News Corp's Q1 2026 Earnings Call: Contradictions Emerge on Revenue Growth, Wall Street Journal Strategy, Realtor.com, Factiva Dispute, and Share Buybacks

Date of Call: November 6, 2025

Financials Results

• Revenue: $2.14B, up 2% YOY
• EPS: $0.22 adjusted EPS, up from $0.20 prior year; GAAP EPS $0.20 from continuing operations vs $0.21 prior year
• Operating Margin: 15.9% total segment EBITDA margin, up 40 bps YOY

Guidance:

• Dow Jones: expect continued strong B2B revenue growth; slight uptick in costs in Q2 vs prior-year comps.
• Digital Real Estate: realtor.com momentum to continue as mortgage rates ease; REA showing early signs of recovery in Australia.
• Book Publishing: October trends improving; Q2 expected to benefit from ordering timing and stronger front list.
• News Media: continue cost efficiencies; expect strong free cash flow; modestly higher capex for supply chain and tech; accelerated share repurchases to continue.

Business Commentary:

* Revenue Growth and Segment Performance: - News Corp reported revenue of $2.14 billion for Q1 FY2026, up 2% year-over-year. - Growth was driven by strength at Dow Jones and Digital Real Estate Services, with notable contributions from AI-related revenues.

• Digital Revenue Surge:
• Digital revenues accounted for 62% of News Corp's revenue in fiscal 2025, nearly doubling from 33% in fiscal 2018.

• This shift is attributed to strategic diversification across high-margin content licensing and digital revenues.

• Dow Jones Segment Strength:

• Dow Jones segment revenue rose 6% year-over-year to $586 million.

• Growth was driven by AI-related revenues, particularly at Risk & Compliance (16% revenue increase) and the integration of acquisitions like Eco-Movement.

• Digital Real Estate Services Growth:

• Digital Real Estate Services segment revenue increased 5% year-over-year to $479 million.
• Growth was driven by higher residential yields and strategic focus on premium offerings and higher yields.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted revenue up 2% to $2.14B, total segment EBITDA up 5% to $340M and adjusted EPS rising to $0.22. CEO and CFO emphasized strong free cash flow, materially increased buybacks (4x prior pace), confidence in Dow Jones and Digital Real Estate growth, and improving book trends—all indicating constructive outlook and shareholder-focused capital allocation.

Q&A:

• Question from Kane Hannan (Goldman Sachs): Given the housing backdrop and comments, is there anything that could stop realtor.com doing double-digit revenue growth through the year?
  Response: Management: Realtor.com is early in a recovery, benefitting from focus on new homes/rentals/sellers and superior engagement; they expect continued momentum though still early-stage.

• Question from David Karnovsky (JPMorgan): Why not lean even further into repurchases given the stock discount; and what have you observed so far from the Wall Street Journal price increase?
  Response: Management: Buybacks have accelerated 4x and the company has flexibility to increase them; WSJ price changes are in early testing, showing elasticity and will be refined alongside product improvements.

• Question from Entcho Raykovski (Evans & Partners): With the Factiva dispute settled, did you see revenues in PR/communications in the quarter and can you quantify contribution or Q2 acceleration?
  Response: Management: The settlement impact was modest; growth is driven more by new customer wins and a successful GenAI search capability in Factiva rather than a one‑time settlement tailwind.

• Question from Craig Huber (Huber Research Partners): Any change in mindset about further simplifying News Corp after Foxtel disposal?
  Response: Management: Open to structural changes and active simplification when appropriate, while pursuing transparency, buybacks and dividend maintenance to maximize shareholder returns.

• Question from David Joyce (Seaport Research Partners): What are the tailwinds and runway for Risk & Compliance growth—could regulation mandate services?
  Response: Management: Very optimistic; strong demand from Know‑Your‑Client and similar regulations, plus product expansion, support continued high growth potential.

• Question from David Fabris (Macquarie Research): How should we think about the trajectory of News Media after modest revenue growth and big EBITDA improvement?
  Response: Management: Margin improvement reflects cost discipline and digital ad strength (notably NY Post); expect continued efficiency gains and additional inventory from initiatives like the California Post to support EBITDA.

Contradiction Point 1

Revenue Growth and Market Conditions

It involves differing perspectives on the expectation of revenue growth and market conditions, which are crucial for assessing the company's financial performance and strategic planning.

