The paragraph is a transcript from News Corp's Third Quarter Fiscal 2025 Earnings Conference Call. Michael Florin, the Senior Vice President and Head of Investor Relations, introduces the call, noting that their earnings press release is available online. The call features Robert Thomson, the Chief Executive, and Lavanya Chandrashekar, the Chief Financial Officer. Florin mentions that the call may contain forward-looking statements and non-GAAP financial measures, with reconciliations available on their website. Robert Thomson comments on the company's robust third-quarter results, attributed to their strategic transformation focusing on digital growth, asset realignment, cost discipline, and the value of intellectual property, despite political challenges affecting business partners.

The paragraph details a positive financial performance for a company, with a 67% increase in net income from continuing operations and a rise in total segment EBITDA, despite challenges like currency headwinds. The company achieved improved revenue and EPS figures compared to the previous year. Additionally, they sold Foxtel to DAZN, which helped reduce their debt and refocus investments on core growth areas. The transaction, which included gaining an equity interest in DAZN, is anticipated to enhance earnings and return on invested capital, showcasing the company's strategic shift towards promising sectors like Dow Jones, digital real estate, and book publishing.

The company has recently been upgraded to investment grade by Moody's and S&P, enhancing its financial flexibility, which is further supported by strong cash flow and a focus on maximizing shareholder returns through strategic deals, like the sale of Foxtel. The importance of quality journalism is emphasized in the current polarized political climate, especially regarding fact-checking and maintaining credibility as AI blurs truth. The company values its partnership with OpenAI and urges others to recognize their responsibilities regarding intellectual property. Visiting China highlighted America's strength in creativity rather than technology sectors, and the company criticizes AI entities for potentially infringing on IP, including that of former President Donald Trump. Dow Jones was noted as a recent success for the company.

In the quarter, Dow Jones experienced a 6% revenue growth with a 12% rise in profitability and an increase in profit margin from 21.7% to 23%. Digital circulation revenue grew by 14%, marking the fastest rate in nearly three years, with consumer subscriptions exceeding six million, over 90% of which are fully digital. Since its resegmentation in 2020, Dow Jones' profitability has more than doubled, and total subscriptions have risen by over 60%. The professional information business saw a 6% revenue uplift, driven by growth in Risk & Compliance and Dow Jones Energy, with Risk & Compliance growing by 11% despite currency challenges. The acquisition of Oxford Analytica and DragonFly Intelligence is expected to enhance Dow Jones' global insights. Dow Jones Energy, benefiting from investments in new offerings like carbon and clean fuels analytics, posted a 10% revenue increase.

The Dow Jones team anticipates improvement in Factiva's performance following a client dispute. Digital Real Estate Services experienced a 19% rise in profitability and increased margins due to a 5% revenue boost. REA's revenue grew by 6%, or 11% on a constant currency basis, and it maintained a strong audience lead. Realtor.com saw a 2% revenue increase from growth initiatives, despite tough market conditions. The network effect from media platforms is expected to strengthen Realtor.com's competitive advantage. Visits to Realtor.com reached 239 million, dominating market share. In Book Publishing, revenue grew by 2% and EBITDA by 3%, aided by acquiring GRÄFE UND UNZER.

The paragraph discusses the growth and successes across various segments of a media company. Digital revenues increased by 3%, driven by popular audiobooks and a key partnership with Spotify. The Christian division, particularly Bible sales and the Bible Gateway site, also showed strength. Upcoming releases and acquisitions are expected to further boost performance. The News Media segment achieved a 22% growth in EBITDA, aided by partnerships with AI platforms. Digital subscriptions and advertising revenue for the Times and Sunday Times have risen, and the launch of the Sun Club offers premium journalism. The New York Post saw significant audience engagement, reaching 85 million uniques in March.

The paragraph highlights News Corp Australia's recent achievements, including its impact on leadership during the election campaign, growth in digital subscriptions, and the success of its news platforms. The company attributes its strong performance and transformation over the past decade to effective leadership by Lachlan and Rupert Murdoch, an engaged Board, and dedicated employees. The Chief Financial Officer, Lavanya Chandrashekar, emphasizes the strategic reshaping of the company's asset mix to focus on recurring digital revenues and reduce reliance on advertising. This transformation has left News Corp more focused on its core pillars: Dow Jones, Digital Real Estate Services, and Book Publishing.

The paragraph discusses News Corp's financial performance and strategy during turbulent times. The company expects faster growth with less capital intensity, leading to higher returns. Despite potential tariffs, the direct impact is expected to be minimal, and cost control measures will be prioritized. The quarterly results were strong, with fiscal third quarter revenues from continuing operations at $2 billion, a 1% increase year-over-year. Total segment EBITDA increased by 12%, with margins improving by 140 basis points to 14.4%. Dow Jones and Digital Real Estate significantly contributed to profitability. Adjusted revenues and EBITDA showed year-over-year growth due primarily to currency impact. The earnings per share from continuing operations improved from the previous year.

The paragraph discusses Dow Jones' improved financial performance, with a 6% increase in year-over-year revenues to $575 million, largely driven by digital revenue, which now accounts for 82% of the segment's total. The professional information business saw a 6% revenue rise, despite a small negative impact from Factiva. Risk and Compliance revenue grew 11% to $84 million, fueled by new customers and products, while energy revenue increased 10% to $69 million, with strong customer retention. Investments were made in risk and compliance through acquisitions to enhance offerings. The consumer business also saw a 7% increase in circulation revenues, driven by a 14% rise in digital circulation revenue as customers shifted to higher pricing tiers. Digital ARPU grew both quarterly and annually, aided by a timing benefit.

