FISCAL 2024 THIRD QUARTER KEY FINANCIAL
HIGHLIGHTS
- Third quarter revenues were $2.42 billion, a 1% decrease
compared to $2.45 billion in the prior year, reflecting a $21
million, or 1%, negative impact from foreign currency fluctuations.
Adjusted Revenues were flat compared to the prior year
- Net income in the quarter was $42 million, compared to net
income of $59 million in the prior year
- Third quarter Total Segment EBITDA was $322 million,
compared to $320 million in the prior year
- In the quarter, reported EPS were $0.05 as compared to $0.09
in the prior year - Adjusted EPS were $0.11 compared to $0.09 in
the prior year
- At the Dow Jones segment, professional information business
revenues grew 10% compared to the prior year, driven by the
continued success of Risk & Compliance and Dow Jones Energy,
which each grew 15%
- Dow Jones achieved its highest sequential quarterly net
additions for digital subscriptions of 322 thousand, reaching over
5 million Dow Jones digital subscriptions for the quarter
- REA Group posted strong results with quarterly revenues of
$256 million, a 15% increase compared to the prior year, primarily
driven by robust Australian residential performance
News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS,
NWSA; ASX: NWS, NWSLV) today reported financial results for the
three months ended March 31, 2024.
Commenting on the results, Chief Executive Robert Thomson
said:
“News Corp has again made substantial progress on our strategic
imperative to transform the company and increase value for all
shareholders.
News Corp’s profitability rose slightly in the third quarter as
compared to the prior year, continuing our growth this fiscal year
— and that increase, which gathered pace in April, follows the
three most profitable years since the company was reincarnated in
2013.
We are in the midst of an exponential digital revolution, and
our own company has continued to change significantly and
profitably. Importantly, we are working to promote our quality
journalism in the age of Generative AI and are gratified that the
most enlightened leaders in the industry appreciate the commercial
and social value of that content.
Separately, we have this week extended our existing partnership
with Google.
As mentioned previously, we have been reviewing our company’s
structure — and that work is intense and ongoing — and we have made
underlying changes to provide maximum flexibility.”
THIRD QUARTER RESULTS
The Company reported fiscal 2024 third quarter total revenues of
$2.42 billion, a 1% decrease compared to $2.45 billion in the prior
year period, primarily driven by lower advertising revenues at the
News Media segment, lower physical book sales at the Book
Publishing segment and lower revenues at Move due to ongoing
challenging housing market conditions in the U.S., in addition to a
$21 million, or 1%, negative impact from foreign currency
fluctuations. The decrease was partly offset by higher Australian
residential revenues at REA Group and continued strong growth in
the professional information business at the Dow Jones segment.
Adjusted Revenues (which excludes the foreign currency impact,
acquisitions and divestitures as defined in Note 2) were flat
compared to the prior year.
Net income for the quarter was $42 million, a 29% decrease
compared to net income of $59 million in the prior year, primarily
driven by lower Other, net, which benefited in the prior year from
a gain on sale, higher impairment and restructuring charges and
higher depreciation and amortization expenses. These impacts were
partially offset by lower income tax expense and improved equity
losses of affiliates.
The Company reported third quarter Total Segment EBITDA of $322
million, a 1% increase compared to $320 million in the prior year
primarily due to strong contributions from REA Group and the Dow
Jones segment combined with lower costs at the Book Publishing
segment and gross cost savings related to the announced 5%
headcount reduction initiative. The increase was largely offset by
the lower revenue drivers discussed above and higher marketing
costs at Move. Adjusted Total Segment EBITDA (as defined in Note 2)
increased 1%.
Net income per share attributable to News Corporation
stockholders was $0.05 as compared to $0.09 in the prior year.
Adjusted EPS (as defined in Note 3) were $0.11 compared to $0.09
in the prior year.
SEGMENT REVIEW
For the three months ended March
31,
For the nine months ended March
31,
2024
2023
% Change
2024
2023
% Change
(in millions)
Better/
(Worse)
(in millions)
Better/
(Worse)
Revenues:
Digital Real Estate Services
$
388
$
363
7
%
$
1,210
$
1,170
3
%
Subscription Video Services
455
477
(5
)%
1,411
1,441
(2
)%
Dow Jones
544
529
3
%
1,665
1,607
4
%
Book Publishing
506
515
(2
)%
1,581
1,533
3
%
News Media
530
563
(6
)%
1,641
1,695
(3
)%
Other
—
—
—
%
—
—
—
%
Total Revenues
$
2,423
$
2,447
(1
)%
$
7,508
$
7,446
1
%
Segment EBITDA:
Digital Real Estate Services
$
104
$
102
2
%
$
373
$
349
7
%
Subscription Video Services
66
68
(3
)%
236
269
(12
)%
Dow Jones
118
109
8
%
405
361
12
%
Book Publishing
62
61
2
%
212
151
40
%
News Media
26
34
(24
)%
92
111
(17
)%
Other
(54
)
(54
)
—
%
(159
)
(162
)
2
%
Total Segment EBITDA
$
322
$
320
1
%
$
1,159
$
1,079
7
%
Digital Real Estate Services
Revenues in the quarter increased $25 million, or 7%, compared
to the prior year, driven by strong performance at REA Group partly
offset by lower revenues at Move. Segment EBITDA in the quarter
increased $2 million, or 2%, compared to the prior year, primarily
due to higher contribution from REA Group partly offset by $11
million in increased costs at Move primarily driven by higher
marketing spend, and the lower revenues referenced above, in
addition to a $4 million, or 4%, negative impact from foreign
currency fluctuations. Adjusted Revenues and Adjusted Segment
EBITDA (as defined in Note 2) increased 9% and 7%,
respectively.
