Strong streaming performance at Foxtel in Q2 2024

At the Subscription Video Services segment, Foxtel Group saw strong streaming performance, with both Kayo and BINGE achieving record paying subscribers, and ended the fiscal year at over 3.2 million total paying streaming subscribers

NEW YORK, NY — 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, 2024.

Subscription Video Services

Fourth Quarter Segment Results

Revenues of $506 million in the quarter increased $5 million, or 1%, compared with the prior year, primarily driven by higher revenues from Kayo and BINGE from increases in both volume and pricing, mostly offset by the impact from fewer residential broadcast subscribers and a $7 million, or 1%, negative impact from foreign currency fluctuations. Adjusted Revenues of $513 million increased 2% compared to the prior year. Foxtel Group streaming subscription revenues represented 32% of total circulation and subscription revenues in the quarter, as compared to 29% in the prior year.

As of June 30, 2024, Foxtel’s total closing paid subscribers were nearly 4.7 million, a 1% increase compared to the prior year, driven by growth in Kayo and BINGE subscribers, partly offset by fewer residential broadcast subscribers. Broadcast subscriber churn in the quarter was 11.7% compared to 11.1% in the prior year partly driven by the price and packaging simplification. Broadcast ARPU for the quarter increased 6% year-over-year to A$90 (US$59).

Subscribers (in 000’s)

                                                As of June 30,
                                           2024           2023
                                  -------------  -------------
Broadcast Subscribers
 Residential                              1,210          1,341
 Commercial                                 242            233
Streaming Subscribers - Total (Paid)
 Kayo                             1,606 (1,550)  1,411 (1,401)
 BINGE                            1,552 (1,529)  1,541 (1,487)
 Foxtel Now                           147 (142)      177 (170)
                                  -------------  -------------
Total Subscribers - Total (Paid)  4,776 (4,690)  4,723 (4,650)

Segment EBITDA of $74 million in the quarter decreased $4 million, or 5%, compared with the prior year, primarily due to $28 million of Hubbl launch costs, partially offset by lower entertainment programming rights and transmission costs and the higher revenues discussed above. Adjusted Segment EBITDA decreased 4%.

Full Year Segment Results

Fiscal 2024 full year revenues declined $25 million, or 1%, compared with the prior year, due to a $52 million, or 2%, negative impact from foreign currency fluctuations. Adjusted Revenues increased 1% compared to the prior year. Higher streaming revenues, primarily from Kayo and BINGE, and higher advertising revenues more than offset the revenue declines from lower residential broadcast subscribers. Foxtel Group streaming subscription revenues represented approximately 30% of total circulation and subscription revenues in the fiscal year compared to 27% in the prior year.

Segment EBITDA for fiscal 2024 decreased $37 million, or 11%, compared to the prior year, primarily due to $51 million of costs related to the launch of Hubbl, higher sports programming costs due to contractual increases and the $9 million, or 3%, negative impact from foreign currency fluctuations, partly offset by the revenue drivers discussed above and declines in other costs including lower technology, entertainment programming rights and marketing. Adjusted Segment EBITDA decreased 8%.

Strategic Review

In response to third party interest, the Company is assessing strategic and financial options for the Foxtel Group, including its capital structure and assets. There is no assurance regarding the timing of any action or transaction, nor that the strategic review will result in a transaction or other strategic change.