FISCAL 2024 THIRD QUARTER KEY FINANCIAL HIGHLIGHTS

• Third quarter revenues were $2.42 billion, a 1% decrease compared to $2.45 billion in the prior year, reflecting a $21 million, or 1%, negative impact from foreign currency fluctuations. Adjusted Revenues were flat compared to the prior year
• Net income in the quarter was $42 million, compared to net income of $59 million in the prior year
• Third quarter Total Segment EBITDA was $322 million, compared to $320 million in the prior year
• In the quarter, reported EPS were $0.05 as compared to $0.09 in the prior year - Adjusted EPS were $0.11 compared to $0.09 in the prior year
• At the Dow Jones segment, professional information business revenues grew 10% compared to the prior year, driven by the continued success of Risk & Compliance and Dow Jones Energy, which each grew 15%
• Dow Jones achieved its highest sequential quarterly net additions for digital subscriptions of 322 thousand, reaching over 5 million Dow Jones digital subscriptions for the quarter
• REA Group posted strong results with quarterly revenues of $256 million, a 15% increase compared to the prior year, primarily driven by robust Australian residential performance

News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months ended March 31, 2024.

Commenting on the results, Chief Executive Robert Thomson said:

“News Corp has again made substantial progress on our strategic imperative to transform the company and increase value for all shareholders.

News Corp’s profitability rose slightly in the third quarter as compared to the prior year, continuing our growth this fiscal year — and that increase, which gathered pace in April, follows the three most profitable years since the company was reincarnated in 2013.

We are in the midst of an exponential digital revolution, and our own company has continued to change significantly and profitably. Importantly, we are working to promote our quality journalism in the age of Generative AI and are gratified that the most enlightened leaders in the industry appreciate the commercial and social value of that content.

Separately, we have this week extended our existing partnership with Google.

As mentioned previously, we have been reviewing our company’s structure — and that work is intense and ongoing — and we have made underlying changes to provide maximum flexibility.”

THIRD QUARTER RESULTS

The Company reported fiscal 2024 third quarter total revenues of $2.42 billion, a 1% decrease compared to $2.45 billion in the prior year period, primarily driven by lower advertising revenues at the News Media segment, lower physical book sales at the Book Publishing segment and lower revenues at Move due to ongoing challenging housing market conditions in the U.S., in addition to a $21 million, or 1%, negative impact from foreign currency fluctuations. The decrease was partly offset by higher Australian residential revenues at REA Group and continued strong growth in the professional information business at the Dow Jones segment. Adjusted Revenues (which excludes the foreign currency impact, acquisitions and divestitures as defined in Note 2) were flat compared to the prior year.

Net income for the quarter was $42 million, a 29% decrease compared to net income of $59 million in the prior year, primarily driven by lower Other, net, which benefited in the prior year from a gain on sale, higher impairment and restructuring charges and higher depreciation and amortization expenses. These impacts were partially offset by lower income tax expense and improved equity losses of affiliates.

The Company reported third quarter Total Segment EBITDA of $322 million, a 1% increase compared to $320 million in the prior year primarily due to strong contributions from REA Group and the Dow Jones segment combined with lower costs at the Book Publishing segment and gross cost savings related to the announced 5% headcount reduction initiative. The increase was largely offset by the lower revenue drivers discussed above and higher marketing costs at Move. Adjusted Total Segment EBITDA (as defined in Note 2) increased 1%.

Net income per share attributable to News Corporation stockholders was $0.05 as compared to $0.09 in the prior year.

Adjusted EPS (as defined in Note 3) were $0.11 compared to $0.09 in the prior year.

SEGMENT REVIEW

Digital Real Estate Services

Revenues in the quarter increased $25 million, or 7%, compared to the prior year, driven by strong performance at REA Group partly offset by lower revenues at Move. Segment EBITDA in the quarter increased $2 million, or 2%, compared to the prior year, primarily due to higher contribution from REA Group partly offset by $11 million in increased costs at Move primarily driven by higher marketing spend, and the lower revenues referenced above, in addition to a $4 million, or 4%, negative impact from foreign currency fluctuations. Adjusted Revenues and Adjusted Segment EBITDA (as defined in Note 2) increased 9% and 7%, respectively.

