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Q1 2024 News Corp Earnings Call

Participants

Michael Florin; Senior VP & Head of IR; News Corporation

Robert J. Thomson; CEO & Director; News Corporation

Susan Lee Panuccio; CFO; News Corporation

Alan Steven Gould; MD; Loop Capital Markets LLC, Research Division

Brian Han; Senior Equity Analyst; Morningstar Inc., Research Division

Craig Anthony Huber; CEO, MD & Research Analyst; Huber Research Partners, LLC

Darren Leung; Analyst; Macquarie Research

Entcho Raykovski

Lucy Huang; Head of Australian TMT Research; UBS Investment Bank, Research Division

Unidentified Analyst

Presentation

Operator

Welcome to News Corp's First Quarter Fiscal 2024 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.

Michael Florin

Thank you very much, operator. Hello, everyone, and welcome to News Corp's Fiscal First Quarter 2024 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 Thomson, Chief Executive; and Susan Panuccio, 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.

Robert J. Thomson

Thank you, Mike. In a world replete with uncertainty, News Corp is proud to report rising revenues and increased profitability in the first quarter of fiscal 2024. These distinctly positive results come despite inauspicious macroeconomic conditions, including steep interest rates and unfavorable foreign exchange fluctuations. The potential for even profitability should be even more pronounced when we return to economic equilibrium.
These results follow the 3 most profitable years since the creation of the new News Corp and our digital transformation has continued apace. And in our view, these results certainly highlight the disparity between the value of our company and our share price, which we believe does not reflect our present profitability yet to lower the potential of our incomparable growing businesses. We are acutely focused on enhancing long-term value for all of our investors, and in that quest, have the patent advantage of prized assets whose value we believe is increasing. We are also assiduously reviewing our structure in the quest to optimize that value.
Our first quarter revenues rose modestly to $2.5 billion, while profitability rose 4%, marking the second consecutive quarter of profit growth in these challenging conditions. We believe these positive results are a harbinger of our potential in the medium and long term. We expect to continue to drive our digital growth, the scale of which has been transformative over the past decade. It is worth noting a couple of metrics for context and to highlight the intrinsic value of our company.
In 2014, print-related advertising accounted for 39% of our revenue, and now it is trending at less than 5%, while digital revenues exceeded 50% of revenues last year, up almost 300%. Our loyal investors understand the inherent value of our assets and the scale of our dramatic transition, but we believe the market has yet to fully comprehend the magnitude of the metamorphosis or the future potential of our platform. We have been and expect to continue to generate significant free cash flow this fiscal year. And we have a $1 billion buyback plan well underway, and ample opportunity to be opportunistic.
That opportunistic efficacy we've shown in our purchases of OPIS and CMA for Dow Jones, 2 high-margin digital businesses with recurring revenues, which have added much profitable prowess. Their impact means that we are at a pivotal point at our Dow Jones business. The B2B segment at Dow Jones is now outpacing the B2C segment in contributing to profit and at a far higher margin.
The net result is that we expect both Dow Jones and News Corporation are becoming more profitable, more digital, and even less dependent on the ebb and flow of advertising. That is why we are highlighting the Dow Jones results today and expect to be providing increasing visibility over the coming year so that potential investors can appreciate the full glory of our valuable assets, while we intensify our institutional introspection on structure.
As a reminder, Dow Jones profitability has more than doubled since we resegmented in fiscal 2020, generating close to $500 million in segment EBITDA last year with strong growth prospects ahead. And the EBITDA margin has been utterly transformed. In Q1 fiscal '18, it was approximately 9%. In Q1 fiscal '20, it was 12.8%. And in Q1 this fiscal year, 23.1%. We certainly agree with the perceptive commentators and analysts who suggest that News Corp is undervalued and its asset quality underappreciated. Our Board, our leaders, and our teams deserve much credit for skillfully navigating the turbulent media waters of the past decade, waters, which have proven treacherous for many media companies.
As always, we remain focused on maximizing that value to the benefit of all shareholders. We are also looking to the future in maximizing the value of our premium content for AI. We are in advanced discussions with a range of digital companies that we anticipate will bring significant revenue in return for the use of our unmatched content sets. Generative AI engines are only sophisticated as their inputs and need constant replenishing to remain relevant, and we are proud to partner with responsible purveyors of AI products and their prescient leaders.