In the quarter, revenues at REA Group increased $34 million, or
15%, to $256 million, primarily driven by higher Australian
residential revenues due to price increases, increased depth
penetration, favorable geographic mix and an increase in national
listings. The increase was partially offset by a $10 million, or
5%, negative impact from foreign currency fluctuations. Australian
national residential buy listing volumes in the quarter increased
6% compared to the prior year, with listings in Sydney and
Melbourne up 20% and 18%, respectively.
Move’s revenues in the quarter decreased $9 million, or 6%, to
$132 million, primarily as a result of lower real estate revenues.
Real estate revenues, which represented 80% of total Move revenues,
decreased $6 million, or 5%, driven by the ongoing impact of the
macroeconomic environment on the housing market, including higher
mortgage rates, which led to lower transaction volumes. Revenues
from the referral model, which includes the ReadyConnect Concierge℠
product, and the core lead generation product decreased due to
these factors. Based on Move’s internal data, average monthly
unique users of Realtor.com®’s web and mobile sites for the fiscal
third quarter was flat compared to the prior year at 72 million.
Lead volume increased 4%, the first year over year increase in over
2 years, and was a strong improvement from the 7% decline in the
prior quarter.
Subscription Video Services
Revenues of $455 million in the quarter decreased $22 million,
or 5%, compared with the prior year, primarily driven by an $18
million, or 4%, negative impact from foreign currency fluctuations.
The impact from fewer residential broadcast subscribers was mostly
offset by higher revenues from Kayo from increases in both volume
and pricing and higher BINGE revenues from an increase in pricing.
Adjusted Revenues of $473 million decreased 1% compared to the
prior year. Foxtel Group streaming subscription revenues
represented approximately 29% of total circulation and subscription
revenues in the quarter, as compared to 26% in the prior year.
As of March 31, 2024, Foxtel’s total closing paid subscribers
were over 4.5 million, a 1% decrease compared to the prior year,
driven by fewer residential broadcast subscribers and lower BINGE
subscribers partly offset by strong growth in Kayo subscribers.
Broadcast subscriber churn in the quarter was 13.3% compared to
12.3% in the prior year partly driven by the recent Broadcast price
increase. Broadcast ARPU for the quarter increased 2%
year-over-year to A$85 (US$56).
As of March 31,
2024
2023
(in 000's)
Broadcast Subscribers
Residential
1,239
1,369
Commercial
239
233
Streaming Subscribers (Total (Paid))
Kayo
1,466 (1,442 paid)
1,332 (1,309 paid)
BINGE
1,477 (1,453 paid)
1,529 (1,484 paid)
Foxtel Now
153 (146 paid)
178 (171 paid)
Total Subscribers (Total (Paid))
4,591 (4,537 paid)
4,662 (4,585 paid)
Segment EBITDA of $66 million in the quarter decreased $2
million, or 3%, compared with the prior year, which included a $3
million, or 4%, negative impact from foreign currency fluctuations.
Adjusted Segment EBITDA of $69 million increased 1% compared to the
prior year, primarily due to lower marketing, entertainment
programming rights and technology costs partially offset by $13
million of costs related to the launch of Hubbl in the quarter.
Dow Jones
Revenues in the quarter increased $15 million, or 3%, compared
to the prior year, driven by growth in circulation and subscription
revenues underpinned by the professional information business.
Digital revenues at Dow Jones in the quarter represented 81% of
total revenues compared to 79% in the prior year. Adjusted Revenues
increased 3%.
Circulation and subscription revenues increased $19 million, or
4%, primarily driven by a 10% increase in professional information
business revenues, led by 15% growth in Risk & Compliance
revenues to $76 million and 15% growth in Dow Jones Energy revenues
to $63 million. Circulation revenues were flat compared to the
prior year, as the continued growth in digital-only subscriptions,
which partially benefited from an increase in bundle offers, was
offset by lower print volume. Digital circulation revenues
accounted for 70% of circulation revenues for the quarter, compared
to 69% in the prior year.
