News Corporation Reports Fourth Quarter and Full Year Results for Fiscal 2022

FISCAL 2022 FULL YEAR AND FOURTH QUARTER KEY FINANCIAL HIGHLIGHTS

• Fiscal 2022 full year revenues and net income were records at $10.39 billion 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
• Full year Total Segment EBITDA was $1.67 billion, also a record and a 31% increase compared to $1.27 billion in the prior year. Reported EPS were $1.05 for the full year compared to $0.56 in the prior year – Adjusted EPS were $1.20 compared to $0.67 in the prior year
• Fourth quarter revenues were $2.67 billion, a 7% increase compared to $2.49 billion in the prior year, while net income was $127 million, a substantial improvement from a net loss of $(15) million in the prior year
• Fourth quarter Total Segment EBITDA was $315 million, a 50% increase compared to $210 million in the prior year. Reported EPS were $0.19 for the fourth quarter compared to $(0.02) in the prior year – Adjusted EPS were $0.37 compared to $0.16 in the prior year
• Digital Real Estate Services revenues for the fiscal year grew 25% despite facing tough prior year comparisons, with 37% and 11% revenue growth at REA Group and Move, respectively
• Dow Jones achieved its highest full year revenues and Segment EBITDA since its acquisition, driven by strategic acquisitions, continued growth in digital-only subscriptions, record advertising revenues and robust growth in Risk & Compliance products
• 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
• 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
• Book Publishing revenues grew 10% in the fiscal year, driven by the acquisition of the HMH Books and Media segment and continued strong consumer spending, which remains above pre-pandemic levels
• Continued strong cash generation funding the execution of the $1 billion share repurchase program

NEW YORK--(BUSINESS WIRE)--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, 2022.

Commenting on the results, Chief Executive Robert Thomson said:

“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. 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. OPIS and Chemical Market Analytics are already contributing to profitability, and they have added meaningful depth to our fast-growing Professional Information Business which targets a premium audience with premium products providing premium value.

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.

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.

Our provenance and principles endure at News Corporation but the business has been fundamentally transformed - we are vastly more profitable and have created a potent platform for even greater growth, to the benefit of all our investors and other stakeholders.”

FULL YEAR RESULTS

The Company reported fiscal 2022 full year total revenues of $10.39 billion, an 11% increase compared to $9.36 billion in the prior year, reflecting growth in all revenue lines, including the contributions from recent acquisitions, a strong increase in digital subscriptions, growth in digital advertising revenues and a $110 million benefit from the additional week in fiscal 2022 (see “Segment Review” below for details). The growth was partially offset by a $161 million, or 2%, negative impact from foreign currency fluctuations. Adjusted Revenues (which excludes the foreign currency impact, acquisitions and divestitures as defined in Note 2) increased 8%. Adjusted Revenues does not exclude the impact from the additional week.

Net income for the full year was $760 million, a 95% increase compared to $389 million in the prior year. The improvement reflects higher Total Segment EBITDA, as discussed below, lower impairment and restructuring charges and lower equity losses of affiliates, partially offset by lower Other, net and higher interest expense.

Total Segment EBITDA for the full year was $1.67 billion, a 31% increase compared to $1.27 billion in the prior year, reflecting improved performance across segments, most notably in the News Media and Dow Jones segments. The growth was driven by higher revenues, as discussed above, and lower costs in the Other segment due to lower employee costs driven by stock price performance and lower non-recurring legal settlement costs. The growth was partially offset by higher expenses, primarily at the Digital Real Estate Services, Book Publishing and Dow Jones segments, and a $24 million, or 2% negative impact from foreign currency fluctuations. Adjusted Total Segment EBITDA (as defined in Note 2) increased 28%. Adjusted Total Segment EBITDA does not exclude the impact from the additional week.

Diluted net income per share attributable to News Corporation stockholders was $1.05 as compared to $0.56 in the prior year.

Adjusted diluted EPS (as defined in Note 3) were $1.20 compared to $0.67 in the prior year.

FOURTH QUARTER RESULTS

The Company reported fiscal 2022 fourth quarter total revenues of $2.67 billion, a 7% increase compared to $2.49 billion in the prior year period, reflecting strength in all revenue lines, including the impact of recent acquisitions, notably OPIS and Base Chemicals (rebranded Chemical Market Analytics, “CMA”), and a $110 million benefit from the additional week in the quarter, partially offset by a $139 million, or 6%, negative impact from foreign currency fluctuations. Adjusted Revenues increased 9%.

Net income for the quarter was $127 million, a substantial improvement compared to a net loss of $(15) million in the prior year. The improvement was driven by higher Total Segment EBITDA, as discussed below, higher tax benefit, which includes a $149 million tax benefit from an adjustment to valuation allowances, lower equity losses of affiliates and lower impairment and restructuring charges, partially offset by lower Other, net and higher interest expense.

