Welcome to News Corp's First Quarter Fiscal 2026 Earnings Conference Call. Today's conference is being recorded. 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 First Quarter 2026 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 then 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 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 it over to Robert Thomson for some opening comments.

Thank you, Mike. Following a sterling performance in fiscal 2025, one that marked a record year for profitability on a continuing operations basis, News Corp continued to increase both revenue and profitability in the first quarter of fiscal 2026, led by strength at Dow Jones and Digital Real Estate Services and bolstered by digital and AI-related revenues. The positive signs came despite an uncharacteristically weak performance in Book Publishing, which has shown clear signs of improvement in recent weeks. The Book Publishing results this quarter included a write-off related to the expected closure of a book distributor. But overall, our revenue for the period rose 2% versus the prior year to $2.14 billion, and total segment EBITDA increased by 5% to $340 million. Net income from continuing operations was $150 million, up from $149 million last year. And our adjusted EPS rose from $0.20 to $0.22 in the quarter. Clearly, our current cash position is robust, and we expect to generate strong free cash flow this fiscal year and have thus materially increased the rate of our share buybacks. We believe our shares are undervalued, given the sum of our valuable parts and our profit trajectory. So we will continue to focus on ways and means to maximize shareholder value. One other notable misconception is the value of IP in the age of AI. Information and sophisticated data are the essence of AI. And without these essential ingredients, AI is but empty, vacuous, ignorant infrastructure, electricity without alacrity, buildings without billings, chips without proper usage. Thankfully, we are seeing a positive trend with both enlightened companies and wise courts, deciding that creativity and content must not be stolen but purchased. Courtships and courts are both crucial components of our strategy. And I must salute Sam Altman and his team at OpenAI for being principal pioneers in understanding the inherent intrinsic value of actual intelligence. As regards to other AI players, our weaving and sewing continues at pace. But thankfully, the weaving has gained traction, and we expect to announce further partnerships in the near future. We anticipate these deals will have a positive impact on our results. The courts are also increasingly enlightened, and we and our authors certainly expect to benefit from the $1.5 billion award against Anthropic for its use of pirated books. It is fair to say this will not be the last case of its kind, given the proliferation of piracy and increased scrutiny of shameless scraping by these epigonic enterprises. We would obviously prefer to partner and limit lawyers' fees, but let me be absolutely clear to every large language model. However large, however small, if you have received stolen goods, we intend to pursue you relentlessly. You may not have done the actual stealing, but receiving stolen property is an offense in legal jurisdictions around the world. Content crime does not and will not pay. As for our segments during the quarter, Dow Jones EBITDA rose 10% compared to a year earlier, following a solid 6% increase in revenue. Once again, we saw particularly strong revenue growth at Risk & Compliance, where revenues surged 16%, while Dow Jones Energy revenues were 7% higher. We expanded our offerings in the rapidly growing professional information business by acquiring Eco-Movement, which provides unique data sets that are sold to map providers and car manufacturers seeking to provide enhanced service for their customers. At the consumer business, total average subscriptions expanded 8% to 6.4 million, including an 11% surge in digital-only subscriptions to The Wall Street Journal. Digital circulation revenues rose from 72% of total circulation revenues last year to 75%, and an increase in digital advertising revenue was offset by a marginal decline in print advertising. In total, digital accounted for 68% of advertising revenues for the quarter, a new record. In Digital Real Estate Services, we saw the beginnings of an expected renaissance in the U.S. real estate market as lower interest rates stimulated higher demand for housing. With the Federal Reserve cutting rates and the current 30-year mortgage rate approaching 6%, it is reasonable to conclude that we will be celebrating when mortgage rates are in the high fives. Even