During the third quarter, total average subscriptions to Dow
Jones’ consumer products were over 5.7 million, a 12% increase
compared to the prior year. Digital-only subscriptions to Dow
Jones’ consumer products grew 17% to over 5 million. Total
subscriptions to The Wall Street Journal grew 8% compared to the
prior year, to over 4.2 million average subscriptions in the
quarter. Digital-only subscriptions to The Wall Street Journal grew
13% to over 3.7 million average subscriptions in the quarter, and
represented 88% of total Wall Street Journal subscriptions.
For the three months ended
March 31,
2024
2023
% Change
(in thousands, except %)
Better/(Worse)
The Wall Street Journal
Digital-only subscriptions
3,715
3,299
13 %
Total subscriptions
4,217
3,888
8 %
Barron’s Group
Digital-only subscriptions
1,221
969
26 %
Total subscriptions
1,355
1,128
20 %
Total Consumer
Digital-only subscriptions
5,068
4,347
17 %
Total subscriptions
5,723
5,117
12 %
Advertising revenues decreased $2 million, or 2%, primarily due
to an 11% decline in print advertising revenues partly offset by 4%
growth in digital advertising revenues. Digital advertising
accounted for 63% of total advertising revenues in the quarter,
compared to 59% in the prior year.
Segment EBITDA for the quarter increased $9 million, or 8%,
primarily as a result of the higher revenues discussed above,
partially offset by higher marketing costs. Adjusted Segment EBITDA
increased 8%.
Book Publishing
Revenues in the quarter decreased $9 million, or 2%, compared to
the prior year, primarily driven by lower gross physical book sales
partly offset by improved returns and an increase in digital book
sales. Key titles in the quarter included Blood Money by Peter
Schweizer, Mostly What God Does by Savannah Guthrie and Fangirl
Down by Tessa Bailey. Adjusted Revenues decreased 3%.
Digital sales increased 5% compared to the prior year, driven by
strong market growth for downloadable audiobook sales, which
benefited from the continued contribution from the new Spotify
partnership. Digital sales represented 25% of Consumer revenues for
the quarter compared to 23% in the prior year with downloadable
audiobooks accounting for approximately half of digital revenues.
Backlist sales represented approximately 63% of consumer revenues
in the quarter compared to 60% in the prior year.
Segment EBITDA for the quarter increased $1 million, or 2%,
compared to the prior year, primarily due to lower manufacturing,
freight and distribution costs driven by product mix and the
absence of prior year supply chain challenges and inventory and
inflationary pressures, largely offset by the lower revenues
discussed above and higher employee costs. Adjusted Segment EBITDA
increased 2%.
News Media
Revenues in the quarter decreased $33 million, or 6%, as
compared to the prior year, primarily driven by lower advertising
revenues. Within the segment, revenues at News Corp Australia
decreased 10%, driven by lower advertising revenues, and included
an $8 million, or 4%, negative impact from foreign currency
fluctuations, while News UK was flat as lower advertising revenues
were offset by a $10 million, or 5%, positive impact from foreign
currency fluctuations and higher circulation and subscription
revenues. Adjusted Revenues for the segment decreased 6% compared
to the prior year.
Circulation and subscription revenues increased $1 million
compared to the prior year, primarily due to price increases,
digital subscriber growth and a $3 million, or 1%, positive impact
from foreign currency fluctuations, partially offset by lower print
volumes.
Advertising revenues decreased $28 million, or 13%, compared to
the prior year, primarily due to lower print advertising at News
Corp Australia and lower digital advertising mainly driven by a
decline in traffic at some mastheads due to platform related
changes.
In the quarter, Segment EBITDA decreased $8 million, or 24%,
compared to the prior year, driven by lower revenues, as discussed
above, partially offset by lower production costs at News UK driven
by lower print volume and newsprint prices and a $1 million, or 2%,
positive impact from foreign currency fluctuations. Adjusted
Segment EBITDA decreased 26%.
Digital revenues represented 38% of News Media segment revenues
in the quarter, compared to 36% in the prior year, and represented
36% 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 March
31, 2024 were 1,113,000 (966,000 for news mastheads), compared to
1,043,000 (937,000 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 March 31, 2024 were
582,000, compared to 554,000 in the prior year (Source: Internal
data). The previously disclosed methodology change resulted in a
59,000 and 60,000 increase to the closing digital subscriber number
at March 31, 2024 and 2023, respectively
- The Sun’s digital offering reached 126 million global monthly
unique users in March 2024, compared to 199 million in the prior
year (Source: Meta Pixel)
- New York Post’s digital network reached 125 million unique
users in March 2024, compared to 147 million in the prior year
(Source: Google Analytics)
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 nine months ended March
31,
2024
2023
(in millions)
Net cash provided by operating
activities
$
844
$
670
Less: Capital expenditures
(353
)
(350
)
Free cash flow
491
320
Less: REA Group free cash flow
(204
)
(153
)
Plus: Cash dividends received from REA
Group
91
91
Free cash flow available to News
Corporation
$
378
$
258
Net cash provided by operating activities of $844 million for
the nine months ended March 31, 2024 was $174 million higher than
$670 million in the prior year, primarily due to lower working
capital and higher Total Segment EBITDA, as noted above, partially
offset by higher restructuring payments.
