Nine Entertainment Co. Holdings Limited

Good morning everyone, and thank you for joining us for our H1FY26 results briefing. I'm Matt Stanton, CEO of Nine Entertainment. Joining me here today is our CFO, Martin Roberts. And we are coming to you from our studio in North Sydney, which was upgraded in preparation for the Winter Olympics. The studio has been integral to the coverage of all the action from Milano Cortino that has enthralled Australian audiences on Nine, Nine Now and Stan over recent weeks. I'd like to start off by acknowledging the traditional custodians of country throughout Australia and their connections to land, sea and community. We pay our respects to their elders past, present and emerging and extend that respect to all First Nations people today. For myself, I am on the land of the Camaro Gaul people of the Eora Nation. For the six months to December, Nine has reported Group EBITDA, including Radio and NBN and Darwin, of $201 million, up 6% on PCP, on revenue of $1.1 billion. On a continuing business basis, this equated to EBITDA of $192 million, also up 6%, and net profit after tax of $95 million, up 30% on PCP. EPS of 6 cents per share was also up 30% and enabled the declaration of a 4.5 cent interim dividend. We were very pleased to report another half of EBITDA growth for the six months to December 2025, consistent with our guidance from August last year. Nine's diversity of revenue and strong cost performance helped to counter the weak advertising market, with growth from Stan, the mastheads, and robust results from Total Television. Overall, Nine's group EBITDA margin increased by nearly two percentage points to 18.2%. Subscription revenues grew by 13% across the half, underpinned by double-digit growth at Stan and in digital subscription revenues at Publishing. Across the half, we continue to see digital revenue at our mastheads growing faster than the rate of decline in print revenue. We removed a further $43 million of costs from the business across the half, $32 million on an ongoing basis. This was the result of our focused program of improving efficiencies in parts of our business whilst continuing to invest in the areas of growth. we continue to expect delivery of at least $160 million across FY25, 26 and 27, with $92 million delivered to date. Since our last result, we have also made significant progress in our strategic initiatives. To this end, the announcement in late January of the acquisition of QMS, sale of Nine Radio and restructuring of MBN and today's announcement on Nine Darwin are key to accelerating Nine's strategic transformation by increasing our exposure to growth assets. The outdoor assets enhance our scale and reach, and are resilient to the power of the global platforms. As a result, we have streamlined Nine's business around our focus on premium content, digital growth, as well as subscription and licensing assets. We believe this portfolio offers the greatest opportunities for optimising the combined value of our assets, underpinning longer-term growth opportunities and value to the shareholders. While these big moves may have grabbed the headlines, we have also been working behind the scenes improving the operating effectiveness of our existing businesses. during the HALF 9 Strategic Transformation Program 9-2028 enabled the delivery of a number of cost and growth initiatives, helping to offset the challenges of the external advertising market, while capitalising also on growth opportunities. We have made significant progress with our AI initiatives. Focusing on both improving the operating efficiency of our business and also the further commercialization of 9's pool of proprietary content. Our own use of our AI continues to gather momentum. We are through the establishment phase. Democratizing the usage of AI across the company with Gemini platform rolled out and being utilized daily by an increasing number of our employees. We are now focused on accelerating the redesign phase, driving efficiencies as well as driving growth in new product and new revenue streams. We are pleased with the progress we are making across customer support, sales, finance automation, consumer engagement, content creation and engineering. One clear example of reimagining the use of NIE's content is evidenced as corporates look to fuel their own in-house LLMs with quality, reliable content in volume. On this point, we have already signed two Australian corporates as licensors of NIE's content into their own proprietary AI ecosystems, with a lot more opportunities to come. These strategic moves have resulted in a step change in the balance of our business. In the latest results, we estimate that around 51% of our revenue and 49% of our EBITDA was sourced from growth assets . Looking forward to FY27, we estimate that on a pro forma basis, around 60% of our revenue and almost 70% of our EBITDA will be sourced from growth assets. adding in the higher margin outdoor business and reducing our reliance on broadcast. Whilst we are not motivated by scale alone, it is also an important outcome enabling us to maximize the impact of our content and remain relevant in a fragmented media market. Moreover, as our business becomes more digital, we expand our ability to build and exploit the opportunities of our integrated consumer platform. At this point, I'd like to ask Martin Roberts, our Chief Financial Officer, to talk through the group financials.

