News (NWS) - 2025 Q4 - Annual Report

PART I ITEM 1. BUSINESS News Corporation is a global, diversified media and information services company operating across five segments, focusing on content, digital distribution, and AI monetization - News Corporation is a global, diversified media and information services company with five reportable segments, focusing on premium content, digital distribution, and new licensing/partnership arrangements with technology and AI-focused platforms[14][15] Fiscal Year Ended June 30, 2025 Segment Revenues and EBITDA | Segment | Revenues (in millions) | EBITDA (in millions) | | :----------------------- | :--------------------- | :------------------- | | Dow Jones | $2,331 | $588 | | Digital Real Estate Services | $1,802 | $601 | | Book Publishing | $2,149 | $296 | | News Media | $2,170 | $153 | | Other | — | $(223) | - The company's diversified revenue base includes recurring subscriptions, advertising sales, real estate listing products, and licensing fees, with operations primarily in the U.S., Australia, and the U.K.[15] Dow Jones Consumer Product Subscriptions (Average Daily, Q4 FY25) | Product | Digital-only subscriptions (in 000's) | Total subscriptions (in 000's) | | :----------------------- | :----------------------------------- | :----------------------------- | | The Wall Street Journal | 4,126 | 4,538 | | Barron's Group | 1,319 | 1,432 | | Total Consumer | 5,719 | 6,261 | - Digital sales, including e-books and audiobooks, represented approximately 24% of HarperCollins' global consumer revenues for fiscal year 2025[47] - As of June 30, 2025, News Corp had approximately 22,300 employees globally, with 7,900 in the U.S., 3,900 in the U.K., and 5,800 in Australia[82] ITEM 1A. Risk Factors The Company faces significant risks from intense competition, evolving AI technologies, macroeconomic conditions, and brand reputation - The Company operates in a highly competitive environment, intensified by evolving technologies like generative AI, which can reduce traffic and subscriber demand[92] - Macroeconomic factors like persistent inflation, elevated interest rates, and lower consumer confidence adversely impacted the U.S. real estate and book publishing markets in fiscal 2025[98] - A decline in customer advertising expenditures, driven by shifts to digital content, audience fragmentation, and large digital platforms, could significantly reduce the Company's revenues[100][101] - The Company's reputation and brands, including The Wall Street Journal and Realtor.com, are vulnerable to damage from incidents, perceptions of bias, or misattributions by generative AI tools[109] - The Company's use of AI exposes it to risks of producing deficient, inaccurate, biased, or infringing content, potentially leading to reputational harm, legal scrutiny, and increased litigation[111] News Corp Total Outstanding Indebtedness (June 30, 2025) | Metric | Amount (in billions) | | :----------------------- | :------------------- | | Total Outstanding Indebtedness | $2.0 | | Undrawn Commitments (aggregate) | $1.0 | ITEM 1B. Unresolved Staff Comments No unresolved staff comments were reported - No unresolved staff comments were reported[147] ITEM 1C. Cybersecurity News Corporation maintains a comprehensive cybersecurity program, informed by the NIST Framework, with Board oversight to manage evolving threats - News Corp's cybersecurity program, informed by the NIST Cybersecurity Framework, employs a defense-in-depth approach with a global organization, training, and technical measures[148] - The Board of Directors, via its Audit Committee, oversees cybersecurity risk management, receiving quarterly reports from the CTO and CISO[153][154] - The company relies on third-party service providers for critical operations and manages associated cybersecurity risks through policies, contractual requirements, and assessments[151] - To date, no cybersecurity incidents have materially affected or are reasonably likely to materially affect the Company's business strategy, operations, or financial condition[152] ITEM 2. Properties News Corporation owns and leases various properties globally, which are considered adequate and suitably utilized for its business operations - News Corporation owns and leases various real properties across the U.S., Europe, Australia, and Asia, including offices, publishing, and printing facilities[155][157] - All properties are considered in good condition, adequate, and suitably utilized, with a policy to improve and replace as appropriate[155] ITEM 3. Legal Proceedings The Company is involved in various legal proceedings, including antitrust lawsuits and U.K. Newspaper Matters, with uncertain outcomes