Conferencia de resultados del primer trimestre fiscal de 2027 de News Corp (NWSA): el EBITDA sube un 19%

Puntos clave

• News Corp reportó unos ingresos de 2.300 millones de dólares en el primer trimestre fiscal de 2027, lo que supone un aumento interanual del 6%, mientras que el EBITDA total de los segmentos creció un 19% hasta alcanzar un récord para un primer trimestre de 403 millones de dólares.
• El margen EBITDA total de los segmentos se expandió 180 puntos básicos hasta el 17,7%. El BPA reportado aumentó a 0,29 dólares desde los 0,20 dólares, mientras que el BPA ajustado se incrementó a 0,28 dólares frente a los 0,22 dólares previos.
• Dow Jones, Digital Real Estate Services y Book Publishing aumentaron conjuntamente el EBITDA de sus segmentos un 24%, reforzando su papel como los tres principales motores de crecimiento de News Corp.
• Los ingresos de Dow Jones aumentaron un 8% hasta los 630 millones de dólares y el EBITDA del segmento creció un 11% hasta los 160 millones de dólares. Las suscripciones exclusivamente digitales aumentaron un 10%, alcanzando casi los 6,5 millones.
• Digital Real Estate Services registró el mayor crecimiento de beneficios: los ingresos aumentaron un 10% hasta los 529 millones de dólares y el EBITDA del segmento se disparó un 34% hasta los 212 millones de dólares, a pesar de las débiles condiciones del mercado inmobiliario.
• La dirección prevé que continúe la sólida evolución de los ingresos y la expansión de los márgenes en Dow Jones, al tiempo que recalca que el flujo de caja libre del ejercicio fiscal sigue concentrándose estacionalmente en la segunda mitad.

Datos financieros clave

Rendimiento empresarial y operativo

Dow Jones

Dow Jones registró unos ingresos récord para un primer trimestre fiscal y su decimoquinto trimestre consecutivo de crecimiento interanual del EBITDA. Los ingresos del negocio de información profesional aumentaron un 5%.

Los ingresos de Risk & Compliance crecieron un 11% hasta los 104 millones de dólares, impulsados por el aumento de clientes, la ampliación de productos, la fijación de precios, mayores volúmenes y ventas adicionales. Los ingresos de Dow Jones Energy aumentaron un 8% hasta los 79 millones de dólares, con una retención de clientes de aproximadamente el 90% y el mayor incremento de nuevas contrataciones netas en un primer trimestre desde su adquisición en el ejercicio fiscal 2022.

Los ingresos por difusión de noticias aumentaron un 4%, incluido un crecimiento del 6% en la difusión digital. Las suscripciones exclusivamente digitales aumentaron un 10% hasta casi 6,5 millones, con unas 219.000 incorporaciones netas frente al trimestre anterior. Los ingresos por publicidad crecieron un 9% hasta los 93 millones de dólares, liderados por la demanda de los sectores tecnológico y financiero. La publicidad digital aumentó un 12% y representó el 70% de los ingresos publicitarios.

La dirección afirmó que Dow Jones sigue bien encaminada hacia el objetivo de 1.000 millones de dólares de EBITDA presentado en su sesión informativa para inversores.

Digital Real Estate Services

Los ingresos de REA aumentaron un 13%, o un 5% a tipo de cambio constante. El crecimiento residencial en Australia reflejó subidas de precios, una mayor penetración de productos y servicios complementarios. El rendimiento (yield) aumentó un 8%, mientras que el rendimiento controlable creció un 14%. Esto compensó en parte la presión derivada de una caída del 2% en los nuevos anuncios inmobiliarios de compra a escala nacional y descensos del 16% en Sídney y Melbourne.

Realestate.com.au promedió 11,5 millones de visitantes únicos mensuales y 137 millones de visitas mensuales durante el trimestre. REA completó la venta de REA India en septiembre, lo que significa que los resultados de News Corp excluirán ese negocio a partir del segundo trimestre fiscal. REA también acordó adquirir una participación del 35% en Distilled por 409 millones de AUD, o aproximadamente 290 millones de USD.

Los ingresos de Realtor.com aumentaron un 5% hasta los 160 millones de dólares, marcando su octavo trimestre consecutivo de crecimiento. Real Pro Select, una mayor monetización de los anuncios prémium y la diversificación de ingresos respaldaron este resultado. Las categorías adyacentes —incluidas viviendas nuevas, alquileres y vendedores— alcanzaron el 23% de los ingresos.

