Welcome to News Corp's Fourth Quarter and Full Year Fiscal 2025 Earnings Conference Call. Today's conference is being recorded. 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.

Thank you very much, operator. Hello, everyone, and welcome to News Corp's Fiscal Fourth Quarter 2025. We issued our earnings press release about 30 minutes ago, and it's now posted on our website at newscorp.com. On the call today are Robert Thomson, Chief Executive; and Lavanya Chandrashekar, Chief Financial Officer. We'll open with some prepared remarks, and we'll be happy to take questions from the investment community. This call may include certain forward-looking information with respect to News Corp's business and strategy. Actual results could differ materially from what is said. News Corp's Form 10-K and Form 10-Q filings identify risks and uncertainties that could cause actual results to differ and contain cautionary statements regarding forward-looking information. Additionally, this call will include certain non-GAAP financial measurements such as total segment EBITDA, adjusted segment EBITDA and adjusted EPS. The definitions and GAAP to non-GAAP reconciliations of such measures can be found in the earnings release for the applicable periods posted on our website. With that, I'll pass it over to Robert Thomson for some opening comments.

Thank you, Mike. We are honored to report a sterling performance sustained across the 4 quarters of fiscal 2025, which was a record year for profitability on a continuing operations basis. For the full year, revenues rose 2% to nearly $8.5 billion, and total segment EBITDA improved 14% to finish the year at just over $1.4 billion, a record for the company on a continuing operations basis. While our net income from continuing operations increased 71% to $648 million. Profit margins also increased by 170 basis points to 16.7%. For the fourth quarter, revenues rose 1% to $2.1 billion, while profitability grew 5% to $322 million, and net income from continuing operations rose a handsome 28% to $86 million. These robust record results have enhanced our financial position and thus our ability to return capital to shareholders. That potency was reflected in our free cash flow for fiscal 2025, which was $571 million compared to $540 million in the prior year, even though we expanded CapEx at Dow Jones including at its rapidly growing Professional Information Business. Hence, the Board last month authorized a new $1 billion stock repurchase program in addition to the approximately $300 million remaining from the previous $1 billion program authorized 4 years ago. As we indicated in our announcement, we expect to begin executing repurchases at an accelerated rate soon after the release of these results. In short, a significantly larger total and a significantly faster tempo. We remain dedicated to driving value across our 3 pillars: Dow Jones, Digital Real Estate Services and Book Publishing, which accounted for the vast majority of our total segment EBITDA for the year. The recent sale of Foxtel Group to our partners at DAZN further focused our portfolio and bolstered our cash position, while the teams have made…

Thank you, Robert, and good afternoon. As Robert highlighted, fiscal 2025 marked a big step in the transformation of News Corp as we continue to expand into high-margin content licensing and increased recurring and digital revenues. We streamlined our asset base with the divestiture of Foxtel Group and have been relentless on cost management while continuing to invest in our core pillars of Dow Jones, Digital Real Estate Services and Book Publishing. We finished the fiscal year and the fourth quarter yet again delivering strong financial results, including improved year-over-year margins in each quarter, underscoring the durability of our brands and benefits of diversification. Before discussing the financial results, I will discuss capital allocation, which is one of my key priorities. Based announcement last month and to reiterate Robert's point, the Board authorized a new $1 billion buyback program in addition to the approximately $300 million remaining under the existing program, providing $1.3 billion of total capacity. We expect the pace of the program will meaningfully increase from the current rate and expect that fiscal 2026 pacing will benefit from the approximately $380 million of proceeds from repayment of Foxtel shareholder loans. We believe the stock is trading at a significant discount to net asset value and believe equity shrinkage is a lever to attack that discount. Importantly, we expect to maintain plenty of financial flexibility and continue reinvesting to drive further growth. For today's discussion, I will focus on the fourth quarter performance. As a reminder, Foxtel's financial results are reflected as discontinued operations for fiscal 2025 and 2024. We closed the Foxtel transaction in early April and have disclosed recast financials in the previous 8-K filing. News Corp reported fiscal fourth quarter revenues of $2.1 billion, up 1% from the prior year and total segment EBITDA of $322…

[Operator Instructions] Our first question will come from David Karnovsky with JPMorgan.

For Robert or Lavanya, I just -- I was hoping you could expand a bit on the decision to accelerate the buyback. What drove that? Where we might expect you to raise your quarterly repurchase activity? You had referenced the Foxtel debt pay down. Does that mean we should sort of assume that, that amount gets swept into a buyback? And then just given the transformation of the company to a more recurring revenue business, how are you thinking about a target leverage going forward?

