News Corporation delivered strong fiscal Q2 2026 results, with revenue increasing 6% year-over-year to $2.4 billion and total segment EBITDA growing 9% to $521 million, driven by double-digit growth at Dow Jones and Digital Real Estate Services. Adjusted EPS rose to $0.40 from $0.33 in the prior year, and profitability margins expanded to 22.1% despite a one-time inventory charge at HarperCollins. The company is aggressively returning capital to shareholders, having repurchased $172 million of stock in the quarter—four times the prior year's pace—while maintaining a robust balance sheet that recently received a positive outlook revision from Moody's. Management expressed high confidence in the company's 'moat' regarding AI, citing the value of proprietary content and expected payouts from AI licensing deals, and indicated that prospects for the third quarter are 'auspicious.'
| Metric | Value | Change |
|---|---|---|
| Revenue | $2.4 billion | +6% |
| Total Segment EBITDA | $521 million | +9% |
| Adjusted EPS | $0.40 | +21% vs prior year |
| Profitability Margin | 22.1% | +70 bps |
| Share Repurchases | $172 million | Up $132M YoY |
| Dow Jones Revenue | $648 million | +8% |
| Dow Jones EBITDA | $191 million | +10% |
| Digital Real Estate Revenue | $511 million | +8% |
| HarperCollins Revenue | $633 million | +6% |
News Corp is aggressively pivoting to monetize Artificial Intelligence through licensing and litigation rather than viewing it solely as a disruption threat. Management highlighted a specific victory where 'Anthropic has already agreed to pay $1.5 billion for using pirated books,' explicitly stating they expect a 'fair share' payout later in the calendar year. This signals a strategic shift where the company's vast proprietary content library is treated as a premium, essential asset for AI model training, creating a new, high-margin revenue stream while legally protecting its IP.
The company is prioritizing aggressive capital return to shareholders, significantly accelerating its share buyback program. In Q2, News Corp repurchased $172 million worth of shares, up $132 million from the prior year period, running at 'four times the prior year pace.' CFO Lavanya Chandrashekar indicated that 'the rate of purchases will be higher in the second half,' signaling strong free cash flow generation and a view that the stock is materially undervalued relative to its net asset value.
Dow Jones is successfully executing a strategy to shift from a consumer-focused advertising model to a high-margin B2B data and information services provider. The segment reported a record 29.5% profit margin, driven by a 12% increase in Professional Information revenues and a 20% surge in Risk & Compliance revenues. Management emphasized the 'record quarter' and the strategic importance of embedding content into enterprise workflows, suggesting this segment provides stable, recurring revenue that insulates the company from consumer advertising cyclicality.
Digital Real Estate services are demonstrating resilience and market share gains despite a 'far from normal' housing market. Realtor.com grew revenue by 10% and increased its share of total portal visits to 29%, significantly outpacing competitors like Redfin and narrowing the gap with Zillow. Management focused on engagement metrics—almost 5 visits per unique user—and product innovation like 'Realtor.com Plus,' indicating a strategy of gaining share during downturns to leverage for outsized growth when the macro environment improves.
The News Media segment continues to face structural headwinds, reporting flat revenues and a 5% decline in EBITDA year-over-year. Management cited 'challenging advertising conditions' and noted that print advertising remains weak. While digital subscriber growth in the UK and Australia is positive, the segment's reliance on a declining print ad base and the need for continued investment in new ventures like the 'California Post' could act as a persistent drag on overall profitability if the digital transition does not accelerate further.
HarperCollins experienced a margin contraction in the quarter, with EBITDA falling 2% despite a 6% revenue increase. This decline was attributed to a '$16 million one-time write-off primarily related to inventory.' While management framed this as a one-time event, inventory write-offs in the publishing industry can signal demand forecasting errors or supply chain inefficiencies. The 260 basis point margin impact from this charge highlights the operational fragility within the segment's cost structure.
Management acknowledged that the housing market remains 'far from normal' and noted that 'national new buy listings in the quarter declined 3% overall' in Australia. While Realtor.com is performing well operationally, the Digital Real Estate segment's core business model is inherently leveraged to housing transaction volumes. A prolonged downturn in housing activity, despite current share gains, poses a risk to the segment's ability to maintain double-digit growth rates over the long term.
