News Corporation

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 earnings call. We issued our earnings press release about 30 minutes ago, and it's now posted on our website at newscorp.com. On the call today are Robert Thompson, Chief Executive, and Lavanya Chandrasekhar, Chief Financial Officer. We'll open some prepared remarks, and they'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 gap-to-non-gap 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 Thompson for some opening comments.

Thank you, Mike. We are honoured to report a sterling performance sustained across the four 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 authorised a new $1 billion stock repurchase program, in addition to the approximately $300 million remaining from the previous $1 billion program authorised four 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 three 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 savvy acquisitions for all three of the core businesses over the past year. And it has also become clear over the past year that discerning audiences crave content that is profound and purposeful and pithy amidst a morass of mediocrity and mendacity. Our writers and journalists and creators of all kinds are conscious of both the responsibility and the opportunity, cognizant that we are at an historic inflection point in the age of AI. That AI age must cherish the value of intellectual property if we are collectively to realize our potential. Much is made of the competition with China, but America's advantage is ingenuity and creativity, not bits and bytes, not watts, but wit. To undermine that comparative advantage by stripping away IP rights is to vandalize our virtuosity. We need to be more enlightened, to eulogize Eunoia socially and commercially. Take the example of President Trump. He has written many successful books, in particular The Art of the Deal, which is still reporting notable sales. Is it right that his books should be consumed by an AI engine, which then profits from his thoughts by cannibalising his concepts, thus undermining future sales of his book? Suddenly, The Art of the Deal has become The Art of the Steel. Is it fair that creators are having their works purloined? Is it just that the President of the United States is being ripped off? Companies are spending tens of billions on data centers, tens of billions on chips, tens of billions on energy generation. These same companies need to spend tens of millions or more on the content crucial for their success. And they need to ensure that the content ecosystem remains healthy, that there is a vast range of varied and verifiable sources, and that a deeply derivative woke AI does not become the default pathway to digital decay. In the meantime, we will fight to protect the intellectual property of our authors and journalists and continue to woo and to sue companies that violate the most basic property rights. Turning now to the segments, Dow Jones had another strong year, with revenue in EBITDA rising 4% and 8% respectively. The business exited the year with strong momentum, reporting a healthy 7% increase in revenue for the fourth quarter to $604 million, significantly higher than the annual rate of 4%, while EBITDA for the fourth quarter rose 10% to $151 million. Our professional information business expanded revenues 10% overall for the fourth quarter, higher than the full year rate of 7%, supported by risk and compliance and Dow Jones Energy, where revenues increased by 21% and 12% respectively for the quarter. The addition of Dragonfly Intelligence and Oxford Analytica this quarter further solidified risk and compliance as a premier source for any business aiming to thoughtfully and legally navigate an increasingly complex global landscape. Compliance failures remain a serious issue for global financial institutions and sanctions regimes are a legal labyrinth. If no, your client is a priority, then you should surely be a client of Dow Jones. At Dow Jones Energy, the team has created a portfolio of innovative products, including the Global Carbon Market Report and RackPro from Opus. This focus on our customers' emerging needs is a core factor behind our retention rates, which are north of 90% across Dow Jones Energy. Factiva showed improvement over the second half of the year, thanks to a new generative AI data product and a concentrated focus on courting new customers in sectors such as communications and public relations. On the consumer side of the business, we reported 10% growth in digital circulation revenues in the fourth quarter and saw increases in both print and digital advertising of 3% and 1% respectively, as companies increasingly understood the power and the prestige of our platforms, including the Wall Street Journal, Barron's, MarketWatch and Investors Business Daily. Digital real estate