NWSA — News Corporation

News Corp (NWSA) Q3 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Total revenue increased by 9% year-over-year to $2.2 billion.
• Total segment EBITDA rose 18% to $343 million, with margins expanding from 14.4% to 15.7%.
• Net income from continuing operations grew by 13%.
• Earnings per share (EPS) increased to $0.16 from $0.14; adjusted EPS rose to $0.21 from $0.17.
• Free cash flow remains strong, supporting an accelerated share buyback program, with $193 million repurchased in Q3.

2. Strategic Updates and Business Highlights:

• The company reported its 12th consecutive quarter of profitability growth on a continuing operations basis.
• Key growth drivers included:
  • Dow Jones: Revenue up 8% to $619 million; EBITDA up 11% to $147 million, marking 13 consecutive quarters of EBITDA growth.
  • Digital Real Estate Services: Revenue increased 17% to $473 million; EBITDA surged 25%.
  • Book Publishing (HarperCollins): Revenue rose 8% to $555 million; EBITDA increased 14%.
• The company is focusing on AI partnerships, notably with Meta and OpenAI, to enhance content licensing revenues and leverage its extensive archives.
• The launch of the California Post is generating positive traffic trends, although it incurred startup costs.

3. Forward Guidance and Outlook:

• Management expects continued strong performance in Q4, driven by recurring revenues and strategic investments.
• Dow Jones is projected to reach $1 billion in annual segment EBITDA within five years.
• Digital Real Estate Services anticipates revenue growth, although the housing market's recovery may be impacted by high mortgage rates.
• Book Publishing trends are favorable, with anticipated benefits from upcoming releases.

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

• The News Media segment reported a decline in profits due to investments in new projects, including the California Post.
• Despite overall revenue growth, print revenue continues to decline, and there are concerns about the impact of rising interest rates on the housing market.
• The company is facing challenges from digital firms illegally using its content, which could affect revenue streams.

5. Notable Q&A Insights:

• Management emphasized the balance between investment and returns in the Dow Jones Energy sector, highlighting strong demand for risk and compliance products.
• The Realtor.com business is experiencing growth despite high mortgage rates, with expectations of benefiting from a recovering housing market.
• There are ongoing negotiations with AI companies, with management confident in the potential revenue from these partnerships.
• The "other" segment's reduced losses were attributed to lower expenses rather than a decrease in operational losses, indicating ongoing cost management efforts.

Overall, News Corp demonstrated strong financial performance in Q3 2026, driven by strategic investments and growth in key segments, while also navigating challenges in the media landscape and economic environment.