Q4 2021 Meredith Corp Earnings Call

Ladies and gentlemen, this is the operator today's teleconference is scheduled to begin momentarily until that time your lines will again be placed on music hold thank you for your patience.

[music].

Good day, and thank you for standing by welcome to the Meredith fiscal 'twenty 'twenty, one fourth quarter earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during this time.

You will need to press star one on your telephone to withdraw your question press the pound or hash key please.

Please be advised that today's conference is being recorded.

If you require any further assistance please press star zero.

I would now like to hand, the conference over to your Speaker today, Mike Lovell Meredith Investor Relations.

Okay.

Good morning, everyone and thanks for joining the call I hope you've had the opportunity to access the press release and presentation posted to Meredith website will.

We will use the presentation to structure our remarks this morning.

We will begin with comments from chairman and Chief Executive Officer, Tom Harty, followed by Chief Financial Officer, Jason Frerotte.

Certain financial measures that we are discussing on this call are expressed on a non-GAAP basis and have been adjusted to exclude the impact of special items.

Reconciliations of these non-GAAP measures are included in our slide presentation, which is available in the Investor Relations section of Meredith Dot com.

I also want to remind you that we will be discussing forward looking information today and of our safe Harbor disclaimer on slide two.

Also as noted on slide three we will be filing relevant materials with the securities and Exchange Commission, including a proxy statement in connection with the announced sale of our local media group to Gray television.

We encourage you to read these materials because they will contain important information about the company and proposed transaction.

Finally, please note all figures refer to fiscal 2021 fourth quarter or full year and the comparable prior year period, unless otherwise noted.

And now I will turn the call over to Tom who will begin our prepared remarks, starting on slide four thank you Mike and good morning.

Since last reporting quarterly results on April 29th we were pleased to deliver strong progress on the strategy. We have described in our recent calls.

Net debt reduction and growth in digital advertising and advancement of our consumer focused capabilities, including performance marketing and paid products.

First as it relates to net debt reduction.

We announced the sale of our local media group to Gray television in May and accepted an offer of $2.8 billion to $5 billion in June.

We believe that the sale will unlock meaningful shareholder value and accelerates all of our top financial priorities, including materially reducing our debt.

This will free up capital to invest in future high potential digital opportunities, while also enabling capital returns to shareholders.

Second as it relates to advancing our digital advertising and consumer focused capabilities.

Digital advertising revenues were fourth quarter record and surpassed magazine advertising for the third consecutive quarter on the consumer side licensing and digital consumer revenues continued to deliver record results in the newsstand channel grew as well in total our business remains well balanced with half hour.

Revenues based on advertising and half from consumers.

With that introduction, let's dive deeper into the fourth quarter highlights.

Starting with digital advertising.

Our team delivered strong performance driven in part by strong pricing, partially offset by slight declines in traffic, we're seeing market and consumer trends beginning to normalize, particularly compared to the year ago period, which was heavily impacted by the onset of Covid 19 pandemic.

Our licensing and digital consumer driven revenues also delivered double digit growth and record fourth quarter results.

Driving our digital performance is our trusted brands and large audience reach to 150 million consumers, who visit our sites each month.

Our strong commercial partnerships and our proprietary technology platform as we've discussed on prior calls our platform brings together all of our content our unique taxonomy and first party data. It provides a comprehensive view of the consumer and how they interact with our branded content and products.

Viding valuable insights and predictive trends.

This holistic view and our analytic capabilities provide us with deep insights into user behavior, we use to drive advertising and performance marketing dollars as well as our own content and product development strategy.

For example, our performance marketing teams drove a nearly threefold increase in partner retail sales for the week during Amazon's June Prime day through solid execution of custom content and promotion across our sites. We performed similarly for Walmart and target who also hosted digital.

Sales events during our fiscal fourth quarter.

The combination of our influential brands focused on women audience reach commercial partnerships and proprietary platforms are differentiators in the market, which drive our growing and diversified digital revenue.

Our magazine business is another differentiating factor, it's the largest in the United States and drive strong awareness for our brands across platforms.

