News Corporation (NASDAQ:NWS) Q1 2025 Earnings Call Transcript

News Corporation (NASDAQ:NWS) Q1 2025 Earnings Call Transcript November 9, 2024

Operator: Welcome to the News Corp’s First Quarter Fiscal 2025 Earnings Conference Call. Today’s conference is being recorded. Media will be allowed on a listen-only basis. At this time, I’d like to turn the conference over to Michael Florin, Senior Vice President and Head of Investor Relations. Please go ahead.

Michael Florin: Thank you very much, operator. Hello, everyone, and welcome to News Corp’s fiscal first quarter 2025 earnings call. We issued our earnings press release about 30 minutes ago and it’s now posted on our website at newscorp.com. On the call today are Robert Thomson, Chief Executive; and Susan Panuccio, Chief Financial Officer. We will open with some prepared remarks and I’ll be happy to take questions from the investment community. This call may include certain forward-looking information with respect to News Corp’s business and strategy. Actual results could differ materially from what is said. News Corp’s Form 10-K and Form 10-Q filings identify risks and uncertainties that could cause actual results to differ and contain cautionary statements regarding forward-looking information.

Additionally, this call will include certain non-GAAP financial measurements such as total segment EBITDA, adjusted segment EBITDA and adjusted EPS. The definitions and GAAP to non-GAAP reconciliations of such measures can be found in the earnings release for the applicable periods posted on our website. With that, I’ll pass over to Robert Thomson for some opening comments.

Robert Thomson: Thank you, Mike. There is no doubt we have begun fiscal 2025 robustly with record first quarter revenue and record first quarter profitability. Revenue rose 3% year-over-year to $2.58 billion, while profitability surged 14% to $415 million. Our profit margin rose from 14.6% a year ago to 16.1%, and recurring circulation and subscription revenues continued to expand, as our reliance on a sometimes volatile advertising market has declined markedly. Our net income jumped from $58 million last year to $144 million and our EPS was $0.21 compared to $0.05 in the same quarter last year. That we have achieved these record first quarter results in macro conditions, which were far from auspicious tells much about the successful transformation of News Corp over the past decade.

Meanwhile, the just-completed election has highlighted the importance of trusted journalism in a media maelstrom in which some journalists routinely mistake virtue signaling for virtue. Artificial intelligence harvests and recycles informational infelicities. And so it is critical that journalist inputs have integrity, which is why our partnership with OpenAI is so crucial and why we will certainly seek to challenge AI companies misusing and abusing our trusted journalism. We have indicated in the past that we would prefer to woo rather than sue artificial intelligence companies, hence the alliance with OpenAI, but we have reached a point where litigation is also essential. Dow Jones and the New York Post have started proceedings against the perplexing perplexity, which is selling products based on our journalism, and we are diligently preparing for further action against other companies that have ingested our archives and are synthesizing our intellectual property.

We hope that litigation will not be necessary, but we intend to defend vigorously our rights and our journalism. This matter is an imperative for our society and for our shareholders. We are also are pruning the blatant biases of ad agencies and ad associations, which we believe are boycotting certain media properties solely on the basis of personal political prejudices. That is detrimental to companies which advertise and obviously enough to the shareholders of those companies, which are being denied the opportunity to optimize audience reach. The ad heavens are certainly not in equilibrium. As for the structure of our company, we continue to examine changes to maximize our overall value for shareholders. It is true to say we are in active discussions over the future of Foxtel.

And we believe all who have studied the worth of our individual assets and our current share price can easily see that price does not reflect the collective value of our businesses. In our view, a clear gap remains, despite the approximately 38% increase in our share price over the past year. The most glaring discrepancy is how the market has assessed the value of REA in our portfolio. By the way, it is really worth highlighting, the presence of Lachlan Murdoch in his early investment of less than $2 million in cash, which gave us a strategic stake that has become a 61% share in a Company worth $31 billion, Australian dollars based on recent trading and has created immense value for all our investors. If you need me to do the math, 61% of $31 billion Australian dollars is approximately $12.5 billion US dollars.

