News Corp reports AI content partnerships as digital subscriptions reach 62% of revenue

News Corporation reported first quarter fiscal 2026 results on November 6, 2025, showing revenue growth to $2.14 billion alongside expanding artificial intelligence content licensing deals that CEO Robert Thomson characterized as "wooing and suing" strategies. The media conglomerate increased Total Segment EBITDA 5% to $340 million while accelerating share repurchases to four times the previous fiscal year's pace.

Digital revenues now comprise 62% of News Corp's total business, nearly double the 32% share recorded in fiscal 2018, according to CFO Lavanya Chandrashekar. This transformation reflects strategic shifts away from advertising dependency, which declined from 32% of revenues in fiscal 2018 to just 16% in fiscal 2025. The company's two strongest divisions—Dow Jones and Digital Real Estate Services—contributed 49% of revenue and 84% of EBITDA in fiscal 2025, up from 29% of revenue and 55% of EBITDA in fiscal 2018.

"Information and sophisticated data are the essence of AI, and without these essential ingredients, AI is but empty, vacuous, ignorant infrastructure," Thomson stated during the earnings call. "Electricity without alacrity, buildings without billings, chips without chops."

AI content licensing gains momentum

News Corp expects to announce additional AI content partnerships following agreements with OpenAI, which Thomson praised as "principled pioneers in understanding the inherent intrinsic value of actual intelligence." The company maintains parallel legal actions against AI companies that use content without authorization while actively negotiating licensing deals with those willing to compensate publishers.

The strategy comes amid intensifying industry debates about AI content usage. A $1.5 billion award against Anthropic for its use of copyrighted books demonstrated judicial support for content owner rights, according to Thomson. "Content crime does not and will not pay," he emphasized. "If you have received stolen goods, we intend to pursue you relentlessly."

Google's advertising revenue distribution recently reached 90% concentration on owned properties versus publisher partnerships, with Network advertising declining 1% year-over-year to $7.4 billion during Q2 2025. This shift affects millions of websites dependent on Google's advertising ecosystem, making direct content licensing arrangements with AI companies increasingly important for publishers seeking sustainable revenue streams.

Dow Jones professional information drives growth

Dow Jones segment revenues increased 6% to $586 million for the quarter ended September 30, 2025, powered by professional information business growth that now represents a substantial portion of segment performance. Risk & Compliance revenues surged 16% to $94 million, driven by new customers, enhanced products, and improved yield from risk feeds and API solutions.

The division acquired EcoMovement in September 2025, a platform providing data on nearly 2 million EV charging connectors across more than 80 countries. This acquisition strengthens Dow Jones Energy's capabilities in energy transition activities including carbon markets, clean fuels, solar, and hydrogen sectors. Dow Jones Energy revenues grew 7% to $73 million despite timing impacts from the World Chemical Forum event shift to Q3.

Digital circulation revenues represented 75% of Dow Jones circulation revenues during the quarter, up from 72% in the prior year. Total average subscriptions to Dow Jones consumer products reached 6.4 million, an 8% increase compared to the prior year, with digital-only subscriptions growing 10% to nearly 5.9 million.

Wall Street Journal digital-only subscriptions increased 11% year-over-year to 4.2 million average subscriptions in the quarter, representing 91% of total Wall Street Journal subscriptions. The company recently raised full-price rates for new customers and certain tenured subscribers, recognizing the value of premium journalism while reviewing go-forward pricing strategies.

Digital advertising accounted for 68% of total advertising revenues for the quarter at Dow Jones, up from 67% in the prior year. Advertising revenues remained stable at $85 million as a 2% increase in digital advertising offset a 4% decline in print advertising.

Dow Jones Segment EBITDA grew 10% to $144 million, with margins increasing to nearly 25%, representing a 90 basis point improvement year-over-year. The profitability growth resulted from revenue increases partially offset by higher employee and marketing costs.

Digital real estate shows recovery signs

Digital Real Estate Services segment revenues increased 5% to $479 million, driven by growth at both Move and REA Group despite an uneven macroeconomic environment. Segment EBITDA rose 13% to $158 million, benefiting from REA Group's absence of $12 million in deal costs related to the withdrawn Rightmove acquisition offer in the prior year.

