segment EBITDA, Adjusted Segment EBITDA, adjusted net income attributable to News Corporation stockholders, Adjusted EPS, constant currency revenues, free cash flow and free cash flow available to News Corporation are non-GAAP financial measures contained in this earnings release. The Company believes these measures are important tools for investors and analysts to use in assessing the Company’s underlying business performance and to provide for more meaningful comparisons of the Company’s operating performance between periods. These measures also allow investors and analysts to view the Company’s business from the same perspective as Company management. These non- GAAP measures may be different than similar measures used by other companies and should be considered in addition to, not as a substitute for, measures of financial performance calculated in accordance with GAAP. Reconciliations for the differences between non-GAAP measures used in this earnings release and comparable financial measures calculated in accordance with U.S. GAAP are included in Notes 1, 2, 3 and 4 and the reconciliation of net cash provided by operating activities to free cash flow and free cash flow available to News Corporation is included above.

Conference call

News Corporation’s earnings conference call can be heard live at 5:00 p.m. EDT on August 10, 2023. To listen to the call, please visit http://investors.newscorp.com.

Cautionary Statement Concerning Forward-Looking Statements

This document contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding trends and uncertainties affecting the Company’s business, results of operations and financial condition, the Company’s strategy and strategic initiatives, including potential acquisitions, investments and dispositions, the Company’s cost savings initiatives, including announced headcount reductions, and the outcome of contingencies such as litigation and investigations. These statements are based on management’s views and assumptions regarding future events and business performance as of the time the statements are made. Actual results may differ materially from these expectations due to the risks, uncertainties and other factors described in the Company’s filings with the Securities and Exchange Commission. More detailed information about factors that could affect future results is contained in our filings with the Securities and Exchange Commission. The “forward- looking statements” included in this document are made only as of the date of this document and we do not have and do not undertake any obligation to publicly update any “forward-looking statements” to reflect subsequent events or circumstances, and we expressly disclaim any such obligation, except as required by law or regulation.

About News Corporation

News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. The company comprises businesses across a range of media, including: digital real estate services, subscription video services in Australia, news and information services and book publishing. Headquartered in New York, News Corp operates primarily in the United States, Australia, and the United Kingdom, and its content and other products and services are distributed and consumed worldwide. More information is available at: www.newscorp.com.

 

NEWS CORPORATION

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)

 

For the three months ended June 30,

 

For the fiscal years ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenues:

 

 

 

 

Circulation and subscription

$

1,129

 

$

1,177

 

$

4,447

 

$

4,425

 

Advertising

 

424

 

 

479

 

 

1,687

 

 

1,821

 

Consumer

 

425

 

 

491

 

 

1,899

 

 

2,106

 

Real estate

 

293

 

 

359

 

 

1,189

 

 

1,347

 

Other

 

162

 

 

168

 

 

657

 

 

686

 

Total Revenues

 

2,433

 

 

2,674

 

 

9,879

 

 

10,385

 

Operating expenses

 

(1,271

)

 

(1,355

)

 

(5,124

)

 

(5,124

)

Selling, general and administrative

 

(821

)

 

(1,004

)

 

(3,335

)

 

(3,592

)

Depreciation and amortization

 

(178

)

 

(183

)

 

(714

)

 

(688

)

Impairment and restructuring charges

 

(85

)

 

(27

)

 

(150

)

 

(109

)

Equity losses of affiliates

 

(84

)

 

(3

)

 

(127

)

 

(13

)

Interest expense, net

 

(22

)

 

(31

)

 

(100

)

 

(99

)

Other, net

 

11

 

 

(91

)

 

1

 

 

52

 

(Loss) income before income tax (expense) benefit

 

(17

)

 

(20

)

 

330

 

 

812

 

Income tax (expense) benefit

 

(15

)

 

147

 

 

(143

)

 

(52

)

Net (loss) income

 

(32

)

 

127

 

 

187

 

 

760

 

Less: Net loss (income) attributable to noncontrolling interests

24

(17

)

(38

)

(137

)

Net (loss) income attributable to News Corporation stockholders

$

(8

)

$

110

 

$

149

 

$

623

 

 

Weighted average shares outstanding:

 

 

 

 

Basic

 

573

 

 

586

 

 

576

 

 

590

 

Diluted

 

573

 

 

589

 

 

579

 

 

593

 

 

Net (loss) income attributable to News Corporation stockholders per share:

Basic

$

(0.01

)

$

0.19

 

$

0.26

 

$

1.06

 

Diluted

$

(0.01

)

$

0.19

 

$

0.26

 

$

1.05

 

 

NEWS CORPORATION

 

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions)

 

 

As of June 30, 2023

As of June 30, 2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,833

 

$

1,822

 

Receivables, net

 

 

1,425

 

 

1,502

 

Inventory, net

 

 

311

 

 

311

 

Other current assets

 

 

484

 

 

458

 

Total current assets

 

 

4,053

 

 

4,093

 

 

 

 

 

Non-current assets:

 

 

 

Investments

 

 

427

 

 

488

 

Property, plant and equipment, net

 

 

2,042

 

 

2,103

 

Operating lease right-of-use assets

 

 

1,036

 

 

891

 

Intangible assets, net

 

 

2,489

 