Thanks, Matt, and good morning, everyone. As Matt summarised earlier, for the six months to December, inclusive of the results of Radio, MBN and Darwin, the reported EBITDA of $201 million equated to growth of 6%. On a continuing business basis, Nine reported group revenue of $1.1 billion and group EBITDA of $192 million, which was also up 6% on half one FY25. Group net profit after tax and before specific items was $95 million, up 30% on the previous corresponding period on a continuing business basis. Inclusive of a specific item cost of $14 million, the net profit for the half was $81 million. Slide 9 details the composition of specific items, which totaled a pre-tax cost of $18 million for the half. A bit over half of this related to restructuring costs, primarily redundancies. We incurred almost $5 million of costs relating to the development of our in-house total training platform and HRIS projects. There was also around $3 million of pre-transaction costs relating to sales of Nine Radio, MBN and Darwin, and the acquisition of QMS. The waterfall chart on page 10 illustrates our continuing work on costs. Reported costs on a continuing business basis were $59 million lower. Pre the impact of the Paris Games, costs were up $36 million or 4%. Within this, nine offset the impacts of returning costs, inflation relating to employee salaries investment, whilst continuing to invest in growth businesses, stand and drive. This resulted in a total cost saving of more than $43 million, including $32 million of ongoing costs. We expect to take a further $70 million of underlying costs out across half to FY26 and into FY27, consistent with a three-year total of around $160 million. Page 11 shows a transition of Nye's net debt from the starting position at the 1st of July 2025 of $450 million to the $158 million in cash we have reported for the 31st of December 2025. This includes the $720 million proceeds from Domain, net of the dividend paid and tax of course. Within this we paid a special dividend of $777 million fully franked to our shareholders. We continue to expect leverage to peak at around 1.8 times by June 2026, post-completion of our M&A transactions. The enhanced EBITDA of the combined entity and the benefit of the tax losses, which are expected to be realized around January 2027, are projected to reduce leverage to within nine's targeted range of one to one and a half times by the end of FY27. For the six months to 31st of December, cash flow from operating activities was $96 million. with the breakdown of this shown in detail in Appendix 3 of the presentation pack.

Turning now to our divisional results. Together, our streaming and broadcasting businesses recorded growth in the first half, with a record result at Stan and a pleasingly robust result for Total Television. We continue to focus on broadening our advertising offering in the digital video market, with the introduction of ads on Stan Sport, coupled with our sales agreement for HBO Max. The logic behind bringing these two businesses together and the appointment of Amanda Lang is playing out, with both revenue and cost initiatives across the half. So in particular, we have accelerated the restructuring of streaming and broadcast under the 9-20-28 program. Specifically, we consolidated the creative and promos teams, resulting in both cost efficiencies and engagement opportunities. We've also stepped up our cross-promotion and collaboration, clearly evidenced during the Winter Olympics. In particular, I'd like to mention the maths spin-off, After the Dinner Party, which launched last week as Stan's highest ever single episode subscription driver in a 24-hour period, beating global phenomenon Yellowstone, and with a massive 15% of the total user base watching the first episode over the first four days. Again, highlighting the benefits of our cross-platform offering. We've also introduced a Pathways to Stand initiative, which uses Nine's digital assets and associated Nine user ID to direct subscribers and non-subscribers to Stand content. Also, earlier this year, we announced plans to consolidate NBN and Nine Darwin within our regional affiliate Wynn Network. enabling both businesses to focus on their strengths. And in mid-2025, we rolled our advertising into StandSport, which together with NineNow and our agency agreement with HBO, further increases our offering in the digital video market. Nine's advertisers are now able to reach audiences across live broadcast, live streaming and on-demand platforms, creating the most powerful video platform in Australia. And finally, we've progressed the Future News Transformation Project with rollout beginning in Sydney and go-live dates starting mid-2026. So, it's been a time of transformation for streaming and broadcast as we position ourselves for the future and enable these latest results with strong growth at Stan and a resilient result for Total TV in a very difficult ad market.