El volumen de clientes potenciales (leads) cayó un 11%, como reflejo de las condiciones del mercado inmobiliario y del giro hacia contactos de mayor calidad. La dirección señaló que las eficiencias en los flujos de trabajo respaldadas por IA contribuyeron a mejorar la rentabilidad. Realtor.com registró 4,9 visitas por usuario único, un aumento interanual del 8%, según comScore.

Book Publishing

Los ingresos de HarperCollins crecieron un 9% y el EBITDA del segmento aumentó un 29%. Los nuevos lanzamientos en publicaciones de interés general e infantiles respaldaron la demanda, mientras que la base comparativa se benefició de una amortización de insolvencias del año anterior vinculada a un distribuidor independiente.

Los ingresos digitales aumentaron un 6%, incluido un crecimiento del 13% en audiolibros impulsado por Spotify, Audible y nuevos títulos. Los títulos de fondo de catálogo representaron el 66% de los ingresos de consumo, frente al 65% del año anterior. Los costes aumentaron un 7% debido a mayores regalías, gastos de fabricación y marketing para los nuevos lanzamientos.

News Media

Los ingresos de News Media cayeron un 1% en un contexto de difíciles condiciones publicitarias y cambios en los algoritmos de búsqueda y redes sociales. The Times cerró el trimestre con 686.000 suscriptores digitales, un 7% más, mientras que las suscripciones digitales en Australia se mantuvieron en 1,16 millones.

La dirección destacó el tráfico directo y hacia sitios de destino propio de News Corp. La empresa registró 249 millones de usuarios únicos mensuales en su red de Estados Unidos, incluidos 84 millones en New York Post y 66 millones en realtor.com. El tráfico directo siguió siendo la fuente de tráfico predominante para The Wall Street Journal.

Perspectivas de la dirección

• Dow Jones: La dirección prevé una sólida evolución continua de los ingresos, una reinversión disciplinada y una mayor expansión de los márgenes.
• REA: El negocio se centrará en nuevas ofertas, mejoras de productos, servicios adyacentes y eficiencias de costes. Los anuncios inmobiliarios de octubre cayeron un 13% interanual, o un 8% tras ajustar por un día laborable menos.
• Realtor.com: La dirección planea seguir buscando el crecimiento continuo de los ingresos y aumentar la rentabilidad a pesar de los elevados tipos hipotecarios y las débiles condiciones del mercado de la vivienda en Estados Unidos.
• Book Publishing: La dirección calificó de saludables las tendencias subyacentes, pero anticipa mayores costes para respaldar un sólido programa de novedades editoriales.
• News Media: La empresa espera tendencias en general similares a las del primer trimestre fiscal, incluidos modestos costes adicionales relacionados con el continuo despliegue de California Post.
• Flujo de caja libre: La dirección atribuyó el menor flujo de caja del primer trimestre al calendario de gastos de capital, cobros de ingresos y un mayor inventario en HarperCollins. Mantiene la confianza en un sólido flujo de caja libre para todo el ejercicio, que suele concentrarse en la segunda mitad.

Riesgos y aspectos a vigilar

• Los tipos de interés más elevados continúan limitando la actividad inmobiliaria. Realtor.com operó en un mercado con tipos hipotecarios superiores al 7%, mientras que REA afrontó menores volúmenes de anuncios inmobiliarios.
• News Media sigue expuesta a la debilidad de las condiciones publicitarias y a los cambios en los algoritmos de búsqueda y redes sociales.
• El conflicto en Oriente Próximo afectó a la actividad de Dow Jones Energy, aunque la dirección señaló una cartera de proyectos en mejoría.
• HarperCollins incrementó su inventario para asegurar la disponibilidad durante la temporada navideña ante la preocupación por la cadena de suministro, lo que contribuyó a presionar el capital de trabajo en el primer trimestre.
• News Corp continúa litigando contra el uso no autorizado de contenidos protegidos por derechos de autor por parte de plataformas de IA. La dirección afirmó que ha emprendido acciones legales contra Perplexity y Brave, y que prevé recibir a corto plazo el primer tramo del acuerdo de 1.500 millones de dólares con Anthropic sobre libros.

Puntos destacados de la sesión de preguntas y respuestas con analistas

Licencias de IA y propiedad intelectual

El consejero delegado, Robert Thomson, afirmó que News Corp mantiene negociaciones activas con varias plataformas de IA, incluidos proveedores verticales especializados que necesitan contenido actualizado para mejorar sus modelos y productos. Señaló que el impacto financiero debería hacerse visible en las cuentas de News Corp una vez que se cierren los acuerdos. La empresa ya cuenta con alianzas con OpenAI y Meta.

