News Corporation (NWSA) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The company demonstrated strong financial performance with revenue and EBITDA growth, particularly in Digital Real Estate and Dow Jones segments. The accelerated stock repurchase program and positive outlook for Risk & Compliance and News Media further enhance sentiment. Despite some challenges in Book Publishing and cautious management responses, the overall outlook is optimistic, supported by strategic initiatives and market recovery potential. With no significant negative factors from the Q&A, the stock is likely to experience a positive movement in the short term.
Key Financial Performance
Revenue Revenue for the period rose 2% year-over-year to $2.14 billion. The increase was driven by strength in Dow Jones and Digital Real Estate Services, despite a weak performance in Book Publishing.
Total Segment EBITDA Total segment EBITDA increased by 5% year-over-year to $340 million. This was negatively impacted by a $13 million write-off related to the expected closure of a book distributor.
Net Income from Continuing Operations Net income from continuing operations was $150 million, up slightly from $149 million last year. The increase reflects overall improved profitability.
Adjusted EPS Adjusted EPS rose from $0.20 to $0.22 year-over-year, reflecting improved earnings performance.
Dow Jones EBITDA Dow Jones EBITDA rose 10% year-over-year, driven by a 6% increase in revenue. Risk & Compliance revenues surged 16%, and Dow Jones Energy revenues grew 7%.
Digital Real Estate Services Revenue Realtor.com delivered a 9% revenue boost year-over-year, attributed to premium offerings and higher yields. REA Group revenue rose 3% (5% in constant currency), with residential yield growth of 13%.
Digital Real Estate Services Margin The margin in Digital Real Estate Services increased from 30.6% a year ago to 33%, reflecting improved operational efficiency.
Book Publishing Revenue Book Publishing revenue declined 2% year-over-year to $534 million, impacted by a $13 million receivable write-off and weaker U.S. market conditions. However, trends improved in recent weeks.
News Media Revenue News Media revenue rose 1% year-over-year to $545 million, driven by higher cover and subscription prices in the U.K. and Australia.
News Media EBITDA News Media EBITDA grew 67% year-over-year to $30 million, supported by cost efficiencies.
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Operating Highlights
AI-related revenues: News Corp has seen growth in digital and AI-related revenues, with plans to announce further partnerships in the near future.
Eco-Movement acquisition: Dow Jones expanded its professional information business by acquiring Eco-Movement, which provides unique data sets for EV charging stations.
Book Publishing: New releases like R.F. Kuang's 'Katabasis' and Harper Lee's collection of stories have become bestsellers. Upcoming releases like 'Wicked: For Good' are expected to boost sales.
Digital Real Estate Services: Realtor.com posted a 9% revenue boost year-on-year, driven by premium offerings and higher yields. Growth areas include sell-side, new homes, and rentals.
Australian property market: REA Group saw a 3% revenue increase, with auction levels in Melbourne and Sydney showing signs of recovery.
New York Post expansion: Plans to launch the California Post early next year, leveraging the New York Post's growing influence.
Digital transformation: Digital revenues now account for 62% of News Corp's business, nearly doubling since fiscal 2018.
Cost efficiencies: News Media segment EBITDA grew 67%, driven by cost efficiencies.
Share buybacks: Accelerated share buyback program, repurchasing at a rate of $2.5 million per day.
AI and IP protection: News Corp is actively pursuing legal action against companies using pirated content and is emphasizing the value of intellectual property in the AI age.
Shift in revenue composition: Dow Jones and Digital Real Estate now account for 49% of revenue and 84% of EBITDA, reducing reliance on advertising revenue.
M&A strategy: Strategic acquisitions like OPIS and CMA have strengthened the portfolio, while divestments like News America Marketing have streamlined operations.
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Risk or Challenges
Book Publishing: Weak performance in the Book Publishing segment due to slowing orders from readers and retailers, and a $13 million write-off related to the expected closure of a book distributor. This segment also faced challenges from difficult prior year comparisons and softer U.S. market conditions.
Digital Real Estate: Uneven macroeconomic environment and softer listing volumes in Australia, driven by a tough prior year comparison. Additionally, the divestment of PropTiger in India and discontinuation of the housing edge offering due to regulatory changes may impact growth.
Advertising Revenue: Decline in print advertising revenue, which was only partially offset by an increase in digital advertising revenue. Advertising trends remain mixed, with difficult conditions in some segments.
Macroeconomic Uncertainty: Ongoing macroeconomic uncertainty, which could impact various business segments, including Digital Real Estate and Book Publishing.
Regulatory and Legal Risks: Potential legal and regulatory challenges related to AI and content piracy, as well as the need to pursue legal action against companies using pirated content.
Supply Chain Logistics: Increased capital spending on new supply chain logistics facilities for HarperCollins, which may temporarily impact free cash flow.
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Guidance & Outlook
Share Buyback Program: The company is accelerating and expanding its share buyback program, repurchasing shares at a rate of approximately $2.5 million per day, over 4x the previous pace. This reflects confidence in the company's growth potential and belief that the stock is trading at a significant discount to net asset value.