revenues rose 9% for the year, while the segment posted increased EBITDA of 18%. At Realtor.com, revenue grew for the third consecutive quarter in the fourth quarter, despite the especially sluggish US housing market. We are particularly pleased with the three growth areas targeted by Damien Eales and the team. Revenue across rentals, new homes and seller accounted for 24% of revenues for the quarter, a rise of five percentage points year over year. These trends provide evidence that realtor should thrive when the US housing market ultimately nears normalcy after a period of punitively high mortgage rates and remarkably low turnover. Realtors' reach has extended despite the depressed markets, with the share of visits significantly expanding in June, when there were 256 million visits, four times that of Homes.com and more than twice that of Redfin, according to Comscore. We are working to enhance our relationship with the National Association of Realtors to the benefit of both partners, and crucially, to the benefit of Americans seeking to buy or to sell a home. REA posted another healthy year in fiscal 2025, with 12% revenue growth or 13% on a constant currency basis to $1.25 billion, while audience reach saw continued improvement. For the year, realestate.com.au saw an average of 132 million visits per month, four times that of the nearest competitor. In fact, 12.1 million people visited the site each month, of which 6.4 million were exclusive to REA. There is no question that REA's business thrives on competition and we look forward to meeting the changes and the challenges ahead in the Australian market with our customary spirit of creativity and innovation. Book publishing posted its second-best revenue year on record in fiscal 2025, with a 3% increase to $2.1 billion, while segment EBITDA expanded by 10% to $296 million. Margins were nearly 14% for the year, an improvement of over 90 basis points compared to the prior year. Performance was weighted to the first half due in part to the impact of a strong frontless schedule and the success of Hillbilly Elegy and Wicked. We have seen softness in the overall book market in more recent months, and that trend was reflected in some of our divisions, though our religious and children's book divisions continue to perform well. Key titles scheduled for fiscal 2026 should pretend positively for the full year, with a new book from Daniel Silver last month and upcoming works from the pioneer woman Reed Drummond, Mitch Elbaum and R.F. Kong. Sylvester Stallone's memoir, The Steps, will no doubt prove inspiring upon its release in November. And we are looking forward to the exclusive release of previously unpublished stories by Harper Lee, the author of To Kill a Mockingbird. Our global reach was enhanced by the agreed acquisition of Crunchyroll's manga publishing operations in France and Germany, and that transaction is expected to close before the end of this calendar year. We already have a strong network of manga contacts through our book business in Japan and believe that our team's collective expertise will enable us to prosper from one of the fastest growing sections of the book reading market. Digital revenues grew 5% for the year, supported by the partnership with Spotify, who last month announced plans to expand audiobook offerings for premium customers in the UK, Australia and parts of Europe. In news media, Profitability improved 15% for the year, despite a challenging advertising environment, reflecting our editorial creativity and cost consciousness. There were also benefits to our mastheads from our digital partnerships with the principled platforms, and subscription growth at News UK and News Corp Australia. The Times and Sunday Times in particular again built on their healthy circulation base, closing the year with 640,000 paying digital subscribers, compared to 594,000 a year ago. The phenomenal expansion in influence and the improvement in profitability over the past decade of the New York Post continued in the last year. The masthead plays a unique role in the New York area, but also far beyond. And to reflect that prowess, we have just announced plans to expand in California, which surely needs the puckish profundity that characterizes the Post. Soon, all will not be quiet on the Western Front. To conclude the fiscal year with such impressive results against a backdrop of complex macro conditions and political dynamics is a testament to our transformation. That work simply would not be possible without the astute leadership of Lachlan Murdoch, the support of an enlightened board and the enduring resonance of our Chairman Emeritus Rupert Murdoch. We also salute the invaluable contributions of our employees around the world. And now, I cede to Lavanya Chandrasekhar, our Chief Financial Officer, who will provide granularity and sagacity.