One observation about generative AI, we often hear about misinformation and disinformation to the point where the very words have become politicized and polluted. The potential for the (inaudible) of the perverse will become ever more real with the inevitable inexorable rise of artificial intelligence. But however, artful the artificial intelligence, it is no match for great reporting and for genuine journalistic (inaudible).
On the subject of journalism, I would like to pay tribute to our reporters in the Middle East and in Ukraine, who are each day taking calculated risks to bring insight and intelligence to readers around the world, during a period of unpredictable turbulence. And I would like to highlight the fate of Evan Gerskovich, the Wall Street Journal reporter who has been unjustly incarcerated in Russia for more than 7 months merely for doing his job as a journalist.
Let me begin the more detailed exegesis with the increasingly valuable POS Dow Jones, where revenues rose 4% in Q1 despite the volatility of the ad market, while segment EBITDA was lifted by an impressive 10% as revenue and profit contribution continued to expand in the professional information business. Dow Jones offers a unique set of services and products for global business users and readers. As a result, many of our customers encounter Dow Jones products several times each day, not just the Wall Street Journal, Barron's, MarketWatch and Dow Jones Newswires, but also risk and compliance, Dow Jones Energy and Factiva. Risk and Compliance revenues surged 23%, thanks to increased demand from the financial and corporate sectors seeking to minimize risk and compliance. I trust all of the institutions on the call today aspire to those 2 worthy goals. R&C has expanded revenues by over 600%. Let me repeat that number, over 600% since we relaunched news in 2013.
It's worth emphasizing that the business is fully digital and has retention rates of over 90%. Dow Jones Energy, which includes both OPIS and CMA continues to see excellent double-digit revenue growth driven in part by higher pricing and is exceeding our initial expectations, thanks to the global energy transition and opportunities emerging in renewable energy, along with continued reinvestment. Our customer base is growing as we launch compelling products and create critical pricing benchmarks. We are genuinely impressed by the vitality and drive an initiative among our new colleagues at both OPIS and CMA.
Factiva is benefiting from its innovative partnership with Cision. And Factiva should be an important building block in the AI future given that it has a database of 33,000 sources in 32 languages from more than 200 countries and territories. That impressive content collection complements our contemporaneous news offerings as we seek to serve corporate, professional, and consumer audiences. Across Dow Jones, subscription volume remained strong with digital subscriptions reaching 4.6 million, up 12%, while total subscriptions reached 5.3 million, up 8%. Our teams are focused on reducing churn and maximizing the lifetime value of each and every subscriber.
As for advertising, we saw a particular improvement in trends with the declines of past quarters abating and digital advertising down only 2%. In digital real estate, it was a tale of 2 markets during the quarter with the Australian property market improving and the U.S. market still bearing the burden of particularly high mortgage rates, which obviously suppressed demand.
But it is fair to say that the revenue rebound in the Australian market certainly surpassed the sluggishness in the U.S. market. REA reported strong growth in listing volumes in the 2 key markets of Sydney and Melbourne, and our valued clients were keen to subscribe to premium products, thus improving yield.
We also saw resounding top line performance and volumes remained strong in October. REA India is the #1 property portal in a country with a rapidly expanding middle class and both its audience and revenue continued to surge during the quarter. As REA has disclosed, the total audience in India in the quarter was up 16% year-over-year, while revenue during the quarter was 25% higher than a year ago. Given a relative political stability in India and ongoing economic growth, REA India is a jewel in the crown.
In the U.S., Realtor.com, like the industry at large, was affected by the unusually high interest rates, which do appear to plateau and are expected to ease over the coming year. But these short-term conditions do not change our long-term optimism for Realtor to capitalize on the increasing digitization of the world's largest property market. It is easier by transient traffic in the short term, but that is merely a sugar high that leads to digital diabetes.