that could impact operations - Dow Jones's OPIS subsidiary faced purported class action complaints alleging antitrust violations related to PVC pipe, preliminarily settled in May 2025[531][532] - HarperCollins is a defendant in class action complaints alleging antitrust and competition law violations related to book sales, with pending appeals despite some dismissals[533] - The Company addresses U.K. Newspaper Matters, including civil claims, with FOX Corporation indemnifying News Corp for certain payments and legal fees, resulting in a $17 million accrued liability and $29 million receivable as of June 30, 2025[534][536][537] ITEM 4. Mine Safety Disclosures Mine Safety Disclosures are not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[158] PART II ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities News Corporation's common stock trades on Nasdaq and ASX, with dividends paid and ongoing stock repurchase programs, including a new $1 billion authorization - News Corporation's Class A and Class B Common Stock are listed on The Nasdaq Global Select Market, and CHESS Depositary Interests are on the Australian Securities Exchange[3][160] - As of August 1, 2025, 376.4 million Class A and 188.5 million Class B Common Stock shares were outstanding[8] Dividends Paid Per Share (FY2023-FY2025) | Fiscal Year Ended June 30, | Cash Dividends Paid Per Share | | :------------------------- | :---------------------------- | | 2025 | $0.20 | | 2024 | $0.20 | | 2023 | $0.20 | Stock Repurchases (FY2023-FY2025) | Fiscal Year Ended June 30, | Class A Common Stock (Shares in millions) | Class A Common Stock (Amount in millions) | Class B Common Stock (Shares in millions) | Class B Common Stock (Amount in millions) | Total (Shares in millions) | Total (Amount in millions) | | :------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :------------------------- | :------------------------- | | 2025 | 3.5 | $97 | 1.8 | $53 | 5.3 | $150 | | 2024 | 3.4 | $79 | 1.6 | $38 | 5.0 | $117 | | 2023 | 9.5 | $159 | 4.7 | $81 | 14.2 | $240 | - As of June 30, 2025, $310 million remained under the 2021 Repurchase Program, with a new $1 billion program authorized on July 15, 2025[162][164][238][239][496][498] ITEM 6. [Reserved] This item is reserved and not applicable - Item 6 is reserved and not applicable[166] ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes News Corporation's financial condition and results for fiscal years 2025 and 2024, including segment performance, liquidity, and accounting policies - News Corporation is a global diversified media and information services company with five segments: Dow Jones, Digital Real Estate Services, Book Publishing, News Media, and Other[169][173][174] Consolidated Operating Results (FY2025 vs. FY2024) | Metric | FY2025 (in millions) | FY2024 (in millions) | Change (in millions) | % Change | | :------------------------------------------ | :------------------- | :------------------- | :------------------- | :------- | | Total Revenues | $8,452 | $8,252 | $200 | 2% | | Operating expenses | $(3,736) | $(3,814) | $78 | 2% | | Selling, general and administrative | $(3,301) | $(3,197) | $(104) | (3)% | | Depreciation and amortization | $(459) | $(440) | $(19) | (4)% | | Impairment and restructuring charges | $(132) | $(133) | $1 | 1% | | Equity losses of affiliates | $(15) | $(6) | $(9) | (150)% | | Interest income (expense), net | $3 | $(18) | $21 | ** | | Other, net | $111 | $(59) | $170 | ** | | Income before income tax expense from continuing operations | $923 | $585 | $338 | 58% | | Income tax expense from continuing operations | $(275) | $(206) | $(69) | (33)% | | Net income from continuing operations | $648 | $379 | $269 | 71% | | Net income (loss) from discontinued operations, net of tax | $692 | $(25) | $717 | ** | | Net income | $1,340 | $354 | $986 | 279% | | Net income attributable to News Corporation stockholders | $1,180 | $266 | $914 | 344% | - Net income from discontinued operations was $692 million in fiscal 2025, primarily due to the sale of Foxtel, compared to a net loss of $(25) million in fiscal 2024[211] Segment EBITDA (FY2025 vs. FY2024) | Segment | FY2025 (in millions) | FY2024 (in millions) | Change (in millions) | % Change | | :----------------------- | :------------------- | :------------------- | :------------------- | :------- | | Dow Jones | $588 | $542 | $46 | 8% | | Digital Real Estate Services | $601 | $508 | $93 | 18% | | Book Publishing | $296 | $269 | $27 | 10% | | News Media | $153 | $133 | $20 | 15% | | Other | $(223) | $(211) | $(12) | (6)% | | Total Segment EBITDA | $1,415 | $1,241 | $174 | 14% | - As of June 30, 2025, the Company had $2.4 billion in cash and cash