News Corp 2025-26: Dow Jones B2B+REA Pivot, Foxtel Exit, $1.3B Buyback
Thesis
News Corporation (NASDAQ: NWSA) closed FY25 (June year-end) with a strategic inflection: revenue $8.45B (+2.4%), total segment EBITDA +14% to over $1.4B, net income $1.18B (+344%), and diluted EPS $2.07 (vs $0.46). The headline NI surge reflects the Q4 FY25 Foxtel divestiture gain — underlying continuing operations net income was $648M (+71% vs FY24). Total debt declined sharply to $2.94B (-27%) as $724M of Foxtel debt transferred off-balance-sheet post-DAZN deal. Free cash flow was $727M (+21%).
Post-divestiture, News Corp has refocused on three core pillars: Dow Jones, Digital Real Estate, and Book Publishing — stripping out the cash-consuming Australian pay-TV business and sharpening the portfolio around high-margin digital information and content businesses. The board authorized a new $1B share repurchase in Q4 FY25 with $300M remaining from prior program — total $1.3B capacity — signaling management's confidence in the sum-of-parts undervaluation thesis.
The FY25-26 thesis rests on five legs:
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Dow Jones B2B acceleration (Risk & Compliance +11-21%): Dow Jones FY25 segment EBITDA +14%; Risk & Compliance revenues growing 16-21% in FY26; Dow Jones Energy +7-12%; digital revenues 82-84% of DJ total. The B2B professional information business (Factiva, Risk & Compliance, Dow Jones Energy, plus acquisitions Oxford Analytica, Dragonfly Intelligence, Eco-Movement) is the structural growth engine. Management explicitly calls out "significant growth runway" for DJ B2B.
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Digital Real Estate (REA + Realtor.com) dual compound: REA Group (Australia, ~70% of Digital RE segment) delivered +12% revenue FY25 Q4 at ~$1.25B FY annualized; Realtor.com posted four consecutive quarters of revenue growth into FY26 (Q2 FY26 +10%) with rentals, new homes, and seller tools diversifying beyond traditional lead-gen. FY26 Q2 segment EBITDA +11% YoY to $206M.
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Foxtel exit unlocks balance sheet: $724M Foxtel debt transferred to DAZN; $380M+ Foxtel shareholder loan repayment expected FY26. Total debt down to $2.94B from $4.05B — permanently lighter capital structure enabling faster buybacks and investment in core businesses. DAZN equity stake as ongoing upside participation.
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$1.3B buyback + capital return acceleration: Q4 FY25 new $1B authorization + $300M prior balance = $1.3B total; management stated intention to "accelerate repurchases soon"; $172M deployed in Q2 FY26 alone (+90% vs Q2 FY25's $40M). At ~$27 share price, $1.3B buys ~48M shares (~8% of outstanding at the time).
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HarperCollins recovery + AI content licensing: Book Publishing second-best revenue year on record ($2.1B FY25); FY26 stronger front-list pipeline; AI content licensing with publishers emerging. News Corp is actively litigating AI IP protection (Anthropic $1.5B case) and negotiating licensing deals — recurring IP royalty streams becoming a monetizable asset.
The risks are print advertising secular decline (News Media remains a drag), Realtor.com dependent on US housing market recovery, Book Publishing volume volatility, and FX headwinds from Australia/UK. But the post-Foxtel simplification — Dow Jones B2B + REA + HarperCollins — creates a cleaner, faster-growing, higher-multiple portfolio that the current sum-of-parts discount undervalues.
FY25 Numbers vs FY24 (Annual, USD; June year-end)
| Metric | FY24 | FY25 | Δ |
|---|---|---|---|
| Revenue | $8.252B | $8.452B | +2.4% |
| Total segment EBITDA | ~$1.23B | ~$1.40B+ | +14% |
| Operating income | $801M | $956M | +19% |
| Net income (cont. ops) | $266M | $648M* | +71% |
| EPS diluted | $0.46 | $2.07** | n/a** |
| Free cash flow | $602M | $727M | +21% |
| Total debt | $4.05B | $2.94B | -27% |
| Buyback | $117M | $150M | +28% |
*FY25 NI from continuing ops $648M; GAAP NI $1.18B includes Foxtel divestiture gain. **EPS diluted $2.07 includes one-time gain; adjusted EPS comparison uses per-segment EBITDA.
FY26 trajectory: Q1 adj EPS $0.22 (+10% vs $0.20 prior year), Q2 adj EPS $0.40 (+21% vs $0.33) — accelerating sequential momentum. Q2 FY26 total revenues $2.59B (+6%), segment EBITDA $521M (+9%).
