News Corp (NWSA) Q4 2021 Earnings Call Transcript


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News Corp (NASDAQ:NWSA)
Q4 2021 Earnings Call
Aug 5, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the News Corp 4Q Fiscal 2021 Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mike Florin, Senior Vice President and Head of Investor Relations. Please go ahead.

Michael FlorinSenior Vice President & Head of Investor Relations

Thank you very much, Valerie. Hello, everyone, and welcome to News Corp’s Fiscal Fourth Quarter 2021 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 then 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 our earnings release.

With that, I will pass it over to Robert Thomson for some opening comments.

Robert ThomsonChief Executive Officer & Director

Thank you, Mike. The past year has been a severe test for families, for countries and for companies. The stresses and strains of a pandemic have stretched the social fabric and the commercial canvas. I want, foremostly, to express my gratitude to the employees of News Corporation, who around the world, have navigated these testing times with professionalism and with principal. Their efforts, their creativity and their commitment have built on the company’s proud foundations and been a catalyst for these impressive results for News Corp and for our group companies.

Overall, revenues in fiscal 2021 rose 4% and by 30% in the fourth quarter, that is 30%, indicating that the company is surely gaining in momentum, while profitability improved by 26% for the year. We have continued to focus our investment on growth areas, with the acquisition of Investor’s Business Daily, Mortgage Choice in Australia and the Books & Media division of Houghton Mifflin Harcourt. We have also continued to simplify the business with the rationalization of REA’s Asian property business and the amicable settlement of residual litigation regarding News America Marketing, which we successfully sold just ahead of fiscal 2021. Our strong cash generation has given us increased optionality. Our cash balance exceeded $2.2 billion at the end of June. And so we were able to take advantage of the required sale of Opus which we expect to strengthen and ultimately transform the Dow Jones’ Professional Information business.

And our clearly robust cash position has prompted the company to actively review our capital returns policy with a greater focus on buybacks. A few highlights before delving deeper into the businesses. For fiscal 2021, we had a record number of digital subscriptions at our key mastheads. Record traffic at realtor.com, where audience growth, according to comScore, is significantly outpacing that of its main rival, and record subscriber growth at Foxtel, where at the end of June, our paid streaming subscribers reached over two million, an increase year-on-year of 155%, a profound escalation that included the successful launch of Binge last year. That success has naturally given us much optionality as we consider Foxtel’s rather favorable future. In short, we had the most profitable year since we created the new News Corp. Dow Jones had its most profitable year since it was acquired in 2007, and HarperCollins and Move also recorded their most profitable years, and we believe there is clearly more growth ahead.

The past year has seen the revaluing of our content through landmark news payment agreements with the major tech platforms. These deals, the financial terms of which are confidential, will add significant revenue annually, clearly into nine figures and are a profoundly important part of the ongoing transformation of the content landscape. We are also watching the evolution of the digital ad market, which historically has lacked transparency, the active interest of regulators around the world should reduce the opacity and provide higher yields for publishers. At Dow Jones, subscriber growth continued to pace, leading to a significant increase in segment EBITDA for the fourth quarter and for the year, up 15% and 41%, respectively. The full year segment EBITDA was indeed the most lucrative since the company’s acquisition.

Digital consumer subscriptions, which were 26% higher in the quarter, contributed to that growth as did an overall increase in advertising revenues for the year of 4% as a surge in digital ads more than compensated for a decline in print advertising. At The Wall Street Journal, subscriptions grew 15% year-over-year in the fourth quarter, reaching nearly 3.5 million, and digital-only subs growing by nearly 100,000 from the third quarter and by 21% year-over-year, now comprise nearly 80% of total subscriptions. Advertising in the fourth quarter rose 45% and digital advertising was 53% higher. It is worth highlighting the success of our Risk & Compliance business, particularly as we contemplate the future potential of the just announced agreement to acquire Opus.

