Nine reports advertising, subscriptions growth as it mulls Domain offer

Nine Entertainment has posted a strong jump in its subscription businesses – including streaming service Stan and this masthead – in the first half of fiscal 2025, with ad spend showing signs of growth at the Nine Network this year.

For the half year ending December 31, Nine reported that revenue edged higher to $1.39 billion, but net profit dropped 25 per cent to $112.2 million after the loss of Meta revenue and the impact of weaker economic and advertising market conditions. The group lowered its half-year dividend to 3.5¢ per share from 4¢ for the prior December half.

Nine’s metro business recorded growth in digital subscription revenue of around 15 per cent.Credit: Joe Armao

The profit number beat market expectations and sent its share price more than 5 per cent higher to $1.72 this morning. Nine’s shares have risen more than 40 per cent this year on expectations of a pickup in advertising as well as a $2.7 billion cash offer for Domain which is 60 per cent owned by Nine.

“Operationally, we were generally pleased with the performance of our portfolio in the half,” acting chief executive Matt Stanton said.

“In particular, at Stan, subscriber numbers exceeded our expectations, underpinning 16 per cent growth in EBITDA (earnings before interest, tax, depreciation and amortisation), whilst publishing, digital subscription revenues at our mastheads grew by 15 per cent (ex the impact of Meta and Google), with the team also doing a great job with cost efficiencies offsetting much of the impact of the Meta withdrawal.”

Nine also owns commercial radio stations 2GB and 3AW, Domain and The Australian Financial Review.

Nine’s metro newspapers – The Age, The Sydney Morning Herald, WA Today and Brisbane Times – recorded growth in digital subscription revenue, with total subscriber numbers growing more than 500,000 in the December half.

Cost-cutting, including lay-offs, delivered $35 million worth of efficiencies for the December half, and Nine said it would exceed its previous target of $50 million in cost savings for the current financial year.

The company is now targeting $200 million in cost cuts across the four financial years from 2024 until 2027.

Stanton said this would, in part, come from reduced spending in areas like marketing for Stan.

“We can reduce that down because we’ve got a better platform to be able to advertise across our own Nine Network,” he said.

But Nine is also looking for revenue growth, including smarter ways to commercialise its content across the Nine Network, Nine Now, Stan, and external platforms like YouTube.

A key focus, according to Stanton, is to break down the old silo mentality and focus on consumer interaction across Nine’s array of content.

This means “making sure that they get the right content, the right time, right place ... and drive the consumers across our platform so we can monetise them a bit better across advertising and subscriptions”, Stanton said.

Nine has started 2025 on a positive note, with growth in both its streaming and traditional broadcast business. The latter expects to record mid-to-high single-digit growth for the March quarter, but Nine cautioned against extrapolating these numbers further.

“With the market remaining short, it is too early to estimate Q4 performance,” the company said.

The Paris Olympics gave Nine’s December-half results a strong boost.Credit: AP

Nine did not clarify its long-term leadership, with Stanton remaining in an acting role more than five months after replacing Mike Sneesby, who departed last September following a year plagued by controversy.

The earnings announcement came just days after Nine’s property listings business, Domain, received a $2.7 billion takeover offer from US property giant CoStar.

Nine reiterated its statement from last week that Domain is of strategic importance to Nine’s media ecosystem and its long-term growth strategy.

Stanton confirmed that he had met with CoStar’s mercurial founder Andrew Florance, but said it wasn’t about the cash offer on the table for the entire Domain business.

“Meetings that we have had with Andy did not inform this proposal from CoStar at all,” he told this masthead.

The conditional offer gave both Nine and Domain shares a strong boost on Friday. Nine jumped 20 per cent to $1.73, while Domain surged 40 per cent to $4.37.

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