We have a long-term commitment to all Americans who are buying and selling a home and to real estate professionals. We also have the ability to leverage our unique media platform from wsj.com to the New York Post, among many others, who had a combined monthly audience of over 200 million uniques in September. These are verified authenticated numbers, not an cocktail of cockamamie. Under Damian Eales' energetic decisive leadership, Realtor is building on the gains of his predecessors and focusing on developing core markets, core clients, and core profitability. The Realtor team is working ever more closely with REA executives in ways that are benefiting both businesses with the sharing of software, marketing mechanics, and AI insights.
The script for our publishing business was completely rewritten in the first quarter. After a few difficult quarters, segment EBITDA at HarperCollins lipped 67%. Revenues posted a healthy 8% increase, and that growth, combined with cost initiatives undertaken over the past year and an easing of supply chain inflationary impacts recalibrated the performance at HarperCollins. The logistical upheaval at Amazon has passed, returned nets are far lower, and both the frontlist and backlist notch gains during the quarter.
Among the many and varied strong sellers were Tom Lake by Ann Patchett, Demon Copperhead by Barbara Kingsover, The Collector by Daniel Silva, and Remarkably Bright Creatures by Shelby VanPelt. We saw particular strength in our Christian books business, including Rebar McEntire's Not That Fancy. Rebar was clearly not describing the HarperCollins performance. And speaking of Christian Books, we look forward to publishing a new book by His Holiness Pope Francis next spring. I would like to highlight our new partnership with Spotify to broaden the reach of audio books. This is a project we have discussed for some time with the Arsenal -- Daniel Ek, with whom I share a passion for books and for the Arsenal Football Club.
The new partnership has begun with the U.K. and Australia and in the U.S. announced yesterday. And we are genuinely confident that it will be positive for both companies for authors and for those who love to read and to listen to books. This market has needed a strong new entrant and Daniel and his team are among the most skillful players on the pitch.
At Subscription Video Services, revenues were up in constant currency for the seventh consecutive quarter. As expected, the decline in EBITDA was mainly due to sports right costs and ForEx fluctuations. But we have no doubt that our streaming strategy has been successful at a time when other companies in other markets are struggling. Overall, paid streaming subscriptions rose 8% on the same quarter last year, while broadcast churn was down from 14.2% to 11.4%, showing that the 2 products are undoubtedly complementary.
But the team at Foxtel is far from complacent. And so we are on the cusp of launching our new streaming aggregation product, Hubbl, which will greatly simplify the search for fascinating entertainment and sports from our own companies and from those of our cherished partners to the benefit of all in particular, to the benefit of viewers.
The News Media segment faced macroeconomic headwinds and volatility caused by algorithmic changes at the large platform, but these trends are more ephemeral than eternal. Subscriptions continue to increase at The Times and Sunday Times, which reported an 8% rise and at News Corp Australia, where we saw a 4% increase in digital subs. As I mentioned earlier, we are increasingly less reliant on advertising, which is now a smaller fraction of our overall revenue focused on digital recurring revenue streams. We saw strong performance at Wireless in the U.K., which had a record 45 million listening hours over the April to September period, up 17% from the prior year, according to RAJAR, led by sports and news.
Our teams in the U.K. and Australia were also acutely cost conscious, and we are retooling the infrastructure to reflect the contemporary and future initiatives, including printing operations, advertising networks, and back office expenses. Rebekah and her teams in the U.K. have been leaders in creating programmatic ad partnerships, which enable all to increase yield and harvest valuable data.
This was in another way and historic quarter. Our Executive Chair, Rupert Murdoch, announced that he will be transitioning to Chairman Emeritus next week at our AGM. I can personally assure you that there has been no change in his heightened levels of curiosity and energy since the announcement and his vast experience will be an important ongoing resource for the company. All of us at News Corp stand on the shoulders of a giant.
And I genuinely look forward to Lachlan becoming sole chair next week. His thoughtful engagement with our teams already enhances the business each working day. And his passion for principal journalism is obvious to all who work with him. There is no doubt that Lachlan's multidisciplinary expertise and his philosophical integrity will be invaluable as we continue the next phase of our crucial journey.
And now our team CFO, Susan Panuccio, will provide more financial granularity.

