8-K: News Corp Q2 FY26: Revenue & Profitability Accelerate

News Corporation reports strong second quarter fiscal 2026 results with 6% revenue growth and 9% Total Segment EBITDA increase, driven by Dow Jones and Digital Real Estate Services.

Summary

• Total revenues for the second quarter of fiscal 2026 increased 6% to $2.36 billion, up from $2.24 billion in the prior year, primarily driven by growth at Dow Jones, Digital Real Estate Services, and Book Publishing segments.
• Net income from continuing operations decreased 21% to $242 million, compared to $306 million in the prior year, which had benefited from an $87 million gain on REA Group's sale of PropertyGuru.
• Total Segment EBITDA rose 9% to $521 million, up from $478 million in the prior year, despite including a $16 million one-time write-off related to inventory at HarperCollins international operations.
• Reported EPS from continuing operations were $0.34, down from $0.40 in the prior year, while Adjusted EPS increased to $0.40 from $0.33.
• Dow Jones revenues grew a robust 8% to $648 million, fueled by 20% growth in Risk & Compliance, higher digital circulation, and record digital advertising revenues.
• Move, operator of Realtor.com, saw revenues increase 10% to $143 million, driven by premium offerings, audience share gains, and expansion in growth adjacencies.
• Book Publishing revenues achieved a quarterly record of $633 million, a 6% increase, attributed to recent acquisitions, strong Christian Publishing performance, and successful frontlist titles.
• News Media revenues remained flat at $570 million, as higher circulation and subscription revenues were offset by lower advertising revenues.
• Free cash flow for the six months ended December 31, 2025, was $136 million, an increase from $121 million in the prior year.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong quarter, with accelerating revenue and profitability, driven by key digital segments. The strategic focus on premium content and AI rights, coupled with an aggressive share buyback, indicates management confidence and positive future prospects.

Positives

• Total revenues increased 6% to $2.36 billion, demonstrating accelerating growth from the prior quarter.
• Total Segment EBITDA grew 9% to $521 million, reflecting strong operational performance.
• Adjusted EPS increased to $0.40, up from $0.33 in the prior year, indicating improved underlying profitability.
• Dow Jones segment delivered robust 8% revenue growth and 10% Segment EBITDA growth, with record digital advertising revenues and nearly 30% Segment EBITDA margins.
• Risk & Compliance revenues within Dow Jones surged 20% to $96 million.
• Digital Real Estate Services revenues increased 8% and Segment EBITDA grew 11%, with Move (Realtor.com) revenues up 10% and lead volume up 13%.
• Book Publishing achieved a quarterly record revenue of $633 million, a 6% increase, driven by acquisitions and strong title performance.
• Total average subscriptions to Dow Jones consumer products grew 10% to over 6.5 million, with digital-only subscriptions up 12% to over 6.0 million.
• The Wall Street Journal total subscriptions grew 11% to almost 4.7 million, with digital-only subscriptions up 13% to nearly 4.3 million.
• Free cash flow for the six months ended December 31, 2025, improved to $136 million from $121 million in the prior year.
• Expanded partnership with Bloomberg to include AI rights for unique Dow Jones content, with other negotiations progressing.
• Actively executing an expanded share buyback program at over four times the prior rate, reflecting confidence in the Company's cash position and intrinsic value.

Negatives

• Net income from continuing operations decreased 21% to $242 million, primarily due to the absence of an $87 million favorable gain on REA Group's sale of PropertyGuru in the prior year.
• Book Publishing Segment EBITDA decreased 2%, driven by higher costs due to sales volume and a $16 million one-time write-off primarily related to inventory at HarperCollins international operations.
• News Media revenues were flat, and Segment EBITDA decreased 5%, primarily due to lower contribution from News Corp Australia and investment in the California Post.
• New York Post's digital network reached 85 million unique users in December 2025, a decrease from 90 million in the prior year.