though the market was far from normalized in the first quarter, realtor.com delivered a 9% revenue boost year-on-year. That result is a tribute to the concerted work of Damian Eales and his team, who have ensured that we are benefiting from more premium offerings and higher yields. The team has targeted three areas of growth: the sell side, new homes, and rentals, which collectively comprised 22% of revenues this quarter, rising 3 percentage points over the prior year, and we see no reason to suggest the opportunities for growth will abate. We have been working to ensure that realtor.com provides a holistic real estate experience. Our moat is uniqueness and quality, so we have built in recent years the largest publisher of original residential real estate news in the United States, as measured by visits per unique user by comScore, not by homebrewed metrics. We are providing more reasons for potential buyers and sellers to come to our site, which is why our user metrics are patently superior to those of other sites. In September, we had the largest number of visits per user, clearly outstripping Zillow and other lesser sites. While revenue growth at realtor.com was superior to that at REA this quarter, we have seen increased signs of life in the Australian property market in recent weeks, with auction levels in Melbourne and Sydney on track for the most active October in recent years. For the quarter, revenue at REA Group rose 3% or 5% in constant currency, and yield grew by double digits. Overall, our margin in Digital Real Estate rose from 30.6% a year ago to 33%. We welcomed a new Chief Executive to the business, Cameron McIntyre, who comes with a distinguished digital background and professional pedigree. There is no doubt that his predecessor, Owen Wilson, performed exceedingly well, and his positive contribution will resonate at the company for many years to come. You will be able to welcome Cam and laud Owen when REA formally delivers its results later today. Book Publishing faced challenging conditions in the first quarter with orders slowing from both readers and retailers, and the write-off of a $13 million receivable due to the expected closure of a book distributor. The numbers last year were elevated by the dramatic resurgence of J.D. Vance's 'Hillbilly Elegy' after he was nominated as the vice presidential candidate. But it does appear that the sluggish market has turned in recent weeks. As orders have rebounded, our recent releases are thriving, including that of R.F. Kuang, whose 'Katabasis' has quickly become a bestseller. We are also seeing strong sales for the latest works by Mitch Albom, Brett Baier, and Ree Drummond. A collection of previously unreleased stories by Harper Lee, author of 'To Kill a Mockingbird', has also become an instant hit. We look forward to the release later this month of 'Wicked: For Good', which should bolster book sales through cross-promotions and Movie Magic. In religious books, we saw elevated interest in the Bible following the tragic assassination of Charlie Kirk. September Bible sales revenue rose more than 65% compared to the prior year, with retailers reporting a significant influx of new and younger customers. At News Media, revenues rose 1%, while EBITDA grew a remarkable 67%. At the New York Post, preparations are underway for the launch of the California Post early in the new year, and the buzz around the project is already audible. We are taking advantage of the Post's reach and influence, which expands with each passing day. One indication of the potency is the advertising revenue at the Post, which increased 19% year-over-year, and nearly 90% of that advertising was digital. It is also worth noting that our Rugby League team, the Brisbane Broncos, has just won the Australian version of the Super Bowl. That will provide a modest boost for our business in Australia and a notable lift to the mood in Queensland. Rebecca and the team in the U.K. oversaw continued growth at The Times and Sunday Times, where digital subscribers rose from 600,000 to 640,000, while digital subscriptions at News Corp Australia expanded 3% to 1.162 million. Overall, our margin for the News Media business increased from 3.3% a year ago to 5.5%. The first quarter saw a positive start to fiscal 2026, even though there were temporary headwinds that obviously were not anticipated. Thankfully, the wind direction has changed in recent weeks in the book business, and we look forward to building on that momentum through the second quarter and for the rest of the year. We are also confident in the outlook for Digital Real Estate and Dow Jones and expect to continue aggressively pursuing our buyback in the coming months.

