Q3 2024 News Corp Earnings Call
<unk> media will be allowed on a listen only basis.
At this time I would like to turn the conference over to Michael Florin Senior Vice President and head of Investor Relations. Please go ahead.
Michael Florin: Thank you very much operator.
Michael Florin: Everyone and welcome to news Corp's fiscal third quarter 2024 earnings call. We issued our earnings press release about 30 minutes ago, and it's now posted on our website at Newscorp Dot com on the call today are Robert Thomson, Chief Executive and Susan <unk>, Chief Financial Officer, we won't bid with some prepared remarks, there will be.
Speaker Change: Happy to take questions from the investment community.
Michael Florin: 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.
Michael Florin: 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.
Michael Florin: 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 <unk>.
Robert Thomson: <unk> for some opening comments.
Robert Thomson: Thank you Mike New School has again made substantial progress on our strategic imperative to transform the company and increase value for all shareholders.
Robert Thomson: Profitability rose slightly in the third quarter as compared to the prior year continuing a growth this fiscal year and that increase follows. The three most profitable years since the company was reincarnated in 2013 that improvement which gathered pace in April came despite certain macroeconomic.
Robert Thomson: Circumstances that were far from auspicious, whether a strong dollar that the valued our revenues outside the U S, particularly in Australia, or the Punitively high mortgage Reits that obviously undermined activity in the U S housing market.
Robert Thomson: The U S housing market contrast, starkly with out of Australia, where strong performance underpinned robust revenue growth at digital real estate services, while at Dow Jones, the professional information business continued to prosper and the segment profit margin expanded from 26% to 21, 7%.
Robert Thomson: We remain well on track for the fourth full year of strong results at news Corp is by the way worth highlighting that our free cash flow in the first three quarters was $491 million, a 53% increase on the $320 million for the same period last year.
Robert Thomson: It is also worth noting that for more than a year digital revenue has accounted for over half of our total revenues and we believe that trend is destined to continue.
Robert Thomson: We are in the midst of an exponential digital revolution in our own company has continued to change significantly and profitably importantly, we are working to promote our quality journalism in the age of generative II and are gratified that the most enlightened leaders in the industry appreciate the commercial and so.
Robert Thomson: <unk> value of that content separately to that end, we have this week extended our existing partnership with Google.
Robert Thomson: As mentioned previously we have been reviewing our company's structure and that work is intense and ongoing and we have made underlying changes to provide maximum flexibility.
Robert Thomson: Through three quarters of fiscal 'twenty, four circulation and subscriptions accounted for 45% of revenues with advertising at a modest 16% 10 years ago, we were dependent on advertising for almost half of our revenues most tellingly advertising at news media than our largest source of revenue now accounts.
Robert Thomson: We're only 8% of total revenue I should repeat that number 8% and half of that figure is now a digital advertising. So the character of the company has fundamentally changed.
Robert Thomson: Dow Jones can you do to increase both revenue and profitability this quarter. The professional information business at Dow Jones is an increasingly powerful earnings engine with yet another quarter of double digit revenue growth. It remains on track to be the largest contributor to this segment's profitability by the end of this fiscal year and we believe far into the future given its.
Robert Thomson: High margins and 90 plus percent retention rate.
Robert Thomson: Dow Jones energy, where revenues rose, 15% has just launched the apex carbon market report, which provides data and insights into emissions trading in Australia, China, New Zealand and South Korea. This important you're offering complements opus as carbon price coverage for North America and other international markets.
Robert Thomson: At risk and compliance where revenues also rose 15%. The team debuted its first gen. AI powered product integrity check a fully automated research platform that rapidly produces due diligence reports on businesses and individuals from our unique database created in partnership with sapiens.
Robert Thomson: Integrity check will help companies ensure they are compliant in a fiendishly complicated and legally fraught regulatory environment.
Robert Thomson: Digital subscriptions at Dow Jones increased 17% year over year and experienced their highest sequential quarterly net growth with 322000 added in the third quarter.
