NEWS CORP

News Corporation is a global, diversified media and information services company that creates and distributes authoritative and engaging content and other products and services to consumers and businesses worldwide ¹. The company operates across various media, including information services and news, digital real estate services, and book publishing, under recognized brands such as The Wall Street Journal, Barron's, Dow Jones, The Australian, Herald Sun, The Sun, The Times, HarperCollins Publishers, realestate.com.au, and Realtor.com® ¹. News Corp's business model is diversified, generating revenue from recurring subscriptions, circulation sales, advertising sales, real estate listing products, licensing fees, and other consumer product sales ¹. The company distributes its content across digital platforms like websites, mobile apps, social media, e-book devices, and streaming audio platforms, as well as traditional platforms such as print and radio ¹.

The company's operations are organized into five reportable segments: Dow Jones, Digital Real Estate Services, Book Publishing, News Media, and Other ¹. For the fiscal year ended June 30, 2025, total revenues were $8.452 billion ². The Dow Jones segment contributed $2.331 billion ³ in revenues, the Digital Real Estate Services segment contributed $1.802 billion ⁴, Book Publishing generated $2.149 billion ⁵, and News Media accounted for $2.170 billion ⁶. The "Other" segment does not generate revenue but includes general corporate overhead and strategy costs ¹.

The Dow Jones segment is a global provider of news and business information, offering products to individual consumers and enterprise customers ¹. Consumer products include The Wall Street Journal, Barron's, MarketWatch, and Investor's Business Daily, which provide insights and research for financial decisions ¹. For the three months ended June 30, 2025, The Wall Street Journal had 4.126 million ⁷ digital-only subscriptions and 4.538 million ⁸ total subscriptions, while Barron's Group had 1.319 million ⁹ digital-only subscriptions and 1.432 million ¹⁰ total subscriptions ¹. Total Consumer digital-only subscriptions were 5.719 million ¹¹ and total subscriptions were 6.261 million ¹² for the same period ¹. Professional information products, targeting enterprise customers, include Dow Jones Risk & Compliance, Dow Jones Energy, Factiva, and Dow Jones Newswires, which provide data and tools for compliance, energy commodities, and real-time business news ¹.

The Digital Real Estate Services segment comprises a 61.4% ¹ interest in REA Group and an 80% ¹ interest in Move, with REA Group holding the remaining 20% ¹ interest in Move. REA Group is a digital media business specializing in property in Australia, operating realestate.com.au, realcommercial.com.au, and Flatmates.com.au, and also provides financial services ¹. For the year ended June 30, 2025, realestate.com.au had 132.2 million ¹³ average monthly visits, and realcommercial.com.au had 1.9 million ¹⁴ people visit each month on average ¹. Move operates Realtor.com® in the U.S., offering real estate information, advertising, and services ¹. Realtor.com® and its mobile sites had approximately 72 million ¹⁵ average monthly unique users during the quarter ended June 30, 2025 ¹. This segment generates revenue from listing advertisements, lead generation products, referral-based services, and media products ¹.

The Book Publishing segment consists of HarperCollins, the second largest consumer book publisher globally, with operations in 15 countries ¹. HarperCollins publishes and distributes consumer books in print and digital formats, including e-books and audiobooks, across more than 120 branded imprints ¹. Digital sales represented approximately 24% ¹⁶ of global consumer revenues for the fiscal year ended June 30, 2025 ¹. Backlist sales accounted for approximately 64% ¹⁷ of consumer revenues during the same period ¹.

The News Media segment primarily includes News Corp Australia, News UK, and the New York Post ¹. News Corp Australia's digital mastheads had approximately 993,000 ¹⁸ aggregate digital closing subscribers as of June 30, 2025 ¹. News UK publishes The Sun, The Sun on Sunday, The Times, and The Sunday Times, which together accounted for approximately one-third ¹⁹ of all national newspaper sales as of June 30, 2025 ¹. The New York Post's average weekday circulation was 498,984 ²⁰ for the three months ended June 30, 2025, and the Post Digital Network averaged approximately 89.2 million ²¹ unique users per month during the same quarter ¹.

