News Corp reports rebound in ad market and strong digital subscriber gains

News Corp has today reported its financial results for the three months ended 31 March, 2022.

The company reported revenues of US$2.49 billion (A$3.5 billion) in the quarter – a record for third-quarter revenue, and a 7% increase compared to US$2.34 billion (A$3.2 million) in the previous year.

In the News Media sector, revenues in the quarter increased by US$30 million (A$42 million), or 5%, as compared to the prior year, driven by the continued recovery of the post-COVID-19 advertising market and higher circulation and subscription revenues, partially offset by a US$25 million (A$35 million). Within the segment, revenues at News UK and News Corp Australia increased 4% and 2%.

News Media continued to benefit from the rebound in the advertising market, new content licensing revenues and strong digital subscriber gains.

As of the end of March, Foxtel’s total paid streaming subscribers grew 62% compared to the prior year with both BINGE and Kayo at approximately 1.2 million subscribers.

Foxtel Group streaming subscription revenues represented approximately 20% of total circulation and subscription revenues in the quarter. Adjusted Revenues increased 1% compared to the prior year.

Total Foxtel Group subscribers were 4.54 million (4.34 million paid) as at March 31, up 20% on
the prior year.

Foxtel Now reached 2.78 million (2.54 million paid), up 52% year-on-year and 21% on the prior quarter. Foxtel Now reached 215,000 subscribers (206,000 paid), down 10% YoY.

Foxtel Residential and Commercial broadcast subscribers were 1.762 million. Foxtel Residential Broadcast subscribers declined to 1.52 million, down 11% year-on-year.

Foxtel Residential Broadcast churn improved 580 basis points to 14.3% compared to the prior year.

Dow Jones reported its highest third quarter revenue since its acquisition with 16% growth and saw continued digital subscription gains as well as strong performance in advertising.

Commenting on the results, chief executive, Robert Thomson, said: “News Corp revenues and profitability set new records for the third quarter, building on the momentum of preceding record quarters. We have now achieved more in profitability through the first three quarters of fiscal 2022 — at over $1.3 billion and rising 27% compared to the prior year — than in any entire fiscal year since our rebirth in 2013.

“We benefited from a surge in digital advertising revenue, including 21% growth at Dow Jones, and more than 15% growth in paid digital subscribers across our key markets.

He added: “Macroeconomic challenges affect all businesses, whether it be supply chain pressures or inflation. But our collective resilience, adaptability and creativity, already stress-tested by the pandemic, have contributed to record revenues and profits.”

Closing digital subscribers at News Corp Australia as of 31 March, 2022 were 946,000 (876,000 for news mastheads), compared to 807,000 (760,000 for news mastheads) in the prior year.

News Corp March quarter 2022

News Corp (NWS) shares where trading on the ASX at A$28.84 as of 6 May, with a market cap of US$11.64 billion (A$16.35 billion).


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