Q2 2025 News Corp Earnings Call
Sprint is being recorded media will be allowed on the listen only basis at this time I'd like to turn the conference over to Michael Florin Senior Vice President and head of Investor Relations. Please go ahead.
Speaker Change: You very much operator, Hello, everyone and welcome to news Corp's fiscal second quarter of 2025 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 Lavinia, Shandra Shaker Chief Financial Officer, we all been some prepared remarks.
They'll be happy to take questions from the investment community. This call may include certain forward looking information with respect to news Corps business and strategy.
Speaker Change: These results could differ materially from what is said.
Speaker Change: 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.
Speaker Change: The definitions and GAAP to non-GAAP reconciliations of such measures can be found in the earnings releases for the applicable periods posted on our website with that I'll pass it over to Robert Thomson for some opening comments.
Mike Newschool: Thank you, Mike Newschool had yet another fruitful quarter qualitatively and quantitatively revenues on a continuing operations basis, which excludes Fox DAU grew 5% to two point to $4 billion, while profitability rose, 20% to $478 million as we made significant.
Mike Newschool: <unk> progress in our digital development, a few more metrics to highlight our performance net income from continuing operations surged to $306 million, a 58% increase compared to the same quarter in the previous year that is correct, 58%, while our EPS from continuing.
Mike Newschool: <unk> was 40 cents compared to 28 cents in the prior quarter and our overall margin rose from 18, 7% to 21, 4%.
Mike Newschool: Our three pillars of growth digital real estate, Dow Jones and book publishing continued to expand this segment EBITA robustly, while we saw the positive impact of rigorous cost discipline and digital development in our news media segment.
Mike Newschool: With a keen eye on every night strengths, we took a significant step towards simplification with the agreement to sell foxtail too does own a premier global sports streaming provider for a total enterprise value of Australia, and $3 $4 billion or approximately seven times Fox tells fiscal <unk>.
Mike Newschool: Twenty-four EBITA.
Mike Newschool: The agreement is a tangible recognition of Fox tell successful digital transformation and should surely benefit our shareholders. Our partners at the zone and all Australia and sports fans, we expect the transaction to close in the second half of the current fiscal year subject to regulatory approvals and other customary closing.
Mike Newschool: Additionally, <unk>, hence foxtail financials are now reported as discontinued operations.
Mike Newschool: The sale of Fox do should have a meaningful impact on our balance sheet. Upon closing Fox tells outstanding shareholder loans will be repaid in full including 574 million Australian dollars to news Corp, well, It's third party debt will be transferred with the business Newschool will also hold an.
Mike Newschool: <unk>, 6% stake in the fast growing design.
Mike Newschool: We are proud to be long term partners with the design team and see material value upside potential in the growth of a company that is at the cutting edge of international Sports development I encourage you all to download the app and delve into a vast range of sports.
In the wake of this important deal we were delighted that both S&P global and Moody's upgraded our credit rating to investment grade, reflecting the impact of our long term strategy of focused investment and an emphasis on return of invested capital.
Mike Newschool: We certainly lead the way in providing priceless content for generative II and remain vigilant in our pursuit of degenerative AI and abuses of our intellectual property.
Mike Newschool: We are pleased with our partnership with open AI and hope that other companies in this segment take a similarly enlightened approach.
Mike Newschool: Our legal action against the Perplexing Perplexity is underway and we look forward with relish to document discovery.
Mike Newschool: We firmly believe that this discovery process will be an important phase not just for us, but for all who cherish the sanctity of IP.
Mike Newschool: The sudden rise of deep Sig is itself a salary lesson for all AI players. If they are unable to host fresh trusted news their version of AI will lack immediacy and relevance data centers and energy sources, and newfangled chips may well be essential AI infrastructure, but.
Lee: Lee, we believe content will be king in the world of AI.
Lee: One rather general generic postal interesting observation.
Lee: We are seeing a tangible increase in business confidence here in the U S. Since the election, the temporary turmoil of transactional tariffs aside.