equivalents; net cash from operating activities increased by $81 million to $978 million in fiscal 2025[235][243] Free Cash Flow (FY2025 vs. FY2024) | Metric | FY2025 (in millions) | FY2024 (in millions) | | :------------------------------------------ | :------------------- | :------------------- | | Net cash provided by operating activities from continuing operations | $978 | $897 | | Less: Capital expenditures | $(407) | $(357) | | Free cash flow | $571 | $540 | Total Commitments and Contractual Obligations (June 30, 2025) | Category | Less than 1 year (in millions) | 1-3 years (in millions) | 3-5 years (in millions) | More than 5 years (in millions) | Total (in millions) | | :-------------------------------- | :----------------------------- | :---------------------- | :---------------------- | :------------------------------ | :------------------ | | Purchase obligations | $415 | $437 | $88 | $94 | $1,034 | | Operating leases | $117 | $208 | $146 | $860 | $1,331 | | Borrowings | $25 | $450 | $1,000 | $500 | $1,975 | | Interest payments on borrowings | $81 | $144 | $90 | $51 | $366 | | Total commitments and contractual obligations | $638 | $1,239 | $1,324 | $1,505 | $4,706 | Overview of the Company's Businesses Results of Operations—Fiscal 2025 versus Fiscal 2024 Liquidity and Capital Resources Critical Accounting Policies and Estimates ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk News Corporation faces market risks from foreign currency, interest rates, and credit, managing interest rate risk with derivatives while not hedging currency translation risk - The Company is exposed to market risks from foreign currency exchange rates, interest rates, and credit, using derivative financial instruments like interest rate swaps to hedge interest rate risk[282][283] - Operations are primarily in U.S. dollars, Australian dollars, and British pound sterling; foreign currency translation risk is not hedged due to local reinvestment[285][286] Revenue and Expense by Principal Currency (FY2025) | Currency | Revenues | Operating and Selling, general and administrative expenses | | :--------------- | :------- | :------------------------------------------------------- | | U.S. Dollars | 50% | 52% | | Australian Dollars | 27% | 23% | | British Pound Sterling | 17% | 18% | - A one-cent change in USD/AUD exchange rate impacts revenues by $35 million and EBITDA by $10 million; for USD/GBP, the impact is $11 million on revenues and $1 million on EBITDA[287] Derivative Financial Instruments Sensitivity (June 30, 2025) | Instrument | Notional Value (in millions) | Fair Value (in millions) | Sensitivity from Adverse 10% Change in Interest Rates (in millions) | | :----------------------- | :--------------------------- | :----------------------- | :---------------------------------------------------------------- | | Interest rate derivatives | US$475 | US$12 | US$(1) | ITEM 8. Financial Statements and Supplementary Data This section presents News Corporation's audited consolidated financial statements, including operations, balance sheets, and cash flows, with management's internal control report and auditor's opinions - Management affirmed effective internal control over financial reporting as of June 30, 2025, with Ernst & Young LLP providing an unqualified opinion[299][303][311] - Goodwill valuation was a critical audit matter due to significant judgment in estimating fair value, sensitive to assumptions like discount rates and revenue growth[317] Consolidated Statements of Operations (FY2023-FY2025) | Metric | FY2025 (in millions) | FY2024 (in millions) | FY2023 (in millions) | | :------------------------------------------ | :------------------- | :------------------- | :------------------- | | Total Revenues | $8,452 | $8,252 | $8,012 | | Operating expenses | $(3,736) | $(3,814) | $(3,911) | | Selling, general and administrative | $(3,301) | $(3,197) | $(3,012) | | Depreciation and amortization | $(459) | $(440) | $(415) | | Impairment and restructuring charges | $(132) | $(133) | $(121) | | Equity losses of affiliates | $(15) | $(6) | $(127) | | Interest income (expense), net | $3 | $(18) | $(49) | | Other, net | $111 | $(59) | $3 | | Income before income tax expense from continuing operations | $923 | $585 | $380 | | Income tax expense from continuing operations | $(275) | $(206) | $(152) | | Net income from continuing operations | $648 | $379 | $228 | | Net income (loss) from discontinued operations, net of tax | $692 | $(25) | $(41) | | Net income | $1,340 | $354 | $187 | | Net income attributable to News Corporation stockholders | $1,180 | $266 | $149 | Consolidated Balance Sheets (June 30, 2025 vs. 2024) | Asset/Liability | June 30, 