 

2,671

 

Goodwill

 

 

5,140

 

 

5,169

 

Deferred income tax assets

 

 

393

 

 

422

 

Other non-current assets

 

 

1,341

 

 

1,384

 

Total assets

$

16,921

 

$

17,221

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

440

 

$

411

 

Accrued expenses

 

 

1,123

 

 

1,236

 

Deferred revenue

 

 

622

 

 

604

 

Current borrowings

 

 

347

 

 

293

 

Other current liabilities

 

 

953

 

 

975

 

Total current liabilities

 

 

3,485

 

 

3,519

 

 

 

 

 

Non-current liabilities:

 

 

 

Borrowings

 

 

2,620

 

 

2,776

 

Retirement benefit obligations

 

 

134

 

 

155

 

Deferred income tax liabilities

 

 

163

 

 

198

 

Operating lease liabilities

 

 

1,128

 

 

947

 

Other non-current liabilities

 

 

446

 

 

483

 

Commitments and contingencies

 

 

 

Equity:

 

 

 

Class A common stock

 

 

4

 

 

4

 

Class B common stock

 

 

2

 

 

2

 

Additional paid-in capital

 

 

11,449

 

 

11,779

 

Accumulated deficit

 

 

(2,144

)

 

(2,293

)

Accumulated other comprehensive loss

 

 

(1,247

)

 

(1,270

)

Total News Corporation stockholders' equity

 

 

8,064

 

 

8,222

 

Noncontrolling interests

 

 

881

 

 

921

 

Total equity

 

 

8,945

 

 

9,143

 

Total liabilities and equity

$

16,921

 

$

17,221

 

 

NEWS CORPORATION

 

NCONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

 

For the fiscal years ended June 30,

 

 

2023

 

 

 

2022

 

Operating activities:

 

 

Net income

$

187

 

$

760

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

Depreciation and amortization

 

714

 

 

688

 

Operating lease expense

 

109

 

 

125

 

Equity losses of affiliates

 

127

 

 

13

 

Cash distributions received from affiliates

 

7

 

 

23

 

Impairment charges

 

25

 

 

15

 

Other, net

 

(1

)

 

(52

)

Deferred income taxes and taxes payable

 

6

 

 

(125

)

Change in operating assets and liabilities, net of acquisitions:

 

 

Receivables and other assets

 

(146

)

 

(51

)

Inventories, net

 

(2

)

 

(87

)

Accounts payable and other liabilities

 

66

 

 

45

 

Net cash provided by operating activities

 

1,092

 

 

1,354

 

Investing activities:

 

 

Capital expenditures

 

(499

)

 

(499

)

Acquisitions, net of cash acquired

 

(17

)

 

(1,501

)

Investments in equity affiliates

 

(43

)

 

(71

)

Other investments

 

(60

)

 

(41

)

Proceeds from property, plant and equipment and other asset dispositions

 

66

 

 

3

 

Other, net

 

(21

)

 

33

 

Net cash used in investing activities

 

(574

)

 

(2,076

)

Financing activities:

 

 

Borrowings

 

514

 

 

1,690

 

Repayment of borrowings

 

(589

)

 

(838

)

Repurchase of shares

 

(243

)

 

(179

)

Dividends paid

 

(174

)

 

(175

)

Other, net

 

(9

)

 

(94

)

Net cash (used in) provided by financing activities

 

(501

)

 

404

 

Net change in cash and cash equivalents

 

17

 

 

(318

)

Cash and cash equivalents, beginning of year

 

1,822

 

 

2,236

 

Exchange movement on opening cash balance

 

(6

)

 

(96

)

Cash and cash equivalents, end of year

$

1,833

 

$

1,822

 

NOTE 1 – TOTAL SEGMENT EBITDA

Segment EBITDA is defined as revenues less operating expenses and selling, general and administrative expenses. Segment EBITDA does not include: depreciation and amortization, impairment and restructuring charges, equity losses of affiliates, interest (expense) income, net, other, net and income tax (expense) benefit. Management believes that Segment EBITDA is an appropriate measure for evaluating the operating performance of the Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources within the Company’s businesses. Segment EBITDA provides management, investors and equity analysts with a measure to analyze the operating performance of each of the Company’s business segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

Total Segment EBITDA is a non-GAAP measure and should be considered in addition to, not as a substitute for, net income (loss), cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment and restructuring charges, which are significant components in assessing the Company’s financial performance. The Company believes that the presentation of Total Segment EBITDA provides useful information regarding the Company’s operations and other factors that affect the Company’s reported results. Specifically, the Company believes that by excluding certain one-time or non-cash items such as impairment and restructuring charges and depreciation and amortization, as well as potential distortions between periods caused by factors such as financing and capital structures and changes in tax positions or regimes, the Company provides users of its consolidated financial statements with insight into both its core operations as well as the factors that affect reported results between periods but which the Company believes are not representative of its core business. As a result, users of the Company’s consolidated financial statements are better able to evaluate changes in the core operating results of the Company across different periods. The following tables reconcile net (loss) income to Total Segment EBITDA for the three months and fiscal years ended June 30, 2023 and 2022:

For the three months ended June 30,

 

2023

 

 

 

2022

 

 

Change

 

% Change

 