Risks

• Actual results may differ materially from forward-looking statements due to risks, uncertainties, and other factors described in the Company's filings with the Securities and Exchange Commission.
• Trends and uncertainties affecting the Company's business, results of operations, and financial condition could impact future performance.
• The outcome of contingencies such as litigation and investigations may affect financial results.

Future Outlook

Chief Executive Robert Thomson expressed delight with the accelerating revenue and profitability growth, noting favorable signs for the second half of the fiscal year and auspicious prospects for the third quarter. The company believes that an increasing number of insightful companies understand the importance of content provenance and will pay a premium for News Corp's premium content, especially in the evolving landscape of AI's impact.

Management Comments

• "We are delighted to report excellent second quarter results with both revenue and profitability growth accelerating from the prior quarter, and we see favorable signs for the second half of our fiscal year."
• "Revenues increased 6 percent to $2.4 billion for the quarter and profitability improved by a robust 9%."
• "Given the current trajectory of our core drivers, we believe prospects for the third quarter are auspicious."
• "Dow Jones, an information services powerhouse with unique IP, delivered 8% revenue growth, accelerating from the first quarter, including 20% growth at Risk and Compliance."
• "There were record digital advertising revenues, and record Segment EBITDA margins at nearly 30% at Dow Jones."
• "It is clear that expectations of AIs impact are continuing to evolve and that the more perceptive players have come to realize that provenance is paramount."
• "We do believe an increasing number of insightful companies understand this content contradiction and will indeed pay a premium for our premium content."
• "This quarter we expanded our partnership with Bloomberg to include AI rights for our unique Dow Jones content and are progressing with other negotiations."
• "We also continued to actively execute on our expanded buyback program, which has been running at over four times the prior rate, reflecting our confidence in News Corp's strong cash position and belief in the intrinsic value of the Company."

Industry Context

StockSavvy.ai notes that News Corp's strong digital growth in its Dow Jones and Digital Real Estate Services segments aligns with broader industry trends favoring digital transformation and the monetization of high-quality, authoritative content. The emphasis on 'provenance' for AI content is a strategic move to differentiate its premium offerings in an increasingly AI-driven media landscape, potentially setting a benchmark for content licensing. While the overall Australian residential listing volumes were down, the growth in key markets like Sydney and Melbourne, coupled with Realtor.com's audience share gains, indicates resilience and strategic positioning within the real estate sector. The flat performance in News Media, despite digital subscriber growth, reflects ongoing challenges in traditional print advertising, a common theme across the news industry.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results for direct industry standard comparisons.

Stakeholder Impact

• Shareholders: Likely positive impact due to strong financial performance, increased Adjusted EPS, dividend declaration, and an expanded share buyback program, signaling confidence and return of capital.
• Employees: Continued growth in key segments like Dow Jones and Digital Real Estate Services may indicate stable or growing employment opportunities in those areas, while News Media faces ongoing challenges.
• Customers: Continued investment in premium offerings and digital services across segments, including new AI partnerships, suggests enhanced value and access to content and services.

Next Steps

• News Corp will host a Dow Jones Investor Briefing on March 16th in New York City to highlight the potential of Dow Jones.
• The company will continue to actively execute on its expanded share buyback program.
• Progressing with other negotiations for AI rights for its unique Dow Jones content.

Key Dates

Recommendation

News Corporation delivered a strong quarter with accelerating revenue and profitability, particularly in its high-growth digital segments like Dow Jones and Digital Real Estate Services. The significant increase in Adjusted EPS, robust free cash flow, and an expanded share buyback program underscore the company's financial health and management's confidence in its intrinsic value. Strategic initiatives, such as monetizing premium content through AI partnerships, position the company well for future growth in an evolving media landscape. These factors suggest a positive outlook for the stock.

Keywords

News Corp, NWSA, NWS, financial results, Q2 2026, earnings, media, information services, Dow Jones, Realtor.com, HarperCollins, Wall Street Journal, digital real estate, book publishing, news media, AI rights, share buyback, EBITDA, EPS, subscriptions