News Corp's First Quarter Fiscal 2024 Earnings Conference Call has begun with Senior Vice President and Head of Investor Relations, Michael Florin, introducing Chief Executive, Robert Thomson, and Chief Financial Officer, Susan Panuccio. They will be discussing the company's financial results and may include forward-looking information. The call will also include non-GAAP financial measurements, which can be found in the earnings release on the company's website. Thomson highlights the company's rising revenues and increased profitability in the first quarter, despite challenging economic conditions. He expresses optimism for even greater profitability once economic equilibrium is achieved.

The company has had three profitable years and is continuing its digital transformation. The company's value is not reflected in its share price and they are working to optimize their structure. First quarter revenues were modestly higher and profitability rose, showing potential for the future. The company's digital growth has been transformative and they have significantly reduced their reliance on print advertising. The market has yet to fully understand the company's value and potential. The company has been generating significant free cash flow and has a buyback plan in place. They have also made strategic purchases to add profitable digital businesses.

The B2B segment at Dow Jones is now more profitable and less dependent on advertising, with strong growth prospects. News Corp is undervalued and its asset quality underappreciated. The company is focused on maximizing the value of its premium content for AI and is in advanced discussions with digital companies. They believe that partnering with responsible leaders in AI will help to constantly replenish and improve their AI engines.

The article discusses the rise of artificial intelligence and its potential for spreading misinformation, but emphasizes that genuine journalism and reporting are still essential. The author pays tribute to reporters in the Middle East and Ukraine, and highlights the unjust incarceration of a Wall Street Journal reporter in Russia. The article then goes on to discuss the success of PLS Dow Jones, which offers valuable services and products for global business users and readers. The company has seen a 4% increase in revenues and a 10% increase in segment EBITDA in Q1. The article also mentions the success of Dow Jones' risk and compliance services, which have seen a 23% increase in revenues. The author notes that many institutions aspire to minimize risk and maximize compliance. Finally, the article mentions the success of RNC, which has seen a 600% increase in revenues since 2013. The business is fully digital and has high retention rates.

Dow Jones Energy, which includes OPIS and CMA, has seen double-digit revenue growth due to higher pricing and the global energy transition. Factiva, with its large database and partnership with Cision, is well-positioned for the future of AI. Across Dow Jones, digital subscriptions have reached 4.6 million and total subscriptions have reached 5.3 million. Advertising trends have improved, particularly in the Australian real estate market. REA has reported strong growth in listing volumes and premium product subscriptions. Overall, October showed strong performance and volume for Dow Jones.

Despite a challenging real estate market in the US, REA India, a leading property portal, saw a significant increase in both audience and revenue. The company is seen as a valuable asset due to India's stable political climate and economic growth. In contrast, the high interest rates in the US affected realtor.com, but the company remains optimistic about the long-term potential of the digitization of the real estate market. The company is committed to providing reliable information and leveraging its media platforms to reach a large audience. Under the leadership of Damian Eales, realtor is focused on developing core markets, clients, and profitability. The company is also collaborating closely with REA executives to share software, marketing strategies, and AI insights. Additionally, HarperCollins, the publishing business, saw a significant increase in segment EBITDA under new leadership.

HarperCollins saw an 8% increase in revenues, thanks to cost initiatives and an easing of supply chain inflationary impacts. Their partnership with Spotify to broaden the reach of audiobooks was announced, and their streaming strategy has been successful, with a 8% increase in paid subscriptions and a decrease in churn rate. The company also saw particular strength in their Christian books business and looks forward to publishing a book by His Holiness Pope Francis next spring.

The team at Foxtel is launching a new streaming aggregation product called Hubbell to simplify the search for entertainment and sports. The News Media segment faced challenges due to macroeconomic headwinds and algorithmic changes, but subscriptions continue to increase. The company is becoming less reliant on advertising and saw strong performance at Wireless in the UK. The company's Executive Chair, Rupert Murdoch, will be transitioning to Chairman Emeritus next week, but his experience will continue to be a valuable resource for the company. Lachlan will become the sole Chair next week.

Lachlan's involvement with the team has been beneficial and his passion for journalism is evident. CFO Susan Panuccio discusses the company's financial performance, including a 1% increase in total revenues and a 4% increase in total segment EBITDA. The Digital Real Estate Services segment saw a 4% decrease in revenues, but an improvement from the previous quarter. Adjusted revenues for the segment only declined by 2%.

The paragraph discusses the financial results of the REA Group and Move, two companies under the News Corp umbrella. While revenue declined for Move, segment EBITDA increased due to higher contributions from REA Group and cost saving initiatives. REA Group had a strong quarter, with revenue growth driven by residential yield increases and growth in national listings. Move's revenues were down compared to the prior year, driven by lower lead and transaction volumes. Despite challenging market conditions, progress has been made in strategic areas such as SEO improvements and collaboration with News Corp. The Subscription Video Services segment is also mentioned.

