Welcome to the News Corp's Third 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.

Thank you very much operator. Hello everyone and welcome to News Corp's fiscal third 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 Lavanya Chandrashekar, Chief Financial Officer. We'll open with some prepared remarks and we'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 cautious 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.

Thank you, Mike. The strong performance of News Corp's third quarter results demonstrates the company's strategic shift. We have focused on digital growth, reorganized our assets, maintained strict cost management, and highlighted the critical value of our intellectual property amidst a changing and challenging content landscape. These impressive results come despite political challenges that have affected some of our business partners and hindered their ability to plan effectively. We firmly believe that this disruption is temporary and that the U.S. has the potential for significant growth when stability is restored. The administration's efforts in sensible deregulation and a robust energy policy, along with America's economic progress and inherent creativity, should yield positive outcomes. When Adam Smith talked about the hidden force of the market, he did not foresee the economic blow from the chaotic introduction of excessive tariffs. The entrepreneurial spirit in America needs to be freed from the constraints of uncertainty. As for our company, net income from continuing operations increased by 67% to $107 million in the third quarter compared to last year. Revenues were $2 billion, up by 1% despite challenging currency fluctuations. Total segment EBITDA rose by 12%, with the overall margin increasing from 13% to 14.4%. Adjusted revenues for the third quarter were up by 2%, while adjusted total segment EBITDA grew by 15%. Our reported EPS from continuing operations doubled to $0.14, and our adjusted EPS was $0.17 compared to $0.13 a year ago. Following the quarter's end, we successfully completed the sale of Foxtel to DAZN, emphasizing our intention to focus investment on three main growth areas: Dow Jones, Digital Real Estate, and Book Publishing. The deal involved transferring $724 million of Foxtel debt off our balance sheet and repaying AUD592 million in shareholder loans to News Corp. We also received about a 6% equity interest in DAZN, a global leader in sports streaming, which has great potential. While music has Spotify, DAZN could become its equivalent. We are very proud of the Foxtel team for their transformation of the company in recent years and are happy to partner with DAZN, which brings significant technological expertise and global reach. This transaction is expected to enhance our earnings and improve our return on invested capital. As mentioned last quarter, both Moody's and S&P have upgraded us to investment grade. There's no doubt that the substantial cash returned from the deal, combined with the strength of our free cash flow and anticipated lower capital intensity, has provided us with increased options. As demonstrated by the Foxtel sale, we are continually exploring structural options to maximize returns for our shareholders. The enduring importance of quality journalism cannot be overlooked currently. It's crucial for journalists to focus on facts, which is complicated by the need for rigorous fact-checking. In a time when even scientific topics, from climate to medicine, have become politically charged, affecting the credibility of trusted experts and institutions, maintaining credibility will be vital as AI advances and blurs the lines between reality and imitation. We are proud of our primary partnership with OpenAI and expect that other entities using our intellectual property acknowledge their responsibilities to our company, creativity, and society. After my recent visit to China, it's clear that America's advantage lies not in chips or data storage, but in creativity and lateral thinking. It would be regrettable if major digital players undermined this strength by eroding IP rights. Clearly, we see some AI companies profiting so extensively from content that they have likely appropriated works from individuals, including President Donald Trump, by using books like "The Art of the Deal" without permission. We suspect that similar activities have occurred with Truth Social, using data and content to drive their business. Returning to our performance, Dow Jones stood out. We anticipated improvement this quarter, and it indeed transpired with a 6% growth in revenue and a 12% increase in profitability, raising the margin from 21.7% to 23%. There is still much work ahead, as Omar and the team recognize, but digital circulation revenue grew by 14%, the fastest rate in almost three years, along with an increase in digital ARPU both year-over-year and quarter-over-quarter, while total consumer subscriptions surpassed the six million mark. Since our resegmentation in 2020, Dow Jones’ profitability has more than doubled, and total subscriptions have increased by over 60%, with more than 90% now digital. Recent busy news cycles have contributed to increased traffic and subscriptions recently. The professional information sector of Dow Jones continued to excel, with a 6% revenue increase propelled by double-digit growth in Risk & Compliance and Dow Jones Energy. Risk & Compliance experienced 11% revenue growth despite currency fluctuations, as