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    News Corp (NWSA)

    CFO Change

    Business Description

    News Corporation (News Corp) is a global diversified media and information services company that operates across several segments, including digital real estate services, subscription video services, news and information services, and book publishing . The company manages its businesses in six segments, with Dow Jones being the largest contributor to overall company revenue . News Corp's offerings include digital real estate platforms, subscription television services, business and financial news, book publishing, and various news media brands .

    1. Dow Jones - Provides news and business information through brands like The Wall Street Journal, Barron’s, and MarketWatch, focusing on both consumer and professional information products, with digital revenue accounting for a significant portion of the segment's revenues .
    2. Digital Real Estate Services - Includes a 61.4% interest in REA Group and an 80% interest in Move, which operates Realtor.com®. REA Group specializes in property-related data and services, while Move offers real estate advertising solutions and online tools for landlords and tenants in the U.S. .
    3. Subscription Video Services - Holds a 65% interest in the Foxtel Group, the largest Australian-based subscription television provider, offering sports, entertainment, and news services via satellite and internet distribution, including the Australian News Channel operating Sky News Australia .
    4. Book Publishing - Represented by HarperCollins Publishers, one of the largest English-language publishers in the world, which has seen strong digital revenue growth .
    5. News Media - Includes various news and information services distributed under brands such as The Australian, Herald Sun, The Sun, and The Times .
    6. Other - Encompasses the company's general corporate overhead expenses and strategy costs .

    Q1 2025 Summary

    Initial Price$27.56June 29, 2024
    Final Price$26.50September 29, 2024
    Price Change$-1.06
    % Change-3.85%

    What went well

    • Strong growth in digital subscriptions at Dow Jones, with a 15% increase to 5.3 million subscribers, leading to a 4% rise in digital circulation revenue, with expectations of continued growth as promotional pricing phases out.
    • Revenue generation from AI agreements, including with OpenAI, is positively impacting the News Media and Dow Jones segments, contributing to future growth.
    • Dow Jones Professional Information Business shows strong underlying growth, with Risk and Compliance revenue up 16% and Dow Jones Energy revenue up 11%, despite a temporary impact from a dispute at Factiva; the segment contributes significantly to Dow Jones profits.

    What went wrong

    • Uncertainty in converting promotional subscribers to higher paying tiers: The company expressed caution about its ability to upgrade promotional subscribers, with Robert Thomson stating that "my powers and prognostication is somewhat limited."
    • Softness in print circulation impacting total revenue: There was "a little softness in print, which affected total circulation revenue," despite growth in digital subscriptions.
    • Lack of transparency on AI revenue contribution: When asked about AI revenues, the company couldn't provide specifics due to "confidentiality requirements," leading to uncertainty about the impact of AI deals on future revenues.

    Q&A Summary

    1. Company Structure Optimization
      Q: When can investors expect progress on optimizing company structures?
      A: Management acknowledged investor concerns about the disparity between the company's inherent asset value and its share price, despite a 40% increase over the past year [4]. They are in "active discussions" regarding Foxtel and are looking to maximize value, noting that recent activities like the REA team's bid to acquire Rightmove have made it a "dynamic quarter" [4].

    2. AI Revenue Impact
      Q: Can you detail AI revenue contributions and prospects for HarperCollins?
      A: Management could not provide specifics due to confidentiality but noted that AI revenue, particularly from the OpenAI deal, is impacting both the News Media section and Dow Jones [0]. They expect to see a positive year-on-year revenue movement across all agreements, including potential contributions to HarperCollins [0].

    3. Dow Jones Circulation Growth
      Q: How will Dow Jones improve circulation growth post-promotional periods?
      A: Overall circulation at Dow Jones rose 11% to 5.9 million subscribers, with digital-only up 15% to 5.3 million [1]. Management is confident that phasing out discounts and adjusting prices will lead to continued positive movements in digital circulation revenue, which increased 4% year-on-year [1]. They expect the positive digital trajectory to continue as engagement and retention rates improve, with revenue growth more weighted in the second half of the year [1].