In the quarter, revenues at REA Group increased $34 million, or 15%, to $256 million, primarily driven by higher Australian residential revenues due to price increases, increased depth penetration, favorable geographic mix and an increase in national listings. The increase was partially offset by a $10 million, or 5%, negative impact from foreign currency fluctuations. Australian national residential buy listing volumes in the quarter increased 6% compared to the prior year, with listings in Sydney and Melbourne up 20% and 18%, respectively.

Move’s revenues in the quarter decreased $9 million, or 6%, to $132 million, primarily as a result of lower real estate revenues. Real estate revenues, which represented 80% of total Move revenues, decreased $6 million, or 5%, driven by the ongoing impact of the macroeconomic environment on the housing market, including higher mortgage rates, which led to lower transaction volumes. Revenues from the referral model, which includes the ReadyConnect Concierge℠ product, and the core lead generation product decreased due to these factors. Based on Move’s internal data, average monthly unique users of Realtor.com^®’s web and mobile sites for the fiscal third quarter was flat compared to the prior year at 72 million. Lead volume increased 4%, the first year over year increase in over 2 years, and was a strong improvement from the 7% decline in the prior quarter.

Subscription Video Services

Revenues of $455 million in the quarter decreased $22 million, or 5%, compared with the prior year, primarily driven by an $18 million, or 4%, negative impact from foreign currency fluctuations. The impact from fewer residential broadcast subscribers was mostly offset by higher revenues from Kayo from increases in both volume and pricing and higher BINGE revenues from an increase in pricing. Adjusted Revenues of $473 million decreased 1% compared to the prior year. Foxtel Group streaming subscription revenues represented approximately 29% of total circulation and subscription revenues in the quarter, as compared to 26% in the prior year.

As of March 31, 2024, Foxtel’s total closing paid subscribers were over 4.5 million, a 1% decrease compared to the prior year, driven by fewer residential broadcast subscribers and lower BINGE subscribers partly offset by strong growth in Kayo subscribers. Broadcast subscriber churn in the quarter was 13.3% compared to 12.3% in the prior year partly driven by the recent Broadcast price increase. Broadcast ARPU for the quarter increased 2% year-over-year to A$85 (US$56).

Segment EBITDA of $66 million in the quarter decreased $2 million, or 3%, compared with the prior year, which included a $3 million, or 4%, negative impact from foreign currency fluctuations. Adjusted Segment EBITDA of $69 million increased 1% compared to the prior year, primarily due to lower marketing, entertainment programming rights and technology costs partially offset by $13 million of costs related to the launch of Hubbl in the quarter.

Dow Jones

Revenues in the quarter increased $15 million, or 3%, compared to the prior year, driven by growth in circulation and subscription revenues underpinned by the professional information business. Digital revenues at Dow Jones in the quarter represented 81% of total revenues compared to 79% in the prior year. Adjusted Revenues increased 3%.

Circulation and subscription revenues increased $19 million, or 4%, primarily driven by a 10% increase in professional information business revenues, led by 15% growth in Risk & Compliance revenues to $76 million and 15% growth in Dow Jones Energy revenues to $63 million. Circulation revenues were flat compared to the prior year, as the continued growth in digital-only subscriptions, which partially benefited from an increase in bundle offers, was offset by lower print volume. Digital circulation revenues accounted for 70% of circulation revenues for the quarter, compared to 69% in the prior year.

During the third quarter, total average subscriptions to Dow Jones’ consumer products were over 5.7 million, a 12% increase compared to the prior year. Digital-only subscriptions to Dow Jones’ consumer products grew 17% to over 5 million. Total subscriptions to The Wall Street Journal grew 8% compared to the prior year, to over 4.2 million average subscriptions in the quarter. Digital-only subscriptions to The Wall Street Journal grew 13% to over 3.7 million average subscriptions in the quarter, and represented 88% of total Wall Street Journal subscriptions.