Given that our market cap is roughly $17 billion US dollars, that means that Dow Jones, including the Wall Street Journal and the lucrative B2B businesses plus HarperCollins, plus Realtor, plus The Times of London, and The Sun, plus our UK radio network, plus our Australian papers plus Foxtel and a few other companies are apparently perceived to be worth less than $5 billion, which we believe simply defies investing or mathematical logic. Now let’s examine each sector’s performance and the Company’s actual value more closely. In digital real estate, we had a particularly strong quarter at REA in Australia, where listings nationally rose 7% in the quarter and have continued to increase at a healthy level through October. We expect that positive momentum will be reflected in second quarter earnings.

There was a certain amount of excitement in recent weeks as REA submitted a thoroughly reasonable bid to acquire the UK market leader, Rightmove. But we applaud the REA leadership team’s financial rectitude, instead fastly refusing to overpay for the asset. That the Rightmove Board did not engage constructively, was disappointing, but we are absolutely confident in the potential of REA and that potential was obvious in the excellent results the Company announced today. At News Corp, we have made several important acquisitions in recent years in book publishing and in particular to expand the professional information business at Dow Jones. But these acquisitions have been knowing investment at rather reasonable prices. And the efficacy of that disciplined investment strategy is reflected in our buoyant earnings.

In the first quarter, digital real estate revenue overall increased by 13%, while profitability rose 15%. This double-digit growth was driven by REA reaching all-time record quarterly revenue, thanks to strong listing volume and yield and continued growth at REA India. We believe REA’s potential is far from fully realized as the company’s expansion into financial services remains in an early but burgeoning stage and the development of premium products for agents and for families seeking to buy or sell a property continues at pace. In the US, the property market remains challenged with punitively high mortgage rates, which have had a innocuous impact on sales. But this should be a relatively temporary trend and we fully expect a rebound as those rates decline.

Listings have increased year-over-year with a more than 30% increase in active listings in September, but we are seeing particularly low sales of existing homes, which impacted lead volume. Our team is positioning the company for the rebound with product enhancements such as dynamic mapping, the bolstering of our tech stack and building the brand Halo, reflected in a 2% increase in unique users despite the softness in property sales. As with REA, Realtor.com continues to diversify, including expanded sell side and new construction offerings and a rental partnership with Zillow and revenues at each of those adjacencies expanded. At Dow Jones, which has more than doubled in profitability since re-segmentation four years ago and which had a strong fiscal 2024, our B2B data and information services businesses continued to prosper.

In Q1, the professional information business expanded revenues overall by 8% with 16% growth at Risk & Compliance and a 11% increase at Dow Jones Energy. For context, our Risk & Compliance revenues over the last five years from fiscal 2019 to fiscal 2024 have more than doubled, representing 18% annual compound growth. With global instability and increasing regulatory vigilance, there is no sentient law-abiding company that does not want to minimize risk and maximize compliance. At Dow Jones Energy, we are excited by the recent acquisition of A2i, a leader in AI powered technology used to optimize fuel pricing strategies, which will complement Opus’ pricing solutions. On the news side, total Dow Jones digital only subscriptions grew 15%, including a 10% increase at the journal.

And we expect circulation revenue growth to improve over the course of the year as we cycle through the phases of promotional pricing. As for advertising, that market remained volatile and affected overall growth rates with digital advertising down 5%. For clarity, it is worth reiterating that advertising as a share of total Dow Jones revenue has fallen from approximately 38% in 2014 to 15% in the most recent quarter. And importantly, advertising revenue at the News Media segment has fallen from approximately 35% of our total revenue a decade ago to 7% in the most recent quarter, with just over half of that figure being digital, underscoring how much we have evolved. At book publishing, HarperCollins had another splendid quarter with profitability expanding 25% and a margin lift of more than 200 basis points.