 

(in millions)

 

 

 

 

Net (loss) income

$

(32

)

 

$

127

 

 

$

(159

)

 

**

Add:

 

 

 

 

 

 

 

Income tax expense (benefit)

 

15

 

 

 

(147

)

 

 

162

 

 

**

Other, net

 

(11

)

 

 

91

 

 

 

(102

)

 

**

Interest expense, net

 

22

 

 

 

31

 

 

 

(9

)

 

(29

)%

Equity losses of affiliates

 

84

 

 

 

3

 

 

 

81

 

 

**

Impairment and restructuring charges

 

85

 

 

 

27

 

 

 

58

 

 

**

Depreciation and amortization

 

178

 

 

 

183

 

 

 

(5

)

 

(3

)%

Total Segment EBITDA

$

341

 

 

$

315

 

 

$

26

 

 

8

%

 

** - Not meaningful

For the fiscal years ended June 30,

 

 

2023

 

 

 

2022

 

 

Change

 

% Change

 

 

(in millions)

 

 

 

 

Net income

$

187

 

$

760

 

$

(573

)

(75

)%

Add:

 

 

 

 

Income tax expense

 

143

 

 

52

 

 

91

 

**

Other, net

 

(1

)

 

(52

)

 

51

 

98

%

Interest expense, net

 

100

 

 

99

 

 

1

 

1

%

Equity losses of affiliates

 

127

 

 

13

 

 

114

 

**

Impairment and restructuring charges

 

150

 

 

109

 

 

41

 

38

%

Depreciation and amortization

 

714

 

 

688

 

 

26

 

4

%

Total Segment EBITDA

$

1,420

 

$

1,669

 

$

(249

)

(15

)%

 

** - Not meaningful

NOTE 2 – ADJUSTED REVENUES, ADJUSTED TOTAL SEGMENT EBITDA AND ADJUSTED SEGMENT EBITDA

The Company uses revenues, Total Segment EBITDA and Segment EBITDA excluding the impact of acquisitions, divestitures, fees and costs, net of indemnification, related to the claims and investigations arising out of certain conduct at The News of the World (the “U.K. Newspaper Matters”), charges for other significant, non-ordinary course legal or regulatory matters (“litigation charges”) and foreign currency fluctuations (“Adjusted Revenues,” “Adjusted Total Segment EBITDA” and “Adjusted Segment EBITDA,” respectively) to evaluate the performance of the Company’s core business operations exclusive of certain items that impact the comparability of results from period to period such as the unpredictability and volatility of currency fluctuations. The Company calculates the impact of foreign currency fluctuations for businesses reporting in currencies other than the U.S. dollar by multiplying the results for each quarter in the current period by the difference between the average exchange rate for that quarter and the average exchange rate in effect during the corresponding quarter of the prior year and totaling the impact for all quarters in the current period.

The calculation of Adjusted Revenues, Adjusted Total Segment EBITDA and Adjusted Segment EBITDA may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what type of events warrant adjustment. Adjusted Revenues, Adjusted Total Segment EBITDA and Adjusted Segment EBITDA are not measures of performance under generally accepted accounting principles and should not be construed as substitutes for amounts determined under GAAP as measures of performance. However, management uses these measures in comparing the Company’s historical performance and believes that they provide meaningful and comparable information to investors to assist in their analysis of our performance relative to prior periods and our competitors.

The following tables reconcile reported revenues and reported Total Segment EBITDA to Adjusted Revenues and Adjusted Total Segment EBITDA for the three months and fiscal years ended June 30, 2023 and 2022:

 

Revenues

 

 

Total Segment EBITDA

For the three months ended June 30,

 

 

For the three months ended June 30,

 

2023

 

 

 

2022

 

Difference

 

 

 

2023

 

 

 

2022

 

Difference

(in millions)

(in millions)

As reported

$

2,433

 

$

2,674

$

(241

)

$

341

 

$

315

$

26

 

Impact of acquisitions

 

(19

)

 

 

(19

)

 

(10

)

 

3

 

(13

)

Impact of divestitures

 

 

 

 

 

 

 

 

 

 

Impact of foreign currency fluctuations

 

72

 

 

 

72

 

 

14

 

 

 

14

 

Impact of litigation charges

 

 

 

 

 

 

 

 

20

 

(20

)

Net impact of U.K. Newspaper Matters

 

 

 

 

 

 

3

 

 

2

 

1

 

As adjusted

$

2,486

$

2,674

$

(188

)

$

348

$

340

$

8

 

 

Revenues

 

 

Total Segment EBITDA

 

 

 

 

 

For the fiscal years ended June 30,

 

 

For the fiscal years ended June 30,

 

2023

 

 

 

2022

 

 

Difference

 

 

 

2023

 

 

 

2022

 

Difference

(in millions)

(in millions)

As reported

$

9,879

 

$

10,385

 

$

(506

)

$

1,420

 

$

1,669

$

(249

)

Impact of acquisitions

 

(196

)

 

 

 

(196

)

 

(57

)

 

18

 

(75

)

Impact of divestitures

 

 

 

(1

)

 

1

 

 

 

 

5

 

(5

)

Impact of foreign currency fluctuations

 

494

 

 

 

 

494

 

 

80

 

 

