The operator introduces the News Corp's Second Quarter Fiscal 2024 Earnings Conference Call and hands over to Senior Vice President and Head of Investor Relations, Michael Florin. He welcomes the participants and introduces the speakers, Chief Executive Robert Thomson and Chief Financial Officer Susan Panuccio. The call may include forward-looking information and non-GAAP financial measurements. Thomson highlights the company's growth in revenue and profitability for the second quarter and predicts further growth as macro conditions improve in some markets.

In the second quarter, News Corp saw strong results in its core pillars of Dow Jones, Book Publishing, and Digital Real Estate Services, with improvement in Australia and signs of recovery in the US residential sector. The company's revenues rose 3% to $2.6 billion and profitability increased 16%. Digital now makes up 52% of all revenues and there has been a shift away from volatile advertising revenues towards growth in circulation and subscription revenues. In the first half of the fiscal year, advertising made up 16% of revenues while circulation and subscriptions surged to 44%. Overall, News Corp has over 7 million subscriptions to its news brands.

The company has 4.3 million paid subscribers at Foxtel in Australia, and also has a growing number of subscribers at Dow Jones. They plan to be a core content provider for AI companies and are currently negotiating with them. The company values integrity, quality, and creativity, and prefers to consult rather than litigate. They believe that those who use their content without permission are stealing and undermining creativity. The CEO compliments Sam Altman for understanding the importance of journalism and hopes to set precedents with digital companies to support journalism and prevent the spread of low-quality content.

The author discusses the issue of misinformation and disinformation in society and how media companies are struggling to distinguish between trends and trendiness. They also mention Evan Gershkovich, a journalist who has been unjustly detained in a Moscow prison, and express hope for his release. The author then moves on to discuss the success of Dow Jones, particularly in their professional information business, thanks to the integration of OPIS and CMA. They also praise the finance team for their role in these deals and mention the development of new products at Dow Jones.

OPIS' Analytics Pro and risk and compliance's financial instruments product provide valuable data and insight for customers. DJ Integrity Check offers AI-driven insight into companies and individuals. Digital subscriptions at Dow Jones have doubled since pre-COVID levels, driven by bundling products. Digital advertising grew for the first time in a while, thanks to growth in the tech and automotive sectors. Digital Real Estate Services had a strong quarter, with 22% revenue growth and higher pricing in key markets.

REA India continues to grow rapidly with over 19 million monthly average unique visitors in December. Realtor.com has been affected by high U.S. interest rates, but there are signs of recovery with an increase in pending home sales and stabilizing unique users. HarperCollins had strong results, particularly in the digital and audio book categories thanks to a partnership with Spotify. The CEO commends Spotify's commitment to creativity.

In the second quarter, Foxtel saw success with bestsellers and strong sales for Christian books. They are expecting more success in the third quarter with upcoming releases and the launch of their new streaming product, Hubbl. Foxtel has achieved revenue growth while managing the transition to streaming. Kayo is looking forward to the upcoming winter sports season and BINGE has seen early success with advertising. News Media has seen improvement in traffic and digital subscription growth. The Times and Sunday Times have set a new record for digital subscriptions and are planning to launch in the U.S. soon.

The paragraph discusses the success and growth of News Corp Australia and the New York Post, which have seen strong results in the second quarter of fiscal year 2024. The company has transformed its free cash flow generation, improved its balance sheet, and initiated a dividend and buyback plan. The success is attributed to the support of Rupert and Lachlan Murdoch, the company's directors, and its employees. The company's revenues have increased by 3% in the second quarter, with a 2% growth in adjusted revenues. The company is focused on increasing recurring and digital revenues while also reducing fixed costs and exercising strong capital allocation discipline.

Total segment EBITDA for the quarter was $473 million, a 16% increase from the previous year, driven by strong performances in Book Publishing, Digital Real Estate Services, and Dow Jones. Adjusted total segment EBITDA also grew 14%. Earnings per share were $0.27, compared to $0.12 in the previous year. Digital Real Estate Services saw a 9% increase in revenues, with a 15% increase in segment EBITDA. REA Group had a strong quarter with revenues rising 22%, while Move's revenues declined by 13%.

Real Estate revenues for the quarter decreased by 14% due to lower lead and transaction volumes, but December showed improvement. The U.S. housing market remains challenging, but the company is focused on strengthening Realtor.com's product and content offerings. In the Subscription Video Services segment, revenues increased by 2%, with streaming revenues accounting for 29% of circulation and subscription revenues. Total paid subscribers for the Foxtel Group were flat, while paid streaming subscribers increased by 4%. However, there was a decline in paid streaming subscribers sequentially due to seasonality, financial conditions, and a weaker sports cycle.