Digital Real Estate Outlook: The company expects improving market conditions driven by a reduction in mortgage rates to lead to continued healthy revenue growth alongside growth in adjacencies such as new homes, rentals, and sellers. Australian residential new buy listings for October were down 3%, but the company remains optimistic about growth opportunities.
Book Publishing Outlook: October trends were encouraging, and the company expects Q2 to benefit from the timing of ordering and a stronger front list. Investment in new supply chain logistics facilities for HarperCollins is expected to deliver additional cost savings.
Dow Jones Segment Outlook: The company expects continued strong revenue growth in B2B, particularly in Risk & Compliance and Dow Jones Energy. Cost growth is expected to be slightly higher in Q2 due to prior year comparisons.
Capital Expenditures: Capital spending is anticipated to increase moderately from the prior year, driven by investments in new supply chain logistics facilities for HarperCollins and continued investment in technology.
Free Cash Flow: The company expects strong free cash flow in the current fiscal year.
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Shareholder Return Plan
Share Buyback Program: News Corp has materially increased the rate of its share buybacks, citing a belief that its shares are undervalued. The company has been repurchasing shares at a rate of approximately $2.5 million per day, which is over four times the previous pace. This accelerated and expanded share buyback program was announced in July 2025. The company remains confident in its growth potential and continues to believe its stock is trading at a significant discount to net asset value.
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Key Q&A
Q:What factors could prevent the Move business from achieving double-digit revenue growth despite strong performance?
A:The U.S. housing market is still hampered by high interest rates. However, the company is focusing on growth areas like Zillow, new homes, rentals, and high-yield sales, which are showing positive results. The market recovery is still in its early stages, but the company is optimistic about future momentum.
Q:Why not further accelerate the share repurchase program given the current share value?
A:The company has already accelerated the buyback rate by 4x and has the potential to increase it further if deemed optimal. They are exercising optionality with investors in mind. The robust cash position supports this strategy.
Q:What is the rationale behind the Wall Street Journal's price increase, and what has been observed so far?
A:The company is testing and reviewing subscription pricing and believes there is elasticity in pricing. Planned product improvements are expected to enhance this elasticity. WSJ readers recognize the value of paying for a premium service.
Q:What impact has the settlement of the Factiva dispute had on revenues, and is it expected to be a tailwind in the future?
A:The settlement's financial impact was modest, but it has allowed for new customer acquisition. Factiva revenues increased by 9%, and Risk & Compliance revenues grew by 16%. The company is optimistic about future growth, supported by new GenAI search capabilities in Factiva.
Q:Has there been any change in the company's approach to simplifying its business structure?
A:The company remains open to structural changes, as evidenced by the recent sale of Foxtel. They emphasize transparency and focus on maximizing shareholder returns through buybacks and dividends. The company is also concentrating on the performance of Dow Jones and News Media.
Q:What are the growth prospects for the Risk & Compliance business, and could regulatory mandates drive further growth?
A:The company is optimistic about Risk & Compliance, which grew 16% in the last quarter. Stringent 'Know Your Client' regulations enforced globally are a source of new business, and further growth is expected in upcoming quarters.
Q:What is the trajectory of the News Media business, given recent revenue growth and EBITDA improvement?
A:News Media saw a slight revenue increase and significant EBITDA improvement, with margins rising from 3.3% to 5.5%. Growth was driven by leadership, cost discipline, and a 23% increase in digital advertising at the New York Post. Cost-saving measures in the U.K. and Australia also contributed.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the financial impact of the Factiva dispute settlement, only describing it as 'modest.' Additionally, they did not quantify the expected tailwind from new customer acquisitions or the exact contribution of new GenAI search capabilities to growth.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI Information
AI ingredient
AI revenue
Albom Ree
Australia fill
Australia margin
Bible assassination
Bowl fill
Brisbane Broncos
Broncos version
California Post
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Corp profitability
Drummond collection
Eales offering
Eco Movement
Estate Services
Times
author
book distributor
buyback
cash
circulation revenue
closure book
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interest
market week
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rate mortgage
reason
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The earnings call presented a positive outlook with strong revenue growth across key segments like Dow Jones and Digital Real Estate. The share buyback program expansion and improved profitability margins are also favorable. Despite some concerns about net income decline, the optimistic guidance and strategic investments in AI partnerships and content protection indicate potential for growth. The Q&A reinforced confidence in core businesses and capital allocation strategies. Overall, the positive sentiment outweighs any negatives, suggesting a likely stock price increase in the short term.
News Corporation (NWSA) Q1 2026 Earnings Call Transcript
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The company demonstrated strong financial performance with revenue and EBITDA growth, particularly in Digital Real Estate and Dow Jones segments. The accelerated stock repurchase program and positive outlook for Risk & Compliance and News Media further enhance sentiment. Despite some challenges in Book Publishing and cautious management responses, the overall outlook is optimistic, supported by strategic initiatives and market recovery potential. With no significant negative factors from the Q&A, the stock is likely to experience a positive movement in the short term.
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Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