Revenues at Risk & Compliance increased 23% for the fiscal year and burgeoned by 30% in the fourth quarter compared to a year earlier, marking six straight years of over 20% growth. We believe that the Professional Information business will continue to expand at a strong rate, and that Opus will be the cornerstone for commodities, energy and renewables digital business that will have a long-term positive impact on our earnings. We are excited to be adding a new growth lever to Dow Jones, whose performance has manifestly been exceptional. We firmly believe Opus and Dow Jones will be more than the sum of their parts. Our acquisition of Investor’s Business Daily was completed in May, and we expect to see the positive impact of this high-margin digital operation in coming quarters. We believe that there are multiple opportunities to cross-sell and upsell products as IBD will benefit from Dow Jones reach and Dow Jones will prosper from IBD’s range of high-value specialist investment offerings.

We are confident that Almar Latour and the team at Dow Jones are poised to deliver ongoing excellent results. The Foxtel narrative is particularly positive as our early emphasis on streaming and on securing long-term valuable sports and entertainment rights has put the company on a decidedly upward trajectory. Our paying subscribers were 40% higher and fiscal year revenue rose 10%, while our EBITDA growth was 11%. There was a noticeable acceleration in revenue growth in the fourth quarter when it surged 33%, driven by our streaming products and thanks in part to positive currency fluctuations. The strong growth in the streaming business, which is taking advantage of and successfully monetizing existing rights was evident in the fourth quarter with the number of total paying streaming subscribers was 155% higher than at the same time last year.

We are obviously pleased with the exponential evolution of both Kayo, our sports streaming product, which has rights to Australia’s most popular sports, and Binge, our entertainment streaming service, as they combine world-class technology, clever user interfaces and high-quality compelling content. It is worth pausing for a moment to consider how the Foxtel narrative has changed decisively and positively over the past 18 months. Then we were being asked whether we would need to put extra funds into Foxtel. And now we have attractive options for a growing, thoroughly contemporary business that has a tangible upside. Our immediate task and that of our team led admirably by Siobhan McKenna and Patrick Delany is to keep driving the business to keep striving because those options will certainly be enhanced by continued success.

Digital Real Estate is another fast-growing sector for the company, and we are proud of the performance of both REA and REALTOR. Many of you will recall, there was a certain skepticism when we acquired Move, the realtor.com parent, a certain doubt about our ability to turn around the company’s then flagging fortunes. Well, there’s no overstatement to say there has been a realtor renaissance with fiscal 2021 profit contribution from Move increasing by $100 million as its revenue scaled. For the year, revenue grew by 36% and the rate accelerated to 68% in the fourth quarter. Audience numbers hit record highs during the quarter. As measured by the independent comScore, audience growth has exceeded that of Zillow and Trulia for 17 successive months, an average more than 20 percentage points faster in the last eight months.

That is a telling testament to the great work by Tracey Fellows, David Doctorow and to all at REALTOR. The two core pillars of the REALTOR business, the premium referral model and lead generation, have both reported superlative growth. And those who watch the industry closely will have noted that a key indicator, the number of houses listed for sale has increased in the past two months. The more inventory on the market, the more opportunities for the REALTOR team to deliver their best-in-class services to buyers, sellers and agents. Our REA had a supernal year with revenue growth of 27%, benefiting from currency and a robust housing recovery in Australia. Revenue growth actually accelerated in the fourth quarter compared to the third quarter, again, listings were a key driver of that success with full year listing 15% higher, while those in the fourth quarter surged 54%. One of the absolute lessons of the pandemic is that families and investors have focused on property as both a source of returns but also of enduring security.

The aloha of real estate is real and the profits are palpable. Meanwhile, we are expanding into sensible adjacencies, in particular, mortgages, which will also benefit from the renewed flow of listings. Smartline is already thriving, and Owen Wilson and the team are confident that Mortgage Choice will benefit from that increased activity by offering borrowers the best possible range of loans. We look forward to updating you in coming quarters with the progress at both Mortgage Choice and Smartline. HarperCollins is another resilient source of revenue growth, profits and cash generation for the company. Revenue for the full year rose 19%, while segment EBITDA was 42% higher as the company benefited from digital sales, the rediscovery of books as a medium and an extensive lucrative backlist. For example, the company has certainly profited from the immense popularity of Bridgeton, the eponymous Netflix series, which has been extended into a second season to the benefit of Julia Quinn’s novels and HarperCollins.

