Fox Corp (FOXA)·Q1 2026 Earnings Summary

Executive Summary

• Q1 FY26 revenue rose 5% to $3.74B, with Adjusted EPS of $1.51 and Adjusted EBITDA of $1.07B; mix benefited from digital strength at Tubi and strong NFL pricing/ratings, while GAAP net income fell on a “Non-operating other, net” headwind .
• Results were above S&P Global consensus: EPS $1.51 vs $1.10*, revenue $3.74B vs $3.57B*, with 16 estimates for both metrics; EBITDA also exceeded S&P’s EBITDA consensus ($1.082B actual vs $0.843B*), though the company reports Adjusted EBITDA of $1.065B (non‑GAAP)* .
• Advertising +6% YoY on continued digital growth led by Tubi and stronger news/sports pricing; distribution +3% despite subscriber declines, which management said remained below 7% for the third consecutive quarter .
• Capital returns accelerated via a $1.5B accelerated share repurchase (ASR) to complete in 2H FY26; cash $4.37B and borrowings $6.60B at quarter-end, positioning flexibility for buybacks .

What Went Well and What Went Wrong

What Went Well

• Beat vs consensus on revenue and EPS; Adjusted EPS $1.51 beat by ~$0.41*, revenue $3.74B beat by ~$0.17B*, supported by Tubi and NFL pricing/ratings .
• Tubi reached quarterly profitability ahead of plan; management targets 20–25% margins over time and expects digital investment needs to moderate as a result .
• Television EBITDA +7% YoY and Cable Network Programming EBITDA +7% YoY on revenue growth and lower sports rights amortization at TV; NFL ratings/pricing supported ad growth .

What Went Wrong

• GAAP net income fell to $609M (from $832M) and GAAP EPS to $1.32 (from $1.78) as “Non-operating other, net” swung to a $(125)M loss vs +$233M last year; Adjusted EPS still grew YoY ($1.51 vs $1.45) .
• Cash from operations was -$130M and free cash flow was -$234M, reflecting seasonality (sports rights payments and receivable build) that typically reverses in 2H .
• Expense pressure from higher digital marketing/content costs and higher entertainment programming amortization partially offset revenue growth .

Financial Results

Company results vs prior year and prior quarter

Estimates vs actuals (S&P Global consensus)

Values marked with * retrieved from S&P Global.

Revenue mix and segment performance

Balance sheet and cash

• Cash & cash equivalents: $4.37B; Borrowings: $6.60B at 9/30/25 . CFO reiterated ~$4.4B cash and ~$6.6B debt on the call .
• Free cash flow: -$234M in the quarter, consistent with seasonal working capital patterns .

Guidance Changes

Note: The company did not provide quantitative revenue/EPS/margin guidance for Q1 FY26 or FY26 in the 8‑K or call .

Earnings Call Themes & Trends

Management Commentary

• “Coming off a record Fiscal 2025, our strong operating momentum has carried through the first quarter of Fiscal 2026… continued engagement growth across the portfolio underpins robust advertising demand… The quality of our assets… gives me great confidence in the positive outlook for FOX… $1.5B accelerated share repurchase… underscores this confidence.” — Lachlan Murdoch, CEO .
• “Free Cash Flow was negative $234 million in the quarter… consistent with the seasonality of our working capital cycle… payments for sports rights and the buildup of advertising-related receivables… reverse in the second half.” — Steven Tomsic, CFO .
• “Tubi… hitting profitability earlier than expected… We would expect [Tubi] margins to be in the 20% to 25% range ultimately… [this] will absolutely moderate the conservative [digital investment] number that Steve gave last quarter.” — Lachlan Murdoch .
• “We ended the quarter with approximately $4.4 billion in cash and $6.6 billion in debt.” — Steven Tomsic .

Q&A Highlights

• Tubi outlook: Management reiterated medium‑term 20–25% margin target and said early profitability will moderate previously contemplated FY26 digital investment levels .
• Distribution/subs: Subscriber declines remained <7% for the third straight quarter; distribution revenue growth continued at +3%, supported by rate increases .
• Ad market/pricing: Strong direct-response and premium pricing trends across News and Sports; NFL momentum supports Q2 sell‑through/pricing .
• Capital allocation: $1.5B ASR to be completed in 2H FY26; repurchase activity continues alongside a robust cash/liquidity position .

Estimates Context

• EPS and revenue exceeded S&P Global consensus: $1.51 vs $1.10* and $3.738B vs $3.569B*; 16 estimates for each metric. EBITDA (S&P methodology) also exceeded consensus (actual 1.082B vs 0.843B*), while company-reported Adjusted EBITDA was $1.065B (non‑GAAP) .
• Given the magnitude of beats and positive ad/distribution trends, Street models are likely to move up on Tubi profitability and advertising leverage; GAAP EPS trajectories may remain more volatile given swings in “Non‑operating other, net” .
  Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

• Clean beat on top line and Adjusted EPS, with digital (Tubi) and NFL driving upside; headline GAAP EPS volatility is driven by non‑operating items, not core operations .
• Tubi’s earlier-than-expected profitability and 20–25% medium‑term margin target increase confidence in FOX’s digital earnings power; incremental targeting/measurement partnerships (e.g., Viant/IRIS.TV) support monetization .
• NFL ratings/pricing momentum and sturdy News pricing underpin ad revenue into Q2, offsetting lower political spending comps .
• Distribution revenue growth continues despite sub pressure (<7% declines), supporting a resilient base of high‑margin revenue .
• Capital return accelerates via a $1.5B ASR; liquidity (cash ~$4.4B vs debt ~$6.6B) provides flexibility for ongoing repurchases .
• Near‑term trading: Positive skew from beats, ASR, and Tubi milestone; medium‑term thesis centers on digital monetization, sports/news pricing power, and disciplined capital returns .

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Sources: Q1 FY26 8‑K press release and exhibits ; Q4 FY25 8‑K press release ; Q3 FY25 8‑K press release ; Q1 FY26 earnings call transcript (company IR PDF, Yahoo, Seeking Alpha) ; Relevant press release on Tubi partnerships .