News Corporation Class A Common Stock 2026 Q4 Earnings Call

Hello, everyone, and welcome to News Corp's fiscal fourth quarter 2026 earnings call. We issued our earnings press release about 30 minutes ago, and it's now posted on our website at newscorp.com. On the call today are Robert Thomson, Chief Executive, and Lavanya Chandrashekar, Chief Financial Officer. We'll open with some prepared remarks and then we'll be happy to take questions from the investment community. This call may include certain forward-looking information with respect to News Corp's business and strategy. Actual results could differ materially from what is said. News Corp's Form 10-K and Form 10-Q filings identify risks and uncertainties that could cause actual results to differ and contain cautionary statements regarding forward-looking information. Additionally, this call will include certain non-GAAP financial measurements such as total segment EBITDA, adjusted segment EBITDA, and adjusted EPS.

The definitions and GAAP to non-GAAP reconciliations of such measures can be found in the earnings releases for the applicable periods posted on our website. With that, I'll pass over to Robert Thomson for some opening comments.

Thank you, Mike. We are delighted to report record profitability for our fourth quarter, with a sterling 11% increase in revenue to $2.3 billion, whilst we generated $423 million in total segment EBITDA, soaring 31% over last year. That is correct, a 31% increase. Our net income surged 167% on a continuing operations basis to $230 million. Reported EPS for the quarter was $0.33 compared to $0.09 in the prior year, and adjusted EPS was $0.35 compared to $0.19. These results mean that we have posted 12 consecutive quarters of year-on-year revenue growth and 13 consecutive quarters of year-on-year total segment EBITDA growth on a continuing operations basis. That positive trajectory reflects our transformation to a company that is majority digital and has vastly expanded its portfolio of premium recurring revenues.

The robustness of our strategy has allowed us to navigate tech and economic and political turbulence, and given us a firm foundation for future growth. For the full year, annual revenues rose 7% to $9 billion, and total segment EBITDA increased 15% to over $1.6 billion. It is particularly noteworthy that our margin for the fiscal year rose from 16.7% to 18%, and we are encouraged by the prospect of further margin expansion in the current fiscal year. A result of that enhanced profitability was a significant increase in our free cash flow, which rose 42% to $811 million, and our EPS surged 23% on a reported basis from $0.84 to $1.03, and 33% on an adjusted basis from $0.89 to $1.18.

That stronger cash position enabled us to aggressively return capital to shareholders, with the buyback accelerating to well over four times the prior year's rate at $643 million for the fiscal year. As ever, we are acutely conscious of the importance of maximizing value for our shareholders. Before delving into the details of the quarter, it is worth reflecting on the profound importance of the AI age. Much of the world is being reshaped by artificial intelligence, but artificial intelligence itself is only as useful, only as trustworthy as the quality and integrity of its inputs. We believe News Corp is an absolutely critical participant in the emerging information ecosystem. Without our journalists, our authors, our data, our brands, and our professional expertise, users would be drowning in a slimy sea of AI slop, a cauldron of content crap.

That is why we remain dedicated to cultivating partnerships with those who have shown integrity at a time of institutional infelicities. We have trusted content relationships with OpenAI and Meta and are in advanced discussions with several other honorable companies. Under our woo and sue approach, we are also taking aggressive action against those who pilfer and profit from our work, whether that be the perplexing Perplexity or Brave, a company brave in name only, which has shamelessly stolen our content at scale. Our claims against Brave focus on their data for AI products, which illegally, gormlessly sourced and repurposed copyrighted material for sale to third-party businesses. Their scheming started with masked web crawlers scanning our pages to ingest copyrighted articles and continued when they repackaged those stolen files and delivered near verbatim copies to enterprise customers, undermining legitimate content commerce and the very concept of creativity.

Companies who buy from these pirates should know that they are in possession of stolen goods. We expect our lawsuits to highlight and halt the murky, illegal behavior of AI companies who steal and flagrantly fence our precious IP. Unfortunately, some of the world's better-known companies are clients of these crass kleptomaniacs. Better-known companies should know better. Dow Jones delivered impressive results to close the year, with fourth quarter revenues rising 7% to $644 million, and EBITDA growth of 20% to $181 million. For the full year, the business recorded nearly $2.5 billion in revenue, an increase of 7%, and $663 million in EBITDA, an increase of 13%. As you are aware, we outlined a path to $1 billion in EBITDA at the recent Dow Jones investor briefing. It is fair to say that Almar and the teams are well on the way to reaching that milestone.