global risks rose and the need for compliance became vital for responsible companies reacting to rapid regulatory changes. Notably, we completed the acquisition of Oxford Analytica and DragonFly Intelligence in the fourth quarter, which will enhance our ability to provide valuable insights to businesses worldwide. Meanwhile, Dow Jones Energy achieved 10% revenue growth due to investments in product development and the introduction of unique pricing and real-time analyses. One of these was our carbon and clean fuels analytics service, which aids businesses and investors in seizing opportunities amid a dramatic regulatory landscape. The Dow Jones team believes Factiva, which has been a drag on professional information revenues, should show improvements in the coming quarters as we move past the negative impacts of a contentious client dispute. In Digital Real Estate Services, profitability soared by 19% on a 5% revenue increase, with margins improving from 26.8% to 30.5%. REA reported a 6% revenue increase, or 11% on a constant currency basis, supported by a 15% rise in yields compared to the same period last year. REA maintained a strong audience lead with almost four times as many average monthly visits as domain and nearly five times the user engagement according to independent metrics. At realtor.com, revenues grew by 2%, with initiatives across rentals, sales, and new homes contributing to 22% of total revenues, despite overall tough market conditions due to high mortgage rates and economic instability. Damian Eales’ Realtor team is thriving in competition, gaining audience loyalty and further distancing from Redfin and Homes.com. Our media platforms have created a network effect that we believe will grow more prominent as the search landscape evolves significantly in the next few years. According to verified third-party source ComScore, total visits to the site reached 239 million in March, capturing a 29% market share among top real estate portals and 3.7 times more traffic than Homes.com and 2.7 times more than Redfin. Our 4.5 visits per visitor is a category leader, indicating strong engagement and loyalty. In Book Publishing, during a relatively slow season under Brian Murray's leadership, revenue grew by 2% to $514 million, and EBITDA increased by 3% to $64 million, largely driven by our recent acquisition of the German book publisher GRÄFE UND UNZER. Additionally, digital revenues increased by 3% as audiobooks flourished, benefiting from our partnership with Spotify. We found notable success from Gregory McGuire’s new Wicked universe book, Elphie, along with titles like Tessa Bailey’s Dream Girl Drama and Alex Aster’s Summer in the City. Our Christian division remained strong, especially in Bible sales, with Bible Gateway, which we are developing as both a portal and community, attracting 87 million unique users during the quarter. We anticipate that this growing site will also contribute to our network effect for realtor.com and our media platforms, further driving traffic to Bible Gateway. In the upcoming quarter, we are excited about the paperback release of Shelby Van Pel’s bestseller Remarkably Bright Creatures, alongside On Democracies and Death Cults by Douglas Murray, I Wish Someone Had Told Me by Dana Perino, and Uptown Girl by Christie Brinkley. HarperCollins has secured North American rights to The Land of Sweet Forever: Stories and Essays by Harper Lee. This collection, scheduled for the first half of fiscal year 2026, will include several unseen short stories from the iconic author. The News Media segment experienced strong EBITDA growth of 22%, building on the 30% year-on-year growth from the previous quarter, as our partnerships with OpenAI and other major digital platforms continue to benefit our brands while our teams maintain diligent cost management. Under Rebecca Brooks' leadership, digital subscriptions to the Times and Sunday Times at News UK reached 629,000, reflecting an 8% increase from last year, while digital advertising revenue at the Times kept growing. Simultaneously, in February, we launched the Sun Club, which provides premium journalism and exclusive offers to subscribers. The New York Post’s extensive audience reached 85 million unique users in March. It's rare for a publication to establish such broad leadership from the corporate level to the Oval Office. News Corp Australia's brands continued to serve as crucial platforms for informed reporting and dialogue throughout the recent election campaign, with digital subscriptions climbing to 1.1 million. News.com.au achieved status as the number one digital news brand in page views, reaching 292 million monthly in March. Additionally, Sky News Australia dominated as the country's leading YouTube news channel with 5.5 million subscribers, demonstrating both local and global influence. The strength of our results over the first three quarters of this colorful fiscal year illustrates the significant transformation that has taken place over the past decade. This change would not have been achievable without the leadership of our Chair, Lachlan Murdoch, Chairman Emeritus Rupert Murdoch, and an engaged Board. Our success is also a testament to our employees worldwide. This collective achievement provides a strong foundation for delivering even greater returns for shareholders in the years ahead. Now, I'll turn it over to our Chief Financial Officer, Lavanya Chandrashekar, for deeper insights into our third quarter results.

