Future Expects Accelerating Growth After Strong H2; 2024 Revenue Comes in Flat 

By: Kari McMahon & Jacob Cohen Donnelly

UK-based publisher Future PLC expects accelerating organic revenue growth beyond 2025 after a year of flat sales, the company said in its earnings report today. They also said they are entering a strategic partnership with OpenAI, though the partnership is “not financially material.”

• Revenue of £788 million ($1 billion) was flat year-on-year and on an organic basis was up 1%. Organic revenue growth for the second half of year rose 5%.
• UK revenue grew 6% on an organic growth basis, driven by insurance platform Go.Compare, while B2C saw a 6% decline.
• U.S. revenue fell 6% on an organic growth basis; the second half of the year saw organic growth of 2%.
• Adjusted operating profit declined 13% from the prior year to £222 million from £256 million.
• The reported adjusted operating margin of 28% was “in line with company expectations.”

“Our return to revenue growth in H2, driven by the execution of [its Growth Acceleration Strategy], puts the group in a good position to achieve current market expectations for FY 2025,” the company said in a statement. “We expect to continue to operate at an adjusted operating profit margin of 28% for the coming year reflecting the planned incremental GAS costs, and to maintain strong cash conversion.”

“We launched our Growth Acceleration Strategy one year ago and have made good strategic progress,” outgoing Chief Executive Officer Jon Steinberg said in a statement. “We have invested in sales and editorial roles, successfully diversified and grown revenue per user, and we have further optimized our portfolio. Importantly, the group has returned to organic revenue growth during the year, underpinned by a strong H2 performance.”

Shares of Future Plc rose over 11% in London on Thursday.

“Looking ahead, whilst we remain mindful of the macro environment and the ongoing evolution of the media landscape, we are confident that the ongoing execution of our Growth Acceleration Strategy will drive long-term accelerating organic revenue growth,” he said.

Steinberg is stepping down from his role as CEO next year; a search is currently underway for his replacement. During his almost two-year tenure, he introduced the Growth Acceleration Strategy (GAS), a two-year investment program of between £25 million to £30 million.

The firm attributed its return to organic growth to the program, under which it added 100 new members of staff across editorial, sales and back office.

Despite the OpenAI deal not being financially material, Steinberg said on an earnings call that he doesn’t believe Future sold itself short because “most people got no deal.”

Some media companies have secured deals with OpenAI where they have been paid millions to license their content to the AI firm, such as Dotdash Meredith’s of at least $16 million in payments per year.

Future has added staff to its U.S. sales force, which it restructured to better capitalize on the digital advertising market, which is eight times bigger than the UK’s. Future’s U.S. digital ad revenue is only 2.5 times larger than its UK digital advertising revenue, the report said.

“The macro has improved in the U.S. and we have always seen the U.S. lead first with the UK following,” said Steinberg on the call. “The [U.S.] goes into bad times first, then the UK goes into bad times. The U.S. comes out of bad times and then the UK follows. I definitely think that there’s a macro benefit that we’re having in the U.S. right now.”

Another area for expansion was the hiring of 50 “incremental editorial heads” to support content creation, resulting in a 15% increase in output in terms of articles created or updated. The firm has also made progress to diversify its approaches towards audience acquisition, notably through social media and email newsletters.

Insurance comparison platform Go.Compare continues to be a winner for Future with strong organic revenue growth of 28%. While Go.Compare is best known for its car insurance comparison service, 36% of revenue now comes from other strategic verticals and the company wants to continue to diversify Go.Compare’s revenue streams in 2025. During the 2024 financial year, Future sold a small number of non-core or low growth assets.

AMO’s Take

As we continue to see this slow march into a post-traffic world, we’ll see the impact play out across various public media companies. Unlike Dotdash Meredith, which actually saw traffic increase year-over-year, Future PLC’s portfolio reported down traffic from 241 million users last fiscal to 226 million this fiscal.

It has partially offset that with growth off-platform, with newsletters growing from 15 million to 16 million and Apple News jumping from 8 million to 13 million users. But history shows that depending on platforms for your long-term success is not a great recipe.

Although terms of the OpenAI deal were not shared, I can’t help but feel like it was a Faustian bargain. Future’s is very much in the traffic business—especially from the likes of Google—and so its consumer portfolio could be one of the big casualties should more people opt to use AI-based tools to answer their questions. The question is how they combat against this.

Some of their investment in TechRadar could give some insight. On the earnings call, management said:

The benefit of our investment is paid off with an increase of editorial output by 15% during the year, as well as continued stabilization of audience.

Moving on, I always think that theory comes to life through an example. Let me briefly explain the work that happened with TechRadar, the number one UK consumer tech website. TechRadar is a well-known tech brand that was launched in 2008, initially focused on phones. Post-COVID, it suffered from a lack of identity, and we were losing website users. We decided to invest in the brand to give it a second life. We redesigned the website, cleaner, better organized, easier to navigate, focused on a mobile-first approach. A revised taxonomy of content to make it easier for Google to navigate the site. Focusing on content creation and new editorial franchises. Diversification of audience sources, more social, more email visits. All with the goal of improving the user experience and driving traffic. This focus has paid off with a 5.5 million monthly average session increase in FY24. 

I read this two ways. On one hand, it’s trying to create a better user experience and diversify its traffic toward other sources—email being a critical one. As mentioned above, that growth is not massive, but still a move in the right direction. Anything it can do to guard itself against the inevitable drops in Google traffic are necessary. On the other hand, the focus on increasing editorial output does feel a bit like trying to feed the search beast—a strategy that is becoming obsolete.

Another concern is the drop in subscription revenue. In fiscal 2023, it had 1.9 million subscribers; fast forward to this year and that dropped to 1.7 million. In the investor deck, management talks about a key 2025 priority being a “focus on pricing, retention and acquisition for subscriptions,” but to what end?

Prior to the rise of AI, Future was considered one of the ultimate success stories, its stock catapulting 3,500% from 2016 to 2021. It’s since dropped nearly 72%. While investors might be happy today, I’m not convinced they will be over the coming years.