NWSA

News Corporation (NWSA/NWS) Q2 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended December 31, 2025 (Q2 of Fiscal 2026). News Corporation is a global diversified media and information services company operating through five segments: Dow Jones, Digital Real Estate Services, Book Publishing, News Media, and Other. The filing notes that the sale of the Foxtel Group closed in April 2025, and its results are classified as discontinued operations.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total revenues increased 6% ($124 million) in Q2 and 4% ($172 million) YTD compared to the prior year. Growth was driven by Dow Jones (circulation and advertising), Digital Real Estate Services (REA Group and Move), and Book Publishing (acquisitions and physical sales).
• Profitability Decline: Net income from continuing operations decreased 21% in Q2 and 14% YTD. This was primarily due to the absence of a $92 million gain on the sale of REA Group's interest in PropertyGuru recorded in the prior year, higher operating expenses, and increased restructuring charges.
• Expense Increases: Operating expenses rose 5% in Q2, largely due to a $16 million one-time inventory write-off at HarperCollins and higher employee costs. SG&A increased 5% in Q2 due to higher marketing and employee costs at Dow Jones and Digital Real Estate Services.
• Restructuring: Impairment and restructuring charges were $30 million in Q2 and $49 million YTD, compared to $16 million and $38 million in the prior year periods.

Outlook, Risks, and Unusual Items

• Capital Allocation: The Company announced a new $1 billion stock repurchase program in July 2025. As of December 31, 2025, approximately $1.044 billion remains authorized. The Board declared a semi-annual dividend of $0.10 per share in August 2025 and another in February 2026.
• Segment Performance:
  • Dow Jones: Strong growth in digital subscriptions (13% increase for WSJ) and professional information services.
  • Book Publishing: EBITDA declined 14% YTD due to the $16 million inventory write-off and a $13 million receivable write-off related to a distributor closure.
  • News Media: Revenues were flat in Q2; advertising revenues declined 6% due to lower print ad sales, partially offset by digital growth.
• Legal Contingencies: The Company is involved in antitrust litigation regarding OPIS (pipe pricing data) and HarperCollins (Amazon pricing). A settlement for the OPIS matter received preliminary approval in July 2025. The Company has accrued approximately $18 million for U.K. Newspaper Matters liabilities.
• Investments: Unrealized losses on equity securities were $11 million in Q2 and $12 million YTD.

Investor Verification Checklist

• One-Time Charges: Verify the impact of the $16 million HarperCollins inventory write-off and $13 million receivable write-off on future margins.
• Discontinued Operations: Confirm that Foxtel results are fully excluded from continuing operations and assess any remaining integration or transition costs.
• Legal Exposure: Monitor the final approval status of the OPIS antitrust settlement and the outcome of the HarperCollins vs. Amazon litigation.
• Currency Impact: Review the sensitivity of international segments (REA Group, News Corp Australia/UK) to foreign exchange fluctuations, which contributed $26 million to Q2 revenue growth.
• Debt Covenants: Confirm continued compliance with debt covenants, particularly given the $1.95 billion in total borrowings and the new HarperCollins equipment lease.