The company’s prospects and its backlist have been bolstered by the addition of the Houghton Mifflin Harcourt Books & Media segment, which has a living library of 7,000 titles including the perennially popular George Orwell and Curious George. We also acquired the U.S. rights to J.R.R. Tolkien’s works, including the Hobbit and the Lord of Rings trilogy, and now have global English language rights, which will surely benefit from the upcoming blockbuster Amazon series based on those classic perdurable books. Brian Murray and the HarperCollins team have focused on driving digital and direct-to-consumer offerings, and it is worth noting that e-book sales rose 14% during the year, while audio books expanded a healthy 22%. Clearly, there is much interest by various podcast-related companies in our unique audio book offerings, and we stand to gain from the proliferation of streaming audio. For those of you who have perused our numbers, it is clear that there has been a strong improvement in the profitability of the News Media businesses with News U.K., News Corp Australia and the New York Post, all performing admirably and contributing to News Corp’s overall enhanced profitability.

There was disciplined cost control and sage leadership throughout those businesses and a strong recovery in advertising during the fourth quarter. In the U.K., our businesses delivered a significant profit contribution for the year, with digital subscriptions increasing markedly and listening at wireless rising sharply during the European football championships with advertising benefiting accordingly. And we look forward with alacrity to the launch of the Premier League season next week. The Sun remains the country’s largest digital news brand and advertising revenue across the properties in the U.K. rebounded in the fourth quarter compared to a year earlier. That rebound is a sign that reach, engagement and provenance are important to advertisers and that our U.K. media companies, under Rebekah Brooks’ leadership, provide a uniquely effective forum.

At News Corp Australia where Michael Miller and the team took the bold and necessary decision to convert most of our regional and community papers to digital-only platforms, we saw a 25% increase in digital subscribers at the mastheads in the fourth quarter, while there was a healthy recovery in advertising. Clearly, businesses are subject to the vagaries of the virus in Australia, but the robust recovery in recent months is a hopeful harbinger. The New York Post was on the very cusp of making an annual profit for the first time in many decades, perhaps for the first time since the age of Alexander Hamilton, which is testament to the epoch work of Sean Giancola, Keith Poole and all of the Post. The Post was a digital success in fiscal 2021, generating 45% digital ad growth, including an acceleration in the fourth quarter with 65% growth. That is 65% growth.

And we should harvest further savings from the exiting of our Bronx printing plant, which is attracting much demand from companies seeking this prime side. I would like to thank all who have printed and distributed the Post in Dow Jones publications through the decades. They provided a great service to the company and to society by delivering news and insight every morning around the Greater New York region. All of our employees deserve gratitude for their stellar contributions, both for the company and their communities over the past complicated, sometimes stressful year. Their efforts have been a crucial part of our unprecedented success and provided a firm foundation for ongoing revenue growth and increasing profitability. As I mentioned earlier, we are generating record profits and cash, and that has given us the ability to make opportunistic acquisitions to bolster the company and generate even more momentum. We will certainly be thoughtful and strategic in deploying our assets and will, as always, be cognizant of our responsibility to and the interest of all of our shareholders.

And now I hand you over to Susan Panuccio, who will provide more salient details about an extraordinary year.

Susan PanuccioChief Financial Officer

Thank you, Robert. Fiscal 2021 fourth quarter total revenues were almost $2.5 billion, up 30%, the highest level since the second quarter of fiscal 2019 when we still owned News America Marketing. Total segment EBITDA was $210 million, up 8% versus the prior year, including record high segment EBITDA at Digital Real Estate Services. Total segment EBITDA included several nonrecurring items that depressed year-over-year comparisons this quarter, including $49 million of nonrecurring legal settlement and transaction costs. The results also include $11 million of one-off costs at Foxtel, which I’ll come back to. Excluding the divestment of News America Marketing, acquisitions, currency fluctuations and the other items disclosed in our release, adjusted revenues increased 20% and adjusted total segment EBITDA increased 26%, driven by a strong performance of Digital Real Estate Services and a big year-over-year improvement in News Media.

For the quarter, we reported a net loss per share of $0.02 compared to a loss of $0.67 in the prior year. Last year’s loss included $292 million of noncash impairment charges, primarily related to fixed assets in the U.K. and Australia. Fiscal 2021 results included a $64 million tax benefit due to an adjustment to valuation allowance in the U.S. and a $54 million noncash write-down of Foxtel’s investment related to the Nickelodeon Australian joint venture, which is now covered through a separate affiliate agreement.