People in all recipes are the industry's number one and number two brands and better homes and gardens is number six on average we sell one magazine via subscription and one via newsstand every second.

While advertising performance remains soft as the uncertain economic environment cause clients to be focused on bottom of the funnel spending we continue to see strong consumer engagement and demand for our magazines as evidenced by 7% growth in circulation revenues driven primarily by new stand performance.

Obviously, we have an easier comp as newsstand was impacted by the pandemic. However, I also wanted to highlight key points that make our newsstand specials, particularly attractive to consumers.

We react quickly to provide relevant in depth coverage of topics and trends that matter to our customers. We use high quality paper and we limit advertising pages. As a result, we were able to charge a premium price typically in excess of $10 per copy.

In addition, consumer response rates towards subscription offers continued to be strong and we have been investing in channels that drive high lifetime value to capitalize on the opportunity. For example, we've more than doubled our direct mail offers in the fourth quarter and saw new subscription orders more than double as well in total.

Our renewals were up 4% in the fourth quarter across all retention channels looking.

Looking more closely at our broadcasting portfolio, we delivered 50% growth and non political spot advertising revenues compared to the prior year period, driven by the professional services automotive and gaming categories.

We also benefited from continued growth in retransmission revenues.

Finally from a consolidated company standpoint, we delivered margin expansion. This was driven by top line growth, particularly from our digital and television businesses, which have relatively higher fixed cost and thus drove positive cost leverage.

Consistent with our financial priorities, we continue to make progress reducing net debt and our net leverage ratio and grew our cash position sequentially from the third quarter.

With that fourth quarter summary, I want to step back and share some thoughts on our full year performance on slide five.

It was equally remarkable and challenging.

Beginning under deep pressure due to Covid 19, and ending with the second highest adjusted EBITDA and Meredith history, approximately $20 million shy of our all time high.

It was also a transformational year shaped by several significant strategic events.

First we crossed an important milestone with digital advertising revenue surpassing magazine for the first time in merits history second the agreement to sell our local media group as I mentioned earlier for $2.8 billion to $5 billion, representing a 10 times valuation.

The combination of these two events sets the stage for post transaction Meredith to be positioned as a digital first media company with low leverage and the capacity to invest in future organic and inorganic growth.

We delivered many operational milestones during the year as well our digital businesses delivered record revenues across the board driven by our launch of the Meredith data studio.

Which brings together our valuable first party data and predictive insights to help customers improve returns on their advertising investments.

Both the Merit daily studio and our new digital platform have been key factors in large client expansion with Walmart and Kroger amongst others.

Strong performance from our licensing relationships with Apple news plus in Walmart and we retained our position as the world's second largest licensor for the sixth straight year. According to licensing global. Additionally, I'm pleased to announced that our multiyear partnership with Clorox, which includes our deep data and insights.

Has recently been expanded to licensing with the launch of the real simple home clean collection available at the container store.

Expanding performance marketing activities in fiscal 2021 in particular, our relationship with Amazon along with key retail partners with Walmart target and Nike in total our performance marketing efforts drove 1 billion in retail sales for our partners during the year.

While our magazine business endured Covid 19, all year, we gained more than four percentage points of magazine advertising market share, bringing our total of 36%.

In addition, we sold nearly 20 million copies of our newsstand specials 1 million more copies in the prior year.

This is a substantial accomplishment considering many new stands were closed our operated at reduced capacity due to Covid 19.

Our local media group also delivered record results driven by record political advertising revenues and continued growth in retransmission consent revenues.

Finally, we delivered record free cash flow in fiscal 2021 that performance along with year over year growth in adjusted EBITDA enabled greater than one turn reduction in our net debt ratio during the year to 3.7 times at June 32021 and <unk>.

Additional to the many performance metrics highlighted this morning, I'm pleased to share several recent social and environmental accomplishments.

For example, we made sustainability accounting standards board disclosures available publicly for the first time and completed the carbon disclosure project Forest and climate question here for the second year, we earned gender fair certification for achieving standards in leadership and opportunity employees policies.

