News (US:NWS)2022-11-09 00:26Financial Data and Key Metrics Changes - Total revenues for Q1 2023 were approximately $2.5 billion, down 1% year-over-year, impacted by a $153 million or 6% negative effect from foreign currency fluctuations [35][36] - Adjusted revenues grew 3% compared to the prior year, while total segment EBITDA was $350 million, down 15% year-over-year [8][36] - Earnings per share were reported at $0.07 compared to $0.33 in the prior year, with adjusted earnings per share at $0.12 compared to $0.23 [37] Business Line Data and Key Metrics Changes - Digital Real Estate Services: Segment revenues were $421 million, down 1% year-over-year, with a 5% negative impact from foreign currency fluctuations. Adjusted revenues increased 3% [38] - Subscription Video Services: Revenues were $502 million, down approximately 2% year-over-year, but adjusted revenues rose 6%. Total paid subscribers reached almost 4.5 million, up 16% year-over-year [43][44] - Dow Jones: Revenues increased 16% to $515 million, with digital revenues accounting for 79% of total revenues. Professional information business revenues rose 40% [47][48] Market Data and Key Metrics Changes - In the digital real estate market, unique lead volumes declined 32% due to consumer affordability constraints, although there was a slight improvement from the previous quarter [39] - The Australian residential new buy listings for October declined 18% compared to tougher prior year comparisons [60] - Digital advertising revenues at Dow Jones grew 11%, with digital advertising accounting for approximately 65% of total advertising revenues [50] Company Strategy and Development Direction - The company is focused on cost control and improving margins, particularly at HarperCollins, while also investing in long-term growth opportunities in digital real estate and subscription services [22][18] - There is a renewed focus on bundling premium content across Dow Jones products, which has already exceeded 200,000 subscriptions [13] - The company is exploring a potential combination with Fox Corporation, although no further comments were made on this topic during the call [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the macroeconomic volatility but expressed confidence in the company's resilient foundations and long-term growth potential [7][9] - The impact of Amazon's inventory adjustments was noted as a significant factor affecting HarperCollins, but management expects these challenges to be short-term [21][70] - The company anticipates ongoing foreign exchange headwinds and higher costs due to supply chain pressures in the upcoming quarters [60][63] Other Important Information - The company reported a strong performance in digital advertising and streaming services, with significant subscriber growth in Foxtel's streaming offerings [25][45] - The integration of OPIS and CMA into Dow Jones is progressing well, contributing positively to revenues and profitability [49] Q&A Session Summary Question: Impact of Amazon on Book Publishing Margins - Management indicated that the majority of the EBITDA decrease was due to Amazon's inventory adjustments, which are expected to be resolved soon, while consumer demand for books remains strong [67][70] Question: Trends in Wall Street Journal Digital Subscribers - Digital subscriptions for both Dow Jones and the Wall Street Journal increased by 13%, with a focus on leveraging a large audience to drive premium product subscriptions [73] Question: BINGE Subscriber Growth Drivers - Subscriber growth for BINGE was attributed to both content releases like House of the Dragon and a strong customer experience, with no significant cannibalization observed [78] Question: Investment in Digital Real Estate - The company confirmed ongoing investments in digital real estate adjacencies, emphasizing the long-term opportunities in the U.S. market [81]