Adjusted earnings per share were $0.16 in the quarter compared to a loss per share of $0.03 in the prior year. Importantly, on a full year basis, free cash flow available to News Corp improved to $731 million from $180 million in the prior year, driven by higher total segment EBITDA, improvements in working capital and lower capital spending. Moving on to the results for the individual reporting segments, starting with Digital Real Estate Services. Segment revenues were $413 million, an increase of 74% compared to the prior year, a sharp acceleration from the third quarter growth rate of 34%. The performance was driven by another record quarterly performance at Move, together with very strong results at REA and to a lesser extent, a positive impact from foreign currency fluctuations.

On an adjusted basis, revenues increased 59%. Segment EBITDA rose 92% to $136 million or 99% on an adjusted basis. Move’s revenues were $186 million, a 68% increase year-over-year with real estate revenues rising 77%, a significant acceleration from the 43% growth in the prior quarter. Move contributed $17 million to the segment EBITDA growth this quarter, achieving strong profit improvements despite $30 million of additional marketing expenses consistent with our commentary that the bulk of the expected increase in cost the second half would materialize in the fourth quarter. For the full fiscal 2021 year, Move increased its profit contribution by $100 million and was the single biggest profit driver across News Corp this year. We saw accelerated revenue growth across both the traditional lead generation and referral businesses in the quarter. The traditional lead generation business continued to benefit from strong agent demand, improved retention rates, higher yield and lead volume growth. Revenues from the referral business represented approximately 30% of total Move revenues, up from 25% in the prior quarter, partly due to seasonality with revenue growth driven by an increase in lead volume, record home pricing and higher referral fees.

In addition, advertising and rental revenue also showed strength during the quarter with the combined revenues more than doubling versus the prior year, only partially offset by the lower revenues resulting from the sale of top producer in the third quarter. The realtor.com’s traffic reached a quarterly record of 106 million average monthly users, reflecting a year-over-year increase of 32%. Lead volume grew 14% year-over-year, a slower growth rate than the prior quarter as we lapped tougher comparisons with the prior year, which saw growth rates in the mid-30s coupled with ongoing industry supply constraints. Compared to the prior quarter, lead volume grew 8%. REA had an exceptional quarter with revenues rising 79% year-over-year to $227 million, including a $34 million or 27% positive impact from currency fluctuations. REA’s results benefited from a material increase in residential premier debt revenues despite the absence of a price increase this fiscal year as part of REA’s prior year COVID-19 support initiatives.

Australian national residential new buy listings for the quarter rose 54% with Melbourne and Sydney both up 64% as growth rates were somewhat exaggerated by the impacts from COVID-19 last year. Listing volumes were not only higher than the prior year, but also higher than fiscal 2019 and 2018 levels. Traffic remained robust with total visits to realestate.com.au for June at 123 million, up 8% year-over-year, and the visits multiplier against its nearest competitor reaching a record high of over 3.4 times in June. Please refer to REA’s earnings release and their conference call following this call for more details. Turning to the Subscription Video Services segment. Revenues for the quarter were $542 million, up 33% versus the prior year and included an $85 million or 21% positive impact from foreign currency fluctuations.

The growth rate also improved sequentially. Adjusted revenues increased 12% with higher revenues from the streaming products more than offsetting the revenue declines from the broadcast product in the quarter, helped by the COVID-19 comparison. Total closing paid subscribers across Foxtel reached nearly 3.9 million as of June 30, with total subscriptions, including trialists, over four million and were up 40% versus the prior year, a material acceleration from the third quarter driven by continued growth in paid streaming subscribers and a year-over-year recovery in commercial, which was hit particularly hard from COVID-19 last year. Sequentially, paid subscribers rose 10%. Kayo total subscribers increased to almost 1.1 million and Binge total subscribers increased to 827,000. In the aggregate, total streaming subscribers reached over 2.1 million with paying subscribers up more than 150% to just over two million.