Move, operator of Realtor.com, posted revenues of $152 million, a 9% increase marking the fourth consecutive quarter of revenue growth and the highest quarterly growth rate in nearly four years. The performance represents a turning point for the US real estate advertising market as lower interest rates stimulate housing demand.

"With the Federal Reserve cutting rates and the current 30-year mortgage rate approaching 6%, it is reasonable to conclude that we will be high-fiving when mortgage rates are in the high fives," Thomson noted during the earnings call.

Revenue growth stemmed from continued strength in growth adjacencies—new homes, rentals, and sellers—which represented 22% of revenues in the quarter, up 3 percentage points from the prior year. Core real estate revenues also returned to growth as Move's strategic shift toward higher intent and quality audiences began generating results.

Strong penetration of Real Pro Select, a product targeted primarily at larger brokers, led to higher annualized contract values. Lead volumes declined just 1%, with trends improving throughout the quarter compared to a 13% decline in the prior quarter. Average monthly unique users fell 6% to 72 million, but Comscore data showed Realtor.com maintained the highest engagement among real estate portals at almost five visits per unique user in September.

REA Group revenues gained 3% year-over-year to $327 million, up 5% on a constant currency basis. Growth came from residential yield increases and customer contract upgrades, with residential yield growth improving 13% driven by strong Premier Plus retention and extension product growth including AMAX.

Australian national residential buy listing volumes declined 8% compared to the prior year, with Sydney listings down 6% and Melbourne down 4%. However, auction levels in Melbourne and Sydney during October tracked toward the most active October in recent years, suggesting market momentum building.

Book publishing faces headwinds before recovery

Book Publishing segment revenues decreased 2% to $534 million compared to strong prior year performance that included elevated sales from Hillbilly Elegy by J.D. Vance following his vice presidential nomination. The quarter was impacted by softer consumer spending within the industry, timing of customer ordering, and a $13 million write-off related to the expected closure of Baker & Taylor, a distributor focused predominantly on the library channel.

Key titles during the quarter included Katabasis by R.F. Kuang, An Inside Job by Daniel Silva, and We Are All Guilty Here by Karin Slaughter. Digital sales decreased 9% due to an 11% decline in audiobook sales and 9% decline in e-book sales, driven by title mix and difficult prior year comparisons. Digital sales represented 23% of Consumer revenues compared to 25% in the prior year.

Segment EBITDA decreased 28% to $58 million, primarily due to the $13 million receivable write-off, lower revenues, and higher employee costs, partially offset by lower costs related to reduced sales volume.

October trends showed encouraging improvement with stronger ordering patterns and front list releases. The quarter will benefit from the Wicked film release later in November, which should bolster book sales through cross-promotions. September Bible sales revenue rose more than 65% compared to the prior year following increased interest after the assassination of religious figure Charlie Kirk, with retailers reporting significant influx of new and younger customers.

News media achieves profitability gains

News Media segment revenues increased 1% to $545 million, driven by higher circulation and subscription revenues alongside mixed advertising trends. Segment EBITDA grew 67% to $30 million, reflecting continued cost efficiencies and strategic initiatives across properties.

The New York Post advertising revenue leapt 19% year-over-year, with nearly 90% of that advertising being digital. Preparations are underway for the California Post launch early in 2026, with the project already generating industry attention. Digital advertising at the Post increased 23% year on year, demonstrating the publication's expanding reach and influence.

The Times and Sunday Times closing digital subscribers, including the Times Literary Supplement, reached 640,000 as of September 30, 2025, compared to 600,000 in the prior year. News Corp Australia's digital subscribers grew 3% to 1.162 million. The Sun's digital network reached 77 million unique users in September 2025 according to Meta Pixel, while the New York Post's digital network reached 94 million unique users according to Google Analytics.

Digital revenues represented 38% of News Media segment revenues in the quarter, flat compared to the prior year, and represented 36% of the combined revenues of newspaper mastheads. News Media margins increased from 3.3% a year ago to 5.5%, reflecting operational improvements and cost discipline.

The cost efficiencies stemmed from multiple initiatives including the commercial printing joint venture entered in the UK, reduced talk TV business costs, and continued operational improvements at News Corp Australia leveraging new capabilities for better EBITDA growth.

