How News Corp's property sites grew as leads and listings fell
The publisher's adjusted segment earnings rose 13%. Its property businesses helped drive that gain, but October brought a sharper fall in Australian listings.
Move, the News Corp business behind Realtor.com, grew quarterly revenue 5% even though its lead volume fell 11%. Sales of premium products increased, alongside revenue from sellers, new homes and rentals.
Its Australian property business, REA Group, also grew while listings declined. Together, the businesses show how pricing and product mix can support growth when the wider housing market offers less help.
The gains helped News Corp's adjusted Total Segment EBITDA rise 13% to $392 million in its first fiscal quarter. That earnings measure excludes depreciation and amortization, interest, taxes and other specified items. Adjustments for currencies and deals made the increase smaller than the 19% rise in reported Total Segment EBITDA.
A strategy that now faces fewer leads
Realtor.com's shift toward premium offerings was already visible in August's results. News Corp said products such as RealPRO Select were bringing in more revenue per lead.
The latest quarter is a harder test of that approach. Move's revenue reached $160 million, up from $152 million a year earlier, despite the decline in leads. News Corp attributed the growth mainly to higher sales of RealPRO Select, plus growth in its seller, new-home and rental businesses.
News Corp owns 80% of Move directly. REA, which is separately listed in Australia and controlled by News Corp, owns the remaining 20%.
Australian pricing is doing more work
REA's revenue in News Corp's accounts rose 13% to $369 million. Favorable currency movements accounted for much of the increase; growth was 5% at constant exchange rates.
Australian residential listings fell 2%, with Sydney and Melbourne down 16%. Higher prices, extra products and more customers choosing premium listings helped offset the weaker volume.
REA's own update reported an average 8% price increase for Premiere+, its premium listing product. The timing of deferred revenue also helped residential revenue growth, so pricing was only part of the lift.
The market weakened further in October. National new listings fell 13%, or 8% after allowing for one fewer working day. REA kept its annual outlook unchanged: a low-single-digit decline in new listings, alongside higher margins and low-double-digit growth in the revenue it earns per residential sale listing before changes in geographic mix.
Profit improved, cash flow weakened
The broader group, which also owns Dow Jones and HarperCollins, reported net income of $215 million, up from $150 million. That included a $37 million pretax gain linked mainly to the sale of REA India's remaining business.
Dow Jones increased segment earnings, while book publishing benefited from higher sales and the absence of a $13 million customer write-off a year earlier. The News Media division went the other way: its segment earnings fell to $18 million from $30 million.
Operating cash flow from continuing operations fell to $13 million from $85 million. News Corp attributed the drop mainly to the timing of money tied up in operations and higher tax payments.
Capital spending rose to $102 million. Subtracting that spending from operating cash flow left negative free cash flow of $89 million, compared with positive $4 million a year earlier.
The group ended the quarter with $1.78 billion in consolidated cash and $2.01 billion of borrowings. The News Corp company profile tracks its property outlook, the longer-term Dow Jones target and how cash is held across the group.