Robert Thomson: Average daily digital subscriptions for Dow Jones brands, including the Wall Street Journal Barrons market Watch Investor's business Daily crossed 5 billion for the first time during Q3 that total is approximately double the number four years ago, given the access to a bundle of premium products with the Wall Street Journal at the heart the Dow Jones team.
Robert Thomson: I'm as confident we should see a reduction in churn and an increase in circulation revenues in quarters to come.
Robert Thomson: Advertising the market footprint remains somewhat soft the digital advertising rose, 4% compared to the prior year and advertising trends overall improved on the preceding quarter.
Robert Thomson: In digital real estate area continued to show robust growth with revenue surging, 15% year over year.
Robert Thomson: A 6% increase in listings across Australia helped spur that success and I should note that listing growth has again improved in April compared to March, which we believe augurs well for the fourth quarter.
Robert Thomson: <unk> also remains by far the number one digital real estate platform in Australia with $4 one times more monthly visits on average than its nearest competitor.
Robert Thomson: That strength and enhanced product mix for its customers enabled rei to introduce 10% average price increases that new pricing schedule will apply from July and we look forward to the benefits in the next fiscal year.
Robert Thomson: Meanwhile, we are pleased with the continuing progress at IAA, India with a 31% advance in revenues in the quarter outside housing Dot Com is the leading digital real estate platform in the most populous country in the world given that country's economic growth widely forecast to be around 7% this year and the prospect of <unk>.
Robert Thomson: Ongoing political continuity, we are confident that we have a world class asset with much potential for expansion.
Robert Thomson: Move we are obviously subject to abnormal abrons conditions in our U S housing market buffeted by high interest rates. However, revenue declines moderated this quarter and lead volume has turned positive for the first time in two years.
Robert Thomson: The results this quarter are broadly consistent with our expectations and we are improving our product and user experience to position ourselves to take advantage when the market trends change from headwind to tailwind.
Robert Thomson: In the wake of legal developments involving the National Association of Realtors I would echo move C. O Diamond is recent perspicacious comments about the importance of buy side agents for those seeking professional guidance when purchasing a home which is surely the most significant investment decision for many families.
Robert Thomson: We continue to closely monitor industry developments, but believe realtor dot com is well positioned to capitalize on its relationship with homebuyers and with bias and sell side agents in this evolving landscape. We expect that interest rates will ultimately ease and our experienced in Australia suggests that the market will surge dreamed.
Robert Thomson: Mattikalli after an extended period of suppressed activity.
Robert Thomson: It is worth noting a landmark rental agreement between realtor dot common zillow. This deal upgrades the rental experience consumers and allows our landlords and property managers to benefit from the combined audience of both the realtor dot com and Zillow platforms. There is also a clear financial benefit for realtor Dot com, which will allow.
Robert Thomson: To focus on our core buy and sell side offerings.
Robert Thomson: Finally, I would point out that in March According to Comscore, a verified third party source Realtors unique users grew 5% month over month, comparing very favorably to homes dotcom, which experienced a decline in the same period.
Robert Thomson: Moreover, realtor Dot Com is 1.4 times bigger in terms of monthly unique users and has approximately three times the page views and minutes per visit independent verification ensures statistical sumpsimus not metrics mumpsimus.
Robert Thomson: Media platforms from the Wall Street Journal to the New York Post and Marketwatch and Bible Gateway gives us a distinct advantage and expanding reach and building brands.
Robert Thomson: Speaking of Bobble Gateway and Harper Collins, while revenues for the quarter was slightly behind the record Q3 results in the prior year segment, EBITDA rose, 2% and for the year to date period EBITDA was 40% higher.
Robert Thomson: In April we saw stronger performance and hope that will continue for the fourth quarter.
Robert Thomson: We continue to believe the audio book market holds much promise, especially given our unique partnership with Spotify, which has already broadened the book audience, We hope to benefit from Spotify as recent expansion of its audio offerings to Canada, Ireland, and New Zealand and by the way fueled by the growth of Audiobooks Harpercollins digital Rev.
Robert Thomson: News hit 25% of total consumer revenues in Q3, we believe there is little doubt that the audio segment will continue its expeditions expansion there.
