News Corporation reported a modest 2% revenue increase and a 1% rise in net income for Q1 Fiscal 2026, driven by strong digital growth at Dow Jones and Digital Real Estate Services. The company also accelerated share buybacks, signaling confidence in its undervalued stock amid strategic AI partnerships.
- Q1 revenues rose 2% to $2.14 billion
- Net income from continuing operations increased 1% to $150 million
- Dow Jones segment revenue grew 6%, led by digital subscriptions
- Digital Real Estate Services revenue up 5%, with gains at Move and REA Group
- Book Publishing segment hit by $13 million receivable write-off, impacting EBITDA
Solid Start to Fiscal 2026
News Corporation kicked off fiscal 2026 with a steady performance, reporting a 2% increase in first quarter revenues to $2.14 billion and a 1% rise in net income from continuing operations to $150 million. The company’s total segment earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 5% to $340 million, underscoring operational momentum despite some headwinds.
Dow Jones and Digital Real Estate Drive Growth
The Dow Jones segment led the charge with a 6% revenue increase to $586 million, fueled by robust growth in digital subscriptions and professional information services. Digital circulation revenues now account for 84% of Dow Jones’ total, reflecting the company’s successful pivot to digital-first content. Meanwhile, Digital Real Estate Services posted a 5% revenue gain, with Move (operator of Realtor.com) achieving its highest year-over-year growth since 2022 and REA Group benefiting from price increases and add-on product sales.
Challenges in Book Publishing
The Book Publishing segment faced a tougher quarter, with revenues declining 2% and EBITDA dropping 28%, impacted notably by a $13 million write-off of a customer receivable. This segment’s softness contrasts with the broader company’s growth and highlights ongoing challenges in consumer spending and digital sales within the publishing industry.
News Media Profitability and Cost Efficiencies
News Media showed a strong turnaround, with segment EBITDA surging 67% thanks to cost savings initiatives and higher pricing on circulation and subscriptions. Digital revenues remain a significant portion of the segment’s mix, supporting a gradual shift away from print advertising declines.
Strategic Focus on AI and Intellectual Property
CEO Robert Thomson emphasized the strategic importance of intellectual property in the evolving AI landscape, underscoring News Corp’s commitment to monetizing its content through partnerships and licensing. The company views its data and content assets as critical to AI development, positioning itself to benefit from emerging opportunities in this space.
Share Buybacks Signal Confidence
Reflecting confidence in its valuation and cash flow generation, News Corp accelerated its share repurchase program to more than four times the pace of fiscal 2025. Management cited strong free cash flow and a belief that the company’s shares remain undervalued relative to its asset base and profit trajectory.
Bottom Line?
News Corp’s steady growth and strategic AI focus set the stage for potential upside, but watch for ongoing challenges in publishing and the impact of new partnerships.
Questions in the middle?
- How will upcoming AI partnerships concretely impact News Corp’s revenue streams?
- What is the outlook for the Book Publishing segment amid ongoing consumer softness?
- How sustainable is the accelerated share buyback program given capital expenditure plans?