Meredith Reports Slight Revenue Growth Amidst Company Transformation

Meredith Reports 80 Percent Increase in Digital Ad Revenue in Q4 FY21

Along with increases in licensing/digital, spot advertising and combined newsstand and subscription revenue

As Meredith moves forward with its strategic transformation, the company reports key accomplishments for the fourth quarter of fiscal year 2021, including total revenue of $718 million, representing 17% growth year-over-year. Other highlights include an 80% increase in digital advertising revenue, a 19% increase in licensing/digital and other consumer driven revenue, a 50% increase in non-political spot advertising, a 5% increase in retransmission revenue, and a 7% increase in combined newsstand and subscription revenue.

“We delivered strong operational performance in fiscal 2021 despite the many challenges presented by the COVID-19 pandemic, ending the year in a stronger financial and competitive position than when we started,” said Tom Harty, Meredith chairman and CEO, in an August 12, 2021 news release. “From a strategic standpoint, fiscal 2021 was transformative. Our digital businesses are delivering record performance, and our agreed sale of the Local Media Group significantly strengthens our financial position.”

Other quarterly highlights

The company also reported these highlights for the quarter ended June 30, 2021:

  • The 19% increase in licensing/digital and other consumer revenue was driven by Apple News+, strong sales of Better Homes & Gardens-branded products at Walmart, and performance marketing at retail partners including Walmart, Amazon and Target.
  • The 7% increase in combined newsstand and subscription revenue was driven by more published titles and stronger consumer demand which began recovery from COVID-related decreased.
  • Meredith said subscription performance was due to strong growth in solicitation channels that drive high lifetime subscriber value, including digital properties, paid search, direct mail and renewal campaigns.
  • Earnings from continuing operations were $37 million, compared to $6 million for the fourth quarter of fiscal year 2020.
  • Adjusted EBITDA was $124 million, up from $80 million for the same period last year. The increase was due to strong revenue growth in digital, non-political advertising and consumer revenue. This was partially offset by lower magazine ad revenues.

Full fiscal year highlights

For the full year, revenue was $3 billion, a 5% increase year-over-year. Earnings from continuing operations were $307 million, compared to a loss of $209 million for the same period last year. Adjusted EBITDA was $683 million, compared to $548 million. Additional highlights for the full fiscal year include the following:

  • Digital ad revenue grew 31% for the full year, surpassing magazine revenue for the first time in company history.
  • Meredith’s licensing and digital and other consumer driven revenues increased 27% and 25%, respectively.
  • The company reduced debt by $254 million.
  • The company agreed to sell its broadcast division, Local Media Group, for $2.825 billion to Gray Television, Inc.

“We concluded the year with a strong fourth quarter performance as our digital business again delivered record results, including digital advertising revenues that surpassed magazine advertising for the third consecutive quarter, coupled with another quarter of licensing and digital consumer related growth,” Harty said.

“Looking ahead, we believe Meredith is well-positioned for growth through the combination of our broad audience engagement and trusted brands across media platforms, our proprietary digital platform, and a stronger balance sheet we expect will enable future digital and consumer investments and capital returns to shareholders,” added Harty.

Image courtesy of Meredith

Insider Take

Meredith’s sales of the Local Media Group have positioned the company to focus on what it does best – print and digital magazines and brands related to those magazines. By selling off their broadcast division, the company paid down debt and positioned itself for a strong fiscal year 2022. Through their bookazines, Magnolia product sales and candle subscription, Shape beauty boxes and REAL SIMPLE’s product collection, the company is driving consumers to visit, subscribe and buy and brands to advertise. This is an exciting strategic transformation to watch.

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