    4. HarperCollins Margin Sustainability
      Q: Is the books margin expansion sustainable?
      A: The margin at HarperCollins improved to 14.8% from 12% in the same quarter last year, with reported EBITDA growth of 25% [2]. Digital sales rose 15%, with audio surging 26% and e-books up 7% [2]. Management believes the momentum is carrying into the current quarter and sees no reason for these trends to wane [2].

    5. Dow Jones Advertising Recovery
      Q: What's causing Dow Jones advertising weakness, and when will it recover?
      A: Advertising softness, particularly in finance and tech, is partly due to companies being apprehensive during election periods [3]. News media advertising represents only 7% of total revenue, with over half being digital [3]. Despite declines, management expects an increase in digital advertising revenue at Dow Jones and across other properties in the current quarter [3].

    6. Professional Information Business Growth
      Q: Can PIB growth return to mid-teens levels?
      A: Risk and Compliance revenues grew 16%, and Dow Jones Energy expanded 11% [5]. The overall growth appeared softer due to a year-on-year decline in Factiva revenue caused by a dispute impacting numbers by about 6% [5]. Management is working to resolve the dispute and enhance Factiva's user experience, including a new search deal with Google [5]. They believe that without the dispute, growth rates would align with expectations [5].

    7. Foxtel Shareholder Loans
      Q: What's the status of Foxtel shareholder loans post-repayment?
      A: The balance of Foxtel shareholder loans now sits at AUD 545 million [3].

    Key Metrics

    View all financials →
    Revenue by Segment - in Millions of USDQ2 2014Q3 2014Q4 2014FY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024Q4 2024FY 2024Q1 2025
    Digital Real Estate3691,5394034193884481,658457
    Subscription Video5011,9424864704555061,917501
    Dow Jones5462,1535375845445662,231552
    News and Information Services--------
    Subscription Video Services--------
    Book Publishing4461,9795255505065122,093546
    News Media5712,2665485635305452,186521
    Digital Real Estate Services--------
    Cable Network Programming--------
    Digital Education--------
    Other162657166175159185685161
    Circulation and Subscription1,1294,4471,1291,1191,1211,144,5091,157
    Advertising4241,687391438358421,607381
    Consumer4251,8995025274844872,000521
    Real Estate2931,1893113273013451,284357
    Total Revenue2,4339,8792,4992,5862,4232,57710,0852,577
    Revenue by Geography - in Millions of USDQ2 2014Q3 2014Q4 2014FY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024Q4 2024FY 2024Q1 2025
    U.S. and Canada-3,967----4,008-
    - U.S.------3,900-
    Europe-1,669----1,737-
    - U.K.------1,300-
    Australasia and Other-4,243----4,340-
    - Australia------4,000-
    Total Revenue-9,879-2,586--10,0852,577

    Executive Team

    NamePositionStart DateShort Bio
    K. Rupert MurdochExecutive Chair2012K. Rupert Murdoch served as the Executive Chair of News Corporation since 2012. He stepped down on November 15, 2023, and will serve as Chairman Emeritus following his retirement .
    Robert J. ThomsonChief Executive OfficerJanuary 2013Robert J. Thomson has been the CEO of News Corp since January 2013. He previously held roles such as Editor-in-Chief of Dow Jones and Managing Editor of The Wall Street Journal .
    Susan PanuccioChief Financial Officer2017Susan Panuccio has been the CFO of News Corp since 2017. She previously served as CFO of News Corp Australia and News UK, and joined the company in 2002 .
    David B. PitofskyGeneral Counsel2015David B. Pitofsky has been the General Counsel of News Corporation since 2015. He also served as Chief Compliance Officer until August 2023 and was previously a partner at Goodwin Procter LLP .
    Lavanya ChandrashekarIncoming Chief Financial OfficerJanuary 1, 2025Lavanya Chandrashekar will become the CFO of News Corp on January 1, 2025. She has nearly 30 years of experience in finance, having served as CFO of Diageo plc and held senior positions at Procter & Gamble and Mondelēz International .

    Questions to Ask Management

    1. With digital circulation revenues at Dow Jones rising only 4%, despite a 15% increase in digital-only subscriptions, how confident are you in sustaining this growth, and what strategies are you implementing to improve revenue conversion from the growing subscriber base?