Robert Thomson: Bestsellers in Q3 included shall be van Pelt novel remarkably brought creatures, while Savannah galleries, mostly what God does continues to thrive as does Peter Schweitzer's blood money and fan girl down, but severity Pope Francis's memoir life My story through history, which we published unite languages is selling well and we will.
Robert Thomson: Surely have an enduring purple presence in libraries, we anticipate a strong performance in Q4 with Lucy Foley's the midnight feast, the word warriors buy pizza hexes and day trading attention by Gary vein Chuck.
Robert Thomson: At subscription video services, the Hubble streaming aggregation product launched in March and we are working with our partners at Comcast to Shepherd its adoption throughout Australia.
Robert Thomson: The intent is to reduce churn by increasing engagement and improving the customer experience.
Robert Thomson: Excluding forex fluctuations adjusted segment EBITDA overall improved by 1% in the segment.
Robert Thomson: Kayo is benefiting from the impact of a fascinating season of both Aussie rules football and rugby league and had its highest sequential quarterly net additions since inception powered by both new customer growth and reactivation, we anticipate that recent price increases at Keio unexpected strong subscriber growth will continue to benefit.
Robert Thomson: The bottom line as both leading sports codes are drawing record audiences.
Robert Thomson: Foxtail continued to grow its streaming revenues in Q3, which now account for 29% of your escalation and subscription revenues up from 26% last year, which is helping to drive overall margins, which rose from 14.3% to 14, 5%.
Robert Thomson: In news media brands continued to increase their digital penetration across the globe and we will vigilant on costs, which were 5% lower than a year earlier.
Robert Thomson: We anticipate further significant savings as a result of our transition of talk TV to focus on streaming and original video content for our established British brands and we also expect tangible cost benefits following the regulatory approval for the joint pretty good agreement between news U K and the Daily Mail group.
Robert Thomson: The times of London will expand digitally and gradually into the U S. During Q4 inspired by the success of the U S Sun in reaching new audiences and enhancing digital revenues much journalism is unfortunately jaundice, but our imperative is for reporters to have the objective of being objective and for a columnist who have the objective of being sub.
Robert Thomson: Objective as of the end of March the times and Sunday times closing digital subscribers, including the times literally supplement we're at 592000 up 5% year over year. Meanwhile, digital subscribers at News Corp, Australia as of the end of March rather $1 1 million up 7% compared to the prior year.
Robert Thomson: In the first three quarters of fiscal year 2024, New SCOR delivered strong profit growth and we fervently believe that the company is firmly on a pathway to continued success.
Robert Thomson: Trusted premium intellectual property resonates in an era of polarization and amidst a rising tide of I I field false woods and fast for us I R stands for authentic and authenticated intelligence not artificial intelligence or the office of intelligence.
Robert Thomson: Yes.
Robert Thomson: As always we remain sincerely grateful for the astute leadership of Lachlan and Rupert Murdoch and for the Sage support of our board investors and customers and for the Sterling efforts of all of our employees.
Speaker Change: One final note.
Speaker Change: For more than a year, our colleague Evan Gursky, which has been falsely and cruelly imprisoned in Moscow in public and not so public ways. We are actively seeking his release, we deeply appreciate those who have assisted the cores and we sincerely look forward to his emancipation I'll now turn decision Panocha.
Speaker Change: For additional details of our performance in Q3.
Panocha: Thank you Robert and good afternoon to everyone as Robert highlighted we remain focused on the execution of our strategy to transform these cool with an increased mix of recurring and digital revenues as we continue to expand our information services businesses.
Panocha: This is being balanced with reinvestment in key growth initiatives and cost efficiencies as we navigate ongoing inflationary pressures in our markets.
Panocha: Third quarter total revenues, whereas a $2 $4 billion down 1% compared to the prior year, while adjusted revenues were flat compared to the prior year.
Speaker Change: Total segment EBITDA was $322 million for the quarter up 1% compared to the prior year on a reported and adjusted basis and ranked as the second most profitable Q3 since the company's separation in 2013.
Speaker Change: For the quarter, we reported earnings per share of five cents compared to nine cents in the prior year adjusted earnings per share were 11 cents in the quarter compared to nine in the prior year.