The Company reported fourth quarter Total Segment EBITDA of $315 million, a 50% increase compared to $210 million in the prior year, primarily due to higher revenues, as discussed above, and lower costs in the Other segment due to lower employee costs driven by stock price performance and lower non-recurring legal settlement costs. The growth was partially offset by higher costs at the Dow Jones, Digital Real Estate Services and Book Publishing segments, which include the increase in costs related to the recent acquisitions and the $14 million negative impact from a valuation adjustment related to expected trail commissions at REA Group’s financial services business. The growth was also partially offset by a $20 million negative impact from foreign currency fluctuations. The results also include $20 million of one-time legal costs related to the settlement with Insignia recognized in the fourth quarter of fiscal 2022. Adjusted Total Segment EBITDA increased 34%.

Net income (loss) per share attributable to News Corporation stockholders was $0.19 as compared to $(0.02) in the prior year.

Adjusted EPS were $0.37 compared to $0.16 in the prior year.

SEGMENT REVIEW

The Company’s full year and fourth quarter ended June 30, 2022 included an additional week (53 weeks and 14 weeks, respectively) compared with the full year and fourth quarter ended June 30, 2021 (52 weeks and 13 weeks, respectively).

Digital Real Estate Services

Full Year Segment Results

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. Segment EBITDA for fiscal 2022 increased $60 million, or 12%, compared to the prior year, primarily due to the higher revenues, partially offset by increased expenses due to REA Group’s acquisitions of Mortgage Choice and REA India, higher employee costs at both Move and REA Group, increased marketing costs at Move, a $14 million negative impact from a valuation adjustment related to expected trail commissions at REA Group’s financial services business and a $12 million, or 2%, negative impact from foreign currency fluctuations. Adjusted Revenues and Adjusted Segment EBITDA (as defined in Note 2), which do not exclude the impact from the additional week, increased 17% and 16%, respectively.

In the fiscal year, REA Group’s revenues increased $277 million, or 37%, to $1.03 billion, driven by higher financial services revenues, primarily due to the $143 million contribution from the acquisition of Mortgage Choice, higher Australian residential depth revenues and an $18 million contribution from the acquisition of REA India. The growth was partially offset by a $29 million, or 4%, negative impact from foreign currency fluctuations and a $22 million negative impact from a valuation adjustment related to expected trail commissions at REA Group’s financial services business. Move’s revenues in the fiscal year increased $71 million, or 11%, to $712 million, primarily due to higher real estate revenues, partially offset by the sale of Top Producer. Move’s real estate revenues, which represented 86% of total Move revenues, grew 14%, primarily due to growth in both the traditional lead generation product and the referral model.

Fourth Quarter Segment Results

Revenues in the quarter increased $30 million, or 7%, compared to the prior year, despite very difficult prior year comparisons. Growth was due to higher revenues at REA Group and Move, which includes the acquisition of Mortgage Choice and a $14 million benefit from the additional week in the quarter, partially offset by a $20 million, or 5%, negative impact from foreign currency fluctuations. Segment EBITDA in the quarter declined $15 million, or 11%, compared to the prior year, primarily due to an increase in expenses associated with the acquisition of Mortgage Choice, higher employee costs at both Move and REA Group, a $14 million negative impact from a valuation adjustment related to expected trail commissions at REA Group’s financial services business and an $8 million, or 6%, negative impact from foreign currency fluctuations. Adjusted Revenues and Adjusted Segment EBITDA, increased 7% and decreased 1%, respectively.

In the quarter, revenues at REA Group increased $23 million, or 10%, to $250 million, driven by higher financial services revenues, primarily due to the $21 million contribution from the acquisition of Mortgage Choice, and higher Australian residential depth revenues due to price increases, strong national listings and favorable depth penetration and product mix. The growth was partially offset by a $22 million negative impact from a valuation adjustment related to expected trail commissions at REA Group’s financial services business and a $20 million, or 9%, negative impact from foreign currency fluctuations. Australian national residential buy listing volumes in the quarter increased 2% compared to the prior year, with listings in Sydney and Melbourne down 8% and 5%, respectively.

Move’s revenues in the quarter increased $7 million, or 4%, to $193 million, primarily as a result of higher real estate revenues despite very difficult prior year comparisons. Real estate revenues, which represented 84% of total Move revenues, increased $4 million, or 3%, due to a $14 million benefit from the additional week in the quarter. The referral model, which generated 31% of total Move revenues in the quarter compared to 30% in the prior year, benefited from the continued increase in average home values, offset by lower transaction volume. Revenues from the traditional lead generation product were flat as the higher contribution from the Market VIP℠ product was offset by the impact from lower lead volume. Based on Move’s internal data, average monthly unique users of Realtor.com^®’s web and mobile sites for the fiscal fourth quarter declined 13% year-over-year to approximately 93 million but remain 16% higher than the fiscal 2020 comparable period. Lead volume declined 39% in the quarter, reflecting continued deceleration in home sales and ongoing inventory constraints compared to historical trends across the industry.