Lee: There is a confluence of economic optimism and a cultural awakening with the yolk of woke, having being lifted we believe these trends should lead to less superfluous gratuitous regulation greater capital formation increased opportunities for all Americans and more candid creative compelling conversations hopefully.
Lee: <unk>, an era of censorship and self censorship is receding into the distance.
Lee: As for specific segments digital real estate revenue increased 13% to $473 million and segment EBITDA Virgin 26% to $185 million that strength came despite significant growth in the prior year quarter at Rei and reflected renewed revenue growth at realtor dot com despite the.
Lee: Still hostile housing market conditions in the U S with a 30 year mortgage rates above 7% in recent weeks clearly realtor dot coms efforts to strengthen adjacent revenue streams are paying off with accelerated growth in rental seller and new homes revenues.
Lee: Realtor continues to make significant progress in engagement as evidenced by the highest repeat visitation and most number of views per visit in the industry in December as per Commscope.
Lee: At ARIA. The success story continues as the company achieved a quarterly record in revenue, while extending its audience leadership and reinforcing its position as Australia is preeminent property side.
Lee: <unk> achieved 129 million average monthly visits during the quarter nearly four times more than our nearest competitor on average listing volumes rose, 4% with yield growth at 14%, while our India Division continued to post healthy revenue growth.
Lee: At Dow Jones revenue grew 3% to $600 million SYGMA.
Lee: Segment, EBITA expanded 7% to $174 million and margins rose an impressive 110 basis points, while overall performance in the first half of the fiscal year has been strong we expect year over year growth to increase in the second half of the year in Q2 digital circulation revenue grew year over year.
Lee: At its fastest pace in two years as digital up who improved sequentially and the conversion from introductory promotions and digital bundle offers ran ahead of expectations reading.
Lee: <unk> derive significant value from our prestige portfolio of the Wall Street Journal, Barrons IBD and market watch.
Lee: We believe there is potential for revenue improvement as we emphasize the strength and the distinctiveness of individual titles.
Lee: Risk and compliance and Dow Jones energy reported revenue growth of 11% and 10% respectively and the teams continue to benefit from new products, such as advanced screening and monitoring and analytics pro that had meaningful value for our compliance focused risk averse clients new.
Lee: New initiatives contributed about one third would be to be revenue growth this quarter.
Lee: Now more than ever Dow Jones risk and compliance clients and navigating rapidly changing regulations and sanctions. This complex environment in the U S and globally boost demand for risk and compliance products as organizations rely on our expert insights and comprehensive data to make informed decisions and.
Lee: To stay compliant.
Lee: The uncertainty regarding the transactional tariffs is driving demand for Dow Jones energy insights and forecasting services as clients seek to understand the potential impact on global energy markets and investment opportunities.
Lee: Book publishing reported yet another exceptional quarter with revenue expanding 8% to $595 million and segment EBITA searching 19% to $101 million.
Lee: Growth in the quarter was powered by strong Bible sales I Sterling performance at Harpercollins U K and a healthy mix of titles margins improved thanks to buoy and sells a backlist books and a particularly noteworthy 13% increase in audio revenue.
Lee: Among the bestsellers, the pumpkin Spice Cafe and the first volume of shares memoirs were standouts. These successful cinematic release, a weaker it has led to strong sales of Gregory Maguire for book series, and we anticipate a further boost from the next installment in the series the positive cycle should continue with the release of the hit film sequel.
Lee: Later this calendar year.
Lee: At news media revenue fell a modest 2% to $570 million, but segment EBITA grew an impressive 30% to $74 million success in the quarter was driven by the transition of talk in the U K to streaming and our commercial printing a partnership with the M G as well as reduced costs at news Australia.
Lee: Overall AD trends moderated while the times posted its largest quarterly net additions of paid digital subscriptions in two years.
Lee: Digital advertising grew by 13% at the New York Post where profitability was also assisted by our open AI deal.