In the latest quarter, digital circulation revenues increased to 75%, with digital-only subscriptions rising by 9% year-on-year. Advertising revenue was stable at $86 million, with digital making up 63%. The Dow Jones segment saw EBITDA growth of 12% to $132 million with improved margins. Digital Real Estate revenues rose by 5% to $406 million despite tough comparisons and ForEx challenges, with an adjusted EBITDA increase of 25%. REA revenues grew by 11% on a constant currency basis, driven by residential yield increases and customer contract upgrades. Listings remained flat overall, although floods in Queensland had a negative impact. Realtors revenue increased by 2%, continuing its growth despite challenging macroeconomic conditions.

The paragraph discusses the financial performance and strategic shifts of Realtor and Book Publishing. Realtor experienced a decline in referral and lead generation revenues but compensated with growth from new revenue streams like rentals, especially through a partnership with Zillow, and improved revenue per lead despite a decrease in lead volumes and audience size. Expenses were lower than forecasted due to a postponed brand campaign. Meanwhile, Book Publishing's revenues rose slightly, influenced by the timing of frontlist titles and the acquisition of a German publisher. Strong performances in Christian Publishing and the UK market countered weaker general book sales. Digital revenues grew by 3%, with backlist titles contributing a larger share of consumer revenues compared to the previous year.

The company faced a challenging revenue environment due to difficult advertising conditions, despite increases in cover and subscription prices. Quarterly revenue decreased by 8%, while adjusted revenue fell by 6%. However, segment EBITDA increased by 22% due to cost-saving measures, particularly from a joint venture with DMG Media in the UK and initiatives at News Australia. Dow Jones expects growth in the second half, focusing on B2B growth in Risk and Compliance and Energy. Digital Real Estate faces challenges with reduced Australian listings, while Realtor.com is enhancing tech and content. Book Publishing expects tough comparisons in the fourth quarter, and News Media benefits from continued cost initiatives despite volatile advertising due to economic uncertainty.

In the paragraph, during a Q&A session, Kane Hannan from Goldman Sachs inquires about investment rates in the Dow Jones business, particularly as they increased slightly in the recent quarter. Robert Thomson responds by highlighting that there hasn't been a significant surge in investment at Dow Jones, aside from acquisition costs related to Dragonfly and Oxford Analytica, which will benefit the professional information business. Thomson emphasizes a focus on both consumer and professional segments, noting consistent double-digit revenue growth, particularly in risk, compliance, and energy sectors, which are bolstered by new services and premium content. He also mentions that issues with a Factiva relationship impacted total revenue but are now being addressed.

The paragraph discusses the impact of a dispute on Factiva, which has affected Dow Jones' margins. Lavanya Chandrashekar explains that although the impact will continue into the fourth quarter, it is expected to be smaller than previous quarters. The growth in Dow Jones' Professional Information Service business, particularly in risk and compliance and energy sectors, contributes positively to margins through operating leverage and an improved business mix. Consumer business growth and disciplined cost management are also highlighted as factors aiding in margin improvement.

The paragraph discusses the company's financial strategy and recent performance. Robert Thomson highlights the expansion in profit margins and the growth of the Professional Information Business (PIB), which now accounts for 39% of revenues and is increasing each quarter. David Joyce from Seaport Research asks about the company's capital allocation strategy given its strong balance sheet. Thomson responds that the company has identified three core areas for potential acquisitions but emphasizes that they will not overpay. He mentions receiving approximately AUD 592 million from Foxtel shareholder loan repayments and expresses a commitment to shareholder responsibility. Despite market turbulence, the company's share price has risen by over 32% compared to the previous year.

The paragraph features a conversation between Frank Huber, a representative from Huber Research, and Robert Thomson, discussing the company's strategic decisions and future plans. Huber congratulates Robert on completing the Foxtel deal and inquires if there are plans to further simplify the company's structure, possibly through divesting real estate assets or parts of the business like Factiva. Thomson responds by using the Foxtel deal as an example of the company's strategic focus on restructuring to benefit shareholders and acknowledges the ongoing evaluations of various segments, including digital real estate, as noted in the company's last earnings call.

The paragraph discusses a company's strategic focus on maximizing shareholder value by leveraging clear insights into market trends, challenges, and opportunities. It highlights the importance of realtors in the property market and emphasizes the company's strong asset base and team, which are positioned for growth. The company aims to increase asset value while reducing discounts to intrinsic value, maintaining a confidence rooted in their strategic choices. In a Q&A session, Robert Thomson addresses a question about the Dow Jones business, highlighting the success in growing digital subscriptions by 14% as part of a strategy to convert users from promotional pricing to higher-paying plans.

The paragraph discusses Dow Jones' focus on increasing average revenue per subscriber and positive trends from its dynamic pricing strategy. This strategy led to a 7% rise in circulation revenues, up from a 3% increase in the previous quarter. The transition from discounted entry-level offers to standard pricing is progressing well and is expected to impact digital revenue numbers in the future. Digital accounts for 82% of Dow Jones' revenue, highlighting its modern and digital-focused nature. In response to a question from Evan Karatzas of UBS, Robert Thomson talks about learning from price elasticity and utilizing advanced AI to understand customer cohorts' sensitivity to pricing changes, which aids in strategic pricing decisions.

The paragraph describes a focus on reducing churn and maximizing revenue using available expertise and tools. Robert Thomson thanks Evan and invites the next question, but none are pending. Operator hands over to Michael Florin for closing remarks, who thanks the investors for participating and looks forward to future discussions.

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