News Corp today released its Fiscal Fourth Quarter and Full Year Earnings for the 12 months ending June 30, 2022, including financial highlights for the Subscription Video Services segment and subscriber highlights for the Foxtel Group.
Commenting on the Foxtel Group in News Corp’s FY22 Earnings announcement, News Corp CEO Robert Thomson said: “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.”
Subscription Video Services Segment Highlights
- Adjusted1 Full Year Revenues for the Subscription Video Services segment grew 1% with annual Adjusted Revenues growing for the first time in five years as higher streaming and advertising revenue more than offset lower residential broadcast revenue.
- Adjusted Segment revenue in Q4 rose 4%, accelerating from the prior quarter rate of 1%.
- Adjusted Full Year segment EBITDA increased 3%, with Q4 Adjusted segment EBITDA up 32%.
Key Foxtel Group Subscriber Metrics
- Total Foxtel Group subscribers increased to 4.529 million (4.413 million paid), a record high, up 13% on the prior year.
- Total streaming subscribers, including Kayo Sports, BINGE, Foxtel Now and Flash reached 2.806 million (2.690 million paid), up 31%.
- Streaming subscribers represent 62% of the Foxtel Group’s total subscribers.
- Kayo Sports reached 1.312 million subscribers (1.293 million paid), up 22%.
- BINGE reached 1.263 million subscribers (1.192 million paid), up 53%.
- Foxtel Now reached 201,000 subscribers (195,000 paid), down 12%.
- Flash, launched in October 2021, reached 29,000 subscribers (11,000 paid).
- Foxtel residential and commercial broadcast subscribers were 1.723 million, down 9%.
- Foxtel Residential subscribers declined to 1.481 million.
- ARPU was A$82 through a focus on Foxtel’s premium brand positioning.
- Residential churn continued to fall in the fourth quarter, improving a further 50 basis points to 13.8% compared to the third quarter, and 350 basis points lower than the fourth quarter FY21.
At New Corp’s FY22 Investor Briefing this morning, Mr Thomson added: “At Subscription Video Services, the Foxtel Group’s renaissance continued, with adjusted revenues, which excludes currency impact, rising 4 percent in the fourth quarter, while Adjusted Segment EBITDA rose 32 percent in the fourth quarter. And importantly, excluding currency, full year revenues for the segment rose for the first time in five years.
“Again, the Foxtel Group is a company transformed, and one generating record metrics. Total streaming subscribers at end of fiscal year soared 31 percent from a year ago to 2.8 million, while broadcast churn fell to 13.8 percent in the fourth quarter, sharply lower than the prior year. Our sports streaming service, Kayo, is particularly successful, with ARPU rising, partially attributable to the recent price increase, and given the quality of our team’s productions and the quantity of quality sports.”
News Corp CFO Susan Panuccio added: “Revenues for the quarter were US$524 million, sequentially higher than the third quarter, and down approximately 3% compared to the prior year on a reported basis due to foreign currency headwinds. Importantly, on an adjusted basis, revenues rose 4%, accelerating from the prior quarter rate of 1%.
“Streaming revenues accounted for 23% of circulation and subscription revenues (Q4), versus 16% in the prior year and more than offset broadcast revenue declines this quarter. We believe this is a key inflection point for the business and has helped underpin the recent stability in Foxtel Group’s revenue.
“Total closing paid subscribers across the Foxtel Group reached over 4.4 million at quarter end, up 13% year‐over‐year. Total subscribers, including trialists, reached over 4.5 million.
“Total paid streaming subscribers reached 2.7 million, increasing 34% versus the prior year and adding 114,000 sequentially, with streaming subscribers now representing 61% of Foxtel’s total paid subscriber base.
“Kayo benefited from strong winter sports content, very high retention from the initial re‐pricing of the legacy Live Pass customers and the successful implementation of the price rise in May. Kayo paying subscribers reached almost 1.3 million, up nearly 23% year‐over‐year.
“BINGE paying subscribers grew 63% year‐over‐year to 1.2 million subscribers, which is relatively stable with the third quarter as the net adds were impacted by the timing of content availability and the record adds in the third quarter. In July we announced a A$2 price rise for BINGE’s standard offering.
“Foxtel ended the quarter with approximately 1.5 million residential broadcast subscribers, down 10% year‐over‐year, with the rate of decline modestly improving from the third quarter rate. Foxtel continues to focus on managing broadcast churn, which reduced by over three percentage points year‐over‐year in the quarter to 13.8%, even though cable customers are being actively migrated to the iQ5. This reflects eleven consecutive months of year‐over‐year churn reduction. The focus on retaining high‐value subscribers saw Broadcast ARPU steadily rise by 2% to A$83 (Q4).
“Segment EBITDA in the quarter of US$81 million rose 23% versus the prior year and 32% on an adjusted basis. Foxtel continues to exhibit healthy cash generation and used existing facilities to pay its A$306 million of July USPP maturities.
“For the full year, th e business showed stability in revenue and Segment EBITDA and as Robert mentioned, full year adjusted revenues improved for the first time in 5 years, which is a great result for the business given the challenges in recent years. As expected, total costs were relatively stable in local currency.”
On Outlook, Ms Panuccio said: “In Subscription Video Services, we remain pleased with the performance of the streaming products and the ongoing focus on Broadcast ARPU and churn as we continue to migrate customers from cable. We look forward to the launch of House of the Dragon on BINGE later this month which we expect will drive an improvement in net subscriber additions and we continue to expect to see stability in earnings in local currency across the year.”
Data and quotes are sourced from News Corp’s Fourth Quarter and Full Year Fiscal 2022 Earnings Announcement and Investor Briefing of August 8, 2022 (New York). Full details can be found at
https://investors.newscorp.com...
1 Adjusted to remove the effect of currency fluctuations. News Corp calculates the impact of foreign currency fluctuations for businesses reporting in currencies other than the US dollar by multiplying the results for each quarter in the current period by the difference between the average exchange rate for that quarter and the average exchange rate in effect during the corresponding quarter of the prior year and totalling the impact for all quarters in the current period.