News Q3 Earnings Call Highlights
News (NASDAQ:NWS) reported fiscal third-quarter 2026 results that Chief Executive Robert Thomson described as the company’s “12th straight quarter of profitability growth on a continuing operations basis,” citing higher revenue, expanding margins and profit gains across several core businesses.
For the quarter, Thomson said total revenue rose 9% to $2.2 billion and total segment EBITDA increased 18% to $343 million, with the overall margin expanding to 15.7% from 14.4% a year earlier. Net income from continuing operations rose 13%, he said, and both EPS and adjusted EPS increased.
Chief Financial Officer Lavanya Chandrashekar added that on an adjusted basis, revenue increased 4% and total segment EBITDA grew 13%. Earnings from continuing operations were $0.16 per share compared with $0.14 in the prior year, while adjusted EPS was $0.21 versus $0.17.
Buybacks and capital allocation
Management emphasized share repurchases, with Thomson saying strong free cash flow and cash balances have provided “much optionality” and that the company believes its share price does not reflect intrinsic value. Chandrashekar said News Corp repurchased $193 million in shares during the quarter, up from $172 million in the second quarter, bringing fiscal year-to-date repurchases to $459 million.
Chandrashekar noted buybacks in fiscal 2026 have benefited from “the approximately $380 million repayment of Foxtel shareholder loans” as well as robust free cash flow.
AI licensing, partnerships, and IP enforcement
Thomson repeatedly positioned News Corp as “an AI inputs company,” pointing to a recent deal with Meta that “complements our partnership with OpenAI.” He said the company is negotiating additional agreements with other AI-focused companies and expects to receive its “fair share of the proceeds” from a $1.5 billion settlement with Anthropic starting later in the calendar year.
While declining to provide specific financial details on AI contracts, Thomson said the Meta and OpenAI agreements are “more than purely transactional,” involving an exchange of insights as AI usage evolves. “You will be able to see the impact in our accounts over the next few years,” he said.
Thomson also warned about “dodgy digital firms scraping illicitly, illegally our precious content,” adding that the company intends to pursue them and that companies purchasing stolen content are “also culpable.” In response to a question about AI revenue potential, he referenced litigation involving Perplexity, saying News Corp is “very much forward to the discovery process” while remaining open to a “meaningful” settlement.
On internal uses of AI, Chandrashekar said the company is seeing benefits in both product development and efficiency. She highlighted efforts to make Factiva “more user-friendly,” testing AI for translation and audiobook creation in Book Publishing, and using conversational search in Realtor and REA. On efficiencies, she cited AI-assisted coding and product testing, and broader support for newsroom and back-office workflows.
Segment performance: Dow Jones, Digital Real Estate, and Book Publishing lead
Thomson said profits were driven by three strategic investment areas—Dow Jones, Digital Real Estate Services, and Book Publishing—each delivering double-digit profit increases in the quarter. Chandrashekar said those pillars collectively generated 17% segment EBITDA growth, accelerating from the second-quarter pace.
Dow Jones posted revenue of $619 million, up 8%, and segment EBITDA of $147 million, up 11%, with margins expanding 70 basis points to 23.7%, according to both Thomson and Chandrashekar. Thomson said the quarter marked Dow Jones’ 13th consecutive quarter of year-over-year EBITDA growth.
Management highlighted continued growth in professional information offerings:
- Chandrashekar said Professional Information Business revenue increased 11%, led by Risk Compliance, which rose 19% to $100 million.
- Dow Jones Energy revenue grew 12% to $77 million, with customer retention of about 90%, Chandrashekar said.
Thomson and Chandrashekar reiterated a target for Dow Jones to reach $1 billion in annual segment EBITDA within five years, a goal discussed at the company’s March investor day. In Q, Thomson told UBS that the professional information business was about 40% of Dow Jones revenue in Q3 but a “significantly larger” share of EBITDA given higher margins.
On the consumer side, Thomson said digital direct subscription ARPU continued to improve and digital-only subscriptions rose 9%. Chandrashekar said digital-only subscriptions grew 9% year-over-year with sequential net adds of about 53,000, and she said the company expects net additions to be “notably higher” in the fourth quarter due to enterprise partnerships. She also said News Corp is optimizing yield, including raising the full-price Wall Street Journal digital subscription rate to $44.99 for new customers and increasing introductory offer pricing.