In the third quarter, the revenues for the company were $486 million, a decrease of 3% compared to the previous year due to currency fluctuations. However, on an adjusted basis, revenues increased by 1%, marking the seventh consecutive quarter of growth. Streaming revenues accounted for 30% of circulation and subscription revenues, and total paid subscribers for the Foxtel Group reached almost 4.6 million. Segment EBITDA for the quarter was $93 million, a 16% decline from the previous year due to contractual price escalators in sports rights agreements. The company completed a debt refinancing and is on track to repay shareholder loans. Dow Jones saw a 4% increase in revenues, with digital revenues accounting for 81% of total revenues.

In the past year, circulation and subscription-based revenues accounted for over 81% of total revenues, showing the stability and recurring nature of the revenue base. Revenues grew by 3%, with the Professional Information business seeing strong growth of 14% driven by risk and compliance and Dow Jones Energy. Retention rates for B2B offerings remained high at over 90%. The Europe market was the largest and fastest source of growth. The Dow Jones Energy division saw a 20% growth, benefiting from price escalators, new products, and customers. Circulation revenues increased by 1%, with digital-only subscriptions growing by 12%. Advertising revenues declined by 3% due to decreases in print and digital advertising, but trends improved from the previous quarter.

In the first quarter, advertising accounted for 17% of revenue, with 66% being digital. Dow Jones segment saw a 10% growth in EBITDA and improved margins. Book Publishing had a strong recovery from the previous year, with revenue up 8% and EBITDA up 67%. The backlist contributed 61% of revenues and digital sales rose 3%. News Media had mixed results, with a 1% decline in revenue and a 5% decline in advertising.

The company saw declines in traffic at some mastheads due to changes in algorithms at large platforms. Segment EBITDA declined $4 million, with $3 million related to one-time costs from a proposed combination of printing operations. Free cash flow was lower in the first quarter due to timing of working capital payments and lower sales at HarperCollins in the previous quarter. The company expects to generate positive free cash flow for the year, with a stronger second half. The overall outlook remains uncertain, but the company expects an improvement in revenues and profitability in the second quarter. Australian residential new buy listings for October grew 16%, and there will be reinvestment in marketing and product development at Move to improve market share.

The company expects modestly higher expenses in Subscription Video Services and Dow Jones, but remains on track to deliver stable results. Book Publishing is expected to see improvements, but revenue and profit growth will be more modest due to industry trends. News Media's revenue trends remain mixed and cost efficiencies are a focus. The company is focused on providing the best possible service in the evolving U.S. property market and building audience through media platforms.

The company is taking advantage of the market downturn to focus on sell-side operations. They have acquired a company called UpNest to strengthen their presence in this area. They expect a surge in activity in the U.S. market when mortgage rates moderate, based on the experience of the Australian market. The company is also considering reviewing its structure, and the recent Real Estate lawsuit may have an impact on the company's future.

The speaker praises the leaders and teams of the company for navigating through changes and the pandemic, resulting in a strong balance sheet. They are constantly reviewing their structure for maximum flexibility. The next question asks for an update on digital ad trends, to which the speaker responds that trends vary by segment and region, but they have a good relationship with Google and Facebook. They specifically mention a 3% decline in advertising at Dow Jones, with a marked improvement from the previous quarter. Digital advertising was flat compared to the same quarter last year.

The New York Post saw an increase in print advertising due to its expansion in social, political, and commercial reach. The company is exploring ways to close the valuation gap and has taken steps to ensure flexibility in its structure. Foxtel is expected to have a modest return this year and the bulk of repayments will come over the next few years. The company is reviewing its structure and considering shareholder comments, but it is inappropriate to comment on specific shareholders.

Robert Thomson, CEO of a company, mentions that they are reviewing their structure which has been a topic of discussion for the past 10 years. He is glad to hear that they are taking it seriously as there is a 35% to 40% conglomerate discount embedded in their stock. Moving on to the book sector, he talks about how the company has faced challenges due to the pandemic, logistical issues, and cost pressures. However, they have seen improvement in margins and are excited about the entry of Spotify into audiobooks. They have reached an agreement with Spotify and the early signs from the U.K. and Australian markets are positive.

The paragraph discusses the expected growth in audio sales and revenue for the company, with a focus on improving EBITDA. It also mentions that B2B earnings in Dow Jones are now larger than B2C earnings, and that Real Estate revenues were down 20% with listings down 11%, potentially leading to a 9% decrease in average yield.

During a conference call, Susan Panuccio, the CFO of the company, discussed the company's yields and how they have been impacted by the current market. She mentioned that they have been seeing increases in yields over the past 18 months, but it is challenging to push them up in the current market. She also stated that they are balancing the potential to push yields with the current macro environment. When asked about the company's plans for the rest of the fiscal year, Panuccio mentioned that they will continue to invest in the business, particularly in product development and marketing, in order to take advantage of future market improvements. She also stated that costs will likely remain in line with the first quarter, but may be adjusted depending on revenue trends.

Michael Florin thanked Craig and asked Laila if she had any other questions. The operator stated that there were no further questions. Michael Florin thanked everyone for participating and wished them a good day. He ended the call.

This summary was generated with AI and may contain some inaccuracies.