News Corp (NasdaqGS:NWS) Q2 2026 Earnings call February 05, 2026 05:00 PM ET Company ParticipantsEntcho Raykovski - Managing Director and Media & TelcoLavanya Chandrashekar - CFOMichael Florin - Head of Investor RelationsRobert Thomson - CEOConference Call ParticipantsCraig Huber - Equity Research AnalystDavid Joyce - Senior Equity Analyst of Media SectorDavid Karnovsky - Executive Director and Senior Research AnalystOperatorWelcome to News Corp's Second Quarter Fiscal 2026 Earnings Conference Call. Today's ...

Financial Data and Key Metrics Changes - Revenues increased by 6% to $2.4 billion for the quarter, with total segment EBITDA expanding by 9% to $521 million, despite a one-time inventory-related charge at HarperCollins [4][20] - Net income from continuing operations was $242 million, a 21% decrease from the prior year, primarily due to the absence of a favorable $87 million gain from the sale of PropertyGuru [4][21] - Adjusted EPS for the quarter was $0.40, compared to $0.33 in the prior quarter, with profitability margin rising from 21.4% to 22.1% [4][20] Business Line Data and Key Metrics Changes - **Dow Jones**: Revenues rose by 8% to $648 million, with digital revenues accounting for 82% of segment revenues. Segment EBITDA grew by 10% to $191 million, achieving a profit margin of 29.5% [21][25] - **Digital Real Estate Services**: Revenues increased by 8% to $511 million, with segment EBITDA up 11% to $206 million. Realtor.com revenues grew by 10% to $143 million, driven by premium products and improved lead volume [11][26] - **Book Publishing**: Revenues grew by 6% to $633 million, although segment EBITDA declined by 2% to $99 million due to a one-time write-off related to inventory [29][31] Market Data and Key Metrics Changes - In Australia, REA revenues grew by 7%, benefiting from double-digit yield growth and improved listing volumes in major cities [12][26] - Digital advertising revenue at Dow Jones reached a record $87 million, rising by 12%, particularly supported by demand from the financial services sector [8][25] - The Times and The Sunday Times in the UK saw digital subscribers rise by 7% to 659,000, while News Corp Australia reached nearly 1.2 million total subscribers, surpassing the prior year by 4% [14][15] Company Strategy and Development Direction - The company is focused on transforming into a digital-first entity, increasing recurring revenues, and reducing dependence on advertising [5][19] - There is a strong emphasis on operational efficiency and disciplined investment in core growth pillars: Dow Jones, Digital Real Estate, and Book Publishing, which collectively accounted for 95% of profitability [18][19] - The company is actively pursuing AI partnerships and content licensing opportunities to enhance revenue streams [10][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the fiscal year, citing strong cash flow and a robust balance sheet [5][16] - The evolving impact of AI on the industry was discussed, with management confident in the value of proprietary content and the company's ability to monetize it [6][36] - The outlook for Dow Jones remains positive, with expectations of continued strong revenue growth in B2B segments [32] Other Important Information - The company repurchased $172 million in shares during the quarter, significantly higher than the previous year, and plans to continue this trend [20][51] - The launch of the California Post was highlighted as a strategic move to enhance the company's media presence [16] Q&A Session Summary Question: Market reaction to AI and its implications for business services - Management clarified that AI's impact is often misunderstood, emphasizing the value of proprietary content and the company's strategy to monetize it through partnerships and legal actions against unauthorized use [35][36] Question: Investment in Dow Jones and CapEx related to AI - Management expressed confidence in the Dow Jones Professional Information business and indicated that CapEx for Dow Jones would be modestly down this year, while overall free cash flow growth is expected to remain strong [40][42] Question: M&A strategy and areas of interest - Management stated that they are continuously looking for sensible investments but will prioritize organic growth and share buybacks at reasonable prices [49][50] Question: Simplifying the company structure and competition from Homes.com - Management noted ongoing evaluations of the company structure to enhance shareholder value and expressed confidence in Realtor.com's growth trajectory despite competition [54][56] Question: Subscription revenue growth and pricing strategy at Dow Jones - Management highlighted successful increases in enterprise customers and the potential for price elasticity, while also noting improvements in ARPU excluding enterprise customers [63][66]

Miami has overtaken New York City as the major U.S. metro area with the highest volume of million-dollar listings. No longer just a vacation destination, Miami is the new epicenter for high-net-worth property investment, according to year-end data from Realtor.com. Miami had 10,591 listings priced at $1 million or more in December, surpassing New York's inventory of 10,176, the report said. It's an indication of a shift in the luxury market, fueled by a southward migration of capital and high-income earn ...

Group 1 - The influx of new residents to smaller cities like Indianapolis, Columbus, and Denver is driven by the search for a lower cost of living, but this may lead to increased pressure on rent rates and housing prices if housing supply does not keep pace with demand [1][1][1] - Population growth in these cities can create a cycle where affordability attracts more people, which in turn drives up costs, as noted by housing experts [1][1][1] - Local leaders are focused on promoting economic growth while managing the challenge of rising living costs, as seen in Denver where the economic development agency is tasked with ensuring housing stock meets demand [1][1][1] Group 2 - The construction of high-end homes has increased, partly due to a growing wealth gap, which may limit the availability of moderately-priced housing options [1][1][1] - A significant number of apartments (18,000 to 20,000) have entered the market in Denver, contributing to a decrease in rent prices, but maintaining this trend is crucial to avoid market disruptions [1][1][1] - The volume of Americans relocating has decreased by over 50% since 2021, with many choosing to stay within the same metro area, indicating a shift in mobility patterns influenced by housing affordability [1][1][1]

