Global media and publishing company News Corp (NASDAQ:NWSA) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, but sales were flat year on year at $2.11 billion. Its non-GAAP profit of $0.19 per share was 5.6% above analysts’ consensus estimates.
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News Corp (NWSA) Q2 CY2025 Highlights:
- Revenue: $2.11 billion vs analyst estimates of $2.09 billion (flat year on year, 1% beat)
- Adjusted EPS: $0.19 vs analyst estimates of $0.18 (5.6% beat)
- Adjusted EBITDA: $322 million vs analyst estimates of $312.4 million (15.3% margin, 3.1% beat)
- Operating Margin: 9.6%, in line with the same quarter last year
- Market Capitalization: $17.12 billion
StockStory’s Take
News Corp’s second quarter results landed slightly above Wall Street’s expectations for both revenue and non-GAAP profit, but sales were essentially flat compared to last year, and the market response was muted. Management attributed performance to continued margin discipline, cost control, and targeted growth in its core pillars: Dow Jones, Digital Real Estate Services, and Book Publishing. CEO Robert Thomson highlighted ongoing investments in the Professional Information business at Dow Jones, strong digital subscription growth, and higher contributions from new business adjacencies at realtor.com as key drivers for the quarter. CFO Lavanya Chandrashekar pointed to improved profitability and operational streamlining, especially following the Foxtel divestiture, as supporting the company’s results.
Looking ahead, News Corp’s management emphasized recurring digital revenues, expanded content licensing, and further investments in high-margin B2B information services as the main pillars of future growth. Thomson stated, “We remain dedicated to driving value across our 3 pillars: Dow Jones, Digital Real Estate Services and Book Publishing,” and cited the integration of acquisitions and new product launches as essential to this strategy. Chandrashekar cautioned, however, that softness in the book market and macroeconomic headwinds, particularly in U.S. housing, could weigh on near-term results. The company also expects continued investment in digital transformation and the integration of recent acquisitions, which may affect margins in the short term.
Key Insights from Management’s Remarks
Management pointed to targeted investments and portfolio simplification, along with a focus on recurring revenue streams in digital and B2B segments, as the major themes shaping the quarter’s performance and longer-term outlook.
- Dow Jones B2B Expansion: The Professional Information Business within Dow Jones delivered double-digit revenue growth, driven by new product launches in risk and compliance, and recent acquisitions like Dragonfly Intelligence and Oxford Analytica. Management noted over 90% retention in Dow Jones Energy, highlighting the stickiness of these services.
- Digital Subscription Momentum: Digital-only subscriptions at The Wall Street Journal and other Dow Jones publications grew 9% year-over-year, aided by new enterprise partnerships such as one with LSEG, which contributed to higher-margin customer acquisition and improved retention.
- Realtor.com’s Growth Adjacencies: Revenue at realtor.com was buoyed by growth in rentals, new homes, and seller services, which now comprise 24% of segment revenues, up five percentage points from last year. CEO Robert Thomson cited these adjacencies as critical to offsetting ongoing weakness in the broader housing market.
- Portfolio Simplification and Capital Allocation: The completed sale of Foxtel Group allowed News Corp to sharpen its focus on core segments and announce a new $1 billion share repurchase program. Management signaled an intention to accelerate buybacks, funded in part by proceeds from the Foxtel transaction.
- AI and Content Licensing Strategy: Management stressed the importance of protecting intellectual property amid the rise of AI, noting ongoing negotiations with AI firms over licensing and a willingness to pursue legal action to defend content rights. They see content licensing as a long-term growth lever, especially for News Media and Dow Jones.
Drivers of Future Performance
News Corp expects recurring digital revenues, high-margin B2B services, and portfolio optimization to drive performance this year, while navigating headwinds in books and real estate.
- Digital and B2B Revenue Expansion: Management is prioritizing further investment in Dow Jones’ Professional Information Business, citing its higher margin profile and recurring revenue stream. The integration of recent acquisitions is expected to enhance the product suite and support continued growth, though operational costs may rise near term.
- Real Estate and Book Market Uncertainty: While realtor.com is diversifying into growth adjacencies, management cautions that the timing of a U.S. housing recovery remains unpredictable. Book Publishing is also facing softness following last year’s strong releases, with management expecting difficult comparisons and macro-related volatility.
- Capital Allocation and Portfolio Streamlining: Proceeds from the Foxtel sale are earmarked for accelerated share buybacks and further reinvestment in core businesses. Management views continued focus on digital transformation and selective M&A as essential to reinforcing the company’s competitive position, though they are closely monitoring leverage and market risks.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team is monitoring (1) the pace of digital and B2B revenue growth at Dow Jones and its ability to sustain margin expansion, (2) any signs of stabilization or recovery in U.S. housing that could lift realtor.com’s results, and (3) progress on integrating acquisitions such as Zenlist and Crunchyroll’s Manga business. The effectiveness of the accelerated buyback program and ongoing developments in content licensing for AI are also key areas to watch.
News Corp currently trades at $28.82, down from $29.25 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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