Advertising and communications diversity reporting and social impact related to women empowerment.

We've been recognized by the 50 and 50 women on boards is having a gender balanced board.

We create a business diversity and social responsibility program to facilitate alignment with suppliers that share our values.

We launched our good impressions program that brings Meredith media and marketing consultation services to bear for minority owned small businesses in the communities we serve.

In summary fiscal 2021 set the stage for a bright future.

We have a large audience deeply engage with our trusted brands. Our digital businesses are delivering record performance and the pending local media group transaction will enhance our ability to invest in future growth and return capital to shareholders.

We're tremendously excited about the opportunities that lie ahead with that I'll turn it over to Jason.

Thanks, Tom starting on slide six looking at fourth quarter 'twenty, one consolidate performance revenues were $718 million up 17% advertising related revenues were $338 million up 30% as Tom said digital advertising was our strongest growth platform followed by non political spot advertising.

While magazine advertising revenues declined 6% debt performance represented a sequential improvement compared to the third quarter.

Consumer related revenues were $355 million of 7% growth was driven by new stand licensing local media retransmission revenues and digital consumer which includes performance marketing E Commerce and lead generation.

These gains were partially offset by declines in affinity marketing revenues.

Other revenue was $25 million up 24%. This was primarily the result of gains related to custom publishing relationships, partially offset by project related declines.

On a consolidated level adjusted EBITDA grew 55% to $124 million stronger adjusted EBITDA performance reflects growing digital nonpolitical advertising and consumer revenues, partially offset by lower magazine advertising revenues.

Fiscal 'twenty, one fourth quarter free cash flow was $51 million. Our prior year period comparison was a tough one because collections significantly outpaced revenue in the Covid period that said our current quarter performance represents strong cash conversion driven by EBITDA improvement.

Looking to full year fiscal 'twenty, one consolidate performance advertising related revenues grew 9% driven by strong digital and political demand.

We offset by magazine advertising.

Adjusting for magazine portfolio changes announced over the last year total advertising revenues would have been up 11%.

Consumer related revenues grew 2% as retransmission licensing and digital consumer driven revenues increased.

This growth was partially offset by magazine subscription results that were impacted by portfolio changes and our ongoing strategy to shift from agent sources towards more profitable direct to publisher subscribers adjusting for magazine portfolio changes announced over the last year total consumer revenues would've been up 3%.

Other revenue was $81 million down 20%. This was primarily the result of sunsetting service agreements or sold brands and non repeating project work on a consolidated level adjusted EBITDA grew 25% to $683 million stronger adjusted EBITDA performance reflects growing digital.

Coal spot advertising and consumer revenues, along with positive cost leverage partially offset by lower magazine advertising revenues.

When I use the term positive cost leverage I mean that revenues grew faster than expenses.

Fiscal 'twenty, one full year free cash flow was a record $363 million $112 million higher than the prior year period and in line with revenue and adjusted EBITDA growth.

Turning to page seven.

National Media group revenues were $515 million up 16% advertising related revenues were $236 million up 26%.

Digital advertising grew 80% or $55 million, surpassing magazine advertising for the third straight quarter Matt.

Magazine advertising revenue performance, while down 6% represents a sequential improvement from the third quarter.

As Tom mentioned, we saw a stronger fourth quarter spending in the prescription drug travel and retail categories.

National Media group consumer related revenues grew 8% subscription revenues were approximately even from the prior year period, and we maintained a stable subscription rebase of $36 million.

Newsstand revenues grew 53% growth was driven by merits premium publishing, which published an incremental nine issues in the fourth quarter and sold 2 million more units.

Collecting stronger consumer demand along with greater newsstand availability.

Our licensing and digital consumer driven revenues, which include performance marketing activities, such as E. Commerce lead generation and affiliate Commerce continued to deliver strong growth up 19% in the quarter.

Other revenues were $47 million up 2% as growth in project work was partially offset by affinity marketing declines due in part to covid related disruptions across retail.

