News Corporation Q2 FY2026 earnings call

Management Statement and Operational Highlights

• Robert Thomson noted excellent Q2 results with revenue and profitability growth accelerating, revenues up 6% to $2.4 billion, total segment EBITDA $521 million up 9%. Net income from continuing operations $242 million, but down due to absence of a prior year gain. Adjusted EPS 40¢, up from 33¢ prior quarter. Driven by sustained growth at Dow Jones and Digital Real Estate with double-digit profit growth. Mentioned AI impact, HarperCollins inventory charge, and upcoming Dow Jones investor briefing.
• Lavanya Chandrashekar discussed Q2 results, revenue and EBITDA figures, progress in share buybacks (repurchased $172 million in shares in Q2), Dow Jones B2B growth potential, digital real estate segment details including REA and Realtor.com performance, and book publishing trends with improved conditions but margin impact from inventory write-off.

Segment Performance

• Dow Jones: Reported revenues of $648 million, increasing 8% versus the prior year period, with segment EBITDA of $191 million, up 10% y/y. Digital revenues accounted for 82% of Dow Jones segment revenues this quarter. Professional Information Business revenues rose 12% y/y, with risk and compliance revenues growing 20% to $96 million.
• Digital Real Estate: Segment revenues of $511 million rose 8% versus the prior year, with segment EBITDA of $206 million, up 11% y/y. REA revenues grew 7% y/y to $368 million, while Realtor.com revenues rose 10% to $143 million.
• Book Publishing: Revenues grew 6% to $633 million despite a tough comparator, but segment EBITDA declined 2% versus the prior year, with a $16 million one-time write-off related to inventory at HarperCollins.
• News Media: Revenues were flat at $570 million, with EBITDA falling 5% versus the prior year, impacted by challenging print advertising trends.

Guidance

• Expectations for third quarter are auspicious based on current core driver trajectory. Dow Jones B2B business seen as having significant growth runway. Digital Real Estate notes Australian residential new buy listings in January down 8%. Realtor.com hopes for improving market conditions leading to strong lead volumes. Book Publishing expects benefits from HarperCollins' backlist and favorable comparisons. News Media expects modest investments related to California Post launch.

Risks

• Economic uncertainty impacting advertising trends. AI-related IP concerns, as seen with Anthropic's $1.5 billion payout for pirated books and need to protect author IP. Market reactions to AI perceptions and their potential impact on operations, though management remains confident in Dow Jones' position.

Q: David Karnovsky asked about market reaction to AI and News Corporation's view on reasonable worry vs. overweighing.

A: Robert Thomson stated AI is retrospective and synthesizes generic content, while News Corp has contemporary proprietary content, noting Anthropic's $1.5 billion payout for pirated books and partnerships with OpenAI.

Q: Entcho Raykovski followed up on Dow Jones investment for AI threat and CapEx.

A: Robert Thomson was confident in Dow Jones' position, Lavanya Chandrashekar said total CapEx to be up moderately, with Dow Jones CapEx modestly down, expecting strong free cash flow growth.

Q: David Joyce asked about capital expenditure allocation.

A: Robert Thomson mentioned focus on three core drivers (Dow Jones, Digital Real Estate, HarperCollins) and cash allocation accordingly.

Q: David Arvest inquired about M&A strategy and buybacks.

A: Robert Thomson said they are constantly looking for external investments at reasonable prices, with focus on maximizing shareholder value and accelerating buyback.

Q: Craig Huber asked about simplifying the company and homes.com impact.

A: Robert Thomson said they focus on generating long-term value, Lavanya Chandrashekar highlighted realtor.com's strong engagement and growth.

Q: Elsa Lee asked about Dow Jones circular revenue and pricing.

A: Robert Thomson discussed enterprise customers and price elasticity, Lavanya Chandrashekar mentioned taking price on digital customers and optimizing promotions, with ARPU excluding enterprise improving.