NWS — News Corporation

News Corp Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: Increased by 6% to $2.4 billion.
• Total Segment EBITDA: Rose 9% to $521 million, despite a one-time inventory-related charge at HarperCollins.
• Net Income: $242 million, a 21% decrease year-over-year due to the absence of an $87 million gain from the previous year’s sale of PropertyGuru.
• Adjusted EPS: $0.40, compared to $0.33 in the prior quarter; profitability margin improved from 21.4% to 22.1%.

2. Strategic Updates and Business Highlights

• Dow Jones: Revenue grew 8% to $648 million, with digital revenues comprising 82%. The Professional Information Business saw a 12% revenue increase, driven by Risk and Compliance services.
• Digital Real Estate Services: Revenues rose 8% to $511 million, with Realtor.com achieving a 10% revenue increase, supported by premium products and improved lead volume.
• Book Publishing: HarperCollins revenues grew 6%, with notable success in general books and faith segments.
• News Media Segment: Revenues were flat at $570 million, with EBITDA declining 5% due to weak print advertising trends.
• Share Buyback Program: Accelerated to $172 million in Q2, up significantly from the previous year, reflecting a strong cash position.

3. Forward Guidance and Outlook

• Positive Outlook: Management expressed optimism for the third quarter, citing strong growth trajectories in core segments, particularly Dow Jones and Digital Real Estate.
• Investment in AI: The company is exploring partnerships and revenue opportunities in AI, emphasizing the value of proprietary content.
• CapEx Plans: Expected to increase moderately, with a focus on maintaining strong free cash flow.

4. Bad News, Challenges, or Points of Concern

• Net Income Decline: The significant drop in net income due to the lack of prior year gains raises concerns about profitability sustainability.
• News Media Segment Struggles: Flat revenues and declining EBITDA highlight challenges in the print advertising market.
• Competitive Pressures: Concerns regarding competition from Homes.com and the broader impact of AI on content creation and market dynamics.

5. Notable Q&A Insights

• AI Strategy: CEO Robert Thomson emphasized that AI's retrospective nature poses limited threats to News Corp, which focuses on contemporary, proprietary content. The company is confident in its ability to monetize its content through strategic partnerships.
• Investment in Dow Jones: Thomson reassured investors about the strength of the Dow Jones Professional Information business, indicating continued confidence in its growth trajectory.
• M&A Strategy: The company remains open to strategic acquisitions but emphasizes disciplined investment practices and prioritizing shareholder value through buybacks.
• Pricing Strategy: Dow Jones is implementing pricing strategies to optimize ARPU while balancing new subscriber acquisition, with a focus on enterprise customer growth.

Overall, News Corp reported solid growth in key segments but faces challenges in the News Media division and must navigate competitive pressures and evolving market dynamics. The outlook remains cautiously optimistic, with strategic initiatives aimed at leveraging AI and enhancing shareholder value.