News Corp reported a strong Q4 FY2026 with record profitability, driven by its digital transformation and a significant increase in AI licensing revenues. The company highlighted its growing AI partnerships with OpenAI and Meta as key contributors to future growth. 13th consecutive quarter of year-over-year total segment EBITDA growth; Q4 EBITDA up 31% with margins expanding 280 bps.
News Corp reported a strong Q4 FY2026 with record profitability, driven by its digital transformation and a significant increase in AI licensing revenues. The company highlighted its growing AI partnerships with OpenAI and Meta as key contributors to future growth. 13th consecutive quarter of year-over-year total segment EBITDA growth; Q4 EBITDA up 31% with margins expanding 280 bps.
Management is confident in AI licensing deals, noting significant deals in the pipeline with horizontal and vertical players, and is pursuing litigation against those who scraped content and their clients. They highlight AI's potential in audiobooks and translations.
13th consecutive quarter of year-over-year total segment EBITDA growth; Q4 EBITDA up 31% with margins expanding 280 bps.
Free cash flow increased 42% to $811 million in fiscal 2026.
AI licensing deals with OpenAI and Meta are now contributing to revenue, with more deals in the pipeline.
Management is confident in AI licensing deals, noting significant deals in the pipeline with horizontal and vertical players, and is pursuing litigation against those who scraped content and their clients. They highlight AI's potential in audiobooks and translations.
Management reports robust demand across segments: Dow Jones Energy pipeline is robust with strong customer retention (~90%), Realtor.com revenue growth continues despite housing challenges, and book publishing benefits from strong front-list demand. Digital subscriptions and advertising show encouraging trends.
Capex increased modestly by $19 million, funding technology investments and supply chain logistics upgrades for HarperCollins. Management expects free cash flow improvement as a key focus, with continued support for growth engines.
Management highlights record profitability, accelerated buybacks, and multiple growth catalysts, with a clear stance that the stock is materially undervalued.
“Lead volume rose 1% with average monthly users at 68 million, down 6%, which is reflective of both the broader market trends and the repositioning of consumer acquisitions to higher quality and higher value leads.”
“What Realtor has been creating is a chasm between itself and other companies. because of the way that they've been building proprietary IP that no AI engine can legally scrape.”
Meta's licensing deal with News Corp is now contributing to revenue, indicating Meta is paying for credible news content across its platforms.
“The Meta deal is now part of the business, not just at Dow Jones, but also for news media, as you'll see over successive quarters.”
Hi, Robert. Hi, Lavanya. My question sort of touches on the AI licensing deals, and I appreciate that you're a little bit restricted in what you can say, but I think there's a lot of interest in the market. around those deals. So I guess to the extent you can talk about this, the Dow Jones and News Media, can you provide some colour around the margin profile of those deals? I mean, it's particularly stark that Dow Jones EBITDA margin was up over 300 basis points in the quarter. So is there any cost associated with those deals? Is that a key contributor to the Dow Jones margins? And I wonder if as part of that answer, can you confirm whether the Meta deal is which you announced in March is…
Obviously, I can't go into detail regarding confidential deals. These deals are important. There are more deals on the way. The Meta deal is now part of the business, not just at Dow Jones, but also for news media, as you'll see over successive quarters. And look, it's a tribute to Open AI and Meta that they have taken a principled approach in valuing our important content, our IP. But it's also true that there are more deals to come and hopefully not too much litigation because essentially those two companies have established benchmarks that other principled companies should follow.
Realtor.com's average monthly users (AMU) declined 6% but lead volume rose 1%, indicating a strategic shift towards higher-quality leads and improved monetization despite market headwinds. — This suggests Realtor.com is sacrificing raw traffic for more profitable user segments, which could lead to better revenue per user and market share gains over competitors like Zillow.
“visitors spend far more time and view more pages at Realtor than any other competitor, including Zillow or Redfin or homes.com.”
Sorry, if I could just ask, I'm sorry, the realtor.com, if you can hear me, can you just explain a little bit further about this really strong 13% revenue growth there? I mean, it's been going on for several quarters you guys have talked about, and we can see on the outside, but what have you guys been doing differently at realtor.com to help explain that really strong growth there in this lousy market? Thank you.
Well, it's a tribute to Damien Eales and the team at Realtor, in particular in the way that the site has been developed. I mean, when people talk about moats in the AI age, moats is a strangely medieval concept. What Realtor has been creating is a chasm between itself and other companies. because of the way that they've been building proprietary IP that no AI engine can legally scrape. It's trusted truthful information that's crucial for customers. No buyer or seller or agent wants housing hallucinations. And that's why the visitors spend far more time and view more pages at Realtor than any other competitor, including Zillow or Redfin or homes.com. And these are Independent ComScore numbers, not home-brewed metrics. We have 5.5 visits per unique visitor, 1.5 times out of zero and almost three times out of homes. That underpins the success.
News Corp is leveraging proprietary data and AI in real estate to create a 'chasm' with competitors, making it harder for AI engines to scrape their content and erode their value.
Sorry, if I could just ask, I'm sorry, the realtor.com, if you can hear me, can you just explain a little bit further about this really strong 13% revenue growth there? I mean, it's been going on for several quarters you guys have talked about, and we can see on the outside, but what have you guys been doing differently at realtor.com to help explain that really strong growth there in this lousy market? Thank you.
Well, it's a tribute to Damien Eales and the team at Realtor, in particular in the way that the site has been developed. I mean, when people talk about moats in the AI age, moats is a strangely medieval concept. What Realtor has been creating is a chasm between itself and other companies. because of the way that they've been building proprietary IP that no AI engine can legally scrape. It's trusted truthful information that's crucial for customers. No buyer or seller or agent wants housing hallucinations. And that's why the visitors spend far more time and view more pages at Realtor than any other competitor, including Zillow or Redfin or homes.com. And these are Independent ComScore numbers, not home-brewed metrics. We have 5.5 visits per unique visitor, 1.5 times out of zero and almost three times out of homes. That underpins the success.