Nine Entertainment Co. Holdings Limited ((AU:NEC)) has held its Q2 earnings call. Read on for the main highlights of the call.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
Nine Entertainment’s latest earnings call struck a cautiously upbeat tone, as management highlighted solid profit and margin gains despite a weak advertising backdrop. Executives framed the period as structurally transformational, with streaming, digital subscriptions and cost-out programs offsetting cyclical ad softness and one-off restructuring costs.
Group Financial Performance
Nine reported group revenue of $1.1 billion for the six months to December, with reported EBITDA of $201 million including Radio, NBN and Darwin, up 6% year-on-year. On a continuing business basis, EBITDA also rose 6% to $192 million, underscoring resilient profitability in a challenging media market.
Strong Profit and EPS Growth
Continuing business net profit after tax climbed 30% to $95 million, driven by cost discipline and mix shift toward higher-margin assets. Earnings per share increased 30% to $0.06, and the board declared an interim dividend of $0.045 per share, signalling confidence in cash generation and capital returns.
Improved Margin and Cost Discipline
Group EBITDA margin improved by nearly two percentage points to 18.2%, reflecting a tighter focus on costs and asset quality. Management removed $43 million of costs in the half, including $32 million of ongoing savings, taking total delivery to $92 million of a $160 million three-year target.
Balance Sheet and Cash Position
The balance sheet swung from $450 million of net debt at 1 July 2025 to $158 million in net cash at 31 December 2025, largely due to $720 million of proceeds from Domain after tax and dividends. A special fully franked dividend of $777 million was paid, and leverage is expected to peak near 1.8 times in June 2026 before trending back to the 1.0–1.5 times target range by FY 2027.
Stan — Record Streaming Performance
Stan delivered record first-half EBITDA of $37 million, up 24%, on 15% revenue growth and roughly 6% higher ARPU, confirming the platform as a key earnings driver. Average sports subscribers jumped around 40%, with Stan Sport logging more than 200 million minutes viewed and record weekly users during the Winter Olympics.
Publishing and Drive Growth
Publishing revenue reached $262 million with combined EBITDA of $74 million, broadly flat year-on-year but with strong digital momentum. Digital subscription revenue at the mastheads grew about 17%, while Drive marketplaces revenue surged 120%, powered by a 108% lift in dealer listings and double-digit digital revenue growth.
Total TV Profit Resilience
Total TV EBITDA held broadly steady at $99 million despite a 14% decline in revenue, which was hit by tough Olympic comparisons and softer ad demand. An $85 million reduction in Total TV costs, including a $76 million net cut in sports rights costs, helped protect profitability across the broadcast portfolio.
Strategic Portfolio Moves
Management emphasized a strategic pivot toward premium content, digital growth and higher-margin outdoor assets through the QMS acquisition and planned sale of Nine Radio, plus restructuring of NBN and Nine Darwin. On this trajectory, the company estimates around 60% of revenue and 70% of EBITDA will come from growth assets by FY 2027, up from roughly half today.
AI and Content Commercialization
Nine is rolling out the Gemini platform internally and has begun licensing its content to power external large language models, signing two Australian corporates so far. Management sees AI both as an efficiency lever and a nascent revenue stream, though the current financial contribution was described as small and early-stage.
Weak Advertising Market and TV Revenue Decline
Total TV revenue fell 14% on a continuing basis, compared with a market estimated to be down about 10%, highlighting cyclical pressure and lapping of Olympic-related strength. The weak ad environment particularly weighed on broadcast revenues, even as audiences and engagement held up relatively well.
BVOD / 9Now Revenue Pressure
Digital video and 9Now revenues declined materially versus the prior period, despite audience growth on the platform. Management pointed to the absence of Olympics inventory and delays in programmatic monetization, noting that higher viewing has not yet translated into proportional revenue uplift.
Advertising Weakness at Mastheads
Print advertising at the mastheads declined 11%, while digital advertising fell 14%, reflecting softer spend from government, business and travel clients. Nine.com.au profitability dropped by around $4 million, prompting a renewed focus on product and audience strategy to stabilize the ad-funded parts of the publishing division.
Specific and Restructuring Costs
Pre-tax specific items were $18 million in the half, including about $14 million flowing through the NPAT bridge, with more than half tied to restructuring redundancies. Additional charges related to platform and HR systems development and pre-transaction M&A expenses, underscoring the one-off cost of reshaping the portfolio.
Uncertainty in Quarter 4 Outlook
Management warned that visibility into fourth-quarter trading remains limited, citing choppy comparatives from prior elections and Olympics as well as continued ad softness. Programmatic timing and the pace of recovery in advertising demand are key unknowns, making near-term revenue trends harder to predict.
Competitive Pressure on Stan Entertainment Subs
Stan’s overall subscriber base of roughly 2.4 million dipped slightly since the last result, reflecting a fiercely competitive streaming landscape in entertainment content. While sports subscriptions grew strongly, management acknowledged churn and mix shifts in entertainment tiers, reinforcing the need for disciplined content investment.
Regulatory and Policy Risks
Executives flagged regulatory uncertainty as a material risk, including the future of the News Media Bargaining Code and potential local content rules for streamers. They cautioned that new obligations could inflate content costs and have unintended competitive consequences for Australian-owned platforms like Stan and Nine’s broader media assets.
Ongoing Work to Monetize New Digital Opportunities
Beyond early AI deals, Nine stressed that monetizing new digital formats and data opportunities is still at a formative stage, with no material revenue guidance yet. Management framed these initiatives as option value that could add incremental upside over time, but not as a near-term driver underpinning current earnings.
Forward-Looking Guidance and Outlook
Guidance centred on executing the $160 million cost-out program, completing the QMS acquisition and managing leverage back into the target range by FY 2027 as tax losses are realized. Pro forma, QMS is expected to generate about $105 million of EBITDA in CY 2026 and move from low single-digit to double-digit EPS accretion once synergies of roughly $14–20 million after tax are delivered.
Nine’s earnings call portrayed a company leaning into structural growth in streaming, digital subscriptions and outdoor, while aggressively trimming costs to counter cyclical ad headwinds. For investors, the story is of a more focused, higher-margin media group with solid financial momentum but near-term earnings still tied to an unpredictable advertising cycle and evolving regulation.