FISCAL 2022 THIRD QUARTER KEY FINANCIAL HIGHLIGHTS

• Revenues in the quarter were $2.49 billion, a record for third quarter revenue and a 7% increase compared to $2.34 billion in the prior year
• Net income in the quarter was $104 million, an 8% increase compared to $96 million in the prior year
• Total Segment EBITDA in the quarter was $358 million, a 20% increase compared to $298 million in the prior year, and includes $15 million of one-time transaction costs
• In the quarter, Reported EPS were $0.14 compared to $0.13 in the prior year – Adjusted EPS were $0.16 compared to $0.09 in the prior year
• Dow Jones reported its highest third quarter revenue since its acquisition with 16% growth and saw continued digital subscription gains as well as strong performance in advertising
• As of the end of March, Foxtel’s total paid streaming subscribers grew 62% compared to the prior year with both BINGE and Kayo at approximately 1.2 million subscribers
• Digital Real Estate Services segment revenues grew 19% in the quarter and Segment EBITDA expanded 17% despite a difficult prior year comparison
• News Media continued to benefit from the rebound in the advertising market, new content licensing revenues and strong digital subscriber gains

News Corporation (“News Corp” or the “Company”) (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) today reported financial results for the three months ended March 31, 2022.

Commenting on the results, Chief Executive Robert Thomson said:

“News Corp revenues and profitability set new records for the third quarter, building on the momentum of preceding record quarters. We have now achieved more in profitability through the first three quarters of fiscal 2022 — at over $1.3 billion and rising 27 percent compared to the prior year — than in any entire fiscal year since our rebirth in 2013.

For the third quarter of fiscal 2022, News Corp delivered $2.5 billion of revenues, up 7 percent, despite significant currency volatility, while profitability improved by 20 percent, including one-time transaction costs for the OPIS acquisition. That growth has been underpinned by our continued transformation to a digital-led company. We benefited from a surge in digital advertising revenue, including 21 percent growth at Dow Jones, and more than 15 percent growth in paid digital subscribers across our key markets.

The acquisition of OPIS, along with Base Chemicals, expected to close by the end of next month, represent an exciting opportunity for Dow Jones, extending the depth and reach of our news and information capabilities in the commodities sector. The appetite for data, analysis and insight in the energy, renewables, chemicals and related fields is strong and growing, and we believe Dow Jones is now well positioned to capitalize on that burgeoning opportunity.

News Corp is a company transformed, more intensely digital and global, with strong growth in our core markets and much unrealized potential. Macroeconomic challenges affect all businesses, whether it be supply chain pressures or inflation. But our collective resilience, adaptability and creativity, already stress-tested by the pandemic, have contributed to record revenues and profits.”

THIRD QUARTER RESULTS

The Company reported fiscal 2022 third quarter total revenues of $2.49 billion, a 7% increase compared to $2.34 billion in the prior year period. The increase reflects growth in all revenue lines, including the impact of recent acquisitions, partially offset by the $85 million, or 3%, negative impact from foreign currency fluctuations. Adjusted Revenues (which exclude the foreign currency impact, acquisitions and divestitures as defined in Note 2) increased 6%.

Net income for the quarter was $104 million, an 8% increase compared to $96 million in the prior year, reflecting higher Total Segment EBITDA, as discussed below, and lower tax expense, partially offset by lower Other, net and higher interest expense.

The Company reported third quarter Total Segment EBITDA of $358 million, a 20% increase compared to $298 million in the prior year, primarily due to higher revenues, as discussed above, and lower costs in the Other segment due to lower employee costs driven by stock price performance. The growth was partially offset by higher costs at the Dow Jones, Digital Real Estate Services and Book Publishing segments, which reflects the impact of recent acquisitions including $15 million of transaction costs related to the acquisition of OPIS. The growth was also partially offset by the $16 million, or 6%, negative impact from foreign currency fluctuations. Adjusted Total Segment EBITDA (as defined in Note 2) increased 25%.

Net income per share attributable to News Corporation stockholders was $0.14 as compared to $0.13 in the prior year.

Adjusted EPS (as defined in Note 3) were $0.16 compared to $0.09 in the prior year.

SEGMENT REVIEW

Digital Real Estate Services

Revenues in the quarter increased $65 million, or 19%, compared to the prior year, driven by continued underlying growth at REA Group and Move, as well as the acquisition of Mortgage Choice, partially offset by the $16 million, or 4%, negative impact from foreign currency fluctuations. Segment EBITDA in the quarter increased $20 million, or 17%, compared to the prior year, primarily due to the higher revenues. The growth was partially offset by the increase in expenses associated with the acquisition of Mortgage Choice, higher employee costs and higher marketing expenses at both Move and REA Group. Adjusted Revenues and Adjusted Segment EBITDA (as defined in Note 2) increased 14% and 18%, respectively.

In the quarter, revenues at REA Group increased $57 million, or 30%, to $246 million, driven by higher financial services revenues, primarily due to the $38 million contribution from the acquisition of Mortgage Choice, and higher Australian residential revenues due to strong national listings, price increases and favorable depth penetration and product mix. The growth was partially offset by the $16 million, or 9%, negative impact from foreign currency fluctuations. Australian national residential buy listing volumes in the quarter increased 11% compared to the prior year, with listings in Sydney up 14% and Melbourne up 8%.