Looking first at the results for Total TV on page 14. Nine recorded audience growth, excluding the Olympic weeks, for total TV in both total people and 25 to 54 year olds for calendar year 25 and also the six months to December. Our content performance continues to strengthen with shows like The Block up 12% across the season on a total TV basis and Love Island up a massive 43%. For the December half, Nine's comparables for revenue and costs were significantly impacted by the prior year Olympic period. As a result, Nine recorded a total TV revenue decline on a continuing business basis of 14% in a market that was down by around 10%. Total television costs declined by $85 million in the half, the key driver being the $76 million net reduction in sports costs, primarily the Paris Olympic and Paralympics. On an underlying basis, savings of an estimated $25 million more than offset inflation and strategic investments in premium content and technology. The net outcome, therefore, was a broadly steady total TV EBITDA of $99 million, which was a pleasing result in a tough advertising market. At Stan, revenue growth of 15% was underpinned by sport, with the Premier League outweighing the absence of the Olympics, resulting in 40% growth in average sports subscribers on a higher ARPU across the half. The current subscriber number of around 2.4 million reflects a more competitive market for entertainment content and the conclusion of Yellowstone in the comparative period. Stansport has been a key driver of Stan this half, with the new Premier League contract boosting subscriber numbers and enabling a price increase in July last year. As a result, ARPU across the half increased by 6%. The Winter Olympics has also been the primary driver of a recent boost in sports subscribers, resulting in more than 200 million minutes viewed and an all-time record for Stan's sport weekly users, once again highlighting to Nine the merits of cross-platform sports rights. Stan's margins expanded further across the year. Entertainment costs were down year on year, showing ongoing cost discipline across the entertainment portfolio, as well as early benefits from the streaming and broadcast restructure. Stan reported a record half-one EBITDA result of $37 million, up 24%. We also introduced advertising to StanSport at the beginning of FY26, delivering single-digit millions of dollars of advertising revenue in the half, despite a short lead time before the start of the Premier League season. Coupled with the new agency revenue from HBO, Nine's ability to generate incremental revenue in the digital video market is continuing to build.

Okay, so turning now to page 16. We continue to be pleased with the performance of our publishing business. These results can only be achieved with commitment to journalism, to our people, and to delivering our content in as many ways across as many platforms as we can. To this end, over the past six months, we have continued to focus on investing in our high-quality journalism, which of course sits at the core of the business. We have cycled through price rises across the SMH, Age and the AFR, and we are constantly developing and evolving the product experience for our subscribers and readers. In particular, this latest half, we have launched personalized notifications and AI-powered in-app audio as additional features for high ARPU packages. We've also continued to deliver profitable industry events and expanded our campus access. building direct relationships with thousands of potential new subscribers. We're also pleased with the performance of Drive. The focus towards lead generation revenues is paying off, with 120% growth in marketplaces revenue across the half. As I mentioned earlier, Nine Publishing has also completed a small number of AI deals with major corporates who are licensing Nine's premium content for use in their in-house LLMs.

In terms of results, Publishing reported revenue of $262 million and a combined EBITDA of $74 million, which was flat on the first half of FY25. The result included an $8 million reduction in defamation provisions, primarily a result of the completion of the Ben Robert Smith case. It also included a mid-single-digit millions of dollars investment in Drive, the early results of which are reflected in Drive's revenue growth. You will see from this table that we reported strong growth in digital revenues, 9% of the Metro mastheads in AFR and 32% at Drive. This growth at Drive was underpinned by 120% year-on-year growth from the marketplace business, supported by a 108% increase in dealer car listings, which together more than offset a 5% decline in advertising. Profitability at nine.com.au declined by around $4 million. We're currently undergoing a complete refocus of the product and audience proposition for the business with significant website enhancements during this half and with our new executive editor starting just last week. The revamp9.com.au strategy is aimed at maximising results for our commercial partners and providing the best news, sport, lifestyle, entertainment and shopping experience for the nearly 10 million Australians that visit every month. On page 18, we take a closer look at our masthead business, which reported EBITDA growth of $5 million to $78 million. These results further highlight the key inflection point Matt spoke to earlier, with the growth in digital revenues more than offsetting the decline in print. Once again, we were pleased with our digital subscriber performance, both in terms of subscriber numbers and ARPU, resulting in digital subscription revenue growth of around 17%. Nines Metro masteds were, however, impacted by the softness in the broader advertising market, as well as prior year Olympics revenue, and some large client campaign and spend movements out of the first half from both print and digital. Print advertising declined by 11% and digital advertising declined by 14%, reflecting softness in government, business and travel. Costs for the mastheads declined by $2 million, with savings from defamation and printing partially offset by cost increases from salaries and increased subscriber marketing. The mastheads are also continuing their targeted investment in their key growth areas, with a focus on ensuring recent audience and subscription strength is maintained.