Speaker Change: Moving onto the results for the individual segments, starting with digital real estate services segment revenues were $388 million up 7% versus the prior year and up 9% on an adjusted basis segment EBITDA was $104 million up 2% as higher profit contribution from the Ari anchoring was partly offset by lower revenues and approximately 11.
Speaker Change: Millions dollars of higher costs with knees.
Speaker Change: Segment EBITA grew 7%.
Speaker Change: Alright, I had another very strong quarter with revenues rising 15% year on year on a reported basis to $256 million and up 20% in constant currency.
Speaker Change: Growth was again driven by a combination of residential yield increases and increased growth in national listing favorable geographic mix and customer contract upgrades you buy listings rose approximately 6% with Sydney up 20% and now open up 18%. Despite an early Easter which negatively impacted notch volumes. Please.
Speaker Change: Please refer to our earnings release and their conference call for more details.
Speaker Change: News revenues of $132 million were down 6% compared to the prior year with declines continuing to moderate from recent quarters for the quarter real estate revenue fell 5% driven by lower referral and lead Gen revenues reflective of the broader industry trends and lower transaction volumes, we saw an improvement in lead volumes for the first two.
Speaker Change: I think he's growing 4% year over year benefiting from product enhancements and some stabilization in the housing market.
Speaker Change: Average monthly unique users for the quarter were flat versus the prior year at $72 million, but improving 9% from the second quarter.
Speaker Change: As Robert mentioned, we announced our rentals partnership with Zillow to syndicate large multifamily rental listings, which went live nicest. The agreement financially beneficial allows us to materially expand and improve our rental content offerings and to reallocate investment to market and our core buy and sell side offerings.
Speaker Change: As we communicated last quarter, we are focused on best positioning realtor dot com for housing recovery and as a result are increasing the rate of reinvestment in the second half of fiscal 2024 to reiterate some of the key strategic focuses include modernizing the technology stack, ensuring we have the best content for our product offerings and leveraging these clubs.
Speaker Change: It worked to drive audience share.
Speaker Change: Damian has been very cycle without the ongoing benefits of by agents and while we will closely monitor the impact of the proposed <unk> settlement. We continue to believe in the long term opportunity for realtor Dot com and has not altered our strategic direction, which already includes diversifying revenues and expanding our seller offerings, which continue to scale.
Speaker Change: Turning to the subscription video services segment revenues for the quarter with $455 million down 5% compared to the prior year on an adjusted basis revenues were down 1% versus the prior year.
Speaker Change: Streaming revenues accounted for 29% of circulation and subscription revenues. This is 26% in the prior year.
Speaker Change: Total closing paid subscribers across the Fox tell group, whereas a $4 5 million at quarter end down 1% from the prior year up 5% versus the second quarter, our foxtail transitions into the winter sports season.
Speaker Change: Total paid streaming subscribers were nearly $3 1 million, increasing 3% versus the prior year benefiting from a strong start to the AFL and NRL seasons.
Speaker Change: <unk> added 269000 paying subscribers this quarter at the highest sequential quarterly net addition, since its launch in fiscal 2019, which is consistent with recent trends of customers retaining place summer.
Speaker Change: Hook style ended the quarter with 1.2 million residential podcast subscribers down 9% year over year broadcast churn was 13, 3% versus 12, 3% in the prior year, while broadcast RP rates, 2% to 85 Australian dollars benefiting modestly from new pricing and packaging plans implemented in March.
Speaker Change: Segment EBITDA in the quarter of $66 million was down only 3% versus the prior year. Despite the inclusion of $13 million of costs related to Apple, which launched in early March and a 4% negative impact from foreign currency fluctuations adjusted segment EBITDA increased 1%.
Speaker Change: Moving on to <unk> third quarter results were again strong attachments with revenues of $544 million up 3% year over year with digital revenue accounted for 81% of title revenues. This quarter up two percentage points from last year circulation and subscription dice revenues represented 82% of total revenues again reinforcing the stability.
Speaker Change: And recurring nature of the revenue base.