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 increase 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 the benefits of diversification. Before discussing the financial results, I will discuss capital allocation, which is one of my key priorities. Per our 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 Fox Dell 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 a previous 8K filing. News Corp reported fiscal fourth quarter revenues of $2.1 billion, up 1% from the prior year, and total segment EBITDA of $322 million, up 5% year-over-year. Margins improved by 60 basis points to 15.3%. This quarter, 94% of profits were from Dow Jones and digital real estate, which we believe underscores the inherent value discount and the company's ability to drive long-term profitable growth. Fourth quarter adjusted revenues were flat, while adjusted total segment EBITDA rose 6% versus the prior year. For the quarter, we reported earnings from continuing operations per share of $0.09 compared to $0.08 in the prior year. Adjusted earnings from continuing operations per share were 19 cents in the quarter compared to 20 cents in the prior year. Moving to the individual segments, starting with Dow Jones. Dow Jones delivered another strong quarter with reported revenues of $604 million, up 7% versus the prior year period, marking the highest quarterly rate of growth this year and was again the largest segment contributor to overall company revenues. Digital revenue accounted for 83% of Dow Jones segment revenues this quarter, improving 2 percentage points from last year. Professional information business revenues, which reflect our B2B products and services, rose 10% year-over-year, the highest quarterly year-over-year growth this fiscal year. Within that, risk and compliance revenues grew 21% to $92 million, driven by new customers, new products, and improved yield. We continue to see strength in several products, including advanced screening and monitoring, and our financial instruments product. We also benefited from the addition of Dragonfly Intelligence and Oxford Analytica, which contributed approximately $4 million to revenues. Integration of those assets is ahead of plan with joint editorial and product initiatives across both Risk and Compliance and Dow Jones Energy. At Dow Jones Energy, revenue grew a healthy 12% to $73 million, with customer retention remaining very strong at over 90%, in addition to improving yields. New swires also saw modest growth due to new licensing deals, while Factiva continued to be negatively impacted by a customer dispute, albeit the decline rates have continued to moderate through the second half of the year. Across our B2B products, higher volumes including new customers and new products accounted for 60% of revenue growth with higher yields accounting for the balance. Within the Dow Jones consumer business, circulation revenues increased 5% versus the prior year. Notably, digital circulation revenues grew by 10%, surpassing our expectations. This increase was driven by growth in digital-only subscriptions and the ongoing shift of customers from introductory and bundle promotions to higher pricing strategies. Digital circulation revenues accounted for 75% of circulation revenues for the quarter, up from 71% in the prior year. Digital-only subscriptions improved 9% year-over-year and by 176,000 sequentially, including the benefit from our recent enterprise partnership with ELSEG. WSJ digital subscriptions increased 213,000 sequentially and were up 9% year-over-year. Advertising revenues of $104 million rose 2%, with year-over-year trends improving each quarter. For the quarter, print advertising revenues increased 3%, while digital grew by 1%, both benefiting from the strength in finance and technology sectors. Digital represented 65% of advertising revenues compared to 66% in the prior year. Dow Jones segment EBITDA for the quarter grew 10% to $151 million, with margins increasing to 25%. Moving on to digital real estate. Digital real estate had another solid quarter despite the macro environment and softer listing volumes in Australia driven by a tough prior year comparison. Segment revenues of $466 million were up 4% versus the prior year and up 6% on an adjusted basis. Segment EBITDA was $152 million, up 13% and up 16% on an adjusted basis. REA revenues gained 4% year-on-year to $318 million and were up 7% on a constant currency basis. Growth was driven by a combination of residential yield increases and customer contract upgrades. Residential yield growth improved by 14%. New-buy listings in the quarter declined 8%, following a 16% increase in the same quarter last year. Listings in Melbourne and Sydney were down 11% and 10% respectively, while home prices remained strong. Please refer to REA's earnings release and their conference call for more details. Realtor's revenue for the quarter of $148 million grew 3% compared to the prior year, marking the third consecutive quarter of revenue growth, despite continued difficult macro conditions. At Realtor, revenue growth was driven by the continued strength of growth adjacencies, new homes, rentals, and cellar, which represented 24% of revenues in the quarter. Realtor continues to focus on higher quality leads through the RealPro Select offering, which once again drove an increase in revenue per lead in the quarter. Lead volumes declined 13%, an improvement compared to the Q3 decline of 17%. Average monthly unique users for the quarter fell 3% year-over-year to 72 million. That said, based on Comscore, Realtor continues to maintain audience share and grow share of visits, benefiting from continued search engine optimization and the scale of News Corp's global audience. Expenses at Realtor were modestly higher, as expected, due to the launch of a new brand campaign. Realtor recently announced the acquisition of Zenlist, a mobile-first communication platform which provides a unified search experience for agents and customers. The tool is being used by 35,000 plus agents and will be integrated as another enhancement to our products. At book publishing, as expected, very difficult prior year comparisons weighed on the results this quarter. The quarter was also impacted by softer U.S. market conditions per AAP data. Segment revenues of $494 million declined 4%, while segment EBITDA of $50 million declined $7 million, or 12%. While performance in Christian publishing continued to be resilient, sales of general books were lower than the prior year. Recollect, this quarter last year had a dual benefit of a stronger front list and a stronger back list from Bridgerton. Digital revenues at HarperCollins fell 3% to $116 million, lapping the start of the Spotify partnership last year and driven by a weaker frontlist. In total, digital sales represented 25% of consumer revenues compared to 24% in the prior year. This quarter, the backlist contributed 65% of consumer revenues, up from 62% last year. Turning to news media, overall revenue performance was challenged with continued soft advertising conditions partially offset by increased cover prices and subscription pricing across mastheads. Revenue for the quarter were $545 million, down 4% versus the prior year, while adjusted revenues fell 4%. Segment EBITDA declined 4 million or 13% year over year to $28 million. Lower advertising revenues were partially offset by ongoing cost reductions. Adjusted segment EBITDA declined 18%. Turning to the outlook. Some of the themes across each of our segments. At Dow Jones, trends remain healthy and we expect continued margin expansion as the business shifts to B2B. At Digital Real Estate, Australian residential new-buy listings for July were down 8%. Please refer to REA for more detailed outlook commentary. At Realtor, we continue to focus on growth adjacencies, including the integration of Zendlist acquisition. We hope to see continued revenue improvement and much will depend on the broader housing market. At book publishing, July trends were soft and comparisons are difficult given the strong backlist performance last year due to Hillbilly Elegy by JD Vance. At news media, we expect recent trends to continue. With that, let me hand it over to the operator for Q&A.