Streaming products are now delivering meaningful growth at scale and over 50% at Foxtel’s total paid subscribers are now on streaming platforms. Residential broadcast subscribers declined to less than 1.7 million and commercial subscribers, while growing sharply year-over-year, continued to be impacted by COVID-19 restrictions and further lockdowns, notably in the accommodation sector. We saw broadcast churn moderate from the past two quarters to 17.1%, but up from 13.2% in the prior year, with the team continuing their focus on retaining high-value subscribers and driving ARPU growth. ARPU increased 4% to AUD81 from the prior year, partially offsetting broadcast subscriber volume declines. Segment EBITDA declined 37% to $66 million or 46% on an adjusted basis. As we communicated in our prior call, the decline was largely timing related, driven by $84 million of higher sports programming rights and production costs in the quarter, which we didn’t have in the prior year due to COVID-19, together with higher marketing expenses.

In addition, Foxtel had approximately $11 million of one-time costs, mainly related to iQ3 and iQ4 promotional activity. Importantly, looking at Subscription Video Services for the full year, segment EBITDA increased 11% and was relatively stable in local currency, which includes the impact of $57 million of sports rights costs that were deferred from last year. The business also generated meaningful free cash flow across the year as increasing scale in streaming is leading to improved financial momentum within the company and lower capital intensity. Moving on to Dow Jones. Dow Jones delivered revenue of $449 million, up 18% compared to the prior year, including two months of revenue from the acquisition of Investor’s Business Daily with digital revenues accounting for 72% of total revenues this quarter. Circulation and subscription revenues increased $34 million or 11%, driven by a 12% increase in circulation revenues, reflecting the continued strong growth in digital-only subscription for Dow Jones consumer products and the acquisition of IBD.

Dow Jones subscriptions increased to over 4.5 million average subscriptions to its consumer products in the quarter, up 19% from the prior year. Of that, nearly 3.5 million were digital-only subscriptions, up 26% year-over-year. IBD had over 100,000 subscriptions at quarter end with the majority being digital-only. Professional Information business revenues rose 11%, driven primarily by Risk & Compliance. Revenue growth from Risk & Compliance accelerated yet again with a year-over-year increase of 30% and marked the fastest growth in three years. For the year, Risk & Compliance reached approximately $195 million of revenues, up 23%.

Advertising revenues, which accounted for 23% of revenues this quarter, grew 45% to $103 million, the highest fourth quarter growth rate since News Corp’s acquisition and was also higher than the fourth quarter fiscal 2019. Digital advertising posted record growth with revenues up 53%, with all categories performing above expectations. We saw a significant increase in yield, particularly in direct display. Print advertising revenues rose 36% year-over-year, primarily benefiting from the COVID-19 comparison. Dow Jones segment EBITDA for the quarter rose 15% to $69 million. EBITDA margins were relatively stable year-over-year as higher revenue growth was partially offset by the timing of marketing expenses for both brand and conferences, IBD integration costs and higher compensation costs. Costs were also notably depressed in the prior year due to COVID-19-related savings initiatives.

As we previously communicated, much of the cost increase this quarter were planned investments with some timing-related items. Dow Jones achieved the highest level of profitability since its acquisition this fiscal year, with margins expanding to nearly 20%, up almost five percentage points from the prior year. On an adjusted basis, segment revenues and EBITDA for the quarter rose 14% and 12%, respectively. At Book Publishing, for the fourth quarter, HarperCollins posted 21% revenue growth from the prior year and segment EBITDA rose 2%. Adjusted revenues grew 11% and adjusted segment EBITDA was flat to the prior year. The moderation in growth was impacted by the lapping of COVID-19 benefits in the prior year and mix of titles as last year’s results included the Magnolia Table Volume II. Despite a difficult prior year comparison, book consumption levels remain high. Fourth quarter continued to benefit from Bridgeton but to a lesser extent than the prior quarter. While physical sales continued their momentum this quarter, digital revenues declined 3% in the quarter, reflecting a difficult comparison to the prior year when many bricks-and-mortar stores were closed due to COVID-19. E-book sales fell 11% in the quarter, but were partly offset by 11% growth in downloadable audio.

