27-06-2025
Corus Entertainment Inc (CJREF) Q3 2025 Earnings Call Highlights: Navigating Revenue Declines ...
Consolidated Revenue: $298 million, a 10% decrease from the prior year.
Consolidated Segment Profit: $62 million, reflecting lower revenue but offset by cost control measures.
Consolidated Segment Profit Margin: 21%, up from 20% last year.
Free Cash Flow: Negative $33 million, impacted by lower segment profit and higher restructuring costs.
Net Debt to Segment Profit: 5.7 times, compared to 3.84 times at the end of August 2024.
TV Segment Revenue: $275 million, down 11%.
TV Advertising Revenue: Declined 15% in Q3.
Subscriber Revenue: $111 million, down 5%.
TV Segment Profit Margin: 23%, up from 22% in the prior year period.
Radio Segment Revenue: $23 million, 1% lower than the prior year.
Radio Segment Profit: $5.1 million, with a profit margin doubling to 22% from 11% in the prior year period.
Warning! GuruFocus has detected 7 Warning Signs with CJREF.
Release Date: June 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Corus Entertainment Inc (CJREF) successfully amended and extended its credit facility, improving terms and positioning for sustainability.
The company achieved significant cost reductions, including a 30% headcount reduction since August 2022, enhancing operational efficiency.
Global TV, a part of Corus, remains one of Canada's most trusted networks, with a 4% increase in viewership year-over-year.
Corus launched two rebranded specialty lifestyle networks, Home and Flavour, which are performing well in terms of audience engagement.
The streaming portfolio, including STACKTV, had its strongest winter-spring season ever, with a 7% increase in streaming hours year-over-year.
The advertising environment remains challenging due to economic uncertainty and oversupply of digital inventory, impacting revenue visibility.
Consolidated revenue decreased by 10% year-over-year, driven by declines in TV advertising and subscription revenue.
Free cash flow was negative $33 million in the quarter, reflecting lower segment profit and higher restructuring costs.
Net debt to segment profit increased to 5.7 times, up from 3.84 times at the end of August 2024, due to lower segment profit.
The company anticipates a 20% year-over-year decline in television advertising revenue for Q4 of fiscal 2025.
Q: Can you elaborate on the better-than-expected TV profit and the moving pieces on TV costs? A: John Gossling, Co-CEO and CFO, explained that the positive variance was due to being under on programming costs compared to the outlook, a $5 million benefit from a tax credit true-up in film investment amortization, and a $6 million pickup related to digital initiatives.
Q: How did the free preview for Home and Flavour channels perform, and what is the status of their carriage across major distributors? A: John Gossling stated that the free preview was successful, with strong ratings and subscriber results. The free preview period has ended, unlike competitor channels that remain in perpetual free preview.
Q: What are your expectations from the CRTC hearings, and when do you anticipate decisions to be made? A: Jennifer Lee, Chief Administrative Officer and Chief Legal Officer, mentioned that they are seeking smarter rules and fair competition. The CRTC aims to renew licenses effective for fiscal 2027, with decisions expected by the end of the calendar year or in fiscal 2026.
Q: Is stability now the goal for TV margins, and how are you planning for fiscal 2026? A: John Gossling indicated that the goal is to keep margins stable, though challenging due to the advertising environment. They aim to manage content costs better, with a focus on stabilizing margins despite revenue pressures.
Q: How do you view the TV ad market, considering linear pressure, premium video inventory oversupply, and macroeconomic factors? A: John Gossling noted that the market is tough, with every category down except travel and election spending. The pressure is due to economic, supply chain, and geopolitical factors, along with shifts to other platforms.
Q: Can you clarify the $6 million reduction in digital initiatives? Is it a sustained reduction or a one-off item? A: John Gossling clarified that it relates to platform costs rather than a slowdown in marketing or product development. It will help going forward, though not to the same extent each quarter.
Q: Is the advertising market weakness specific to Corus, or is it industry-wide? A: John Gossling acknowledged that Corus's reliance on linear puts them in a tougher spot, with digital products also feeling pressure. The market is competitive, and sports programming has been a significant factor.
Q: What is your regulatory strategy, and are you advocating for significant changes? A: Jennifer Lee emphasized advocating for smarter rules and fair competition. John Gossling added that they are participating constructively with regulators, though some issues like digital services tax and advertising deductibility require broader industry efforts.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