Adjusted EBITDA was $93 million up 95%, reflecting growing digital and consumer revenues, along with positive cost leverage partially offset by lower magazine advertising revenues.

Let me walk you through our regular digital Kpis on the right side of the page.

Digital sessions declined 4% as we began lapping the strong consumer numbers, we saw last year at the start of Covid 19.

This was particularly true of our food and home oriented sites, we delivered strong year over year growth across our entertainment travel and fashion sites people Dot com delivered the strongest year over year traffic growth as it continues to benefit from strong interest in celebrity and human interest stories for context fourth quarter sessions.

Results were 15% higher than the fourth quarter of fiscal 2019.

From a revenue mix standpoint, the majority of digital advertising continues to be sold directly by our sales team. We view this as a key differentiator highlighting advertiser demand for full suite of our offerings, including our powerful brands premium content and first party data along with the flexibility that our digital platform hovers.

Looking at the bottom right of the page our licensing and digital consumer revenue activities continued to gain traction led by relationships, including those with Apple Walmart and Amazon.

To summarize the National media performance, our digital platforms continued to perform strongly and combined with consumer related performance drove adjusted EBITDA growth both for the fourth quarter and the year.

Turning to slide eight.

In local media group results.

Local media group revenues were $204 million up 22%.

Revenue growth was led by non political spot advertising and retransmission revenues, which were up 50% and 5% respectively.

Looking more closely at non political spot advertising performance, we delivered revenue growth in all twenty-five nonpolitical spot categories, we track.

Of particular note in the fourth quarter, we saw the strongest growth from the professional services automotive and gaming categories, which were up 57% collectively.

Digital third party and other revenues, which includes MNI targeted media grew 57%.

Driven by development of new categories, including vaccine awareness and higher education.

Adjusted EBITDA grew 44% to $55 billion, primarily driven by higher non political spot advertising.

Finally, as it relates to the announced sale of our local media group to Gray television we've made good progress towards obtaining regulatory approvals.

This includes gray announcing the sale of its Flint, Michigan station last month.

This is the only market overlap with Meredith portfolio. Additionally, while not related to our local media group sale Gray announced last week had completed the acquisition of Quincy media.

We remain on track to close our transaction in the fourth quarter of calendar 'twenty 'twenty one as expected.

Turning to slide nine fourth quarter 21, free cash flow was $51 million, reflecting earnings growth, partially offset by professional fees incurred related to the local media group transaction, we continue to make progress improving our net debt leverage ratio, which was three seven times as of June 30th 'twenty 'twenty one.

Compared to $5 three times last year.

Our revolving credit facility balance was zero at June 30th the fifth straight quarter. It has remained unused.

We ended fiscal 2021 with $240 million of cash an increase from March 31st 2021. These results include positive free cash flow generation. Additionally, during the quarter, we redeemed at $67 million of warrants issued to our former preferred equity partners in conjunction with the time each acquisition we all.

Also incur professional fees related to our proposed local media group transaction.

Turning to slide 10, when we announced the local media group sale on May 3rd we also discussed our intention to expand our financial reporting to three segments starting in the first quarter of fiscal 'twenty two.

Consistent with the way we began managing our business on July 1st of this year.

These segments are digital magazine and the local media group.

The Bar chart on the slide shows revenue for fiscal 'twenty, one as reported with two segments and on a pro forma basis with these new segments with magazine accounting for approximately 65% of National Media group revenues and digital accounting for approximately 35%.

Looking at adjusted EBITDA Directionally in fiscal 'twenty, one digital delivered roughly two thirds of the national media groups $392 million of adjusted EBITDA.

The table at the bottom right give some direction where revenue line items will be included.

Our effort has focused on isolating our magazine business, while grouping our faster growing digital licensing and performance marketing businesses into our new digital segment.

We're excited about our future digital growth the differentiated position, we continue to develop and merits continued transformation to a digital first company now I'll turn it back to Tom for closing thoughts on slide 11, Thanks, Jason our consumers today continue to focus on celebrity and Entertainment News House and home food Star.