I'd also like to say a few words about the current regulatory environment. Australia faces some significant challenges from the increasing influence of global tech giants and the rapid evolution of artificial intelligence. These developments are having significant impacts on local media companies. That is why the media sector eagerly awaits the government's intent following the industry feedback to the discussion paper on proposed reforms to the News Media Bargaining Code. The Prime Minister has assured the sector he remains committed to the reform. This policy is not just of great importance to Nine and the journalism we so heavily invest in, it will have long-lasting impacts on the health of our democratic nation, the voices of its communities and the broader economy. We encourage the Prime Minister to give the News Media Bargaining Code a higher priority status on the policy agenda than at present, to ensure implementation doesn't slip into late 2026. On the commercial broadcasting tax, Nine continues to advocate strongly for the abolition or further suspension of the tax, as economic headwinds and the challenges faced by broadcasters has not fundamentally changed since it was first suspended. The rushed implementation of local content investment obligation for subscription streamers has been a concerning example of the unintended consequences of pursuing policy aimed at global streamers without properly understanding the impact this has on the content landscape for local media broadcasters and Nine's SVOD platform, Stan, the only Australian-owned service of its kind. We will be monitoring the impacts of this new regulation on content cost inflation, competition, and access to quality Australian content for NINE, other Australian services, both free and subscription, and audiences. So, turning back to these results. Our ASX release this morning includes the updated view of current trading, which I refer you to. Overall, the new year has started on a more positive note operationally, underpinned by Nine's exceptionally strong content, which has been reflected in Q3 advertising share. We're also buoyed by the strategic changes we announced a couple of weeks back. Our goal is clear. To be Australia's leading digital-first connected media business. We are confident the changes we have made and continue to make both through our portfolio and operating structure will accelerate Nine's transition to a digitally focused, structurally growing media company in a way which demonstrates our commitment to enhancing shareholder value. We are moving from a traditional media-based business to a data-driven, integrated digital media powerhouse. So, now Martin and I will take your questions. Operator, if you could pass us through to our first question.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Eric Choi and Baron Joey. Please go ahead.

Oh, thanks. Hey, Matt. Hey, Martin. Thanks for the questions. I had a few. I'll just go one by one and just tell me to bugger off when you think there's too many. But first one, just a boring one on impact. On the outdoor call before, I think I incorrectly backsold about $140 million of FY26 MPAT just using your accretion comments. Just with the new information you've given us today on interest DNA, I just wanted to confirm that's looking more like a 140 to 150 MPAT range, and I just don't want to shortchange you because if we're calculating EPS accretion for the outdoor deal, we just want to make sure we're using the right EPS base.

Yeah, thanks Eric and thanks for such a technical question to start us off. So I might refer to Martin, I don't know if you can.

Yeah, yeah. So morning Eric. So I think as we said on the call in January with QMS, we're looking at 105 million of EBITDA in calendar year 26. I think I also indicated that DNA would be about 50 million. Clearly for the EPS accretion to be the low single digits that we called out pre synergies, you've got to get over the after tax interest costs of roughly $35 million a year if you take the $850 million acquisition price and so that's how you get to that small accretion and then the synergies of 20 million after tax of 14 and then that adds together with the low single digit to get to double digit. Clearly, it depends on what your EBITDA forecast is to get to whatever you want to focus on MPAT, but hopefully that helps you work it out yourself. Thank you, Martin.