For the fiscal year ended June 30, 2025, News Corporation reported total revenues of $8.452 billion ², operating expenses of $3.736 billion ²², selling, general and administrative expenses of $3.301 billion ²³, depreciation and amortization of $459 million ²⁴, and impairment and restructuring charges of $132 million ²⁵. Equity losses of affiliates were $15 million ²⁶, interest income, net was $3 million ²⁷, and other, net was $111 million ²⁸. Income before income tax expense from continuing operations was $923 million ²⁹, with income tax expense from continuing operations of $275 million ³⁰, resulting in net income from continuing operations of $648 million ³¹. Net income from discontinued operations, net of tax, was $692 million ³². Total net income was $1.340 billion ³³. Net income attributable to News Corporation stockholders was $1.180 billion ³⁴, with basic EPS from continuing operations of $0.85 ³⁵ and diluted EPS from continuing operations of $0.84 ³⁶. Basic EPS from discontinued operations was $1.23 ³⁷ and diluted EPS from discontinued operations was $1.23 ³⁸. Total basic EPS was $2.08 ³⁹ and total diluted EPS was $2.07 ⁴⁰. Cash and cash equivalents were $2.403 billion ⁴¹ as of June 30, 2025 ⁴¹. Total outstanding indebtedness was $1.962 billion ⁴² as of June 30, 2025 ⁴². Free cash flow for the fiscal year ended June 30, 2025, was $571 million ⁴³.

Year-over-year, total revenues increased by $200 million ², or 2% ², from $8.252 billion ² in fiscal 2024 to $8.452 billion ² in fiscal 2025. This increase was driven by higher revenues in Digital Real Estate Services, Dow Jones, and Book Publishing, partially offset by a decline in News Media revenues ¹. Operating expenses decreased by $78 million ²², or 2% ²², while selling, general and administrative expenses increased by $104 million ²³, or 3% ²³. Net income from continuing operations increased by $269 million ³¹, or 71% ³¹, from $379 million ³¹ in fiscal 2024 to $648 million ³¹ in fiscal 2025. Net income from discontinued operations significantly improved from a loss of $(25) million ³² in fiscal 2024 to a gain of $692 million ³² in fiscal 2025, primarily due to the sale of Foxtel ¹.

During the second quarter of fiscal 2025, the Company entered into a definitive agreement to sell the Foxtel Group to DAZN Group Limited, with the transaction closing on April 2, 2025 ¹. All assets, liabilities, results of operations, and cash flows for Foxtel have been classified as discontinued operations for all periods presented ¹. Upon reclassification, the Subscription Video Services segment ceased to be a reportable segment, and its residual results were aggregated into the News Media segment ¹. In connection with the sale, News Corp received a minority equity interest in DAZN of approximately 6% ⁴⁴, recorded at $648 million ^{45 1}. The Company also announced a new stock repurchase program on July 15, 2025, authorizing the purchase of up to $1 billion ⁴⁶ in aggregate of its Class A and Class B Common Stock, in addition to the remaining $310 million ⁴⁷ under the 2021 Repurchase Program ¹.

The Company intends to permanently reinvest approximately $1 billion ⁴⁸ of undistributed foreign earnings generated after the Tax Act ¹. However, if these earnings were to be repatriated, additional taxes, including foreign withholding taxes and income taxes, may be payable ¹. The Company will evaluate all U.S. deferred tax balances and any other impacts to its financial statements as a result of the H.R. 1 - One Big Beautiful Bill Act (OBBBA) in the first quarter of fiscal 2026 ⁴⁹. Certain provisions of OBBBA will become effective for the Company's 2026 fiscal year, while others will take effect beginning in fiscal 2027 ⁴⁹.

The Company expects to continue to pursue new strategic initiatives, incorporate new technologies, and develop new and enhanced products and services to remain competitive ¹. These initiatives include licensing arrangements with certain large platforms for the use of its content, continued expansion into new business models and adjacencies at its digital real estate services businesses, streaming audio partnerships for its books, multi-product digital bundles, and other innovative digital news products and experiences ¹. The Company is also developing additional products and services that incorporate AI solutions to enhance insights and value for consumers and customers and respond to industry trends ¹.

The Company expects to continue to incur significant costs in connection with these efforts, including costs to acquire, develop, adopt, upgrade, and exploit new and existing technologies and attract and retain employees with necessary knowledge and skills ¹. The Company's printing and distribution costs, including the cost of paper, are significant expenses for its book and newspaper publishing units, and these costs have historically been volatile ¹. Factors such as inflationary pressures, labor shortages, higher transportation costs, and supply chain issues could increase these costs or lead to disruptions ¹.

