The paragraph outlines the start of News Corp's Third Quarter Fiscal 2025 Earnings Conference Call. Michael Florin, Head of Investor Relations, introduces the event, noting that the earnings press release was posted on their website, and highlighting the presence of Robert Thomson, Chief Executive, and Lavanya Chandrashekar, Chief Financial Officer. The call will involve prepared remarks and a Q&A for investors, featuring forward-looking statements that may differ from actual results due to risks and uncertainties. Non-GAAP financial measures will also be discussed. Robert Thomson remarks on the company's strong third-quarter results, attributing success to strategic digital growth, asset realignment, cost discipline, and the value of intellectual property, despite political challenges impacting some business partners.

The paragraph outlines positive financial outcomes and strategic moves by the company amidst economic challenges. It highlights the company's belief in potential U.S. economic growth, driven by deregulation and sound energy policies. The company reported a 67% increase in net income and a rise in revenues by 1%, despite currency challenges, with improved margins and earnings. A significant transaction involved selling Foxtel to DAZN, allowing the company to focus on key growth areas like Dow Jones and Digital Real Estate. The deal removed substantial debt from the balance sheet and included a 6% equity stake in DAZN, anticipated to be financially beneficial and enhance capital returns. The company expresses pride in Foxtel's transformation and its partnership with DAZN.

The paragraph discusses the company's positive financial developments, including its upgrade to investment grade and exploration of structural options for maximizing shareholder returns, such as the sale of Foxtel. It highlights the crucial role of quality journalism, especially with the increasing challenges of fact-checking and the politicization of science. The paragraph emphasizes the importance of credibility, particularly as AI technology advances. It mentions the company's partnership with OpenAI and expresses concerns about potential intellectual property infringements by AI companies. Lastly, it briefly touches upon America's strength in creativity and highlights Dow Jones as a positive aspect of the company's results.

In the quarter, Dow Jones experienced substantial growth, with a 6% increase in revenue and a 12% rise in profitability, leading to an improvement in margins. Digital circulation revenue grew by 14%, marking the fastest growth in nearly three years, and total consumer subscriptions exceeded six million, with over 90% being digital. Since the 2020 resegmentation, Dow Jones has seen its profitability more than double and subscriptions have risen by over 60%. The professional information sector thrived with a 6% revenue growth, driven by strong performance in the Risk & Compliance and Dow Jones Energy segments. Despite currency volatility, Risk & Compliance achieved an 11% revenue growth, while Dow Jones Energy saw a 10% increase largely due to investments in product offerings, including carbon and clean fuels analytics. Additionally, Dow Jones completed acquisitions of Oxford Analytica and DragonFly Intelligence, enhancing its ability to provide global insights.

The Dow Jones team anticipates improvement in Factiva's performance following a client dispute. Digital Real Estate Services reported a 19% increase in profitability and improved margins. REA experienced revenue growth due to increased yield and maintained a strong audience lead. Realtor.com's revenues increased by 2%, supported by growth in rental, seller, and new home initiatives, despite challenging market conditions. The realtor.com team has been gaining audience and user loyalty, outperforming competitors like Redfin and Homes.com. According to ComScore, realtor.com achieved significant site traffic, holding a substantial market share. In Book Publishing, revenue and EBITDA grew, aided by the acquisition of German publisher GRÄFE UND UNZER.

The paragraph discusses HarperCollins' strong digital revenue growth, driven by popular audiobooks and partnerships like the one with Spotify. Sales from their Christian division, particularly Bible Gateway, have been robust and are expected to synergize with other business segments. Upcoming book releases include notable titles from Shelby Van Pel, Douglas Murray, Dana Perino, and Christie Brinkley, along with a newly acquired collection from Harper Lee. Additionally, the News Media segment saw a 22% increase in EBITDA, aided by partnerships with platforms like OpenAI, with The Times and Sunday Times boosting digital subscriptions and ad revenue. The launch of the Sun Club and the New York Post's substantial audience growth are highlighted as well.

The paragraph discusses News Corp Australia's notable achievements, including their role in informed reporting during the election campaign, and growth in digital subscriptions, with news.com.au ranking as the top digital news brand and Sky News Australia as the leading YouTube news channel. The company's success is attributed to leadership from Lachlan and Rupert Murdoch, a supportive board, and global employees. The Chief Financial Officer, Lavanya Chandrashekar, highlights the company's strategic transformation towards recurring digital revenues and reduced reliance on advertising, focusing on core pillars like Dow Jones, digital real estate services, and book publishing.

The paragraph outlines News Corp's financial performance and strategic focus. Despite economic volatility, News Corp expects minimal impact from tariffs and aims to maximize shareholder value through efficient capital usage and cost management. It reports strong third-quarter financial results, with $2 billion in revenues and a 12% increase in total segment EBITDA. Margins improved, and Dow Jones along with Digital Real Estate contributed significantly to profitability. Adjusted revenues and EBITDA saw increases of 2% and 15%, respectively, year-over-year. Earnings per share from continuing operations rose from $0.07 to $0.14, with adjusted earnings at $0.17, up from $0.13.

In the recent quarter, Dow Jones saw a 6% increase in year-over-year revenues, reaching $575 million, driven mainly by an 82% share of digital revenue. The professional information business grew 6%, overcoming a challenge from Factiva, while the Risk and Compliance unit increased 11%, aided by new customers and products. Energy revenues also rose by 10%, supported by strong customer retention and expanding product offerings. The company enhanced its risk and compliance capabilities by acquiring Dragonfly and Oxford Analytica. The consumer business saw a 7% rise in circulation revenues, bolstered by a 14% growth in digital circulation and a higher digital ARPU, with a noted benefit from the timing of digital circulation revenue growth.