And sorry, Matt, let me bring it back to the operations. Just on the fourth quarter outlook, and if we look at what Southern Cross has said today, They're implicitly guiding to probably like $130 million of EBITDA for the TV business, which would be probably below what consensus was expecting for SWM before. And if you look at their 4Q comments, they're definitely not expecting an improvement in the TV market versus 3Q. I'm just wondering if you think that's conservative because if you look at SMI, May and June look like easier comps. So just from a market perspective, I'd be interested in your views, and I realize your share is going to be lower in 4Q versus 3Q, but I'm just interested in the market outlook.

Yeah, so I think we've guided the fact is it's a bit too early to say what quarter four. We've talked about quarter three being better than quarter two. We had a very strong content slate in quarter three. That's no doubt about that. Don't forget last year you had the election in April which does buoy up and then May June softened down so it does depend a little bit on your share and also don't forget for us the business in quarter four will be the advertising part and the broadcast bit if you like is under 30% of the business at that point in time so it's very difficult to say how material that will be to our numbers. in quarter four. But it is, I say the market feels better in quarter three than it was quarter two. It was choppy through quarter four last year, and it's a bit early for us to say.

I'm sorry, Matt. Do you mind if I put in one more? Yes, go for it. Okay, thanks, Matt. Probably the most important question at the moment, which is, do you think you guys are an AI winner or loser? Obviously, you're doing enterprise deals. Just wondering... the potential for bigger LLM deals and then there's all of that sort of potential licensing revenue, you guys monetizing the bold and all of your data, et cetera, et cetera. Does that more than offset any kind of potential disruption vectors to ad markets or content aggregation?

Yeah, great question. I mean, where we sit with this is that, you know, I think we're net positive on the impact for us. I think, you know, we are very much strategies around premium content. And I think when you've got premium content and the quality of the content we've got, is very strong, that we're in good shape, and there will obviously be some efficiencies coming through, but a bit of disruption as well. So we've done a couple of LLM deals that we announced today, and there's a good pipeline of other opportunities, both locally and we'll see globally over time. But, you know, we're net positive on where AI will land us. Thanks, Matt. Thank you. Thanks.

Your next question comes from Encho Rakowski and ENT. Please go ahead.

Good morning, Matt. Good morning, Martin. I might start with a question on Total TV as well. Just looking at that three Q trajectory, it looks reasonably strong given the PCP. I know you had a really strong Q3 last year. So my question is how much of that strength can you attribute to the Olympics and how much can you attribute to the fact that the Australian Open effectively had close to an extra week of content, which looks to have been pretty well marketed, and sort of other factors. I guess I'm just trying to isolate what's one-off within that number as opposed to recurring.

Yeah, no, you're right, Maureen. You're right to say that we had a very strong period last quarter. So this time last year we were up, I think, 7% or 8% year on year for the quarter, and then to come up again. But don't forget, this quarter we had... you know ao which was very strong from an audience point of view and good commercially you go into the to the olympics um which is very strong you've got mass which is very strong and then we get into the nrl so you've got four huge content pillars through the first quarter so we will over index on share there's no doubt about it in quarter three um uh through it so as i said like quarter two the whole mark as a whole market is better But it's, you know, quarter three was pretty soft as a market and I think, you know, we were lower share in quarter two because of, you know, the content slate we had. Quarter three is definitely driven by the content slate we've got. The market does feel better but it's still soft and a bit short.

Okay, it sounds like it's mostly, I mean, sort of the three out of the four factors are basically recurring, so it doesn't feel like it's a one-off sort of Olympics shooting or anything like that.

Yeah, I think where we've sort of realised, the Olympics actually, the audience was better than we thought it was going to be, because you're doing the, you know, we were putting the Olympics on at the same time as maths was on, on a different channel, obviously on GEMM, And then when maths finished, we saw a surge back into the Olympics. And so the numbers were very strong on the Olympics, which is great. I think, you know, in the longer term, you know, next time around with the Olympics, we'll probably push maths out, I'd have thought, because you can't move the AR, you can't really move the Olympics as much as we'd like to tell them what to do. I don't think we'll move those two, so we'll probably shift it out because it's a lot to do in one quarter.

