News Corp cements AI input status as Dow Jones and Digital Real Estate drive momentum
Meta deal, Anthropic settlement, and accelerating buyback underscore pivot to high-margin data and content licensing.
NWS · Earnings Call · 2026-05-07
AI inputs and the content moat
News Corp delivered its 12th straight quarter of profitability growth, with total revenue up 9% to $2.2 billion and segment EBITDA up 18% to $343 million. The quarter’s narrative was dominated by the company’s positioning as an “AI inputs company,” a theme brought into sharp focus by the new Meta partnership, the $1.5 billion Anthropic settlement, and Bloomberg’s acquisition of Dow Jones AI rights. CEO Robert Thomson framed it directly:
AI engines require information, and they need constant updates to remain relevant. Otherwise, they are merely retrospective.
The OpenAI relationship was highlighted as more than transactional, with negotiation momentum across horizontal and vertical AI players.
The AI deal flow is a deliberate evolution of a strategy articulated in prior calls. In February, Thomson warned that AI is retrospective and needs real-time data, a point he reinforced with the memorable moat analogy:
It is a moat with saltwater crocodiles, with sharks, and an even more dangerous species, lawyers.
The current quarter’s deals validate that positioning, turning defended content into a licensing engine.
Dow Jones: from publisher to intelligence platform
Dow Jones remained a core growth engine, with revenues up 8% to $619 million and segment EBITDA up 11% to $147 million. The Professional Information business grew 11%, led by Risk & Compliance (+19%) and the energy business (+12%), with customer retention near 90%. Management reiterated the path to $1 billion annual segment EBITDA within five years, a target detailed at the March investor briefing. The investor briefing itself, now a recurring event, is part of a deliberate effort to reframe Dow Jones as a digital intelligence platform rather than a legacy publisher. As Thomson noted in the Q&A, the Professional Information business now accounts for about 40% of revenue but a significantly larger share of EBITDA, driving margin expansion. “Overall, the Professional Information business accounted for about 40% of revenues in Q3, but a significantly larger percent of EBITDA as it is a higher-margin business.” — Robert Thomson, Chief Executive Officer · 2026-05-07
The company also continues to invest in yield optimization, including raising the full price of WSJ digital subscriptions to $44.99. This strategy, echoed in prior calls, is beginning to show in ARPU trends. Total Revenue rose to $2.2 billion, and operating margins expanded. Operating Margin reached 8.6%, reflecting the mix shift toward higher-margin data and licensing.
Digital Real Estate and the housing recovery
Digital Real Estate Services posted strong results despite a sluggish U.S. housing market. Realtor.com revenues rose 10% to $148 million, with visit share reaching 31% in Q3, up from 29% in Q2. CFO Lavanya Chandrashekar emphasized the engagement edge: “visit shares are up at 31%, which is 6x that of Homes.com and 3x that of Redfin.” — Lavanya Chandrashekar, Chief Financial Officer · 2026-05-07 Meanwhile, REA grew 20% (8% constant currency), helped by a 14% increase in yield and double-digit growth in the financial services vertical. The housing market remains the wildcard; as Thomson noted, existing home sales are near historic lows, but the team has retooled the site to capture higher revenue per home when rates eventually fall. This is a deliberate long-term bet, consistent with prior commentary on Realtor’s potential. “We have built a site that is a holistic housing experience and ... the leader in residential property news in the U.S.” — Robert Thomson, Chief Executive Officer · 2025-11-06
Capital allocation and forward outlook
The capital return program accelerated sharply, with $193 million repurchased in Q3 and $459 million year-to-date. Management continues to believe the stock is materially undervalued versus net asset value. This buyback intensity, funded partly by the Foxtel loan repayment, is a continuation of a shareholder-friendly stance. As Thomson said in August 2025: “We have worked hard as a company to improve our free cash flow and return on investment. And we now have the ability to reward shareholders with cap returns.” — Robert J. Thomson, Chief Executive Officer · 2025-08-06 Free cash flow was negative in Q3 due to working capital timing, but management expects strong full-year growth despite higher CapEx.
Forward guidance remains optimistic, with fourth-quarter strength driven by Dow Jones growth, realtor.com innovation, and a strong frontlist at HarperCollins. The California Post launch costs pressured News Media EBITDA, but management frames this as a disciplined investment. With AI licensing momentum, a robust balance sheet, and an accelerated buyback, News Corp is—as Thomson put it—an “AI inputs company” with a moat that seems to be widening. “IP powers AI. IP is an input imperative.” — Robert Thomson, Chief Executive Officer · 2026-05-07 The market has taken notice: the stock is up over 22% in the past 90 days.