NWS — News Corporation

News Corp (NWS) Q1 Fiscal 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: $2.14 billion, up 2% year-over-year.
• Total Segment EBITDA: $340 million, an increase of 5%.
• Net Income from Continuing Operations: $150 million, slightly up from $149 million in the prior year.
• Adjusted EPS: Increased from $0.20 to $0.22.
• Cash Position: Robust, with strong free cash flow expected for the fiscal year and an accelerated share buyback program.

2. Strategic Updates and Business Highlights

• Dow Jones: Revenue rose 6% to $586 million, with digital revenues comprising 84% of total. Notable growth in Risk & Compliance (16%) and Energy (7%). Digital subscriptions for The Wall Street Journal increased by 11%.
• Digital Real Estate Services: Revenue increased 5% to $479 million, with realtor.com achieving a 9% revenue boost, marking the highest growth rate in nearly four years. Focus on premium offerings and higher yields is paying off.
• Book Publishing: Revenue declined by 2% to $534 million, impacted by a $13 million write-off related to a distributor closure. However, recent trends show improvement in orders and sales.
• News Media: Revenues rose 1% to $545 million, with a significant EBITDA increase of 67% due to cost efficiencies and strong advertising growth at the New York Post.

3. Forward Guidance and Outlook

• Dow Jones and Digital Real Estate: Expected continued strong revenue growth, with Dow Jones anticipating slightly higher cost growth in Q2.
• Book Publishing: Optimistic about Q2 with improved market conditions and a stronger front list.
• Overall: Strong free cash flow anticipated, with ongoing investments in technology and supply chain logistics for HarperCollins. Continued share buybacks are planned.

4. Bad News, Challenges, or Points of Concern

• Book Publishing: Experienced a weak quarter with a significant write-off and difficult prior year comparisons. The market remains sluggish, although recent trends are improving.
• Digital Real Estate: While there are signs of recovery, new buy listings in Australia are down, and the market is not fully normalized.
• Advertising Trends: Mixed results in News Media, with some challenges in print advertising despite strong digital performance.

5. Notable Q&A Insights

• Share Buyback Strategy: Management is open to increasing the buyback rate, emphasizing a robust cash position and the stock's undervaluation.
• Pricing Strategy for The Wall Street Journal: Early stages of testing subscription price increases, with expectations of positive elasticity and planned product improvements.
• Risk & Compliance Growth: Driven by regulatory demands, indicating potential for sustained growth in this segment.
• News Media Outlook: Positive margin improvements and cost efficiencies noted, with expectations for continued growth driven by strong advertising at the New York Post.

Overall, News Corp reported a solid start to fiscal 2026, with mixed results across segments but a strong focus on digital growth and shareholder value. Challenges remain, particularly in Book Publishing, but recent trends suggest potential recovery.