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 a question. If you have joined via the audio line, please press star nine. Questions will be answered in the order they are received. We will now pause a moment to assemble the queue. Our first question will come from David Karnofsky with JP Morgan. Please unmute and ask your question.

Thank you. For Robert Orlovandia, I was hoping you could expand a bit on the decision to accelerate the buyback, which 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? Thank you.

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 and as you referenced that ability has certainly been enhanced by the sale of foxtel to our partners at the zone we also believe that there is a significant discount between our current share price and the net asset value of the company do the math and that will 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. Layla, we will take our next question, please.

Your next question will come from Kane Hennon with Goldman Sachs. Please go ahead.

Morning, guys. Maybe just move, obviously, a pretty solid quarterly result there. 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 obviously called out some of the ad campaigns and the like that were coming through in the fourth quarter this year. Cheers.

Cain, we're particularly positive about the prospects at Realtor. You can see that we've had revenue growth in the past three quarters, despite the sluggish, torpid property market, a market hobbled by high interest rates. And we're delighted with the progress in the three 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 US market now come from the buy side, while the opposite is true in our market-leading REA business in Australia. Now, those three 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 Realtors is far in excess of that at Zillow or Holmes 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 ComSchool. And by the way, we've now built the largest property news and analysis site in the US as part of Realtor. And that's another reason why visitors keep returning to the site. And Realtor 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, Cain, we did acquire Zenlist, which is a 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 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.

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

Your next question will come from Ensha Rakofsky with Evans and Partners.

Hi, Robert. Hi, Lavanya. My question is on Dow Jones, which had an 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. Thank you.

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 of 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 was split was an area that we absolutely identified as a priority for expansion investment, not over investment, I must emphasize. And we purposefully developed risk and 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, you know, cost growth in the second half of the year was mid single digits. And with that, we have continued to expand margins On the on the dad's business, I mean in the last quarter itself, I mean margins, but 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. And Joe, Layla, we will take our next question.

Your next question will come from Craig Huber with Huber Research. Please go ahead.

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

No, no, Craig, that's a very astute observation. Uh, we 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, um, 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 sports franchise, and that's their speciality. For us, we didn't really have the same economies of scale and had to be realistic about the best use of our capital now and in the future for our investors. Now, that institutional introspection never 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're focused on cap returns, hence our dividend, and the 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. Please unmute and ask your question.

Thank you. I've got a question, a couple 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 license, the New York Times Amazon licensing deal and the President's AI action plan what impact they're going to have on the business. Thank you.

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. 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. 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 of stable energy sources. 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. We prefer the former, but we will never shy away from protecting our property rights. For example, if it is the case that DeepSeek has been using OpenAI's information set, in other words, more DeepSneak 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.

Thank you. 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 non-professional, to be well-informed by a trusted news 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 set.

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 MarketWatch 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 Karatsas with UBS.

Guy Coward- hi okay thanks most of my questions been been asked, can you just talk to the free cash flows i'm sorry the capex step up in the fourth quarter what what's underpin that and how that should look into fi 26 relative to fi 25 for the capex please.

Yeah, sure, Evan. 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 service 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 four, 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 Hahn 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.

Layla, we will take our next question, please.

If you have any further questions, please feel free to use the raise hand feature, which can be found at the bottom of your screen. Or if you've dialed in by phone, star nine will activate the raise hand. And as soon as we have no further questions at this time, I will now hand over to Michael Florin for closing remarks.

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