The operator welcomes listeners to News Corp's Fourth Quarter and Full Year Fiscal 2024 Earnings Conference Call. The call will feature Robert Thomson, Chief Executive, and Susan Panuccio, Chief Financial Officer. Forward-looking information and non-GAAP financial measurements will be discussed, and the call will include a Q&A session. Thomson expresses gratitude for the release of Evan Gershkovich, made possible by the efforts of concerned individuals.

The author expresses gratitude to the leaders at Dow Jones and News Corp for their efforts in campaigning for Evans' release. They also acknowledge the work of the U.S. government and other governments in securing the release. The company saw growth in revenue and profitability in the fourth quarter and fiscal year, driven by their core pillars of growth. The company also made significant steps to prepare for the future of e-books through a partnership with OpenAI and taking legal action against aggregators and addressing political bias in the advertising industry.

The House Judiciary Committee is pursuing the Global Alliance for Responsible Media (GARM) and its boycott of media platforms. This has caused harm and there should be consequences. The company is reviewing its portfolio and has received interest in a potential transaction involving Foxtel Group. They are not actively looking for purchases, but believe strongly in the potential of Foxtel. In the fourth quarter, digital real estate had a strong performance, driven by REA and its successful premium products. Listings and revenues continue to grow, with Financial Services returning to growth and REA India seeing substantial revenue growth.

In the US, Realtor.com is preparing for an upturn in the property market by improving technology and offerings for agents. They are hopeful that interest rate cuts by the Federal Reserve will improve affordability and liquidity. Dow Jones saw a 4% revenue growth, with B2B being the main driver. B2B has been a pivotal factor in the company's profitability, with a 17% annual growth rate and 80% of segment revenue coming from digital. Renewal rates for core B2B products are above 90%.

In the last 4 years, consumer subscriptions have increased by 55% and digital subscriptions have almost doubled. Dow Jones gained 158,000 digital subscribers and digital advertising grew by 14%. The company signed a multi-year content licensing agreement with the London Stock Exchange Group. HarperCollins had a strong quarter with a 250% increase in segment EBITDA and a 15% increase in revenue. Their back catalog performed well, with the Bridgerton collection benefiting from a streaming series. Audio books were the largest share of digital sales, growing by 28%. The company also saw success with new works and a resurgence of interest in J.D. Vance's Hillbilly Elegy.

In the quarter, subscription video services revenue grew for Foxtel due to the success of their streaming services and transition away from traditional broadcast. Kayo and Binge gained 200,000 subscribers and digital advertising now makes up 40% of total advertising. The launch of Hubbl has also been successful, with a significant number of new customers and additional purchases of Foxtel products. On the broadcast side, ARPU grew and churn was low. News Media has seen growth in profile and impact, with strong journalism leading to a partnership with OpenAI to improve information distribution.

In this paragraph, the speaker discusses the company's plans to use learnings from the evolving digital reading experience to adapt their newsrooms, as well as their ongoing restructuring and efforts to increase profitability. They also mention the success of the New York Post and News U.K., and the importance of leadership and support from shareholders. The CFO then takes over to discuss the company's transformation.

In the fourth quarter, News Corp saw growth in recurring and digital revenues, as well as high-margin licensing revenues. They focused on reinvesting in their core pillars of Book Publishing, Digital Real Estate Services, and Dow Jones. This resulted in the company's second best year on record and their strongest ever fiscal fourth quarter profitability. Digital Real Estate Services saw a 21% increase in segment revenues, with REA Group contributing significantly to this growth.

REA Group saw a 16% increase in new buy listings, with Sydney and Melbourne experiencing even higher growth. The company also saw strong growth in their Financial Services division and in REA India. Move's revenues for the quarter were down only 2%, with declines moderating from the previous year. Real estate revenues fell 2%, driven by lower referral and lead generation revenues. However, lead volume and average monthly unique users remained flat. The company has been able to maintain market share according to MACOM score data. They are also seeing success in diversifying their revenue base with sell-side offerings, rentals, and new homes. In the Subscription Video Services segment, revenues were up 1% compared to the prior year, or 2% on an adjusted basis.

In the fourth quarter, streaming revenues accounted for 32% of circulation and subscription revenues, with total paid subscribers reaching 4.7 million. This was driven by strong performance from Kayo and Binge, with a record 3.2 million paid streaming subscribers. Foxtel also saw a decline in residential broadcast subscribers, but broadcast revenues declined at the lowest rate in over five years. Dow Jones had strong results, with digital revenue accounting for 81% of total revenues and circulation and subscription-based revenues representing 79% of total revenues. PIB, Risk & Compliance, and Dow Jones Energy all saw strong growth in revenues.