The Company anticipates making required pension contributions of approximately $1 million ⁵⁰ in fiscal 2026, assuming actual plan asset returns are consistent with fiscal 2025 and beyond, and that interest rates remain constant ¹. The Company also expects its other postretirement benefit (OPEB) payments to approximate $7 million ⁵¹ in fiscal 2026 ¹. The Company will continue to make voluntary contributions as necessary to improve the funded status of the plans ¹.

The Company operates in a highly competitive business environment, facing significant competition from other providers of information, news, real estate-related, and entertainment products and services, which is intensifying due to evolving technologies, including generative AI, and changes in consumer behavior ¹. Macroeconomic and market conditions, such as economic weakness, uncertainty, or volatility, geopolitical tensions, conflicts, pandemics, natural disasters, and political or social unrest, may adversely affect the Company's business ¹. A decline in customer advertising expenditures, influenced by shifting consumer preferences towards digital content, increased audience fragmentation, and the dominance of large digital platforms, could cause the Company's revenues and operating results to decline significantly ¹. The Company's strategic transactions, including acquisitions, investments, and divestitures, introduce risks such as integration difficulties, failure to achieve anticipated benefits, loss of key employees, and increased regulation ¹. Dependence on a single or limited number of suppliers for certain products, services, data, and information exposes the Company to risks of reductions, interruptions, or significant price increases in supply ¹. Damage to the Company's reputation, credibility, and brands, potentially from incidents eroding consumer trust or perceptions of low quality, unreliability, or bias, including from generative AI tools misattributing incorrect information, could adversely affect its business ¹. Significant increases in the cost to print and distribute books and newspapers, or disruptions in the supply chain or printing and distribution channels, could adversely affect the Company's business ¹. Developments in AI, including the Company's use of AI, may expose it to risks such as producing deficient, inaccurate, biased, or infringing content, leading to negative brand impact, legal scrutiny, and increased litigation ¹. The Company's international operations expose it to additional risks, including economic uncertainties, geopolitical tensions, and compliance with foreign laws and regulations ¹. An inability to attract and retain talented employees could adversely affect the Company's business ¹. The Company is subject to payment processing risk, which could lead to adverse effects on its business and results of operations due to increased fees, changes in the payment ecosystem, or fraudulent use of payment methods ¹. Agreements with third parties, such as Move's perpetual agreement with NAR for Realtor.com®, contain operational restrictions and termination clauses that could adversely impact the Company ¹. Labor disputes, including strikes or work slowdowns, may have an adverse effect on the Company's business ¹. Unauthorized use of the Company's content and other intellectual property, particularly with advancements in AI, may decrease revenue and adversely affect profitability ¹. Failure to protect intellectual property and brands, or infringement claims by third parties, could adversely impact the Company's business ¹. A breach, failure, misuse, or other incident involving the Company's or its third-party providers' network and information systems or other technologies could cause service disruption, adversely impact data confidentiality, integrity, or availability, and result in increased costs, loss of revenue, and reputational damage ¹. Failure to comply with complex and evolving laws and regulations, industry standards, and contractual obligations regarding privacy, data use, and data protection could have an adverse effect on the Company's business ¹. The indebtedness of the Company and its subsidiaries may affect their ability to operate their businesses, and the Company is exposed to fluctuations in foreign currency exchange rates ¹. The Company could suffer losses due to asset impairment and restructuring charges ¹. The Company could be subject to significant additional tax liabilities, which could adversely affect its operating results and financial condition ¹.

Management's message to shareholders emphasizes the Company's focus on creating and distributing authoritative and engaging content and other products and services globally, leveraging its diversified media businesses ¹. The Company is committed to premium content and product innovation, capitalizing on the shift to digital consumption to deliver products in a more engaging, timely, and personalized manner ¹. Management highlights opportunities for more effective monetization, including new licensing and partnership arrangements with large technology companies and AI-focused platforms, and digital offerings that leverage existing content ¹. The Company is pursuing strategies to exploit these opportunities by leveraging global audience scale, valuable data, and sharing technologies and practices across geographies and businesses ¹. Management announced a new stock repurchase program on July 15, 2025, authorizing the purchase of up to $1 billion ⁴⁶ in aggregate of its Class A and Class B Common Stock, which is in addition to the remaining authorized amount of approximately $310 million ⁴⁷ under the 2021 Repurchase Program ¹.