Free cash flow in the nine months ended March 31, 2024 was $491
million compared to $320 million in the prior year. Free cash flow
available to News Corporation in the nine months ended March 31,
2024 was $378 million compared to $258 million in the prior year.
The improvement in both free cash flow and free cash flow available
to News Corporation was primarily due to higher cash provided by
operating activities, as mentioned above. Foxtel’s capital
expenditures for the nine months ended March 31, 2024 were $107
million compared to $118 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 (used in) 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. Free cash flow and free cash
flow available to News Corporation may not be comparable to
similarly titled measures reported by other companies, since
companies and investors may differ as to what items should be
included in the calculation of free cash flow.
Neither free cash flow nor free cash flow available to News
Corporation represents the total increase or decrease in the cash
balance for the period and should be considered in addition to, not
as a substitute for, 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.
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.
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 May 8, 2024. 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 March
31,
For the nine months ended March
31,
2024
2023
2024
2023
Revenues:
Circulation and subscription
$
1,121
$
1,122
$
3,369
$
3,318
Advertising
358
393
1,187
1,263
Consumer
484
495
1,513
1,474
Real estate
301
272
939
896
Other
159
165
500
495
Total Revenues
2,423
2,447
7,508
7,446
Operating expenses
(1,238
)
(1,286
)
(3,792
)
(3,853
)
Selling, general and administrative
(863
)
(841
)
(2,557
)
(2,514
)
Depreciation and amortization
(192
)
(183
)
(542
)
(536
)
Impairment and restructuring charges
(35
)
(25
)
(86
)
(65
)
Equity losses of affiliates
(2
)
(10
)
(5
)
(43
)
Interest expense, net
(19
)
(25
)
(67
)
(78
)
Other, net
(10
)
14
(23
)
(10
)
Income before income tax expense
64
91
436
347
Income tax expense
(22
)
(32
)
(153
)
(128
)
Net income
42
59
283
219
Net income attributable to noncontrolling
interests
(12
)
(9
)
(67
)
(62
)
Net income attributable to News
Corporation stockholders
$
30
$
50
$
216
$
157
Weighted average shares outstanding:
Basic
571
575
572
578
Diluted
574
578
574
580
Net income attributable to News
Corporation stockholders per share, basic and diluted
$
0.05
$
0.09
$
0.38
$
0.27
NEWS CORPORATION
CONSOLIDATED BALANCE
SHEETS
(Unaudited; in
millions)
As of March 31, 2024
As of June 30, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
1,943
$
1,833
Receivables, net
1,438
1,425
Inventory, net
331
311
Other current assets
416
484
Total current assets
4,128
4,053
Non-current assets:
Investments
416
427
Property, plant and equipment, net
1,901
2,042
Operating lease right-of-use assets
974
1,036
Intangible assets, net
2,359
2,489
Goodwill
5,131
5,140
Deferred income tax assets, net
305
393
Other non-current assets
1,330
1,341
Total assets
$
16,544
$
16,921
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
269
$
440
Accrued expenses
1,238
1,123
Deferred revenue
549
622
Current borrowings
56
27
Other current liabilities
930
953
Total current liabilities
3,042
3,165
Non-current liabilities:
Borrowings
2,844
2,940
Retirement benefit obligations
135
134
Deferred income tax liabilities, net
124
163
Operating lease liabilities
1,053
1,128
Other non-current liabilities
438
446
Commitments and contingencies
Equity:
Class A common stock
4
4
Class B common stock
2
2
Additional paid-in capital
11,270
11,449
Accumulated deficit
(1,933
)
(2,144
)
Accumulated other comprehensive loss
(1,292
)
(1,247
)
Total News Corporation stockholders'
equity
8,051
8,064
Noncontrolling interests
857
881
Total equity
8,908
8,945
Total liabilities and equity
$
16,544
$
16,921