This quarter’s results also include almost two months of results from the acquisition of the HMH Books & Media segment. We’re excited about the acquisition and feel very confident about achieving the cost synergy target of $20 million within two years, and the team are actively exploring revenue opportunities, notably in licensing and animation. Turning to News Media. Revenues for the quarter were $595 million, up 21% versus the prior year, driven by the recovery of the advertising market from COVID-19-related weaknesses in the prior year. Growth in circulation and subscription revenues and a $73 million or 14% positive impact from foreign currency fluctuations. Growth was partially offset by a $58 million or 12% negative impact from the divestiture of News America Marketing in May 2020. On an adjusted basis, revenues rose 21% as we cycled the steep declines from COVID-19 last year. Circulation and subscription revenues rose 26%, driven by a $34 million or 15% benefit from currency fluctuations, strong digital paid subscriber growth and cover price increases as well as the recovery of print volumes from COVID-19-related weakness in the prior year.

Advertising revenues increased $31 million or 15% compared to the prior year, benefiting from the COVID-19 comparison with strong gains in both print and digital advertising revenues across key mastheads as well as a $29 million or 14% increase from foreign currency. Those gains came despite a $58 million or 28% negative impact related to the divestment of News America Marketing and a $10 million or 5% negative impact related to the closure or transition to digital of certain regional and community newspapers in Australia. On a reported basis, advertising revenues in Australia rose 34% or 14% in local currency, while News U.K. advertising revenues rose 86% or 65% in local currency. In the U.S., the trends remained strong with the New York Post posting 60% advertising revenue growth, of which digital advertising grew 65%. Segment EBITDA for the quarter was breakeven compared to a loss of $44 million in the prior year. In the Other segment, fourth quarter results include nonrecurring legal settlement costs. Excluding that charge, costs were modestly higher than we had expected, primarily driven by higher equity compensation across both cash and noncash expenditure.

I would now like to talk about some themes for the upcoming quarter and fiscal 2022. Visibility remains limited, especially in Australia due to ongoing COVID-19 lockdowns. That said, we are very encouraged by our July trends and are looking to build on that momentum into fiscal 2022. Our Digital Real Estate Services, as noted in their release, revenue in fiscal 2022 will benefit from a price rise in July for REA, and they also noted that new buy listings declined 3% in the month. Results will also include the acquisition of Mortgage Choice. Please refer to REA’s press release for more details. At Move, we continue to see strong pricing in agent demand despite ongoing supply constraints. Like the fourth quarter, we expect to balance reinvestments with revenue growth as we focus on expanding into adjacencies. In Subscription Video Services, we are pleased with the ongoing performance of Kayo and Binge and the efforts to improve broadcast ARPU. We do expect a modest impact in the first quarter due to the current lockdowns in Australia, particularly in commercial venues. For the year, we expect costs in local currency to be stable with fiscal 2021 and revenue trends to continue to improve as the streaming products continue to scale. At Dow Jones, overall trends across the business remains strong.

We expect costs to increase as we focus on top line growth, but we will remain focused on margin expansion. Dow Jones will also see incremental content licensing revenues from Google. In Book Publishing, overall trends remain favorable despite lapping the benefits from COVID-19. While publishing faces a difficult comparison given its fiscal 2021 performance, we remain very encouraged by HarperCollins strong release slate and favorable secular trends. We also expect to see additional contribution from the acquisition of HMH. At News Media, we expect the segment to show notable improvement in fiscal 2022, driven by the contributions from the deals with Google and Facebook, improving advertising trends and disciplined cost action. capex for the year is expected to be approximately $100 million higher in fiscal 2022, partly driven by higher technology costs and the rollout of the IP-enabled iQ5 set-top box at Foxtel.

We will continue to manage spend closely throughout the year as we did during fiscal 2021. And finally, free cash flow generation will remain a priority in the coming year. The company ends the year stronger, better capitalized and with new levers of growth. We’re excited about the potential for our recent acquisitions, including our announcement this week on Opus. And as Robert mentioned, we are now actively reviewing our capital allocation policy as we look to balance reinvestment and growth with healthy shareholder returns.

With that, let me hand it over to the operator for Q&A.

Questions and Answers:

Operator

Thank you. [Operator Instructions] And we will take our first question from the line of Kane Hannan of Goldman Sachs. Please go ahead.

