Detailed narrative
Digital Transformation and Profitability
News Corp reported record profitability in Q4 FY26, with revenue up 11% to $2.3 billion and total segment EBITDA soaring 31% to $423 million. This marks 12 consecutive quarters of revenue growth and 13 consecutive quarters of EBITDA growth on a continuing operations basis. The company's transformation to a majority-digital business, with 61% of FY26 revenues now digital, and an expanded portfolio of recurring revenues, underpins this robust performance and margin expansion.
AI Strategy and Content Monetization
The company is actively engaging with the AI age, emphasizing the critical role of quality content. News Corp has established content relationships with OpenAI and Meta and is in advanced discussions with other companies. Concurrently, it is pursuing aggressive legal action against entities like Perplexity and Brave for unauthorized use of copyrighted material, highlighting a "woo and sue" approach to protect its intellectual property. A $1.5 billion settlement with Anthropic for authors and publishers was also noted.
Capital Returns and Shareholder Value
News Corp significantly increased its capital return to shareholders, with share buybacks accelerating to $643 million for the fiscal year, over four times the prior year's rate. In Q4 alone, $184 million in shares were repurchased. This aggressive capital return strategy is supported by a strong balance sheet and robust free cash flow generation, which rose 42% to $811 million for the full year.
Dow Jones Performance and B2B Growth
Dow Jones delivered impressive results, with Q4 revenues up 7% to $644 million and EBITDA growing 20% to $181 million. B2B capabilities continue to flourish, accounting for 50% of segment EBITDA in Q4. Risk and Compliance revenues grew 11%, while Dow Jones Energy saw modest 4% growth but expects improvement. The business remains on track for its goal of $1 billion in segment EBITDA by FY30, driven by digital circulation growth and yield optimization.
Digital Real Estate Resilience and Innovation
Despite challenging housing markets, Digital Real Estate Services posted strong Q4 performance, with revenues up 19% to $553 million and EBITDA expanding 46% to $222 million. Realtor.com achieved 13% revenue growth, marking its seventh consecutive quarter of expansion, driven by premium offerings, AI-inspired product innovation, and high-quality leads. Realtor.com also demonstrated industry leadership in consumer engagement, with 297 million visits in Q4 and 5.5 visits per unique user.
Book Publishing Strength and Digital Expansion
HarperCollins finished the fiscal year strongly, with Q4 revenue up 15% to $566 million and EBITDA rising 14% to $57 million. This performance was driven by a strong frontlist and robust backlist sales, benefiting from adaptations and popular series. Digital demand was strong, with revenues growing 12%, including a 16% boost in audiobooks and an 11% resurgence in e-books, supported by partnerships with platforms like Spotify and Audible.
Simplification and Optionality
Management reiterated its commitment to simplifying the company structure, citing past divestitures like Foxtel and News America Marketing. While acknowledging investor frustration with complexity, the company emphasized its "obvious optionality" regarding structure, particularly concerning Realtor.com, and aims to maximize value for investors when market conditions improve.