Advertising revenues decreased $2 million, or 2%, primarily due to an 11% decline in print advertising revenues partly offset by 4% growth in digital advertising revenues. Digital advertising accounted for 63% of total advertising revenues in the quarter, compared to 59% in the prior year.

Segment EBITDA for the quarter increased $9 million, or 8%, primarily as a result of the higher revenues discussed above, partially offset by higher marketing costs. Adjusted Segment EBITDA increased 8%.

Book Publishing

Revenues in the quarter decreased $9 million, or 2%, compared to the prior year, primarily driven by lower gross physical book sales partly offset by improved returns and an increase in digital book sales. Key titles in the quarter included Blood Money by Peter Schweizer, Mostly What God Does by Savannah Guthrie and Fangirl Down by Tessa Bailey. Adjusted Revenues decreased 3%.

Digital sales increased 5% compared to the prior year, driven by strong market growth for downloadable audiobook sales, which benefited from the continued contribution from the new Spotify partnership. Digital sales represented 25% of Consumer revenues for the quarter compared to 23% in the prior year with downloadable audiobooks accounting for approximately half of digital revenues. Backlist sales represented approximately 63% of consumer revenues in the quarter compared to 60% in the prior year.

Segment EBITDA for the quarter increased $1 million, or 2%, compared to the prior year, primarily due to lower manufacturing, freight and distribution costs driven by product mix and the absence of prior year supply chain challenges and inventory and inflationary pressures, largely offset by the lower revenues discussed above and higher employee costs. Adjusted Segment EBITDA increased 2%.

News Media

Revenues in the quarter decreased $33 million, or 6%, as compared to the prior year, primarily driven by lower advertising revenues. Within the segment, revenues at News Corp Australia decreased 10%, driven by lower advertising revenues, and included an $8 million, or 4%, negative impact from foreign currency fluctuations, while News UK was flat as lower advertising revenues were offset by a $10 million, or 5%, positive impact from foreign currency fluctuations and higher circulation and subscription revenues. Adjusted Revenues for the segment decreased 6% compared to the prior year.

Circulation and subscription revenues increased $1 million compared to the prior year, primarily due to price increases, digital subscriber growth and a $3 million, or 1%, positive impact from foreign currency fluctuations, partially offset by lower print volumes.

Advertising revenues decreased $28 million, or 13%, compared to the prior year, primarily due to lower print advertising at News Corp Australia and lower digital advertising mainly driven by a decline in traffic at some mastheads due to platform related changes.

In the quarter, Segment EBITDA decreased $8 million, or 24%, compared to the prior year, driven by lower revenues, as discussed above, partially offset by lower production costs at News UK driven by lower print volume and newsprint prices and a $1 million, or 2%, positive impact from foreign currency fluctuations. Adjusted Segment EBITDA decreased 26%.

Digital revenues represented 38% of News Media segment revenues in the quarter, compared to 36% in the prior year, and represented 36% of the combined revenues of the newspaper mastheads. Digital subscribers and users across key properties within the News Media segment are summarized below:

• Closing digital subscribers at News Corp Australia as of March 31, 2024 were 1,113,000 (966,000 for news mastheads), compared to 1,043,000 (937,000 for news mastheads) in the prior year (Source: Internal data)
• The Times and Sunday Times closing digital subscribers, including the Times Literary Supplement, as of March 31, 2024 were 582,000, compared to 554,000 in the prior year (Source: Internal data). The previously disclosed methodology change resulted in a 59,000 and 60,000 increase to the closing digital subscriber number at March 31, 2024 and 2023, respectively
• The Sun’s digital offering reached 126 million global monthly unique users in March 2024, compared to 199 million in the prior year (Source: Meta Pixel)
• New York Post’s digital network reached 125 million unique users in March 2024, compared to 147 million in the prior year (Source: Google Analytics)

CASH FLOW

The following table presents a reconciliation of net cash provided by operating activities to free cash flow and free cash flow available to News Corporation:

Net cash provided by operating activities of $844 million for the nine months ended March 31, 2024 was $174 million higher than $670 million in the prior year, primarily due to lower working capital and higher Total Segment EBITDA, as noted above, partially offset by higher restructuring payments.