 

80

 

Impact of litigation charges

 

 

 

 

 

 

 

 

 

20

 

(20

)

Net impact of U.K. Newspaper Matters

 

 

 

 

 

 

 

16

 

 

11

 

5

 

As adjusted

$

10,177

 

$

10,384

 

$

(207

)

$

1,459

 

$

1,723

$

(264

)

Foreign Exchange Rates

Average foreign exchange rates used in the calculation of the impact of foreign currency fluctuations for each of the three month periods in the fiscal years ended June 30, 2023 and 2022 are as follows:

 

Fiscal Year 2023

Q1

 

Q2

 

Q3

 

Q4

U.S. Dollar per Australian Dollar

$0.68

 

$0.66

 

$0.68

 

$0.67

U.S. Dollar per British Pound Sterling

$1.17

 

$1.17

 

$1.22

 

$1.25

 

 

 

 

 

 

Fiscal Year 2022

 

Q1

 

Q2

 

Q3

 

Q4

U.S. Dollar per Australian Dollar

$0.74

 

$0.73

 

$0.72

 

$0.72

U.S. Dollar per British Pound Sterling

$1.38

 

$1.35

 

$1.34

 

$1.26

Adjusted Revenues and Adjusted Segment EBITDA by segment for the three months and fiscal years ended June 30, 2023 and 2022 are as follows:

For the three months ended June 30,

 

2023

 

 

 

2022

 

 

% Change

(in millions)

Better/(Worse)

Adjusted Revenues:

Digital Real Estate Services

$

383

 

$

443

 

(14

)%

Subscription Video Services

 

538

 

 

524

 

3

%

Dow Jones

 

532

 

 

565

 

(6

)%

Book Publishing

 

446

 

 

513

 

(13

)%

News Media

 

587

 

 

629

 

(7

)%

Other

 

 

 

 

%

Adjusted Total Revenues

$

2,486

 

$

2,674

 

(7

)%

 

 

 

 

Adjusted Segment EBITDA:

 

 

 

Digital Real Estate Services

$

115

 

$

121

 

(5

)%

Subscription Video Services

 

84

 

 

81

 

4

%

Dow Jones

 

127

 

 

109

 

17

%

Book Publishing

 

14

 

 

47

 

(70

)%

News Media

 

47

 

 

33

 

42

%

Other

 

(39

)

 

(51

)

24

%

Adjusted Total Segment EBITDA

$

348

 

$

340

 

2

%

For the fiscal years ended June 30,

 

2023

 

 

 

2022

 

 

% Change

(in millions)

Better/(Worse)

Adjusted Revenues:

Digital Real Estate Services

$

1,603

 

$

1,740

 

(8

)%

Subscription Video Services

 

2,099

 

 

2,026

 

4

%

Dow Jones

 

2,006

 

 

2,004

 

%

Book Publishing

 

2,026

 

 

2,191

 

(8

)%

News Media

 

2,443

 

 

2,423

 

1

%

Other

 

 

 

 

%

Adjusted Total Revenues

$

10,177

 

$

10,384

 

(2

)%

 

 

 

 

Adjusted Segment EBITDA:

 

 

 

Digital Real Estate Services

$

491

 

$

579

 

(15

)%

Subscription Video Services

 

376

 

 

360

 

4

%

Dow Jones

 

434

 

 

451

 

(4

)%

Book Publishing

 

170

 

 

306

 

(44

)%

News Media

 

166

 

 

217

 

(24

)%

Other

 

(178

)

 

(190

)

6

%

Adjusted Total Segment EBITDA

$

1,459

 

$

1,723

 

(15

)%

The following tables reconcile reported revenues and Segment EBITDA by segment to Adjusted Revenues and Adjusted Segment EBITDA by segment for the three months ended June 30, 2023 and 2022:

For the three months ended June 30, 2023

 

As Reported

 

Impact of Acquisitions

 

Impact of Divestitures

 

Impact of Foreign Currency Fluctuations

 

Impact of Litigation Charges

 

Net Impact of U.K. Newspaper Matters

 

As Adjusted

(in millions)

Revenues:

 

 

 

 

 

 

 

Digital Real Estate Services

$

369

 

$

(1

)

$

$

15

 

$

$

$

383

 

Subscription Video Services

 

501

 

 

 

 

 

37

 

 

 

 

538

 

Dow Jones

 

546

 

 

(13

)

 

 

(1

)

 

 

 

532

 

Book Publishing

 

446

 

 

(3

)

 

 

3

 

 

 

 

446

 

News Media

 

571

 

 

(2

)

 

 

18

 

 

 

 

587

 

Other

 

 

 

 

 

 

 

 

 

 

 

Total Revenues

$

2,433

 

$

(19

)

$

$

72

 

$

$

$

2,486

 

 

 

 

 

 

 

 

 

Segment EBITDA:

 

 

 

 

 

 

 

Digital Real Estate Services

$

108

 

$

 

$

$

7

 

$

$

$

115

 

Subscription Video Services

 

78

 

 

 

 

 

6

 

 

 

 

84

 

Dow Jones

 

133

 

 

(5

)

 

 

(1

)

 

 

 

127

 

Book Publishing

 

16

 

 

(2

)

 

 

 

 

 

 

