This report was published shortly after News Corp reported its results on Tuesday morning. We publish it again today with coverage below about how the results were greeted by other media.
News Corp: Full financial year highlights
• Fiscal 2022 full-year revenues and net income were records at $10.39 billion (all amounts US dollars) and $760 million, respectively. Revenues grew 11% compared to $9.36 billion in the prior year and net income increased 95% compared to $389 million in the prior year.
• Dow Jones achieved its highest full-year revenues and Segment EBITDA since its acquisition, driven by acquisitions, continued growth in digital-only subscriptions, and record advertising revenues.
• News Media’s segment EBITDA improved to $217 million from $52 million in the prior year, helped by growth in digital advertising revenues, and was the biggest contributor to total segment EBITDA growth for the fiscal year.
• Revenues at News Corp Australia increased 9% year-on-year, digital subscriptions for News Corp Australia products are now close to 1m.
• At the Subscription Video Services segment, Foxtel saw its streaming revenues from Kayo and Binge offset broadcast declines during the year, while achieving over 2.8 million total streaming subscribers as of year-end.
News Corp chief executive Robert Thomson and chief financial officer Susan Panuccio fronted analysts this afternoon US time as the company released its 4th quarter and full financial year results.
Thomson noted he was reluctant to overuse superlatives to describe company performance, but he added that the continuing record results made them hard to avoid. He told listeners to the results conference call that News Corp’s media properties are performing unlike any others around the world.
The chief executive paid tribute to the support of Rupert and Lachlan Murdoch and the News Corp board.
“News Corp set significant records in fiscal 2022, including in revenue and profitability, which surged 31 percent to $1.7 billion, and that came after a resounding 26 percent increase in the previous year,” Thomson said on the call.
“Revenues rose a robust 11 percent, reaching a record $10.4 billion, with increases in each and every segment on an adjusted basis.
“Dow Jones profitability soared 54 percent in the quarter to $106 million, while for the year, it rose 30 percent to $433 million.
“Our Digital Real Estate Services segment reported 25 percent revenue growth for the year and a healthy 12 percent improvement in profitability, as we continued to build brands and products for future success across Realtor.com and REA Group.
“The News Media segment was the single largest contributor to the enhanced profit picture this fiscal year with profitability expanding to $217 million from $52 million, bolstered by growth in digital advertising revenues and record digital subscriber numbers.”
In his opening address, Thomson also noted the performance of the Australian team under the guidance of Michael Miller.
“Foxtel’s renaissance continued, as streaming revenues from Kayo and Binge offset broadcast declines during the year. While down slightly for the year due to currency fluctuations, both revenue and profitability were markedly higher on an adjusted basis. It is a company transformed,” said Thomson as he detailed some of the record-busting results.
Regarding the future, Thomson was very upbeat about the current performance continuing into the future. News Corp was “well positioned”, added Susan Panuccio succinctly.
News Corp segment summaries: Digital Real Estate Services
Fiscal 2022 full year revenues increased $348 million, or 25%, compared to the prior year, due to strong performances at REA Group and Move and the acquisitions of Mortgage Choice and REA India, partially offset by a $29 million, or 2%, negative impact from foreign currency fluctuations.
Subscription Video Services
Fiscal 2022 full year revenues declined $46 million, or 2%, compared with the prior year, due to a $61 million, or 3%, negative impact from foreign currency fluctuations, as higher streaming revenues, primarily from Kayo and Binge, and higher advertising revenues more than offset the revenue declines from the residential broadcast product. Foxtel Group streaming subscription revenues represented approximately 20% of total circulation and subscription revenues in the fiscal year compared to 14% in the prior year. Adjusted Revenues increased 1% compared to the prior year.
As of June 30, 2022, Foxtel’s total closing paid subscribers were 4.4 million, a 13% increase compared to the prior year, primarily due to the growth in Binge and Kayo subscribers, partially offset by lower residential broadcast subscribers. Broadcast subscriber churn in the quarter improved to 13.8% from 17.1% in the prior year. Broadcast ARPU for the quarter increased 2% year-over-year to A$83 (US$59).
Dow Jones including The Wall Street Journal
Fiscal 2022 full-year revenues increased $302 million, or 18%, compared to the prior year, which reflects the growth in circulation and subscription revenues from the acquisitions of Investor’s Business Daily (“IBD”), OPIS and CMA, as well as continued digital subscription gains and growth in Risk & Compliance products.
Dow Jones had its highest advertising revenues since fiscal 2017, which also contributed to the revenue growth. Adjusted revenues increased 11% compared to the prior year. Digital revenues at Dow Jones represented 75% of total revenues compared to 72% in the prior year.
Circulation and subscription revenues increased $220 million, or 17%, which includes $59 million, $47 million and $6 million of higher contributions from the acquisitions of IBD, OPIS and CMA, respectively, a $31 million benefit from the additional week and a $10 million, or 1%, negative impact from foreign currency fluctuations.
