ARN prepares investors for 27% earnings plummet
ARN's Lauren Joyce and Michael Stephenson have big plans for 2026 - but they have to get through 2025 first
ARN has provided the market with a sobering financial outlook for the calendar year, as it forecasts a full-year EBITDA drop of between 25% and 27%.
In an ASX filing on Wednesday morning, the audio company reported that the Australian advertising market has experienced “significant softness” in the second half of the year, with ARN suffering a 10% year-on-year revenue drop for the ten months to October 31.
Revenue for the second half of FY 2025 is “expected to decline by low double digits compared to the prior year”, suggesting a much softer Christmas advertising season than last year.
There was a lot of couched language in the financial update: “Broader economic uncertainty and cautious client sentiment weigh[s] on advertising spend across the industry”, for example.
This cautious client sentiment has been observed in the results of other media companies.
Last week at its annual general meeting, Seven reported a 12–13% fall in TV advertising during the October period while outdoor media company Ooh Media reported a “significantly” softened out-of-home market for October. News Corp Australia was also blamed for a US$7m miss in its first quarter FY2026 results.
Despite the gloomy financial forecast, ARN painted a rosy picture of 2026, reframing 2025 as a rebuilding year for the media company.
“ARN has shifted its strategy to better align with evolving market dynamics and is encouraged by the progress of its turnaround strategy, which is delivering operational improvements and positioning the business for long term sustainable growth,” the report reads.
“Actions taken YTD include: simplifying the operating model; $35m of $40m cost out actioned; improved leadership and digital capability; commercial team reset; divestments of non-core assets underway; significant iHeart product upgrades in October; new data and ad tech rollouts; and revitalised brand, network, content and commercial strategy.”
ARN repeatedly drew attention to its cost-out program, which it said would reduce costs by 8% year-on-year for this half (July-December).
“ARN is committed to continuing its evolution into an entertainment business that connects audiences and advertisers through audio, video, social and live experiences.”
This update isn’t entirely unexpected.
In the first half of 2025, ARN’s underlying EBITDA suffered a 14% year-on-year drop. During the company’s half-year earnings call, CFO Alexis Poole said this figure is what ARN considers the primarily measure of its performance.
For the first half of the year, ARN’s revenue from continued operations fell by 7% (from $152.8 million to $142.3 million). This figure, however, excluded Cody, ARN’s Hong Kong-based out-of-home business, which it is actively looking to sell, and creative agency Emotive, which it sold its majority stake in this July.
Total radio revenue dropped by 9% year-on-year, with metro radio falling by 12% (from $85.24m to $75.26m) and regional by 5% (from $56.6m to $53.7m). Digital revenues increased by 21%, a modest $2.4 million increase, from $11m to $13.4m.
Outgoing CEO Ciaran Davis was blunt during the half-yearly investor call, blaming “2024 audience challenges” that carried into the first half of this year, as well as some formatting issues.
“GOLD is overperforming, however KIIS is underperforming,” he said, promising that KIIS was “actively working on shifting its operating model … refreshing our content for commercial results”.
Michael Stephenson, ARN’s new boss, delivering the new message at the company’s upfront in October
This content refresh was presented at ARN’s first-ever upfront last month at the Star Casino in Sydney, a splashy presentation which was rumoured to cost a cool $1.5 million to stage.
During the presentation, ARN announced the expansion of its KIIS network into a national brand; reported it had poached Ben Harvey and Liam Stapleton from Nova’s national Late Drive show and inserted them into KIIS Adelaide breakfast; tapped Craig “Lowie” Lowe to host Brisbane’s KIIS 97.3 breakfast show; and expanded Kyle and Jackie O into breakfast at KIIS’ new DAB+ Perth station.
Kent “Smallzy” Small will also come over to KIIS from Nova in 2026, hosting celebrity-drenched content across two national timeslots on KIIS — 3pm to 4pm, and 7pm to 9pm.
Outside of KIIS, Gold has also expanded into a national network — with Melbourne breakfast star Christian O’Connell, and Sydney’s Jonesy and Amanda in Drive both also going national.
The iHeart app has been refreshed to model a hybrid of Spotify, Apple Music, and the humble car stereo, while new boss Michael Stephenson has introduced a number of live events that expand the ARN brand into new realms, including run clubs, singles cruises, and a series of live concerts aimed squarely at scrolling Gen Zers.
Read more about ARN’s plans for 2026 here
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