Overall: Management exhibited a highly confident and assertive demeanor throughout the call, particularly regarding the company's strategic positioning against AI disruption and the value of its proprietary content. Robert Thomson was characteristically colorful and combative in defending the company's IP, while Lavanya Chandrashekar provided grounded, data-driven reinforcement of the financial stability and growth trajectory.
Confidence: HIGH - Management used definitive, optimistic language such as 'auspicious prospects,' 'poised with poise,' and 'absolutely confident.' They provided specific forward-looking indicators, including the expected payout from the Anthropic settlement and accelerated share buybacks, underscoring their belief in the business model's resilience.
Management believes prospects for the third quarter are 'auspicious' based on the current trajectory of core drivers.
The rate of share purchases is expected to be higher in the second half of the fiscal year compared to the first half.
Total CapEx is expected to be up moderately for the full year, with Dow Jones CapEx specifically expected to be modestly down.
The company expects to incur modest investments related to the launch of the California Post.
Hedging & Uncertainty: Management utilized minimal hedging regarding their core performance and strategic positioning, employing strong, definitive verbs such as 'accelerating,' 'expanded,' and 'record.' However, when discussing the macro environment, they employed standard qualifiers like 'uncertainty,' 'volatility,' and 'far from normal' to set expectations. Regarding AI, CEO Robert Thomson used aggressive, colorful metaphors rather than financial hedging to dismiss competitive threats, though he did qualify the timing of the Anthropic payout as 'starting later this calendar year.' The CFO used standard forward-looking qualifiers like 'expect' and 'believe,' but the overall lack of heavy cautionary language suggests a high degree of operational confidence.
We are poised with poise. - Robert Thomson, Chief Executive
Anthropic has already agreed to pay $1.5 billion for using pirated books. - Robert Thomson, Chief Executive
I'm even more confident in News Corporation's growth opportunities and our ability to maximize shareholder value. - Lavanya Chandrashekar, Chief Financial Officer
The results are indicative of our ongoing transformation, both digitally and commercially. - Robert Thomson, Chief Executive
We believe prospects for the third quarter are auspicious. - Robert Thomson, Chief Executive
Our consistently strong cash position has allowed us to enhance our buyback program. - Robert Thomson, Chief Executive
Analyst Sentiment: Analysts focused heavily on the implications of generative AI on the business model, asking about competitive threats and the defensibility of the company's data assets. Questions were direct and probing, specifically regarding the 'homes.com' competitive threat and capital allocation priorities.
Management Responses: Management was combative but articulate regarding AI, dismissing threats as 'retrospective' and emphasizing the superiority of their 'premium' content. They were disciplined on capital allocation, reiterating a focus on buybacks and 'optionality' rather than committing to specific M&A targets, and expressed strong confidence in the Dow Jones growth trajectory.
AI impact and IP monetization strategies, specifically regarding the Anthropic settlement and OpenAI partnerships.
Capital allocation priorities, balancing accelerated share buybacks against potential M&A and internal investment.
Competitive dynamics in the digital real estate market, specifically the threat posed by CoStar's homes.com.
Pricing power and ARPU growth strategies at Dow Jones, particularly regarding enterprise partnerships.
News Corporation is successfully executing a strategic pivot to a digital-first, recurring revenue model, with high-margin B2B services driving profitability and margin expansion. The company's aggressive stance on IP monetization regarding AI represents a significant hidden asset, with potential for substantial licensing revenue (e.g., the Anthropic payout) that is not yet fully reflected in the stock price. The balance sheet is robust, enabling accelerated share buybacks which provide a solid floor for the stock. While legacy print advertising remains a headwind, the strength of Dow Jones and Digital Real Estate provides a resilient growth engine. Management's confidence in their 'moat' of proprietary content positions the company uniquely to benefit from the AI revolution rather than be disrupted by it.
Management described the housing market as 'far from normal' with 'lingering challenges,' noting a 3% decline in national new buy listings in Australia, though specific regions like Sydney and Melbourne showed improvement.
Print advertising trends remain 'challenging' and 'weak,' particularly in the News Media segment, although digital advertising showed resilience with a 12% increase at Dow Jones.
Management views AI as a net positive for the company, arguing that the 'need for provenance' and 'premium content' will drive licensing revenues from AI developers who require reliable, real-time data.