NEWS CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited; in
millions)
For the nine months ended March
31,
2024
2023
Operating activities:
Net income
$
283
$
219
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
542
536
Operating lease expense
72
82
Equity losses of affiliates
5
43
Cash distributions received from
affiliates
4
7
Impairment charges
24
—
Deferred income taxes and taxes
payable
52
27
Other, net
23
10
Change in operating assets and
liabilities, net of acquisitions:
Receivables and other assets
15
(236
)
Inventories, net
(12
)
(55
)
Accounts payable and other liabilities
(164
)
37
Net cash provided by operating
activities
844
670
Investing activities:
Capital expenditures
(353
)
(350
)
Acquisitions, net of cash acquired
(20
)
(15
)
Investments in equity affiliates and
other, net
(31
)
(105
)
Proceeds from property, plant and
equipment and other asset dispositions
—
51
Other, net
—
(21
)
Net cash used in investing activities
(404
)
(440
)
Financing activities:
Borrowings
1,140
434
Repayment of borrowings
(1,235
)
(506
)
Repurchase of shares
(83
)
(196
)
Dividends paid
(115
)
(116
)
Other, net
(24
)
2
Net cash used in financing activities
(317
)
(382
)
Net change in cash and cash
equivalents
123
(152
)
Cash and cash equivalents, beginning of
period
1,833
1,822
Effect of exchange rate changes on cash
and cash equivalents
(13
)
(11
)
Cash and cash equivalents, end of
period
$
1,943
$
1,659
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 income
to Total Segment EBITDA for the three and nine months ended March
31, 2024 and 2023:
For the three months ended March
31,
2024
2023
Change
% Change
(in millions)
Net income
$
42
$
59
$
(17
)
(29
)%
Add:
Income tax expense
22
32
(10
)
(31
)%
Other, net
10
(14
)
24
**
Interest expense, net
19
25
(6
)
(24
)%
Equity losses of affiliates
2
10
(8
)
(80
)%
Impairment and restructuring charges
35
25
10
40
%
Depreciation and amortization
192
183
9
5
%
Total Segment EBITDA
$
322
$
320
$
2
1
%
For the nine months ended March
31,
2024
2023
Change
% Change
(in millions)
Net income
$
283
$
219
$
64
29
%
Add:
Income tax expense
153
128
25
20
%
Other, net
23
10
13
**
Interest expense, net
67
78
(11
)
(14
)%
Equity losses of affiliates
5
43
(38
)
(88
)%
Impairment and restructuring charges
86
65
21
32
%
Depreciation and amortization
542
536
6
1
%
Total Segment EBITDA
$
1,159
$
1,079
$
80
7
%
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 and nine months ended March 31, 2024
and 2023:
Revenues
Total Segment EBITDA
For the three months ended March
31,
For the three months ended March
31,
2024
2023
Difference
2024
2023
Difference
(in millions)
(in millions)
As reported
$
2,423
$
2,447
$
(24
)
$
322
$
320
$
2
Impact of acquisitions
(4
)
—
(4
)
1
4
(3
)
Impact of foreign currency
fluctuations
21
—
21
6
—
6
Net impact of U.K. Newspaper Matters
—
—
—
2
4
(2
)
As adjusted
$
2,440
$
2,447
$
(7
)
$
331
$
328
$
3
Revenues
Total Segment EBITDA
For the nine months ended March
31,
For the nine months ended March
31,
2024
2023
Difference
2024
2023
Difference
(in millions)
(in millions)
As reported
$
7,508
$
7,446
$
62
$
1,159
$
1,079
$
80
Impact of acquisitions
(16
)
—
(16
)
—
10
(10
)
Impact of foreign currency
fluctuations
22
—
22
14
—
14
Net impact of U.K. Newspaper Matters
—
—
—
7
13
(6
)
As adjusted
$
7,514
$
7,446
$
68
$
1,180
$
1,102
$
78
Foreign Exchange Rates
Average foreign exchange rates used in the calculation of the
impact of foreign currency fluctuations for the three and nine
months ended March 31, 2024 and 2023 are as follows:
Fiscal Year 2024
Q1
Q2
Q3
U.S. Dollar per Australian Dollar
$0.65
$0.65
$0.66
U.S. Dollar per British Pound Sterling
$1.27
$1.24
$1.27
Fiscal Year 2023
Q1
Q2
Q3
U.S. Dollar per Australian Dollar
$0.68
$0.66
$0.68
U.S. Dollar per British Pound Sterling
$1.17
$1.17
$1.22
Adjusted Revenues and Adjusted Segment EBITDA by segment for the
three and nine months ended March 31, 2024 and 2023 are as
follows:
