News (US:NWS)2024-05-09 10:59Revenue Performance - Total revenues decreased by $24 million, or 1%, for the three months ended March 31, 2024, compared to the same period in 2023, while revenues increased by $62 million, or 1%, for the nine months ended March 31, 2024[129]. - Circulation and subscription revenues for the three months ended March 31, 2024, were $1,121 million, a slight decrease of $1 million from $1,122 million in 2023[129]. - Advertising revenues decreased by $35 million, or 9%, to $358 million for the three months ended March 31, 2024, and decreased by $76 million, or 6%, for the nine months ended March 31, 2024[129]. - Digital Real Estate Services segment reported a revenue increase of $29 million, or 11%, for the three months ended March 31, 2024, driven by higher Australian residential revenues at REA Group[129]. - Revenue for the nine months ended March 31, 2024, was $7.508 billion, an increase from $7.446 billion in the same period of fiscal 2023, driven by higher revenues in the Dow Jones and Digital Real Estate Services segments[156]. - For the three months ended March 31, 2024, total revenues increased by $25 million, or 7%, to $388 million compared to $363 million in the same period of 2023[157]. - For the nine months ended March 31, 2024, revenues at the Dow Jones segment increased by $58 million, or 4%, compared to the same period in fiscal 2023[176]. Segment Performance - The Subscription Video Services segment experienced revenue declines due to foreign currency fluctuations and lower residential subscription revenues, partially offset by higher streaming revenues[130]. - Digital Real Estate Services segment revenues for the nine months ended March 31, 2024, were $1.210 billion, up from $1.170 billion in the same period of fiscal 2023[156]. - Subscription Video Services segment revenues for the nine months ended March 31, 2024, were $1.411 billion, a slight decrease from $1.441 billion in the same period of fiscal 2023[156]. - Segment EBITDA for Digital Real Estate Services increased by $24 million, or 7%, for the nine months ended March 31, 2024, reaching $373 million compared to $349 million in the same period of 2023[161]. - Segment EBITDA for Subscription Video Services decreased by $33 million, or 12%, for the nine months ended March 31, 2024, totaling $236 million compared to $269 million in the same period of 2023[166]. - Segment EBITDA at the Dow Jones segment increased by $9 million, or 8%, for the three months ended March 31, 2024, primarily due to revenue increases and gross cost savings from a 5% headcount reduction initiative[187]. - For the nine months ended March 31, 2024, Segment EBITDA at the Dow Jones segment increased by $44 million, or 12%, primarily due to revenue increases and cost savings from the headcount reduction initiative[188]. Cost Management - The Company implemented a 5% headcount reduction in February 2023, expected to generate annualized gross cost savings of at least $160 million, primarily reflected in fiscal 2024[126]. - Operating expenses decreased by $61 million, or 2%, for the nine months ended March 31, 2024, compared to the same period in fiscal 2023, primarily due to lower costs in the Book Publishing and News Media segments[133]. - Selling, general and administrative expenses increased by $43 million, or 2%, for the nine months ended March 31, 2024, compared to the same period in fiscal 2023, mainly due to higher employee costs and marketing spend[136]. Net Income and Cash Flow - Net income attributable to News Corporation stockholders decreased by $20 million, or 40%, to $30 million for the three months ended March 31, 2024, compared to $50 million in 2023[129]. - Net income for the nine months ended March 31, 2024, was $283 million, an increase of $64 million, or 29%, compared to $219 million for the same period in fiscal 2023[150]. - Net cash provided by operating activities increased by $174 million for the nine months ended March 31, 2024, totaling $844 million compared to $670 million in the same period of fiscal 2023[208]. - Free cash flow was $491 million, up from $320 million in the prior year, while free cash flow available to News Corporation increased to $378 million from $258 million[217]. Debt and Liquidity - The Company had $1.9 billion in cash and cash equivalents as of March 31, 2024, providing a strong liquidity position[202]. - The Company had total borrowings of $2.9 billion as of March 31, 2024, with $1,971 million attributed to News Corporation and approximately $720 million to the Foxtel Debt Group[218][219]. - The Foxtel Debt Group refinanced its A$610 million revolving credit facility and A$250 million term loan facility with a new A$1.2 billion syndicated credit facility[221]. - The Company authorized a repurchase program for up to $1 billion of its outstanding Class A and Class B Common Stock, with approximately $495 million remaining as of March 31, 2024[205]. Market and Legal Considerations - The Company believes free cash flow provides useful information about liquidity and cash flow trends, with adjustments made for REA Group's cash flow[215]. - The agreements governing the Foxtel Debt Group's borrowings require maintaining a net debt to EBITDA ratio of not more than 3.25 to 1.0 and a net interest coverage ratio of not less than 3.5 to 1.0[223]. - The Company establishes an accrued liability for legal claims when a loss is probable and can be reasonably estimated[235]. - Legal fees associated with litigation are expensed as incurred, and gain contingencies are recognized when realized or realizable[235].