Thanks to strong digital and backlist sales, including JD Vance’s Hillbilly Elegy, which sold 1.5 million units across all formats during the quarter. In addition, A Death in Cornwall by Daniel Silva; The Au Pair Affair by Tessa Bailey, and the Wicked collection, which benefited from the movie tie-in, also performed well. Our Bible sales were again robust during a time of acute political uncertainty and intense global conflict. Digital revenue growth at HarperCollins of 15% was driven by the continued success of audio book sales, which climbed 26% and renewed revenue growth in e-books, which increased 7%. Looking ahead, we anticipate that momentum will stay strong ahead of the seasonal gifting period. We also have the release in Q2 of Cher’s new book, as well as The Blue Hour by Paula Hawkins, and Unleashed by Boris Johnson, the former British Prime Minister, whose puckish perceptions are compulsively compelling.

As the pithy Boris once observed, the beauty and riddle in studying the motives of any politician is trying to decide what is idealism and what is self-interest. And often we are left to conclude that the answer is a mixture of the two. At subscription video services, revenue increased 3% as growth in streaming more than offset declines in linear revenues. While this quarter was impacted by Hubbl costs as is normal with any product launch, those costs have come down sequentially and we expect them to continue to fall. Foxtel’s strength is reflected in its successful transition to streaming, which now accounts for nearly 70% of paid subscribers, while ARPU has continued to rise. Advertising on our streaming platforms rose over 45% and accounted for over 40% of Foxtel’s advertising revenues with notable strength at Kayo, our sports streaming service.

Meanwhile, broadcast churn of 11% fell 70 basis points sequentially and broadcast ARPU rose 4% on prior year to AUD89. Sports are the cornerstone of Foxtel’s success with record Rugby League and Australian audiences for the just completed season and a fascinating summer sports looming. These trends drove strong free cash flow in the quarter and enabled the further repayment of shareholder loans. At news media, profitability increased 14% despite the challenging macro environment. Across our mastheads, we are starting to see the positive impact of our landmark agreement with OpenAI as well as the impact of our cost discipline. In Australia, our digital subscribers rose to 1.13 million and the New York Post digital network recorded 103 million monthly unique users in September.

The re-tooling of Talk TV meant a much lower cost run rate as we focused on video and deployed the acquired skills to enhance the video offerings at the times and the sun. Our UK results also benefited from cost savings related to our new Print joint venture with the Daily Mail Group and a reduction of investment at The Sun US, which was bruised by sudden capricious algorithm changes. That necessary focus on costs is part of our absolute determination to sustain and invest in our journalism. Now, we come to another significant moment, a moment that is for me personally and professionally tinged with a certain sadness. Susan Panuccio, our esteemed Chief Financial Officer, is stepping down to take a time out from the hurly burly of business to devote time to her beautiful family.

Susan has played an absolutely crucial role in the transformation of News Corp over the past eight years. She is an empathetic, enlightened, energetic leader who has helped me, the Board and her colleagues navigate a transition that has fundamentally changed the character of the Company. We have reported record results during her tenure and that is a testament to the success of her sterling efforts. Rupert and Lachlan have made very clear their genuine appreciation for Susan’s contribution to the Company and her positive influence will definitely resonate for many years to come. Susan, in her inimitable way, is irreplaceable, but we are honored to announce that our new CFO is Lavanya Chandrashekar, formerly the CFO of Diageo, the global drinks business where she worked closely with the great Ivan Menezes, the late Chief Executive of Diageo.