For the three months ended March
31,
2024
2023
% Change
(in millions)
Better/(Worse)
Adjusted Revenues:
Digital Real Estate Services
$
395
$
363
9
%
Subscription Video Services
473
477
(1
)%
Dow Jones
543
529
3
%
Book Publishing
502
515
(3
)%
News Media
527
563
(6
)%
Other
—
—
—
%
Adjusted Total Revenues
$
2,440
$
2,447
—
%
Adjusted Segment EBITDA:
Digital Real Estate Services
$
109
$
102
7
%
Subscription Video Services
69
68
1
%
Dow Jones
118
109
8
%
Book Publishing
62
61
2
%
News Media
25
34
(26
)%
Other
(52
)
(46
)
(13
)%
Adjusted Total Segment EBITDA
$
331
$
328
1
%
For the nine months ended March
31,
2024
2023
% Change
(in millions)
Better/(Worse)
Adjusted Revenues:
Digital Real Estate Services
$
1,224
$
1,170
5
%
Subscription Video Services
1,456
1,441
1
%
Dow Jones
1,657
1,607
3
%
Book Publishing
1,559
1,533
2
%
News Media
1,618
1,695
(5
)%
Other
—
—
—
%
Adjusted Total Revenues
$
7,514
$
7,446
1
%
Adjusted Segment EBITDA:
Digital Real Estate Services
$
386
$
349
11
%
Subscription Video Services
244
269
(9
)%
Dow Jones
404
361
12
%
Book Publishing
208
151
38
%
News Media
90
111
(19
)%
Other
(152
)
(139
)
(9
)%
Adjusted Total Segment EBITDA
$
1,180
$
1,102
7
%
The following tables reconcile reported revenues and Segment
EBITDA by segment to Adjusted Revenues and Adjusted Segment EBITDA
by segment for the three and nine months ended March 31, 2024 and
2023:
For the three months ended March
31, 2024
As Reported
Impact of Acquisitions
Impact of Foreign Currency
Fluctuations
Net Impact of U.K. Newspaper
Matters
As Adjusted
(in millions)
Revenues:
Digital Real Estate Services
$
388
$
(3
)
$
10
$
—
$
395
Subscription Video Services
455
—
18
—
473
Dow Jones
544
—
(1
)
—
543
Book Publishing
506
(1
)
(3
)
—
502
News Media
530
—
(3
)
—
527
Other
—
—
—
—
—
Total Revenues
$
2,423
$
(4
)
$
21
$
—
$
2,440
Segment EBITDA:
Digital Real Estate Services
$
104
$
1
$
4
$
—
$
109
Subscription Video Services
66
—
3
—
69
Dow Jones
118
—
—
—
118
Book Publishing
62
—
—
—
62
News Media
26
—
(1
)
—
25
Other
(54
)
—
—
2
(52
)
Total Segment EBITDA
$
322
$
1
$
6
$
2
$
331
For the three months ended March
31, 2023
As Reported
Impact of Acquisitions
Impact of Foreign Currency
Fluctuations
Net Impact of U.K. Newspaper
Matters
As Adjusted
(in millions)
Revenues:
Digital Real Estate Services
$
363
$
—
$
—
$
—
$
363
Subscription Video Services
477
—
—
—
477
Dow Jones
529
—
—
—
529
Book Publishing
515
—
—
—
515
News Media
563
—
—
—
563
Other
—
—
—
—
—
Total Revenues
$
2,447
$
—
$
—
$
—
$
2,447
Segment EBITDA:
Digital Real Estate Services
$
102
$
—
$
—
$
—
$
102
Subscription Video Services
68
—
—
—
68
Dow Jones
109
—
—
—
109
Book Publishing
61
—
—
—
61
News Media
34
—
—
—
34
Other
(54
)
4
—
4
(46
)
Total Segment EBITDA
$
320
$
4
$
—
$
4
$
328
For the nine months ended March
31, 2024
As Reported
Impact of Acquisitions
Impact of Foreign Currency
Fluctuations
Net Impact of U.K. Newspaper
Matters
As Adjusted
(in millions)
Revenues:
Digital Real Estate Services
$
1,210
$
(10
)
$
24
$
—
$
1,224
Subscription Video Services
1,411
—
45
—
1,456
Dow Jones
1,665
—
(8
)
—
1,657
Book Publishing
1,581
(6
)
(16
)
—
1,559
News Media
1,641
—
(23
)
—
1,618
Other
—
—
—
—
—
Total Revenues
$
7,508
$
(16
)
$
22
$
—
$
7,514
Segment EBITDA:
Digital Real Estate Services
$
373
$
2
$
11
$
—
$
386
Subscription Video Services
236
—
8
—
244
Dow Jones
405
—
(1
)
—
404
Book Publishing
212
(2
)
(2
)
—
208
News Media
92
—
(2
)
—
90
Other
(159
)
—
—
7
(152
)
Total Segment EBITDA
$
1,159
$
—
$
14
$
7
$
1,180
For the nine months ended March
31, 2023
As Reported
Impact of Acquisitions
Impact of Foreign Currency
Fluctuations
Net Impact of U.K. Newspaper
Matters
As Adjusted
(in millions)
Revenues:
Digital Real Estate Services
$
1,170
$
—
$
—
$
—
$
1,170
Subscription Video Services
1,441
—
—
—
1,441
Dow Jones
1,607
—
—
—
1,607
Book Publishing
1,533
—
—
—
1,533
News Media
1,695
—
—
—
1,695
Other
—
—
—
—
—
Total Revenues