Susan Lee Panuccio

Thank you, Robert, and good afternoon, everyone. As Robert mentioned, we are pleased with the positive start to the new fiscal year, returning to revenue growth and posting the second consecutive quarter of profit growth despite the macroeconomic conditions. We have been diligently executing on our long-term plan to drive greater value for our shareholders and believe this is yet to be reflected in our current market value.
Our first quarter total revenues were $2.5 billion, up 1% compared to the prior year, marking the first year-over-year revenue growth since the fourth quarter of fiscal 2022. Adjusted revenues also grew 1% compared to the prior year. Total segment EBITDA was $364 million, up 4% compared to the prior year. HarperCollins was the largest contributor to the profit improvement, which is encouraging on the back of last year's challenging results. Adjusted total segment EBITDA grew 5% versus the prior year. For the quarter, we reported earnings per share of $0.05 compared to $0.07 in the prior year. Adjusted earnings per share was $0.16 in the quarter compared to $0.12 in the prior year.
Moving on to the results for the individual reporting segments, starting with Digital Real Estate Services. Segment revenues were $403 million, down 4% compared to the prior year, a notable improvement from the fourth quarter rate. On an adjusted basis, segment revenues declined just 2%. Despite the revenue decline, segment EBITDA rose 3% to $122 million due to higher contribution from the REA Group and cost-saving initiatives that move that were partially offset by revenue headwinds. Adjusted segment EBITDA rose a healthy 8%.
REA had a very strong quarter, with revenues rising 4% year-on-year on a reported basis to $261 million, which included an $11 million or 4% negative impact from foreign exchange. Growth was driven by residential yield increases and growth in national listings, along with 25% revenue growth at REA India. Results were partially offset by modest decline in Financial Services revenues due to lower settlement activity. Overall, new buy listings rose 1%, with Sydney and Melbourne up 16% and 14%, respectively, enabling upward pressure on yields. Please refer to REA's earnings release and their conference call following this call for more details.
Move's revenues of $142 million were down 16% compared to the prior year, relatively similar to the fourth quarter trend, absent the 53rd week impact. For the quarter, real estate revenues fell 20%, driven by lower lead and transaction volumes reflective of the broader industry trends. Lead volumes fell 11% year-over-year, while Realtor's average monthly unique users declined 12% from the prior year to 76 million in the first quarter based on internal metrics, but improved from 74 million in the fourth quarter.
As Robert mentioned, despite challenging market and competitive conditions, we've made solid progress in Q1 across a number of strategic areas, including SEO improvements, expanding our sell-side offerings into the launch of a listing agent tool kit, deepening our collaboration with News Corp's powerful global platform to drive further reach, and the recent launch of a new brand campaign.
Turning to the Subscription Video Services segment. Revenues for the quarter were $486 million, down approximately 3% compared to the prior year on a reported basis due to foreign currency headwinds. Importantly, on an adjusted basis, revenues rose 1% versus the prior year, the seventh consecutive quarter of growth. Streaming revenues accounted for 30% of circulation and subscription revenues versus 25% in the prior year, and again, more than offset broadcast revenue declines, benefiting from both a year-over-year increase in subscribers and price rises at Kayo and BINGE.
Total closing paid subscribers across the Foxtel Group reached almost $4.6 million at quarter end, up 2% year-over-year. Total paid streaming subscribers were 3 million, increasing 8% versus the prior year, although declining sequentially impacted by less output at bids related to the strikes in Hollywood, as well as typical seasonality at Kayo due to the end of the winter sports codes in September.
Foxtel ended the quarter with 1.3 million residential broadcast subscribers, down 9% year-over-year broadcast churn continued to improve, down 280 basis points year-over-year to 11.4%, while broadcast ARPU rose 3% to over AUD 85 helped in part by a price rise for non-platinum subscribers implemented in July. Segment EBITDA in the quarter of $93 million was down 16% versus the prior year driven by contractual price escalators in Foxtel sports rights agreements. Adjusted segment EBITDA declined 13%. We completed the debt refinancing in the first quarter, which included securing a new AUD 1.2 billion credit facility. As we said last quarter, given the improved performance and the completion of the refinancing, this provides a pathway for repayment of our shareholder loans.
Moving on to Dow Jones. Dow Jones had a strong quarter with revenues of $537 million, up 4% year-over-year despite fully lapping recent acquisitions. Digital revenues accounted for 12% of total revenues this quarter, up 2 percentage points from last year. Circulation and subscription-based revenues represented over 81% of total revenues, up approximately 1 percentage point from the prior year, underscoring the stability and recurring nature of the revenue base. On an adjusted basis, revenues grew 3%. We are continuing to see very strong growth in our professional information business with revenues rising 14% year-over-year driven by risk and compliance and strong gains at Dow Jones Energy.
Factiva posted modest growth benefiting from a new licensing deal. Retention across B2B offerings remains at over 90% with nearly all of the revenues recurring. Risk and compliance revenues rose 23% with consistent growth between financials and corporates. Europe remained the largest territory at over 50% of revenues and also the fastest source of growth. Secular trends remain very favorable with global corporations navigating complex sanctions and trade guidance, particularly as it relates to Russia and China.