Thank you, Robert, and good afternoon to everyone. I would like to start with an update on our capital allocation strategy. We are making strong progress in returning value to our shareholders through the accelerated and expanded share buyback program, which we announced in July 2025. Since we last reported earnings, we have repurchased at a rate of approximately $2.5 million per day, over four times the previous pace. We are confident in the company's growth potential and continue to believe the stock is trading at a significant discount to net asset value. As a reminder, we expect fiscal 2026 pacing to benefit from the repayment of approximately $380 million of Foxtel shareholder loans. This quarter, our results demonstrate the continued strength and resilience of our digital businesses, particularly within Dow Jones and digital real estate services. Despite the backdrop of ongoing macroeconomic uncertainty and difficult prior year comparisons, especially in our Book Publishing business, our results underscore the benefits of our strategic diversification across recurring, high-margin content licensing, and digital revenues. As a reminder, since fiscal 2018, the percentage of our business comprising digital revenues has almost doubled to 62% in fiscal 2025. Dow Jones and Digital Real Estate, which together accounted for 29% of our revenue and 55% of our EBITDA in fiscal 2018, accounted for 49% of revenue and 84% of our EBITDA for fiscal 2025. On the other hand, our reliance on advertising revenue has reduced by almost 50% to just 16% of revenues for fiscal 2025. Shareholder value-accretive M&A in this decade has brought valuable assets such as OPIS and CMA to our portfolio while divesting assets such as News America Marketing, and we have successfully exchanged Foxtel for a valuable stake in DAZN, the Netflix of sports. There is always more to do on this front, and we remain committed to maximizing shareholder value. Turning to the results. News Corp reported fiscal first-quarter revenues of over $2.1 billion, up 2% from the prior year and total segment EBITDA of $340 million, up 5% year-over-year. Total segment EBITDA was negatively impacted by a $13 million write-off of a receivable at HarperCollins related to the expected closure of one of its distributors. Margins improved from the prior year by 40 basis points to 15.9%. This quarter, 89% of profits were from Dow Jones and Digital Real Estate Services, which we believe underscores the inherent value discount and the company's ability to drive long-term profit growth. First-quarter adjusted revenues were up 2%, while adjusted total segment EBITDA rose 5% versus the prior year. Note that the adjusted result includes the $13 million write-off of the receivable at HarperCollins. For the quarter, we reported earnings from continuing operations per share of $0.20 compared to $0.21 in the prior year. Adjusted earnings from continuing operations per share were $0.22 in the quarter compared to $0.20 in the prior year. Moving to the individual segments, starting with Dow Jones. Dow Jones delivered another strong quarter with reported revenues of $586 million, up 6% versus the prior year period. Digital revenues accounted for 84% of Dow Jones segment revenue this quarter, improving by 2 percentage points from last year. Professional information business revenues, which reflect our B2B products and services, rose 10% year-over-year, repeating the Q4 fiscal 2025 growth rate. Within that, Risk & Compliance revenues grew 16% to $94 million driven by new customers, new products, and improved yield. We saw continued momentum from risk fees and API solutions and further penetration of advanced cleaning and monitoring products. At Dow Jones Energy, revenue grew 7% to $73 million, with customer retention remaining very strong at approximately 90% in addition to improving yields. Admittedly, the rate of growth was lower than recent quarters, partially impacted by the timing of the World Chemical Forum event. In September, Dow Jones acquired Eco-Movement, a leading global platform for EV charging station data, which collects and optimizes EV data across almost 2 million connectors across more than 80 countries. Eco-Movement strengthens Dow Jones Energy with best-in-class data and analytics and builds on OPIS's energy transition activity in carbon markets, clean fuels, solar, and hydrogen. Factiva returned to growth driven by lapping a customer contract dispute, which has now been settled and new customer acquisitions with a focus on GenAI. Within the Dow Jones consumer business, circulation revenues increased 3% versus the previous year, with digital circulation revenues up 8%. We recently raised the full price rate for The Wall Street Journal digital subscription for new customers and for a portion of our tenured customers. Recognizing the value of our best-in-class journalism, we are actively reviewing our go-forward pricing strategy. Digital circulation revenues accounted for 75% of circulation revenues for the quarter, up from 72% in the prior year. Digital-only subscriptions improved by 10% year-over-year and by 159,000 sequentially, driven by enterprise customers. While ARPU dilutive, these are margin accretive. Wall Street Journal digital subscriptions increased by 91,000 sequentially and were up 11% year-over-year. Advertising revenues were $85 million for the quarter, stable versus the prior year, with digital up 2% and print down 4%. Digital represented 68% of advertising revenues, up 1 point from the prior year. Dow Jones segment EBITDA for the quarter grew a robust 10% to $144 million, with margins increasing to almost 25%, an increase of 90 basis points year-over-year. Moving on to Digital Real Estate. Digital Real Estate had another solid