Fox Corp Earnings - Q3 2025 Analysis & Highlights

Key Takeaways

Fox Corp's Q1 2026 earnings call highlighted a strong start to the fiscal year with revenue and EBITDA growth, driven by advertising strength and Tubi's profitability. Key topics included the performance of FOX One, advertising revenue trends, and capital allocation strategies, including a significant share repurchase program.

Key Financial Results:

  • Revenue grew by 5% in Q1 2026.
  • Advertising revenue increased by 6%, despite the absence of political revenue from the previous year.
  • EBITDA grew by 2% to $1.07 billion.
  • Adjusted EPS was $1.51, a year-over-year increase of 4%.
  • Free cash flow was negative $234 million due to the timing of sports rights payments and advertising receivables.

    • Business Segment Results:

  • Cable Networks revenue increased by 4%.
  • Cable advertising revenue grew by 7%, driven by pricing at FOX News.
  • Cable distribution revenues increased 3%.
  • Television segment revenue increased by 5%.
  • Television advertising revenues were up 6%, driven by Tubi and sports pricing.
  • Tubi's revenue grew by 27% and reached profitability.

    • Capital Allocation:

  • A $1.5 billion accelerated share repurchase (ASR) transaction was announced.
  • The ASR consists of $700 million of Class A common stock and $800 million of Class B common stock.
  • The company repurchased a further $300 million in shares so far this fiscal year.
  • The company ended the quarter with approximately $4.4 billion in cash and $6.6 billion in debt.

    • Industry Trends and Dynamics:

  • Subscriber declines remained below 7% for the third consecutive quarter.
  • The advertising market is robust, driven by both upfront and scatter markets.
  • There is increasing interest and engagement in FOX's portfolio of live sports.
  • Consumers have more flexibility with skinny bundles based around entertainment, news, and sports.

    • Competitive Landscape:

  • FOX News is the most-watched cable network in total day and primetime.
  • FOX News is the most-viewed network in all television in weekday prime year-to-date.
  • Tubi has solidified its position as a top premium AVOD platform in the US.

    • Macroeconomic Environment:

  • AI companies are driving growth in tech advertising.

    • Growth Opportunities and Strategies:

  • FOX launched FOX One, a direct-to-consumer streaming service.
  • The company is focused on partnerships for FOX One distribution, including Amazon Prime channels, ESPN, and Verizon.
  • Continued investment in digital-led growth initiatives.
  • The company expects to do more M&A, focusing on areas with tailwinds rather than headwinds.

    • Financial Guidance and Outlook:

  • The momentum in Q1 is continuing into Q2, led by a healthy advertising market.
  • The company expects continued total company distribution revenue growth for the full year.
  • Tubi is expected to be a meaningful contributor to EBITDA in the medium term, with margins in the 20% to 25% range.
  • The company anticipates the $1.5 billion ASR will be completed during the second half of fiscal 2026.
  • Full year FY 2026 TV affiliate revenue is expected to be at or about where it was in 2025.

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