14

 

News Media

 

45

 

 

 

 

 

2

 

 

 

 

47

 

Other

 

(39

)

 

(3

)

 

 

 

 

 

3

 

(39

)

Total Segment EBITDA

$

341

 

$

(10

)

$

$

14

 

$

$

3

$

348

 

For the three months ended June 30, 2022

 

As Reported

 

Impact of Acquisitions

 

Impact of Divestitures

 

Impact of Foreign Currency Fluctuations

 

Impact of Litigation Charges

 

Net Impact of U.K. Newspaper Matters

 

As Adjusted

(in millions)

Revenues:

 

 

 

 

 

 

 

Digital Real Estate Services

$

443

 

$

$

$

$

$

$

443

 

Subscription Video Services

 

524

 

 

 

 

 

 

 

524

 

Dow Jones

 

565

 

 

 

 

 

 

 

565

 

Book Publishing

 

513

 

 

 

 

 

 

 

513

 

News Media

 

629

 

 

 

 

 

 

 

629

 

Other

 

 

 

 

 

 

 

 

 

Total Revenues

$

2,674

 

$

$

$

$

$

$

2,674

 

 

Segment EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital Real Estate Services

$

121

$

$

$

$

$

$

121

Subscription Video Services

81

 

81

 

Dow Jones

106

 

3

109

 

Book Publishing

47

 

47

 

News Media

33

 

33

 

Other

(73

)

20

2

(51

)

Total Segment EBITDA

$

315

 

$

3

$

$

$

20

$

2

$

340

 

The following tables reconcile reported revenues and Segment EBITDA by segment to Adjusted Revenues and Adjusted Segment EBITDA by segment for the fiscal years ended June 30, 2023 and 2022:

For the fiscal year ended June 30, 2023

 

As Reported

 

Impact of Acquisitions

 

Impact of Divestitures

 

Impact of Foreign Currency Fluctuations

 

Impact of Litigation Charges

 

Net Impact of U.K. Newspaper Matters

 

As Adjusted

(in millions)

Revenues:

 

 

 

 

 

 

 

Digital Real Estate Services

$

1,539

$

(10

)

$

$

74

 

$

 

$

$

1,603

 

Subscription Video Services

 

1,942

 

 

 

 

 

157

 

 

 

 

 

2,099

 

Dow Jones

 

2,153

 

 

(165

)

 

 

18

 

 

 

 

2,006

 

Book Publishing

 

1,979

 

 

 

(11

)

 

 

 

58

 

 

 

 

 

2,026

 

News Media

 

2,266

 

 

 

(10

)

 

 

 

187

 

 

 

 

 

 

2,443

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenues

$

9,879

 

 

$

(196

)

 

$

 

$

494

 

 

$

 

$

 

$

10,177

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital Real Estate Services

$

457

 

$

 

$

$

34

 

$

 

$

 

$

491

 

Subscription Video Services

 

347

 

 

 

 

 

 

 

29

 

 

 

 

 

 

376

 

Dow Jones

 

494

 

 

 

(59

)

 

 

 

 

(1

)

 

 

 

 

 

 

434

 

Book Publishing

 

167

 

 

 

(2

)

 

 

 

 

5

 

 

 

 

 

 

170

 

News Media

 

156

 

 

 

(3

)

 

 

 

 

13

 

 

 

 

 

 

 

166

 

Other

 

(201

)

 

 

7

 

 

 

 

 

 

 

 

 

 

16

 

 

(178

)

Total Segment EBITDA

$

1,420

 

$

(57

)

$

 

$

80

 

$

 

$

16

 

$

1,459

 

For the fiscal year ended June 30, 2022

 

As Reported

 

Impact of Acquisitions

 

Impact of Divestitures

 

Impact of Foreign Currency Fluctuations

 

Impact of Litigation Charges

 

Net Impact of U.K. Newspaper Matters

 

As Adjusted

(in millions)

Revenues:

 

 

 

 

 

 

 

Digital Real Estate Services

$

1,741

 

$

$

(1

)

$

$

$

$

1,740

 

Subscription Video Services

 

2,026

 

 

 

 

 

 

 

 

2,026

 

Dow Jones

 

2,004

 

 

 

 

 

 

 

 

2,004

 

Book Publishing

 

2,191

 

 

 

 

 

 

 

 

2,191

 

News Media

 

2,423

 

 

 

 

 

 

 

 

2,423

 

Other

 

 

 

 

 

 

 

 

 

 

Total Revenues

$

10,385

 

$

$

(1

)

$

$

$

$

10,384

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment EBITDA:

Digital Real Estate Services

$

574

 

 

$

 

$

5

 

 

$

 

$

 

$

 

$

579

 

Subscription Video Services

360

 

 

 

 

 

 

 

 

 

 

 

 

 

 

360

 

Dow Jones

433

 

 

 

18

 

 

 

 

 

 

 

 

 

 

 

451

 

Book Publishing

306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

306

 

News Media

217

 

 

 

 

 

 

 

 

 

 

 

 

 

 

217

 

Other

(221

)

 

 

 

 

 

 

 

 

 

20

 

 

11

 

 

(190

)

Total Segment EBITDA

$

1,669

 

 

$

18

 

$

5

 

 

