NWSA — News Corporation

News Corporation (NWSA) Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: Increased 6% year-over-year to $2.4 billion.
• Total Segment EBITDA: Rose 9% to $521 million, with a profitability margin improvement from 21.4% to 22.1%.
• Net Income: Declined 21% to $242 million, primarily due to the absence of a prior year gain from the sale of Property Guru.
• Adjusted EPS: Increased to $0.40 from $0.33 in the previous quarter.
• Share Buybacks: $172 million repurchased in Q2, up significantly from the previous year.

2. Strategic Updates and Business Highlights:

• Core Growth Drivers: Focus remains on Dow Jones, Digital Real Estate Services, and Book Publishing, which together accounted for 95% of profitability.
• Dow Jones Performance: Revenue grew 8% to $648 million, with digital revenues making up 82% of total segment revenues. Notable growth in professional information services, particularly risk and compliance, which saw a 20% increase.
• Digital Real Estate: Revenue rose 8% to $511 million, with realtor.com achieving a 10% increase in revenue. The company is expanding its presence in the digital real estate market.
• Book Publishing: Revenues grew 6% to $633 million, with strong sales in general books and faith segments, despite a one-time inventory-related charge impacting margins.
• News Media Segment: Revenues were flat at $570 million, with EBITDA declining 5% due to challenging advertising conditions.

3. Forward Guidance and Outlook:

• Positive Outlook: Management expressed optimism for the second half of the fiscal year, citing strong performance in core segments and a robust balance sheet.
• Dow Jones: Expected to continue strong revenue growth, particularly in B2B services.
• Digital Real Estate: Anticipated improvements in market conditions for realtor.com, which should support revenue growth.
• Book Publishing: Expected to benefit from a strong backlist and favorable comparisons in the upcoming quarters.

4. Bad News, Challenges, or Points of Concern:

• Net Income Decline: The significant drop in net income due to the absence of prior year gains raises concerns about profitability sustainability.
• News Media Segment Struggles: Flat revenues and declining EBITDA highlight ongoing challenges in the print advertising market.
• Market Competition: Increased competition in digital real estate, particularly from homes.com, poses a risk, though management remains confident in realtor.com's growth trajectory.

5. Notable Q&A Insights:

• AI Impact: CEO Robert Thomson addressed concerns about AI, emphasizing that News Corporation's proprietary content is valuable and that AI companies will need to pay for quality data. He highlighted a $1.5 billion payout from Anthropic for the use of pirated books as a positive development.
• CapEx and Investment Strategy: CFO Lavanya Chandrashekar indicated that while overall CapEx will increase, Dow Jones-specific CapEx will decrease. The focus remains on maximizing shareholder value through strategic investments and share buybacks.
• Pricing Strategy at Dow Jones: Thomson noted the successful increase in enterprise customers and pricing for digital subscriptions, which should enhance ARPU over time, despite initial impacts from promotional pricing.

Overall, News Corporation reported solid growth in key segments, but faces challenges in the news media space and must navigate competitive pressures in digital real estate. The outlook remains cautiously optimistic, with a focus on leveraging proprietary content and strategic investments.