Lavanya was previously the CFO for the North America business as well as Global Head of Investor Relations at Diageo. Prior to that, she had significant and global financial leadership roles at Mondelez and Procter & Gamble. Susan will stay on in her current role through the end of the calendar year and then transition to an advisory role for six months to assist Lavanya in making the transition from bourbon to books and from gin to journalism, though it’s fair to say that journalists and gin are well acquainted with each other. We salute Susan and we welcome, Lavanya. The result of the US elections means that one of our cherished Directors, Kelly Ayotte, is leaving our Board to become the Governor of New Hampshire. Kelly too has played a pivotal role in our successful evolution.

Her wise counsel has been priceless for me. And her intelligence, her insight and her integrity have been obvious to all who have served with her on the Board. I know that Rupert and Lachlan are sincerely grateful for her service and New Hampshire’s gain is surely our loss. And now, for the final time, I give you Susan Panuccio, our brilliant CFO and my dear friend.

Susan Panuccio: Thank you, Robert, for those kind words and thank you for a wonderful partnership and your guidance and support over the years, which I shall always value. It’s been an absolute pleasure to work alongside you. As Robert said, after nearly eight years in this role and over two decades at News Corp, I’m going to take some much desired time-off to spend with my family. It has been a privilege to help Robert lead News Corp’s transformation into the global news and information powerhouse it is today and I truly believe that the Company has an incredibly bright future ahead. I think so fortunate over the years to have had the support of both Rupert and Lachlan together with our Board of Directors and I would like to sincerely thank them all.

Most importantly, I want to thank the talented teams past and present across News Corp, who I’ve had the privilege of working with together with my hugely talented and hard-working finance team who I will miss most of all. I’m committed to supporting Lavanya during the transition and will be a willing resource going forward. With that, I’ll take you through the quarter. We have now grown profitability year-over-year for six consecutive quarters by transforming the earnings profile of Dow Jones to focus more on B2B and information services, capitalizing on the upswing in Australian listing volumes at REA while reinvesting and enhancing Realtor’s product offerings, revitalizing HarperCollins with strong digital revenue growth and signing a landmark agreement with OpenAI, leveraging the value of our incredible content across the news portfolio.

This has helped to drive record first quarter revenue and profitability together with our firm focus on the execution of our digital-first strategy, supported by focused M&A and organic reinvestments and disciplined cost initiatives, all underpinned by our three core pillars of Dow Jones’ digital real estate and book publishing. First quarter total revenues were almost $2.6 billion, up 3% year-over-year and total segment EBITDA reached $415 million, up 14% year-over-year. Margins improved by 150 basis points to 16.1%. These results also include $12 million of deal related costs at REA, which impacted total segment EBITDA growth by approximately 3 percentage points. First quarter adjusted revenues rose 2% compared to the prior year, while adjusted total segment EBITDA rose 12% versus the prior year.

For the quarter, we reported earnings per share of $0.21 compared to $0.05 in the prior year. Adjusted earnings per share were $0.21 in the quarter compared to $0.16 in the prior year. Moving on to the results. For the individual segments, starting with Dow Jones, the first quarter results were again strong at Dow Jones with revenues of $552 million, up 3% year-over-year and was the largest segment contributor to overall company revenue. Digital revenue accounted for 82% of total Dow Jones ‘segment revenues this quarter, up 1 percentage point from the last year. Our B2B products continued to grow strongly with professional information business revenues rising 8% year-over-year despite the impact of the customer dispute at Factiva. Approximately two-thirds of the growth within PIB was driven by volume due to upsells, new customers and products and retention remains very strong at nearly 90%.

Revenue this quarter included 16% growth at Risk & Compliance to a record $81 million and 11% growth at Dow Jones Energy to $68 million. Those results were particularly impressive in the context of the prior year revenue comparisons, which rose 23% and 20% year-over-year, respectively. At Risk & Compliance, demand remain strong from new and existing customers with recently launched products including two AI-powered products advanced screening and monitoring in partnership with which — an Integrity Check developing robust sales pipeline. At Dow Jones Energy, revenue in the quarter also continued to benefit from the launch of new products and benchmarks together with price adjustments. As Robert mentioned, Dow Jones Energy acquired A2i Systems, a leader in AI-powered fuel pricing solutions that applies advanced predictive technologies to real-time fuel pricing data and the electric vehicle charging station market.