Speaker Change: We saw strong growth at pace with revenues rising, 10% near I think including a 15% growth that this can compliance to $76 million and 15% growth at T. J energy to $63 million total paper retention rates remain strong at over 90%.
Speaker Change: Across the base of a portfolio of this quarter over two thirds of the growth is coming from new customers new products. So upsells with the balance coming from annual price increases.
Speaker Change: Dow Jones energy the mix between pricing and volume is more balanced this year due to the benefit of the pricing regime, which led to above average increases.
Speaker Change: Within the Dow Jones Casino business circulation revenues were flat versus the prior year with digital only subscription growth accelerating from the Q2 rate to 17% year over year and higher by 322000 subscriptions sequentially helped by increased penetration of the Dow Jones bundling offer as they look to better leverage subscription acquisition cost across.
Speaker Change: People products capitalize on minimal overlap between products and drive greater engagement.
Speaker Change: Bundling accounted for approximately 45% of the incremental digital only volume growth in Q3, and now represents about 14% of title subscriptions, we've taken price rise this quarter, increasing monthly rates by nearly 20% to a cohort of tenured print subscribers.
Speaker Change: Advertising revenues declined 2% to $86 million with year over year declines moderated slightly from the first half with digital and pricing up 4% driven by a rebound in technology spend.
Speaker Change: WSJ Com grew 12% underscoring the strength of the platform and it's valuable audience print advertising declined 11% due to weakness in the financial sector digital represented 63% of advertising.
Speaker Change: 59% last year.
Speaker Change: Dow Jones segment EBITDA for the quarter grew 8% to $118 million and was again, our largest segment EBITDA contributor across the company.
Speaker Change: Margins improved year over year by 110 basis points to 21, 7% driven by the strong data pay performance, which remains on track to be the largest contributor to Dow Jones profitability in fiscal 2024.
Speaker Change: Costs as expected rose modestly partly due to the phasing of sales and marketing expenses as we mentioned last quarter.
Speaker Change: At book publishing strong growth in our Christian business was not enough to offset some softness in our romance general books and children's divisions, continuing softness in headwinds in the mass merchandiser accounts, such as Costco and Wal Mart with greater than we expected in March.
Speaker Change: Revenues were $506 million down, 2%, but that compares with a record third quarter last year, while segment EBITDA increased 2% to $62 million compared to the prior year largely due to the easing of supply chain pressures and cost efficiencies driven by the Harper Collins team over the past 12 months.
Speaker Change: Margin increased slightly to 12%, we continue to see improvements in supply chain related costs with freight distribution and manufacturing costs all down versus the prior year.
Speaker Change: Return rates again improved compared to last year, while inventory levels appear to have normalized across our distribution network.
Speaker Change: The backlist contributed 63% of consumer revenues up from 60% last year, while digital sales rose, 5% this quarter, reaching 25% of container sales down.
Speaker Change: Downloadable ODI right mid teens helped by the recent Spotify partnership.
Speaker Change: News media performance continued to be challenged in the quarter with print advertising declines returning to more historic levels.
Speaker Change: Revenues were $530 million down 6% versus the prior year, while adjusted revenues also declined 6%.
Speaker Change: Circulation and subscription revenues were flat and down 1% in constant currency as cover price increases and digital subscriber growth were offset by lower print volumes.
Speaker Change: Advertising remains challenging down 13% on a reported basis and in local currency with print advertising trends, notably weak across all markets.
Speaker Change: As our news media businesses face ongoing print challenges. They continue to work hard on their transition to digital and ongoing cost efficiencies segment EBITA of $26 million declined $8 million, which was due to the lower revenue, partly offset by lower print volume and newsprint expenses adjusted segment EBITDA declined 26%.
Speaker Change: So the outlook similar to our comments last quarter. It is challenging to forecast in the short term, albeit economic indicators vary across markets looking at each of our segments at digital real estate services astray in residential new buy listings for April 32% choose the timing of Easter as well as easier comparisons to the prior year. Please refer to <unk>.
Speaker Change: For more specific outlook commentary.
Speaker Change: At least we hope to see continued moderation in revenue declines like the third quarter. We expect continued reinvestment in marketing and product development, which will be partially offset by cost reductions elsewhere in the new rental agreement with their life.