In the At Risk & Compliance division, there was strong demand from both new and existing customers, particularly in new products such as media screening and financial instruments. Corporate customers were the fastest growing segment, accounting for 45% of the customer base. At Dow Jones Energy, revenue was boosted by pricing reviews and new product launches, with a retention rate of 90%. In the consumer business, circulation revenues increased by 1%, driven by a 16% growth in digital-only subscriptions. Advertising revenues also saw growth, with a 2% increase and digital advertising showing the strongest growth due to a rebound in the technology category. Dow Jones segment EBITDA grew by 3% and remained the largest contributor to overall EBITDA. Expenses were higher due to increased marketing and employee costs.

In financial year '24, the Dow Jones segment was the top contributor to company revenue and segment EBITDA. HarperCollins had a strong fourth quarter and a successful turnaround for the full year, with increased revenues and profitability. The backlist and digital sales were major contributors to this success. News Media had mixed performance, with improved results at News U.K. being offset by challenges at News Corp Australia. Revenues and advertising were down due to lower print volumes and platform algorithm changes.

The news media business is facing challenges with print and is transitioning to digital revenues. Segment EBITDA declined due to challenges at News Australia and higher newsprint prices. Market trends are mixed, but there is hope for improvement in fiscal 2025. Digital Real Estate is seeing growth in new buy listings and plans to benefit from price increases and investments. Subscription video services will focus on scaling streaming products and retaining high-value customers. Dow Jones will focus on B2B growth.

The company expects to see improved circulation revenue growth through digital subscription pricing and will continue to focus on cost efficiencies. Book Publishing has seen strong momentum from the backlist and is pleased with the partnership with Spotify. The advertising market remains challenging for News Media, but they will focus on enhancing first-party data offerings. The company expects CapEx to be moderately higher in fiscal 2025 due to digital reinvestment. They are in talks with third parties regarding potential interest in Foxtel and this may impact the timeline for the broader strategic review.

Robert Thomson discusses the various processes in motion at Foxtel, including an overture that they are currently assessing. He emphasizes their faith in the potential of Foxtel and their talented team, as well as their interest in emulating the success of Kayo in the U.S. Thomson also mentions a broad review of their portfolio and its potential for increasing shareholder value, but does not provide any further details. Moving on to another topic, Thomson briefly mentions the OpenAI deal and its impact on their news businesses, but cannot disclose specific details. The deal includes a guaranteed amount and the two companies will work together to create products that generate even more value.

The OpenAI team, led by Sam Altman, stands out for its ability to generate profit while maintaining its principles. However, not all players in the Gen AI field possess these qualities, with some simply looking to capitalize on content. When asked about the potential Foxtel transaction, the company's representatives emphasized the need for a fair and transparent process, and expressed confidence in the company's performance and potential. They also mentioned that there is still approximately $600 million in shareholder loans that would need to be addressed in any transaction.

During a conference call, Brian Han from Morningstar asked about the stagnant traffic numbers for Realtor.com despite ongoing investments. In response, Robert Thomson highlighted the improvements made to the tech and user experience by the team and expressed optimism for a potential revival in the market. He also mentioned the success of REA in the Australian market and the potential impact of lower mortgage rates on housing activity. Susan Panuccio added that they will continue to invest in the business.

The cost increases for the full year are expected to be modest, with a greater impact in the second half. However, the dollar value of these increases will be lower compared to the previous year. During the Q&A session, a question was asked about Foxtel's performance and if there were any updates on the targets set during the Investor Day in 2021. The executives did not reveal any new figures but expressed their ambitions for Foxtel and highlighted the growth in the streaming business and increase in ARPU in the Broadcast segment. The landscape has changed since the Investor Day, but the company is proud of the success of Kayo, Binge, and Hubbl, with streaming subscribers at an all-time high.

The company has been focusing on revenue growth by increasing prices for its broadcast and streaming products. Despite investing in Hubbl, the company's capital expenditures have been decreasing. The management is confident in the targets they have set. The company has been able to control costs well this year, and they expect this trend to continue into fiscal year 2025. The cost cadence will vary across different segments, with some expecting reinvestment and others seeing cost savings. The U.K. and Australia segments have already undergone restructuring, which will contribute to cost savings in the future. Dow Jones' costs are expected to increase mid-single digits due to business growth, while HarperCollins' costs have stabilized after a volatile period.

During the earnings call, the company discussed expectations for consistent margins in their business in 2025. They also addressed questions about the impact of the OpenAI deal on negotiations with other Gen AI companies, and the potential for simplifying the company's structure by focusing on the three main divisions. The company emphasized their preference for negotiations over litigation, and acknowledged the challenges faced by the News Media segment but highlighted its value in providing an audience for the rest of the portfolio.

Craig Huber asks Robert Thomson about the delay in the simplification process of the company, which was announced nine months ago. Thomson explains that part of the holdup is due to regulatory issues, which were not anticipated. He also mentions that the company did a lot of work on this before making the public announcement, but there have been delays in the process.

The company's investors are eager for a simplification of the company, but the process is taking longer than expected. The CEO, Robert Thomson, says they have already completed a significant amount of regulatory work but cannot give a specific date for when the process will be completed. There is also tension surrounding the process due to interest in Foxtel. The conference call is now ending.

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