Lee: Used media generally has clearly benefited from those open AI revenues and we are pleased with the progress in our partnership with Sam Edelman and his exceptional colleagues.
Lee: Content is but one part of a broad deal and for example, our legal and government affairs teams are swapping ideas and experiences as we negotiate the nuances of AI as part of our partnership news called content will be featured in open a new operator product ensuring prominence for Alger and wisdom in the.
Lee: Burgeoning world of Agentic AI.
Lee: <unk> companies are striving to ensure that the a in AI does not stanfill anarchy in alphabetic or absurdity.
Lee: In a world in which so many media companies and masked heads are in terminal decline our business is thriving thanks, certainly to the diligent and creative work of our talented teams and the savvy strategic guidance of Lachlan and Rupert Murdoch and our student board of directors.
Lee: Speaking of talent I am honored to introduce our new Chief Financial Officer, Lovinger chunk of Shaker, who will eloquently expand on the exegesis.
Speaker Change: Thank you Robert for the kind introduction.
Speaker Change: I'm delighted to be with all of you today and look forward to meeting many of you in the coming months.
Speaker Change: I'm excited to Chinese carbonate the company's continued impressive digital evolution.
Speaker Change: As Robert mentioned in December we announced an agreement to sell Fox tail to disown, which for news Corp will allow for a greater focus on our core growth pillars will meaningfully strengthen our balance sheet and should reduce our future capital intensity.
Speaker Change: Turning to the quarter.
Speaker Change: Foxtons financial results are reflected as discontinued operations for fiscal 2025, and 2020 for second quarter and year to date periods.
Speaker Change: In subscription video services is no longer a reportable segment.
Speaker Change: I will not speak to Fox tells results on this call and they are excluded from the numbers I will be discussing today, but more information will be available in the 10-Q to be filed tomorrow morning.
Speaker Change: We will also be filing an 8-K with recast historical financial information.
Speaker Change: News Corp reported fiscal second quarter revenues on a continuing operations basis of $2.2 billion by some 5% year over year, and total segment EBITDA of $478 million, increasing 20% year over year.
Speaker Change: Margins improved by nearly 270 basis points to 21, 4%.
Speaker Change: The three core pillars, Dow Jones digital real estate and book publishing collectively grew revenue by 7% and segment EBITDA by 16%.
Speaker Change: Second quarter, adjusted revenues rose, 4% compared to the prior year with the difference from reported primarily due to currency impact while adjusted total segment EBITDA rose 20% versus the prior year.
Speaker Change: For the quarter, we reported earnings from continuing operations per share or 40 cents compared to 28 cents in the prior year.
Speaker Change: Adjusted earnings from continuing operations per share were 33 cents in the quarter compared to 27 cents.
Speaker Change: In the prior year.
Speaker Change: Moving to the individual segments, starting with Dow Jones.
Speaker Change: Dow Jones reported revenues of $600 million up 3% year over year similar to the first quarter and was again the largest segment contributed to overall company's Anthony.
Speaker Change: Digital revenue accounted for 81% of total Dow Jones segment revenue this quarter, improving three percentage points from last year.
Speaker Change: Overall professional information business Avenue, which reflects our b to b products rose, 4% year over year, notwithstanding an over 300 basis point adverse impact from Factiva, primarily due to the ongoing customer dispute that we mentioned last quarter with the impact greater in the second quarter.
Speaker Change: This quarter the growth came from new customers, new products and improved deemed at risk and compliance, which grew 11% to $80 million, including a modest negative FX impact due to European exposure.
Speaker Change: And Dow Jones energy, which grew 10% to $68 million with customer retention remaining that is strong at over 90%.
Speaker Change: During the quarter risk and compliance enhanced its product offerings with the acquisition of World ECR and London based provider of export control and trade sanction use.
Speaker Change: And in energy, we continued to see strong demand for newer products associated with carbon retail fuels and liquefied petroleum gas and experienced robust pipelines and strong closing rates.
Speaker Change: Within the Dow Jones consumer business circulation revenues rose, 3% versus the prior year benefiting from improved digital circulation revenues of 8%.