Mortgage Rates - The average rate on the benchmark 30-year fixed mortgage increased to 6.09% from 6.06% last week, remaining the lowest in three years [1] - A year ago, the average rate on a 30-year loan was 6.96% [1] - The average rate on a 15-year fixed mortgage rose to 5.44% from 5.38% last week [5] Market Dynamics - The improving economy and lower mortgage rates compared to last year are attracting more homebuyers [4] - The 10-year Treasury yield was around 4.25% as of Thursday afternoon, influencing mortgage rates [4] - Recent policy decisions, including the announcement of Fannie Mae and Freddie Mac buying $200 billion in mortgage-backed securities, have contributed to rate volatility [8] Buyer Behavior - Homebuyers are encouraged to shop around for the best mortgage rates, as multiple quotes can lead to significant savings [4] - Uncertainty around the implementation of new policies may limit their immediate impact on the housing market [9]

The average long-term U.S. mortgage rate ticked higher this week, but remains near its lowest level in more than three years. The benchmark 30-year fixed rate mortgage rate rose to 6.09% from 6.06% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the rate averaged 6.96%. Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week. That average rate inched up to 5.44%, up from 5.38% last week. A year ago, it was at 6.16%, Fre ...

For years, home buyers have been told the housing market would eventually "normalize" — meaning if mortgage rates came down or inventory improved, affordability would return to something resembling pre-pandemic levels such as 2019. But new data from Realtor.com suggests that version of the market may never come back, and returning to pre-pandemic affordability would require outcomes economists say are extremely unlikely.The numbers underscore a tougher reality for buyers, one expert points out: America’s ho ...

Core Insights - The number of Americans with mortgage rates above 6% has surpassed those with rates below 3%, marking a significant shift in the housing market dynamics [2][9][10] - This change is crucial as the ultra-low rates during the pandemic have been a key issue in the housing market, leading to a phenomenon known as the "mortgage lock-in effect" where homeowners are reluctant to sell due to the high costs of new loans [10][11] Mortgage Lock-In Effect - The "mortgage lock-in effect" has resulted in reduced housing inventory and soaring prices, as homeowners with low-rate mortgages choose to stay put rather than incur higher costs [10][11] - Nick Gerli, CEO of Reventure, suggests that as average mortgage rates continue to rise, the lock-in effect may weaken, potentially increasing market inventory [11] - Daryl Fairweather from Redfin believes that while the recent shift in mortgage rate demographics may not have an immediate impact, the lock-in effect will likely remain a significant factor in the housing market for the next four to five years [11][12] Housing Market Dynamics - Approximately 40% of homes do not have a mortgage, indicating that the low liquidity of housing supply and rising prices cannot be solely attributed to the lock-in effect [13] - The median home price in the U.S. has increased by about $100,000 since 2019, now exceeding $410,000, largely due to inflation and rising labor and construction costs [13] - The lock-in effect may create a generational gap, as younger individuals feel priced out of the market due to older homeowners holding onto their low-rate mortgages [13] Future Market Predictions - Predictions for the U.S. housing market in 2026 show divergence among analysts: - Reventure forecasts stable overall home prices with regional variations, while Realtor.com anticipates a slight increase in home sales and inventory driven by new construction [13][14] - Zillow expects home sales to rise by over 4% and prices to increase by 1.2%, while the National Association of Realtors predicts a 14% increase in home sales and a 4% rise in prices [14] - Even if the lock-in effect diminishes, potential buyers may not see lower prices due to ongoing inflationary pressures [14]

Core Insights - Homeowners' association (HOA) fees and property taxes significantly impact the overall cost of homeownership, with about 3 million U.S. households paying over $500 monthly in HOA or condo fees as of 2024 [1] - The average monthly HOA fee in the U.S. is $390, equating to $4,680 annually, and 81% of new single-family homes sold in 2024 are part of homeowners' associations [6] - Property taxes are also on the rise, with the median property tax bill for 2024 reaching $3,500, reflecting a 2.8% increase from 2023 [7] HOA Fees - Homeowners' associations consist of volunteer homeowners who set rules and manage shared spaces, collecting fees for communal expenses [5] - Non-compliance with HOA rules can lead to fines or liens on properties, increasing the financial burden on homeowners [6] Property Taxes - Rising home values are contributing to increased property taxes, which are becoming a significant financial consideration for homeowners [7]

Core Insights - Florida remains a popular retirement destination due to its favorable climate, beaches, and lack of state income tax, with home prices expected to decline slightly in 2026, presenting a potential opportunity for buyers [1][9][11] Home Price Trends - Home prices in Florida's eight largest metro areas are projected to decrease nearly 2% in 2026, with Miami being the only city expected to see a slight increase of 1.1%, while Gulf Coast areas may experience declines up to 10.2% [3][9] - The decline in home prices follows a period of rapid appreciation during the pandemic, driven by increased demand from remote workers and retirees, which led to unsustainable price increases [4][5] Affordability Challenges - Rising homeowners insurance costs, averaging $7,136 annually—nearly three times the national average—along with increasing homeowners association (HOA) fees, which range from $100 to $800 per month, are significant factors affecting affordability for retirees [7][8][9] - Despite potential home price declines, the overall cost of living in Florida remains high due to these rising expenses, which may offset any savings from lower home prices [9][12] Financial Benefits - Florida's lack of state income tax provides financial advantages for retirees relying on Social Security, pensions, or investment income, potentially offsetting higher housing-related costs [10][11] - Recent initiatives by the state government, such as proposals to eliminate property taxes on owner-occupied homes, could further enhance the financial appeal of living in Florida [10]