Circulation revenues grew 15%, reflecting the acquisition of IBD and continued strong growth in digital-only subscriptions at The Wall Street Journal and Barron’s. Digital circulation revenues accounted for 67% of circulation revenues for the year, compared to 64% in the prior year.
Advertising revenue increased $76 million, or 20%, the highest growth rate since Dow Jones’ acquisition, primarily due to a 22% increase in digital advertising and a 19% increase in print advertising. Digital advertising revenues accounted for 59% of total advertising revenues for the year, compared to 58% in the prior year.
During the last quarter, total average subscriptions to Dow Jones’ consumer products reached approximately 4.9 million, a 9% increase compared to the prior year. Digital-only subscriptions to Dow Jones’ consumer products grew 14%. Subscriptions to The Wall Street Journal grew 8% compared to the prior year, to over 3.7 million average subscriptions in the quarter. Digital-only subscriptions to The Wall Street Journal grew 14% to approximately 3.1 million average subscriptions in the quarter, and represented 83% of its total subscriptions.
News Media: Australia, US and UK
Fiscal 2022 full-year revenues increased $218 million, or 10%, compared to the prior year, which includes a $47 million, or 2%, negative impact from foreign currency fluctuations. Within the segment, revenues at News Corp Australia increased 9% and revenues at News UK increased 7%.
The New York Post and Wireless Group also saw higher revenues during the fiscal year. Adjusted revenues for the segment increased 12% compared to the prior year.
Circulation and subscription revenues increased $83 million, or 8%, compared to the prior year, primarily due to higher content licensing revenues, digital subscriber growth and cover price increases, partially offset by print volume declines and a $22 million, or 2%, negative impact from foreign currency fluctuations.
Advertising revenues increased $120 million, or 14%, compared to the prior year, driven by growth in digital advertising across the businesses and the recovery of print advertising, predominantly in the UK, partially offset by a $20 million, or 2%, negative impact from foreign currency fluctuations.
Segment EBITDA for fiscal 2022 increased $165 million compared to the prior year, driven by higher revenues, as discussed above. News Corp Australia and News UK contributed $109 million and $54 million, respectively, to the segment EBITDA growth and Wireless Group and the New York Post were also positive contributors. The growth was partially offset by higher costs related to TalkTV, which launched in April 2022. Adjusted segment EBITDA increased $166 million compared to the prior year.
Revenues at News Corp Australia increased 6% in the last quarter and revenues at News UK were flat as both were impacted by negative foreign currency fluctuations.
Digital revenues represented 35% of News Media segment revenues in the fourth quarter, compared to 32% in the prior year, and represented 33% of the combined revenues of the newspaper mastheads.
Digital subscribers and users across key properties within the News Media segment are as follows:
Closing digital subscribers at News Corp Australia as of June 30, 2022 were 964,000 (882,000 for news mastheads), compared to 859,000 (810,000 for news mastheads) in the prior year. (Source: Internal data)
In the UK, The Times and Sunday Times closing digital subscribers, including the Times Literary Supplement, as of June 30, 2022 were 445,000, compared to 374,000 in the prior year. (Source: Internal data)
The Sun’s digital offering reached approximately 165 million global monthly unique users in June 2022, compared to 124 million in the prior year. (Source: Google Analytics)
New York Post’s digital network reached approximately 198 million unique users in June 2022, compared to 123 million in the prior year. (Source: Google Analytics)
News Corp results reaction elsewhere in the media:
News Corp profits almost double as subscriptions drive recovery from pandemic losses
The Financial Times
Record News Corp profits dwarf $20m TalkTV launch costs
Press Gazette
News Corp almost doubles its profits on back of digital advertising and subscribers
The Guardian
Streaming puts Foxtel on a roll
The Australian Financial Review
News Corp profit, revenue hit fresh record
The Australian
News Corp Posts Revenue Growth, Boosted by Dow Jones
The Wall Street Journal
Motley Fool – Raymond Jang
The News Corp share price has dropped 21% in the last 12 months, far underperforming the S&P/ASX 200 Index. Across the same period, the ASX 200 has declined by 6%.
News Corp has been a benefactor of the digital media tailwind as people move away from physical news publications. As a result, gross margins have steadily risen in the last decade.
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2022 Mediaweek 100 Power Lunch live event
Last year News Corp executives filled the chart with 16 separate entries – Rupert Murdoch ranked #1 and the company had three of the top four spots and six of the top 20.
Will the company executives retain their spots. Find out when the new Mediaweek 100 is revealed in October.
The Mediaweek 100 Power Lunch will be held on Friday October 21 at The Crown’s Pearl Ballroom in Sydney.
The event will also showcase two new lists this year: the Mediaweek Agency 50, and the Mediaweek Star Power 25.
Tables are now available here.
The Mediaweek 100 and the new lists are not just a tribute to the decision makers, but a celebration of the achievements of the companies they lead.
See also:
News Corp’s Damian Eales looks at changing face of business model for news publishers
• INMA board member and NY-based News Corp global head of transformation on paywalls, pricing and PDFs
News Corp helps tackle cost of living with News Compare
• 68% of people have sought to save money on bills, utility and fuel-related costs in recent months