Thank you, Robert and good afternoon. I'd like to start by reinforcing our distinguished Chief Executive's comments on our ongoing transformation. While economic and geopolitical conditions have been uncertain, we continue to be purposeful in our execution and strategic focus. We have transformed our asset mix, increasing exposure to recurring revenues while reducing advertising exposure. Moreover, the majority of our revenue is now digital. Our divestiture of Foxtel has resulted in News Corp being more weighted to our three core pillars, Dow Jones, Digital Real Estate Services, and Book Publishing. This is expected to drive faster growth with less capital intensity and hence a higher return on invested capital. Our strong balance sheet and steady cash flow enable us to maximize shareholder value creation. During these turbulent times as you would expect from News Corp, we are monitoring trends closely. As things stand, the direct impact of tariffs on News Corp is expected to be immaterial. Of note at present, newsprint is excluded from additional tariffs as are our children's and Christian books imported from China. In these volatile times, we will continue to focus on what we can control and we'll seek to take cost action as necessary. Turning to the quarterly results, which I'm pleased to report were again strong. As a reminder, Foxtel's financial results are reflected as discontinued operations for the fiscal 2025 and 2024 third quarter and year-to-date periods, and subscription video services is no longer a reportable segment. News Corp reported fiscal third quarter revenues on a continuing operations basis of $2 billion, rising 1% year-over-year and total segment EBITDA of $290 million, increasing 12% year-over-year. Margins improved by 140 basis points to 14.4%. This quarter, Dow Jones and Digital Real Estate contributed 88% of profitability. Third-quarter adjusted revenues rose 2% compared to the prior year, with the difference from reported being primarily due to currency impact while adjusted total segment EBITDA rose 15% versus the prior year. For the quarter, we reported earnings from continuing operations per share of $0.14 compared to $0.07 in the prior year. Adjusted earnings from continuing operations per share were $0.17 in the quarter compared to $0.13 in the prior year. Moving to the individual segments, starting with Dow Jones. As we expected, Dow Jones results year-over-year improved from the first half with reported revenues of $575 million, up 6% versus the prior year period and was again the largest segment contributor to overall company revenue and for this quarter also to total segment EBITDA. Digital revenue accounted for 82% of total Dow Jones segment revenues this quarter, improving one percentage point from last year. Overall, professional information business revenues, which reflect our B2B products and services rose 6% year-over-year overcoming a 200 basis point adverse impact from Factiva primarily due to the ongoing customer dispute that we mentioned last quarter, a modest improvement from the second quarter impact. Risk and Compliance grew 11% to $84 million with the growth driven by new customers, new products, and improved yield. At Dow Jones Energy, revenue grew 10% to $69 million, with customer retention remaining very strong at over 90%. In April, we reinvested in risk and compliance to further enhance its product offerings and data sets to include geopolitical security intelligence and risk analysis via the acquisition of Dragonfly and Oxford Analytica. At energy, customer demand for our key benchmark pricing products remained robust, and we continue to expand our offerings with the launch of several new indices assisting customers to hedge more effectively and manage risk in increasingly volatile markets. Within the Dow Jones consumer business, circulation revenues rose 7% versus the prior year benefiting from an improvement in digital circulation revenue of 14%, notably higher than the 8% growth posted in the second quarter as we move customers from introductory and bundled promotions to higher pricing. Digital ARPU also increased quarter-over-quarter and year-over-year. Also of note, the digital circulation revenue growth included an approximate 300 basis points timing benefit. Digital circulation revenues accounted for 75% of circulation revenues for this quarter, up from 70% in the prior year. Digital-only subscriptions improved by 9% year-on-year and by 191,000 sequentially benefiting from seasonality particularly related to students and marked the highest addition since the third quarter of 2024. Advertising revenue of $86 million was flat, improving from the prior quarter and the first half rate, with both digital and print relatively flat. Digital represented 63% of advertising revenues in line with the prior year. Dow Jones segment EBITDA for the quarter grew 12% to $132 million with margins increasing to 23%. Moving on to Digital Real Estate. Digital Real Estate had another solid quarter, despite a tough prior year comparison and foreign exchange headwinds, with segment revenues of $406 million, up 