Kane HannanGoldman Sachs — Analyst

Good morning guys. Just two quick ones for me quickly. Just firstly on that comment around the buybacks. Could you just give us a little bit more detail around potential outcomes there? What sort of quantum and timing you should be thinking about? And then on Move, just obviously very strong revenue growth this year. Can you just talk about sort of how we think about the sustainability of that growth into FY 2022 and some of those pricing tailwinds that you mentioned? Thank you.

Robert ThomsonChief Executive Officer & Director

Sure. On buybacks, obviously, we’re indicating that there’s a more vigorous, livier discussion about capital allocation. For a start, we have more capital to allocate, given the strong cash generation in the company over the past year and for the foreseeable future. The acquisition of Opus does not change that thinking, which is at an advanced stage. So I’ll reiterate what we said earlier, we are actively reviewing our capital returns policy with a greater focus on buybacks. As for REALTOR, REALTOR really is at a very early stage of its exponential evolution. The growth over the past year has come despite a relative paucity of listings. And the encouraging sign is the level of listings is on the rise again, and the immutable laws of supply and demand, as always, is beginning to take effect.

And it is worth reiterating that we’ve grown faster than Zillow and Trulia, as measured independently for 17 successive months, and in the past eight months, that growth has exceeded 20 percentage points. And that is a profound transformation and surely indicates that the fundamentals are favorable.

Susan PanuccioChief Financial Officer

And Kane, just in relation to Move as well as we sort of think about the coming year, notwithstanding, obviously, market conditions, we do expect to see yield optimization on the core lead-gen product moving into 2022, and we still see opportunities to improve sell-through within that product. In relation to the referral business, we expect to continue to benefit from record home prices, yield optimization, and we’ll continue to focus on improving the close rates. Overall, agent demand remains very robust and existing home sales remain notably higher than pre-COVID levels. So we feel very confident.

Michael FlorinSenior Vice President & Head of Investor Relations

Thank you, Kane. Valerie we’ll take our next question please.

Operator

Thank you. [Operator Instructions] We’ll move to our next question from the line of Entcho Raykovski of Credit Suisse. Please go ahead.

Entcho RaykovskiCredit Suisse — Analyst

Robert, Susan, so if I can ask one on books and just a very quick one on Opus. So books in the quarter, you had very strong revenue growth, but adjusted EBITDA was flat. And obviously, you’ve talked about the mix of titles. But just wanted to understand, are there any one-off cost factors driving this? And should we expect perhaps a reversal in future quarters? If you could provide us more detail that would be useful. And then with the Opus acquisition announced earlier this week, do you see any potential synergies from that transaction? And if you do, can you talk to what areas that perhaps come from? Thank you.

Susan PanuccioChief Financial Officer

Entcho, I might start in relation to HarperCollins. So look, there’s not anything really that’s material in one-off. We have had some integration costs for HMH, but they’re not material in the context of the overall results. It really rolls down to just the mix of slightly lower digital sales. The backlist mix was a little bit different, 2% difference quarter-on-quarter, year-on-year. But the consumption trends do remain favorable. So we are expecting to see the momentum continue.

Robert ThomsonChief Executive Officer & Director

On Opus, Entcho, Opus was opportunistic. It was a required sale, and we were able to act swiftly and decisively. And we do have a significant amount of expertise in that sector, thanks to Dow Jones and a very clear sense of how we can develop the Opus business, which is already high-margin, cash-generative and decidedly digital. I mean it’s grown every year since 2007 despite the ebb and flow of energy cycles. And so there’s no doubt that Opus will be an important source of ongoing revenue and profit and cash flow for Dow Jones and News Corp. And we’re talking energy, commodities, renewables and carbon-related products, which will have a long runway deep into the future.

Michael FlorinSenior Vice President & Head of Investor Relations

Thank you, Entcho. Valerie we’ll take our next question please.

Operator

Thank you. We’ll move on to our next question from the line of Darren Leung of Macquarie. Please go ahead.

Darren LeungMacquarie — Analyst

Hi guys. Thanks. Thank you. Just a very quick question, obviously considering a buyback. Can you give us a feel for, I suppose, the other side of capital management, like, obviously, with the Opus acquisition, how we should think about debt levels on a sustainable basis going forward, please?