We were really pleased with the 20% growth at Dow Jones Energy, which benefited from price escalators, the rollout of new products, and new customers. The results also benefited mid-single digits from onetime items and the World Chemical Forum, a new annual event this quarter, which leveraged the wider Dow Jones experience in corporate events. Circulation revenues gained 1% in the prior year, with digital-only subscriptions growing 12% year-over-year or 101,000 sequentially, which was principally driven by an increased focus on Dow Jones bundling offer as they look to better leverage subscription acquisition costs across multiple products, capitalize on minimal overlap between products, and drive greater engagement from customers. We believe that in the medium term, bundling will drive higher ARPU per subscriber and reduce long-term churn.
Advertising revenues declined 3% to $91 million due to 6% and 2% declines in print and digital advertising revenues, respectively, with trends improving from the fourth quarter. Advertising accounted for 17% of total revenue was 66% being digital, up 100 basis points from last year. Dow Jones segment EBITDA for the quarter grew 10% to $124 million, with margins improving 120 basis points to 23.1%, the highest first quarter margin since News Corp's acquisition of Dow Jones, driven by the strong B2B performance, which is on track to be the largest contributor to Dow Jones profitability in fiscal 2024.
At Book Publishing, we saw a big recovery from fiscal 2023 results. Revenues were $525 million, up 8%, while segment EBITDA improved 67% to $65 million compared to the prior year. Margins improved over 400 basis points to 12.4%. You will recall the results a year ago were significantly impacted by the Amazon reset of inventory levels and rightsizing of its warehouse footprint. The strong performance this quarter benefited from the success of some key front-list titles, as Robert mentioned, and also saw improvement in backlist sales, including a notable increase from Christian Publishing.
Return rates improved materially, while inventory levels appear to have normalized. Inflationary costs are beginning to moderate with lower manufacturing costs helped by product mix and lower freight and distribution costs this quarter. The backlist contributed 61% of revenues, down from 65% last year, while digital sales rose 3% this quarter and accounted for 22% of consumer sales. Within the 22%, downloadable audio accounted for 45% of digital revenues. On an adjusted basis, revenues gained 6%, and segment EBITDA rose 59%.
Turning to News Media. Overall trends continue to be mixed geographically. Revenues were $548 million, down 1% versus the prior year, while adjusted revenues declined 2%. Advertising declined 5% and was down 6% in constant currency. While circulation and subscription rose 2% and was flat in constant currency. At News Australia, advertising saw some improvement compared to the fourth quarter, while the U.K. weakened, notably in digital. As Robert mentioned, we did see declines in our traffic at several mastheads related to changes in algorithms at the large platforms which we are monitoring closely and have been felt across the wider publishing industry.
Segment EBITDA of $14 million declined $4 million results included approximately $3 million related to onetime costs as a result of the proposed combination of printing operations in the U.K. with DMG. This initiative demonstrates the continued focus on driving cost efficiencies across our news media businesses.
Before we look at the outlook for the next quarter, I would like to touch on free cash flow. First quarter free cash flow is typically lower due to the timing of working capital payments, including sports rights payments at Foxtel, and this year, it was also impacted from the lower HarperCollin sales in Q4 of the prior year. We anticipate generating strong and positive free cash flow for the year weighted to the second half, consistent with prior years.
As for the outlook, similar to our comments last quarter, we are continuing to operate in a difficult environment that remains unpredictable in the short term. That said, we expect the second quarter to continue to show an improvement in revenues and profitability.
Looking at each of our segments. At Digital Real Estate Services, Australian residential new buy listings for October grew 16%. Please refer to REA for a more specific outlook commentary. At Move, U.S. housing conditions remain challenging, and we are expecting some reinvestment in marketing to improve share of voice levels, including the recently launched advertising campaign, and also in product development to ensure we are best positioned to take advantage of market conditions when they improve.
In Subscription Video Services, as mentioned last quarter, we continue to expect modestly higher expenses for the full year, driven by sports rights and some costs related to the launch of Foxtel streaming aggregation service, Hubbl, but remain on track to deliver relatively stable results for the year in local currency. At Dow Jones, we hope to see continued improvements in advertising declines, but as typical, visibility is limited. We continue to expect modestly higher overall expenses for the full year and strong revenue growth in B2B revenues.
At Book Publishing, while we expect year-over-year improvements versus the prior year, revenue and profit growth is expected to be more modest than the first quarter given overall industry trends and the normalization of return rates. At News Media, revenue trends remain mixed geographically, and we will continue to focus on ongoing cost efficiencies.
With that, let me hand it over to the operator for Q&A.