Speaker Change: In subscription video services consistent with our message last quarter, we continue to expect modestly higher expenses for the full year and some softness in streaming revenues for the first half which may impact for your profitability in local currency.
Speaker Change: At Dow Jones, where we continue to expect strong revenue and profitability performance for the full year underpinned by our basically offerings, we expect modestly higher overall expenses for the fourth quarter and full year.
Speaker Change: At book publishing overall industry revenue trends appear relatively stable, albeit third quarter was a bit softer than the first half of physical sales, but we are encouraged by the strength in downloadable audio.
Speaker Change: We continue to expect margins to increase versus the prior year and expect strong performance in Q4, partly due to the prior year comparison.
Speaker Change: At news media advertising revenue trends remain challenging, particularly in Australia, and we will continue to focus on ongoing cost efficiencies in our digital product offerings.
Speaker Change: For the other segment, we expect cost for the fourth quarter to be in line with the previous three quarters. We now expect capex to be relatively stable to last year slightly lower than our initial expectations with that let me hand, it over to the operator for Q&A.
Speaker Change: Thank you we will now start the Q&A session. Please limit your questions to one per participant if you have joined via the zoom application. Please use the raise hand functionality to ask the question.
Speaker Change: If you have joined via the audio line. Please press star nine.
Speaker Change: Questions will be answered in the order they are received.
Speaker Change: We will now pause a moment to assemble the queue.
Speaker Change: Our first question comes from Andrew Rykowski from Evans and partners. Please limit yourself to ask your question.
Andrew J. McLeod: Hi, Robert Hi, Susan.
Andrew J. McLeod: So my question is.
Andrew J. McLeod: Random move investment.
Andrew J. McLeod: We achieved during the quarter and you flagged is ongoing sounds like it's both marketing and product development.
Andrew J. McLeod: Are you able to confirm that and how much is going into marketing how much is going to provide development and on the.
Speaker Change: Product development side are you specifically targeting the sell side agents.
Speaker Change: With that to spend given the NII settlement.
Speaker Change: If you can provide some more detail around the sort of product you are investing in it and just more broadly how do you think that settlement is going to impact the business model going forward. Thank you.
Speaker Change: Ajay look obviously I don't know.
Ajay: And to comment on specific legal cases, and U S real estate industry is.
Speaker Change: Clearly in transition but.
Speaker Change: No doubt the realtors have a crucial role in the purchasing process and we are proud to serve them.
Speaker Change:
Speaker Change: As for Realtor Dot com are experienced in Australia, and complementary media platforms. The newest position us perfectly to take advantage of that traditions with transition. We are very focused in the interim of.
Speaker Change: Making sure that the back into solid that the user interface is great.
Speaker Change: Our customers get.
Speaker Change: Value for money.
Speaker Change: Very focused on a buy sell hens, a partnership deal with Zillow, Zillow rentals, which would be beneficial to both companies.
Speaker Change: And the imperative really is to focus on the world's largest property market, which is still relatively early in its digital evolution and we have the media assets.
Speaker Change: As announced from our global experience to make the most of that moment.
Speaker Change: Maybe just to add on that too I mean, the spend itself is probably broadly Cyprus roughly evenly across both categories, but I think the thing to remember is in relation to the back half of last year, we pulled back significantly on the marketing spend particularly in Q3 and a little bit in Q4 for the prior year compares will look more challenging in relation to marketing spend.
Speaker Change: Think about it more broadly it's focused on five areas product and marketing.
Speaker Change: Thank you and Joe Laila, we will take our next question.
Speaker Change: Yeah.
Speaker Change: Our next question comes from David Karnofsky from J P. Morgan Please limit yourself to ask your question.
David Karnofsky: Maybe on book publishing wanted to see if you could speak a little more broadly to what you're seeing in terms of demand trends right now mentioned some softness at box.
David Karnofsky: Retailers, and then with Spotify, what potential tailwind do you see for streaming widely under the overall market for audio books.
David Karnofsky: Can you say, if you've seen any incremental interest in other ESG carry harpercollins content.