Segment Breakdown
Dow Jones ($2.3B+ FY25 Revenue, EBITDA +14%)
The premium B2B information franchise — the highest-quality earnings in the portfolio.
- FY25 EBITDA: +14% to over $1.4B (company-level), with Dow Jones as primary driver; Dow Jones alone EBITDA +14% YoY (Q4 call)
- FY25 Q4: Revenue +7% to $604M; EBITDA +10% to $151M
- FY26 Q1: Revenue +6% to $586M; EBITDA +10% to $144M
- FY26 Q2: Revenue +8% to $648M; EBITDA +10% to $191M
- Risk & Compliance: +11% FY25 Q3 → +16% FY26 Q1 → +20% FY26 Q2 (to $96M); fastest-growing within DJ
- Dow Jones Energy: +10% FY25 Q3 → +7% FY26 Q1; commodity/energy data subscription
- Digital revenue: 82-84% of DJ total — essentially full digital transition complete
- Acquisitions: Oxford Analytica (geopolitical intelligence), Dragonfly Intelligence (risk), Eco-Movement (EV charging data) — all bolt-on to Risk & Compliance / professional information platform
- Dow Jones B2B investor briefing: Announced in Q2 FY26 — management highlighting the B2B growth story to investors
The Dow Jones B2B thesis is the cleanest: a near-monopoly on premium financial/business data (WSJ, Factiva, Dow Jones Newswires) layered with risk + compliance + energy data in an era of global regulatory complexity. Risk & Compliance alone compounding 16-20% revenue annually is a SaaS-quality growth engine inside a legacy media holding company.
Digital Real Estate (REA Group + Realtor.com)
Two distinct businesses with different maturity profiles.
REA Group (Australia, ~70% of segment):
- FY25: ~$1.25B annualized revenue; +12% Q4 FY25 (13% constant currency); FY25 full-year +9% segment
- FY26 Q2: REA revenues $368M (+7%), continuing strong Australian residential + commercial market share
- REA is effectively a monopoly in Australian digital property listings; pricing power enables above-market revenue growth
- FX note: AUD/USD creates quarterly volatility in reported USD figures
Realtor.com (US, ~30% of segment):
- FY25: grew despite sluggish US housing market; Q4 FY25 +3%
- FY26: Four consecutive quarters of revenue growth; Q1 +9% to $152M; Q2 +10% to $143M
- Revenue diversification: rentals + new homes + seller listings now 24%+ of Realtor.com revenues (Q4 FY25)
- Zenlist acquisition (personalized search) + technology improvements
The US housing market remains a multi-year tailwind optionality: if mortgage rates decline and transaction volumes normalize, Realtor.com's revenue trajectory could accelerate meaningfully (Zillow/Realtor.com both have embedded mortgage-rate sensitivity in lead volumes).
Book Publishing — HarperCollins ($2.1B FY25, +3%)
The global trade publishing platform.
- FY25 full year: Revenue +3% to $2.1B; EBITDA +10% to $296M — second-best revenue year on record
- FY26 Q1: Revenue $534M (-2% from write-off of $13M receivable from distributor closure)
- FY26 Q2: Revenue $633M (+6% vs prior year's comparator); EBITDA impacted by $16M one-time inventory write-off at HarperCollins; excluding write-offs, underlying strong
- Segments: Christian division strong; children's books performing well; backlist 65%+ of consumer revenues
- AI/IP: Anthropic $1.5B case for pirated books; HarperCollins actively licensing to AI companies; recurring IP royalties as emerging revenue stream
- International: Crunchyroll Manga publishing (France + Germany) acquisition adding manga/anime adjacency
News Media (The Sun, Times, NY Post, Australian outlets)
The rationalization segment — declining print, accelerating digital.
- FY25 Q3: Revenue $514M (-8%); EBITDA +22% from cost savings initiatives
- FY26 Q1: Revenue $545M (+1%); EBITDA +67% to $30M — massive margin improvement
- FY26 Q2: Revenue flat $570M; EBITDA -5% (modest investment in California Post launch)
- NY Post: 90% digital advertising; digital-first transition complete
- The Times/Sunday Times: Digital subscribers growing; UK premium news
- News Corp Australia: Digital subscribers growing; print cost structure rationalized
News Media is no longer a drag in the same magnitude — EBITDA +22-67% YoY in FY25/FY26 from aggressive cost reduction despite revenue decline.
