Q2 2025 Earnings Summary
- Dow Jones is expected to see accelerated year-over-year growth in the second half, driven by higher sales and benefits from the dynamic pricing system, which is starting to bring benefits.
- Margin expansion at Dow Jones is anticipated, as the higher-margin Professional Information Business (PIB) takes a larger share of revenue, leading to continued improvement in profitability.
- News Corp is focused on maximizing shareholder returns, with a $1 billion buyback provision underway, and has received upgrades to investment grade credit rating by both Moody's and S&P Global, reflecting the company's strong financial position.
- The Factiva dispute had more than a 300 basis point negative impact on Dow Jones revenue, and management is not providing margin guidance for the second half, indicating uncertainty about future profitability in this segment.
- Management expects growth at Book Publishing to moderate in the second half due to the phasing of frontlist releases into the first half, suggesting potential slowdown in revenue and profits in upcoming quarters.
- The challenging U.S. mortgage market could negatively affect realtor.com's performance, potentially hindering growth in the Digital Real Estate segment, and management acknowledges these market conditions may impact strategic decisions regarding realtor.com.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | -32% (from $2,586M to $1,757M) | Total revenue declined by 32% YoY, which may reflect strategic or operational adjustments and potential discontinuation or reclassification of revenue streams; this is notable since the major business segments reported steady performance, suggesting the drop came from areas outside these segments. |
Cost of Goods Sold | -49% (from $1,281M to $652M) | COGS fell by 49% YoY, a sharper decline than the revenue drop, likely due to effective cost-cutting measures or reduced production volumes as a consequence of lower revenues, highlighting an improved cost structure relative to prior periods. |
Operating Income (EBIT) | +78% (up to $431M) | Operating Income surged by 78% YoY despite lower revenue, driven by lower operating expenses and enhanced cost efficiencies—benefits amplified by reductions in other expense categories such as D&A, indicating a strong internal expense discipline compared to the previous period. |
Net Income & Basic EPS | +55% (up to $283M); Basic EPS from 0.28 to 0.38 (≈+36% improvement) | Net Income increased by 55% YoY with Basic EPS improving by approximately 36%, reflecting the impact of improved operating profitability and lower non-operating costs, despite overall revenue pressure, thus showing a stronger bottom‐line performance compared to the previous period. |
Depreciation & Amortization | -80% (from $179M to $36M) | Depreciation & Amortization costs dropped by 80% YoY, which may be attributable to lower capital expenditure levels, asset disposals, or changes in amortization schedules, significantly contributing to margin expansion relative to the previous period. |
Interest Expense | Reversed to - $15M (from a $25M expense) | Interest Expense turned into net interest income, reversing from a $25M expense in Q2 2024 to –$15M in Q2 2025. This dramatic swing, exceeding 100%, suggests an improvement in interest income possibly due to a stronger cash position or refinancing benefits compared to the previous period. |
Business Segment Revenues | Steady levels (Dow Jones: $552M, Book Publishing: $546M, News Media: $541M, Digital Real Estate Services: $457M) | Segment revenues remained at steady levels across key areas, implying that the overall revenue decline was not driven by these core segments. This steadiness coupled with sharp changes in other financial metrics indicates that other factors—possibly non-core activities or structural adjustments—contributed to the overall metric changes. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Dow Jones - Circulation Revenue Growth | FY 2025 | Expected to improve, particularly in the second half of FY 2025, as phased digital subscription step-up pricing takes effect. | No current guidance | no current guidance |
Dow Jones - B2B Growth | FY 2025 | Continued focus on upselling, new products, and strong growth in Risk and Compliance and Dow Jones Energy. | No current guidance | no current guidance |
Dow Jones - Expenses | FY 2025 | Expected to be modestly higher year-over-year due to investments, particularly in B2B. | No current guidance | no current guidance |
Realtor.com - Revenue Improvements | FY 2025 | Anticipates revenue improvements driven by technology enhancements, content upgrades, and expected interest rate cuts. | No current guidance | no current guidance |
