• Revenue: $2.58 billion, up 3% year over year.
• Profitability: $415 million, up 14% year over year.
• Profit Margin: Increased from 14.6% to 16.1%.
• Net Income: $144 million, up from $58 million last year.
• Earnings Per Share (EPS): 21, compared to 5 last year.
• Digital Real Estate Revenue: Increased by 13%.
• Dow Jones Revenue: $552 million, up 3% year over year.
• Digital Revenue at Dow Jones: 82% of total segment revenues.
• Book Publishing Revenue: $546 million, up 4%.
• Subscription Video Services Revenue: $501 million, up 3%.
• Advertising Revenue at Dow Jones: Declined 7% to $85 million.
• Foxtel Streaming Subscribers: Nearly 70% of paid subscribers.
• HarperCollins Digital Revenue: $129 million, up 15%.
• RE A Group Revenue: $318 million, up 22% year on year.
• Realtor.com Revenue: $140 million, down 1% year over year.

• Warning! GuruFocus has detected 4 Warning Signs with EB.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• News Corp (NASDAQ:NWS) reported record first quarter revenue of $2.58 billion, a 3% increase year over year.
• Profitability surged 14% to $415 million, with a profit margin increase from 14.6% to 16.1%.
• Digital real estate revenue increased by 13%, driven by strong performance at REA Group.
• HarperCollins saw a 25% increase in profitability, with digital sales rising 15%.
• Foxtel's transition to streaming is successful, with streaming now accounting for nearly 70% of paid subscribers.

Negative Points

• Advertising revenue remains volatile, with digital advertising down 5% at Dow Jones.
• The U.S. property market is challenged by high mortgage rates, impacting sales and lead volume.
• News media segment revenues declined by 5%, with advertising conditions particularly challenging in the UK.
• Factiva faced a customer dispute, impacting the overall growth of Dow Jones' professional information business.
• Foxtel's profitability was impacted by $11 million in costs related to the Hubble product launch.

Q & A Highlights

Q: Can you provide details on AI revenue distribution and its impact on different segments? A: We can't specify the distribution of AI revenues, particularly from the OpenAI deal, but it impacts the news media section and is part of Dow Jones' revenue and profit profile. We expect a positive year-on-year movement in revenue across all agreements. - Robert Thomson, CEO and Susan Panuccio, CFO

Q: What is the outlook for Dow Jones' consumer circulation growth, and how do you plan to transition promotional subscribers to higher-paying tiers? A: Overall circulation at Dow Jones rose 11%, with digital-only up 15%. We expect positive movements in digital circulation revenue as engagement and retention rates improve. The rate of increase in digital circulation revenue is expected to step up, particularly in the second half of the year. - Robert Thomson, CEO and Susan Panuccio, CFO

Q: Can you discuss the sustainability of the book publishing margin expansion? A: HarperCollins had a strong quarter, and the momentum has carried into the current quarter. Digital sales rose 15%, with audiobooks up 26% and ebooks up 7%. These trends are expected to continue. - Robert Thomson, CEO

Q: What is the outlook for advertising at Dow Jones, and when might we see a recovery? A: There was softness in finance and tech advertising, but we expect an increase in digital advertising revenue at Dow Jones and across our news media properties in the current quarter. - Robert Thomson, CEO

Q: What is the status of the Foxtel shareholder loans? A: The balance of the Foxtel shareholder loans now sits at $545 million. - Susan Panuccio, CFO

Q: Why has there been a delay in optimizing the company's structure, and when can investors expect changes? A: We are in active discussions over Foxtel and other assets. Despite the 40% increase in our share price over the past year, we believe our asset value is not fully reflected. We are looking to maximize value. - Robert Thomson, CEO

Q: How should we think about the growth rate for Dow Jones' professional information services moving forward? A: Risk and compliance revenues continue to grow at 16%, and Dow Jones Energy at 11%. The Factiva dispute impacted overall growth, but we are enhancing the user experience and expect growth to continue. - Robert Thomson, CEO and Susan Panuccio, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.