Kyle health fitness and parenting as well as news and information about their local communities. These fundamental lifestyle categories are Meredith cornerstone are even more relevant in today's market.

In closing I want to leave you with four key thoughts first our digital advertising and consumer related activities continue to deliver revenue growth.

Driven by our trusted and powerful brands focused on women proprietary technology platform strong commercial partnerships and our large audience reach these assets are unique in the marketplace and form the basis for our differentiation.

Second consumer demand for our magazines in the fourth quarter was stable even as advertising performance is uncertain in.

In addition to showcasing our beautiful photography and long form storytelling. The magazine platform plays an important consumer awareness and marketing role for a powerful brands, including people allrecipes better homes and gardens and southern living.

Consider our presence in the home with 36 million active subscriptions and our position at retail with 2 million new stand pockets nationwide, while advertising demand is variable and uncertain our connection to the individual consumer remained stable and durable.

Third we are on track to close the local media group transaction in the fourth quarter of calendar 2021 as expected. We believe the sale will accelerate all of our top financial priorities, including materially reducing debt and free capital to invest in future high potential digital opportunities while also enabling.

All in capital returns to shareholders.

Fourth from an expense standpoint, we've seen evidence of inflation over the last six months consistent with others in our industry and across the broader economy, particularly paper postage and employee related expenses. Additionally, we anticipate incremental spending on strategic investments focused on fueling continued.

Digital and consumer growth initiatives as you know we have a well established track record of careful expense management, and we will bring that discipline to bear to the extent possible.

As we look into our fiscal 2022 first quarter compared to the prior year period, assuming no changes in trajectory due to covid or other macro factors, we expect digital advertising revenues up in the 20% range Maggie.

Magazine advertising revenues down in the mid teens in local media group non political spot advertising revenues to be up in the mid teens.

As I said in my opening comments fiscal 2021 was remarkable and challenging I'm proud of the way we responded to the challenges and capitalize on opportunities to deliver the second highest adjusted EBITDA in the company's history.

Our progress in fiscal 2021 set the stage for a bright future.

We possess a large and deeply engaged audience across multiple media platforms.

Proprietary digital and data analytic capabilities are delivering record performance in our pending local media group transaction will enhance our ability to invest in future growth and return capital to shareholders.

In closing I want to take a moment to sincerely, thank our talented and creative employees, who made our fiscal 2021 results possible. This includes our sales and marketing professionals support groups and editorial teams, who earned more than 200 accolades and awards in fiscal 2021, including pet.

Ahrendts in food and wine, we're named National Magazine Award finalists by the American Society of magazine editors.

People Allrecipes and Instyle were named to the AD weeks Heartless and our stations in Kansas City, St. Louis and Atlanta earn prestigious Edward R. Murrow Awards with W. G C L winning an overall Excellence award.

With that we'll open up the remaining time to your questions. Operator, please begin with our first question.

As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound or hash key you.

Your first question comes from the line of John <unk> with Wolfe Research.

Thanks, Good morning, Tom.

Good morning, you talked about the funnel and so can you give more color on the magazine visits it's going up against easier easier comps Senate looks like youre expecting some weakness still here. So what are you hearing from advertisers in key verticals is there any line of sight.

For that advertising bucket, you improve to flattish or even possibly grow at some point or what is the growth really coming from the mix shift to digital and then maybe big picture when you talk about M&A and digital opportunities.

Can you give us more color on the types of things you would find interesting and do.

Do they need to be accretive in the short term.

Yes, great John.

Yeah.

Obviously, there's always a lot of things that go into our performance, but what we're hearing from clients on the print side print print is a great format for for branding and longer term brand building and with the uncertainty in the pandemic and looking for quicker results, there's been a shift a significant shift to digital.

Which is more bottom of the funnel transactional in nature and that's why you're seeing.

Lot of growth in our performance marketing and it's happening across the industry. So we are you know we're cautiously optimistic that print is going to be recovering we.

We are seeing in certain categories, you know in our in our travel and our luxury we're seeing signs of of of growth year over year coming up but there are other areas, where we hear you know, we still hear supply chain issues commodity price increases from some of our bigger bigger package. Good clients. So it is a little slower than we.