Eficiencias y productos impulsados por IA

News Corp no cuantificó el ahorro de costes vinculado a la IA. La directora financiera, Lavanya Chandrashekar, señaló que la IA se está utilizando en ingeniería, pruebas de calidad, atención al cliente, analítica de datos, operaciones financieras y marketing.

La dirección también identificó oportunidades de producto en el sector inmobiliario digital, audiolibros y traducción de texto y audio a menor coste. REA y realtor.com colaboran en aplicaciones de IA diseñadas para mejorar la experiencia de agentes, compradores y vendedores.

Tráfico de búsqueda y publicidad digital

La dirección afirmó que las marcas de destino propio y el tráfico directo de News Corp diferencian a la empresa de los editores dependientes del contenido de búsqueda genérico. El crecimiento publicitario de The Wall Street Journal se vio respaldado por clientes de tecnología y finanzas, mientras que las visitas directas siguieron siendo su principal fuente de tráfico.

Calendario del flujo de caja libre

La dirección atribuyó la presión sobre el flujo de caja trimestral a la concentración de los ingresos en el último mes del trimestre, lo que retrasó los cobros hacia el segundo trimestre fiscal, así como a un mayor inventario en HarperCollins y al calendario de gastos de capital. La compañía mantuvo su confianza en lograr un sólido flujo de caja libre para todo el ejercicio.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Welcome to News Corp's First Quarter Fiscal 2027 Earnings Conference Call. Today's conference is being recorded. Media will be allowed on a listen-only basis. [Operator Instructions] At this time, I would like to turn the conference over to Michael Florin, Senior Vice President and Global 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 2027 Earnings Call. We issued our earnings press release about 30 minutes ago, and it's now posted. On the call today are Robert Thomson, Chief Executive; and Lavanya Chanchashaker, Chief Financial Officer. We have 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 and 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, and adjusted segment EBITDA and adjusted EPS. The definitions and GAAP to non-GAAP reconciliations of such measures can be found in the earnings releases for the applicable periods posted on our website.

With that, I'll pass it over to Rob Thomson for some opening comments.

Robert Thomson

Thank you, Mike. Following a year of record revenue and record profitability in fiscal 2026, we began the new fiscal year with our first quarter revenue, 6% higher than prior year at $2.3 billion. while total segment EBITDA surged 19% to $403 million. Our positive results were bolstered by strong performances across our 3 growth engines, Dow Jones, Digital Real Estate Services and Book Publishing, which saw a collective segment EBITDA increase of 24% compared to the prior year, even though economic conditions were volatile with conflict in the Middle East, tariff turbulence and interest rate increases. And our margin for the quarter was 17.7% compared to 15.9% in the same quarter last year, while Star earnings per share were $0.29 compared to $0.20 a year ago, and adjusted EPS were $0.28 compared to $0.22. The 19% increase in total segment EBITDA marked 14 consecutive quarters of growth and we have also reported 13 consecutive quarters of year-on-year revenue increases on a continuing operations basis. .

Our company has been transformed over the past decade of the digital age, and we believe the business is primed for further growth in the age of AI when trusted sources will inevitably become more valuable and consumers and companies will be able to prompt agents to seek out those sources. In the Agentic age, individual agents will be potentially free of the political bias and media myopia that characterize some old school digital aggregators and will seek out sources that provide tangible value. We are traversing an era that rapidly exposes the femoral but which rewards companies with a cogent and coherent tech trajectory. Business is ultimately transactional. And digital drops, superficial slop is not the concrete insight sought by companies or the brilliant books sold by readers or property intelligence sought by families making the most important investment buying a home. And we have network now, meaning that those 3 growth areas are clearly more than the sum of their prosperous parts. In the U.S., we have just experienced an election, which has inevitably prompted politicization of everything from water to wattage. At least, there has been more focus on the integrity of inputs necessary in the AI age and we believe our content is an absolutely essential input.

Often lost in a debate is that intelligent content is actually the essence of AI. Infrastructure is not AI, silicon is not I Water is not AI. These are but necessary components. AI runs on created content, and we create that core intelligence. That intelligence is dependent on the content that our journalists, our writers, our teams across the world and across cultures create day after day, minute after a minute. So we, as a company, play a crucial role in creating the inputs that are contributing to the extraordinary outputs that people are experiencing. The outputs enhancing so much of the personal and of the professional. They are value-added experiences, and we are creating that core value and we do so with core values. As for the AI platforms, we note that anthropic has signaled with fanfare its intent to IPO in the near future. Publishers have serious concerns about Antropic's unlicensed use of copyrighted content to power its AI tools.

