NWSA Q1 Earnings Call: Digital Growth and Portfolio Restructuring Drive Results

Global media and publishing company News Corp (NASDAQ:NWSA) beat Wall Street’s revenue expectations in Q1 CY2025, but sales were flat year on year at $2.01 billion. Its non-GAAP profit of $0.17 per share was 27.5% above analysts’ consensus estimates.

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StockStory’s Take

News Corp’s first quarter results were shaped by its transformation toward digital and recurring revenues, as discussed by CEO Robert Thomson and CFO Lavanya Chandrashekar. Dow Jones stood out, with Thomson highlighting, “Dow Jones posted a healthy 6% revenue growth, while profitability surged 12% and the margin rose from 21.7% to 23%.” The company benefited from an improved product mix within Dow Jones’ professional information business, including double-digit growth in Risk & Compliance and Energy. Management also cited cost discipline and the completed sale of Foxtel, which refocused investment on core areas. Book publishing saw modest revenue growth, supported by new acquisitions and digital audio partnerships, while Digital Real Estate maintained profitability despite challenging property market conditions.

Looking forward, News Corp’s strategic focus remains on its three pillars: Dow Jones, Digital Real Estate, and Book Publishing. Management signaled continued investment in digital products and B2B services, particularly at Dow Jones. CFO Lavanya Chandrashekar noted, “the team remains focused on B2B growth including up-selling and new products across Risk and Compliance and Dow Jones Energy.” The company expects ongoing margin improvement as higher-margin segments expand, while also monitoring potential headwinds such as volatile advertising markets and shifting consumer demand for books. Management believes that product innovation and digital engagement will help offset macroeconomic uncertainties, with the divestiture of Foxtel expected to lower capital intensity and increase returns on invested capital.

Key Insights from Management’s Remarks

Management attributed first quarter performance to digital expansion, cost control, and a realignment of core business segments following the Foxtel divestiture.

• Dow Jones digital momentum: Dow Jones saw its fastest digital circulation revenue growth in three years, with digital-only subscriptions up 9% year-on-year and total consumer subscriptions surpassing six million, driven by targeted ARPU improvement and a dynamic pricing strategy.
• Professional information services growth: The Risk & Compliance and Energy segments at Dow Jones both posted double-digit revenue gains, attributed to new products, customer acquisition, and increased demand for regulatory compliance solutions amid global volatility.
• Digital Real Estate resilience: The Digital Real Estate segment achieved margin expansion and higher profitability, despite flat property listings and macro headwinds in the U.S. housing market. New revenue streams—rentals, seller, and new homes—now account for 22% of realtor.com revenue.
• Book publishing diversification: HarperCollins expanded digital revenues, particularly through audiobooks and a partnership with Spotify, and integrated a newly acquired German publisher. Christian publishing and the backlist catalog contributed to stable performance, offsetting lower general book sales due to the timing of new releases.
• Portfolio restructuring: The completed sale of Foxtel to DAZN removed significant debt from News Corp’s balance sheet and enabled a sharper focus on its three core growth pillars. Management emphasized that this restructuring is expected to be earnings accretive and to improve capital allocation.

Drivers of Future Performance

News Corp’s outlook is shaped by ongoing investment in digital businesses, margin expansion in higher-value segments, and caution around advertising and book market volatility.

• Continued B2B product growth: Management cited ongoing investments in Dow Jones’ Risk & Compliance and Energy businesses, expecting double-digit growth to persist as demand for compliance and data solutions remains strong. Recent acquisitions, such as Dragonfly and Oxford Analytica, are expected to broaden the product set and support future revenue.
• Focus on digital engagement: Across Dow Jones and Digital Real Estate, News Corp plans to enhance digital offerings and leverage dynamic pricing and technology upgrades to drive subscription and engagement metrics. Management is monitoring subscriber churn and elasticity as they move customers to higher-priced tiers.
• Macroeconomic and cost pressures: While management expects margin improvements from portfolio mix and cost discipline, they acknowledged ongoing risks from advertising market fluctuations, book release timing, and legal costs related to artificial intelligence and intellectual property. The company also noted that tariffs are not expected to materially impact results at present.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will monitor (1) Dow Jones’ ability to sustain double-digit growth in Risk & Compliance and Energy, (2) execution of digital engagement and pricing strategies at Dow Jones and realtor.com to drive subscription revenue, and (3) continued progress in cost discipline, especially in light of legal and technology investments. Additionally, we will watch for signs of stabilization in the U.S. property and book markets that could influence segment performance.

News Corp currently trades at a forward P/E ratio of 31.1×. In the wake of earnings, is it a buy or sell? Find out in our full research report (it’s free).

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