Subscription Video Services

Full Year Segment Results

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.

Segment EBITDA for fiscal 2022 was flat compared to the prior year, reflecting an $8 million, or 3%, negative impact from foreign currency fluctuations. Total expenses for the year were relatively flat compared to the prior year as higher sports and entertainment programming costs due to increased content availability, higher technology costs and higher investment spending on streaming products were offset by the absence of the $57 million negative impact seen in the first half of fiscal 2021 from the recognition of sports programming rights and production costs deferred from the fourth quarter of fiscal 2020. Adjusted Segment EBITDA increased 3%.

Fourth Quarter Segment Results

Revenues in the quarter decreased $18 million, or 3%, compared with the prior year, primarily due to a $42 million, or 7%, negative impact from foreign currency fluctuations, partially offset by higher revenues from Kayo and BINGE, which more than offset the revenue declines from the residential broadcast product, as well as higher advertising revenues. Foxtel Group streaming subscription revenues represented approximately 23% of total circulation and subscription revenues in the quarter, compared to 16% in the prior year. Adjusted Revenues increased 4% 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).

Segment EBITDA in the quarter increased $15 million, or 23%, compared to the prior year, primarily due to the absence of one-time costs mainly related to a specific promotional activity for iQ3 and iQ4 in the prior year and lower BINGE marketing costs, partially offset by higher entertainment and sports programming rights costs driven by increased content availability and a $6 million, or 9%, negative impact from foreign currency fluctuations. Adjusted Segment EBITDA increased 32%.

Dow Jones

Full Year Segment Results

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. Professional information business revenues grew 21%, driven by the acquisition of OPIS as well as 18% growth in Risk & Compliance products, which reached over $225 million in revenues in fiscal 2022. 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.

Segment EBITDA for fiscal 2022 increased $101 million, or 30%, compared to the prior year, primarily due to higher revenues, as noted above, partially offset by higher employee costs and higher costs related to the OPIS and CMA acquisitions, including $25 million of transaction costs. Adjusted Segment EBITDA increased 25%.

Fourth Quarter Segment Results

Revenues in the quarter increased $116 million, or 26%, compared to the prior year, which includes the contributions from the acquisitions of OPIS, IBD and CMA. The CMA acquisition closed on June 1, 2022. The growth was also driven by the $40 million benefit from the additional week, the growth in circulation and subscription revenues from continued digital subscription gains and higher advertising revenues. Digital revenues at Dow Jones in the quarter represented 76% of total revenues compared to 72% in the prior year. Adjusted Revenues increased 16%.

Circulation and subscription revenues increased $97 million, or 29%, which includes $43 million from the acquisitions of OPIS and CMA and $31 million from the additional week, partially offset by an $8 million, or 2%, negative impact from foreign currency fluctuations. Circulation revenues grew 17%, reflecting a $17 million benefit from the additional week, the continued strong growth in digital-only subscriptions for Dow Jones’ consumer products and the acquisition of IBD. Professional information business revenues grew 47%, reflecting the acquisitions of OPIS and CMA and a $14 million benefit from the additional week. Revenues from Risk & Compliance products grew 19% in the quarter. Digital circulation revenues accounted for 68% of circulation revenues for the quarter, compared to 65% in the prior year period.

During the 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.

Advertising revenue increased $13 million, or 13%, including a $9 million benefit from the additional week. In the quarter, digital advertising revenues grew 16% and print advertising revenues grew 9%. Digital advertising accounted for 58% of total advertising revenues in the quarter, compared to 56% in the prior year period.

Segment EBITDA for the quarter increased $37 million, or 54%, including the $16 million contribution from the acquisitions of OPIS, IBD and CMA. The growth was primarily due to higher revenues, as discussed above, partially offset by an increase in overall expenses, including higher compensation costs, mostly due to the acquisitions of OPIS and CMA, as well as higher sales and marketing costs. Adjusted Segment EBITDA increased 30%.

Book Publishing

Full Year Segment Results

Fiscal 2022 full year revenues increased $206 million, or 10%, compared to the prior year, reflecting a $149 million contribution from the acquisition of HMH, higher book sales in the U.K., strong frontlist sales in General books, including Twelve and a Half by Gary Vaynerchuk, The Storyteller by Dave Grohl, Pioneer Woman Cooks: Super Easy! by Ree Drummond and The Stranger in the Lifeboat by Mitch Albom, and a $20 million benefit from the additional week. Revenue growth was partially offset by the $16 million impact from lower sales of the Bridgerton series and a $14 million, or 1%, negative impact from foreign currency fluctuations. Adjusted Revenues increased 3% compared to the prior year.

Investor Relations Michael Florin 212-416-3363 mflorin@newscorp.com Leslie Kim 212-416-4529 lkim@newscorp.com Corporate Communications Jim Kennedy 212-416-4064 jkennedy@newscorp.com