5% versus the prior year and up 8% on an adjusted basis. Segment EBITDA was $124 million, up 19% and up 25% on an adjusted basis. REA revenues rose 6% year-on-year to $271 million, which included a $14 million adverse impact from foreign exchange fluctuations. REA revenue grew 11% on a constant currency basis. Growth was driven by a combination of residential yield increases and customer contract upgrades. Residential yield growth improved by 15%. Listings in the quarter were flat compared to the prior year, with listings in Sydney up 4% and Melbourne down 3%. Listings benefited from Easter falling into the fourth quarter this year, but were negatively impacted by floods in Queensland. REA also benefited from higher revenues at REA India and growth at Financial Services, due to higher settlements. Please refer to REA's earnings release and their conference call for more details. Realtor's revenue for the quarter of $135 million was up 2% compared to the prior year marking the second consecutive quarter of revenue growth despite continued difficult macro conditions. At Realtor, lower referral and lead generation revenues were more than offset by robust growth from adjacencies. Realtor continued to show strong growth from new revenue streams such as seller, new homes, and rentals, which now represent 22% of revenues. Rentals in particular were notably strong driven by the partnership with Zillow. Realtor.com has been shifting its audience acquisition and engagement strategies to focus on higher-quality consumers and leads, which resulted in a notable increase in revenue per lead in the quarter, partly offsetting softer lead volumes. This shift combined with the persistent affordability issues and home sales volatility resulted in lead volumes declining 17% while average monthly unique users for the quarter fell 8% year-over-year to 66 million at realtor.com. Expenses at Realtor came in better than we had initially forecasted, driven by the shift of a new brand campaign to the fourth quarter. At Book Publishing, as expected the phasing of frontlist titles weighed on performance this quarter. That said, segment revenues of $514 million, which rose 2%, represented the second highest third quarter on record, while segment EBITDA of $64 million rose 3%. The third quarter results included the recently acquired German book publisher. The strong performance from Christian Publishing and continued growth from the UK offset lower general book sales due to the timing of frontlist releases compared with the third quarter last year. Adjusted revenues were flat. HarperCollins posted digital revenues of $122 million, up 3%, which was impacted by a combination of the current release slate and lapping the start of the Spotify partnership last year. In total, digital sales represented 25% of consumer revenues flat compared to the prior year. The backlist contributed 65% of consumer revenues, up from 63% last year. Turning to News Media. Overall revenue performance was challenged due to tougher advertising conditions, partially offset by increased cover prices and subscription pricing across Revenue for the quarter was $514 million, down 8% versus the prior year while adjusted revenues fell 6%. Segment EBITDA was up 22% year-over-year to $33 million driven by cost savings initiatives similar to the first half most notably in the UK from the benefits of the commercial printing joint venture with DMG Media and lower top costs and further cost initiatives at News Australia. Adjusted segment EBITDA also rose 22%. Turning to the outlook. Some of the themes across each of our segments. At Dow Jones, the team remains focused on B2B growth including up-selling and new products across Risk and Compliance and Dow Jones Energy. We are pleased with the performance and continue to expect improvement in growth in the second half compared to the first half. Given the mix of subscribers and timing, we expect circulation revenue growth to be more similar to the second quarter, which was also very strong. At Digital Real Estate, Australian residential due by listings for April were down 11%, which was impacted by the timing of public holidays. Please refer to REA for a more detailed outlook commentary. Realtor.com will continue to focus on technology improvements and enhanced content and product offerings. We expect the rate of reinvestment to be modestly higher in the fourth quarter as we continue to focus on growth initiatives and as mentioned also plan to launch a new ad campaign in the quarter. At Book Publishing overall we will face particularly difficult comparisons in the fourth quarter compared to the prior year. At News Media we expect the segment to continue to benefit from ongoing cost initiatives while advertising is likely to be volatile given the macro uncertainty. Also of note, we will lap the beginning of the cost savings from the commercial joint venture with DMG Media and the changes at Top TV. As mentioned last quarter, we expect other segment costs to be higher than last year, including ongoing AI and related legal costs. With that let me hand it over to the operator for Q&A.