Book Publishing - Profitability | FY 2025 | Expected to see further profit improvements in FY 2025, though at a more modest rate due to normalized prior-year comparisons. | No current guidance | no current guidance |
Subscription Video Services - Streaming | FY 2025 | Strategy to scale streaming offerings while retaining high-value broadcast customers through improved ARPU and churn measures. | No current guidance | no current guidance |
Subscription Video Services - Hubbl Investment | FY 2025 | Rate of investment expected to be lower for the remainder of FY 2025. | No current guidance | no current guidance |
News Media - Cost Savings | FY 2025 | Expected to benefit from lower Talk TV costs, a new commercial printing joint venture in the U.K., and ongoing operational efficiencies. | No current guidance | no current guidance |
News Media - AI-Related Costs | FY 2025 | Anticipated to be higher due to ongoing legal and operational expenses related to artificial intelligence. | No current guidance | no current guidance |
Dow Jones - Revenue Growth | Second half of FY 2025 | No prior guidance | Expected to improve in the second half of FY 2025, driven by higher sales and benefits from dynamic pricing systems. | no prior guidance |
Dow Jones - Expenses | Second half of FY 2025 | No prior guidance | Anticipated to be modestly higher year-over-year due to investments, particularly in B2B products. Cost efficiencies will remain a focus to drive growth. | no prior guidance |
REA Group - Residential New Buy Listings | Second half of FY 2025 | No prior guidance | Residential new buy listings in Australia for January were up 3%. Refer to REA’s earnings release for more detailed commentary. | no prior guidance |
Realtor.com - Technology & Product Focus | Second half of FY 2025 | No prior guidance | Focus will remain on technology improvements, enhanced content, and product offerings; revenue improvement expected from adjacencies like rentals, sellers, and new homes when the housing market recovers. | no prior guidance |
Book Publishing - Profit Growth | Second half of FY 2025 | No prior guidance | Expected to continue in FY 2025, but at a more modest rate due to difficult prior-year comparisons. Growth in Q3 FY 2025 will be impacted by the phasing of frontlist releases. | no prior guidance |
News Media - Currency Impact | Second half of FY 2025 | No prior guidance | Currency translation is expected to be a headwind in the second half of FY 2025 due to current spot rates for the Australian dollar and pound sterling versus the U.S. dollar. | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Dow Jones | Q2 2025 | Expected to improve year-over-year | 552Vs. 584 in Q2 2024 | Missed |
Digital Real Estate | Q2 2025 | Anticipates revenue improvements driven by technology and content | 457Vs. 419 in Q2 2024 | Met |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Dow Jones subscription growth | Q1 2025: Total subscriptions rose 11% y/y to 5.9M; digital-only +15% y/y. Q3 2024: Digital-only +17% y/y. | Q2 2025: Subscriptions +9% y/y to ~5.9M; digital-only +13%. | Consistently mentioned. Growth pace slightly moderated y/y but remains positive. |
Dynamic pricing | Q1 2025: Successful step-ups from promo pricing, driving circulation revenue growth. Q3 2024: Above-average price lifts. | Q2 2025: Continues supporting higher ARPU and revenue uplift. | Ongoing focus. Strategy remains a key driver for subscription revenue improvements. |
Margin expansion | Q1 2025: Dow Jones margin to 23.7%. Q3 2024: Dow Jones margin +110 bps to 21.7%. | Q2 2025: Dow Jones margin rose from 27.9% to 29%. | Recurring theme. Margins continue to improve across Dow Jones. |
Professional Information Business | Q1 2025: +8% revenue y/y despite Factiva dispute. Q3 2024: +10% revenue y/y, >90% retention. | Q2 2025: +4% revenue y/y with ~300 bps drag from Factiva, Risk & Compliance +11%. | Still growing, though Factiva dispute slowed overall momentum. |
Factiva dispute | Q1 2025: -6% drag on PIB growth. Q3 2024: No mention. | Q2 2025: ~300 bps adverse impact on revenue, more pronounced than before. | Re-emerged. Larger negative effect called out this quarter. |
AI revenue agreements | Q1 2025: OpenAI deal mentioned but details confidential. Q3 2024: No payments for Gen AI use in renewed Google deal. | Q2 2025: Partnership with OpenAI cited as revenue contributor; IP litigation concerns vs. Perplexity AI. | Expanding discussions. Potentially large future impact on News Media segment. |