Consistent with our woo and sue strategy, we remain vigilant about protecting our IP. We will not tolerate any abuse of our IP and more broadly, the undermining of the very value of creation and creativity in our society. As we journey, and some other people stumble into the AI age, News Corp is no peripheral participant. We are a primary provider of the essential ingredients AI companies need to operate thoughtfully and productively. We are glad to have principal partners in OpenAI and Meta and others who appreciate the crucial role our inputs play. So we remain optimistic that other platforms will choose compensation over conversation, principal over plunder, and that they will understand that digital [indiscernible] is inimical to their own interests.

Turning to our segments. Dow Jones once again posted robust results with first quarter revenue rising 8% year-on-year to $630 million. while EBITDA increased 11% to $160 million, marking the 15th consecutive quarter of year-on-year EBITDA growth. Margin expanded by 80 basis points to 25.4% compared to the prior year, and we remain focused on building our high-margin professional information business. The Risk & Compliance business increased revenue 11% over the prior year, and the recent spate of painful fines for prominent financial institutions highlights the need to minimize risk and maximize compliance. The Dow Jones Energy business expanded 8% despite the Middle East conflict that inevitably had an impact on our activities. The team has pivoted savvily in the circumstances, and we are seeing a potent revenue pipeline that we expect will become more obvious later in the year. The news business saw circulation revenue expand 4% for the first quarter versus prior year, with digital volumes rising 10% to average nearly 6.5 million subscriptions during the period.

Advertising demand particularly across tech and finance helped fuel 9% revenue growth period overall with digital advertising achieving double-digit growth for the fourth consecutive quarter at 12%. And Elmar and Dowl Jones team remain firmly on track to reach the $1 billion EBITDA target that was outlined at the Dow Jones Investor briefing earlier this year. Speaking of investor briefings. Cam McIntire and the REA leadership team just held a particularly successful Investor Day in Australia and highlighted the company's revenue resilience and growth potential even in a market experiencing short-term disruption. Core messages, whether AI should be an accelerator for growth providing enhanced services for agents, sellers and buyers, and that the company has increased yield markedly even in times of a lagged listings growth and elevated interest rates.

Overall, in the Digital Real Estate Services segment, revenues for the first quarter rose 10% to $529 million and EBITDA surged 34% to $212 million. as REA and realtor.com both showed their structural strength in markets that were challenged. That excellent performance, obviously, augurs well for our company when market conditions become less hostile and more specious. At REA, revenues rose 13%, benefiting from high yield and the positive impact of a stronger currency despite a 2% national decline in listings. The team continued to sharpen their strategic focus by completing the sale of REA India to Orem and by agreeing to take a 35% stake in Distilled, the leading multi-vertical digital marketplace in Ireland, where our company has a strong media presence and we'll be able to deploy that network to enhance the business.

In the U.S., realtor.com defied a depressed market, posting its eighth consecutive quarter of top line revenue growth at 5% and achieving considerable gains in profitability. In a housing market constrained by 7% plus mortgage rates Damian and the team have exhibited exceptional discipline in their operational focus and AI integration. And that approach has converted revenue growth into meaningful bottom line expansion. They also continue to lead the industry in engagement with 4.9 visits per unique user in Q1 according to comScore, well above their competitors, while realtor.com remains the leading publisher of residential real estate news in the world's largest property market. In Book Publishing, revenues for the first quarter rose 9% to $582 million, while profitability surged 29% to $75 million. And our margins rose to 12.9% compared to 10.9% in the prior year. Audio books delivered a sterling performance with 13% year-on-year growth, propelled by a global partnership with Spotify and by a focus on enhancing audio as a higher-yielding listening event.

We had a plethora of successful titles, including Ann Patris Whistler, Rebecca Kwan's Type story and Daniel Silvers Ransom. We were delighted to reincarnate one of AgateChristi's most indomitable and encourageable characters Ms. Maple, thanks to the talented Luciole in the intriguing novel Murder At The Grand Alpine Hotel. The enduring breadth of our catalog will be on full display in the second quarter, including the knockout success of Silvestor Stallone's The Steps, which debuted as a #1 seller at the end of September. We are excited about titles from Brian Kilmed, Baba King Silver and Veronica Roth, As well as [indiscernible] much awaited adaptation of the Magician's Nephew, the CS Lewis Classic, which should benefit from extensive promotion ahead of the Fibra Premier. In the meantime, the late great Jeffrey Archer has had customer success with Adamaniv, which became an immediate best seller.