Robert ThomsonChief Executive Officer & Director

Look, Darren, I don’t think we can give you any more detail than that which we have revealed today. But as I just made clear, the Opus acquisition itself has not affected our thinking on capital allocation, and we are in the fortuitous position of having more capital to allocate.

Susan PanuccioChief Financial Officer

And Darren, just to add to that, I mean, as I mentioned, we’ve got a healthy cash balance of about $2.2 billion at the end of the year. The Opus transaction will be an all-cash transaction, but we still will be retaining a healthy cash balance. And having generated meaningful free cash flow this year, we are continuing to focus on free cash flow generation as we move forward. So at this stage, we’re fairly comfortable with what our balance sheet looks like.

Michael FlorinSenior Vice President & Head of Investor Relations

Thank you, Darren. Valerie, we’ll take our next question please.

Operator

Thank you. [Operator Instructions] We will now take our next question from the line of Brian Han of Morningstar. Please go ahead.

Brian HanMorningstar — Analyst

Robert, you mentioned several times the optionality that’s opening up for Foxtel. Can you please elaborate on what that means? And when you will make a decision on which option you’re going to take? And Susan, you mentioned the decline in capital intensity for Foxtel. Can you shed some light on how capex will change for Foxtel in 2022 compared to 2021? Thanks.

Robert ThomsonChief Executive Officer & Director

Well, Brian, it’s very clear that what we have with Foxtel are options, and that’s a tribute to the team in Australia, who patently transformed the business and its fortunes. We’ve got the key sports rights long into the future. We have an absolutely contemporary customer-friendly streaming platform network and those systems are another means of monetizing existing rights at no extra cost. We have a broadcast experience that is world-class and is now the village square for video in Australia.

And we surely have price elasticity in a market where an ever larger number of people in Australia understand that you pay a premium for premium content. And these are all special circumstances and their confluence combined with sage leadership from Patrick and Siobhan has transformed Foxtel fortunes and certainly given us choices.

Susan PanuccioChief Financial Officer

And then just a follow on in relation to the capex question. So the increasing investment next year is in relation to the iQ5 box, as I mentioned, which really is to focus on IP for that business going forward, which will drive efficiencies going forward. So while capex will be slightly elevated relative to this financial year, it will then start to come down. And even the forecast for financial year 2022 is materially below the financial year 2020 numbers.

Michael FlorinSenior Vice President & Head of Investor Relations

Thank you, Brian. Valerie, we’ll take our next question please.

Operator

Thank you. And we have a follow-up question from Kane Hannan of Goldman Sachs. Please go ahead.

Kane HannanGoldman Sachs — Analyst

Hi guys. I know you’re not talking to specifics around the Google, Facebook 9-figure earnings number. But just was there any of that benefit in this fourth quarter? And then just any comments, I suppose you can make around the Dow Jones versus the News Media split of that number?

Susan PanuccioChief Financial Officer

Kane, the numbers for Q4 are actually pretty immaterial. So we’re expecting to see the full benefit of those deals come through into financial year 2022. We haven’t actually given any guidance on the allocation. It’s fair to say the bulk of that allocation is obviously going to go across the Dow Jones segment and the News Media segment. And we’ll obviously be updating on that as we work through the year.

Michael FlorinSenior Vice President & Head of Investor Relations

Thank you, Kane. Valerie, we’ll take our next question please.

Operator

[Operator Instructions] It appears that there are no further questions at this time. I’d like to turn the conference back to Mr. Florin for any additional or closing remarks.

Michael FlorinSenior Vice President & Head of Investor Relations

Well, thank you, Valerie, and thank you for all participating today. Have a great day. And as always, we look forward to speaking with you all again in the very near future. Take care.

Operator

[Operator Closing Remarks]

Duration: 44 minutes

Call participants:

Michael FlorinSenior Vice President & Head of Investor Relations

Robert ThomsonChief Executive Officer & Director

Susan PanuccioChief Financial Officer

Kane HannanGoldman Sachs — Analyst

Entcho RaykovskiCredit Suisse — Analyst

Darren LeungMacquarie — Analyst

Brian HanMorningstar — Analyst

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