quarter despite the uneven macro environment and softer listing volumes in Australia, driven by a tough prior year comparison. Segment revenues of $479 million were up 5% versus the prior year, an improvement to the growth rate in the prior quarter and up 7% on an adjusted basis. Segment EBITDA was $158 million, up 13% and up 16% on an adjusted basis. Recall, last year in this quarter, the EBITDA included $12 million of deal-related costs for the proposed offer to acquire Rightmove, which was subsequently withdrawn. REA revenues gained 3% year-on-year to $327 million and were up 5% on a constant currency basis. Growth was driven by a combination of residential yield increases and customer contract upgrades. Residential yield growth improved by 13%, driven by strong premium plus retention and the growth in extension products, including Amex. New buy listings in the quarter declined 8%, with listings in Melbourne and Sydney down 4% and 6%, respectively, while home prices remained strong. Financial Services posted a strong improvement driven by higher settlements. In September, the business divested PropTiger in India, and following recent regulatory changes impacting the commercial viability of the housing edge offering, REA India made the decision to discontinue this business in October. Please refer to REA's earnings release and their conference call for more details. We are very pleased with the continued progress at realtor.com, which posted revenues of $152 million, up 9% compared to the prior year, marking the fourth consecutive quarter of revenue growth and the highest quarterly growth rate in nearly four years. Revenue growth was driven by the continued strength of growth adjacencies, new homes, rentals, and sellers, which represented 22% of revenues in the quarter. Importantly, core real estate revenues also returned to growth this quarter as the strategic shift to higher intent and quality audiences is beginning to pay off. Strong penetration of RealPro Select, a product targeted primarily at larger brokers, led to higher annualized contract values. Lead volumes declined by just 1%, with trends improving throughout the quarter, a notable improvement compared to the quarter four decline of 13%. Average monthly unique users for the quarter fell 6% to 72 million. comScore data for the first quarter and the month of September highlighted that Realtor once again had the highest engagement amongst real estate portals at almost five visits per unique user. Realtor has also gained audience share with total visits reaching over double that of Homes.com and that of Redfin, while narrowing the gap versus Zillow. The improvement reflects Realtor's focus on high-quality audiences and the benefits of the investments made to improve user experience and increase brand awareness. At Book Publishing, as expected, very difficult prior year comparisons weighed on the results this quarter. The quarter was impacted by both timing of ordering and softer U.S. market conditions, albeit trends improved in the recent weeks. Segment revenue of $534 million declined 2%, while segment EBITDA of $58 million declined $23 million or 28%. As mentioned earlier, EBITDA was negatively impacted by a $13 million receivable write-off relating to the expected closure of Baker & Taylor, a distributor focused predominantly on the library channel. While performance in the U.K. and Christian Publishing continue to be resilient, sales of general books were notably lower than the prior year. Recall, this quarter last year benefited from a strong performance by J.D. Vance's 'Hillbilly Elegy', the 'Bridgerton' series, and 'Wicked'. Digital revenues at HarperCollins fell 9%, with audiobooks down 11%, driven by the mix of titles compared to last year. In total, digital sales represented 23% of consumer revenues compared to 25% in the prior year. This quarter, the backlist contributed 65% of consumer revenues, up from 64% last year. News Media had a very strong quarter, with revenues rising 1% to $545 million, led by higher cover and subscription prices in the U.K. and Australia. Advertising trends were mixed but with notable strength at the New York Post. Segment EBITDA grew 67% to $30 million, driven by continued cost efficiencies. Turning to the outlook. Some of the themes across each of our segments. At Dow Jones, overall trends remain healthy, and we expect continued strong revenue growth in B2B. We also expect cost growth to be slightly higher in quarter two, primarily due to the prior year comparisons. At Digital Real Estate, Australian residential new buy listings for October were down 3%, please refer to REA for more detailed outlook commentary. At Realtor, we hope that improving market conditions driven by a reduction in mortgage rates will lead to continued healthy revenue growth alongside growth in adjacencies. At Book Publishing, October trends were encouraging, and we expect quarter two to benefit from the timing of ordering and a stronger front list. At News Media, despite difficult advertising trends, we are focused on continuing to drive cost efficiencies. We expect strong free cash flow in the current fiscal year despite anticipating capital spending to be up moderately from the prior year. The increase in capital spending will be partially driven by an investment in new supply chain logistics facilities for HarperCollins, which should deliver additional cost savings and continued investment in technology. And as I mentioned at the start of my remarks, we expect to repurchase shares at an elevated rate, reflecting our confidence in the company's growth potential, and we continue to believe the stock is trading at a significant discount to net asset value. With that, let me hand it over to the operator for Q&A.