Within the Dow Jones consumer business, circulation revenues rose 1% versus the prior year as growth in digital-only subscriptions was mostly offset by lower print volume. Digital-only subscriptions improved by 15% year-over-year and by 99,000 sequentially. Bundling accounted for approximately 31% of the sequential digital-only volume growth in the first-quarter. Print volume declined by 16% year-over-year, partially offset by higher pricing. Digital circulation accounted for 72% of total consumer circulation revenue for the quarter. The conversion to full or step-up pricing from our digital subscriptions added in the past year via introductory promotional offers has so-far exceeded our expectations, which will help to drive improvements in year-over-year circulation revenue growth throughout the balance of the year, which we expect will be more weighted to the second half.

Advertising revenues declined 7% to $85 million lower than we had hoped with digital down 5% impacted by some softness in the technology and finance categories and lower programmatic sales this quarter. Digital represented 67% of advertising revenues, up from 66% last year, while overall advertising revenues accounted for 15% of Dow Jones’ total revenue. Dow Jones segment EBITDA for the quarter grew 6% to $131 million with costs increasing just 2% this quarter and margins increasing to 23.7%. B2B again accounted for the majority of the profitability. Moving onto digital real estate. Segment revenues were $457 million, up 13% versus the prior year and 11% on an adjusted basis. Segment EBITDA was $140 million, up a robust 15% driven by higher profit contribution from the REA Group, which notably includes deal-related costs for the proposed right move transaction, which was subsequently withdrawn.

Adjusted segment EBITDA grew 13%. REA had an outstanding quarter with revenues rising 22% year-on-year to $318 million, its highest-ever quarterly revenues. Growth was again driven by a combination of residential yield increases, continued strong growth in national listings and customer contract upgrades. Residential yield growth improved by 15%. New buy listings rose approximately 7% with Sydney up 11% and Melbourne up 9% with both markets achieving a 10 year high in September. In addition, REA saw strong revenue growth at REA India and growth of financial services due to higher settlements and submissions. Please refer to REA’s earnings release and their conference call for more details. Realtor’s revenues for the quarter of $140 million were down just 1% compared to the prior year as revenue declines continued to moderate for the fifth consecutive quarter.

For the quarter, real estate revenues fell 4%, driven by lower referral and lead generation revenues, reflective of the broader macro trends. Lead volume fell 1%, while average monthly unique users for the quarter rose 2% to $77 million year-over-year and up 4% sequentially as realtor.com continues to maintain strong audience share despite much higher competitive marketing spend. Core to realtor.com strategy is successfully diversifying revenues to capture more of the total real estate marketplace. To that end, the key adjacencies of seller, new homes and rentals collectively grew revenues this quarter versus the prior year, representing 19% of revenues and we anticipate continued strong growth going forward this fiscal year. Realtor.com remains focused on strengthening its core offerings and to be best-positioned for a recovery.

We released several product enhancements this quarter, including a renovation designer tool powered by AI, dynamic mapping across all platforms and a visual-based keyword search that was released in beta allowing consumers to use natural language to search for a home. As we expected, the rate of increased reinvestment at realtor.com moderated from the past two quarters with costs up approximately $2 million compared to the prior year. At Book Publishing, momentum from the prior year continued with revenues of $546 million, up 4%, while segment EBITDA improved by 25% to $81 million. Margins expanded by over 200 basis points to 14.8%, helped by a strong digital and backlist performance. We continued to benefit from lower returns and operating cost moderation together with strong Bible sales and higher trade sales in the UK.