Specced at on the recovery, but we do expect our print recovery, because we're down or down so far but the digital performance has been outstanding.

We continue to believe and bullish on on our portfolio of digital brands and the growth that we see there.

I think what we're looking at is on the digital side I'm going to ask Catherine to make some comments when we look at acquisitions and growth. We are really focused laser focused on the consumer side of our digital business.

And looking to grow consumer revenue in our digital space. So I think that we're kind of focused on both both internally and looking for acquisitions in that area to Katherine might make some comments on that.

Hi, Yeah 10 Senate.

Well.

A balancing of the AD.

The diversity of our revenue streams in the digital side of the business. So that would be on anything that has consumer revenue associated with it that could be subscription based it could be performance marketing base.

That in that area video.

We're growing our video nicely right now that we could accelerate that through acquisition in that area.

And the third area may be around and different categories our audiences.

So those are really the three areas that we look at and in from that perspective anything that we would add that it's that it's around audience since would fit right into our strategic flywheel.

Great Alright, thank you very much.

Thanks, Sean.

Your next question comes from the line of Dan Cornell's with the benchmark company.

Great. Thanks, Good morning, Let me press a little bit on the digital side here Your September guidance actually relative to the backdrop and what we've heard from other digital publishers is actually pretty impressive.

A lot of other guys, including one of our favorites that we'd like to talk to you about guided down sequentially from the June to the September quarter given.

Obviously increase mobility and the change in some of the trends. So can you just talk about obviously people had a tremendous quarter AR continues to be strong can you just talk about what you're seeing and how we should think about digital relative to some of the covid tailwind starting to come out you feel comfortable.

This is a good base EBIT as we see increased mobility for sure.

Yeah, I'm going to ask Catherine to dig a little deeper, but Dan to your point I think obviously, our fourth quarter performance in digital 80% growth was off a lower base related to covid, but when you start looking at our Q1.

We were up last year I think we're in that in the high Twenty's last year and now now we're predicting again, so strong year over year growth Catherine you want to make some comments.

Yeah.

It's a combination.

And.

You know are our brands and a flight to quality from that perspective pricing. So we are still seeing and.

Significant.

Increase in pricing year over year.

Across the board between all of our products.

And then of course, our data and platform is really driving a lot of significant scale and readouts right. Now so we're able with our diverse AD product portfolio hit deliver a variety of different.

<unk> solution for advertisers.

And while we look at our guide on advertising, while print is a little softer the strength of digital we will be we will be up in overall advertising year over year.

Great and then maybe just one for Jason or common Liana Hitchin too just on the margin thoughts here with some of the cost inflation commentary, obviously some of the covid costs coming back in as well you had a really good June quarter.

18% in Mg I wanted to focus on LNG obviously.

Directionally, how do we think about kind of margins over the balance of this year relative to kind of how you finished off.

2021, understanding obviously that there's going to be seasonality in there too.

Yes, I think Dan you said Theres some theres some lumpiness in there in terms of some of the cost.

Comments that Tom made I'd say that as we have investments in kind of strategic digital investments they'll it'll probably most likely sit there in terms of me.

Roughly half the cost and in terms of the print inflation obviously.

The U S postal service inflation rates those types of things.

But you know we're working to kind of offset that so I wouldn't expect that to have a material change in terms of rate.

And then broadly.

Across everybody.

This past year, we had spin.

Specific cost actions that we took.

There were temporary that both were in the magazine business and the digital business. So I'd say that would kind of hit hit both businesses, but again with our with topline growth in the advertising side, we shouldnt be able to kind of hold that obviously, we're not giving guidance in terms of margin rates on the go forward, but those would be the common side sure Yeah I think Dennis.

You look at the we're excited to come out when we report our first quarter with our new segments and to Jason's commentary in the script around or the digital side of the business now approximately representing two thirds of the National Media group EBITDA for the prior year, you can start thinking about the margins.

Weighted to that you're kind of thinking in the range of TV margins related to our new digital segment as you go forward.

