Fox Corporation Q3 FY2026 earnings call

• Overall Financial Results

  • Total company revenue reached $4 billion in Q3 FY26, with adjusted EBITDA growing 11% to a record quarterly $954 million
  • Adjusted EPS increased 20% year-over-year to $1.32; reported net income was $166 million ($0.38 per share), down from $346 million ($0.75 per share) in the prior year due to the Super Bowl comparison
  • Generated $1.77 billion in quarterly free cash flow, consistent with seasonal capital cycle patterns; ended the quarter with $3.6 billion in cash and $6.6 billion in debt
  • Year-to-date share repurchases total $1.95 billion, bringing cumulative repurchases to over $8.5 billion (≈36% of outstanding shares) since the 2019 program launch

• Brand & Content Performance

  • Fox News achieved its highest ever Q3 advertising revenue, and finished the quarter as the most-watched cable network in total day and primetime; Fox News Digital delivered double-digit year-over-year growth in YouTube and social media views
  • Fox Sports saw strong ratings growth: World Baseball Classic average ratings up 150% vs 2023, 2026 MLB opening weekend ratings up 45%, IndyCar ratings up 37% through quarter end, and the 2005-26 NFL season averaged over 170 million total regular season viewers
  • Tubi delivered 23% year-over-year revenue growth and a 19% increase in total view time; it reached nearly 100 million monthly active users, hosts over 220 creators with 17,000+ episodes, and achieved breakeven or better adjusted profitability for three consecutive quarters
  • Broadcast entertainment delivered solid audience performance for its new mid-season slate, with new shows amplified by delayed digital streaming

• Strategic Initiatives

  • Fox One, the company's direct-to-consumer offering, has outperformed early expectations, with better-than-expected new subscriber additions, retention, and low churn; over half of Fox One viewership is currently news content
  • Fox acquired rights to two additional NFL regular season games for the upcoming 2026 season, and will be the exclusive broadcaster of the 2026 FIFA Men's World Cup this summer, with coverage carried across Fox broadcast, Tubi, and Fox One

Cable segment: Delivered 6% year-over-year revenue growth, with adjusted EBITDA growing 1% to $884 million. Cable distribution revenue grew 5% as pricing gains outpaced stable net subscriber declines (under 6.5% excluding Fox One contributions), cable advertising revenue grew 5%, and cable content and other revenue grew 24% driven by higher sports sublicensing revenue. Expenses increased 13% primarily due to higher sports rights amortization. This segment contributes approximately 45% of total company revenue.

Television segment: Reported $2.2 billion in quarterly revenue, accounting for 55% of total company revenue. Headline advertising revenue declined 30% as the absence of 2025's Super Bowl 59 (which generated $800 million in gross ad revenue last year) offset underlying growth from Tubi and an extra NFL wildcard game. Television distribution revenue declined 1% (in line with full-year expectations of roughly flat results), and television content and other revenue grew 2% driven by higher entertainment studio content revenue. Expenses fell 24% due to the absence of Super Bowl-related programming costs, leading to EBITDA of $191 million, over three times the prior year quarter level.

• Full fiscal year 2026 EBITDA is on track to reach a new record, driven by core operating momentum and the upcoming FIFA Men's World Cup
• Television distribution revenue is expected to be roughly flat for full fiscal year 2026, before returning to growth in fiscal 2027
• The 2026 upfront advertising market is expected to be healthy, matching the strong conditions seen in 2025, with low unsold inventory, stable scatter pricing, and growth across key categories including pharmaceuticals, tech, and finance
• Political advertising revenue for the 2026 midterm cycle is already tracking to a record off-year level, with Fox positioned to capture significant share from battleground state and issue ad spend
• Net digital investment for full fiscal 2026 is expected to come in below the prior year's $290 million, with investment levels moderating as Tubi scales; fiscal 2027 digital investment will remain disciplined, with no unplanned large spending increases expected

• Traditional cable industry net subscriber declines continue, though the rate of decline has stabilized below 6.5% per quarter for Fox
• Longer-term industry negotiations for NFL media rights are speculative, with no substantive extension discussions in place as of the call
• Profitability of new digital initiatives like Fox One remains unproven over a full business cycle, leading management to take a conservative near-term accounting approach
• While Fox One has shown early low churn, seasonal volatility in subscriber retention has not yet been fully tested over multiple content cycles

Q: Can you share details on the new additional NFL games, address reported tension with the NFL, and update on long-term contract extension negotiations? / A: The two new regular season games are a Munich-based overseas game in week 10 (forming broadcast TV's first ever triple-header) and a Saturday game in week 15. Management stated there is no tension between Fox and the NFL, which has been a 30-year mutually beneficial partner, and there are currently no substantive discussions about extending the existing deal, which has four years remaining. Fox is open to broadening the relationship only on terms that deliver long-term shareholder value.

Q: What is driving cable distribution revenue growth, and can Fox One support sustained mid-single digit cable growth long-term? / A: Stable subscriber decline rates (below 6.5% even before counting Fox One additions) and strong pricing power for Fox's must-have news and sports brands are supporting growth. Fox One has outperformed early expectations for subscriber additions and retention with very low current churn, and the evolving cable ecosystem (including skinny bundles and direct-to-consumer offerings) is creating heterogeneous outcomes that favor strong brands like Fox. Management did not commit to permanent mid-single digit growth but expects stable positive distribution growth into fiscal 2027.

Q: Can you break down national vs local advertising trends, and what is the expected cross-company financial impact of the 2026 World Cup? / A: Advertising growth is strong across national and local, with healthy low inventory, solid scatter pricing, and growth in pharmaceuticals, tech, and finance categories. Political ad spend is already tracking to a record off-year level, with Fox well-positioned in key battleground states. Financially, the World Cup will split recognition 50/50 between Q4 FY26 and Q1 FY27, it is accretive to overall company EBITDA, with most revenue coming from the broadcast network. It will drive added subscribers and engagement for Fox One, and boost Tubi's brand awareness without impacting Tubi's direct revenue.

Q: Can you update on Fox One subscriber trends and your sports betting investment strategy? / A: Fox One has exceeded early expectations, with very low churn that has held steady through spring sports (MLB, IndyCar, NASCAR), and over half of current viewership comes from news content. Management remains bullish on the FanDuel business, retains a 2.5% equity stake in Flutter and an 18.6% option to acquire a stake in FanDuel, has over four years to exercise the option, and is progressing through required licensing processes to exercise.