2025 (in millions) | June 30, 2024 (in millions) | | :------------------------------------------ | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $2,403 | $1,872 | | Total current assets | $4,811 | $4,372 | | Total assets | $15,504 | $16,684 | | Total current liabilities | $2,608 | $3,055 | | Total liabilities | $6,115 | $7,673 | | Total News Corporation stockholders' equity | $8,774 | $8,120 | | Total equity | $9,389 | $9,011 | Consolidated Statements of Cash Flows (FY2023-FY2025) | Cash Flow Activity | FY2025 (in millions) | FY2024 (in millions) | FY2023 (in millions) | | :------------------------------------------ | :------------------- | :------------------- | :------------------- | | Net cash provided by operating activities from continuing operations | $978 | $897 | $777 | | Net cash used in investing activities from continuing operations | $(406) | $(410) | $(423) | | Net cash used in financing activities from continuing operations | $(524) | $(483) | $(525) | | Net cash provided by discontinued operations | $370 | $129 | $187 | | Net change in cash and cash equivalents, including discontinued operations | $418 | $133 | $16 | | Cash and cash equivalents, end of year | $2,403 | $1,960 | $1,833 | - The Company completed the sale of Foxtel on April 2, 2025, resulting in a $716 million pre-tax gain and classifying Foxtel as discontinued operations[415] Disaggregated Revenues by Type and Segment (FY2025) | Revenue Type | Dow Jones (in millions) | Digital Real Estate Services (in millions) | Book Publishing (in millions) | News Media (in millions) | Other (in millions) | Total Revenues (in millions) | | :----------------------- | :---------------------- | :--------------------------------------- | :---------------------------- | :----------------------- | :------------------ | :--------------------------- | | Circulation and subscription | $1,884 | $7 | — | $1,118 | — | $3,009 | | Advertising | $396 | $151 | — | $820 | — | $1,367 | | Consumer | — | — | $2,047 | — | — | $2,047 | | Real estate | — | $1,410 | — | — | — | $1,410 | | Other | $51 | $234 | $102 | $232 | — | $619 | | Total Revenues | $2,331 | $1,802 | $2,149 | $2,170 | — | $8,452 | - The Company recorded $120 million in restructuring charges in fiscal 2025, primarily for employee termination benefits[428][429] Investments (June 30, 2025 vs. 2024) | Investment Type | June 30, 2025 (in millions) | June 30, 2024 (in millions) | | :----------------------- | :-------------------------- | :-------------------------- | | Equity method investments | $85 | $215 | | Equity and other securities | $931 | $214 | | Total Investments | $1,016 | $429 | - The Company's equity and other securities include a 6% equity interest in DAZN, valued at $648 million, received from the sale of Foxtel[435] Goodwill by Segment (June 30, 2025) | Segment | Goodwill (in millions) | | :----------------------- | :------------------- | | Dow Jones | $2,239 | | Digital Real Estate Services | $1,575 | | Book Publishing | $424 | | News Media | $135 | | Total Goodwill | $4,373 | Total Borrowings (June 30, 2025) | Category | Amount (in millions) | | :----------------------- | :------------------- | | News Corporation Borrowings | $1,962 | | REA Group Borrowings | — | | Total Borrowings | $1,962 | - News Corporation had $750 million of undrawn commitments available under its Revolving Facility as of June 30, 2025[459] Net Income Attributable to News Corporation Stockholders Per Share (FY2025) | Metric | Basic EPS | Diluted EPS | | :----------------------- | :-------- | :---------- | | Continuing operations | $0.85 | $0.84 | | Discontinued operations | $1.23 | $1.23 | | Total | $2.08 | $2.07 | Income Before Income Tax Expense from Continuing Operations by Jurisdiction (FY2025) | Jurisdiction | Amount (in millions) | | :----------------------- | :------------------- | | U.S. | $213 | | Foreign | $710 | | Total | $923 | Effective Tax Rate Reconciliation (FY2025) | Factor | % Impact | | :------------------------------------------ | :------- | | U.S. federal income tax rate | 21% | | State and local taxes, net | 2% | | Effect of foreign operations | 10% | | Non-deductible compensation and benefits | 1% | | R&D tax credits | (1)% | | Impact of dispositions | (3)% | | Other | — | | Effective tax rate | 30% | - The 'One Big Beautiful Bill Act' (OBBBA), enacted July 4, 2025, made permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation[581] - The OECD's proposed global minimum tax (Pillar 2) of 15% is incorporated into many domestic laws, with the U.S. opposing certain aspects and G7 acknowledging exemptions for U.S. parented groups[582] ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure No changes