Speaker Change: Double the quarterly run rate and the highest quarterly growth in two years.
Speaker Change: We have started to benefit from the conversion to higher pricing from our digital subscriptions added in the past year by introductory promotional offers.
Speaker Change: Digital auto also increased quarter over quarter.
Speaker Change: Digital circulation revenues accounted for 73% of circulation revenues for the quarter up from 70% in the prior year.
Speaker Change: Digital only subscriptions improved by 13% year over year and by 27000 sequentially negatively impacted by the phasing of marketing promotions and seasonality.
Speaker Change: Particularly related to students and some industry headwinds from search algorithms.
Speaker Change: That said, we do expect stronger volumes in the third quarter.
Speaker Change: Bundling subscriptions for the quarter improved by 45% year over year to over 950000, while also benefiting from improved yield with the focus on the three product bundle of Wall Street Journal Marketwatch and balance.
Speaker Change: Volume declined by 16% year over year, but it's sequential decline was the lowest since the fourth quarter of fiscal 2021.
Speaker Change: Advertising revenue of $121 million moderated from the prior quarter to a decline of 4% year over year I spent declined 10% with digital flat an improvement from the first quarter <expletive>.
Speaker Change: Digital represented 64% of advertising revenues up from 62% last year.
Speaker Change: Dow Jones segment EBITDA for the quarter grew 7% to $174 million with margins increasing to 29%.
Speaker Change: Moving on to digital real estate.
Speaker Change: Digital real estate had another exceptional quarter with segment revenues of $473 million up 13% versus the prior year and 12% on an adjusted basis.
Speaker Change: Segment, EBITDA was $185 million up 26% driven by higher profit contribution from <unk> group the highest growth since 2021.
Speaker Change: Adjusted segment EBITDA grew 25%.
Speaker Change: <unk> had an outstanding quarter with revenues rising 17% year on year to $343 million, marking its highest ever quarterly revenue on record.
Speaker Change: Growth was again, driven by a combination of restaurants and yield increases.
Speaker Change: <unk> strong growth in national listings and customer contract upgrades.
Speaker Change: Residential <unk> growth improved by 14% new buy listings rose approximately 4% with Sydney and Melbourne, each up 2%.
Speaker Change: Please refer to <unk> earnings release, and their conference call for more details.
Speaker Change: Rialto 70 for the quarter of $130 million were up 2% compared to the prior year, marking the first year over year improvement since the fourth quarter of fiscal 2022.
Speaker Change: Access to real estate revenues were essentially flat as lower lateral and lead generation revenues were largely offset by accident rating growth from adjacencies.
Speaker Change: Lead volumes fell 2%, while average monthly unique users for the quarter fell 6% year over year to $62 million at realtor Dot com.
Speaker Change: However, Rialto continues to maintain strong audience share despite much higher competitive marketing spend underscoring the strength and quality of that audience.
Speaker Change: Rialto also continued to show strong traction on new revenues as seller, new home and renters represented 20% of revenues and we anticipate continued strong growth in decent Jason sees going forward this fiscal year.
Speaker Change: At book publishing momentum from the prior year continued with the year over year growth improving from first quarter with revenues of $595 million up 8%, while segment EBITDA improved by 19% to $101 million.
Speaker Change: Margins expanded by 150 basis points to 17% as positive operating leverage was underpinned by strong digital and backlist performance.
Speaker Change: We saw strong growth in Christian publishing from higher Bible sales and very strong sales in the U K as Robert mentioned.
Speaker Change: Harper continues to benefit from strong physical book orders and continued robust audio book growth across all regions.
Speaker Change: Harper Collins supposed to digital revenues of $120 million, increasing 9% in the prior year driven by strong order book growth across all regions, including increased adoption at Spotify and increased performance from audible.
Speaker Change: In total digital sales represented 21% of consumer revenue in line with the prior year.