What factors could prevent realtor.com from achieving double-digit revenue growth next year? - Kane Hannan (Goldman Sachs Group, Inc., Research Division)

2026Q1: Realtor is expanding revenue despite U.S. housing market constraints. Focus on Zillow, new homes, and rentals drives growth. Realtor is a holistic housing experience and leads in residential property news in the U.S. Market recovery will likely boost Realtor's value. - Robert Thomson(CEO)

Could you clarify Move's strategy and where adjacencies fit in the long term? What are your 2026 investment expectations? - Kane Hannan (Goldman Sachs Group, Inc.)

2025Q4: Move's strategy focuses on rentals, new homes, and seller, which now account for 24% of revenues, up 5%. These segments increased by 40% over the year. Realtor's audience engagement is high. The integration of Zenlist will enhance capabilities, focusing on higher-quality leads. - Robert J. Thomson(CEO)

Contradiction Point 2

Wall Street Journal Pricing and Strategy

It highlights differing views on the pricing strategy and its impact on the Wall Street Journal's growth, which is a key revenue driver for the company.

Why hasn't the company accelerated share repurchases more? Also, what is the impact and future strategy regarding the Wall Street Journal's price increase? - David Karnovsky (JPMorgan Chase & Co, Research Division)

2026Q1: Buyback rate is already 4x higher than before. We have flexibility to increase if optimal. WSJ pricing is in early stages, showing elasticity. Enhanced product offerings expected to improve pricing. - Robert Thomson(CEO)

What prompted the decision to accelerate the buyback? How much will quarterly repurchase activity increase? Will funds from the Foxtel debt paydown be allocated to buybacks? - David Karnovsky (JPMorgan Chase & Co)

2025Q4: Fiscal 2026 will benefit from Foxtel sale proceeds. We are maintaining a conservative balance sheet, and no target leverage ratio is set. - Lavanya Chandrashekar(CFO)

Contradiction Point 3

Realtor.com Growth Strategy

It involves the strategic focus and growth expectations for Realtor.com, which is a significant revenue driver for the company.

What factors could prevent realtor.com from achieving double-digit revenue growth next year despite a soft housing market? - Kane Hannan(Goldman Sachs Group, Inc., Research Division)

2026Q1: Realtor is expanding revenue despite U.S. housing market constraints. Focus on Zillow, new homes, and rentals drives growth. Realtor is a holistic housing experience and leads in residential property news in the U.S. Market recovery will likely boost Realtor's value. - Robert Thomson(CEO)

Can you provide details on the investment level in the Dow Jones segment for Q4, which areas received the investment, and what are your plans for future investments? - Kane Hannan(Goldman Sachs)

2025Q3: There was no significant increase in investment in Dow Jones. The acquisition of Dragonfly and Oxford Analytica added to professional information business costs. The focus remains on driving ARPU in the consumer business and maintaining double-digit revenue growth in key segments like Risk and Compliance, and Energy. - Robert Thomson(CEO)

Contradiction Point 4

Factiva Dispute Impact

It involves the impact and resolution of the Factiva dispute, which could have significant implications for revenue and operational efficiency.

What was the revenue impact of the Factiva dispute resolution and does it impact Q2 growth? - Entcho Raykovski(E&P, Research Division)

2026Q1: Dow Jones performed well despite the resolution. Factiva grew 9%. New customers and GenAI capabilities are promising. Minimal impact from the dispute resolution. - Robert Thomson(CEO), Lavanya Chandrashekar(CFO)

What was the impact of the Factiva dispute on Q4 and how did this affect Dow Jones margins? - Entcho Raykovski(Evans & Partners)

2025Q3: The Factiva dispute impact will reduce as it cycles through. The professional information business growth contributes to margin expansion. Dow Jones' overall margin expanded from 21.7% to 23%. The share of PIB revenues is growing, indicating potential for further margin growth. - Lavanya Chandrashekar(CFO), Robert Thomson(CEO)

Contradiction Point 5

Share Buyback and Capital Allocation

It involves changes in financial strategy, specifically regarding share repurchases and capital allocation, which are crucial for shareholder value and investor expectations.

Why hasn't there been more acceleration in share repurchases considering the perceived value? - David Karnovsky (JPMorgan)

2026Q1: Buyback rate is already 4x higher than before. We have flexibility to increase if optimal. - Robert Thomson(CEO)

What are the plans for the Foxtel sale proceeds and future capital expenditures? - Entcho Raykovski (Evans & Partners)

2025Q2: We are focused on shareholder returns, with a $1 billion buyback in place. - Robert Thomson(CEO)