in or disagreements with accountants on accounting and financial disclosure were reported - No changes in or disagreements with accountants on accounting and financial disclosure were reported[617] ITEM 9A. Controls and Procedures Management, including the CEO and CFO, affirmed the effectiveness of disclosure controls and internal control over financial reporting as of June 30, 2025, with an unqualified audit opinion - The Company's CEO and CFO concluded disclosure controls and procedures were effective as of June 30, 2025[617] - Management determined News Corporation maintained effective internal control over financial reporting as of June 30, 2025, based on the COSO framework[299][618] - Ernst & Young LLP issued an unqualified opinion on the effectiveness of the Company's internal control over financial reporting[300][303][618] - No material changes occurred in the Company's internal control over financial reporting during the fourth quarter of fiscal year 2025[619] ITEM 9B. Other Information No other information was reported under this item - No other information was reported under this item[620] ITEM 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections Disclosure regarding foreign jurisdictions that prevent inspections is not applicable - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable[620] PART III ITEM 10. Directors, Executive Officers and Corporate Governance Information on directors, executive officers, corporate governance, and related policies is incorporated by reference from the 2025 Proxy Statement - Information on Directors, Executive Officers, Corporate Governance, Section 16(a) compliance, and related policies is incorporated by reference from the 2025 Proxy Statement[622][623][624][625][626][627] ITEM 11. Executive Compensation Details on executive and director compensation, including risk-related policies, are incorporated by reference from the 2025 Proxy Statement - Information on executive and director compensation, pay ratio, pay versus performance, and risk-related policies is incorporated by reference from the Proxy Statement[628][629][630] ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information on equity compensation plan securities and beneficial ownership is incorporated by reference from the 2025 Proxy Statement - Information on securities authorized under equity compensation plans and beneficial ownership is incorporated by reference from the Proxy Statement[631][632] ITEM 13. Certain Relationships and Related Transactions, and Director Independence Information on related person transactions and director independence is incorporated by reference from the 2025 Proxy Statement - Information on transactions with related persons and director independence is incorporated by reference from the Proxy Statement[633][634] ITEM 14. Principal Accountant Fees and Services Information on principal accountant fees and Audit Committee pre-approval policies is incorporated by reference from the 2025 Proxy Statement - Information on principal accountant fees and services, including fees paid and Audit Committee pre-approval policies, is incorporated by reference from the Proxy Statement[635] PART IV ITEM 15. Exhibits and Financial Statement Schedules This section lists all documents filed as part of the Annual Report, including consolidated financial statements, key agreements, corporate governance documents, and executive certifications - The report includes the Company's Consolidated Financial Statements and Reports of Independent Registered Public Accounting Firm[638] - Exhibits include key agreements such as the Separation and Distribution Agreement, Tax Sharing and Indemnification Agreement, and the Credit Agreement[638] - Corporate governance documents like the Restated Certificate of Incorporation and Amended and Restated By-laws are filed as exhibits[638] - Management contracts and compensatory plans, such as the News Corporation 2013 Long-Term Incentive Plan, are also listed[638][639] - Certifications from the Chief Executive Officer and Chief Financial Officer, as required by the Securities Exchange Act, are included[639][642] ITEM 16. Form 10-K Summary No Form 10-K Summary is provided - No Form 10-K Summary is provided[641] SIGNATURES SIGNATURES The report is duly signed by News Corporation's Chief Financial Officer, Chief Executive Officer, and other Directors, affirming compliance with the Securities Exchange Act - The report is signed by Lavanya Chandrashekar (CFO), Robert J. Thomson (CEO and Director), Marygrace DeGrazio (CAO), Lachlan K. Murdoch (Chair), and other Directors[644] - Signatures confirm compliance with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934[644]