Realtor.com performance | Q1 2025: $140M revenue (-1% y/y), leads -1%, strong user numbers. Q3 2024: Revenue -6%, leads +4%. | Q2 2025: Adjacency revenue +51% y/y, leads -2%, unique users -6%. | Continues to face tough market. Adjacent revenue strength helps offset mortgage headwinds. |
Book Publishing growth moderation | Q1 2025: Growth expected but at modest rate; revenue +4%. Q3 2024: Stable trends; margins to improve vs. prior year. | Q2 2025: Growth to moderate further in the second half. | Repeated caution. Publisher expects slowing momentum in back half. |
Shareholder returns (buybacks) | Q1 2025: No mention. Q3 2024: No mention. | Q2 2025: $1B buyback ongoing; 70% of free cash flow returned; investment-grade rating upgrades. | Newly highlighted. Signals stronger financial position and shareholder confidence. |
Cost-saving initiatives | Q1 2025: News Media costs down; printing JV with DMG; TalkTV retool. Q3 2024: 5% headcount cut, pivot to TalkTV streaming. | Q2 2025: Focus on discipline across segments; fosters EBITDA growth, especially in News Media. | Consistent efforts. Remains a critical profitability lever. |
Sum of the parts discount | Q1 2025: CEO cited gap between share price & asset value. Q3 2024: Acknowledged significant discount, pledging solving. | Q2 2025: Structural reform (Foxtel sale), but no direct “discount” reference. | Less direct mention. Transformation continues; still a factor in valuation discussions. |
Uncertainty around promo conversions | Q1 2025: Strong confidence stepping up promo subs to higher tiers. Q3 2024: No mention. | Q2 2025: Ongoing subscriber phasing from discount to standard rates, fueling digital revenue. | Maintained optimism. Continues to track positively, though slower than initial surge. |
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Capital Management and Foxtel Sale Proceeds
Q: Will you use Foxtel sale proceeds for capital returns or reinvestment?
A: We are focused on maximizing shareholder value. We have a $1 billion buyback underway , and last fiscal year, we returned 70% of our available free cash flow through buybacks. The significant increase in free cash flow gives us optionality, and recent upgrades to investment grade by Moody's and S&P reflect our strength. -
Company Structure Optimization
Q: Are there plans to further simplify the company structure?
A: We constantly review our structure. The Foxtel deal is evidence of decisive action. We have valuable assets like Realtor.com, whose seller-related revenues, new homes, and rentals grew 51% year-over-year. Realtor.com has a higher rate of visits per unique visitor than Zillow, showing a quality audience. -
Dow Jones Earnings Growth Drivers
Q: What is driving Dow Jones earnings growth in the second half?
A: It's a combination of 9% total subscriber growth to 5.9 million , an 8% increase in digital circulation revenues , and positive trends in moving subscribers from discounted offers to standard pricing. Risk and Compliance and Dow Jones Energy are also faring well. Seasonality will help with more additions in the second half. -
Dow Jones Margin Expansion
Q: How did the Factiva dispute impact Dow Jones margins, and what's the margin outlook?
A: Factiva had more than a 300 basis point impact on revenue , affecting margins accordingly. We won't provide specific margin guidance, but we will remain disciplined on cost, focus on profitability, and expect continued upside in margins. -
Digital Revenue Growth at Dow Jones
Q: Does Dow Jones expect revenue or earnings growth to accelerate, and will you invest more?
A: We always seek opportunities for Dow Jones. The increase in digital has led to 81% of revenues from digital, up from 78% last year. Higher-margin PIB expansion increased margins from 27.9% to 29%. We believe margins will continue to expand as PIB grows. -
Realtor.com Performance
Q: Can you elaborate on Realtor.com's recent performance?
A: Realtor.com's seller-related revenues, new homes, and rentals grew 51% year-over-year. According to comScore, Realtor.com has a higher rate of visits per unique visitor than Zillow, indicating a quality audience. -
Spotify Partnership Impact
Q: What have you achieved with the Spotify deal after one year?
A: Our partnership with Spotify has changed the audiobook market. Audio sales were 13% higher, and even e-books were 6% higher after sluggish years. We see changing consumer behavior and are benefiting from the expanded audience. -
Book Publishing Outlook
Q: What's the outlook for Book Publishing in the coming quarters?
A: We have a full roster at HarperCollins and a strong backlist, which rose from 60% to 61% of total sales. However, growth will moderate in the second half due to frontlist phasing into the first half.