Speaker Change: Audio books grew 13% year over year, a slower rate than quarter, one as we began to lap the initial rollout from Spotify in the U K, Australia and U S.
Speaker Change: The backlist contributed 61% of consumer revenues up from 60% last year.
Speaker Change: Turning to news media.
Speaker Change: Overall revenue performance improved from the first quarter with advertising declines moderating and the segment benefited from increased cover prices and subscription pricing across Massachusetts.
Speaker Change: Revenues for the quarter were $570 million down 2% versus the prior year, while adjusted revenues fell 3%.
Speaker Change: Note that both periods were recast to include the contribution from Sky News, Australia, which previously had been included in the subscription video services segment Sky.
Speaker Change: Sky News contributed $17 million since avenues flat compared to the prior year.
Speaker Change: Segment, EBITDA showed strong improvement rising 30% year over year, driven by cost savings initiatives as we mentioned last quarter.
Speaker Change: Most notably at the U K and the benefits of the commercial printing joint venture with DMT media and lower costs.
Speaker Change: Adjusted segment EBITDA increased 28%.
Speaker Change: Turning to the outlook.
Speaker Change: Market trends remain mixed geographically and given the current spot rates for the Australian dollar and pound Sterling versus the U S. Dollar, we expect currency translation to be a headwind in the second half.
Speaker Change: Some of the teams across each of our segments.
Speaker Change: At Dow Jones, the team remains focused on b to b growth, including Upselling, and new products across risk and compliance and Dow Jones energy.
Robert Thomson: As Robert mentioned for total Dow Jones, we expect to see improvement in growth in the second half.
Robert Thomson: We expect expenses to be modestly higher year over year due to investment, notably in B to B. However, we will continue to focus on cost efficiencies to drive growth.
Speaker Change: At digital real estate Australian residential new buy listings for January were up 3%.
Speaker Change: That's like the audio for more detailed outlook commentary.
Speaker Change: Rialto Dot com will continue to focus on technology improvements and enhanced content and product offerings with the goal to be best positioned to drive share when the housing market recovers.
Speaker Change: We hope to see some revenue improvement, notably from continued growth from Adjacencies, but continue to monitor macro trends.
Speaker Change: We currently expect the rate of reinvestment to be modestly higher in the second half as we continue to focus on growth initiatives.
Speaker Change: At book Publishing as mentioned last quarter, we hope to see further profit improvement in fiscal 2025, albeit likely at a much more modest rate due to difficult prior year comparisons and quarter three will be impacted by phasing of frontlist releases.
Speaker Change: At news media, while we expect the segment to continue to benefit from lower talk TV costs together with savings associated with the new commercial printing joint venture with DMT in the U K advertising conditions remained difficult with limited visibility and coupled with Forex headwinds, we anticipate a more challenge.
Speaker Change: <unk> second half.
Speaker Change: As mentioned last quarter, we expect the other segment cost to be higher than last year, including ongoing AI and related legal costs.
Speaker Change: With that let me hand, it over to the operator for Q&A.
Speaker Change: Okay.
Speaker Change: Thank you we will now start the Q&A session. Please limit your questions to one per participant.
Speaker Change: Joining me the zoom application. Please use the raise hand functionality to ask a question.
Speaker Change: If you have joined via the audio line.
Speaker Change: Press Star nine to raise your hand and star six to Amit once called upon questions.
Speaker Change: Questions will be answered in the order they are received.
Speaker Change: We'll now pause for a moment to assemble the queue.
Speaker Change: Okay.
Speaker Change: First question will come from David Karnofsky with J P. Morgan. Please UN mute your line and ask your question.
David Karnofsky: Alright. Thank you just maybe on the box Hill deal one see if you could discuss a bit the structure here and reasoning.
Speaker Change: Does own equity as payment and maybe your view on the asset and then following this Robert would be great to get your updated view on the overall news Corp structure and can you say at this point. If you are still engaged in an overall strategic review. Thank you.
David Karnofsky: Yes.
David Karnofsky: David obviously the deal is subject to the usual regulatory approvals in particular out of the foreign investment review board and electrical seed in Australia.