Digital Real Estate Services revenue was $473 million, up 17% reported (8% adjusted), while segment EBITDA rose 25% reported (16% adjusted) to $155 million, Chandrashekar said. Thomson said segment EBITDA surged 25% and that margins widened to 32.8% from 30.5%.
At Realtor.com, Thomson said revenue rose 10% despite mortgage rates generally above 6% and existing home sales near historic lows. Chandrashekar said Realtor.com revenue increased 10% to $148 million, with growth driven by core real estate products including 6% higher lead volume, improved yields, and higher annual contract values. She also said “growth adjacencies” (new homes, rentals, and sellers) represented 22% of revenues.
Thomson and Chandrashekar both highlighted audience engagement metrics. Thomson cited Comscore figures showing Realtor.com averaged 5.3 visits per unique user in Q3 versus 3.5 for Zillow, 2.9 for Redfin, and 1.9 for Homes.com. Chandrashekar said Realtor.com averaged 31% of total real estate portal visits in the quarter, up from 29% in Q2.
In response to a JPMorgan question about how a housing recovery might translate to profitability, Thomson said Realtor’s revenue momentum has “preceded the recovery” and pointed to a 15% increase in core real estate revenues, representing 77% of total revenues. Chandrashekar added that revenue per existing home sale on a trailing 12-month basis is more than 20% higher than in Q3 2022, which she called a “high watermark” for housing activity.
At REA, Thomson said revenue grew 20%, helped by foreign exchange and a 14% increase in yield. Chandrashekar said REA revenue grew 20% reported and 8% in constant currency, driven by pricing, contract upgrades, and geographic mix, and noted the financial services business grew double digits with a 21% increase in settlements.
Book Publishing (HarperCollins) revenue rose 8% to $555 million and segment EBITDA increased 14% to $73 million, with margins expanding to 13.2%, Chandrashekar said. Thomson cited higher digital sales, with e-books up 17% and audiobooks up 7%. Chandrashekar said digital revenues grew 11% and pointed to demand tied to the TV adaptation associated with the “Game Changers” series and “Heated Rivalry.”
News Media: revenue up, profit down amid California Post investment
In News Media, Thomson said revenue increased 5% to $538 million but profits declined partly due to investment in new projects, including the launch of the California Post. He said early traffic trends have been encouraging, including “meaningful increases in daily active users and engagement” from California-based users across the New York Post media group.
Chandrashekar said News Media segment EBITDA was $15 million, down $18 million year-over-year, reflecting lower contribution from News UK and “disciplined investment” tied to the California Post rollout. She added that adjusted News Media revenue declined 2% due to ongoing print declines, even as reported revenue benefited from currency.
On News UK, Thomson said The Times and The Sunday Times ended the quarter with 676,000 subscribers, up 7% year-over-year, and that digital advertising at The Sun “rebounded” with a double-digit increase. Chandrashekar pointed to ongoing cost-efficiency efforts, including a partnership with DMG that she said has helped reduce print-side operating costs and is being expanded.
Outlook: monitoring geopolitics, expecting a strong fourth quarter
Looking ahead, Chandrashekar said the company is “closely monitoring events in the Middle East” and acknowledged exposure to cyclical and supply chain issues, but said News Corp remains confident in its strategy driven by recurring revenue. She said the company expects strong fourth-quarter results, with continued strong performance and improved margins at Dow Jones, favorable trends at HarperCollins with a stronger frontlist, and ongoing investment in the California Post partially offset by expected benefits from new content licensing revenue.
Chandrashekar also said third-quarter cash flows were affected by working-capital timing, but the company still expects strong free cash flow growth for the fiscal year despite moderately higher capital expenditures.
About News (NASDAQ:NWS)
News Corporation (NASDAQ: NWS) is a global media and information services company engaged in news and digital real estate, book publishing and other media businesses. The company's operations include print and digital newsbrands, business and financial information services, consumer platforms for property listings, and a major book publishing arm. Through its subsidiaries and brands, News Corp produces news content, market and financial reporting, online real-estate marketplaces and trade and consumer publishing products.
Key areas of activity include news and information, where the company publishes national and regional newspapers and operates business information services; book publishing through a well-known global publisher; and property-related digital businesses that operate online marketplaces for real estate listings.
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