In this quarter, digital circulation revenues increased to 75% of total circulation revenues, up from 70% the prior year, with digital-only subscriptions rising by 9% year-on-year. Advertising revenue remained flat at $86 million, with digital contributing 63%. The Dow Jones segment saw a 12% increase in EBITDA to $132 million, with margins at 23%. The Digital Real Estate segment reported revenues of $406 million, up 5% from the previous year, influenced by residential yield growth and customer contract upgrades. REA revenues grew by 6% year-on-year despite ForEx impacts, and Realtors revenue increased by 2%, marking steady growth in difficult macroeconomic conditions.

The paragraph discusses various financial aspects of Realtor and Book Publishing. Realtor experienced strong growth from new revenue streams like seller, new homes, and rentals, particularly benefiting from a partnership with Zillow. There was a shift towards acquiring higher-quality leads, causing a decline in lead volumes and average monthly users, but increasing revenue per lead. Expenses were below expectations due to a deferred brand campaign. Book Publishing faced challenges with the timing of new title releases but still achieved strong third-quarter revenues, partly due to its acquisition of a German publisher. Digital sales grew slightly, and the backlist contributed a significant portion of revenue.

The company's revenue for the quarter was $514 million, down 8% from the previous year, with adjusted revenues dropping 6%. However, segment EBITDA increased by 22% to $33 million due to cost-saving initiatives, particularly from a joint venture with DMG Media in the UK. The company anticipates growth in the second half, with Dow Jones focusing on B2B growth and Digital Real Estate investing in technology and launching a new ad campaign. The Book Publishing segment faces tough comparisons, and News Media is expected to benefit from cost initiatives amidst volatile advertising conditions.

The paragraph is part of an earnings call Q&A session, where Kane Hannan from Goldman Sachs asked about the rate of investment in the Dow Jones business in the fourth quarter. Robert Thomson responded, mentioning there was no significant increase in investment but highlighted the recent acquisitions of Dragonfly and Oxford Analytica to enhance the professional information business. The focus remains on the consumer business and increasing ARPU, with consistent double-digit revenue growth in key segments like risk, compliance, and energy. The numbers were affected by a Factiva relationship, impacting total revenue by 200 basis points, but this issue is being resolved.

The paragraph discusses the outlook for Dow Jones, specifically addressing the impact of the Factiva dispute on margins and future growth. Lavanya Chandrashekar explains that as they progress through the year, the impact of the dispute is expected to lessen, with a smaller effect anticipated in the fourth quarter compared to previous quarters. The discussion also covers the factors contributing to margin growth, such as the expansion of the Professional Information Service business and the consumer business, which provide operating leverage and improve the business mix. Additionally, maintaining disciplined cost management is highlighted as a key strategy for enhancing margins.

In the paragraph, Robert Thomson discusses the expansion of the professional information business (PIB) segment, which has led to an increase in overall profit margins from 21.7% to 23%. PIB now accounts for 39% of revenues and is growing continuously. David Joyce from Seaport Research inquires about how the strong balance sheet is shaping the company's capital allocation strategy, including internal and external investments, as well as the possibility of mergers and acquisitions (M&A) to enhance business connectivity. Thomson outlines that the company's acquisition strategy is focused on three core pillars and stresses a disciplined approach to spending. He highlights the company's solid financial standing, noting a cash influx from Foxtel shareholder loans repayment and a significant increase in share price over the past year.

The paragraph features a dialogue during a business call, where Frank Huber of Huber Research questions Robert Thomson about the strategic decisions and future plans of their company, particularly regarding potential simplification and rationalization over the next six to twelve months. Huber references the completion of the Foxtel deal and inquires about possibilities on the real estate side and the performance of specific assets like realtor.com and Factiva. Robert Thomson responds by emphasizing their willingness to make significant structural changes in the interest of shareholders and acknowledges ongoing discussions about digital real estate.

The paragraph discusses the company's focus on maximizing value for its shareholders, particularly in the property market where the value of realtors is underappreciated. The company claims to have a clear vision of trends, challenges, and opportunities, positioning itself for both short- and long-term gains. They emphasize the quality of their assets and teams, which are in growth-oriented sectors. They aim to increase asset value and reduce the discount to intrinsic value. Robert Thomson then addresses a question from Alan Gould about the original Dow Jones business strategy, confirming that subscription growth is strong, with digital subscriptions contributing significantly to the 7% increase in total subscriptions.

The paragraph discusses the Dow Jones' successful implementation of a dynamic pricing strategy, which has led to a 7% increase in circulation revenues, up from 3% the previous quarter. The transition of subscribers from discounted to standard pricing is progressing well and is expected to positively influence digital revenue figures in the coming quarters. Dow Jones' digital operations contribute to 82% of its revenue, highlighting its strong digital presence. In a Q&A session, Evan Karatzas from UBS inquires about the impact of moving customers to higher-priced plans on churn rates and price elasticity. Robert Thomson explains that they are continuously learning about price elasticity with the help of advanced AI, which aids in identifying customer segments with different levels of elasticity and vulnerability.

In the paragraph, Robert Thomson and Michael Florin conclude a discussion, emphasizing the goal of reducing churn and maximizing revenue using available expertise and tools. The operator notes no further questions from investors, and Michael Florin thanks participants and ends the call, expressing anticipation for future conversations.

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