News Corporation (NWSA) Q2 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue Revenues increased 6% to $2.4 billion for the quarter. This growth was driven by sustained growth at Dow Jones and Digital Real Estate Services, which both reported double-digit profit growth.
Total Segment EBITDA Total segment EBITDA of $521 million expanded 9%. This was despite a onetime inventory-related charge at HarperCollins.
Net Income from Continuing Operations Net income from continuing operations was $242 million, a 21% decrease from the prior year. This decline was due to the absence of a favorable $87 million gain on REA Group's sale of PropertyGuru last year.
Profitability Margin Profitability margin rose from 21.4% to 22.1%. This reflects improved operational efficiency and growth in recurring revenues.
Dow Jones Revenue Dow Jones revenue rose 8% to $648 million, marking the highest quarterly revenue growth in nearly 3 years. This was driven by a 12% increase in Professional Information Business revenues and a 10% rise in advertising revenue.
Digital Advertising Revenue (Dow Jones) Digital advertising reached a record level of $87 million for the quarter, rising 12%. This was supported by strong demand, particularly from the financial services sector.
Digital Real Estate Services Revenue Digital Real Estate Services revenue grew 8% to $511 million. This was driven by a 7% increase in REA revenues and a 10% rise in realtor.com revenues.
Book Publishing Revenue HarperCollins revenues grew 6%, recovering from a sluggish first quarter. This was driven by strong frontlist sales and growth in the faith segment.
News Media Revenue News Media revenues were flat at $570 million. Higher cover and subscription prices in the U.K. and Australia offset weak print advertising trends.
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Operating Highlights
AI partnerships: News Corp is establishing new AI partnerships, including an expanded deal with Bloomberg for AI rights for Dow Jones content and bolstering Factiva's Gen AI capabilities with expanded licensing rights for over 8,000 premium news and business information sources.
Realtor.com+: News Corp announced the launch of realtor.com+, a platform enhancing home search experience through agent-client collaboration, transparency, and insights.
Digital Real Estate Services: Realtor.com's revenues grew by 10%, driven by premium products, improved lead volume, and audience share expansion. In Australia, REA revenues grew 7%, supported by double-digit yield growth and improved listing volumes in Sydney and Melbourne.
Dow Jones B2B growth: Dow Jones Professional Information business revenues increased 12%, with Risk and Compliance revenues surging 20%. All B2B verticals contributed positively, including Dow Jones Energy with double-digit growth.
Revenue and profitability growth: Revenues increased 6% to $2.4 billion, and total segment EBITDA grew 9% to $521 million. Adjusted EPS rose to $0.40 from $0.33 in the prior quarter.
Operational efficiency: News Corp achieved margin expansion and increased free cash flow, with a focus on operational discipline and strategic diversification.
AI content monetization: News Corp emphasized the value of proprietary content in AI, expecting fair compensation from companies like Anthropic, which agreed to pay $1.5 billion for using pirated books.
Share buyback program: The company enhanced its buyback program, repurchasing $172 million in shares during the quarter, up $132 million from the previous year.
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Risk or Challenges
Net income decrease: Net income from continuing operations decreased by 21% compared to the prior year, primarily due to the absence of a favorable $87 million gain from the REA Group sale of PropertyGuru last year.
Advertising revenue cyclicality: The company is reducing its dependence on advertising revenue due to its inherent cyclicality, which could impact financial stability during downturns.
AI content challenges: The company faces challenges in ensuring fair compensation for proprietary content used by AI companies, as highlighted by the $1.5 billion payment issue with Anthropic.
Housing market uncertainty: The U.S. housing market remains far from normal, posing challenges for the growth of realtor.com and other real estate services.
Print advertising decline: The print advertising market remains challenging, with weak trends impacting the News Media segment.
Inventory-related charges: HarperCollins faced a $16 million one-time inventory-related charge, which negatively impacted margins.
Economic uncertainties: The uneven economic backdrop continues to pose challenges for the company's operations and growth.
Australian real estate market: REA Group in Australia faces challenges due to lower national listing volumes and uncertain macroeconomic conditions.
California Post launch costs: The launch of the California Post required investments, which impacted the News Media segment's profitability.
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Guidance & Outlook
Revenue Growth: The company expects continued strong revenue growth in B2B at Dow Jones, supported by ongoing reinvestment and favorable market conditions.
Digital Real Estate: Realtor.com anticipates improving market conditions, leading to strong lead volumes and healthy revenue growth. Australian residential new buy listings for January were down 8%, but the company remains optimistic about future performance.
Book Publishing: Trends remain encouraging, with expectations to benefit from HarperCollins backlist and more favorable year-on-year comparisons.