Awesome. Thanks for all the color guys this quarter way to finish the year strong.

Thanks.

As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound or Heskey. Your next question comes from the line of Jason Bazinet with Citi.

Thanks, Good morning, I just had one question at least relative to our estimates the adds were about in line, but it was really the consumer side on the nationals.

That really did very well.

Do you think that stimulus played a role in.

In the quarterly strength in terms of some of that.

Licensing of new stand at some of the other things you highlighted it will be difficult to replicate or is your sense that stimulus was really a non event.

Yeah.

I'm sure as stimulus, obviously is helping the broader economy, but I think that this has been a long time long term strategy of ours to buildup, specifically, our performance marketing and E commerce activities on our digital side of the business I think our comments kind of speak for themselves, where you start thinking about that we generated.

$1 billion in retail sales from our activity associated with that and now getting a piece of that action. So we're bullish on that side of the house and then even on the magazine side, we've talked about in the prior year the strength of of our of the consumer demand for for magazine. So you know in our premium publishing.

For the year.

We were up 10% in revenue.

In our premium publishing where we sell on the newsstand and sell close to 20 million copies up a million copies.

That was strong performance in the fourth quarter and then when you start thinking about.

We're looking to get more direct to publisher we've been investing.

Lifetime value of subscriptions on the magazine side.

The highest value as our direct to publisher, where we had the direct relationship and when we look at our fourth quarter direct publisher renewals were up about 5% and then direct to publisher new was up about 47%. So that really bodes well for magazine subscriptions that longer term the issues, we've been having is really.

The advertising, but the consumer demand for both our new digital side and on our magazine side are really kind of outstanding.

That's great. Thank you.

And your next question comes from the line of Kyle Evans with Stephens.

Hi, Thanks.

Congrats on a very strong digital AD quarter, I think I think we're all just sitting here trying to figure out where it's going to settle out with the 80% quarter going to a 20% got it.

Katherine I know I'm, not going to be able to.

Trick you into guiding us maybe if you could just talk at a high level about where you.

Zinc sessions will go over the next 12 months.

Where pricing will go over the next 12 months, where that mix will go over the next 12 months and then I've got a follow up question. Thanks.

Sure.

I think.

Well sort of hover around.

Likely head in that flat to slightly up range will be frightened download can be kind of that sort.

Our focus in the flat because we have such a strong.

A quarter of a year last year.

Hey.

Pat.

Well, it's up significantly for us.

And that's across the board in all of our businesses so that those from.

Our direct business to our premium programmatic business to our open programmatic business and that is.

Again, because of a lot of the investments we've made over the years and data.

And our proprietary platform that domo can deliver.

We have a specific audience false against real context with trusted content.

So I think there's you know.

Pricing opportunity.

I also think.

Our performance marketing business.

Is has got a lot of growth left in it.

We're making investments this year that return quite quickly for us.

So let's say those notes two big areas are the ones.

And I would look at and finally, our direct relationships with our clients that allow for a more multiyear multimillion dollar integrated partnerships.

Well with large large clients from the ones that you know Thomas mentioned.

On the phone today.

Two others that are utilizing these new rules new integrated products that we have.

Hope that's helpful.

Yes.

And I guess.

Get a whole lot of TV questions going forward, but I think I'll sneak one more in before.

Okay.

Just a quick update on your Retrans sub.

Counts. Please thank you great Patrick.

Yeah. We're we're seeing you know the sub counts continue.

We lose more cable and satellite and pick up more OTT a on a regular basis and I think Jason on the year for the year, what where are we at for subs.

Down one.

Yes, I think it was.

One is.

Is the right ballpark.

Yes, and as a as a reminder, on our cadence we have two major deals coming up at the end of the year.

While I've got you.

OTT contribution for overall.

Jobs.

I don't have that breakout in front of me, but I can get we can get that to you and the follow ups.

Sure.

There are no questions at this time.

Great again, I want to thank everyone for your time today and your continued support we look forward to talking to everyone. Again soon next quarter. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

Yeah.