Nine Entertainment Co. (NEC) H1 2025 earnings summary

Executive summary

• Achieved strong audience growth, increased subscription revenues, and cost efficiencies in H1 FY25, with digital revenue now representing about 50% of group revenue, up 6% year-over-year.

• Major events like the Olympics, Paralympics, and Melbourne Cup delivered strong audience and advertiser engagement, with digital platforms driving growth.

• Launched Nine2028 transformation program and new operating model to reset the business for growth, emphasizing cost efficiencies, revenue opportunities, and cultural transformation.

• Cost savings of $35 million delivered in H1, with full-year savings expected to exceed original target by $10-20 million.

Financial highlights

• Group revenue for H1 FY25 was $1.4 billion, up 1-2% year-over-year.

• Group EBITDA reached $268 million, down 15% year-over-year; EBITDA margin at 19.3%.

• Net profit after tax and minorities (before specific items) was $95 million; statutory net profit was $96 million, including $16 million in specific item expenses.

• Operating cash flow rose 11% to $190.6 million; net debt reduced to $481-628.5 million, leverage at 1.3-1.4x.

• Interim dividend of 3.5 cents per share declared, with an annualized fully-franked yield of ~5.5%.

Outlook and guidance

• Calendar 2025 started well, with strong audience and advertiser momentum, especially in streaming and broadcast.

• Total TV ad revenue in Q1/Q3 expected to be up high single digits; 9Now and digital subscription revenue growth in low-mid teens.

• Stan's H2 EBITDA growth expected to exceed H1's 16% growth.

• Further cost efficiencies of over $100 million expected by FY27, with $10-20 million realized in FY25.

• Macro-economic uncertainty and softness in advertising markets expected to persist.