News (US:NWS)2023-08-11 00:26Financial Data and Key Metrics Changes - Total revenues for Q4 2023 were over $2.43 billion, down 9% year-over-year, primarily due to foreign exchange rates and the absence of a 53rd week in the previous year [28][67] - Adjusted earnings per share were a loss of $0.01 compared to income of $0.19 in the prior year, reflecting restructuring and impairment charges [68] - Total segment EBITDA was $341 million, up 8% year-over-year, with margins improving by over 2 percentage points to 14% [37] Business Line Data and Key Metrics Changes - Digital real estate services segment revenues were $369 million, down 17% year-over-year, impacted by macroeconomic pressures and foreign currency fluctuations [38] - Dow Jones revenues were $546 million, down 3%, with professional information business revenues rising 10% year-over-year [44][46] - Subscription video services reported revenues of $501 million, down 4% on a reported basis but up 3% on a constant currency basis [72] Market Data and Key Metrics Changes - In the U.S., the New York Post reported strong profits, with digital outpacing print ads [33] - REA revenues were $223 million, declining 11% on a reported basis, attributed to lower national listings and decreased financial services revenue [39] - The Australian housing market showed signs of improvement, with auction completion rates rising to over 70% in June [62] Company Strategy and Development Direction - The company is focused on digital transformation, with digital revenues now comprising over half of total revenues [66] - Strategic acquisitions, including OPIS and CMA, have strengthened the company’s revenue base and positioned it for long-term growth [17] - The company aims to capitalize on the energy transition through new products and pricing transparency in the OPIS segment [11] Management's Comments on Operating Environment and Future Outlook - Management noted that fiscal 2023 was the second most profitable year despite macroeconomic challenges, with optimism for future growth [15][9] - The company expects to generate strong cash flows and return a high percentage to shareholders through buybacks and dividends [55] - Management highlighted the importance of addressing AI challenges and ensuring fair compensation for content creators [6][24] Other Important Information - The company announced a 5% headcount reduction, expected to yield over $160 million in annual gross savings [9] - The Dow Jones segment was the highest contributor to profits across all of News Corp in fiscal 2023 [10] - The company is experiencing ongoing inflationary pressures related to wages and manufacturing costs, but is optimistic about moderating these impacts [57] Q&A Session Summary Question: What is the impact of cost initiatives in the quarter? - Management confirmed that cost savings significantly helped segments, particularly News Media, and expects full benefits to materialize in fiscal 2024 [87] Question: Can you provide insights on Generative AI and its implications? - Management acknowledged the importance of addressing AI's impact on news and emphasized the need for fair compensation for content creators [90] Question: What are the expectations for Foxtel's subscriber and revenue targets? - Management remains optimistic about achieving the 5 million subscribers and $3 billion revenue target, citing strong growth in streaming [114][115] Question: What is the outlook for book publishing margins and revenue performance? - Management expressed confidence in upcoming releases and expects significant margin improvement in the current fiscal year [131] Question: Can you discuss the growth drivers in Professional Information Services? - Management highlighted double-digit growth in Risk & Compliance and the successful integration of OPIS and CMA as key growth drivers [126]