News Corp. reported The Wall Street Journal lost subscribers during the holiday quarter that coincided with the 2024 presidential election — a decline that stood in contrast to its competitor The New York Times, which reported its best subscriber growth in years earlier on Wednesday.
The Wall Street Journal ended its second fiscal quarter — covering October through December — with 4.225 million customers, or 30,000 less than it had at the start of the quarter.
News Corp.’s news business reported a 2% drop in sales from the same time a year prior, going from $582 million in revenue to $572 million in revenue in its most recent quarter.
Still, the parent company of the WSJ, New York Post, and publisher HarperCollins offset the hit to its news operation with notable revenue growth from its publishing and digital real estate services business. News Corp. brought in more money and saw its quarterly profit increase 58% from the same time period a year prior.
CEO Robert Thomson, on the company’s earnings call, expressed optimism on the business front with Donald Trump back in the White House. The move mirrored Mark Zuckerberg’s pro-Trump comments on Meta’s quarterly earnings call a week ago.
“We are seeing a tangible increase in business confidence here in the U.S. since the election,” Thomson said. “The temporary turmoil of transactional tariffs aside, there is the confluence of economic optimism and the cultural awakening with the yoke of woke having been lifted.”
He added: “We believe these trends should lead to less superfluous, gratuitous regulation, capital formation, increased opportunities for all Americans, and more candid, creative, compelling conversations. Hopefully an era of censorship and self censorship is receding into the distance.”
Here are the top line results from News Corp.’s second quarter report:
Net income: News Corp. reported $306 million in Q2 net income, an increase of 58% compared to the year prior. That $306 million was also more than double (112% increase) the $144 million net income News Corp. reported last quarter.
Revenue: Q2 sales of $2.24 billion were up 5% compared to last year, and narrowly edged past analyst estimates of $2.20 billion from Zacks Investment Research. The company said its Q2 revenue was driven by “growth at the Digital Real Estate Services, Book Publishing, and Dow Jones segments.”
— Book Publishing: $595 million in Q2 sales, up 8% annually and $49 million more than the sector reported in Q1; interestingly, CFO Lavanya Chandrashekar pointed to”strong Bible sales” as one of the standout performers on the company’s Q2 earnings call
— Digital Real Estate Services: $473 million in Q2 revenue, an increase of 13% year-over-year and $16 million more than the sector reported the quarter before.
The company said “Dow Jones achieved record revenues for the quarter of $600 million,” which represented a 3% annual increase. Dow Jones sales were “underpinned by improved circulation revenues and higher professional information business revenues driven by growth of 11% at Risk & Compliance and 10% at Dow Jones Energy,” News Corp. said in its earnings release.
Subscriptions: As mentioned above, WSJ reported 4.225 million subscribers at the end of the quarter — down from 4.255 million the quarter prior. The paper had 4% more subscribers at the end of 2024 than it did at the end of 2023.
Overall, Dow Jones subscriptions of 5.924 million represented a slight increase from the 5.908 million at the start of the quarter; Dow Jones had 9% more subscribers than the 5.427 million it finished with in 2023.
Earnings Per Share: Adjusted EPS of 33 cents matched analyst estimates from Zacks Investment Research.
The company announced at the end of 2024 it was selling Foxtel Group to DAZN Group Limited, a global sports streaming platform, at an enterprise value of A$3.4 billion.
Artificial intelligence was a key topic in Thomson’s Q2 statement on Wednesday. He lauded the company’s partnership with OpenAI — on the same day The New York Times noted it spent $10.8 million on its lawsuit against the company behind ChatGPT — while also saying he was looking forward to his company’s legal battle against Perplexity AI.
The New York Post and Dow Jones sued Perplexity AI in October, claiming the AI startup has illegally ripped off a “massive amount” of its reporting.
“We are providing priceless content for Generative AI, and remain vigilant in our pursuit of degenerative AI. We are pleased with our partnership with OpenAI and hope that other companies in the segment take a similarly enlightened approach,” Thomson said.
He added: “Our legal action against the perplexing Perplexity is underway, and we look forward with relish to document discovery.”
Thomson also commented on the “sudden rise” of DeepSeek. The Chinese AI model, Thomson said, “lacks the immediacy of trusted news and, ultimately, content will be king in the world of AI.”
Digital advertising at the New York Post increased 13% annually, Thomson noted on the Q2 call, and said the outlet’s profitablity was “assisted by our OpenAI deal.”
Heading into its earnings report on Wednesday afternoon, News Corp.’s share price had increased about 8% since the start of October. The company was trading for $28.78 per share and had a market cap of $17 billion at the closing bell on Wednesday.