Thank you. We will now start the question-and-answer session. Our first question will come from Kane Hannan with Goldman Sachs. Please unmute your line and ask your question.

Good morning, guys. Thank you for the question. Just I suppose on the Dow Jones business the standout in the quarter. Is there any more color you can share around how we think about the rate of investment going into the fourth quarter. It did pick up a little bit this quarter. And just where that investment was on sort of the Dow Jones consumer or across the business? And also how we think about that going forward as well would be helpful.

There was no particular startling increase in investment in Dow Jones. We did make the acquisition and the related acquisition costs that of Dragonfly and Oxford Analytica, which will add to the professional information business but we are duly focused on both the consumer business where we are seeing that increase in ARPU that Lavanya spoke about on the last call, and we'll continue to do what's necessary and reasonable to drive that revenue. And secondly, with people, I can say is that we're consistently reporting double-digit revenue increases in the key segments, and there's no reason to presume that those double-digit increases will not continue, particularly at risk and compliance and energy where we have been adding new services modestly and creating new products about charging a premium for premium content. As mentioned, the overall numbers have been complicated by a Factiva relationship which had a 200 basis point impact on total revenue but we are now beginning to let that issue. Overall, we are extremely confident about the continuing growth of both revenue and profits at the professional information business.

Thank you, Ken. Luke, we’ll take our next question, please.

Our next question will come from the line of Entcho Raykovski with Evans & Partners. Please unmute and ask your question.

Hi, Robert. Hi, Lavanya. My question is also on Dow Jones. Just a follow-up on the 200 basis point impact from the Factiva dispute. Do you mind just to clarify do you expect a similar impact in the fourth quarter? And then longer term, I'm just interested in any comments you could provide on where Dow Jones margins can get to. You mentioned last quarter that you'd expect margins to expand given people will be a greater contributor to earnings. I mean you obviously saw that 1.3% expansion in the quarter. So is there a longer-term target you can share or even just some quantitative direction that would be quite useful. Thank you.

Thank you, Entcho. I'll maybe start and then Robert can add on. On the Factiva dispute, look as we cycle through it as we start to lap it, I mean the impact on the will start to reduce. So in the fourth quarter I would expect a smaller impact than what we've seen in the third quarter which was sequentially smaller than in the second quarter as well. On margins, here's how I think about margins on Dow Jones. First and foremost, the growth of the Professional Information Service business that really does help lead to margins the strong growth that we've had on that business of 6% this quarter with risk and compliance up 11% and risk and compliance up 10%. That definitely helps both with operating leverage as well as with sweetening the mix. The growth on the consumer business as well helps with operating leverage. And then the team, as always, continues to be focused on being very disciplined on costs as well. And so that also helps with margin growth.

Yes, just to reiterate what Lavanya said, as you note the margin expanded from 21.7% to 23%. And there's every reason to believe that as that professional information business expands so will the overall margin as that is a higher-margin segment. PIB revenues now account for 39% of revenues and a majority of profit and that PIB share of the business is expanding quarter-after-quarter.

Thank you, Entcho. Luke, we’ll take our next question, please.

