Olympics, Streaming, and Cost Efficiencies Drive Performance
Nine Entertainment Co. (ASX: NEC) has delivered its FY25 interim results, reporting $1.4 billion in revenue and $96 million in net profit after tax for the six months ending 31 December 2024. Despite challenging economic and advertising conditions, Nine’s Total TV, Publishing, and Digital segments remained resilient, with notable growth in streaming, subscription revenue, and Domain’s EBITDA contribution.
Key Financial Highlights
- Revenue: $1.4 billion
- Group EBITDA (pre-specific items): $268 million (down 15% YoY)
- Net Profit After Tax: $96 million (including $16 million in post-tax specific items)
- Interim Dividend: 3.5 cents per share, fully franked
Operational & Strategic Wins
- Olympic coverage success: Profitable and cash flow positive, boosting engagement across Nine’s platforms.
- Streaming & Broadcast audience growth: Stan and Nine saw increases in 2024, driving advertising and subscription revenue.
- 8% growth in underlying subscription revenue (excluding Domain and Meta/Google impacts).
- 15% increase in Domain’s EBITDA contribution, with a 7% rise in new “for sale” listings.
- 33% growth in digital audio revenue, maintaining radio industry leadership in live streaming.
- $35 million in cost efficiencies delivered, exceeding the previously targeted $50 million for FY25.
CEO & Chair Insights
Chair Catherine West emphasized Nine’s ability to adapt in tough market conditions, crediting a strategic realignment and cultural reset for strengthening the business.
Acting CEO Matt Stanton highlighted key performance areas, including:
- Stan’s 16% EBITDA growth in H1, surpassing expectations.
- Publishing’s 15% digital subscription revenue growth (excluding Meta/Google impact).
- Olympics driving strong Total TV performance, boosting engagement across platforms.
- Resilience in advertising and cost efficiencies, offsetting Meta withdrawal impacts.
Outlook: Positive Start to 2025 with Strong Ad Revenues
- Q3 FY25 advertising revenue is expected to rise in the high-single digits on the back of strong audience numbers.
- 9Now digital ad revenue growth projected in the low-mid teens for Q3.
- Stan’s full-year EBITDA growth expected to exceed H1’s 16% rise, though subscriber numbers may consolidate.
- Publishing Q3 digital subscription revenue growth forecast in the low-mid teens, but advertising remains weak.
- Further cost efficiencies of over $100 million expected by FY27, with $10-20 million realized in FY25.
Nine’s strategic transformation is gathering momentum, with a focus on revenue growth through additional content, subscriptions, and advertising opportunities. Despite near-term market challenges, Nine’s strong audience engagement and diversified revenue streams position it well for continued success.