Well, David, one can only reiterate what Lavanya and I indicated earlier in our statements. The scale of the buyback has increased, and the pace of the buyback will increase in coming weeks. We have worked hard as a company to improve our free cash flow and return on investment. And we now have the ability to reward shareholders with cap returns. And as you referenced, that ability has certainly been enhanced by the sale of Foxtel to our partners at DAZN. We also believe that there is a significant discount between our current share price and a net asset value of the company. Do the math, and that would be rather obvious. So this is a moment to invest in our future by buying our stock. Given the necessary regulatory disclosures, you will be able to track the trajectory of the purchases and see for yourself how the program has indeed been intensified.

Just add to that, Robert, by saying that, as I said in my prepared remarks, David, fiscal 2026 will benefit -- the pacing in fiscal 2026 will benefit from the proceeds of the Foxtel sale. And we're not putting out a target leverage ratio at this point in time. As you would have noticed, our balance sheet is extremely conservative. And we believe that with the strength of our business and the strength of our cash flows, we'll continue to maintain it that way.

Thanks, Dave. Leila, we will take our next question, please.

Your next question will come from Kane Hannan with Goldman Sachs.

Maybe just Move -- obviously, a pretty solid quarterly result there. Can you just talk a little bit more about the strategy at Move, I suppose, where you think adjacencies could get to over time relative to that 24%? I suppose as we think about 2026, I mean do you think about this as another year of investment? You also called out some of the ad campaigns and the like that were coming through in the fourth quarter this year.

Kane, we're particularly positive about the prospects of Realtor. You can see that we've had revenue growth in the past 3 quarters despite the sluggish torpid property market, a market hobbled by high interest rates. And we're delighted with the progress in the 3 areas that we've chosen to develop as growth businesses, that is rentals, new homes and seller. Don't forget that most of the revenue in the U.S. market now come from the buy side, while the opposite is true in our market-leading REA business in Australia. Now those 3 segments accounted for 24% of total revenues, up 5%. And overall, those revenues increased around 40% over the year, and we do foresee that increase continuing this fiscal. And it's worth referencing that the audience engagement at Realtor is far in excess of that at Zillow homes or Redfin. And that is the number of visits per visitor each month and the number of pages viewed per visit. And we had 256 million site visits in June according to comScore. And by the way, we've now built the largest property news and analysis site in the U.S. as part of Realtor, and that's another reason why visitors keep returning to the site. And Realtor has certainly had a role in the overall improvement in our real estate margin, which was 32.6% in Q4 compared with 30.1% in the same quarter a year ago.

If I could add to that, Robert. I mean, we will continue to invest in Realtor for sure. As you would have seen recently again, we did acquire Zenlist, which is a delightful little acquisition that will add to the capabilities that we have on Realtor. And the integration of Zenlist is well underway, and it will be a part of our -- the continued strategy that Realtor has pursued of increasing revenue per lead by pursuing higher quality leads as we've done through the RealPRO MLS -- RealPRO Select program so far.

Thank you, Kane. Leila, we will take our next question, please.

Your next question will come from Entcho Raykovski with Evans & Partners.

My question is on Dow Jones, which had, I mean, accelerating revenue growth performance in the second half. As you've noted, I think revenue growth was 6% in 2H versus 3% in the first half. So my question is, do you expect the second half trajectory can continue into fiscal '26? And what do you expect will drive this? Is it mainly the B2B segment and further growth in risk and compliance. And as part of the answer, if you could please address how you think about the corresponding OpEx growth which is required to support the revenue growth.

Well, look, we're delighted with the progress at Dow Jones generally. And we are seeing growth in both the Professional Information Business and in the consumer business. Clearly, the Professional Information Business, which now accounts for 39% of revenues and around half the profits at Dow Jones, has been a growth engine over recent years. And there is no reason to imagine that, that growth will decline. It's fair to say that when the new news call split was an area that we absolutely identified as a priority for expansion and investment, not over-investment, I must emphasize. And we purposely developed Risk & Compliance where revenues rose 21% in the fourth quarter compared to a year earlier. While Dow Jones Energy revenues were 12% higher.

On the OpEx question, cost growth in the second half of the year was mid-single digits. And with that, we have continued to expand margins on the Dow Jones business. I mean, in the last quarter itself, I mean, margins were up at 25%, up from 24.2% and a lot of this does come from the benefit we get from the faster growth of the Professional Information Services business, which, as we've mentioned in the past, does have a much higher margin profile than the consumer part of the business.

Thank you, Entcho. Leila, we will take our next question.

Your next question will come from Craig Huber with Huber Research.

Robert, just curious, any update from you and your Board, how much you think about maybe further simplifying the company? And maybe in conjunction with that, are you guys seeing anything -- any improvements on the U.S. housing market that benefit realtor.com? I realize it's probably so tied together. How would you answer that, please?