$
7,446
$
—
$
—
$
—
$
7,446
Segment EBITDA:
Digital Real Estate Services
$
349
$
—
$
—
$
—
$
349
Subscription Video Services
269
—
—
—
269
Dow Jones
361
—
—
—
361
Book Publishing
151
—
—
—
151
News Media
111
—
—
—
111
Other
(162
)
10
—
13
(139
)
Total Segment EBITDA
$
1,079
$
10
$
—
$
13
$
1,102
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 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 and nine months ended March 31, 2024
and 2023:
For the three months ended March
31, 2024
For the three months ended March
31, 2023
(in millions, except per share data)
Net income attributable to
stockholders
EPS
Net income attributable to
stockholders
EPS
Net income
$
42
$
59
Net income attributable to noncontrolling
interests
(12
)
(9
)
Net income attributable to News
Corporation stockholders
$
30
$
0.05
$
50
$
0.09
U.K. Newspaper Matters
2
—
4
0.01
Impairment and restructuring charges
35
0.06
25
0.04
Other, net
10
0.02
(14
)
(0.03
)
Tax impact on items above
(12
)
(0.02
)
(12
)
(0.02
)
Impact of noncontrolling interest on items
above
—
—
—
—
As adjusted
$
65
$
0.11
$
53
$
0.09
For the nine months ended March
31, 2024
For the nine months ended March
31, 2023
(in millions, except per share data)
Net income attributable to
stockholders
EPS
Net income attributable to
stockholders
EPS
Net income
$
283
$
219
Less: Net income attributable to
noncontrolling interests
(67
)
(62
)
Net income attributable to News
Corporation stockholders
$
216
$
0.38
$
157
$
0.27
U.K. Newspaper Matters
7
0.01
13
0.02
Impairment and restructuring charges
(a)
86
0.15
65
0.11
Other, net
23
0.04
10
0.02
Tax impact on items above
(30
)
(0.05
)
(39
)
(0.07
)
Impact of noncontrolling interest on items
above
2
—
(1
)
—
As adjusted
$
304
$
0.53
$
205
$
0.35
(a)
During the nine months ended March 31,
2024, the Company recognized non-cash impairment charges of $22
million at the News Media segment related to the write-down of
fixed assets associated with the proposed combination of certain
U.K. printing operations with those of a third party.
NOTE 4 – CONSTANT CURRENCY REVENUES
The Company believes that the presentation of revenues excluding
the impact of foreign currency fluctuations (“constant currency
revenues”) provides useful information regarding the performance of
the Company’s core business operations exclusive of distortions
between periods caused by the unpredictability and volatility of
currency fluctuations. The Company calculates the impact of foreign
currency fluctuations for businesses reporting in currencies other
than the U.S. dollar as described in Note 2.
Constant currency revenues are not measures of performance under
generally accepted accounting principles and should not be
construed as substitutes for revenues as determined under GAAP as
measures of performance. However, management uses these measures in
comparing the Company’s historical performance and believes that
they provide meaningful and comparable information to investors to
assist in their analysis of our performance relative to prior
periods and our competitors.
The following tables reconcile reported revenues to constant
currency revenues for the three and nine months ended March 31,
2024:
Q3 Fiscal 2023
Q3 Fiscal 2024
FX impact
Q3 Fiscal 2024 constant
currency
% Change - reported
% Change - constant currency
($ in millions)
Better/(Worse)
Consolidated results:
Circulation and subscription
$
1,122
$
1,121
$
(12
)
$
1,133
—
%
1
%
Advertising
393
358
(2
)
360
(9
)%
(8
)%
Consumer
495
484
3
481
(2
)%
(3
)%
Real estate
272
301
(7
)
308
11
%
13
%
Other
165
159
(3
)
162
(4
)%
(2
)%
Total revenues
$
2,447
$
2,423
$
(21
)
$
2,444
(1
)%
—
%
Digital Real Estate Services:
Circulation and subscription
$
3
$
3
$
—
$
3
—
%
—
%
Advertising
35
32
(1
)
$
33
(9
)%
(6
)%
Real estate
272
301
(7
)
$
308
11
%
13
%
Other
53
52
(2
)
$
54
(2
)%
2
%
Total Digital Real Estate Services segment
revenues
$
363
$
388
$
(10
)
$
398