Yeah, got it. Thank you. And then the stand-paying subs, they have reduced slightly since the last result. I guess, can you talk about what the dynamic is which is driving this? You mentioned in your prepared remarks a competitive market, and just for the avoidance of doubt, is it just reduced entertainment subs? And how have sports subs trended? I'm sure you're not going to give us specific numbers, but just the broad trend would be useful. And have you seen any benefit from the Winter Olympics to those sports subs? And sorry, there's a lot in there, but that 2.4 million, I assume that includes any benefit from the Winter Olympics as well, given you've said that as of February?

Yes, yeah, there is some benefit there in that 2.4. So, in effect, sport being very strong, driven really by the Premier League coming into it. We had a lot of conversions from entertainment into sport. So, if you think about the entertainment tier, and then you purchase the sport on top of that. So, ARPU growth has been very strong because of that. So that's what's happened there with the biggest driver of the revenue growth has been the ARPU coming through from people coming through. So the sport has been very strong. The entertainment has been stable, but not as strong as the sport growth.

Okay, thanks, Matt. And just a very final one. The publishing deals with corporates to power their LLMs are quite an interesting announcement. I suppose you're restricted to some extent in what you can say, but can you talk about the structure of these contracts and the revenue you can generate from a single contract? And if you can't talk about specifics, I suppose where do you think you can get to over time in terms of revenue from this channel if they're a big addressable opportunity you can attack?

Yeah, thanks. You're right, I can't talk about specifics on this, but we've done a couple of deals and they will depend on the size of organisation and the size of the deal we do. So they will change a little bit depending on what sector you're in and category as well. whether you're in tourism or banking or mining, et cetera, through that. So, you know, it's a licensed deal, basically, for our content to sit to train their own models to help them train to be a stronger model for them in their market in what they're doing. So it's obviously got the AFR, the SMH, the AHRQ, type contract but it's mainly AFR in there and it's, you know, we've done two. We have a pipeline of other opportunities and we see it as a good revenue stream in the future. I don't really want to get into material how much at this point in time until we get through a few more.

Okay, that's great. Thanks, Matt.

Thanks very much.

Your next question comes from Fraser McLeish and MST Marquis. Please go ahead.

Yeah, hi Martin. A couple from me. Just firstly on QMS, just if you can say anything about the sort of trading you've seen in, I guess, another month on from when you announced the transaction. And just, you know, how much visibility do you have over that sort of 25% revenue growth you've outlined for QMS this year? If you can give us some kind of indication of how much is coming from QMS you know new contracts or new inventory that you've put in rather than any assumption of underlying growth that would be helpful um another one was just if you could run through some of the moving parts on nine now and that that revenue is obviously down pretty substantially some of that assumes the olympics but what's happening there underlying i mean you've had great red audience growth there but still doesn't seem to be translating into revenue growth thanks

Yeah, thanks Fraser. Sort of three questions there. On QMS, you know, we obviously haven't completed yet the deal on QMS yet, so I can't really sort of talk about trading from that side. What I would say is, you know, we've had very good strong conversations with advertisers and agencies. around the acquisition and feel pretty good about that from the ability for us to bring the QMS business into the NIME business. So we're very pleased about that. But I can't really talk about trading. We don't actually own technically the business at this point. If we talk about the 25%, I talk rough, rough numbers around that. So about 10%, I think about 10% is from growth from the business. So whether it be from more inventory going through those assets and price and so forth. So about 10%, I suppose, organic, if you like. and about 5% for new assets coming on board in Australia, so about 5%. And then about another 10% coming actually from the Auckland contracts. That's a new contract in New Zealand they've got, and that gives some growth through there as well. So that's about roughly to think about that 25%. but through there yeah you're absolutely right on the nine now um performance um the olympics was the biggest driver of the difference we had a huge olympics uh this time last year in that six months period uh from there and then you know one of the other things is we're thinking more and more about this digital video market um extending out on outside of the b-bob market is one thing into digital so we launched stan ads was one thing, and also did the HBO Max rep deal through that period as well. So from a digital video, that sort of comes a bit more into it through there as well. But, you know, we are very pleased with the performance as we go through into Q3 and so forth with the B-Bod side of it. And, you know, possibly could we have done better in quarter two? Yes, we probably could have done.

Great, thanks. And I'll just take the opportunity to say well done again on the domain transaction. That's obviously looking at a better deal by the day when you look at share prices across the sector.

Thank you. Yeah, we're not pleased about that, but we're pleased about the transaction we did, yeah. Thank you.