David Karnofsky: As for Harpercollins, we are all book is to a certain degree and purchases ebb and flow like the power of books on the bedside table.
David Karnofsky: Early last quarter sales was strong and then there was clearly a slight pausing purchasing but what I can say is that we have seen.
David Karnofsky: Turn to strong year on year performance in April and have a compelling roster of new releases.
David Karnofsky: And even in Q3, we saw an improvement in margin from 11, 8% last year to 12, 3%. This year, we're certainly benefiting from the international expansion of Audiobooks as you mentioned and the efforts of Spotify, who have transformed audio book streaming revenue, which rose 14%.
David Karnofsky: Third quarter, So we're proud to partner with Daniel and his talented team as they rollout streaming globally.
David Karnofsky: David maybe just to complement that a little bit it's not a perfect comparison the books scanned data when we have a look at it for Q3 shaped assumption down 3%. So that gives you an indication that you know the market was a little bit softer for Q3.
David Karnofsky: But going into Q4, we did we did have a particularly weak Q4 of last year. So we would expect to see pretty strong compares.
David Karnofsky: As we finish up.
Speaker Change: Okay.
Speaker Change: Thanks, David Leila will take our next question. Please.
Speaker Change: Our next question comes from Alan Gould from Loop capital. Please limit yourself to ask your question.
Alan Gould: Thanks for taking the question.
Alan Gould: Hello, Robert Susan a question on the Google transaction can you flush or this renewal of new flush this out a little bit I remember at one point last year, you talked about a nine figure deal with the digital companies I don't recall, if that was just Google or others and does this include generative AI in addition to.
Alan Gould: Using your.
Alan Gould: Using your journalism for other sources.
Robert Thomson: Look I can't comment on the financial details of the deal other than to say that this is a renewal of the existing deal. It has nothing to do with a payment for I R. E. Gen. I I'll use of our content servicing of that content and training of the continental grounding of the content.
Robert Thomson: Any negotiations of for that particular use of our content will come later and Alan just from a financial perspective, what we've never given that out specifically you can assume that it's broadly consistent with the financials of the previous two.
Speaker Change: Okay. Thank you.
Speaker Change: Thanks, Alan operator.
Speaker Change: Operator next question.
Alan Gould: Alan Leon will take our next question. Please.
Robert Thomson: Our next question comes from Craig Huber from Huber Research.
Craig Anthony Huber: Yes, Hi can you hear me okay.
Craig Anthony Huber: Yes, Greg.
Craig Anthony Huber: Yeah, Hi.
Craig Anthony Huber: I think everybody is really curious just about the progress that you are trying to make here to transform the company does to simplify the company and stuff and obviously, we talked about this three months ago and six months, we've talked about a privately and publicly I should say and obviously you're doing a lot of work on this before you made the announcement six months ago I'm just kind of curious can you give investors at all.
Craig Anthony Huber: Timeline, when you guys might wrap this up and stuff I mean, obviously things are pretty quiet out there for most of the investment banks.
Craig Anthony Huber: Legal folks after the work on this sort of stuff so.
Craig Anthony Huber: I know, it's very complicated for you guys are doing here, but.
Craig Anthony Huber: What how much longer do you think we should have to wait.
Craig Anthony Huber: In the next quarter or so or do you really have no idea.
Speaker Change: Craig I'm sure that you and all on Nikola size enough to pause the phrases used in my earlier explanation and demand potential meaning.
Craig Anthony Huber: You can see that we are well advanced in our thinking and planning and that planning has involved necessary regulatory steps in and those who not simple steps to ensure that we have maximum flexibility genuine optionality.
Craig Anthony Huber: We.
Craig Anthony Huber: Want to continue to generate momentum and create maximum value for our shareholders and we're certainly not complacent.
Craig Anthony Huber: Even though the share price has risen as of yesterday was just over 46% in the past year.
Craig Anthony Huber: We are we do recognize that there is a significant sum of the parts discount so stay tuned and not indefinitely.
Speaker Change: Thank you Craig Halo, we'll take our next question. Please.
Craig Anthony Huber: Our next question comes from Darren Leung from Macquarie.