The article discusses the financial results of Foxtel and Dow Jones for the quarter. Foxtel saw a decline in subscribers and an increase in ARPU, resulting in a 14% decrease in segment EBITDA. Dow Jones had its highest quarterly revenue and segment EBITDA since its acquisition, with strong growth in digital and subscription-based revenues. PIB, Factiva, and Dow Jones Energy all saw growth, and the company is working on increasing transparency in its disclosures.

The Dow Jones consumer business saw flat circulation revenues, with digital-only subscriptions growing 15%. Bundling accounted for most of the growth, while advertising revenues declined 4%. Digital advertising saw growth for the first time in a while, driven by technology and auto categories. Dow Jones segment EBITDA grew 17%, with margins improving. Book Publishing exceeded expectations in profitability, with revenues up 4% and segment EBITDA up 67%. Margins also increased significantly. The success of key titles and backlist sales contributed to the strong performance, including a notable increase in Christian Publishing.

The company saw improved return rates and normalized inventory levels due to better sell-through and lower inflationary costs. Backlist and digital sales increased, with downloadable audio accounting for nearly 50% of digital sales. The partnership with Spotify generated positive results. In the News Media segment, revenues and advertising declined, but circulation and subscription increased. The decline in segment EBITDA was due to lower revenue, but there was some recovery in recent weeks. The outlook is challenging, but Australian residential new buy listings for January grew 12% in the Digital Real Estate Services segment.

The paragraph discusses the outlook for various departments at Move, including expected improvements in lead volumes and increased expenses for marketing and product development. It also mentions challenges in the Subscription Video Services and News Media departments, as well as positive trends in the Book Publishing department. The company expects to face some negative translation in the third quarter due to exchange rates. The Operator then opens the floor for questions, with the first one regarding the company's involvement in AI and current negotiations in that area.

Robert Thomson, CEO of News Corp, is leading the intellectual and commercial discussions on AI. He has been skeptical of Silicon Valley's impact on media for almost two decades and is now cautious about the potential positive and negative effects of AI on journalism and content. He praises the thoughtfulness of Sam Altman and emphasizes the importance of deep facts in this era of deep fakes. The next question is from Entcho Raykovski who wants to discuss generative AI further.

During a conference call, Robert Thomson and Michael Florin were asked about the potential payments for the value of their content from digital platforms. Thomson could not comment on the negotiations but mentioned that they are at an advanced stage and they are dealing with willing partners. The next question was about Dow Jones' costs, which were down $3 million in the quarter. Susan Panuccio responded that Dow Jones had a good cost performance and they constantly look for transformation opportunities, but they also like to invest in their businesses. They have participated in a 5% headcount reduction and are seeing the benefits of that, but variable costs are expected to increase as revenue scales.

The company has had inflationary costs due to headcount and will continue to invest in this area. They also expect to see additional costs in marketing in the second half of the year. The PIB margins improved for the quarter and are expected to be the majority of the profit for the full year. Dow Jones is a priority for the company and has shown strong growth in its energy and risk and compliance segments. The company is also working on a portfolio review and simplification, but did not provide further updates.

The speaker is asking about the timing of a major announcement from the company, as they did not expect it to happen within the first three months but also not to take another six months. The speaker acknowledges the preparation that has been done but also hints at possible legal restrictions. The speaker also mentions that the company has created options for shareholders and that there is a discussion on how to fully monetize their portfolio. The next question is from someone at UBS.

The speaker discusses the growth and integration of OPIS and CMA, and the potential for further expansion in the future. They mention the success of the PIB business and its importance to Dow Jones and News Corp. The speaker also notes that new products can leverage existing data sets and mentions the potential for growth in the renewables sector. The questioner asks about the significant increase in earnings for books and the speaker attributes it to a return to stability after the impact of COVID-19.

The returns and market have settled down, partly due to HarperCollins' cost-cutting efforts and price increases on books. Margins are expected to improve in the first half of the year but not as much as in the first half. The company expects to exceed the $160 million cost-cutting goal and has already reached the run rate. However, there are reinvestments in certain areas of the business, and cost savings are always being looked for.

The company is constantly looking for ways to cut costs and improve efficiency, and they are also exploring new technologies like AI to help reduce costs in the future. The company is not becoming complacent despite their good results and will continue to pursue cost-cutting measures. The call is now over.

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