10-Q: News Corp Reports Increased Revenue and Earnings in Q2 2025, Driven by Digital Real Estate and Book Publishing

News Corp's Q2 2025 results show revenue growth driven by Digital Real Estate Services and Book Publishing, with a definitive agreement to sell Foxtel to DAZN Group Limited.

Summary

• News Corporation's Q2 2025 saw a revenue increase of 5% to $2.238 billion compared to $2.135 billion in Q2 2024.
• For the six months ended December 31, 2024, revenue increased 4% to $4.334 billion compared to $4.166 billion in the prior year.
• Net income from continuing operations increased by 58% to $306 million for the quarter and 83% to $455 million for the six months ended December 31, 2024.
• The company entered into a definitive agreement to sell Foxtel to DAZN Group Limited, with the transaction expected to close in the second half of fiscal 2025.
• News Corp will receive a minority equity interest of approximately 6% in DAZN and hold one seat on its Board of Directors as part of the Foxtel sale.
• The assets and liabilities of Foxtel were classified as held for sale, and its results were classified as discontinued operations.
• The company's Board of Directors declared a semi-annual cash dividend of $0.10 per share for Class A and Class B Common Stock, payable on April 9, 2025.
• The remaining authorized amount under the Repurchase Program was approximately $382 million as of December 31, 2024.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with increased revenue and earnings, strategic divestiture, and continued investment in digital growth. However, some challenges remain in the News Media segment.

Positives

• Revenue growth driven by Digital Real Estate Services and Book Publishing segments.
• Increased net income from continuing operations.
• Strategic decision to sell Foxtel to DAZN, simplifying the company's portfolio.
• Strong digital revenue growth at Dow Jones.
• Cost savings initiatives driving improved profitability in the News Media segment.
• REA Group's revenue growth driven by price increases, increased depth penetration and growth in national listings.
• HarperCollins' revenue growth driven by higher physical and digital book sales.

Negatives

• Lower revenues at the News Media segment driven by the transfer of third-party printing revenue contracts to News UKs joint venture with DMG Media and lower advertising revenues.
• Net loss from discontinued operations related to Foxtel.
• Advertising revenues decreased $5 million, or 4%, during the three months ended December 31, 2024 as compared to the corresponding period of fiscal 2024 due to lower print advertising revenues, as digital advertising revenues were flat compared to the corresponding period of fiscal 2024.

Risks

• Divestitures involve significant risks and uncertainties that could adversely affect the Company's business, results of operations and financial condition.
• The outcome of legal proceedings and governmental investigations is subject to significant uncertainty.
• Tax authorities may disagree with the treatment of items reported in the Company's tax returns.
• Challenging market conditions resulted in lower lead volumes, which decreased 2%, and lower transaction volumes.

Future Outlook

The transaction to sell Foxtel to DAZN is expected to close in the second half of fiscal 2025, subject to regulatory approvals and other customary closing conditions.

Industry Context

The results reflect the ongoing shift towards digital media consumption, with strong performance in digital real estate and digital book sales offsetting declines in traditional print media.

Comparison to Industry Standards

• News Corp's performance in digital real estate can be compared to that of Zillow and Rightmove, while its book publishing segment competes with Penguin Random House and Simon & Schuster.
• REA Group's performance is benchmarked against other Australian real estate portals like Domain Group.
• Dow Jones's performance is comparable to that of Bloomberg and Thomson Reuters in the financial information services sector.

Management Changes

Legal Proceedings

• Dow Jones is facing purported class action complaints alleging violations of federal and state antitrust laws.
• HarperCollins is involved in purported class action complaints alleging violations of antitrust and competition laws.
• The company continues to address civil claims related to U.K. Newspaper Matters.

Stakeholder Impact

• Shareholders will benefit from increased profitability and continued dividend payments.
• Employees may be affected by restructuring and cost-saving initiatives.
• Customers will see continued investment in digital products and services.
• Suppliers may be impacted by changes in the company's business strategy.

Next Steps

• Complete the sale of Foxtel to DAZN Group Limited.
• Continue to execute the stock repurchase program.
• Focus on growing digital revenues across all segments.

Key Dates

Keywords

News Corporation, Financial Results, Digital Real Estate, Book Publishing, Foxtel, DAZN, Revenue, Earnings, REA Group, HarperCollins, Dow Jones, News Media