HarperCollins posted record digital revenues of $129 million, increasing 15% from the prior year, driven by the addition of Spotify and general audio book growth across all regions. In total, digital sales represented 25% of consumer revenues compared to 22% in the prior year. Audio books grew 26% year-over-year, while we also saw healthy growth in e-books this quarter. The backlist contributed 64% of consumer revenues, up from 61% last year. Turning to the subscription video services segment. Revenues for the quarter were $501 million, up 3% compared to the prior year. On an adjusted basis, revenues rose 1% versus the prior year. Streaming revenues accounted for 34% of circulation and subscription revenues versus 30% in the prior year and growth again outpaced declines in broadcast revenues.

Segment EBITDA in the quarter was $92 million, down just $1 million versus last year despite the inclusion of $11 million of costs related to Hubbl for devices and marketing. Excluding the Hubbl investment, Foxtel’s profitability would have been higher for the quarter. For the quarter, adjusted segment EBITDA fell 3%. Turning to News Media, performance was mixed with advertising conditions challenging, particularly in the UK, but that was more than offset by lower costs. As a reminder, advertising revenues for the segment now account for only 7% of total Company wide revenue. Revenues for the quarter were $521 million, down 5% versus the prior year, while adjusted revenues fell 7%. Segment EBITDA, which only accounted for approximately 4% of total News Corp EBITDA showed improvement year-over-year, driven by cost-saving initiatives.

Adjusted segment EBITDA increased 7%. Turning now to the outlook. Market trends remain mixed geographically. However, we hope to see continued improvements across the portfolio throughout the balance of the financial year. Some of the themes across each of our segments include, at Dow Jones, the team will remain focused on B2B growth, including upselling and new products across Risk & Compliance and Dow Jones Energy. We expect to see improved circulation revenue growth through digital subscription step-up pricing, albeit second half weighted given phasing of renewals and we’ll continue to monitor those trends closely. Expenses are expected to be modestly higher year-over-year due to investment, notably in B2B. However, we will continue to focus on cost efficiencies to drive growth.

At digital real estate, Australian residential new buy listings for October are up 14% or 7% on a like-for-like basis, excluding additional working days. Realtor.com will continue to focus on technology improvements and enhanced content and product offerings. We hope to see some revenue improvements given expected interest rate cuts and continued growth from adjacency. At book publishing, as I mentioned last quarter, we hope to see further profit improvements in 2025, albeit likely at a much more modest rate given more normalized prior year comparison. At subscription video services, the strategy remains to scale the streaming products while retaining high value broadcast customers through improved ARPU and churn measures and we continue to anticipate the rate of investment at Hubbl to be lower during the remainder of fiscal 2025.

At News Media, despite a challenging advertising marketplace, we expect the segment to benefit from lower TalkTV costs together with savings associated with the new commercial printing joint venture with DMG in the UK and ongoing operational efficiencies will remain a focus. We expect other segment costs to be higher than last year due to ongoing AI-related costs, including legal costs. With that, let me hand it over to the operator for Q&A.

Q&A Session

Operator: [Operator Instructions] Our first question comes from Alan Gould from Loop Capital. Please unmute yourself to ask a question.

Alan Gould: Thanks for taking the question. I’ve got a general question on OpenAI. So I see Dow Jones, you have content licensing revenue in there. Can you give us some sense on how much AI revenue came in during the quarter? How was split between Dow Jones and the news media segment? And what are the possibilities for getting some AI revenue for the HarperCollins division? Thank you.

Robert Thomson: Well, thanks for the question. We can’t be more specific than we already have been about the distribution of AI revenues, particularly from the OpenAI deal, but you will see it having an impact in the news media section. There’s no doubt about that as in subsequent quarters. And it is also a part now of the revenue and profit profile of Dow Jones. But other than that, I’m not at liberty to say anything more given confidentiality requirements.

Susan Panuccio: I think, Alan, the only thing I could add to that is, I know we’ve had some questions in the past about measure done in Australia and the impact of that. And I think all we can say is collectively across all our agreements that we would expect to see a positive year-on-year movement in relation to revenue.

