A strong first half for the fiscal year ended June 30, 2025, helped HarperCollins overcome softening conditions in the fourth quarter to post a 3% increase in sales in the year, to $2.15 billion, while profits rose 10%, to $296 million.

In the fourth quarter, sales fell 4% and earnings dropped 12%. HC CEO Brian Murray said the entire book market seemed to lose momentum in the quarter ended June 30 (indeed, AAP reported sales were down across the board in May), but couldn’t pinpoint an exact cause. He speculated that consumer concerns over how tariffs may impact their spending power could have resulted in them limiting their discretionary spending. He also cited the lack of a major new bestsellers in the spring as another possible cause for slowing sales. Murray told PW a number of promotions HC ran in the fourth quarter “didn’t drive the business.”

Given the softening market, Murray said he was satisfied with HC’s full fiscal 2025 performance. He was particularly happy with the boost in earnings and said HC has been able to better keep costs under control since the inflation spike has eased. At present, the supply chain “looks pretty clean,” Murray said, which could be a good sign for sales in the rest of the calendar year. No one division had a standout fiscal 2025, Murray said, but he noted that HarperCollins Christian Publishing has had a solid year and its children’s business showed improvement.

Overall revenue growth was also hurt by a 7% fourth-quarter drop in digital audiobook sales, largely because Spotify’s entrance into the market more than a year ago means the company’s revenues are facing comparisons from last year rather than reflecting a new source of income. For the full year, total digital sales increased 5%, led by higher audiobooks sales as well as growth in e-book sales. Digital sales represented 24% of consumer revenues for the year, compared to 23% in the prior year.

Despite the fourth quarter drag in digital audio, Murray said he still believes the format “has more room to run,” though he wasn’t sure it will post the double-digit increases it saw immediately following Spotify’s entrance into the market. He said HC is using AI to help add synthetic narration for audiobooks, but stressed that the publisher is only using it on “longtail titles where audio rights have never been exploited.” Murray added that HC has adopted a very cautious approach to using AI internally.

Murray is taking a very long range view on how AI will play out in publishing, noting the copyright battles will likely take many years to be resolved. He was encouraged by the ruling that let a class action lawsuit against Anthropic proceed, hoping that the ruling will discourage AI companies from using pirate sites to train AI in the immediate future. He still doesn’t see HC developing any new AI-created products soon, noting, among other things, that the technology changes so quickly it is hard for publishers to keep pace.

Murray was most excited about HC’s international growth and suggested that is where he expects the company’s biggest growth will come from in the near term. The purchase of the German book publisher, Gräfe und Unzer, added $14 million to fiscal 2025 revenue. In July, HC announced it signed an agreement to buy the France and Germany–based manga publishing operations of anime-focused entertainment company Crunchyroll. The deal is expected to be completed before the end of the year. Murray said HC will continue to look for acquisitions both in the U.S. and overseas.

Back in the U.S., Murray said HC, and Harlequin in particular, is well positioned to adapt to the further decline in mass market paperback sales once Readerlink ends its distribution to mass market retailers at the end of the year. The decline in mass market sales has been happening for a long time, Murray observed, and Harlequin has found new ways to get its content to readers, he said.

Murray said HC’s list for the rest of 2025 “feels good,” and pointed to new books from Mitch Albom, Ree Drummond, R.F. Kuang, and Daniel Silver, as well as a Sylvester Stallone memoir and the release of unpublished stories by Harper Lee. Still, he acknowledged, HC faces a tough comparison in the current quarter with last year when JD Vance’s Hillbilly Elegy became a huge bestseller following his selection has Donald Trump’s running mate. Murray said that results for the remainder of the calendar rests in part on how confident consumers will feel during the holiday season.

This article previously stated that HarperCollins’s profits rose to 10% to $269 million. It was $296 million.