News Media continues to navigate complex market pressures including a challenging advertising environment and the ongoing evolution of the search and social algorithm landscape. As mentioned earlier, that search landscape will change dramatically with the advent of agentic AI. Revenues for the segment declined slightly versus prior year to $540 million, while EBITDA was $18 million for the quarter, which included modest investments in both the California Post and News24, our Australian-based broadcast network whose global reach has expanded rapidly. In the U.K., the Times grew digital subscribers by 7% to finish the quarter with 686,000 subs while advertising at TalkSport benefited from vibrant streaming growth. Thanks in part to the World Cup. Advertising would have benefited further had England as it should have made the final. In Australia, total digital subscribers held at $1.16 million, while digital ARPU remained resilient.

The New York Post is preparing to celebrate a notable milestone later this year, the 225th anniversary of its founding by Alexander Hamilton. And it has rarely been in such strong financial shape, having previously suffered decades of losses before the recent turnaround, which was built on a still study print subscription business and the material expansion of digital revenues. Our strong first quarter performance is a testament to the company's collective focus on higher margins and our determination to develop digital businesses with recurring revenues and promising prospects. These qualities have clearly set us far apart from other media companies or what you might call trade media. And some of that trade media has indeed become tragic media.

At News Corp, we remain committed to driving growth and profitability while exercising judicious cost discipline and prudent capital stewardship with the clear goal of creating value for all our shareholders. In this quest, we are grateful for the astute leadership of our Chair, Lachlan Murdoch and our Board of Directors. We also recognize the enduring residents of our Chairman Emeritus, Rupert Murdoch, and lowered the commitment and creativity of our employees around the world.

And now I turn to our Chief Financial Officer, Lavanya Chandrashekar for further insight into an excellent quarter for the company.

Lavanya Chandrashekar

Thank you, Robert, and good afternoon to everyone. Our first quarter results demonstrate the continued strength and resiliency of the business and its consistent earnings power. We delivered another quarter of double-digit profit growth with increased profit margins led by our core growth engines. We achieved record first quarter profitability marking our 14th consecutive quarter of year-over-year total segment EBITDA growth on a continuing operations basis. Our focus on operational efficiency has driven meaningful margin expansion and we continue to see substantial runway for further improvement. We have posted updated slides highlighting our first quarter performance, along with the trending schedule to the Investor Relations section of the News Corp website.

As I mentioned last quarter, while we believe many in the investment community appreciate that News Corp has a very valuable portfolio of assets and treat at a discount to net asset value, with which we certainly agree. We are also continuing to deliver profit growth at a faster rate than most companies in our peer group, including those in the information services sector. We have demonstrated strong earnings and free cash flow power built in financial flexibility and a clear focus on maximizing value. Turning to the quarter. Revenue for the quarter were $2.3 billion, up 6% year-over-year, and total segment EBITDA was $403 million, up 19%. And margins expanded by 180 basis points to 17.7%. Our core growth engines, Dow Jones, Digital Real Estate Services and Book Publishing, continued to generate outsized performance and collectively grew segment EBITDA by 24% this quarter. On an adjusted basis, revenue increased 4%, and total segment EBDA grew 13%. The Earnings per share were $0.29 compared to $0.20 in the prior year. Adjusted EPS were $0.28, up from $0.22.

Turning to Dow Jones. This was a record first quarter with revenues of $630 million, growing 8% year-over-year. Digital revenues represented 85% of total segment revenue, up from 84% in the prior year. Risk and Compliance revenues increased 11% to $104 million, supported by customer growth, product expansion and pricing. We continue to see growth in both feed and platform revenue including for value-added solutions, such as advanced screening and monitoring and investigative research. The majority of incremental revenue growth this quarter was driven by higher volume and product upsells. At Dow Jones Energy, as anticipated, revenues grew 8% to $79 million, improving from the prior quarter rate supported by an improved pipeline of new business. We had the highest first quarter increase in net new bookings since the acquisition in fiscal 2022. Customer retention remains very strong at approximately 90%. Other Information Services revenues declined 4%, lapping the resolution of a customer dispute in the prior year.