Question and Answer Session

Operator

(Operator Instructions) Our first question comes from Lucy Huang from UBS.

Lucy Huang

My one question is in relation to Move. So I just wonder if you can give us updating to the competitive landscape in the U.S.? And just any early thoughts on the recent U.S. court ruling around agent commissions. Like do you think this could have an impact on industry dynamics more broadly? And I guess, for the Move business longer term?

Robert J. Thomson

Yes, Lucy. Well, first of all, we'll have to see what transpires on appeal in that particular case. But it's clear that the U.S. property market has already been evolving if rather incrementally. I mean our focus is solely on providing the best possible service for vendors, for purchases, and for real estate professionals, and we'll continue to build audience through the use of our rather large media platforms. We've been taking advantage of the present downturn in the market to build out our sell-side operations. And there is definitely a downturn in existing home sales when you have an annual rate of $3.9 million, which is well below the normal average of $5.5 million. .
We certainly foresee stronger activity longer term on the sell side, a bit like the Australian market, and we've acquired a company UpNest, which is particularly strong in that area. And there are interesting lessons for the U.S. market generally from Australia about what happens when the market turns, patently much suppressed demand here at the moment. In Australia, we saw listings in Melbourne and Sydney surge 14% and 16% in the last quarter. And those numbers were even higher in October, Melbourne listings surged 32% and Sydney saw 33%. So we look forward to similar surging and soaring in the U.S. market when mortgage rates moderate.