Move’s revenues in the quarter increased $8 million, or 5%, to $170 million, primarily as a result of higher real estate revenues. Real estate revenues, which represented 85% of total Move revenues, increased $9 million, or 7%, due to growth in both the referral model and the traditional lead generation product. The referral model benefited from record average home values, partially offset by lower transaction volume. The referral model generated 28% of total Move revenues in the quarter compared to approximately 25% in the prior year. The improvement in the traditional lead generation product was driven by higher contribution from the Market VIP℠ product and continued improvements in yield from Connections℠ Plus, partially offset by the impact from lower lead volume. Revenue growth was also partially offset by a $3 million negative impact from the divestiture of Top Producer. Based on Move’s internal data, average monthly unique users of realtor.com^®’s web and mobile sites for the fiscal third quarter declined 3% year-over-year to 95 million, which includes 100 million unique users in March. Lead volume declined 22%, reflecting a continued tough comparison to the prior year when lead volumes increased over 40% year-over-year.

Subscription Video Services

Revenues in the quarter decreased $29 million, or 6%, compared with the prior year, reflecting a $35 million, or 7%, negative impact from foreign currency fluctuations. Higher revenues from BINGE and Kayo and an increase in advertising revenues were partially offset by the impact from fewer residential broadcast subscribers. Foxtel Group streaming subscription revenues represented approximately 20% of total circulation and subscription revenues in the quarter. Adjusted Revenues increased 1% compared to the prior year.

As of March 31, 2022, Foxtel’s total closing paid subscribers were over 4.3 million, a 23% increase compared to the prior year, primarily due to the growth in BINGE and Kayo subscribers, partially offset by lower residential broadcast subscribers. Broadcast subscriber churn in the quarter improved to 14.3% from 20.1% in the prior year. Broadcast ARPU for the quarter increased 2% year-over-year to A$82 (US$59).

Segment EBITDA in the quarter decreased $12 million, or 13%, compared with the prior year. The decline was primarily driven by higher entertainment and sports programming rights costs, higher investment spending on streaming products and the $5 million, or 5%, negative impact from foreign currency fluctuations. The Company continues to expect full year costs to be flat compared to the prior year on a local currency basis. Adjusted Segment EBITDA decreased 8%.

Dow Jones

Revenues in the quarter increased $66 million, or 16%, compared to the prior year, which includes $20 million and $10 million contributions from the acquisitions of Investor’s Business Daily (“IBD”) and the Oil Price Information Services business and related assets (“OPIS”), respectively. The OPIS acquisition closed on February 28th, 2022. Adjusted Revenues at the Dow Jones segment increased 9% compared to the prior year, primarily due to the growth in circulation and subscription revenues from continued digital subscription gains and higher advertising revenues. Digital revenues at Dow Jones in the quarter represented 76% of total revenues compared to 74% in the prior year.

Circulation and subscription revenues increased $48 million, or 15%, which includes $18 million and $10 million contributions from the acquisitions of IBD and OPIS, respectively. Circulation revenue grew 16%, reflecting the acquisition of IBD and continued strong growth in digital-only subscriptions at The Wall Street Journal. Professional information business revenues grew 13%, primarily driven by the acquisition of OPIS and 12% growth in Risk & Compliance products, partially offset by negative foreign currency fluctuations. Digital circulation revenues accounted for 68% of circulation revenues for the quarter, compared to 64% in the prior year.

During the third quarter, total average subscriptions to Dow Jones’ consumer products reached over 4.8 million, a 14% increase compared to the prior year, and includes 122,000 IBD subscriptions, the majority being digital-only. Digital-only subscriptions to Dow Jones’ consumer products grew 19%. Total subscriptions to The Wall Street Journal grew 10% compared to the prior year, to over 3.7 million average subscriptions in the quarter. Digital-only subscriptions to The Wall Street Journal grew 16% to over 3 million average subscriptions in the quarter, and represented 82% of total Wall Street Journal subscriptions.

Advertising revenues increased $17 million, or 20%, primarily due to 21% growth in digital advertising revenues, driven by improvement in the financial services and technology categories and benefiting from higher average yield, as well as 18% growth in print advertising revenues, which continued to recover strongly from the COVID-19 related weakness in the prior year. Digital advertising accounted for 62% of total advertising revenues in the quarter, compared to 61% in the prior year.

Segment EBITDA for the quarter increased $6 million, or 7%, including a $5 million contribution from the acquisition of IBD, primarily due to higher revenues, as discussed above, partially offset by higher costs related to the OPIS acquisition, including $15 million of transaction costs, and higher employee costs. Adjusted Segment EBITDA increased 16%.