Overall, Professional information business revenues increased 5%. In the news business, circulation revenues grew 4%, while digital circulation increased 6%. We continue to optimize yield and posted accelerated year-over-year and quarter-over-quarter growth in digital direct subscription ARPU and expect further improvements in fiscal 2027. Digital circulation represented 76% of total circulation revenue compared to 75% in the prior year. Digital-only subscription grew 10% year-over-year to nearly 6.5 million with sequential net adds of approximately 219,000 benefiting from the timing of enterprise subscription deals topped the highest sequential net adds in almost 3 years. Advertising revenue increased 9% to $93 million, driven by 12% growth in digital advertising, while print grew 4%. Both improving from the prior quarter rate. Growth was led by strong performance in the technology and finance categories. Digital advertising represented 70% of total advertising revenue, up 2 percentage points from the prior year.

Dow Jones segment EBITDA for the quarter grew a healthy 11% to $160 million, with margins increasing to 25.4% and improving by 80 basis points versus the prior year. Turning to digital real estate. Segment revenues were $529 million, up 10% reported and 4% on an adjusted basis. Segment EBITDA was $212 million, up 34% reported and 23% on an adjusted basis, benefiting from strong profit contributions at both REA and at realtor.com. REA revenue grew 13% and 5% in constant currency. Growth was driven by the Australian residential business, led by price increases increased depth penetration and growth in add-on products, resulting in 8% growth in yield or 14% growth in controllable yield. The growth was partially offset by lower listing volumes and geo mix. National new buy listings in the quarter fell 2%, with Sydney and Melbourne down 16%. Very importantly, realestate.com.au averaged 11.5 million monthly unique visitors and 137 million monthly visits for the quarter, nearly $100 million more than the nearest competitor.

As a reminder, News Corp's results include the revenue and losses from REA India this quarter. The divestiture of this business closed in September, and our results starting the second quarter will no longer include REA India. During the quarter, REA announced an agreement to take a 35% stake in distant, which is the leading multi-vertical digital marketplace operator across Ireland and Northern Ireland, an owner of Ireland's #1 property portal Jaf.ie. The investment is expected to be AUD 409 million or approximately USD 290 million. Please refer to REA's earnings release for more details. The presentation materials and a webcast from the recent Investor Day are posted on REA'S website for your reference.

In the U.S. realtor.com continued to make very strong progress this quarter despite the difficult U.S. property market conditions with revenues rising 5% to $160 million, driven by strong execution and lapping tougher year ago comparisons. And importantly, realtor continues to demonstrate improved profitability as it realizes further cost efficiencies through the integration of AI into its workflow. Realtor has now grown revenues 8 straight quarters, an impressive trend given the macro environment. This quarter, revenue performance was driven by the growth in Real Pro Select, its premium marketing solution for top-performing agents and teams. Strong demand for and increased penetration of Real Pro Select continued to drive higher yields, complemented by a strategic focus on higher-priced listings, which offer greater monetization potential. We continued to diversify the revenues with adjacencies, comprising new homes, rentals and sellers increasing to 23% of revenues. Lead volume declined 11% impacted by the broader market conditions, coupled with the repositioning of customer acquisitions to higher quality and higher value leads.

Importantly, revenue per existing homes sold, a proxy for yield rose 25% compared to quarter 4, 2022. Based on comScore for the first quarter, realtor.com continues to lead the industry in engagement with 4.9 visits per unique user, increasing 8% year-over-year and maintaining substantial leads over Redfin and Homes.com.

Turning to Book Publishing. HarperCollins posted another strong quarter. Revenues grew 9% to $582 million, outperforming recent industry trends. Segment EBITDA was $75 million, up 29% year-over-year driven by the strong top line performance and lapping the bad debt write-off related to an independent distributor in the prior year. On an adjusted basis, revenue and EBITDA increased 8% and 29%, respectively. Costs increased 7% this quarter, driven by higher royalties, manufacturing and marketing expenses related to new frontlist releases. Results were driven by strong demand for new releases in general trade and children's. Digital revenue at HarperCollins grew 6% with titles such as [indiscernible] Whistler driving strong growth at both Spotify and Audible, leading to a 13% increase in revenue from audio books. This quarter, the backlist contributed 66% of consumer revenues compared to 65% last year.

At this time, we continue to anticipate the commencement of the anthropic settlement payments in the near term. At News Media. Revenues declined 1% to $540 million as challenging advertising conditions were partially offset by currency favorability of the Australian dollar. Segment EBITDA was $18 million, down $12 million year-over-year which included disciplined investment at the New York Post and tougher trading conditions.