Dow Jones' B2B capabilities continue to flourish, accounting for 50% of segment EBITDA in Q4. Risk & Compliance revenues grew a healthy 11%, while Dow Jones Energy rose a modest 4%, with the conflict in the Middle East obviously having an impact on some clients and on potential clients. The business has shown improved growth in the current quarter, with a strong pipeline of new business as the need for our premium data, analysis, and expertise remains robust. The expansion of enterprise subscriptions continued this quarter as the business benefited from deals with the likes of Bloomberg, Delta Air Lines, and Charles Schwab. Our news business reported an increase in total subscriptions of 7% year-on-year to over 6.7 million, while circulation revenues improved and digital direct subscription ARPU accelerated. Digital advertising was also buoyant in Q4, rising 10%. There has been continued momentum thus far this fiscal.

Among various projects, we have been bolstering the powerful platform that is The Wall Street Journal with the launch of a flagship event, WSJ Sports: The Next Sports Economy. We intend to extend our expertise in high-end sports intelligence, for which there is burgeoning demand given the flourishing professional interest in investment, marketing, sponsorship, and broadcast rights. In digital real estate services, both Realtor.com and REA demonstrated remarkable resilience despite challenges in the U.S. and Australian housing markets. Together, they posted an emphatic Q4 performance, with revenues rising 19% to $553 million, while EBITDA expanded 46% to $222 million. To repeat, EBITDA surged 46% compared to a year earlier. At Realtor.com, revenues increased 13%, marking the third straight quarter of double-digit growth and the seventh consecutive quarter of year-on-year expansion, even though mortgage rates rose in recent months.

Its success comes as premium offerings have expanded and yield has been increasingly optimized. The emphasis on high-quality leads, combined with AI-inspired product innovation and assiduous assistance for buyers, sellers, and realtors, have transformed the business's fortunes, as has the team's emphasis on providing reliable real estate news and analysis, which has made Realtor.com the largest site in America for residential property news. If you want to comprehend trends, places, and prices, you must read Realtor.com. According to Comscore, Realtor.com has become the clear industry leader in consumer engagement. Total average visits per month to the platform increased share to 33%, with 297 million in Q4, while an average of 5.5 visits per unique user gave Realtor.com a significant lead over Zillow and nearly three times the engagement of Homes.com.

In Australia, REA revenues rose 21%, reflecting a strong quarter for residential listings, which expanded by 11%, with Sydney and Melbourne each finishing ahead of prior year by 8%. The quarter also benefited from favorable Forex fluctuations. With the successful announced sale of REA India last month, Cam McIntyre and the team are focused on realizing the company's potential and driving growth in lucrative adjacencies, including mortgage broking and enhancing services for buyers, sellers, and agents. HarperCollins finished the fiscal year strongly, with fourth quarter revenue of $566 million, exceeding the prior year by 15%, while EBITDA rose 14% to $57 million. The quarter hosted a strong frontlist, including Sarah A.

Sarah A. Parker's rollicking romantasy, "The Ballad of Falling Dragons," J.D. Vance's "Communion," and Ann Patchett's "Whistler." As for the backlist, Shelby Van Pelt's enduring "Remarkably Bright Creatures" benefited from the success of the Netflix adaptation, and the Pheromone Phenom "Game Changer" series was certainly searing and soaring both on and off the ice, thanks to the hot and bothered heated rivalry. Digital demand was robust, with revenues growing 12%, supported by a 16% audiobook boost and an e-book resurgence of 11%. We have an eclectic lineup of looming releases, including works by Sylvester Stallone; MrBeast, in collaboration with James Patterson; Cher; and the already legendary R.F. Kuang. In addition, we will likely benefit in coming months from our share of the $1.5 billion settlement with Anthropic, which will be compensating authors and publishers for IP claims related to AI.

This will certainly not be the last litigation related to AI. We expect compelling cash-rich legal sequels. In News Media, revenue grew in the quarter by 5% to $574 million, thanks to favorable Forex fluctuations and higher circulation and subscription revenues. In the U.K., under Rebekah Brooks' leadership, the business benefited from the World Cup, with news broadcasting posting a 40% increase in streaming hours to over 9 million hours for the fourth quarter. Bookings would've been even more lucrative had England prevailed. Our team is eagerly looking forward to the imminent relaunch of the Premier League and ideally more success for the preeminent London club, Arsenal. The New York Post benefited from the triumph of the New York Knicks, while our audience and reach in California continued to expand with the launch of an edition in San Francisco to complement the Los Angeles edition.