Good day, and welcome to the News Corp 3Q Fiscal 2022 Conference Call. Today's conference is being recorded. Media will be on a listen-only basis. At this time, I would like to turn the conference over to Mike 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 2022 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 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 our earnings release. With that, I'll pass it over to Robert Thomson for some opening comments.

Thank you, Mike. I'm delighted to report that revenues and profitability were at a new record for the third quarter, since the company's rebirth in 2013, building comprehensively on the momentum of our record performance in preceding quarters News Corp delivered $2.5 billion of revenues up 7%, despite the vicissitudes of currency volatility. While profitability improved by 20% and that was despite the one time transaction costs for our Opus acquisition. The tangible benefits to revenue and profitability of that transaction should be obvious in coming quarters. To put the results in a broader context, we attained more in profitability at over $1.3 billion through the first three quarters of fiscal 2022 than we did in any entire fiscal year, since our rebirth in 2013. And there is certainly more to come in the fourth quarter. Given the impact of the pandemic and not so transitional inflation, both exogenous in the extreme, these sterling results are testament to the strength of the company's culture created and curated by Rupert and Locklin Murdoch and the commitment, creativity, and passion of all our employees. We are investing as well as returning capital to shareholders and have focused that investment on bolstering our growth pillars. The results of that productive investment should be felt for years to come. Our core product suite has expanded as has our reach, and we expect that auspicious combination will [indiscernible] our long-term growth. Following a strong fiscal 2021 and first half of fiscal 2022 Dow Jones continued to power ahead with revenues and segment EBITDA both sharply rising. Though the latter was impacted by the one-time costs related to the Opus transaction. Segment EBITDA was up 7% even including the Opus costs, adjusted segment EBITDA actually rose 16%. Opus, along with Base Chemicals, which we expect will…

Thank you, Robert. Fiscal 2022 third quarter total revenues were approximately $2.5 billion, up 7% reflecting strong growth across our core pillars led by digital real estate services and Dow Jones, which includes benefits from our recent acquisitions and our continuing shift to digital across the company. Total segment EBITDA was $358 million higher than the prior year by 20%. And, as Robert mentioned, marked the highest third quarter total segment EBITDA on records since separation, reflecting our ongoing focus on costs. Those results came despite approximately $15 million of one-time cost related to the Opus transaction, which closed on February the 28 and a $16 million negative impact from currency headwinds. Excluding acquisitions, currency fluctuations, and other items disclosed in the release, adjusted revenues and adjusted total segment EBITDA rose 6% and 25% respectively. Reported EPS were $0.14 compared to $0.13 in the prior year. Adjusted earnings per share in the quarter was $0.16 compared to $0.09 in the prior year. Moving on to the results for the individual reporting segments, starting with Digital Real Estate Services. Segment revenues were $416 million an increase of 19% compared to the prior year. The results include the contribution from the acquisition of Mortgage Choice, as well as the negative impact from foreign currency fluctuations. On an adjusted basis segment revenues increase 14%. Segment EBITDA rose 17% to $137 million or up 18% on an adjusted basis. Like the second quarter, the driver of segment EBITDA improvement was REA while segment EBITDA contribution from news was flat compared to the prior year. News revenues were $170 million similar to last quarter and up 5% year-over-year, this followed 37% revenue growth in the prior year and is now approximately 44% higher than pre-pandemic levels in the third quarter of fiscal 2020. For the…

Thank you. [Operator Instructions] We'll take our first question from Entcho Raykovski with Credit Suisse. Please go ahead.

Hi Robert. Hi, Susan. Entcho Raykovski here. If I can just sneak in two questions please. I mean the first one is on Move. I appreciate the comments Susan you've just made around fourth quarter. I'm conscious that the comps are particularly difficult with, I think, it was 68% revenue growth in the PCP. Can you talk about what yield benefit you might expect to see in that fourth quarter? And could you conceivably see revenue growth within Move, given that tough comp? That's the first question. And secondly, I have a question on the pace of the buyback by my calculus you've done, I think, $158 million so far versus an authorization of $1 billion. Do you think there is scope to accelerate that particularly if you think there is value on offer in the current share price? And could we see that in the coming months? Thank you.

Thank you. Entcho, I'll take the first question about movement, Susan will address the buyback. Look, we're not going to give you a forecast for the quarter, but obviously enough, even though leads have been in decline in Q3, if there are fewer houses for sale, there'll be fewer leads. The beauty of the referral model is that we're focused on the quality, not the quantity. We can have fewer leads, but make more from each of those leads by offering realtors more purposeful purchases So quantity of course matters, but so does quality. And that is the beauty of the model that we've been building in recent years. Our quarterly real estate revenues rose even in this difficult market by 7%. And as you say, that followed 43% growth in the same quarter last year. And by the way, leads are still 11% higher than 2020. And existing home sales in calendar 2021 were 15% higher than 2019. Another thing to watch in coming months and quarters, the change in the mortgage market with origination being more important than refinancing, which had dominated over the past few years, the mortgage companies were more focused on serving preexisting, preapproved customers with refinancing and rapid decline. Our new leads will be relatively more valuable and we will surely extract that value.

And Entcho, so just in relation to the buyback, your numbers were accurate. That is what we have brought back to date. And you will notice from that that we have been buying back at a relatively steady rate since we announced the buyback like last calendar year. We haven't given a timeframe in relation to the execution of that buyback. But as always, we will continue to look at the reinvestment opportunities, versus the shareholder returns and monitoring the share price.

Thank you, Entcho. Keith, we'll take our next question please.

Our next question is from Kane Hannan with Goldman Sachs, please go ahead.

Hey guys just two quick ones as well, just Kayo and that price increase you mentioned, is there any more color you can give us around, I suppose, timing and quantum of that? I suppose, is that what is going to drive the improved profitability in the fourth quarter? And then just News Media, given the inflationary pressures and that $20 million investment you called out, is it right to assume a step down in margin for that segment in the fourth quarter.

Okay Kane I'll take those. So just in relation to Kayo, the price increase will hit. I think it's towards the end of May. So we'll actually see pretty limited impact of that in Q4. So it's 250 and it'll hit on the 9 of May. But we will obviously see the benefit of that as we go through into next financial year. In relation to News Media, what I would say about that is we obviously have seen really strong growth within that segment over the course of the year. And we are taking a balanced approach to reinvestment. So we are expecting to see profitability improve in Q4, obviously subject to revenue trends, and foreign currency and how that trades. And we will make sure that the revenue upside will help some of the cost investments that we're going to have within that business. And we will continue to focus on margins within that segment.

Thank you, Kane. Keith, we'll take our next question, please.

We'll take our next question from David Karnowski with JPMorgan. Please go ahead.

Hi guys. This is John Gaudioso on for David. Just one quick one for me. It's only been two months, but I thought I would just ask you about any early learnings as you integrate the Opus acquisition. And I realize you have a significant amount of expertise in Spector, particularly with Dow Jones, but any warning that might also affect base chemicals when it closes next month and its potential future integration thereafter.

Yes, we're very pleased with the first phase of integration as you say said, it is early. But clearly enough international events have only highlighted the economic, commercial and political importance of energy policy and prices and the shift to renewables. Both Opus and Base Chemicals are essentially a hundred percent digital recurring subscription revenues and rather high EBITDA margins. But these are premium products at premium prices. And we have a very large base of potential, professional customers through our Barron's, WSJ, IBD and MarketWatch audiences. That vast base will create an ongoing funnel of possible premium subscribers for Opus. You'll certainly see the positive impacts in coming quarters. And it is obvious that this is a pivotal moment for Dow Jones.

Thank you, John. Keith, we'll take our next question please.

We'll take our next question from Darren Leung with Macquarie. Please go ahead.

Hi guys. Thanks for your time. Just one from me. Looking at the professional information business in the Dow Jones segment, where we look at risk appliance, obviously going quite strong but actually largely in line with so a little bit faster than TRV. It sort of implies that Factiva and Newswires is sort of smaller in terms of its growth here. Any color or details implied here, please.

Darren we’re pleased overall with the professional information business. Newswire provides an important service not just for the professional side, but also for our consumer journalism. And we're fully invested in the, in the future of developing that Newswire’s business. And you'll see in coming quarters, as I said, with the Piers acquisition, just how much potential professional information business actually has.

Can you comment whether subscribers are still increasing in Factiva?

Well, I'm sorry Darren the detail I gave you is the detail that I will give you. Thank you.

Okay, thank you.

I think Darren it’s fair to say that that Factiva newswires is relatively stable. Keith, we'll take our next question please.

Okay.

Our next questions from Brian Han with Morningstar. Please go ahead.

Robert, I think, you mentioned that in News Media, digital advertising revenue was greater than print in the UK. First, can you please confirm that? And second, does that mean in Australia and U.S. print advertising revenue is still way bigger than digital advertising revenue?

No. The second supposition is not accurate. Look, advertising generally has been excellent, particularly in digital and you see it from Dow Jones to the New York Post, which is on track as we've indicated for genuine profitability. But across, in total, the business units, Dow Jones advertising up 20%; News UK, 32%; New York Post, 13%; and News Australia, 2%, obviously currency affected. So strong growth and indications are that growth remains relatively robust.

Thank you, Brian. Keith, we'll take our next question, please.

At this time, we have no further questions in the queue.

Great. Well thank you all for participating. Thank you, Keith. Have a wonderful day and we look forward to speaking with you soon,

Ladies and gentlemen, this concludes today's conference. We appreciate your participation. You may now disconnect.