Robert Thomson: Thank you. Alan.

Alan Gould: Best of luck, Susan.

Susan Panuccio: Thanks Alan.

Robert Thomson: Thanks, Alan. Luke, we’ll take our next question, please.

Operator: Our next question comes from the line of David Karnovsky from JPMorgan. Please unmute yourself to ask your question.

David Karnovsky: Hey, thank you for the question. Robert, I think you noted an expectation for Dow Jones consumer circulation growth to improve from here as you cycle past promotional periods. Can you dig in here a little bit, provide any color around that process? What gives you confidence you can bring those promo subs into higher paying tiers? And then as we look out over the medium-term, what should we consider possible in terms of a normalized growth rate for that circulation line? Thank you.

Robert Thomson: David, thanks for the question. Obviously, for legal reasons, my powers of prognostication are somewhat limited. But I think you can see that overall circulation at Dow Jones rose 11% to 5.9 million subs, while digital-only rose 15% to 5.3 million. Now, Almar and the team have been very confident that with the phasing of discounts and subsequent price movements, we would see positive movements in digital circulation revenue. And that is evidenced now with the 4% increase in digital circulation revenue on the same quarter last year. Now obviously, there was a little softness in print, which affected total circulation revenue, but the team confidently expects the positive digital trajectory to continue in this quarter as engagement and retention rates improve.

Susan Panuccio: And, David, we — just again without giving specific guidance on this, we would expect the rate of increase in revenue for digital to step up at Dow Jones and be more weighted in the second half of the year as those phase customers step up.

Robert Thomson: Thank you, Dave. Luke, we’ll take our next question, please.

Operator: Our next question comes from the line of Kane Hannan with Goldman Sachs. Please unmute and ask your question.

Kane Hannan: Good morning, guys. And, Susan, thanks for your help over the years and best of luck to the future. Maybe just the books margin this quarter. Just talk about sort of the sustainability of that? I mean, how much of that 250 basis points expansion is the title performance and the back book contribution just maybe more of the digital contribution sort of underlying efficiencies that are more sustainable?

Robert Thomson: Kane, you’re quite right. We obviously had a strong quarter at HarperCollins, but it’s fair to say that momentum has carried across to the current quarter. Whichever way you look at the numbers, HarperCollins is traveling well. Our margin improved to 14.8% from 12% in the same quarter last year. And as we’ve already said, the reported EBITDA growth was 25%. Now significantly, our digital sales rose 15% with audio surging 26%. And also significantly, e-books, which had been somewhat soft, rising a solid 7% after a period of relative sluggishness. There’s no reason to suggest that those trends will suddenly wane.

Michael Florin: Thank you, Kane. Luke, we’ll take our next question, please.

Operator: Our next question comes from the line of Entcho Raykovski with Evans and Partners. Please unmute your line to ask a question.

Entcho Raykovski: Hi, Robert. Hi, Susan. Before I ask my questions, Susan, all the best for life after News Corp. So my question is really two-fold. Firstly, looking at advertising at Dow Jones, it has suffered and it’s underperformed some peers. I mean, you obviously acknowledged some of the weakness and I get that it’s a smaller part of the segment, but are there any business-specific issues or factors which are causing this and what is your thinking around when we might see a recovery? And just secondly, the Foxtel shareholder loans, I think I can probably say that there has been a more recent repayment. Are you able to give us an indication of where they sit now post that repayment, and apologies if I missed this. Thank you.

Robert Thomson: Entcho, I think during an election period, certain companies are a little bit apprehensive about advertising. So we have seen some softness in finance and tech at Dow Jones. But overall, we do bear in mind that news media advertising is itself only 7% of total revenue and more than half of that is now digital revenue. When you look at Dow Jones in particular, there was a fall in digital revenue, digital advertising revenue and a slightly larger fall in print advertising. But candidly, in the current quarter, we are expecting an increase in digital advertising revenue at Dow Jones and frankly across our news media properties, including the New York Post, UK Mastheads and Australia.