$

 

$

20

 

$

11

 

$

1,723

 

NOTE 3 – ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO NEWS CORPORATION STOCKHOLDERS AND ADJUSTED EPS

The Company uses net income (loss) attributable to News Corporation stockholders and diluted earnings per share (“EPS”) excluding expenses related to U.K. Newspaper Matters, litigation charges, impairment and restructuring charges and “Other, net”, net of tax, recognized by the Company or its equity method investees, as well as the settlement of certain pre-Separation tax matters (“adjusted net income (loss) attributable to News Corporation stockholders” and “adjusted EPS,” respectively), to evaluate the performance of the Company’s operations exclusive of certain items that impact the comparability of results from period to period, as well as certain non-operational items. The calculation of adjusted net income (loss) attributable to News Corporation stockholders and adjusted EPS may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what type of events warrant adjustment. Adjusted net income (loss) attributable to News Corporation stockholders and adjusted EPS are not measures of performance under generally accepted accounting principles and should not be construed as substitutes for consolidated net income (loss) attributable to News Corporation stockholders and net income (loss) per share as determined under GAAP as a measure of performance. However, management uses these measures in comparing the Company’s historical performance and believes that they provide meaningful and comparable information to investors to assist in their analysis of our performance relative to prior periods and our competitors.

The following tables reconcile reported net (loss) income attributable to News Corporation stockholders and reported diluted EPS to adjusted net income attributable to News Corporation stockholders and adjusted EPS for the three months and fiscal years ended June 30, 2023 and 2022:

For the three months ended June 30, 2023

 

For the three months ended June 30, 2022

(in millions, except per share data)

Net (loss) income attributable to stockholders

 

EPS

 

Net income attributable to stockholders

 

EPS

Net (loss) income

$

(32

)

 

$

127

 

 

Less: Net loss (income) attributable to noncontrolling interests

 

24

 

 

 

(17

)

 

Net (loss) income attributable to News Corporation stockholders

$

(8

)

$

(0.01

)

$

110

 

$

0.19

 

U.K. Newspaper Matters

 

3

 

 

 

 

2

 

 

 

Litigation charges

 

 

 

 

 

20

 

 

0.03

 

Impairment and restructuring charges (a)

 

85

 

 

0.15

 

 

27

 

 

0.05

 

Equity losses of affiliates (b)

 

81

 

 

0.14

 

 

 

 

 

Other, net

 

(11

)

 

(0.02

)

 

91

 

 

0.15

 

Tax impact on items above

 

(37

)

 

(0.06

)

 

(30

)

 

(0.05

)

Impact of noncontrolling interest on items above

 

(35

)

 

(0.06

)

 

(2

)

 

 

As adjusted

$

78

 

$

0.14

 

$

218

 

$

0.37

 

(a)

 

During the three months ended June 30, 2023, the Company recognized non-cash impairment charges of $25 million related to the impairment of certain indefinite-lived intangible assets during the Company’s annual impairment assessment.

 

 

 

(b)

 

During the three months ended June 30, 2023, the Company recognized a non-cash write-down of REA Group’s investment in PropertyGuru of approximately $81 million.

For the fiscal year ended June 30, 2023

 

For the fiscal year ended June 30, 2022

(in millions, except per share data)

Net income attributable to stockholders

 

EPS

 

Net income attributable to stockholders

 

 

EPS

Net income

$

187

 

 

$

760

 

 

Less: Net income attributable to noncontrolling interests

 

(38

)

 

 

(137

)

 

Net income attributable to News Corporation stockholders

$

149

 

$

0.26

 

$

623

 

$

1.05

 

U.K. Newspaper Matters

 

16

 

 

0.02

 

 

11

 

 

0.02

 

Litigation charges

 

 

 

 

 

20

 

 

0.03

 

Impairment and restructuring charges (a)

 

150

 

 

0.26

 

 

109

 

 

0.18

 

Equity losses of affiliates (b)

 

81

 

 

0.14

 

 

3

 

 

0.01

 

Other, net

 

(1

)

 

 

 

(52

)

 

(0.09

)

Tax impact on items above

 

(76

)

 

(0.13

)

 

(45

)

 

(0.08

)

Impact of noncontrolling interest on items above

 

(36

)

 

(0.06

)

 

43

 

 

0.08

 

As adjusted

$

283

 

$

0.49

 

$

712

 

$

1.20

 

(a)

 

During the fiscal year ended June 30, 2023, the Company recognized non-cash impairment charges of $25 million related to the impairment of certain indefinite-lived intangible assets during the Company’s annual impairment assessment.

 

 

During the fiscal year ended June 30, 2022, the Company recognized a non-cash impairment charge of $15 million related to the write- down of fixed assets associated with the shutdown and sale of certain U.S. printing facilities at the Dow Jones segment.

 

 

 

(b)

 

During the fiscal year ended June 30, 2023, the Company recognized a non-cash write-down of REA Group’s investment in PropertyGuru of approximately $81 million.

 

 

During the fiscal year ended June 30, 2022, the Company recognized a non-cash impairment charge related to an equity method investment.