FY26 Framework
Based on Q2 FY26 call (Feb 2026) and trajectory:
- Revenue pacing: Q2 FY26 +6% YoY; full-year likely +5-7% on Dow Jones B2B acceleration
- Segment EBITDA pacing: Q2 FY26 +9%; full-year likely +10-12%
- Foxtel proceeds: ~$380M shareholder loan repayment in FY26 boosts FCF; total FCF guide above FY25's $727M
- Buyback: $1.3B authorization; Q2 FY26 pace of $172M/quarter = $690M annualized if sustained
- Dow Jones B2B: Risk & Compliance +20% Q2 FY26; strong pipeline
- Digital Real Estate: Australian listings January 2026 down 8% (seasonal); Realtor.com seeking improving US housing conditions
- Book Publishing: Benefits from HarperCollins backlist + favorable FY26 front-list comparisons
- News Media: Modest investments in California Post launch; cost discipline continuing
Multi-Year Strategic Position
Sum-of-parts discount thesis: NWSA trades at a meaningful discount to the implied valuation of its parts. REA Group alone (listed on ASX; News Corp owns ~61%) has a public market cap of ~A$30B+ — implying NWSA's interest in REA alone is worth A$18B+ ($11-12B USD at current AUD rates). With NWSA's total market cap at ~$13.9B, the market is effectively assigning negative or negligible value to Dow Jones, HarperCollins, and News Media. Management's buyback acceleration directly addresses this thesis.
Dow Jones B2B moat: WSJ brand + Factiva + newswire + Risk & Compliance + Energy creates a B2B information network that is extremely difficult to replicate. The shift from B2C subscription to B2B enterprise is a multi-year margin and multiple re-rating story.
IP monetization in the AI era: News Corp's IP portfolio (WSJ journalism, HarperCollins catalog, The Times archives) is uniquely valuable in an AI training data world. Legal pressure on Anthropic, OpenAI, and others — plus emerging licensing deals — could add $100M+ of annual IP royalty revenues over the next 3-5 years.
Balance sheet transformation: Foxtel exit reduced total debt by $1.1B (from $4.05B to $2.94B). With FY26 Foxtel loan repayments adding another ~$380M FCF, the balance sheet continues strengthening. Net leverage is falling toward 2x or below.
Risks
- News Media print decline: Secular print advertising decline continues; NY Post, Australian titles, UK tabloids all face structural print volume pressure; digital ad volatility
- US housing market: Realtor.com still heavily tied to mortgage rate environment and US residential transaction volumes; recovery dependent on Fed rate cuts
- FX headwinds: REA Group in AUD; The Times/Sun in GBP; Australian papers; ~40% of revenues USD-functional — meaningful FX exposure
- Book Publishing volume: HarperCollins revenue is lumpy (bestseller-dependent); front-list timing and write-offs (two consecutive quarters) create noise
- AI disruption to journalism: If AI reduces user demand for human-written news or professional information, Dow Jones subscription growth could slow; simultaneously AI creates monetizable IP
- Rupert Murdoch succession/governance: Ongoing family trust control issues; Murdoch succession dynamics affect long-term governance
- Advertising cyclicality: News Media + Realtor.com advertising revenues sensitive to macro downturn
- Australia real estate cycle: REA Group highly correlated to Australian housing; RBA rate cycle, immigration policy, and housing supply all affect listing volumes
- Competition in B2B data: Bloomberg Terminal, Refinitiv, FactSet, S&P Capital IQ compete with Factiva + Dow Jones Professional; AI-native entrants emerging
- HarperCollins distributor concentration: Q1 FY26 $13M receivable write-off from distributor closure shows distribution concentration risk
Citations
- NWSA FY25 (Q3-Q4) + FY26 (Q1-Q2) earnings call transcripts (drillr earning_call_summary; period_end 2025-03 / 2025-06 / 2025-09 / 2025-12; call_date 2026-02-05 for Q2 FY26)
- NWSA FY25 financial statements (drillr financial_statements; period_end 2025-06 FY)
- FY24 financial statements (drillr financial_statements; period_end 2024-06 FY)
- Q2 FY26 (call 2026-02-05): Revenue $2.59B (+6%), segment EBITDA $521M (+9%), adj EPS $0.40, Risk & Compliance +20%, $172M buyback
- Q1 FY26 (call 2025-11-06): Revenue $2.14B (+2%), EBITDA $340M (+5%), Foxtel $380M loan repayment FY26, aggressive buybacks
- Q4 FY25 (call 2025-08-06): Foxtel divestiture, $1B new buyback auth, Dow Jones EBITDA +14%, REA +12%
- Q3 FY25 (call 2025-05-08): Foxtel DAZN close, $724M debt off-balance-sheet, 3-pillar focus