Our next question will come from David Joyce with Seaport Research. Please unmute your line and ask your question.

Thank you. Given your very strong balance sheet position now, I was wondering how you're prioritizing the strategy going forward for capital allocation across internal investments, external investments, capital returns? And to the extent there are M&A opportunities, do you envision anything that would provide incremental connectivity among your business lines? Or would be really still focusing on some of the core growth drivers like professional business services? Thanks.

David, regarding acquisitions, we can't provide specific details, but I can share that we've identified three main areas to explore for opportunities. We will make sure not to waste our cash by overpaying for companies, and our record on this in recent years has been exemplary. Additionally, we've received around AUD 592 million in cash from repaying the Foxtel shareholder loans. We remain committed to our responsibilities to shareholders, which will always be a priority for us. Despite some market fluctuations, our share price at today's close was more than 32% higher than it was a year ago. We view this as progress rather than a conclusion. We've been prudent in managing our cash, maximizing investments, and ensuring that our returns through dividends and a $1 billion buyback reflect our resources. Last fiscal year, we returned 70% of our available free cash flow to investors. Moreover, we have recently been upgraded to investment grade by both Moody's and S&P, indicating that our options have indeed increased.

Thank you, David. We'll go for next question please.

Our next question will come from the line of Frank Huber with Huber Research. Please unmute your line and ask your question.

Thank you. I appreciate it. Robert, first, congratulations on finalizing the Foxtel deal. Should investors expect you to further rationalize and simplify the company over the next six to twelve months? Is there anything on the real estate side where we have to wait for realtor.com to improve in terms of revenue growth and profit margins? Also, what about Factiva? I have quite a history with Dow Jones, covering it on the sell side when it was a standalone company 20 or 22 years ago. I remember Factiva was struggling then, and it seems it might still be facing challenges. I'm curious if there’s a possibility of it being divested. I'd like your thoughts on simplifying the company further.

Sure. The Foxtel deal exemplifies our commitment to making significant structural decisions in the interest of our shareholders. While there's much discussion about digital real estate, we are evaluating all segments. As you pointed out in the last earnings call, the current state of the U.S. property market has led to a significant undervaluation of realtor value. Regardless of our activities in any sector, our focus remains on maximizing value for our shareholders. Our track record over the past few years shows that we have a clear understanding of trends, challenges, and opportunities, positioning us to benefit both in the short and long term. The assets we've retained and developed, along with our talented teams, are world-class and located in sectors poised for growth. We are committed to enhancing our asset value and minimizing the discount to intrinsic value. While we have never been complacent, we do have reason to be confident.

Thank you.

Thank you, Frank. Luke, we will take our next question, please.

Our next question will come from the line of Alan Gould with Loop Capital. Please unmute your line and ask your question.

Yeah. Thanks for taking my question. Robert, I'd like to talk about the original portion of the Dow Jones business. It is doing great, but the original one, you're continuing to grow subs. I know part of the strategy is converting people from promotional pricing to higher-paying pricing. How is that endeavor going?

Yeah, look, you're exactly right in placing our strategy at Dow Jones, and total subscriptions were 7% higher, driven by digital subscriptions, which rose 14%. And we are very focused on average revenue per subscriber and seeing positive trends, as the Dow Jones dynamic pricing strategy is unfolding. I mean, that trend itself was reflected in the overall 7% increase in circulation revenues, which were up from a 3% increase in the previous quarter. Now, the Dow Jones team is rather confident that the phasing of subscribers from discounted entry-level offers to more standard pricing is proceeding well, and that strategy will be reflected in the digital numbers in coming quarters. And, by the way, in total at Dow Jones, our digital contributed to 82% of revenue. So we are talking about a company that's certainly contemporary in character and a powerful digital platform on which to build. Thank you, Alan.

Thank you.

Thank you, Alan. Luke, we will take our next question, please.

At this time, we have no further questions. I'll hand the call back over to Michael Florin for closing remarks.

Well, thank you, Luke, and thank you to all the investors for participating. We look forward to talking to you shortly. And have a wonderful day. Bye, for now.