Turning to free cash flow. First quarter free cash flow was impacted by the timing of working capital and capital spending. We continue to be focused on driving strong free cash flow. And as a reminder, our free cash flow generation tends to be second half weighted due to seasonality. Turning to the outlook. At Dow Jones, we expect continued strong revenue performance, and we will support this growth with disciplined reinvestment and expect continued margin expansion. REA continues to be focused on driving value in the marketplace through new offerings, product enhancements and adjacencies while pursuing cost efficiencies. October listings were down 13% year-over-year but down 8%, removing the impact of 1 less working day. At realtor, despite difficult housing conditions due to higher rates, we remain focused on driving continued revenue growth and scaling profitability.

At Book Publishing, overall trends remain healthy. Like the first quarter, we expect higher cost to support a strong front list program. At News Media, we expect broadly similar trends to quarter 1, including modest incremental costs compared to the prior year related to the continued rollout of the California post.

With that, I'll turn it over to the operator for Q&A.

Operator

[Operator Instructions] Our first question comes from Brent Penter with Raymond James.

Preguntas y respuestas

Brent Penter

Just a couple on AI. Robert, you talked about the value of your content as an AI input. As you evaluate the AI deals that you've done so far, how do you think about the value you're getting out of those deals relative to a potential opportunity cost? And what have you learned from those deals? And then you also quickly mentioned agentic AI. So just as muse becomes a bigger topic -- how do you feel you're positioned for people using Agent AI to manage their consumer subscriptions?

Robert Thomson

Brent, first of all, we feel we're very well positioned in the agentic age and the agents themselves will be seeking out individual stories and servicing them, which is certainly more beneficial to us than what you might call egregious aggregation. We're in active negotiation on several fronts, and those talks with AI platforms are progressing well. Clearly, we can't reveal any details of confidential deals. But once they are concluded, you'll be able to see the impact in our accounts very clearly. There's no doubt, we already have important partnerships with OpenAI and Meta. And apart from the other large players, which you might call horizontal platforms, we're in discussion with specialist verticals who need our content and our immediacy to freshen their models and create compelling products for their specialist clients. As for litigation, we do expect the first tranche of the $1.5 billion Atopic book settlement to be received in the near term, as Lavanya indicated. And we still have issues with Antropic, we have cases against the perplexing perplexity and the not so Bravura brave. I noticed that New York Times has also brought an action against brave this week. .

And I would emphasize that not only are we pursuing companies that still our content, but also taking it in at those companies, which knowing we purchase that per line content. They are obviously receiving stolen goods and should cease and desist. As for the subscription cancellation issue, look, if making it difficult for subscribers to cancel is a core part of your strategy then clearly, you have a problem and you need a new strategy. You should be making it impossible for people to subscribers that is to cancel by exceeding their expectations and delivering quality journalism that provides unique insights and absolute value and that's our strategy.

Michael Florin

Thank you, Brent. Mariana, we'll take our next question, please.

Operator

Our next question comes from Ailsa Lei with UBS.

Ailsa Lei

My question is on the higher year-on-year CapEx. If you could please give more color on what drives the spend and how we should be thinking about the rest of FY '27.

Lavanya Chandrashekar

Sure, Ailsa. Thank you for the question. The CapEx increase in this quarter was entirely driven by timing. We continue to be very confident in our ability to deliver strong free cash flow for the year.

Michael Florin

Thank you, Ailsa. Mariana, we'll take our next question, please.

Operator

Our next question comes from Entcho Raykovski with Evans and Partners.

Entcho Raykovski

I've also had a question related to free cash flow. I mean, given it was a little bit weaker in the quarter. And I also appreciate the seasonality. But can you provide a little bit more color around the timing factors which drive the working capital movements in the quarter. So putting CapEx to 1 side, obviously, the operating activities cash was quite a bit lower Yes. So some further color would be appreciated.

Lavanya Chandrashekar

Thanks, Entcho. Yes, so I'll give you a little bit more color. I mean like other than the CapEx timing, the other thing that impacted free cash flow this quarter was the timing of working capital. And so what do I mean by the timing of working capital? It's really 2 things. One is from a revenue perspective, more of our revenue was weighted into the back -- the last month of the quarter. And that was really good news coming from the strength of the both the Dow Jones business as well as HarperCollins. And so obviously, that money gets collected in the second quarter. And then the second thing was a slight increase on inventories at HarperCollins again this is to -- given all of the supply chain issues that we -- that people are having, if this was really to make sure that we protected our ability to have an outstanding holiday season on HarperCollins. As you said, our cash flow does tend to be more second half weighted due to seasonality free cash flow continues, remains a key focus for us in terms of value expansion, and I am very confident that we will generate strong free cash flow for the year.