Operator

Our next question comes from Alan Gould from Loop Capital.

Alan Steven Gould

Robert, I was wondering if you can get into a little bit more detail about this residulously reviewing our structure? And secondly, if you could comment on how the recent real estate lawsuit might affect the Realtor and Move?

Robert J. Thomson

I think, Alan, I answered the second question. just now. So we'll have to wait for the appeal there. The market itself is still obviously suffering from the heavy burden of mortgage rates here in the U.S. As for structure, look, we agree with the general thesis that the company has been transformed over the past decade, and the full value of our incomparable assets is not fully represented in the share price.
And that's a tribute to the leaders of all our business from Rebekah in London to Patrick at Foxtel, and to all our teams who have navigated through fundamental changes in each of their sectors and through the pandemic and the subsequent surge in interest rates. And as you can divine from today's numbers, we are in a truly different position to most media companies with a robust balance sheet and are poised for even greater growth and profitability in the coming years when the economic heavens return to equilibrium. .
But at the same time, we are consciously and constantly reviewing our structure and have already taken tangible steps to clarify internal corporate structures to ensure that we have maximum flexibility in that overall structural consideration.

Operator

Our next question comes from David Karnovsky from JPMorgan.

Unidentified Analyst

This is Ted on for David. I wanted to ask if you could give us an update on digital ad trends. Any color you can share on the quarter and expectations moving forward would be appreciated?

Robert J. Thomson

Sure. Obviously, the trends across the mass heads vary by segment and region. And algorithm changes can have a short-term impact. Though we do have a strong relationship with both Google and Facebook, and they tend to respond thoughtfully to any infulicities that we identify. And I'd particularly like to call out Sundar Pichai and his trustee team, who are conscious of the importance of journalists and journalism.
Specifically at Dow Jones, advertising was down 3%, which was a marked improvement after a 14% decline in the prior quarter. Both digital and fringe reported improvement in trend lines. And there was a more modest decline of 8% in the U.K., but most of that was actually in print as digital advertising was flat compared to the same quarter last year. And the New York Post, while flat overall, actually saw an increase in print-related advertising as the paper continued to expand its social, political and commercial reach.

Operator

Our next question comes from Entcho Raykovski from Evanson Partners.

Entcho Raykovski

Firstly, I just wanted to ask, given that there have been some public comments from a shareholder over the past month about a proposal to spin out REA, interested in your comment as to whether you see merit in that proposal, and is that something you're willing to explore? Or are you looking at other ways, as you've spoken about of closing the valuation gap. And if I can quickly throw a second one in there as well, hopefully, a straightforward one. Given the Foxtel refinance over the quarter, when do you think the shareholder lines will be repaid? Are there any other impediments or hurdles to that repayment taking place now?

Robert J. Thomson

It would obviously be inappropriate to comment on any shareholder in particular, and actually inappropriate to comment on any shareholder comment. But as I've made clear, we are conscientiously reviewing our structure and have taken steps corporately to ensure that we have maximum flexibility that of itself reflects the constant institutional introspection that characterizes the way we oversee these very valuable assets.

Susan Lee Panuccio

Entcho, just in relation to your question on Foxtel, we expect a modest return this year and anticipate the bulk of the repayments to come over the next few years. That's obviously dependent on the current plans and cash flow position.

Operator

Our next question comes from Craig Huber from Huber Research.

Craig Anthony Huber

Great. Robert, it's nice to hear that you guys are reviewing your structure, and I have long talked about for the last 10 years or so. I mean, the company is very complicated from an investor -- an outside investor standpoint. So I'm glad to hear you guys are looking at it seriously. I mean when I look at the stock, I mean, I looked at a 35% to 40% conglomerate discount that's embedded in your stock in order to justify the stock at in the low 20s here and stuff. So I guess we'll see what happens. I hope some significant happens on that front.
If I could ask a question about books. I mean it's nice to see the recovery from a year ago. Are you seeing anything in the book area, whether it be on the cost side or on the revenue side that would stop you from getting back to your EBITDA level that you're at in the low 300s back in fiscal '21 and '22?

