News Corp Media Divisions See Mixed Results in Fiscal Q1 2025

By: Christiana Sciaudone & Jacob Cohen Donnelly

News Corp’s Dow Jones division saw growth in sales, profit and circulation, even as ad revenue dropped, bolstered by professional services. Overall sales in the News Media segment dropped 5%, including ad revenue down 5%, which the company blamed on algorithm changes. 

Overall, News Corp hit record revenue and profit, propped up by its real estate businesses. First quarter fiscal 2025 results:

• First quarter revenues were the highest for a first quarter since separation at $2.58 billion, a 3% increase compared to a year earlier, driven by growth at the Digital Real Estate Services, Book Publishing and Dow Jones segments
• Net income was $144 million compared to $58 million in the prior year
• Total Segment EBITDA was the highest for a first quarter since separation at $415 million, compared to $364 million 
• EPS was $0.21 as compared to $0.05 – Adjusted EPS was $0.21 compared to $0.16
• Dow Jones’ growth continued to be underpinned by robust performance in its professional information business, where revenue increased 8%, driven by growth of 16% at Risk & Compliance and 11% at Dow Jones Energy.

Advertising has taken a hit from a weak tech sector and companies shying away from a loud election season. But they are representing less and less of overall revenue for the company.

As a share of total Dow Jones revenue, ad sales have fallen from 38% in 2014 to 15% in the most recent quarter, Robert Thomson, chief executive officer at News Corp, said in an earnings call today. Similarly, advertising revenue at the News Media segment has dropped from 35% of total revenue a decade ago to 7% in the most recent quarter with just over half of that figure being digital, “underscoring how much we have evolved.” 

Dow Jones

Dow Jones saw revenue up 3% to $552 million, from a year earlier, driven by continued growth in the professional information business and higher content licensing revenue. 

“Across our masterheads, we are starting to see the positive impact of our landmark agreement with OpenAI, as well as the impact of our cost discipline,” Thomson said. “We can’t be more specific than we already have been about the distribution of AI revenues, particularly from the OpenAI deal, but you will see it having an impact in the news media section. There’s no doubt about that, as in subsequent quarters, and it is also a part now of the revenue and profit profile of Dow Jones.”

Digital represented 82% of total revenue compared to 81% in the prior year.

Circulation and subscription revenues increased 5%, primarily driven by an 8% increase in professional information business revenues, led by 16% growth in Risk & Compliance revenues to $81 million and 11% growth in Dow Jones Energy revenues to $68 million. 

Circulation revenues increased 1% compared to the prior year, as the continued growth in digital-only subscriptions was mostly offset by lower print volume. Digital circulation revenue accounted for 72% of circulation revenues for the quarter, compared to 70% in the prior year. 

Professional information services had previously been growing in the mid-teens. The explanation, according to Thomson: “What you’re seeing in that seeming softer growth is the impact of the dispute at Factiva, where there was a decline year-on-year, dragging down the overall revenue increase. Two things there: One, we hope the dispute will be resolved. And secondly, the team is working diligently to enhance the user experience at Factiva. We have just announced a search deal with Google.”

Risk and Compliance revenue over the last five years from fiscal 2019 to fiscal 2024 have more than doubled, representing 18% annual compound growth with global instability and increasing regulatory vigilance. “There is no sentient law abiding company that does not want to minimize risk and maximize compliance,” Thomson said.

News Media

News Media saw revenue drop 5%, with circulation and subscription revenue decreasing 1% compared to the prior year on lower print volumes, partially offset by cover price increases and a $6 million, or 3%, positive impact from foreign currency fluctuations.

Advertising revenue decreased $10 million, or 5%, on algorithm changes, among other issues. Digital revenue represented 39% of News Media sales compared to 37% in the prior year, and represented 37% of the combined revenues of the newspaper mastheads. 

The New York Post’s digital network reached 103 million unique users in September 2024, compared to 127 million in the prior year, despite the contentious election.  

AMO’s Take

There are three main themes within the earnings: two good and one bad. Let’s start with the bad news. 

Looking at the traffic numbers of two of News Media’s biggest publications is an indication of how much harder things have become over the last couple of years. News Corp consistently calls out the traffic for The Sun and New York Post. We’ve graphed the drop in traffic going back to Fiscal Q2 2023 (October – December 2023). 

In the earnings release, management explicitly calls out that algorithmic changes at certain platforms impacted some of the mastheads. Both publications are predominately advertising driven, so seeing this sort of a drop in traffic will, of course, negatively impact revenue. We can see “algorithmic changes” have come up repeatedly in the press releases, but what’s unclear is if there’s a plan to overcome it. 

Some of News Media’s publications are making a push into subscriptions, but the growth is slow. As an example, The Times and Sunday Times reached 600,000 digital subscribers in the quarter, up from 572,000 a year ago—4.9% growth in a year. 

This is unusually problematic because this was prime election season. President Biden stepped down for Vice President Harris to run for president; Trump selected JD Vance to be his running mate; Harris made a sprint to the election. The big question is: what would traffic have been if it had been a normal year? 

And so, News Media is likely a far bigger problem for News Corp than the financials are showing. Fortunately for News Corp, it also owns Dow Jones. And that portfolio continues to perform thanks to two primary initiatives. 

First, the consumer subscription business across The Wall Street Journal, Barron’s and MarketWatch continues to grow rather impressively.

Compared to last year, there are 714,000 more digital subscribers in the portfolio, which represents 15.5% growth. But what’s important to note is that in the quarter, a lot of the subscribers chose the bundle. Susan Panuccio, outgoing CFO of News Corp, said on the earnings call:

Digital only subscriptions improved by 15% year over year and by 99,000 sequentially. Bundling accounted for approximately 31% of the sequential digital only volume growth in the first quarter print volume declined by 16% year over year, partially offset by higher pricing. Digital circulation accounted for 72% of total consumer circulation revenue for the quarter. 

While it’s only 30,700 subscribers, this is a trend that is necessary if Dow Jones is going to continue growing revenue. A critical way to increase revenue is to convince readers that they should be paying for more than one product. The total cost is less than a per-publication subscription, but it results in a strong boost to LTV. 

Second, the B2B business continues to see strong growth. Although the entire professional information services division only grew by 8% growth—that Factiva problem is holding it back—the two other divisions continue to drive double digit growth. 

It could be argued that the Dow Jones Energy and Risk & Compliance product portfolios are the most valuable assets in all of News Corp. They are multi-year, high-priced subscription businesses with unbelievably low churn. This is nirvana for investors. In many respects, being a part of News Corp holds back the true value of these assets from being achieved—a point that Starboard Value likely believes.