News Corporation (NWSA) Earnings & Analysis

Latest quarter

News Corp reported Q1 FY2027 revenue of $2.3 billion, up from $2.1 billion a year earlier. Diluted earnings per share rose to $0.29 from $0.20, while gross margin increased to 56.7% from 56.1%.

The company’s filing attributed revenue growth to REA Group and Move in digital real estate, higher physical and digital book sales, and increased circulation, subscription and advertising revenue at Dow Jones. It also said foreign currency movements increased revenue. Dow Jones generated $630.0 million in revenue, while Digital Real Estate Services brought in $529.0 million.

At Book Publishing, News Corp reported $75.0 million in segment EBITDA; the filing attributed the increase partly to higher revenue and the absence of a prior-year customer receivable write-off. News Media revenue fell as lower print advertising and other revenue outweighed gains in circulation and subscriptions, according to the filing.

The filing said operating cash provided by continuing operations declined, primarily because of payment timing and higher tax payments, partly offset by higher total segment EBITDA.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Chief Executive Robert Thomson said Dow Jones was focused on expanding its professional information business. CFO Lavanya Chandrashekar said growth in risk and compliance came from customer gains, product expansion and pricing, with much of the incremental revenue driven by higher volumes and product upsells. She also pointed to demand from technology and finance advertisers.

In Australian real estate, Chandrashekar said REA’s residential revenue benefited from price increases, greater use of premium listing products and add-on sales, partly offset by lower listing volumes and geographic mix. She said Realtor.com’s premium marketing product helped drive revenue growth in a difficult US property market, while AI integration supported cost efficiencies. The filing said Move’s lead volumes declined as mortgage rates increased.

At HarperCollins, Chandrashekar said demand for new releases supported results, while royalties, manufacturing and marketing costs rose. She attributed the EBITDA increase in part to the absence of the prior-year bad debt write-off. Thomson said News Media faced challenging advertising conditions and changes to search and social algorithms.

Asked about free cash flow, Chandrashekar said collections were affected by revenue arriving later in the quarter and that HarperCollins had increased inventories. Asked about AI-related savings, she said, “We’re not quantifying cost savings,” but identified engineering, customer service and data analytics among the areas using the technology.

Thomson said News Corp was negotiating with AI platforms over content use and discussing deals with specialist providers alongside its existing OpenAI and Meta partnerships. He also said the company was pursuing cases against Perplexity and Brave.

For the period ahead, Chandrashekar said News Media should see trends broadly similar to the first quarter, including incremental costs from the California Post rollout. She also expects Dow Jones margin expansion while the company reinvests in its growth.

Guidance

Chandrashekar said News Corp expects Dow Jones margins to continue expanding as it reinvests in the business. At News Media, she expects trends broadly similar to the first quarter, including modest incremental costs from the California Post rollout. She also said free cash flow generation tends to be weighted toward the second half because of seasonality.