Episode Details

News Corporation (NWSA) Q4 FY2026 — Q4 FY2026 (3 months ended June 30, 2026, and the full fiscal year): Q4 revenue $2,337M +11% (Adjusted Revenues +7%; $71M of currency). Q4 Total Segment EBITDA $423M +31%. Adjusted EPS $0.35 vs a $0.21 bar - a 67% BEAT. FY2026 revenue $9,028M +7%, net income from continuing operations $743M +15%, Total Segment EBITDA $1,627M +15%, free cash flow $811M +42%, buyback $643M. The 8-K was accepted 4:17pm ET, AFTER the close, so Thursday Aug 6 is the reaction session: $29.06 to $29.67, +2.10%, after trading as high as $30.88. Friday Aug 7 gave it back to $28.52, -3.88%. News Corp beat the adjusted EPS bar by 67%, posted a record year on continuing operations, and grew free cash flow 42% to $811M - and two sessions later the stock was lower than before the print. Here is the arithmetic nobody ran. Adjusted Total Segment EBITDA grew $169M for the year. $115M of that - 68% of everything - came from Digital Real Estate Services, which is mostly REA Group, an Australian property portal News Corp owns 62.0% of. Strip that segment out and adjusted segment profit grew 6.5%, not 12%. Book Publishing and News Media went BACKWARDS by $34M between them. And $170M of the year's continuing-operations profit is attributable to minority holders, so only 39 cents of every segment-EBITDA dollar reaches a News Corp shareholder. THE CALL: HOLD (3/5, FAIR VALUE $29.00 vs THE $28.52 CLOSE - ONLY 1.7% OF UPSIDE, AND BELOW WALL STREET) — base-case value ~$29.0 vs ~$28.52 today. KEY METRICS: - CALL: HOLD 3/5, fair value $29.00 vs the $28.52 Aug 7 close = +1.7%. Cash-flow model $24.61, multiples model $32.45, buy under $24.65. The 62% REA stake alone is $9.94B of a $16.14B market cap. - Street: Buy (22 buy, 5 hold, 1 sell). Consensus target $32.20 (high $35, low $29.40). Morgan Stanley to $35 from $34 on Aug 6. We are 10% below consensus. What to watch: UP: the beat is real on a like-for-like basis - the $0.35 print and the $0.21 bar are both adjusted, and the four adjusted quarters sum to the reported $1.18 full year. Dow Jones segment EBITDA grew 13% to $663M with Risk & Compliance +16% to $392M and Dow Jones Energy +8% to $301M, and 84% of Dow Jones revenue is now digital at a 28.1% Q4 margin. The balance sheet is net cash ($2,095M vs $1,989M of borrowings). The buyback tripled to $643M and cut the share count 4.3% - and we falsified the lazy 'it is all buyback' story: only ~$0.02 of the $0.29 of adjusted EPS growth came from the share count. On segment EBITDA the stub costs 6.9x, and Dow Jones alone at 12x would be worth more than all of it. DOWN: 68% of the year's growth came from a 62%-owned business. 4 of Q4's 11 points of revenue growth were currency, and for News Media the currency was ALL of it (adjusted revenue flat in Q4, -1% for the year, adjusted segment EBITDA -14%). The Sun's monthly unique users fell 87M to 65M and the NY Post network 90M to 77M. News Corp discloses no dollar figure at all for AI content licensing. And the stub only converts $386M of free cash flow against $6.09B of enterprise value. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.