NOTE 4 – CONSTANT CURRENCY REVENUES

The Company believes that the presentation of revenues excluding the impact of foreign currency fluctuations (“constant currency revenues”) provides useful information regarding the performance of the Company’s core business operations exclusive of distortions between periods caused by the unpredictability and volatility of currency fluctuations. The Company calculates the impact of foreign currency fluctuations for businesses reporting in currencies other than the U.S. dollar as described in Note 2.

Constant currency revenues are not measures of performance under generally accepted accounting principles and should not be construed as substitutes for revenues as determined under GAAP as measures of performance. However, management uses these measures in comparing the Company’s historical performance and believes that they provide meaningful and comparable information to investors to assist in their analysis of our performance relative to prior periods and our competitors.

The following tables reconcile reported revenues to constant currency revenues for the three months and fiscal year ended June 30, 2023:

Q4 Fiscal 2022

 

Q4 Fiscal 2023

 

FX impact

 

Q4 Fiscal 2023 constant currency

 

% Change - reported

 

% Change - constant currency

($ in millions)

 

Better/(Worse)

Consolidated results:

Circulation and subscription

$

1,177

 

$

1,129

 

$

(38

)

$

1,167

 

(4

)%

(1

)%

Advertising

 

479

 

 

424

 

 

(12

)

 

436

 

(11

)%

(9

)%

Consumer

 

491

 

 

425

 

 

(3

)

 

428

 

(13

)%

(13

)%

Real estate

 

359

 

293

 

(12

)

 

305

(18

)%

(15

)%

Other

 

168

 

 

162

 

 

(7

)

 

169

 

(4

)%

1

%

Total revenues

$

2,674

 

$

2,433

 

$

(72

)

$

2,505

 

(9

)%

(6

)%

Digital Real Estate Services:

Circulation and subscription

$

4

 

$

3

 

$

 

$

3

 

(25

)%

(25

)%

Advertising

 

36

 

 

37

 

 

 

$

37

 

3

%

3

%

Real estate

 

359

 

 

293

 

 

(12

)

$

305

 

(18

)%

(15

)%

Other

 

44

 

 

36

 

 

(3

)

$

39

 

(18

)%

(11

)%

Total Digital Real Estate Services segment revenues

$

443

 

$

369

 

$

(15

)

$

384

 

(17

)%

(13

)%

 

 

 

 

 

 

 

REA Group revenues

$

250

 

$

223

 

$

(15

)

$

238

 

(11

)%

(5

)%

 

 

 

 

 

 

 

Subscription Video Services:

 

 

 

 

 

 

Circulation and subscription

$

446

 

$

422

 

$

(30

)

$

452

 

(5

)%

1

%

Advertising

 

67

 

67

 

(6

)

$

73

%

9

%

Other

 

11

 

 

12

 

 

(1

)

$

13

 

9

%

18

%

Total Subscription Video Services segment revenues

$

524

 

$

501

 

$

(37

)

$

538

 

(4

)%

3

%

Q4 Fiscal 2022

 

Q4 Fiscal 2023

 

FX impact

 

Q4 Fiscal 2023 constant currency

 

% Change - reported

 

% Change - constant currency

($ in millions)

 

Better/(Worse)

Dow Jones:

Circulation and subscription

$

434

 

$

432

 

$

1

 

$

431

 

%

(1

)%

Advertising

 

116

 

 

100

 

 

 

$

100

 

(14

)%

(14

)%

Other

 

15

 

14

 

 

$

14

(7

)%

(7

)%

Total Dow Jones segment revenues

$

565

 

$

546

 

$

1

 

$

545

 

(3

)%

(4

)%

 

 

 

 

 

 

 

Book Publishing:

 

 

 

 

 

 

Consumer

 

491

 

 

425

 

 

(3

)

$

428

 

(13

)%

(13

)%

Other

 

22

 

 

21

 

 

 

$

21

 

(5

)%

(5

)%

Total Book Publishing segment revenues

$

513

 

$

446

 

$

(3

)

$

449

 

(13

)%

(12

)%

 

 

 

 

 

 

 

News Media:

 

 

 

 

 

 

Circulation and subscription

$

293

 

$

272

 

$

(9

)

$

281

 

(7

)%

(4

)%

Advertising

 

260

 

 

220

 

 

(6

)

$

226

 

(15

)%

(13

)%

Other

 

76

 

 

79

 

 

(3

)

$

82

 

4

%

8

%

Total News Media segment revenues

$

629

 

$

571

 

$

(18

)

$

589

 

(9

)%

(6

)%

 

 

 

 

 

 

 

News UK

 

 

 

 

 

 

Circulation and subscription

$

149

 

$

138

 

$

(1

)

$

139

 

(7

)%

(7

)%

Advertising

 

78

 

 

72

 

 

 

$

72

 

(8

)%

(8

)%

Other

 

29

 

 

29

 

 

 

$

29

 

%

%

Total News UK revenues

$

256

 

$

239

 

$

(1

)

$

240

 

(7

)%

(6

)%

 

 

 

 

 

 

 

News Corp Australia

 

 

 

 

 

 

Circulation and subscription

$

120

 

$

109

 

$

(7

)

$

116

 

(9

)%

(3

)%

Advertising

 

129

 

 

96

 

 

(6

)

$

102

 

(26

)%

(21

)%

Other

 

43

 

 

44

 

 

(3

)