Free cash flow in the nine months ended March 31, 2024 was $491 million compared to $320 million in the prior year. Free cash flow available to News Corporation in the nine months ended March 31, 2024 was $378 million compared to $258 million in the prior year. The improvement in both free cash flow and free cash flow available to News Corporation was primarily due to higher cash provided by operating activities, as mentioned above. Foxtel’s capital expenditures for the nine months ended March 31, 2024 were $107 million compared to $118 million in the prior year.

Free cash flow and free cash flow available to News Corporation are non-GAAP financial measures. Free cash flow is defined as net cash provided by (used in) operating activities, less capital expenditures, and free cash flow available to News Corporation is defined as free cash flow, less REA Group free cash flow, plus cash dividends received from REA Group. Free cash flow and free cash flow available to News Corporation may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what items should be included in the calculation of free cash flow.

Neither free cash flow nor free cash flow available to News Corporation represents the total increase or decrease in the cash balance for the period and should be considered in addition to, not as a substitute for, the net change in cash and cash equivalents as presented in the Company’s consolidated statements of cash flows prepared in accordance with GAAP, which incorporates all cash movements during the period.

The Company believes free cash flow provides useful information to management and investors about the Company’s liquidity and cash flow trends. The Company believes free cash flow available to News Corporation, which adjusts free cash flow to exclude REA Group’s free cash flow and include dividends received from REA Group, provides management and investors with a measure of the amount of cash flow that is readily available to the Company, as REA Group is a separately listed public company in Australia and must declare a dividend in order for the Company to have access to its share of REA Group’s cash balance. The Company believes free cash flow available to News Corporation provides a more conservative view of the Company’s free cash flow because this presentation includes only that amount of cash the Company actually receives from REA Group, which has generally been lower than the Company’s unadjusted free cash flow.

COMPARISON OF NON-GAAP TO U.S. GAAP INFORMATION

Adjusted Revenues, Total Segment EBITDA, Adjusted Total Segment EBITDA, Adjusted Segment EBITDA, adjusted net income attributable to News Corporation stockholders, Adjusted EPS, constant currency revenues, free cash flow and free cash flow available to News Corporation are non-GAAP financial measures contained in this earnings release. The Company believes these measures are important tools for investors and analysts to use in assessing the Company’s underlying business performance and to provide for more meaningful comparisons of the Company’s operating performance between periods. These measures also allow investors and analysts to view the Company’s business from the same perspective as Company management. These non-GAAP measures may be different than similar measures used by other companies and should be considered in addition to, not as a substitute for, measures of financial performance calculated in accordance with GAAP. Reconciliations for the differences between non-GAAP measures used in this earnings release and comparable financial measures calculated in accordance with U.S. GAAP are included in Notes 1, 2, 3 and 4 and the reconciliation of net cash provided by operating activities to free cash flow and free cash flow available to News Corporation is included above.

Conference call

News Corporation’s earnings conference call can be heard live at 5:00 p.m. EDT on May 8, 2024. To listen to the call, please visit http://investors.newscorp.com.

Cautionary Statement Concerning Forward-Looking Statements

This document contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding trends and uncertainties affecting the Company’s business, results of operations and financial condition, the Company’s strategy and strategic initiatives, including potential acquisitions, investments and dispositions, the Company’s cost savings initiatives, including announced headcount reductions, and the outcome of contingencies such as litigation and investigations. These statements are based on management’s views and assumptions regarding future events and business performance as of the time the statements are made. Actual results may differ materially from these expectations due to the risks, uncertainties and other factors described in the Company’s filings with the Securities and Exchange Commission. More detailed information about factors that could affect future results is contained in our filings with the Securities and Exchange Commission. The “forward-looking statements” included in this document are made only as of the date of this document and we do not have and do not undertake any obligation to publicly update any “forward-looking statements” to reflect subsequent events or circumstances, and we expressly disclaim any such obligation, except as required by law or regulation.