Financial position supports accelerated buybacks

News Corp reported net income from continuing operations of $150 million for the quarter, a 1% increase from $149 million in the prior year. Adjusted earnings per share reached $0.22 compared to $0.20 in the prior year, while reported EPS from continuing operations were $0.20 versus $0.21.

The company accelerated share repurchases in the first quarter to a rate of approximately $2.5 million per day, over four times the fiscal 2025 pace. Management continues to believe shares trade at a significant discount to net asset value given the sum of valuable parts and profit trajectory.

Free cash flow improved to $4 million for the three months ended September 30, 2025, compared to negative $49 million in the prior year. The improvement came from higher cash provided by operating activities from continuing operations of $85 million, up $59 million from $26 million in the prior year, partially offset by higher capital expenditures of $81 million versus $75 million.

The company expects strong free cash flow for the current fiscal year despite anticipating capital spending to increase moderately from the prior year. The increase in capital spending will be partially driven by investment in new supply chain logistics facilities for HarperCollins that should deliver additional cost savings, along with continued technology investment.

Chandrashekar noted that fiscal 2024 pacing would benefit from the repayment of approximately $380 million of Foxtel shareholder loans. The robust cash position and strong anticipated free cash flow support the elevated share repurchase rate while maintaining the dividend.

Outlook reflects digital momentum

Management provided outlook commentary for each segment, indicating confidence in continued digital revenue growth and operational improvements. At Dow Jones, overall trends remain healthy with expectations for continued strong revenue growth in B2B offerings. Cost growth will be slightly higher in quarter two primarily due to prior-year comparisons.

Digital Real Estate Services faces mixed conditions with Australian residential new buy listings down 3% in October. Realtor.com expects continued healthy revenue growth alongside adjacency growth as improving market conditions driven by mortgage rate reductions take effect.

Book Publishing expects quarter two to benefit from timing of ordering and stronger front list releases following encouraging October trends. News Media remains focused on continuing to drive cost efficiencies despite difficult advertising trends.

The strategic emphasis on digital transformation positions News Corp to capitalize on changing media consumption patterns while building sustainable revenue streams through subscriptions, professional information services, and content licensing deals. Industry dynamics continue shifting as platforms like Google alter traditional referral relationships, making direct-to-consumer relationships and content licensing increasingly important for publishers.

Timeline

• November 6, 2025 - News Corp reports Q1 FY2026 earnings with $2.14 billion revenue, 5% EBITDA growth
• September 2025 - Dow Jones acquires EcoMovement for EV charging station data capabilities
• August 2025 - News Corp accelerates share buyback rate to $2.5 million daily, four times FY2025 pace
• Fiscal 2025 - News Corp achieves record profitability on continuing operations basis with digital revenues reaching 62% of total business
• Fiscal 2018 - Digital revenues represented 32% of business, establishing baseline for transformation strategy

Summary

Who: News Corporation, a global media and information services company led by CEO Robert Thomson and CFO Lavanya Chandrashekar, reported earnings affecting marketing professionals who rely on Dow Jones professional information services, Wall Street Journal journalism, Realtor.com advertising solutions, and HarperCollins publishing platforms.

What: The company reported Q1 fiscal 2026 results showing 2% revenue growth to $2.14 billion with 5% Total Segment EBITDA growth to $340 million, driven by Dow Jones professional information business gaining 16% in Risk & Compliance revenues, Move's Realtor.com achieving 9% growth, and expanding AI content licensing partnerships while accelerating share repurchases to four times prior pace.

When: Results cover the three months ended September 30, 2025, with the earnings announcement released on November 6, 2025, at 5:00 p.m. EST.

Where: News Corp operates primarily in the United States, Australia, and the United Kingdom, with Dow Jones serving global professional information markets, REA Group dominating Australian digital real estate, Move operating Realtor.com in the US market, HarperCollins publishing internationally, and news media properties spanning multiple English-speaking markets including The Wall Street Journal, New York Post, The Times, The Sun, and News Corp Australia mastheads.

Why: The results matter to marketing professionals because they demonstrate successful digital transformation strategies in an industry disrupted by AI-driven search reducing publisher traffic, show sustainable models combining subscriptions, professional information services, and content licensing, reveal real estate advertising market recovery benefiting property marketers, highlight premium journalism's ability to command subscription pricing, and establish precedents for content creator compensation from AI companies affecting broader publisher economics and platform relationships.