ITV warns Q4 ad revenue to fall 5-10% as demand weakens, cuts costs

ITV, the British media company, has announced that advertising revenue for the fourth quarter is expected to decline by 5-10% due to weakened demand. This prediction is significantly lower than analysts' expectations, who had forecast a 1.8% drop. The company's chief executive, Carolyn McCall, cited broader economic uncertainty, increased digital advertising on global streaming platforms, and new restrictions on unhealthy food as factors contributing to the decline.

To offset the reduced demand, ITV plans to cut £30 million from its content and other spending. This includes £25 million in content spending and £5 million in non-content costs. Despite the expected decline in advertising revenue, ITV anticipates a 2-3% drop in full-year advertising revenue for 2025. The company's total content budget for next year is expected to be around £1.2 billion.

For the nine months ended September 30, total advertising revenue fell by 1% to £1.24 billion, falling short of the analysts' expectation of no change. Media and Entertainment revenue also decreased by 1% to £1.43 billion, below the forecasted £1.44 billion. However, streaming hours rose by 29%. Non-advertising revenue fell by 3%, slightly more than the forecasted 4%.

The company's overall revenue decreased by 1% to £2.76 billion, aligning with the forecast. External revenue fell by 2% to £2.36 billion, as per the expected decline of 1%. ITV Studios' revenue also dropped by 1% to £1.33 billion, consistent with the predictions. ITV maintains optimism about the unit's full-year revenue growth, with an EBITA margin expected to be at the lower end of the 13-15% range.

The sale of ITV's Media and Entertainment business to Sky is expected to conclude in the second half of 2027. As of September 30, ITV's net debt was £695 million, up from £652 million as of June 30.