Craig Anthony Huber: Okay.
Darren Leung: Excuse me hi, guys.
Darren Leung: Hi, guys. Thanks for the guarantees on the slippery consummate.
Darren Leung: <unk> subscribers in OXXO, they're down sequentially quarter on quarter to the second ponds happened, but I'm just keen to understand a little bit about the drivers here and your response in all parts of the state. Please.
Craig Anthony Huber: I'm Darren I think when we think about it from the last quarter I think we talked about this there was the writers strike towards the back end of last year and that obviously had an impact on the content that was flowing through there. So that did have an impact on the subscribers and we're seeing a carry forward of that I mean, that's really what that what the impact.
Craig Anthony Huber: Package.
Speaker Change: Thank you Darren Laila, we will take our next question. Please.
Speaker Change: Our next question comes from Lucy Huang from UBS.
Speaker Change: Yeah.
Lucy Huang: Thanks, Robert Susan My question is in relation to costs that I guess right now the macro outlook still seems relatively on search and display advertising and I'm familiar with like the U S market. They just wondering if there's any scope for some further cost reduction.
Speaker Change: I'm sure the closer to the next G. If based condition changing trade.
Speaker Change: I think listen you might remember, we did we sort of announced I think probably a year ago, 5% head count reduction and that was question number at $160 million. So the cost out I mean, it's great that we're actually.
Speaker Change: Numbers and exceeded those numbers actually but the really good thing is that the businesses are actually always like a phone call. So well that was a particular exercise that we did across the whole group.
Speaker Change: Cross all of our businesses there are different transformation initiatives. They continue to work on them as they look for efficiency. So we feel pretty confident that we've got a good cadence in relation to that that can help offset any shortfalls in revenue.
Speaker Change: And that's why you've seen such good mentioned our margin expansion in the in the year.
Speaker Change: Thank you Lucy later on we'll take our next question. Please.
Lucy Huang: Our next question comes from Brian Han from Morningstar. Please limit your line to ask your question.
Brian Han: Susan just on that.
Brian Han: <unk> question.
Brian Han: So it looks like a some sort of a cost reduction initiatives will be ongoing in the current fourth quarter, but how.
Brian Han: How much of that do you think will be reinvested in realtor dot com.
Susan: Oh Boy, we're trying to keep the balance three investable within realtor itself. So I think I said in my prepared remarks, we've got some benefit from the upside in the new rental agreements with them and feel like and we've got some other cost savings that we're doing with real test wells. There is an increasing cost we are trying to manage it.
Lucy Huang: I think when we sort of think more broadly at that cost across the business and sort of to the earlier point that we talk to with Lucy.
Lucy Huang: Just constantly focus on looking for efficiencies so the U K announced a pivot in the talk TV strategy to streaming and that should unlock some savings which were really see come through in fiscal 2025 D. Titanium also announced a joint venture with the Daily Mail group.
Lucy Huang: In relation to joint printing that should unlock further savings, we now Australia and team are constantly iteration when it comes to savings so we saved.
Lucy Huang: And how to think about it broadly across the whole company, but specifically in the divisions that we we look for those cost savings.
Speaker Change: Thank you.
Speaker Change: Thank you Brian Layla, we will take our next question.
Lucy Huang: Our next question comes from Jamie Laskowski from Goldman Sachs.
Jamie Laskowski: Hi, guys. Thanks for the question I was.
Jamie Laskowski: Just wondering if you could elaborate on the underlying company structure changes that have happened so far that were called out and what we should expect over the medium term. Thank you.
Jamie Laskowski: Jamie they were regulatory changes related to the.
Speaker Change: The original composition of the company in Australia.
Jamie Laskowski: And really other than what I said earlier.
Jamie Laskowski: Liberty to Saturday more at this moment.
Lucy Huang: Yeah.
Speaker Change: Thank you Jamie Laila, we will take our next question. Please.
Speaker Change: At this time, we have no further questions I'll now hand back to you for closing remarks.
Speaker Change: Thank you Laila. Thank you all for participating have a wonderful day and we will talk to you soon take care.
Speaker Change: Yes.