News (US:NWSA)2025-02-06 00:02Financial Data and Key Metrics Changes - Revenues from continuing operations grew 5% to $2.24 billion, while profitability rose 20% to $478 million, indicating significant progress in digital development [6][33] - Net income from continuing operations surged 58% to $306 million, and EPS from continuing operations increased to $0.40 from $0.28 in the prior quarter [7][34] - Overall margin improved from 18.7% to 21.4%, reflecting enhanced operational efficiency [7][33] Business Line Data and Key Metrics Changes - Digital Real Estate revenue increased 13% to $473 million, with segment EBITDA margin rising 26% to $185 million [17][41] - Dow Jones reported a 3% revenue growth to $600 million, with segment EBITDA expanding 7% to $174 million [19][41] - Book Publishing revenue grew 8% to $595 million, and segment EBITDA surged 19% to $101 million [23][45] - News Media revenue fell 2% to $570 million, but segment EBITDA grew 30% to $74 million due to cost-saving initiatives [25][49] Market Data and Key Metrics Changes - Digital circulation revenue at Dow Jones grew year-over-year at its fastest pace in two years, with digital ARPU improving sequentially [20][38] - REA achieved a quarterly record in revenue with 129 million average monthly visits, nearly four times more than the nearest competitor [19][42] - Digital advertising grew by 13% at the New York Post, contributing to profitability [26] Company Strategy and Development Direction - The company is focusing on its three pillars of growth: Digital Real Estate, Dow Jones, and Book Publishing, which collectively grew revenue by 7% and segment EBITDA by 16% [33] - The agreement to sell Foxtel to DAZN for AUD 3.4 billion is seen as a strategic move to strengthen the balance sheet and focus on core growth areas [8][31] - The company is committed to maximizing shareholder returns, with a $1 billion buyback provision in place [79] Management's Comments on Operating Environment and Future Outlook - Management noted a tangible increase in business confidence in the US, which is expected to lead to greater capital formation and opportunities [15] - The company anticipates mixed market trends geographically, with currency translation expected to be a headwind in the second half [50] - There is confidence in the growth of Dow Jones, particularly in B2B segments, despite ongoing challenges [50][102] Other Important Information - The company has been upgraded to investment grade by both S&P Global and Moody's, reflecting its long-term strategy and improved financial position [11] - The partnership with OpenAI is expected to enhance content visibility in the AI space, with ongoing legal actions to protect intellectual property [12][28] Q&A Session Summary Question: Discussion on the Foxtel deal structure and overall News Corp strategy - Management emphasized the importance of regulatory approvals for the Foxtel deal and highlighted the partnership with DAZN as a significant strategic move [58][60] Question: Insights on Dow Jones earnings growth in the second half - Management attributed confidence in growth to improved subscriber trends and the phasing of discounted offers to standard pricing [66][70] Question: Expected use of proceeds from the Foxtel sale - Management confirmed a focus on maximizing long-term shareholder value, with plans for buybacks and dividends [79] Question: Outlook for Dow Jones pricing and product launches - Management provided insights on the expected trajectory for pricing and emphasized the importance of the backlist in the Book Publishing segment [87][89]