News Corp (NWS) Q4 2021 earnings summary

Executive summary

• FY2021 was described as the most profitable year since the 2013 separation, with revenue up 4% and Total Segment EBITDA up 26% YoY; Q4 revenue rose 30% YoY.

• Growth across digital real estate, books, subscription video and Dow Jones offset lower News Media revenue, including the impact of the News America Marketing sale.

Financial highlights

• Revenue increased 4% to $9.358B; circulation and subscription revenue rose 9%, real estate advertising 34%, while consumer advertising fell 27%.

• Net income was $389M versus a $1.545B net loss in FY2020; attributable net income was $330M and diluted EPS was $0.56 versus a $2.16 loss.

• Operating cash flow rose to $1.237B from $780M; free cash flow available to News Corporation, a non-GAAP measure, was $731M versus $180M.

• Cash and cash equivalents were $2.236B at June 30, 2021; total assets were $16.771B and total equity was $9.146B.

Outlook and guidance

• Management said it expects further growth and views Dow Jones Risk & Compliance and OPIS as long-term growth drivers; news payment agreements are expected to add annual revenue in the nine figures, with terms confidential.

• FY2022 capital expenditures were expected to rise by ~$100M, subject to FX, partly for technology investment and Foxtel IP-enabled set-top boxes.

• Ongoing Australian lockdowns were expected to have a modest negative impact on commercial subscription revenue in FY2022 Q1.

• OPIS acquisition for $1.15B cash was expected to close in FY2022 Q2, subject to customary conditions and approvals.