David Karnofsky: Providing whatever information is important agencies require we do expect it to do formally close this fiscal.
David Karnofsky: But I should emphasize that we will be close partners with design, whose team we've found to be particularly impressive but I think it's fair to say that I found the Fox tells him.
David Karnofsky: To be particularly impressive.
David Karnofsky: Essentially you have the marriage of two world class companies and.
David Karnofsky: Together there'll be more than the sum of the parts.
David Karnofsky: As for structural reform.
David Karnofsky: Fox Hill deal itself.
Self should reinforce the sense that we are constantly reviewing our portfolio and that deal is eloquent testimony that we don't just reviewed we act decisively.
David Karnofsky: Our conscious of maximizing returns for our shareholders and improve returns have certainly come from buttressing of bolstering our core pillars and that is reflected in our share price is not entirely obviously, but some word I'm sure you're aware that our shares have risen more than 26% of the past six months.
David Karnofsky: Thank you.
David Karnofsky: Dave look we will take our next question.
Speaker Change: Our next question will come from Kane Hannan with Goldman Sachs. Please ask your question.
Kane Hannan: Hey, good morning, guys.
Speaker Change: Maybe just a comment.
Speaker Change: And instruction Robert around Dow Jones earnings growth accelerating in the second half.
Speaker Change: Despite the expectations for more exports during the second half just talk a little bit more about what's driving that.
Speaker Change: The backdrop, you're way improving subscriber trends you called out of the journal. So its just help us understand what gives you the confidence in the previous second half.
Speaker Change: Well I think it's a combination of two things the Dow Jones circulation trends. The total subs were up non centered around $5 9 million digital only up 13% and we're very focused there on average revenue per subscriber and are seeing positive trends as the Dow Jones dynamic pricing strategy unfolds and that was the.
Speaker Change: Reflected in the overall, 3% increase in circulation revenues. Despite a continuing fall in print circulation revenue to be candid. So digital circ revenues were up 8%.
And the Dow Jones team is generally comfortable with the phasing of subscribers from discounted entry level offers to more standard pricing is proceeding well and we will see that reflected.
Speaker Change: In ensuing months and then at the Pip.
Speaker Change: Clearly, our risk and compliance and Dow Jones energy.
Both very well and we have full confidence in him.
Speaker Change: If I could just add to that drop it.
Speaker Change: Okay, and one of the things we need to remember is that the second half generally tends to be the time when we have more additions in any case.
Speaker Change: Seasonality piece status, which was up.
Speaker Change: Thank you Kane look we will take our next question. Please.
Speaker Change: Our next question will come from Jason Bazinet with Citi. Please on mute and ask your question.
Jason Bazinet: Just had a question for Mr. Thompson, given that it's a year into this Spotify deal can you just remind us what you are hoping to achieve.
Speaker Change: With that agreement and then based on <unk>.
Speaker Change: Consumer behavior sort of a year and what lessons if any have you learned so far.
Speaker Change: Jason we're very proud of the partnership with Spotify, which I think itself has changed the audio book market and the broad trends remain in place now.
Speaker Change: The audience is expanding.
Speaker Change: Audio overall was 30% higher than a dare I say, even the ebooks were 6% higher after a couple of years of relatively.
Speaker Change: Sluggish sales I think what we are seeing is a change in consumer behavior.
Speaker Change: And adaptation by both Spotify.
Speaker Change: And the order book for that.
Speaker Change: Increased audience and Dare I say, we are the beneficiaries of that.
Speaker Change: Thank you Jason Luke we will take our next question. Please.
Speaker Change: Our next question will come from NPI Rykowski with Evans and partners. Please immune ask your question.
NPI Rykowski: Hi, Robert Hi, Lavinia.
Speaker Change: My question is surround the.
Speaker Change: Expected use of the proceeds from the Fox they'll file operation the transaction is yet to Claus, but you'll get some money as part of the shareholder line retirement. So do you expect that present, some skype for capital management.