Any more questions? Yes, we do have a question from Alsa Lay and UBS. Please go ahead.

Morning, Matt. Morning, Martin. I've got two questions. Firstly, on Stan, I believe there's a cohort of Optus subs who received a Stan entertainment tester at a discounted price for circa about six months. I'm just wondering what's been the churn like for these subs post-discount plan that you guys have seen?

Yes, I think that's high morning. On the stand, so we had that deal in place where we continue to give content through for those subs that come soon. I mean, basically, where we're seeing at the moment is it's relatively stable, but we're getting more people go into the main package, i.e. entertainment, into sport, which has helped us drive our ARPU growth, so we're seeing good traction on the ARPU versus the volume a little bit as well. So more people are sort of just coming out of those deals and coming just direct to us.

Understood. And then secondly, maybe just adding on from Eric and Andrew's LLM questions, interest is to what your current proportion of traffic is from LLMs, if you have visibility, and what's been the trend in that as well?

Sorry, I'm a little bit confused by the question. So were you saying on the LLMs, what's our traffic from the LLMs?

Yeah, traffic straight from audience traffic, straight from LLMs onto the nine platforms.

Yeah, okay. I'd have to come back to you on that, to be fair. I don't think I've got an answer. We'd have to come back to you. Apologies, I haven't got that to hand.

Yeah, that's all good. Thank you guys so much.

Thank you. The next question comes from Roger Samuel and Jefferies. Please go ahead.

I've got two questions as well. First one, just going back on the outlook for Total TV for Q4, which is, as I mentioned, there's still a lot of uncertainty. So what do you need to see to get more confidence in your outlook for Q4? And do you think that the most recent rate hike and potentially more to come has introduced more uncertainty because of the outlook for the ad market.

Sorry, that last bit, Roger, was that more uncertainty from what?

More uncertainty on the ad market, yeah.

Okay, just on, look, you know, I think, I mean, as we go into every quarter, well, we're still not in that quarter, obviously, but before the quarter, we open our books up, and then when we get more trading coming through our books, we get a better visibility of what it is. I think, look, quarter four was very choppy last year, so it's quite difficult to say because there was a lot of election money went into April, but then May and June came off a lot. So it's a bit of a difficult quarter to say. And we haven't... I mean, we've got obviously strong NRL through that. We haven't got any big... We've got some big shows, but not to the level of mass or block, for example, coming through. So it's just a bit short for us to say at the moment. And if you're online now, the programmatic will come through a bit later. So it's difficult for us to give exact numbers at this point.

Got it. And, yeah, just in terms of your guidance for CapEx, it looks like it has been reduced by about $5 million by 526. What's driving that? Is it because of the divestment of the radio assets or is it some ongoing proficiency?

All those forecasts in the appendix are on a kind of like-for-like basis just to help you going through that so it's not to do with radio it's just a normal seasonal process of people not quite spending what they anticipate spending. A lot of the capex in the first half as you'd appreciate is all digital so we're putting together the nine now stand platforms You know, we've got some investments in publishing, and obviously investments Matt's talked about in AI and data, and they can continue through into the second half. But it's just really just updating from the run rate that we've got, nothing specific. Okay, got it. Thank you.

Your next question comes from Lachlan Elliott and Macquarie. Please go ahead.

Hi, good morning, Matt and Martin. Thanks for the opportunity. Just a couple of questions from me. First of all, how should we be thinking about the underlying cost base across the whole group? You called out a few one-offs like Winter Olympics and Ben Roberts Smith, but just trying to get a guidance on how we should think about the second half and then how the net benefits from those cost initiatives fit into that.

Hey, morning, Lachlan. Yeah, thank you. The underlying cost base, as we've got a program in place that we talked about, 9-20-28, which we'll continue with that. We've talked about costs coming out of the business. The way we think about the cost base is not so much individual platforms. We do think across the business, how do we work, the platforms work better together. So especially across the streaming and broadcast side of the business, we're very much around how do we do content that can go across both platforms. Nine, Nine Now and Stan. The maths after party being a good example of that where we've had cross-base across Nine that goes into there. The Winter Olympics, we have a cross-base that goes across Broadcast, Streaming, Nine Now and Stan. So we do think of it as a whole, how do we just basically get efficiencies across across the business and we've got a program there to drive through which we're very confident of hitting as we go forward so and the other probably the other point is around you know just the affiliation deals we've just done with Wynn with NBN and Darwin we announced this morning that allows really a capital light model in those markets so for us it's a you know, a continuous way for us to push our content across the whole of Australia, but in a more capital-like way, with something like WIN, who's one of our, is our partner, who's very good at regional broadcasting and the management of those assets.