7
%
10
%
REA Group revenues
$
222
$
256
$
(10
)
$
266
15
%
20
%
Subscription Video Services:
Circulation and subscription
$
419
$
398
$
(16
)
$
414
(5
)%
(1
)%
Advertising
49
47
(1
)
$
48
(4
)%
(2
)%
Other
9
10
(1
)
$
11
11
%
22
%
Total Subscription Video Services segment
revenues
$
477
$
455
$
(18
)
$
473
(5
)%
(1
)%
Q3 Fiscal 2023
Q3 Fiscal 2024
FX impact
Q3 Fiscal 2024 constant
currency
% Change - reported
% Change - constant currency
($ in millions)
Better/(Worse)
Dow Jones:
Circulation and subscription
$
426
$
445
$
1
$
444
4
%
4
%
Advertising
88
86
—
$
86
(2
)%
(2
)%
Other
15
13
—
$
13
(13
)%
(13
)%
Total Dow Jones segment revenues
$
529
$
544
$
1
$
543
3
%
3
%
Book Publishing:
Consumer
495
484
3
$
481
(2
)%
(3
)%
Other
20
22
—
$
22
10
%
10
%
Total Book Publishing segment revenues
$
515
$
506
$
3
$
503
(2
)%
(2
)%
News Media:
Circulation and subscription
$
274
$
275
$
3
$
272
—
%
(1
)%
Advertising
221
193
—
$
193
(13
)%
(13
)%
Other
68
62
—
$
62
(9
)%
(9
)%
Total News Media segment revenues
$
563
$
530
$
3
$
527
(6
)%
(6
)%
News UK
Circulation and subscription
$
135
$
144
$
6
$
138
7
%
2
%
Advertising
72
64
3
$
61
(11
)%
(15
)%
Other
28
26
1
$
25
(7
)%
(11
)%
Total News UK revenues
$
235
$
234
$
10
$
224
—
%
(5
)%
News Corp Australia
Circulation and subscription
$
112
$
105
$
(4
)
$
109
(6
)%
(3
)%
Advertising
99
83
(3
)
$
86
(16
)%
(13
)%
Other
31
31
(1
)
$
32
—
%
3
%
Total News Corp Australia revenues
$
242
$
219
$
(8
)
$
227
(10
)%
(6
)%
Q3 YTD Fiscal 2023
Q3 YTD Fiscal 2024
FX impact
Q3 YTD Fiscal 2024 constant
currency
% Change - reported
% Change - constant currency
($ in millions)
Better/(Worse)
Consolidated results:
Circulation and subscription
$
3,318
$
3,369
$
(16
)
$
3,385
2
%
2
%
Advertising
1,263
1,187
1
1,186
(6
)%
(6
)%
Consumer
1,474
1,513
16
1,497
3
%
2
%
Real estate
896
939
(18
)
957
5
%
7
%
Other
495
500
(5
)
505
1
%
2
%
Total revenues
$
7,446
$
7,508
$
(22
)
$
7,530
1
%
1
%
Digital Real Estate Services:
Circulation and subscription
$
9
$
8
$
—
$
8
(11
)%
(11
)%
Advertising
103
99
(1
)
$
100
(4
)%
(3
)%
Real estate
896
939
(18
)
$
957
5
%
7
%
Other
162
164
(5
)
$
169
1
%
4
%
Total Digital Real Estate Services segment
revenues
$
1,170
$
1,210
$
(24
)
$
1,234
3
%
5
%
REA Group revenues
$
714
$
809
$
(24
)
$
833
13
%
17
%
Subscription Video Services:
Circulation and subscription
$
1,249
$
1,217
$
(39
)
$
1,256
(3
)%
1
%
Advertising
160
160
(5
)
$
165
—
%
3
%
Other
32
34
(1
)
$
35
6
%
9
%
Total Subscription Video Services segment
revenues
$
1,441
$
1,411
$
(45
)
$
1,456
(2
)%
1
%
Dow Jones:
Circulation and subscription
$
1,257
$
1,322
$
8
$
1,314
5
%
5
%
Advertising
313
303
—
$
303
(3
)%
(3
)%
Other
37
40
—
$
40
8
%
8
%
Total Dow Jones segment revenues
$
1,607
$
1,665
$
8
$
1,657
4
%
3
%
Book Publishing:
Consumer
1,474
1,513
16
$
1,497
3
%
2
%
Other
59
68
—
$
68
15
%
15
%
Total Book Publishing segment revenues
$
1,533
$
1,581
$
16
$
1,565
3
%
2
%
Q3 YTD Fiscal 2023
Q3 YTD Fiscal 2024
FX impact
Q3 YTD Fiscal 2024 constant
currency
% Change - reported
% Change - constant currency
($ in millions)
Better/(Worse)
News Media:
Circulation and subscription
$
803
$
822
$
15
$
807
2
%
—
%
Advertising
687
625
7
$
618
(9
)%
(10
)%
Other
205
194
1
$
193
(5
)%
(6
)%
Total News Media segment revenues
$
1,695
$
1,641
$
23
$
1,618
(3
)%
(5
)%
News UK
Circulation and subscription
$
398
$
429
$
24
$
405
8
%
2
%
Advertising
216
199
10
$
189
(8
)%
(13
)%
Other
80
73
4
$
69
(9
)%
(14
)%
Total News UK revenues
$
694
$
701
$
38
$
663
1
%
(4
)%
News Corp Australia
Circulation and subscription
$
331
$
318
$
(10
)
$
328
(4
)%
(1
)%
Advertising
316
272
(8
)
$
280
(14
)%
(11
)%
Other
102
103
(3
)
$
106
1
%
4
%
Total News Corp Australia revenues
$
749
$
693
$
(21
)
$
714
(7
)%
(5
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240508006243/en/
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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