$

47

 

2

%

9

%

Total News Corp Australia revenues

$

292

 

$

249

 

$

(16

)

$

265

 

(15

)%

(9

)%

Fiscal 2022

 

Fiscal 2023

 

FX impact

 

Fiscal 2023 constant currency

 

% Change - reported

 

% Change - constant currency

($ in millions)

 

Better/(Worse)

Consolidated results:

Circulation and subscription

$

4,425

 

$

4,447

 

$

(245

)

$

4,692

 

%

6

%

Advertising

 

1,821

 

 

1,687

 

 

(92

)

 

1,779

 

(7

)%

(2

)%

Consumer

 

2,106

 

1,899

 

(58

)

 

1,957

(10

)%

(7

)%

Real estate

 

1,347

 

 

1,189

 

 

(55

)

 

1,244

 

(12

)%

(8

)%

Other

 

686

 

 

657

 

 

(44

)

 

701

 

(4

)%

2

%

Total revenues

$

10,385

 

$

9,879

 

$

(494

)

$

10,373

 

(5

)%

%

 

 

 

 

 

 

 

Digital Real Estate Services:

 

 

 

 

 

 

Circulation and subscription

$

13

 

$

12

 

$

 

$

12

 

(8

)%

(8

)%

Advertising

 

135

 

 

140

 

 

(3

)

$

143

 

4

%

6

%

Real estate

 

1,347

 

 

1,189

 

 

(55

)

$

1,244

 

(12

)%

(8

)%

Other

 

246

 

 

198

 

 

(16

)

$

214

 

(20

)%

(13

)%

Total Digital Real Estate Services segment revenues

$

1,741

 

$

1,539

 

$

(74

)

$

1,613

 

(12

)%

(7

)%

 

 

 

 

 

 

 

REA Group revenues

$

1,029

 

$

937

 

$

(74

)

$

1,011

 

(9

)%

(2

)%

 

 

 

 

 

 

 

Subscription Video Services:

 

 

 

 

 

 

Circulation and subscription

$

1,753

 

$

1,671

 

$

(134

)

$

1,805

 

(5

)%

3

%

Advertising

 

232

 

 

227

 

 

(19

)

$

246

 

(2

)%

6

%

Other

 

41

 

 

44

 

 

(4

)

$

48

 

7

%

17

%

Total Subscription Video Services segment revenues

$

2,026

 

$

1,942

 

$

(157

)

$

2,099

 

(4

)%

4

%

 

 

 

 

 

 

 

Dow Jones:

 

 

 

 

 

 

Circulation and subscription

$

1,516

 

$

1,689

 

$

(18

)

$

1,707

 

11

%

13

%

Advertising

 

449

 

 

413

 

 

 

$

413

 

(8

)%

(8

)%

Other

 

39

 

 

51

 

 

 

$

51

 

31

%

31

%

Total Dow Jones segment revenues

$

2,004

 

$

2,153

 

$

(18

)

$

2,171

 

7

%

8

%

 

 

 

 

 

 

 

Book Publishing:

 

 

 

 

 

 

Consumer

 

2,106

 

 

1,899

 

 

(58

)

$

1,957

 

(10

)%

(7

)%

Other

 

85

 

 

80

 

 

 

$

80

 

(6

)%

(6

)%

Total Book Publishing segment revenues

$

2,191

 

$

1,979

 

$

(58

)

$

2,037

 

(10

)%

(7

)%

Fiscal 2022

 

Fiscal 2023

 

FX impact

Fiscal 2023 constant currency

% Change - reported

% Change - constant currency

($ in millions)

 

Better/(Worse)

News Media:

Circulation and subscription

$

1,143

 

$

1,075

 

$

(93

)

$

1,168

 

(6

)%

2

%

Advertising

 

1,005

 

907

 

(70

)

$

977

(10

)%

(3

)%

Other

 

275

 

 

284

 

 

(24

)

$

308

 

3

%

12

%

Total News Media segment revenues

$

2,423

 

$

2,266

 

$

(187

)

$

2,453

 

(6

)%

1

%

News UK

Circulation and subscription

$

577

 

$

536

 

$

(58

)

$

594

 

(7

)%

3

%

Advertising

 

313

 

288

 

(25

)

$

313

(8

)%

%

Other

 

117

 

 

109

 

 

(11

)

$

120

 

(7

)%

3

%

Total News UK revenues

$

1,007

 

$

933

 

$

(94

)

$

1,027

 

(7

)%

2

%

 

 

 

 

 

 

 

News Corp Australia

 

 

 

 

 

 

Circulation and subscription

$

474

 

$

440

 

$

(34

)

$

474

 

(7

)%

%

Advertising

 

466

 

 

412

 

 

(32

)

$

444

 

(12

)%

(5

)%

Other

 

148

 

 

146

 

 

(11

)

$

157

 

(1

)%

6

%

Total News Corp Australia revenues

$

1,088

 

$

998

 

$

(77

)

$

1,075

 

(8

)%

(1

)%

 

Investor Relations Michael Florin 212-416-3363 mflorin@newscorp.com

Anthony Rudolf 212-416-3040 arudolf@newscorp.com

Corporate Communications Jim Kennedy 212-416-4064 jkennedy@newscorp.com

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