Speaker Change: Is your intention to reinvest those proceeds and all of that now as part of that and see if you can give us any sort of broad guidance on where you expect capex to trend going forward post the completion of the sale. Thank you.
Speaker Change: Well then.
Speaker Change: Clearly we are absolutely focused on generating maximum value long term for our shareholders. We have one.
Speaker Change: $1 billion buyback provision in place and you can see from our disclosures that the debt buyback is well underway as well as that we have the dividend payments. So we're extremely conscious of shareholder returns and returning to shareholders. We last fiscal we returned 70% of our available free cash flow through the buyback in <unk>.
Speaker Change: Clearly the significant increase in our free cash flow in recent years has given us optionality on the upgrades to investment grade by both Moody's and S&P global in recent days reflect that reality, but we will go on being conscious about Judy to shareholders, but we do start from a position of strength.
Speaker Change: Thank you and Joe look we will take our next question. Please.
Our next question will come from David Joyce with Seaport Research. Please ask your question.
Speaker Change: Thank you.
Speaker Change: Appreciate it and your Oh look.
Speaker Change: The back half of the year could you provide some more color, though on the timing of.
Speaker Change: When we will be lapping the price increases at Bell Jones on the consumer and professional services side and also when.
Speaker Change: When you would expect the new products to be coming online.
Speaker Change: And contributing there.
Speaker Change: Then finally on book publishing.
You have more of an outlook over the next few quarters of significant titles that would be released there would be drivers. Thank you.
Speaker Change: Well I think we've given as much guidance as we can on the likely trajectory for for Dow Jones and pricing was essentially what you are seeing by the way there is the.
Speaker Change: The increase in digital and <unk>, which led to 81% of our revenues are being generated through digital compared to 78%.
Speaker Change: Last year, and secondly, the continuing influence or through the expansion of the of the Pip business relative to the entire business.
Speaker Change: The impact of that higher margin business on a profitability that.
Speaker Change: It's quite obvious the module at Dow Jones Rose from 27.9% to 29% and there's every reason to believe in coming months and quarters and years. This dare I say that as people takes a larger share of revenue that margin will continue to expand.
Speaker Change: As for the for the books business.
Speaker Change:
Speaker Change: Have.
Speaker Change: A a full roster as always it at Harper Collins.
Speaker Change: Books.
Speaker Change: And I I mentioned, but also.
Speaker Change: We have a very strong backlist, which has some the value of which is sometimes underestimated by a.
Speaker Change: Certain analysts.
Speaker Change: Through the years, we have been working diligently on bolstering that back with switch, which tends to be more profitable obviously enough.
Speaker Change: Not insignificant.
Speaker Change: The backlist share rose from 60% to 61% of total sales in the most recent quarter that backlist as a platform for future growth.
Speaker Change: Okay.
Speaker Change: That's just too.
Speaker Change:
Speaker Change: I mean, what we have guided to in the second half is that you know.
Speaker Change: Growth will be moderating because we've had more facing off the off the frontlist into the first half of the year.
Speaker Change: So that's just something to keep in mind.
Speaker Change: Thank you.
David Karnofsky: David look we will take our next question. Please.
Speaker Change: Our next question will come from the line of Craig Huber with Huber Research. Please you and ask your question.
Thank you Robert just wanted to ask you.
Speaker Change: As you know you guys went public with your thoughts on the opt.
Speaker Change: Optimizing the structure of the company to novembers ago lot of people applaud you for what you did with Fox television.
Speaker Change: On the company from that angle I'm, just curious if you have a gentleman was asking as well is there more to go here to simplify the company I know part of it is kind of maybe come up a little bit here, just given the tough U S. Mortgage market. If you are ever going to do anything at realtor Dot com there'll be would want you to potentially sell that.
Speaker Change: The housing market, we will optimize the value of it and so forth, but putting that issue aside can we maybe.
Speaker Change: Potentially get another announcement here before maybe we get to the two year, Mark just want to get sort of a center.