News Media: The company expects to incur modest investments related to the launch of the California Post. Advertising trends are likely to remain difficult, but cost efficiencies will be a focus.
AI and Content Licensing: The company anticipates additional revenues from new AI partnerships, including an expanded deal with Bloomberg for AI rights for Dow Jones content. The company also expects to benefit from payments related to the use of proprietary content by AI companies.
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Shareholder Return Plan
Buyback Program: The company has enhanced its buyback program, running at 4x the prior year pace, while maintaining financial flexibility. In the second quarter, $172 million in shares were repurchased, up $132 million from the previous year period. Share repurchases in fiscal 2026 are expected to benefit from the approximately $380 million repayment of Foxtel shareholder loans.
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Key Q&A
Q:What is News Corporation's perspective on the impact of AI on their business?
A:Robert Thomson stated that there is a fundamental misconception about AI's impact on News Corporation. He emphasized that AI relies on retrospective and generic content, whereas News Corporation produces contemporary, proprietary content. He highlighted their strategy to protect their content, including legal measures, and mentioned partnerships with AI companies like OpenAI. He expressed confidence in their ability to create premium content and noted that AI companies need real-time data, which News Corporation provides.
Q:Is News Corporation comfortable with the investment into Dow Jones to address AI threats?
A:Robert Thomson expressed full confidence in the Dow Jones Professional Information business and its trajectory. He stated that the company faces limited AI threats and has unique, contemporary content. Lavanya Chandrashekar added that while total CapEx is expected to increase moderately, Dow Jones CapEx will be modestly down this year, and the company anticipates strong free cash flow growth.
Q:How does News Corporation prioritize capital allocation to drive returns?
A:Robert Thomson identified three core drivers of the business: Dow Jones, Digital Real Estate, and HarperCollins. He stated that these businesses are performing well, and cash will be allocated accordingly.
Q:What is News Corporation's M&A strategy and approach to AI developments?
A:Robert Thomson stated that the company is open to external investments that make sense for the business but at reasonable prices. He mentioned organic investments and the buyback program. Lavanya Chandrashekar added that the company evaluates buybacks continuously and has repurchased $172 million worth of shares in the second quarter, with plans for higher purchases in the second half.
Q:Has News Corporation considered simplifying its company structure?
A:Robert Thomson stated that the company is constantly examining its structure to generate long-term shareholder value. He highlighted their strong balance sheet, free cash flow, and growth trajectory. Regarding competition from Homes.com, he expressed confidence in Realtor's performance and growth, supported by Lavanya Chandrashekar's data on engagement and audience share.
Q:What is News Corporation's approach to pricing growth and subscriber acquisition at Dow Jones?
A:Robert Thomson explained that Dow Jones has increased enterprise customers, which impacts ARPU in the short term but reduces churn and marketing costs. He mentioned dynamic pricing strategies and improving tools to track subscriber behavior. Lavanya Chandrashekar added that ARPU has been improving, excluding enterprise customers, and the company is optimizing promotions.
Q:Review of Unclear Management Responses
A:Management avoided providing specific forward guidance on the trajectory of Dow Jones beyond general positive remarks. Additionally, while discussing M&A strategy, the response lacked detailed areas of interest or specific plans, focusing instead on general principles and the buyback program.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI Digital
AI angst
AI application
AI capability
AI creator
AI friend
AI intransigence
AI partnership
AI right
Albam Twice
Estate Services
Pope
Street Journal
Times
Wall Street
age AI
audience number
author
balance sheet
buyback program
calendar
cash
digit
expansion
faith
gain
housing
improvement volume
insight
launch
player
premium
realtorcom
sector
shareholder value
sign
subscriber
vertical
NWS Transcript
News Corporation (NWSA) Q2 2026 Earnings Call Transcript
Positive2-5
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
Positive11-6
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.
News Corporation (NWSA) Presents At Goldman Sachs Communicopia + Technology Conference 2025 Transcript
Neutral9-8
News Corporation (NWSA) Q4 2025 Earnings Call Transcript
Positive8-6
The earnings call reflects strong financial performance, with revenue and EBITDA growth, and strategic moves like the Foxtel sale enhancing financial health. The partnership with OpenAI and acquisitions indicate a focus on growth. The Q&A highlights positive sentiment from analysts about buybacks and Realtor's prospects. Despite some vague responses, the overall tone is optimistic, with management expressing confidence in growth areas like Dow Jones. The positive aspects, such as increased shareholder returns and strong revenue growth, outweigh concerns, leading to a likely stock price increase in the next two weeks.
NWS Report
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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Why do some answers appear as “Unclear” or “Inaudible”?
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.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
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.