Great. Thanks. That makes sense. And then maybe shifting gears a little bit, but focusing on content, are there any other kind of content deals or contracts that you think would be a good fit for the business in general, whether it be new content or expanding current rights into digital? I know F1 was mentioned middle of last year. I'm not sure if there's any other contracts you want to comment on that would be appealing?

Yeah, sure. I mean, it's a bit commercially sensitive to say individual contracts, but I'd say, you know, Formula One, we had a good crack at, but didn't quite get there. So there are, you know, some both on the sport and entertainment side of the business. There's some contracts. that we're working on at this point in time. You know, so some sport contracts. And if you think about entertainment with the big global production houses, you know, there's continuous... conversations and deals to be had around output deals from the big players as well as any sports deals. So we're very active in that space, as you can imagine. And, you know, when we look at them, we look at them to try and work out how do we both best commercialise those across all of our assets, including publishing as we go.

Great. Thanks. Really appreciate it.

Thank you.

Your next question comes from Tom Beadle and Jordan. Please go ahead.

Thanks for the opportunity. I've just got a couple of questions around publishing. I mean, firstly, obviously that subscription revenue growth was really strong, but total revenue probably came in a bit below expectations. So I was just wondering if you could just unpack that the drivers of revenue growth or reduction just outside of subscriptions and in particular just interested to understand ad revenue trends?

Yeah, sure. So, you know, as you say, we're very pleased with the publishing revenue growth and the digital subscription revenue growth was very strong. So that was very good and offset the print decline. So I'd say you've got your print... subscriptions and circulation that goes through the retailer has come down and that continues to be a trend where we are seeing that the digital subscription offsets the print and so we're through the inflection point that that's probably the biggest bit on the advertising side you'd say that the advertising has been pretty robust actually in the print area where we've got some work to do is actually on the digital display advertising. It's not been probably where we wanted it to be, so there's some work to be done around improving that digital ad display revenue, whether it be short-form advertising or whether it be just display ads. So that's the offset, if you like, so both print and some of the advertising on the digital side, on digital display, which is something we're working on.

Great. And I guess just a second question around, you know, just total subscriber numbers in publishing. I mean, if I look at that, you know, it's a bit apples and oranges, but, you know, that subscriber ARPU was up 14%. If I look at that, you know, digital subscriber print revenue, that was up 12%. That possibly suggests that subs were fairly flat. Is that a fair comment?

Yeah, I think the majority of the growth came through ARPU, definitely. So I think you'd say it's relative to that. We constantly look at the elasticity of the mastheads and AFR around what's the pricing, what's the volume. And you have to look at that elasticity, and it depends on the AFR versus the mastheads to some extent. It also depends on whether you look at the corporate subscription versus the bidder. B to C subscription. So we do go through a bit of a process through that. And we also think about the paywall. How much do we open the paywall and close the paywall? So as an example, when we went through Bondi, for example, we opened up the paywall completely to give full access to everybody to the content because it was one of those national moments that we feel an obligation that we should do that, do the right thing. And so that will impact stuff as well. So we'll look at a combination of price elasticity across the different verticals and also the paywall. How much do we leave behind the paywall? How much do we close the paywall and how much do we open it up? So it's quite a considered pricing volume approach that we work through.

Great. Thank you. Thank you. That does conclude our investor conference call for today. Thank you for participating. Media wishing to ask questions should remain on the line.

Thank you. So that's a bit of a wrap-up of the results briefing. So if you're still on the line, thank you very much. I think we might be going to media now. Is that right? So we're carrying on? Just a couple of minutes. Okay, in a couple of minutes, we'll go to media. Okay, thank you for your attendance and we will see you again at our full year results briefing in August. Thank you.