Hearst posts record revenues and profits as B2B business grows
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Hearst, the 138-year-old media giant, saw record revenues and profits last year, CEO Steve Swartz wrote in an annual memo to employees Tuesday, obtained by Axios.
Why it matters: Hearst has grown its business by investing in business software and trade journalism. Those efforts have helped offset a challenging environment for consumer media, particularly magazines and newspapers.
- Swartz also cited investments in generative AI for helping the company makes its processes "faster and better." The company struck a multiyear deal with OpenAI in 2024 and has since brokered other deals with AI companies.
Zoom in: According to Swartz, revenue grew 3% last year to $13.5 billion. While the media giant doesn't disclose profit metrics, Swartz said Hearst hit record profit levels last year.
- The company's B2B business today accounts for 60% of the company's total profit, up from less than 10% 15 years ago.
Between the lines: Hearst's B2B arm includes financial information services firm Fitch Group, several health care services companies, and a transportation services and media arm.
- Hearst invested in Fitch in 2006 and acquired the entire company by 2018. It is the single biggest contributor to the company's profits.
- Hearst acquired its first health care services company, First Databank (FDB), in 1980. Today, Hearst has several other B2B health care companies in its portfolio.
- Hearst's transportation arm includes data and software services for aviation, trucking and automotive businesses. That business was rooted in Hearst's 1903 launch of Motor Magazine.
Yes, but: Hearst's success growing its B2B media business should not be taken as an indication that it won't still invest in consumer media, Swartz noted.
- He cited Pulitzer-winning work last year from one of its magazine titles, Esquire, and one of its newspapers, the Houston Chronicle, as examples of areas where Hearst's investment in journalism matters.
- He noted Hearst's acquisition of Dallas Morning News last as another example of the company's continued investment in journalism.
Hearst owns several local TV stations, and has investments in national TV networks. It owns 20% of ESPN and 50% of A&E, both through joint ventures with Disney.
- Swartz acknowledged that Fitch Group's outstanding performance helped offset any challenges the TV business faced last year.
The big picture: Hearst's diversified portfolio has allowed it to invest in its media properties and make acquisitions without taking on too much debt.
- Swartz says the company is "one of the few of its size with no net debt, providing a massive cash cushion for future acquisitions."
What to watch: Swartz says the company is "cautiously optimistic" about 2026.
- "Despite the many worrisome geopolitical trouble spots across the globe, business conditions are generally favorable. We have not been overly affected by the substantial increase in tariffs here in the U.S.," he noted.
- "Thanks in part to a bias toward deregulation and to lower interest rates we expect economies around the world to grow, albeit slowly. Inflation isn't fully tamed but it is moderating."