Susan Panuccio: Entcho, thanks for your kind words. And just in relation to the Foxtel loan, it is in the filings and that the balance now sits at AUD545 million.

Michael Florin: Thanks, Entcho. Luke, we’ll take our next question, please.

Operator: Our next question comes from the line of Craig Huber with Huber Research. Please unmute to ask your question.

Craig Huber: Yeah. Hi there. Likewise, Susan, thank you very much for all your help over the years and best of luck to you after News Corp. You’ve done a great job. Robert, just curious what’s — can you help me just understand it, it’s been a year here since you announced your Company is looking to optimize structures gone through the Board of Directors and all that. You made the public announcements that we’re sitting here literally 12 months later and stuff. When should investors expect something to materially happen here? I mean it’s been a full year. I mean, why the delay — is the delay because of this Murdoch family issue going through the court system? Is that what’s delaying this whole thing? I mean, I just can’t believe you lie to me that you guys make an announcement and then nothing happened for a year unless something came out of left field that you were not expecting. So can you just help us understand what the delay is here, please?

Robert Thomson: Craig, I think you’d have to admit it’s been a rather dynamic quarter with the REA team bidding to acquire Rightmove. And as mentioned, we’re in active discussions over Foxtel and active means active. But there’s no doubt that does not remove the disparity between inherent value of our assets and the values reflected in the share price. I did the math in the earlier statement and only the enumerate would not appreciate that discrepancy, but there are quite a few moving parts, whether the continuing express growth at the Dow Jones professional information and the cyclical slump in the US housing market, which obviously affects Realtor and the value of our property portfolio and the Foxtel discussion. So without being sector-specific, we are indeed looking to maximize value. I believe that our current value at the moment is not fully represented in the share price. Even with the 40% increase in that share price over the past year.

Michael Florin: Thank you, Craig. Luke, we’ll take our next question, please.

Operator: [Operator Instructions] Our next question comes from the line of Lucy Huang with UBS. Please unmute and ask your question.

Lucy Huang: Hi, Robin, Susan. Thanks for taking questions. I’ve just got one on professional information services. So within Dow Jones, growth is kind is up 8% in the quarter for this business. How should we be thinking about the new rate of growth moving forward? Because I guess last year this business was growing in the low to mid-teens? And do you think some of the new AI and data products that you’ve released can accelerate growth back into that mid-teens level over the next couple of months?

Robert Thomson: Lucy, as you can see, Risk & Compliance revenues are still continuing there, express growth at around 16% year-on-year and there was another 11% expansion at Dow Jones Energy. And what you’re seeing in that seeming softer growth is the impact of the dispute of — at Factiva, where there was a decline year-on-year dragging down the overall revenue increase. Two things there. One, we hope the dispute will be resolved. And secondly, the team is working diligently to enhance the user experience at Factiva. We have just announced a search deal with Google, which should improve customers ability to both retrieve and deploy valuable intelligence. And without being specific about margins, overall, PIB accounted for 40% of total revenue and well over 50% of Dow Jones profits.

Susan Panuccio: And, Lucy, just to follow up on Robert’s comments, the sort of the underlying growth rates within Risk & Compliance and Energy are actually very healthy, as Robert said. That Factiva dispute has impacted the numbers by about 6% this quarter. And so actually, if you added that backlog, you’d be up at the rate that you were sort of expecting. And as Robert said, we’ll see how that dispute plays out, but that certainly had the impact in Q1.

Michael Florin: Thank you, Lucy. Luke, we’ll take our next question, please.

Operator: At this time, we have no further questions. I’ll now hand it over to Michael Florin for closing remarks.

Michael Florin: Well, thank you, Luke, and thank you all for participating. Look forward to talking to you again soon. Have a wonderful day.