About News Corporation

News Corp (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. The company comprises businesses across a range of media, including: digital real estate services, subscription video services in Australia, news and information services and book publishing. Headquartered in New York, News Corp operates primarily in the United States, Australia, and the United Kingdom, and its content and other products and services are distributed and consumed worldwide. More information is available at: www.newscorp.com.

NOTE 1 – TOTAL SEGMENT EBITDA

Segment EBITDA is defined as revenues less operating expenses and selling, general and administrative expenses. Segment EBITDA does not include: depreciation and amortization, impairment and restructuring charges, equity losses of affiliates, interest (expense) income, net, other, net and income tax (expense) benefit. Management believes that Segment EBITDA is an appropriate measure for evaluating the operating performance of the Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources within the Company’s businesses. Segment EBITDA provides management, investors and equity analysts with a measure to analyze the operating performance of each of the Company’s business segments and its enterprise value against historical data and competitors’ data, although historical results may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).

Total Segment EBITDA is a non-GAAP measure and should be considered in addition to, not as a substitute for, net income (loss), cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment and restructuring charges, which are significant components in assessing the Company’s financial performance. The Company believes that the presentation of Total Segment EBITDA provides useful information regarding the Company’s operations and other factors that affect the Company’s reported results. Specifically, the Company believes that by excluding certain one-time or non-cash items such as impairment and restructuring charges and depreciation and amortization, as well as potential distortions between periods caused by factors such as financing and capital structures and changes in tax positions or regimes, the Company provides users of its consolidated financial statements with insight into both its core operations as well as the factors that affect reported results between periods but which the Company believes are not representative of its core business. As a result, users of the Company’s consolidated financial statements are better able to evaluate changes in the core operating results of the Company across different periods. The following tables reconcile net income to Total Segment EBITDA for the three and nine months ended March 31, 2024 and 2023:

NOTE 2 – ADJUSTED REVENUES, ADJUSTED TOTAL SEGMENT EBITDA AND ADJUSTED SEGMENT EBITDA

The Company uses revenues, Total Segment EBITDA and Segment EBITDA excluding the impact of acquisitions, divestitures, fees and costs, net of indemnification, related to the claims and investigations arising out of certain conduct at The News of the World (the “U.K. Newspaper Matters”), charges for other significant, non-ordinary course legal or regulatory matters (“litigation charges”) and foreign currency fluctuations (“Adjusted Revenues,” “Adjusted Total Segment EBITDA” and “Adjusted Segment EBITDA,” respectively) to evaluate the performance of the Company’s core business operations exclusive of certain items that impact the comparability of results from period to period such as the unpredictability and volatility of currency fluctuations. The Company calculates the impact of foreign currency fluctuations for businesses reporting in currencies other than the U.S. dollar by multiplying the results for each quarter in the current period by the difference between the average exchange rate for that quarter and the average exchange rate in effect during the corresponding quarter of the prior year and totaling the impact for all quarters in the current period.

The calculation of Adjusted Revenues, Adjusted Total Segment EBITDA and Adjusted Segment EBITDA may not be comparable to similarly titled measures reported by other companies, since companies and investors may differ as to what type of events warrant adjustment. Adjusted Revenues, Adjusted Total Segment EBITDA and Adjusted Segment EBITDA are not measures of performance under generally accepted accounting principles and should not be construed as substitutes for amounts determined under GAAP as measures of performance. However, management uses these measures in comparing the Company’s historical performance and believes that they provide meaningful and comparable information to investors to assist in their analysis of our performance relative to prior periods and our competitors.

The following tables reconcile reported revenues and reported Total Segment EBITDA to Adjusted Revenues and Adjusted Total Segment EBITDA for the three and nine months ended March 31, 2024 and 2023:

Foreign Exchange Rates

Average foreign exchange rates used in the calculation of the impact of foreign currency fluctuations for the three and nine months ended March 31, 2024 and 2023 are as follows:

Adjusted Revenues and Adjusted Segment EBITDA by segment for the three and nine months ended March 31, 2024 and 2023 are as follows:

The following tables reconcile reported revenues and Segment EBITDA by segment to Adjusted Revenues and Adjusted Segment EBITDA by segment for the three and nine months ended March 31, 2024 and 2023: