Fox Corp Earnings - Q1 2026 Analysis & Highlights
Fox Corp reported strong third quarter fiscal 2026 results driven by robust advertising trends, distribution revenue growth from FOX One, and record EBITDA, while management highlighted strategic opportunities in live sports, news, and streaming, with confidence in near-term upfront performance and political advertising revenue.
Key Financial Results
Total company revenue reached $4 billion in fiscal third quarter 2026.
Adjusted EBITDA grew 11% to $954 million, representing a record third quarter for Fox.
Net income attributable to Fox stockholders was $166 million, or $0.38 per share, compared to $346 million, or $0.75 per share, in the prior year period.
Adjusted net income was $570 million and adjusted EPS was $1.32, up 20% compared to $1.10 per share in the prior year.
Advertising revenue declined 24% on a headline basis due to the absence of last year's Super Bowl broadcast.
Excluding the Super Bowl impact, total company advertising revenue would have grown double digits over the prior year quarter.
Distribution revenue grew 3% during the quarter, benefiting from FOX One subscriber additions and retention.
Content and other revenue was up 12%, primarily due to higher sports sublicensing revenue at the Cable segment.
Total expenses fell 14%, mainly as a result of NFL postseason schedule differences.
Business Segment Results
Cable segment delivered 6% revenue growth and 1% adjusted EBITDA growth to $884 million.
Cable distribution revenue grew 5% over the prior year quarter, as pricing gains outpaced net subscriber declines.
Cable subscriber declines remained stable at under 6.5% across third party distributors, before accounting for FOX One contributions.
Cable advertising revenue was up 5% versus the prior year, driven by strength in national pricing at News and the World Baseball Classic at Sports.
Cable content and other revenue increased 24%, driven by higher sports sublicensing revenue.
Cable expenses increased 13%, primarily attributable to higher sports rights amortization.
Television segment reported $2.2 billion in quarterly revenue.
Television advertising revenue declined 30% as the absence of Super Bowl 59, which generated over $800 million in gross advertising revenue in the prior year quarter, more than offset underlying growth.
Television distribution revenue was down 1%, continuing to be in line with expectations for TV distribution revenue to be about flat for the full year.
Television content and other revenue was up 2% year-over-year, primarily due to higher content revenue tied to entertainment production studios.
Television segment EBITDA was $191 million, more than 3x the level posted in the prior year quarter.
FOX News achieved its highest third quarter advertising revenue ever.
FOX News Channel finished the quarter as the most watched cable network in both Total Day and Prime.
FOX News finished April with year-on-year total audience growth, becoming the second most watched network in Monday through Friday Prime in all of television.
FOX News Digital delivered strong results with YouTube and social media views up double-digits over the prior year.
World Baseball Classic on FOX was a resounding success, with average ratings up over 150% versus the 2023 tournament.
Major League Baseball's opening weekend on FOX scored ratings 45% over last year.
INDYCAR grew ratings 37% as of quarter-end.
Over 170 million viewers tuned in to regular season NFL games on FOX during the 2025-'26 season.
Tubi revenue grew 23% in the third quarter.
Tubi engagement increased 19% in total view time.
Tubi now features more than 220 creators with over 17,000 episodes.
Capital Allocation
Fiscal year-to-date share repurchases totaled $1.95 billion through the share buyback program.
Cumulative amount repurchased reached over $8.5 billion, or approximately 36% of total shares outstanding since the launch of the buyback program in 2019.
The $1.5 billion accelerated share-repurchase transaction is now complete.
Quarterly free cash flow was $1.77 billion.
Cash position ended the quarter at approximately $3.6 billion with $6.6 billion in debt.
Industry Trends and Dynamics
Advertising trends remain strong across the entire portfolio, including sports, news, entertainment, Tubi, and local stations.
Low options are being taken up in the advertising market, indicating strength.
No cancellations are being seen and healthy scatter prices are present in the advertising market.
Most advertising categories are growing, including pharmaceutical, tech, and finance.
Political advertising market is estimated at $11 billion for the midterm, which would be a midterm record.
Record political revenue is already being seen for an off year.
Cable network distribution can grow sustainably with the emergence of FOX One and genre bundles creating heterogeneity in cable network performance.
Skinny bundles launched 12 to 18 months ago and are showing positive signs.
Competitive Landscape
FOX News brands are described as the most coveted and valuable in the cable universe, whether FOX Sports or FOX News.
FOX News CPMs and national pricing are up over 45%, though still below broadcast network CPM pricing, indicating upside opportunity.
FOX News has added 200 new additional advertising clients in fiscal year '26, on top of 350 new advertising clients in fiscal '25, totaling over 500 new clients.
FOX News is positioned as the number one cable network in the country and the number two network overall, with only one broadcast network slightly ahead.
Macroeconomic Environment
The advertising market is described as very healthy, similar to the market seen around the same time last year.
Strong underlying ad market trends are expected to continue into the upfront.
Growth Opportunities and Strategies
FOX acquired rights to two additional NFL games in national windows for the coming season, including a week 10 overseas game from Munich that will create the first triple header on broadcast TV in history, and a Saturday game in week 15.
FOX will host the FIFA Men's World Cup, bringing the first World Cup to the United States in over 30 years, with an expanded schedule encompassing 104 matches over five weeks.
FOX will deliver the most World Cup matches ever on US broadcast television.
Tubi will simulcast opening matches of the World Cup, including the first USA match, and will be home to a FIFA World Cup hub.
FOX One is expected to benefit from World Cup content, with strong consumption across news and sports offerings.
Refreshed midseason slate introduced new shows including Fear Factor, Memory of a Killer, and Best Medicine.
New shows for the upcoming year include Baywatch and The Interrogator, to be announced at the upfront.
FOX One has exceeded expectations with very little churn, much lower than expected, particularly during the quieter spring and summer period.
Over half of FOX One viewership in the third quarter is news viewership, demonstrating the strength of that content and user base.
FOX One subscriber additions are described as additive to the ecosystem and have outperformed expectations.
FOX remains bullish on FanDuel and retains a 2.5% equity stake in Flutter and an 18.6% option in FanDuel, with over four years to exercise the option.
Financial Guidance and Outlook
Management expects record EBITDA for fiscal year 2026.
All signs point to a healthy upfront for FOX.
Management expects a very healthy upfront market, similar to the market seen around the same time last year.
Momentum in advertising continues into fiscal fourth quarter.
TV distribution revenue is expected to be about flat for the full year before returning to growth in fiscal '27.
About just north of one-third of distribution income is up for renewal in fiscal '27, skewed towards TV.
Management feels very good about both cable distribution revenue growth and TV distribution growth in fiscal '27.
World Cup financial impact is expected to be 50/50 split between Q4 of the current fiscal year and Q1 of the next fiscal year.
World Cup is expected to be EBITDA accretive on an overall company basis, with revenue and EBITDA accretion on the broadcast side and less revenue and probably not EBITDA accretive on the cable network side.
Net digital investments are expected to be comfortably inside the $290 million spent last year.
No surprises are anticipated for fiscal '27 in terms of investment envelope.
NFL Partnership and Strategic Relationships
FOX and the NFL have been partners for more than 30 years in a mutually beneficial relationship.
Management stated there is no tension with the NFL and expressed desire to be partners for the next 30 years.
Four years remain on the current NFL deal.
No substantive discussions have occurred with the NFL about renegotiating or extending the current deal, though speculation exists in the press.
FOX would like to broaden and deepen its relationship with the NFL, but only in a disciplined way that creates long-term shareholder value.