Michael Florin

Thank you, Entcho. Mariana, we'll take our next question please.

Operator

[Operator Instructions] Our next question comes from Craig Huber with Huber Research.

Craig Huber

I've got a couple of questions on AI, if I could, please. Can you just -- is it possible for you to quantify for us AI cost savings at your company, either at 1 or 2 segments or maybe for the whole company? I mean how significant are AI cost savings for you, right, like an annual run rate or something like that? And then secondly, where are you the most excited about using AI to enhance your products and services.

Lavanya Chandrashekar

I'll do the first part of your question, Craig. We're not quantifying cost savings. What I would say is that we are focused on driving cost efficiencies in a disciplined manner, always protecting the long-term strength of the business. And AI is increasingly becoming a tool and a capability that allows us to do so. I mean, 1 of the -- a few examples maybe is what I can give you. One, I mean, obviously, in terms of our product development in terms of engineering, folding quality testing, et cetera, that's definitely a place where we're seeing -- I mean, our teams are using AI. They're extraordinary curious about being able to do so, they're doing so in a disciplined and with the right card rails, but that is driving efficiencies. Customer service is another area where we are definitely driving efficiencies. Also anything which is automated -- being able to automate certain data analytics kind of work -- what I would say stepping back, I'd say that we're actually using AI across all of our functions across all of our business units. You see it in operations, you see it in finance operations. You see it in marketing. And so I mean, this is an extraordinarily curious and driven organization and the ability to use AI to drive both top and bottom line growth is enormous.

I'll hand it off to Robert to talk about the second part.

Robert Thomson

Yes, Craig. Look, in terms of products, really right across the company. We are talking to each other, creating new experiences, new interfaces for our customers, for our clients. And if you look, for example, at digital real estate, AI is going to enhance the real estate experience, not undermine. And we'll ensure that we use our understanding of the market, our unique data sets. Our unique real estate at a trial to leverage AI to the benefit of the customers. And that's a guiding principle both real and REA. And those 2 companies are talking to each other virtually every day about the implementation of new AI applications. And just 1 other -- 1 of many other examples, AI and HarperCollins and audio books. Obviously, we're seeing Spotify innovate as is Audible and AI is going to really provide a role in helping to bring books to live through these vivid voices and the ability to generate a compelling audio experience that makes the book even more valuable. It really does transform audio books. So there's so many more choices in reading voices, sound effects and other techniques and tools and creativity that will bring words to life. And don't forget as well how AI will enable much more cost-effective translations. And the multiple languages, both in text and audio and thus, reach new audiences and generate new revenue.

Michael Florin

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

Operator

Our next question comes from Douglas Wardlaw with JPMorgan.

Unknown Analyst

Robert, we've heard from some publishers in Internet platforms this earnings season about the headwinds from search traffic and AI overlays. Your digital stayed at double digits. So maybe you're seeing something different. Can you speak to engagement trends generally or just a test of your digital advertising growth over the past few quarters?

Robert Thomson

Yes, Doug, we're very fortunate that our companies are destination sites. And at a couple, we've actually seen recent increases in traffic to some of the larger sites. And so our experience is rather different to those sites, which rely on what is called evergreen content, that is sites thinking that endless lists or gardening or food would fatten their traffic. Well, those sites have definitely been on a digital diet in the AI age. Generic does not flourish as synthesis proliferates. So the Evergreen turned out to be rather seasonal and has been withering on the vine. For example, our larger sites, realtor, REA, Bible Gateway are different types of experiences in that we -- at a monthly level, we have 249 million uniques in the U.S. so it's a huge audience, but it's also a network, 84 million at the New York Post. 66 million realtor, for example. And so hard news specialist intelligence, unique expertise remain huge traffic drivers. And these really are our strengths.

And as I say, we do have a particularly potent network effect. So for example, realtor dot-com can drive traffic to viable gateway, which can drive traffic to WSJ.com and New York Post and vice versa. So we have our own circular system, which is particularly valuable at this time.

Lavanya Chandrashekar

Yes. I'll just add on Robert in terms of ad revenue growth. we did see notable strength at the Wall Street Journal. And really, it's coming from both the tech sector as well as the finance sector, and it's the kind of the unique positioning that they're able to get by advertising with the journal. And I'd also say that direct traffic at the Wall Street Journal is the -- it's a predominant source of traffic at the Wall Street is direct traffic.

Michael Florin

Thank you Doug, Mariana, we'll take our next question.

Operator

At this time, we have no further questions. I will now hand over to Michael Florin for closing remarks.

Michael Florin

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