Book Publishing

Revenues in the quarter increased $25 million, or 5%, compared to the prior year, reflecting a $35 million contribution from the acquisition of Houghton Mifflin Harcourt’s Books and Media segment (“HMH”) and strong frontlist sales in General books, including Red Handed by Peter Schweizer, The Paris Apartment by Lucy Foley and One Damn Thing After Another by William Barr. The growth was partially offset by the $14 million impact from lower sales of the series of Bridgerton titles by Julia Quinn, lower sales of Children’s and foreign language books and the $6 million, or 1%, negative impact from foreign currency fluctuations. Adjusted Revenues decreased 1%. Digital sales declined 6% compared to the prior year, primarily due to lower e-book sales, mostly related to the Bridgerton series, partially offset by higher sales of downloadable audiobooks. Digital sales represented 23% of Consumer revenues for the quarter compared to 26% in the prior year.

Segment EBITDA for the quarter decreased $13 million, or 16%, compared to the prior year, driven by higher manufacturing and freight costs due to mix of titles and the impact from ongoing supply chain and inflationary pressures. Adjusted Segment EBITDA decreased 19%.

News Media

Revenues in the quarter increased $30 million, or 5%, as compared to the prior year, driven by the continued recovery of the post-COVID-19 advertising market and higher circulation and subscription revenues, partially offset by a $25 million, or 5%, negative impact from foreign currency fluctuations. Within the segment, revenues at News UK and News Corp Australia increased 4% and 2%, respectively. Wireless Group and the New York Post also saw higher revenues in the quarter. Adjusted Revenues for the segment increased 10% compared to the prior year.

Circulation and subscription revenues increased $13 million, or 5%, compared to the prior year, primarily due to higher content licensing revenues, digital subscriber growth and cover price increases, partially offset by a $12 million, or 4%, negative impact from foreign currency fluctuations and a decline in print volumes.

Advertising revenues increased $20 million, or 9%, compared to the prior year, driven by growth in digital advertising across the businesses due to higher impressions, primarily at The Sun and the Australian mastheads, improved yields and the recovery of print advertising at News UK (primarily at The Times and Sunday Times), partially offset by a $10 million, or 5%, negative impact from foreign currency fluctuations.

In the quarter, Segment EBITDA increased $31 million compared to the prior year, reflecting higher revenues, as discussed above. News Corp Australia and News UK contributed $25 million and $5 million, respectively, to the Segment EBITDA growth and Wireless Group and the New York Post were also positive contributors. The growth was partially offset by costs related to TalkTV, which launched in April 2022. The Company expects to incur at least $20 million of incremental costs in the fourth quarter of fiscal 2022 compared to the prior year, relating to product investments across the segment, including TalkTV. Adjusted Segment EBITDA increased $34 million.

Digital revenues represented 35% of News Media segment revenues in the quarter, compared to 30% in the prior year, and represented 32% 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, 2022 were 946,000 (876,000 for news mastheads), compared to 807,000 (760,000 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, 2022 were 421,000, compared to 360,000 in the prior year (Source: Internal data)
• The Sun’s digital offering reached 171 million global monthly unique users in March 2022, compared to 119 million in the prior year (Source: Google Analytics)
• New York Post’s digital network reached 155 million unique users in March 2022, compared to 139 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 available to News Corporation:

Net cash provided by operating activities of $1,030 million for the nine months ended March 31, 2022 was $30 million lower than $1,060 million in the prior year, primarily due to higher working capital, driven by higher employee bonus and equity-based compensation payments, payments related to one-time legal settlement costs and higher inventory purchases, as well as $22 million in higher interest payments, partially offset by higher Total Segment EBITDA as noted above.

Free cash flow available to News Corporation in the nine months ended March 31, 2022 was $618 million compared to $762 million in the prior year period. The decline was primarily due to higher capital expenditures and lower cash provided by operating activities, as mentioned above, partially offset by higher dividends received from REA Group. Foxtel’s capital expenditures for the nine months ended March 31, 2022 were $125 million, compared to $103 million in the prior year.

Free cash flow available to News Corporation is a non-GAAP financial measure defined as net cash provided by operating activities, less capital expenditures (“free cash flow”), less REA Group free cash flow, plus cash dividends received from REA Group.

The Company considers free cash flow available to News Corporation to provide useful information to management and investors about the amount of cash that is available to be used to strengthen the Company’s balance sheet and for strategic opportunities including, among others, investing in the Company’s business, strategic acquisitions, dividend payouts and repurchasing stock. The Company believes excluding REA Group’s free cash flow and including dividends received from REA Group provides users of its consolidated financial statements 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. A limitation of free cash flow available to News Corporation is that it does not represent the total increase or decrease in the cash balance for the period. Management compensates for the limitation of free cash flow available to News Corporation by also relying on 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.

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 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 and 3 and the reconciliation of net cash provided by operating activities to free cash flow available to News Corporation is included above.

Conference call

News Corporation’s earnings conference call can be heard live at 5:00pm EDT on May 5, 2022. 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, 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, 2022 and 2021:

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, 2022 and 2021:

Foreign Exchange Rates

Average foreign exchange rates used in the calculation of the impact of foreign currency fluctuations for each of the three month periods in the nine months ended March 31, 2022 and 2021 are as follows:

Adjusted Revenues and Adjusted Segment EBITDA by segment for the three and nine months ended March 31, 2022 and 2021 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, 2022 and 2021: