Q3 2021 News Corp Earnings Call
[noise] Good day and welcome to the News Corp, third quarter Physical 2021 Conference call. Today's conference is being recorded all media will be and a listen only basis at this time and I would like to turn the conference over to Mike flooring, Senior Vice President and head of Investor Relations. Please go ahead.
Thank you very much Todd Hello, everyone and welcome to news Corp, physical third quarter of 2021 and call. We you should our earnings press release about 30 minutes ago now posted on our website at news Corp. Dot com on the call and say, a Robert Thomson Chief Executive and Susan for New Joe Chief Financial Officer, We're all going on with some prepared remarks and.
And we'll be happy to take questions from the investment community. This call may include certain and forward looking information with respect to news corp's business and strategy actual results could differ materially from what is said news Corp form 10-K, and form 10-K filings identify risks and uncertainties that could cause actual results to differ and contained cautionary statements Rick.
Guarding forward looking information. Additionally, this call will include certain non-GAAP financial measurement and such as total segment EBITDA adjusted segment EBITDA and adjusted EPS, the definition and GAAP to non-GAAP reconciliations such measures can be found and our earnings release with that I'll pass on over to Robert Thomson for some opening comments.
Thank you might as well.
While some nations, including America spasmodically emerging from the ravages of the pandemic other regions continued to suffer profoundly we.
We certainly hope that the vicissitudes of the virus will about it and trust that all on this call and other getting these perplexing time safely and securely.
I must have gained salute the people of news Corp. As they continue their extraordinary work for the company and for their communities and these demanding circumstances.
If it's the expertise and their insurance have yielded strong results for our company and and for the millions of people, who find comfort and inspiration and illumination from the news information inside and entertainment and he'll be.
And this is around the world and deliver each and every day.
It is further testament to the efforts of all of US call that fiscal year 2021 is being defined by improving revenue trends and flourishing profitability.
In fact, and strictly financial terms. This year is on a trajectory could be the most successful since reincarnation and 2013 and profitability highlighting how much the character the company has evolved over that period.
Heightened Lee the strategy of simplifying the asset mix the vigorous pursuit of Digitization disciplined cost reductions and the investment focus on three growth areas digital real estate, Dow Jones and book publishing have proven to be particularly fruitful.
You will have noticed that since and lost earnings Cold and February we announced III significant acquisitions that we firmly expect will immediately increase revenue and EBITDA upon closing the.
The first being investor's business daily to be operated by Dow Jones. The second was Houghton Mifflin Harcourt books, and media segment, which will become part of Harper Collins and the third was mortgage choice by Rei group, which will add heft to their mortgage broker business.
And since our last earnings announcement, we have reached historic and lucrative deals with Google and with price.
As we continue our campaign for equitable and substantial compensation from the big kick platforms for our premium journalism, whether and text audio or video.
The three of Google deal is global and involves the creation of a subscription platform AD revenue sharing and partnerships and audio journalism as well as video journalism on Youtube.
Agreement is evolving well and should be a platform for further cooperation between our companies and the future.
The Facebook deal also for three years involves leading metro newspapers in Australia, and a large array of regional and local masters as well as Sky News, Australia, and we'll have a material and meaningful impact on our business and Australia.
This deal is and in addition to that loans with Facebook and the us and 2019 involving Dow Jones and and your post.
We have yet to reach agreement with Facebook and the UK and hope that reason will descend immediately.
We note the uk's sharing the G seven and applaud the diligent and intelligent work and drive to Shelley and the competition and Marcus Authority, which is developed great insights into the diesel landscape and will play a crucial role and dropping a G seven response, and and raising social and commercial consciousness.
As the terms of trade change, we can expect to see tangible benefits flow to those who reported and distribute news for the public and I am confident that will include publishes large and small urban and rural and many countries and and many languages for us and Australia. The deals will obviously improved the results and Ah newspapers, but also.
Enable us to hire journalists to improve the coverage and undeserved regions and communities.
Finally, before turning to the quarters results I would like to highlight the successful completion of our local bond offering which was multiple times oversubscribed at and attractive coupons and thus a resounding vote of confidence and the company's strategy and its prospects.
As for the third quarter of fiscal year, 2021, and I'm pleased to report that we achieve nearly $300 billion and profits up 23% year over year. We have now had three successive quarters of double digit profit increases and we strongly believe these rather positive results reflect and increase in our call profitability.
Revenues and the third quarter exceeded $2.3 billion, representing a 3% increase from the prior year.
Turning for us to the resolutely robust digital real estate services segment moves revenue growth was 37% exceeding queue to 28% growth move and realtor dot coms value to news cool to the real estate industry and consumers is becoming more obvious with each passing quarter.
Overall this real estate services revenues were up 34% year over year.
And segment EBITDA searched 68%.
Realtor dot com and traffic growth has outpaced Arab zillo for 14 consecutive months three months and a significant growth spare the between the two has been widening markedly. According to come school and March Realtors traffic growth outpaced cillo and truly about nearly 30 percentage points.
Why this extraordinary growth that real quick because we are focused on our consumers, whether that'd be a family buying or selling our house or the agents handling that important transaction. We're not flipping houses we're not competing with our clients. We are not building up a stock a bricks and mortar inventory, we're not worrying over the wallpaper operating our defenses on.
Dark up on Stucker, we are absolutely digital and devoted throughout and chairs.
This reputation on and functional advantages for realtor comes at a moment of genuine momentum for the.
Real estate, Mark our internal metrics show that average monthly unique using the quarter, where 44% higher than the prior year and reached 108 million uniques for the month of March on a burgeoning of 60% versus the prior year.
Not only Israel to dot com, serving home buyers and sellers, we're saving renters and landlords as well we expanded our rentals offering by acquiring a file where revenue growth has exceeded initial expectations and we are excited about the opportunity that lies ahead and this lucrative market segment.
And Australia, the real estate market is thriving, particularly and Sydney and Melbourne Rei group, the clear leader and that countries did for real estate sector. So revenues increased by 52%.
During the quarter Rei announced that he proposed to acquire on 100% of the shares and mortgage choice limited the proposed acquisition aligns with Rei's financial services strategies strategy by leveraging new groups digital expertise.
Weighted property.
Motivated property buyers and and daughter and sites across a large and network.
And Dow Jones revenues rose, 6% year over year and segment EBITDA lift and impressive 61%.
Overall advertising, which was slightly down and Q2 moves into positive to Ryan and Q3 with digital advertising, 30% higher and the quarter almost doubled and growth rate and the New York Times digital now represent 61% of all advertising compared to a ratio of 48% and the prior year digital only subset Dow Jones and the Wall Street Journal.
Searched, 29% and Dow Jones digital on the net ads and the quarter exceeded does that New York times for its news subscription.
Marketwatch is achieving record high revenues and is now benefiting from multiple revenue stream with a successful launch of its subscription offerings and October.
And compliance reported growth of 24% and the quarter, marking 23 consecutive quarters and double digit expansion.
This strength underscores rnc's value as a global leader and daughter intelligence, including and anti money laundering, anticorruption and commercial risk assessment.
With increasingly stringent demands from the U S government and bodies around the world for strict compliance and heightened emphasis on E. S. G. We believe Dow Jones risks and compliance is perfectly poised to benefit if anyone on this call we'd like to minimize risk all maximized compliance please do reach out.
Meanwhile, we are on the cusp of integrating investor's business day on me that deal closed this week and we expect IBD will provide innumerable opportunities for cross selling and up selling with the Dow Jones portfolio products.
IBD will also be a source of important expertise and insight as 90% of its revenue is digital and the company has a compelling lucrative suite of software products.
For publishing is another engine of growth for news call.
As Harper Collins continued on and it's extremely positive trajectory with 19% revenue growth and the quarter compared to a year early and segment EBITDA searching 45% as both are powerful backlist and notable frontless performed strongly.
One of the standouts and the third quarter was the Bridget and series, which is now the most successful series for Harpercollins and physical 21. Other strong performers included the boy the mold the Fox and the horse by Charles Maxie and Cicely Tyson memoir, just desire.
The power of the hospital and substantial back list and Q3 reinforces our enthusiasm the anticipated integration of the newly acquired Houghton Mifflin Harcourt books, and media segment, we should close and queue for.
This acquisition will greatly expand to Harper Collins backwards with an additional 7000 titles, including such monumental works of the Lord of the Rings trilogy animal farm and 1994 and.
And beloved children's books like curious George the polar express little prints and many many more.
And we look forward with eager anticipation two amazons production of J tokens works do in coming years as with HMH. We will have acquired the U S rides to that extraordinary collection and will now on the global English language rights as token himself roads. The greatest adventure is what lies ahead today.
And tomorrow, and I get to be safe.
And to description video services, our strategy to rapidly expand streaming has been transformed transformational for Folkstone express growth of Keio and being together with Fox channel now so the number of paying OTT subscribed as reach approximately 1.6 billion as at the end of March that represents a W.
<unk> of streaming subscribers over the past year alone and extraordinary achievements and Kojo functional closing subscribers grew to a record of over three $5 million up 21% year over year, driving a significant increase and profitability.
<unk> sports helped Fox, Mike Fox toe, the pre eminent term sports and Australia with a record 2.2 million sports subscribers.
Of these chaos accounted for 851000 and paying subscribers as at March 31, more than double the prior year, where it was 400 nights out and.
In recent days Taio exceeded 1 million total subscribers with paying subscribers expected to reach that milestone imminently a.
A strong summer of cricket and the start of the dominant winter sports talk higher generate more momentum. This was supported by our recent agreement with Telstra, which is seen kayo replace Telstra lives pass and.
And the AFL live App and R. L official and making Coyote exclusive streaming home of the extremely popular Aussie rules and rugby league competitions not.
Not yet one year on the binge entertainment streaming service reached 516000 paying subscribers up nearly 20% on the second quarter.
Thank you Robert.
Fiscal 2021 third quarter total revenues for over $2 $3 billion and increase of 3% versus the prior year. While total segment EBITDA was $298 million up 23% year over year, reflecting strong performances across our key segments.
Our three core pillars, Dow Jones, and digital real estate services and book publishing collectively grew segment EBITDA by 55% the prior year.
On an adjusted basis, which excludes the impact from acquisitions and divestitures, most notably the sale of news America marketing and the fourth quarter and fiscal 2020, as well as currency fluctuations and other items as disclosed in our release.
And youth Rose, 4%, while total segment EBITDA grew 24 per cent.
Net income for the quarter with $96 million compared to a net loss of $1 billion and the prior year, which reflects the absence of a noncash impairment charges related to Pakistan and news American marketing and the prior period.
For the quarter, we reported earnings per share of 13 cents as compared to a net loss per share was $1 20 for last year.
And our adjusted EPS with nine cents in the quarter compared to three cents in the prior year.
Turning now to the operating segments.
Digital real estate services segment revenues were $351 million and increase of 34 per cent compared to the prior year, which was more than double the growth rate. We saw in the second quarter. The performance was driven by another record quarterly performance at news together with improvements at Rei as well as the <unk> consolidation and positive impact from foreign ex.
Strange fluctuation on an adjusted basis revenues increased 22%.
Segment, EBITDA rose 58 per cent to $117 million with 52% on an adjusted face fastest quarterly growth rate in nearly for us.
These revenues accelerated to $162 million 37 per cent increase year over year with real estate revenues rising 43%.
And these contributed $36 million on 84 per cent of the segment EBITDA growth this quarter, the highest contribution to growth to the segment for the fiscal year.
We also don't come as traffic increased to 98 million average monthly unique users and the third quarter, reflecting a year over year increase of 44% noticeably and March Realtors unique uses it for 100 million for the first time, reaching over 108 million unique users up 60 per cent compared to the prior year on.
Average lead volume remained very strong growth over 40%, which was higher than the second quarter right. Despite continued inventory constraints across the industry.
We saw very strong growth across both the traditional lead generation and referral businesses and the third quarter with a notable acceleration from the second quarter right and the growth of connection plus our traditional lead generation products, which benefited from higher traffic and lead volumes and high retention rates and improved crossing.
These results underscore the success of our strategy of choice and flexibility.
Revenues from the referral business continued to grow strongly representing 25% of total move revenues lower than the first half mainly true to the acceleration in the traditional lead generation business, coupled with the seasonality impact.
Sorry for all the drivers behind the performance of the referral model remains similar to the prior quarter with continued strong transaction volumes higher home pricing and stable to higher referral fees.
As we mentioned last quarter that we expect to continue reinvesting and move primarily and marketing and product development balancing continued improvement and profitability ability with revenue growth.
We are pleased to see strong growth across cards and sustain accelerates the pace of innovation and new products as we expand into adjacencies.
Turning to our EIA group revenues at <unk> Rose 32 per cent to $189 million, reflecting a $28 million on 19% positive impact from currency fluctuations and a $7 million.
On the acquisition of a lora.
Australia and national residential listings for the quarter rose, 8% with Melbourne up, 13% and Sydney up 5% with growth rates improving throughout the quarter.
You develop a project launches increased by 14% compared to the prior year are as results also benefited from and increasing residential depth revenue. Despite the absence of a price increase this fiscal year, it's part of Rei's, COVID-19 and support initiatives.
Black Rialto Rei is benefiting from record traffic with real estate dotcom today, you hitting an all time high of 100, and so she's 7 million monthly visits and March up 60% year over year and buyer inquiries are also at record highs. Please.
Please refer to our as earnings release and their conference call. Following this call for more detail.
Turning to the subscription video services segment revenue for the quarter with $523 million up 13% versus the prior year and included a $79 million or 17% positive impact from foreign currency fluctuations adjusted revenues were down 4% continuing the improving trend through the fiscal year as the expansion of <unk>.
OTT revenues, partially offset the declines and broadcast subscription revenue.
Total closing paid subscribers across Fox told Roy for $3 5 million as of March 31 up 21% versus the prior year as the team focused on maintaining its premium broadcast customers, while the kao and <unk> streaming services to live and subscriber growth at scale.
Parison versus the prior year was helped by the absence of the initial impact of COVID-19, and the launch of billings for the fourth quarter.
Total paying OTT subscribers expanded to nearly $1 6 million paying subscribers up 120 per cent compared to the prior year with K I, reaching 851000, and beat and shipped 516000 paying subscribers, including Triallist Kao and being reached 914000 and 679000 and subscribers.
And that's usually which is indicative of the strong consumer interest and each of the products you need content and fit.
Tayo as growth has been enhanced by the recent.
Agreement with Telstra to replace Telstra as life, Pos with Kao and accelerating the penetration and adoption of the product well the revenue impact from the addition of form of live path customers will be minimal and you one of the agreements you should the pricing promotion and we see this partnership as a unique opportunity and window to introduce Coyote two and your audience.
Residential forecast subscribers declined 12% from the prior you too I for $1 7 million and commercial subscribers also declined 12% to 255000. However, the trend improved sequentially as COVID-19 restrictions continue to ease, particularly and pubs and clubs will be at the accommodation sector remains challenged.
Broadcast churn was elevated at 21% versus $17 five per cent and the price as the team continued to balance Chen with revenue optimization as a result, all to continue to rise both year over year and sequentially, partly mitigating forecast described the volume declines broadcast all through rose, 2% Joy for atheist.
And does for 62 U S dollars.
Segment, EBITDA improved 34% to $91 million and was up 13% on adjusted basis. The improvement was driven by $22 million of lower sports programming rights and production costs as well as lower transmission marketing and employee costs.
Finally on Fox tell they refinance their existing $650 million, Australia, and dollars revolving credit and working capital facilities and extended the maturity out 18 months to May 2020 for at a slot crossing true.
Moving on to Dow Jones, Dow Jones delivered another outstanding quarter with year over year growth for both revenue and segment EBITDA acceleration versus the second quarter and the first half right revenue for the quarter were $421 million up 6% compared to the prior year with digital revenues accounting for 74% of total revenues this quarter up six per.
And since each points from the prior year.
Circulation revenues again rose, 8%, you said the growth and digital circulation revenues, partially offset by lower single copy and amenity print volume, which is still impacted by COVID-19 restrictions.
So I'll try and continue to post record subscriptions with nearly $4 3 million average subscription to its consumer products and the quarter up 19% from the prior year off that nearly $3 3 million with digital only subscriptions, reflecting 238000 and so.
<unk> net adds and 29% year over year growth.
Total Wall Street Journal, there were approximately $3 4 million average subscription for the quarter up 21% from the prior year with digital only subscriptions growing 29% joy for $2 6 million.
Revenues from Dow Jones risk and compliance grew 24% improving from the Q2 right and was the fastest growth since the first quarter of fiscal 2025 for all professional information business revenues rose, 9% within professional information business risk and compliance with the largest source of revenues this quarter for the first time on record and is now approaching.
$200 million in revenues for the full year compared to approximately $160 million and fiscal 2020.
Advertising revenues, which accounted for 20% of revenues this quarter grew 1% to $85 million a marked improvement from the four per cent decline last quarter and was the first growth since the first quarter and fiscal 2020.
As Robert mentioned digital advertising revenue has had the fastest growth and a decade up 30% and accounting for 61 per cent of advertising revenues for the third quarter and he.
It's worth noting that this level of growth came despite a tough prior year comparison, if I play the 20%, which at the time was a record quarterly performance.
Encouragingly the growth with a guy and broad based with notable gains and the financial services category, we saw growth in both volume and yield, particularly in direct display print.
Print advertising revenues declined 25 per cent year over year, which was an improvement from the 29% decline and the second quarter.
And I'll try and segment EBITDA for the quarter Rose 61 per cent to $82 million with margins expanding close to seven percentage points versus the prior year total cost declined 2% this quarter, which was better than we had expected mostly due to lower print volume and other discretionary savings, partially offset by higher compensation costs.
Our book publishing Harpercollins posted 19% revenue growth to $490 million and 45 per cent segment EBITDA growth to $80 million, reflecting another very strong quarter and continues to benefit from the industry wide increase in consumption.
Like the second quarter revenue growth was again broad based and was led by the general tried children's UK and foreign language categories. The backlist was the key driver this quarter accounting for 62% of files led by very strong sales from the bridge and series by Julia Queen.
Similar to previous quarters, we are continuing to benefit from a strong rebound and E books, It's files up 38% year over year and gains in all categories, well downloadable audiobooks increased 42% year over year overall digital sales were up 38 per cent.
Albert Collins, a guy and demonstrated strong operating leverage despite a 15% increase in total costs and part due to royalties and high production expenses related to the successful top line performance margins improved by three percentage points.
Turning to news media, we continue to remain focused on right sizing the cost base and moving towards digital within the segment revenues for the quarter with $550 million.
Down 25% versus the prior year of which the impact from the divestment of news American marketing accounted for the majority of the decline on an adjusted basis revenues declined only 7%, which is an improvement for the 9% decline last quarter.
The decline also reflects the $28 million four per cent negative impact from the closure or transition to digital obsession regional and community newspapers in Australia.
Circulation and subscription revenues rose, 13% driven by a 26 million dollar or 10 per cent benefit from currency fluctuations stroke, and digital paid subscriber growth and cover price increases partially offset by lower new standard sales relates to COVID-19 and.
Advertising revenues decreased $258 million 50 per cent compared to the prior year, reflecting a $199 million or 47% and negative impact from the divestiture of news America, marketing and a $23 million or five per cent negative impact related to the closure or transition to digital of CIT and regional and community newspapers and.
Australia there.
For the remainder of the movement was driven by favorable foreign exchange, partly offset by the continued weakness and the print advertising market exacerbated by COVID-19.
Advertising performance was mixed across the regions with Australia, showing moderating declines compared to the second quarter, right, particularly driven by increased retail spending well. The UK is year over year performance weekend, mostly compared to the second quarter impacted by it and not the lockdown, which started at the end of 2020.
And the U S. The trends remained robust with the New York post posting 21% advertising revenue growth of which did digital advertising grew 32 per cent.
Segment EBITDA for the quarter was $8 million compared to $24 million and the price due primarily to the absence of the contribution from news American marketing adjusted segment EBITDA increased by $5 million.
And now all the segment the third quarter costs were higher than we expected primarily driven by higher equity compensation due to the rising share price and the initial investment spending related to the implementation of a global shared services initiatives.
I would now like to talk about some themes for the upcoming quarter as noted in the past cold for coffee remains challenging and keeping the ongoing global COVID-19 pandemic.
Real estate services National residential listings in Australia for April were up 98 per cent compared to the prior year, while the market dynamics are strong. These growth rates are exaggerated by the severe COVID-19 related declines experienced in April 2020, Please refer to <unk> press release and earnings call for more details.
And maybe if we remain very encouraged by overall trends and expect the revenue momentum to continue we continue to expect additional reinvestments that moving areas such as brand marketing and product development as we focus on guiding market share and expanding into adjacencies.
And subscription video services, we have seen blood culture and trends moderate during April and we remain encouraged by strong OTT demand from Coyote and binge, we expect EBITDA results to be challenged due in large part to the lapping of the prior year cost savings.
It reminded the price fourth quarter results included 17 million U S dollars of lower sports programming costs.
Mainly due to the suspension of sporting events as a result of COVID-19 for.
Current fiscal fourth quarter, we expect to incur those rights, which will be impacted by the rising Aussie dollar visit for the U S dollar as well as some additional costs for for the OTT investment.
At Dow Jones overall revenue trends remained favorable compared to the prior year, including strong digital advertising growth as mentioned last quarter, we expect to reinvest and the business as we focus on driving revenue growth through its digital assets and expect second half expenses to increase modestly compared to the prior year.
In book publishing overall industry trends remain favorable, but we continue to monitor closely the sustainability of recent consumer spending patterns, such as the increasing free time for consumers to read and the increase and the average number ex purchase.
We continue to expect performance to moderate in the fourth quarter and part due to the strong performance and the prior year, which benefited from increased consumer demand at the onset of COVID-19, Lockdowns and restrictions as well as the successful release of Magnolia table volume two.
News media, we expect continued improvement in the fourth quarter as we lap the impact from COVID-19, and the sale of News America marketing and May 2020 cost decline should moderate as we lap COVID-19, and saving initiatives as well as the divestment of news America marketing and the closure for digital transition of some of that and newspapers in Australia in the fourth quarter.
For fiscal 2020, we expect overall profitability trends to improve and we expect modest revenue impact from our new licensing agreements.
You know other segment, we expect the fourth quarter cost to increase around $20 million versus the prior year and part due to the reduction of bonuses and the prior year highest share price and the cost related to the global shared services initiatives.
I used to die and free cash flow available with $762 million compared to $63 million and the price benefiting from higher EBITDA improvements and working capital and lower Capex.
All of the working capital improvement is timing related but it was very pleased with the progress made to date also note that the fourth quarter balance sheet reflects the proceeds from our recent senior notes offering together with the three recently announced acquisitions, which will impact on interest expense and cash balance.
Let me hand, it over to the operator for Q&A.
Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you were using a speaker phone. Please make sure. Your mute function is turned on to allow your signal to reach our work with it.
Also management has asked that you limit yourself to one question again press star one to ask a question.
And for just a moment to on that.
And an opportunity to signal.
Okay.
Hum.
Hum.
Okay.
Hum.
Okay.
Thank you and we'll take our first question from Alan Gould with loop capital.
Okay.
Thanks for taking the question.
Robert These results at realtor are quite impressive can you just look out three five years and give us some sense of what the opportunity is for digital real estate and the United States.
Well and I'm not sure on that Christine.
And so forth as a suite.
Yes.
We are firmly of the view that.
Real estate properties make us the world's leading digital property company.
But we also on our family of the views that we have vast potential for growth given the markets and which we operate and given how successful acquisition strategy.
And equally we are firmly of the view that the full value of the digital publishing property assets potentially not be entirely recognized net share price.
Now for.
Global leadership of our real estate assets with Tracey Fellows and.
And our appointment itself was a sign of interest.
Our attention and.
And our ambition.
And.
And she's she's not just working through ideas for the future. She is driving the business and seeking out new opportunities such as cities such as rental and so.
And as other adjacencies that will generate even more momentum.
If I could just thank you now and we'll take our next question. Please.
Thank you we'll take our next question from Mccain and on with Goldman Sachs.
Okay.
Morning, guys just in terms of the investment margin.
I'll try and keep it cool yeah sure.
We would be expecting investments to step off in the fourth quarter relative to the third quarter and how you guys will at least for example.
Yeah. So just interested how do we think about the pricing.
Okay, and I'll take that one so I think just a real true. If you think about the cost for Q4, we did guide to an additional 40 million of cost and the second half.
Probably could've, she and the bulk of that $40 million that we quoted locate and Q4. So if you compare that to the Q3 numbers. We also expect those numbers to scale up from a variable cost per se.
And the revenue growth.
In relation to Dow Jones, we would expect to see higher costs in Q4, largely as a consequence of compensation and marketing expenditure, but we have been.
Very encouraged by the ongoing cost for it because he does that business and as you could see they had a pretty good cost result for this quarter as well.
It's probably more investment coming through it real time, and what we would expect to say and downtime.
Thank you okay. Thank you Kane Todd we'll take our next question. Please.
Thank you. Our next question comes from Alexia Quadrant, <unk> with J P. Morgan.
And thank you and for my questions on on the Journal Dow Jones, when you look at the Wall Street Journal Digital subscription do you think that's a change in administration here and Youre in the U. S has has a positive is it a tailwind going forward for future digital subscription or is it is and it's a negative or is it.
Neutral and I'm curious you think curious to hear how you think the change and the political environment may or may not flow into the digital sub growth there.
Well the key factor for us as a quality on the Wall Street Journal and the quality of the journalism and accordingly.
The leadership, we have a great team at Dow Jones with them on.
On the tour.
Joe strength Chief revenue Officer.
On a sterling job collectively and developing.
Digital expertise.
We don't have to worry about a trump bump, becoming a trump slump.
And you might see.
Races, the Wall Street journal's journalism, obviously rises above the.
For the gormless retrofit.
Thanks for sharing the.
And as journalism that you see and some other places and so.
And the Dow Jones results, certainly rise above dose for the day.
New York Times, and circulation now and news segment.
Digital advertising, which was almost double that of the New York times.
And so.
And in essence, the enduring quality of the jury.
And will that gives us momentum and I was.
A very positive wins that we're seeing.
And.
Confident and we'll see and the future.
And let's see here I think the other thing that is really encouraging for us is because I look back over the last 10 courses and the quarter on quarter sort of net adds for that so we had this quarter for the second highest that we've had over those 10 periods and so that gives us actually about the ongoing growth potential within Dow Jones.
And to further supplement Susan's was observation and the acquisition of <unk> will give us for the opportunity to upsell and cross sell across both properties.
That's why we.
Quad.
Good day, which is close close to closing.
And that's why and net investment itself was an indication of our confidence and the sector.
Thank you.
Todd we'll take our next question please.
Thank you. Our next question comes from and Chill Rykowski with credit Suisse.
Hi, Robert Hi, Susan.
My question is on the other segment.
Costs were up 50, Amelia and and a quarter year on year, and you're obviously guiding to a further 20 Amelia and increase in Q4.
I'm, just interested and what's driving the incremental uplift relative to the 50 million number which you gave us back and said and maybe for the share price performance and driving bonuses.
Any color would be useful and.
And you stay and element of catch up and nice numbers.
As we look into FY 'twenty two could we expect a stable cost base you know though.
And your potential for drop as well.
Yes, looking to for we obviously had the absence and some bonuses in Q4 of last year and so we obviously wouldn't expect to see that these sheets and with Whatsapp movement. That's happening. We also had some of the COVID-19 impacts coming through in Q4. So we did have a couple of one off cost savings that hit in Q4 of losses, which we wouldn't say for patients.
Except for their patient and Q4 of this year.
And we also have the scale off with some of the news next that transformation project called for it going to hit in Q4. So I think when we look sort of going forward, we wouldn't expect to save a lots of people that were being thinking and equity comp I mean, obviously and the share price continues to go up we'll have that natural fluctuation. So we did have a very depressed share price as a consequence of COVID-19 back in queue.
For and so we've been seeing nice lease and it's come through this year.
Thank you and Joe Todd, we'll take our next question. Please.
Thank you. Our next question comes from Craig Huber with Huber Research partners.
Thank you wonder focus if I could on your IBD acquisition and the books for segment you guys are buying from Houghton Mifflin Harcourt, obviously, you're spending a little bit over $600 million for the two.
Good to hear if you agree with this I mean my take on this and this environment for you guys just spent over $600 million.
Which is unlike you do too often I think youre on your.
Balance sheet pretty conservatively with a couple of pretty conservative over the years, but for you to do this right now do you agree with my thought that you must be feeling pretty good pretty optimistic on the direction of the virus for the direction of the global economies and more importantly direction of your revenue revenue great cost containment.
He put it altogether and it gave you a conference call for instance, and $600 million plus.
Right.
And Thats, a fair assessment, we'd certainly have confidence and our teams and their ability to integrate those acquisitions, we certainly have a fundamental faith in the sectors themselves and.
You will see that the financial impact of the acquisition pool, we almost immediately positive for both revenue and EBITDA.
The price investor's business daily and the Houghton Mifflin Harcourt total book Division and highly profitable.
And in Australia, and mortgage choice for them shortly complement the existing mortgage growth business at Rei.
And as I mentioned earlier with IBD.
Being 90% digital now is extremely contemporary and we will be able to cross sell and up sell.
And make the most about.
Existing content and.
This is Harper Collins with Brian Murray and the team. There is no doubt we have a history of successfully integrating businesses and.
So we fully expect profits to increase.
Hi, Joe and thus tropical loans and Gus at News Corp.
Thank you, Greg and Todd we'll take our next question. Please.
Thank you. Our next question comes from Darren Leung with Macquarie.
Yeah.
Good morning, Thank you for the update.
And I just wanted to ask a question around <unk>.
And you have talked about this.
And the risks and coupons business.
Please give us a feel for what the margin so.
Not necessarily.
And do you want but perhaps the medium term once you're done and investing.
For the Wall Street Journal.
Business. Please.
We we don't give out the margin is actually for risk and compliance that we would size and they are high margin and they've been scale. So we are seeing good growth within that particular segment.
And as we indicated earlier.
Climate for risk and compliance.
Certainly conducive to growth given the.
So for U S administration.
And as published Lee intent on increasing regulation and the day.
And for compliance.
Thank you Darren and Todd we'll take our next question. Please.
And it does a reminder to ask a question. Please press star one our next question comes from Brian Han with Morningstar.
Oh I'm sorry.
And for sure.
Australia.
Bob.
For folks.
Okay.
Gordon.
And once the market and we have some stomach and towards.
Well.
We're certainly focused on.
All segments at Folkestone.
And genuinely delighted by the progress.
Where we have EBIT are up 34% and the revenue trends are obviously improved and we haven't seen.
And down from broadcasting.
Some feared.
And then as we mentioned on the cost per 1 million paying subscribers with the user base is already larger than trying to bid and is growing week after week after week.
And frankly, all underpinned by World class cutting edge technology that provides a great user experience for.
Financial position overall is much more robust and Patrick Siobhan and the team deserves much credit for the markedly improved performance that means we frankly have options real options.
Yeah.
Brian Todd we'll take our next question please.
And Sir at this time and we have no questions I'll turn it back to you for closing remarks.
Well. Thank you Todd. Thank you for all for participating have a great day and as always we look forward to speaking with you all and the very near future.
Have a great day.
This concludes today's call.
Thank you for your participation you may now disconnect.
Okay.
[music].