Our first question will come from Kane Hannan with Goldman Sachs.

Just, Move, obviously a very strong revenue print there. Given the housing backdrop and some of the comments that were made, is there anything you can see or anything we should be thinking about that, I suppose, stops that business doing double-digit revenue growth through the year?

We are pleased with the revenue growth at Realtor, which continues to expand despite the challenges posed by high interest rates in the U.S. housing market. Our focus has been on three key growth areas: Zillow, new homes, and rentals, along with high-yield sales. This strategy is proving effective, even as we are just beginning to see a recovery in the housing market. We have developed a comprehensive housing platform that leads in residential property news in the U.S. The benefits of this investment and the value of Realtor will become more apparent as the market is expected to gain momentum over the next year.

Our next question will come from David Karnovsky with JPMorgan.

Maybe just on the repurchase, recognizing that you've already accelerated this rate by 4x. I think there's still a question naturally from investors on why not lean in even further for a period, given where shares have traded and the views you've expressed on the call regarding value. And then if I can ask just one more on the business with The Wall Street Journal price increase. I don't know if you could speak to the decision to raise the rate there and what you've observed so far and how that kind of informs your strategy ahead.

David, you can indeed see from our disclosures that the rate of the buyback has accelerated markedly, actually at 4x the previous rate. And we intend to fully take advantage of the expanded resources approved by our Board. Our robust cash position means that we certainly have the potential to increase the buyback if that is the optimal strategy. We have genuine optionality, and we will exercise that optionality with all of our investors in mind. And as for The Wall Street Journal, clearly, we're at the early stage of testing and reviewing subscription pricing, but believe that there is definitely elasticity; an elasticity that will be enhanced by planned product improvements in coming months. Our WSJ readers do indeed recognize that they should pay a premium service.

Our next question will come from Entcho Raykovski with Evans and Partners.

My question is around Dow Jones and the Factiva dispute, which has obviously now been settled. Given that settlement, obviously, not a headwind anymore. I'm just curious on whether you've seen any revenues in the PR and communications category in the quarter, which obviously was the source of the dispute. And if it was a tailwind, are you able to quantify the contribution to growth and whether that tailwind is likely to accelerate into Q2?

Entcho, it's difficult to be specific. But I think overall, Dow Jones' performance was excellent with a 16% increase in revenues at Risk & Compliance. And as you indicate, much improvement at Factiva, which had been hobbled by that legal dispute, but increased revenues 9%. And we had a growth of 7% at Dow Jones Energy. And there, I should point out that as Lavanya mentioned, the revenues were somewhat affected by a shift in date for its landmark event, the World Chemical Forum, which will be held this year in Q3. So factor that into your calculations. Nonetheless, we are strengthening the team at Dow Jones Energy and have an impressive array of new and enhanced offerings pending for our customers, current and potential.

I would just add that the outcome of the settlement was quite limited. The positive aspect is that we are acquiring new customers in that area. We now have a very impressive GenAI search capability in Factiva, which is also proving to be a successful addition.

Our next question will come from Craig Huber with Huber Research. Sorry, I'd just add to that. The settlement we received from the dispute was very modest. The good news is we are attracting new customers in that area. We now have an impressive GenAI search capability in Factiva, which is proving to be a successful source as well.

Robert, I typically like to ask you, I mean, you obviously fairly recently disposed of your Foxtel operation, pleased a lot of investors there. I'm wondering if your thoughts have changed at all here about further simplifying of the business at News Corp here. Any changes there in your mindset?

Craig, we are certainly not allergic to structural changes. And as you indicated, the recent sale of Foxtel to our partners at DAZN is eloquent testimony to that willingness to simplify, not only to be institutionally perspective but actually active. But we also believe in the importance of transparency, hence, for example, the research segmentation and the increased focus on the performance of Dow Jones, which is a global growth engine for the company, and on our News Media business, which reported a significant increase in margin for the quarter. Overall, we are acutely conscious of the need to consider the evolving environment and to maximize returns for our shareholders, which is why we have significantly accelerated the buyback and maintained our dividend. And we certainly have an armory and arsenal when it comes to the buyback.

Our next question will come from David Joyce with Seaport Global.

I am very fascinated by the growth at Risk & Compliance, granted that little bit of that came from some acquisitions. But I'm wondering what could be some further tailwinds to growth there? Specifically, I was wondering if some of the services could be maybe mandated by certain industry verticals, regulatory bodies, for example. Just wondering what your thoughts are for the runway there.

We're very optimistic about the trajectory of Risk & Compliance. Clearly, companies and boards want to minimize risk and maximize compliance. The Know Your Client regulations, which are stringent and being enforced by governments around the world, are also a source of new business. So while we saw 16% growth in the most recent quarter, we're confident that further growth is indeed possible in coming quarters.

Our next question will come from David Fabris with Macquarie.

I just wanted to ask about News Media. So revenues returned to growth modestly, and there's been a big improvement in EBITDA. How should we be thinking about the trajectory of that business from here?

David, we saw a slight increase in revenue, but also the benefits of leadership and cost discipline across the businesses in Australia and the U.K., and a significant surge in advertising at New York Post. Digital advertising at the Post was up 23% year-on-year. And we are looking forward to the extra inventory that is great journalism that will be generated when the California Post launches early next year. It really is a testament to all the team's hard work around the world that the margin at News Media rose from 3.3% last year to 5.5%.

Yes. I'd just add to that on the cost front, especially, I mean, really great work done by the team in News UK. The commercial printing joint venture that we entered into last year is continuing to deliver savings to us. We've also saved money on the top TV business. And that's been an important move for the team over there. News Australia as well has continued to really press the boundaries in terms of cost efficiency, leveraging new capabilities to deliver better EBITDA growth.

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

Well, thank you for participating. We look forward to speaking to you very soon. Have a great day. Luke, thanks as always for your help, and we'll talk to you soon. Have a great day.