Speaker Change: We're playing with here.
Speaker Change: Or to come here on the optimize the company. Thank you.
Speaker Change: Craig we are constantly reviewing the structure of the company and it is fair to say that you folks they'll deal itself is is hard evidence of that.
Speaker Change: Our consideration of the appropriate structure does not end with that significant decision.
Speaker Change: But there is no doubt we have a collection of very valuable assets and I certainly wouldn't underestimate the value of Rialto.
Speaker Change: When you look at the new growth areas.
Speaker Change: Seller related revenues, new homes and rentals.
Speaker Change: All of which had been a focus of investment by Diamond and entertain those revenues rose, 51% in the quarter compared to a year earlier and just one other point worth highlighting a realtor.
Speaker Change: And this is according to Comscore so its independent not one of those wonderful internal metrics used by some.
Speaker Change: Realtor has a significantly higher rate of visits per unique.
Speaker Change: Page visits per unique visits and Zillow and.
Speaker Change: That's valuable that shows that.
Speaker Change: We have a quality audience. These are drive Bys. These are not drive bys I should say.
Speaker Change: These are customers talking to car in the garage.
Speaker Change: Thank you. Thank you Greg look.
Speaker Change: Look we will take our next question. Please.
Speaker Change: Our next question comes from the line of Brian Han with Morningstar. Please immune ask a question.
Speaker Change: Robert just to be clear on Dow Jones, your expectation that year on year growth will accelerate in the second half.
Speaker Change: Are you referring to revenue growth.
Speaker Change: Earnings growth.
Speaker Change: And are there any plans to increase investment in Dow Jones going forward.
Speaker Change: Whether in marketing or technology. Thanks.
Speaker Change: <unk>.
Speaker Change: But we're always looking for opportunities for Dow Jones, and you can see from the investments there as I say edge investments made in recent years.
Speaker Change: Now coming to fruition.
Speaker Change: If there is an opportunity at a reasonable price we'll pursue it.
We we see two areas of potential improvement from the Dow Jones team one we're coming into the period is loving you mentioned of higher sales and secondly, we are also seeing that the dynamic pricing system adopted by the team started to bring its benefits. So the combination of both.
Speaker Change: Thank you.
Speaker Change: Brian look we will take our next question. Please.
Speaker Change: Yes, and as a reminder, if you'd like to ask a question. Please raise your hand feature on your screen.
Speaker Change: Our next question will come from Evan <unk> with UBS. Please ask your question.
Speaker Change: Okay.
Evan: Good morning, guys.
Speaker Change: One around the strong Dow Jones margin expansion, you're delivering maybe.
Speaker Change: You talked about a couple of minutes ago can you just firstly just give an idea of the margin headwind from the fact Teva the street to help us get a I guess a more normalized margin and then you can as well is this expectation of the 100 ish basis points quarterly margin expansion is that around the level you would be expecting for the rest of the year or I guess going forward just given the <unk>.
Speaker Change: Ultimately moving parts happening there in the second half that you just sort of concern.
Yes.
Speaker Change: Thank you for your question Evan This is loving it.
Speaker Change: We're not I'm not going to be giving margin guidance for Dow Jones for the second half of the year, but just kind of talk about what the impact of property, but it was just on <unk>.
Speaker Change: Revenue perspective, Factiva had more than a 300 basis point impact on revenue.
Speaker Change: And so you can kind of do the math that on what that may have impacted from a margin perspective.
Speaker Change: In the second half we will continue to be disciplined on cost we will continue to work towards improving profitability.
Speaker Change: And they're focused on monetizing all the subscriptions that we added last year.
Speaker Change: We should expect to continue to see upside in margins.
Speaker Change: Thank you Evan look we will take our next question.
Speaker Change: At this time, we have no further questions I will hand, the call over to Michael Florin for closing remarks, great.
Michael Florin: Well. Thank you all for participating and look forward to speaking to you soon have a wonderful day.
Speaker Change: Thank you Sir.