DEFA14A: News Corp Highlights Strong Fiscal 2024 Performance and Strategic Initiatives

News Corp reports a profitable fiscal year driven by digital growth and strategic partnerships, including a landmark deal with OpenAI.

Summary

• News Corp achieved its four most profitable years in fiscal 2021-2024, with fiscal 2024 being its second most profitable year on record.
• Fourth quarter net income was $71 million, a significant improvement over the prior year, and News Corp posted its highest fourth quarter Total Segment EBITDA since separation at $380 million.
• Digital revenues accounted for over 50% of total revenues for the second consecutive year.
• News Corp and OpenAI announced a multi-year global partnership to bring News Corp news content to OpenAI and extended their existing partnership with Google for content licensing.
• REA Group posted exceptional fiscal 2024 results with revenues rising 19% compared to the prior year.
• Book Publishing revenues grew 6% in fiscal 2024, while Segment EBITDA increased 61% compared to the prior year.
• Dow Jones has been transformed with B2B offerings the largest contributor to profitability in fiscal 2024.
• Foxtel Group saw streaming revenue growth more than offset broadcast declines full year, as total paid streaming subscribers reached a record 3.2 million.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results, strategic partnerships, and growth in key segments. While there are some challenges, the overall tone is optimistic.

Positives

• Strong financial performance with increased revenue and EBITDA in several segments.
• Growth in digital revenues and subscriptions.
• Strategic partnerships with OpenAI and Google.
• Successful transformation of Dow Jones with B2B offerings.
• Growth in streaming subscribers for Foxtel.
• REA Group's continued success as the #1 property portal.
• Strong cash flow generation and a healthy balance sheet supporting capital returns.

Negatives

• News Media segment revenues decreased by 4%.
• Subscription Video Services segment revenue decreased by 1%.

Risks

• The document contains forward-looking statements that are subject to risks and uncertainties.
• Changes in global economic, business, competitive market, and regulatory factors could affect future results.
• The launch of Hubbl impacted fiscal 2024 results with investment spending.

Future Outlook

The company expects investment spending on Hubbl to be lower for fiscal 2025. Dow Jones B2B offerings are expected to be a key driver of future growth.

Management Comments

• News Corp started life post-spin with a collection of largely legacy media assets.
• Through investments (inorganic and organic) and divestments the portfolio has been significantly repositioned with better long-term growth.

Industry Context

News Corp's trading performance stands apart from the original peer set in the last year. The company's focus on digital transformation and strategic partnerships aligns with industry trends.

Comparison to Industry Standards

• News Corp's share price performance of 44% is compared to the ASX Media (+42%), Large Cap US Media (0%), and US Publishing (+25%).
• The company's performance is also benchmarked against the JP Morgan JP1MDA Index.

Stakeholder Impact

• Shareholders benefit from capital returns through share buybacks and consistent cash dividends.
• Employees are part of a company with a strong focus on ESG and a commitment to diversity and inclusion.
• Customers benefit from innovative products and services and access to reliable news and information.
• Suppliers and partners are engaged on sustainability outcomes.

Key Dates

Keywords

News Corp, Financial Results, Digital Revenue, OpenAI, REA Group, Dow Jones, Foxtel, Subscriptions, EBITDA, Partnership