Robert J. Thomson

Craig, look, obviously, HarperCollins is journey through a rather unique period of unusual circumstances, the pandemic, logistical issues at Amazon, cost pressures. And it has emerged from that confluence of complexity with a strong front back list and margins actually dramatically improvement, improving from the percent in the final quarter of last fiscal to 12.4%. So we are seeing that margin improvement already. And there's also no doubt that there's reason for excitement about the entry of Spotify into audio books. Over the past few years, audio books have been by far the fastest-growing sector. And Spotify itself has really transformed both the concept and the experience of streaming.
And so Daniel Ek and I have been discussing audio books for a few years, and we've reached an agreement on a model that is great for orders, for book lovers, for Spotify, and for us. And the early signs from the U.K. and Australian markets are certainly positive. And if those trends hold, audio, which now comprise about 45% of digital sales will reach a far higher threshold level, we'll be generating significantly more revenue and as you asked, be improving our EBITDA.

Susan Lee Panuccio

And Craig, maybe just to add, we do expect continued profit growth in the balance of the year given certainly the prior year compares subject, of course, to that consumer demand that Robert talked about. But we expect it to be at a more modest rate than Q1. And we're hopeful that the EBITDA margin can remain positive to last year and in the low double digits for the full year, having delivered the 12.3% in Q1. So I expect that margin rate will be more over the medium term when we look to lift it.

Operator

Our next question comes from Brian Han from Morningstar.

Brian Han

Robert or Susan, can you please clarify, did you guys say in Dow Jones, B2B earnings are larger in B2C earnings? Or did you mean its contribution to growth is now larger than B2C?

Susan Lee Panuccio

They are larger and on track to be larger for the full year. So yes, we did say that.

Brian Han

On track to be larger.

Susan Lee Panuccio

And they were for the quarter .

Robert J. Thomson

And they're obviously a higher margin, digital high retention rates. .

Operator

Our next question comes from Darren Leung from Macquarie.

Darren Leung

I just have one on Move, please. The real estate revenues were obviously down 20%, and you called out listings at 11%, pretty crude, but it sort of implies that yield average yield was down about 9%. Can you talk a little bit about the drivers on this front, please? And how we should be thinking about the yield driver in the remainder of the year?

Susan Lee Panuccio

Darren, we don't, as you know, give out specific yields. You may recollect that actually over the course of probably the last 18 months, we've been seeing increases in yields that have helped us offset some of those declines. You could imagine in the current market, it's obviously challenging to be pushing yields up in the U.S. So look, I think what we would say is that we just continue to balance where we think we can push yields in certain markets with the current macro environment. That's probably all we can say on that.

Operator

We can go to Craig Huber with a follow-up.

Craig Anthony Huber

Yes. The follow-up question on Realtor.com, please. Can you maybe just comment a little further on what you're plan doing the cost side of the business for the rest of the fiscal year here? I understand obviously the pressure on the top line. But I mean, where do you guys think profits and Realtor.com are going to go the issue with issue on the top line from a macro standpoint, but you want to invest more, it sounds like on the R&D side and in marketing?

Susan Lee Panuccio

Craig. Look, I think if you think about the next quarter, you could probably expect cost to be relatively in line with what we've seen in Q1. As we mentioned, we do want to continue to invest in that business. We see a huge opportunity in that business when the market picks up, and we want to make sure that we're in the best position to take advantage of that.
Some of the investment areas that we're looking at are building our product investment having a look at marketing, obviously, just given the competitive position there. It's really important that we do that. So we will probably back in some of those cost investments depending on how revenue trends.

Michael Florin

Thank you. Leila. Any other questions?

Operator

There are no further questions on the line at this time.

Michael Florin

Right. Well, thank you all for participating. Have a wonderful day, and we'll talk to you soon. Take care.