    2. Given that advertising revenues at Dow Jones declined 7%, with digital advertising down 5% due to softness in the technology and finance categories, are there specific factors causing this underperformance compared to peers, and when do you expect advertising revenues to recover?

    3. The Factiva dispute impacted growth by about 6% this quarter, affecting the Professional Information Business's overall growth to 8% from the low to mid-teens last year. Can you provide more details on this dispute, its resolution timeline, and how it influences your growth outlook for this segment?

    4. You mentioned being in active discussions over the future of Foxtel, and the Foxtel loan balance now sits at AUD 545 million. Can you elaborate on the strategic options being considered for Foxtel and how these might unlock shareholder value and address the perceived undervaluation of your assets?

    5. With ongoing legal actions against AI companies like Perplexity and expectations of higher AI-related costs, including legal expenses, how do you balance the costs and benefits of litigation versus partnership in the AI space, and what is your strategy for monetizing your content amid these challenges?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateSeptember 22, 2021
    End Date/DurationNo time limit
    Total additional amount$1 billion
    Remaining authorization amount$422 million (as of September 30, 2024)
    DetailsAllows purchase of Class A and Class B Common Stock; may be modified, suspended, or discontinued at any time

    Past Guidance

    Q1 2025 Earnings Call

    • Issued Period: Q1 2025
    • Guided Period: FY 2025
    • Guidance:
      1. Dow Jones: Focus on B2B growth, improved circulation revenue growth, modestly higher expenses due to investment.
      2. Digital Real Estate Services: Continued investment in technology and content, anticipated revenue improvements.
      3. Book Publishing: Strong digital revenue growth, benefits from lower returns and cost moderation.
      4. Subscription Video Services: Streaming revenues growth, segment EBITDA slightly down due to costs.
      5. News Media: Mixed performance with challenging advertising conditions, advertising revenues account for 7% of total revenue .

    Q4 2024 Earnings Call

    • Issued Period: Q4 2024
    • Guided Period: FY 2025
    • Guidance:
      1. Subscription Video Services: Scaling streaming products, modestly higher programming costs.
      2. Dow Jones: Focus on B2B growth, improved circulation revenue growth.
      3. Book Publishing: Further profit improvements expected.
      4. News Media: Benefits from cost savings, focus on first-party data and video.
      5. Open AI Partnerships: New revenue expected.
      6. Capital Expenditures (CapEx): Expected to be moderately higher.
      7. Digital Real Estate: Year-over-year growth expected, continued investment strategy.
      8. Cost Management: Moderately higher expenses expected.
      9. Foxtel: Reviewing strategic and financial options .

    Q3 2024 Earnings Call

    • Issued Period: Q3 2024
    • Guided Period: Q4 2024 and FY 2024
    • Guidance:
      1. Digital Real Estate Services: Growth in Australian listings, continued reinvestment at Move.
      2. Subscription Video Services: Modestly higher expenses, potential softness in streaming revenues.
      3. Dow Jones: Strong revenue and profitability, modestly higher expenses.
      4. Book Publishing: Improved margins, strong Q4 performance expected.
      5. News Media: Challenging advertising revenue trends, focus on cost efficiencies.
      6. Capital Expenditures (CapEx): Expected to be stable .

    Q2 2024 Earnings Call

    • Issued Period: Q2 2024
    • Guided Period: Q3 2024 and FY 2024
    • Guidance:
      1. Dow Jones: Strong revenue and profitability, modestly higher expenses.
      2. Book Publishing: Improved margins, stable industry revenue trends.
      3. News Media: Challenging advertising trends, focus on cost efficiencies, negative translation effects expected.
      4. Digital Real Estate Services: Improvements in lead volumes, reinvestment in marketing and product development.
      5. Subscription Video Services: Modestly higher expenses, potential impact on profitability due to external factors .

    Latest news

    Recent developments and announcements about NWSA.

    Corporate Leadership

      CFO Change

      ·
      Nov 7, 2024, 12:00 AM

      Susan Panuccio, the current Chief Financial Officer (CFO) of News Corp, will be leaving her position on January 1, 2025. She will be succeeded by Lavanya Chandrashekar, who previously served as CFO of Diageo. Panuccio will remain with the company as a Senior Advisor until June 29, 2025, to ensure a smooth transition .