Craig, that's a very astute observation. We've been investing in Realtor.com. You already see the signs -- the positive signs and the returns on that investment. And so it is poised to surge when the property market improves, that is when interest rates decline. But we're not at that point at the moment. But more broadly, obviously, the sale of Foxtel to our partners at DAZN was a sign of simplification in and of itself. They've obviously built an impressive global boards franchise, and that's their specialty. For us, we didn't really have the same economies of scale and have to be realistic about the best use of our capital now and in the future for our investors. Now that institutional introspection of wanes and we are constantly challenging ourselves and explaining the trajectory of the company to investors so that they fully appreciate the value of the extraordinary assets we have in our portfolio. And we'd focused on cap returns, hence our dividend and a much enhanced buyback facilities. As for further strategic moves, the concentrated contemplation continues.

Thank you, Craig. Leila, we will take our next question, please.

Your next question will come from Alan Gould with Loop Capital.

I had a question -- a couple of questions regarding AI. I was wondering what the -- Robert, what the impact of AI interviews, AI overviews is having on your publishing business? Is that part of the reason that print ad revenue grew quicker than digital ad revenue at the Dow Jones segment? And also wondering what the Amazon -- the New York Times Amazon licensing deal and the present AI action plan, what impact they're going to have on the business?

Alan, we're not seeing any particular negative trends from search, particularly at Dow Jones. Clearly, the current or the new Google format affects different types of content in different ways. So breaking news of -- specialist news, real estate news, we aren't actually seeing any negative impact. And more broadly, we're in the midst of advanced negotiations with several AI companies. So it is clear that many of them have come to recognize that the purchase of IP is as important as the acquisition of semiconductors or the securing stable energy sources. And in the end, IP powers AI. Now these are important deals, particularly for our News Media Properties and Dow Jones. And there is, as I mentioned, a mix of wooing and suing for the former, but we will never shy away from protecting our property rise. And for example, if it is the case that DeepSeek has been using Open AI's information set in other words, more [ DeepSnik ] than DeepSeek, then they too will be hearing from us in the near future. We do careful research before embarking on a legal journey and are able to quantify the level of potential abuse.

Thank you, Alan. Leila, we will take our next question, please.

Your next question will come from David Joyce with Seaport Research.

You had really strong growth in The Wall Street Journal subscriptions, both digital and total. What would you attribute that? And what do you think you can do to keep that growth continuing?

We would attribute that to the unique excellence of The Wall Street Journal and its functionality as the imperative of readers, both professional and nonprofessional to be well informed by a trusted new source. And absolutely, The Wall Street Journal is that source. And we saw, as mentioned, an overall 9% increase in digital subs, a 10% increase in digital revenues, and there is no reason why that shouldn't continue given the uniqueness of the content.

I'd add to that, Robert. We did also benefit from a new partnership that we have entered into with LSEG. The partnership is much broader than just circulation revenue and provides a custom and streamlined dashboard with our content from The Wall Street Journal, Barron's Market Watch and IBD to be available to the subscribers. This is just kicking off right now. It's still very early days. But the business does come with a higher margin driven by lower acquisition costs, lower churn and lower retention costs.

Thank you, Dave. Leila, we will take our next question, please.

Your next question will come from Evan Karatzas with UBS.

Okay. Most of my question has been asked. Can you just talk to the free cash flow -- sorry, the CapEx step up in the fourth quarter, what's underpinned that and how that should look into FY '26 relative to FY '25 for CapEx, please?

Yes, sure, Evan. So free -- so CapEx in the last quarter was $157 million, which was up 42% on the quarter and year-over-year. And this really came from a pull forward in spend at Dow Jones for growth initiatives, including web redesign as well as the Sky News studios relocating following the closing of the Foxtel transaction. Looking forward, while we're not giving any specific guidance on CapEx, I will say that we will continue to invest in Dow Jones, especially on the Professional Information Services part of the business, which, as we have seen, is contributing to very strong growth. Realtor, we will continue to invest on that business as well, specifically on the integration of Zenlist. And Harper has also benefited from some of the investments that we have made in the last year which have driven efficiencies and scale. But I will say that quarter 4, that rate isn't a run rate that we should just plug into the models for right now.

Thank you, Evan. Leila, we will take our next question, please.

Your next question will come from Brian Han with Morningstar.

Robert, are there many acquisition opportunities out there in the Professional Information or data subscription space that you may spend some of your money on?

Brian, you probably don't expect me to be specific about potential targets. It is fair to say we survey the landscape and we do so from a position of strength.

Leila, we will take our next question, please.

[Operator Instructions] And it seems we have no further questions at this time. I will now hand over to Michael Florin for closing remarks.

Great. Thank you, Leila. Thank you all for participating, and we look forward to speaking with you all very soon. Have a wonderful day. Take care.