Financial Data and Key Metrics Changes - Revenue is at the lower end of guidance, reflecting a tough economic climate and delays in planned initiatives due to satellite migration [21] - EBITDA is in the middle of guidance, partly offset by strong cost management [21] - Net profit after tax is down due to higher depreciation from elevated CapEx and new products [21] - Free cash flow increased by 4.6% year on year to $24.8 million [22] - Total dividends distributed increased by 21% year on year to $30 million [30] Business Line Data and Key Metrics Changes - Sky4Now, broadband, and advertising contributed over $22 million in revenue, but Skybox revenue declined due to customer churn and service interruptions [6][7] - Skybox now accounts for 62% of revenue, down from 78% five years ago, indicating increased revenue diversity [7] - Sky Sports Now saw a 20% increase in monthly subscribers and a 16% revenue growth for the year [15] - Neon performance remained steady, with advertising revenue growing by 7% [16][17] Market Data and Key Metrics Changes - The linear TV market has been declining at a 5.8% CAGR since 2019, while digital video growth is at 17% CAGR [18] - Sky has secured a significant share in the linear market and a strong stake in the fast-growing digital ad space through the Sky Free acquisition [18] Company Strategy and Development Direction - The company aims to enhance its multi-platform approach and strengthen its content bundle through strategic partnerships [8][10] - Focus on reducing reliance on output deals and moving towards a more responsive content strategy [11] - Integration of Sky Free is a key priority, with expectations of positive free cash flow impact in FY 2026 [34][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing economic challenges but remains optimistic about customer engagement and revenue growth opportunities [37][40] - The company plans to reinvest in marketing and customer experience to lay the groundwork for future growth [38][40] - Management is focused on achieving margin growth while navigating the current economic landscape [76] Other Important Information - The company has completed the satellite migration and secured the renewal of New Zealand Rugby rights from 2026 to 2030 [3][4] - The acquisition of Discovery New Zealand, now called Sky Free, is expected to enhance the company's market position [3][34] Q&A Session Summary Question: What is the expected payout ratio for FY 2026? - Management acknowledges the payout ratio will be at the top of the range for FY 2026 and will consider future guidance as they approach FY 2027 [43][44] Question: What is driving the reduction in programming costs for FY 2026? - The reduction is attributed to fewer one-off events compared to previous years, such as the Olympics, and a focus on entertainment spend [45][46][47] Question: How is trading going in the first months of FY 2026? - The first month has gone well, with improved churn levels as customers transition to the new Sky experience [49][50] Question: What are the main reasons for customer churn? - Price sensitivity is the primary reason for churn, as customers are facing economic pressures [82] Question: What is the impression of the Sky Free acquisition so far? - Management expresses excitement about the opportunities presented by the acquisition, reporting all positive insights [86][87]