Earnings call transcript: Fox Corp Q1 2026 beats EPS, stock rises

Fox Corporation reported a robust performance in its fiscal first quarter of 2026, surpassing Wall Street’s expectations with an adjusted earnings per share (EPS) of $1.51 against the forecasted $1.11. This represents a 36.04% earnings surprise. Revenues also exceeded projections, reaching $3.74 billion compared to the anticipated $3.57 billion, marking a 4.76% revenue surprise. In response, Fox’s stock rose 4.52% in pre-market trading to $63.56.

Key Takeaways

• Fox Corp’s EPS beat estimates by 36.04%, signaling strong operational performance.
• Revenue growth was driven by a 6% increase in advertising revenues.
• The stock price surged 4.52% in pre-market trading following the earnings announcement.
• Fox One streaming platform launched, enhancing digital presence.
• A $1.5 billion accelerated share repurchase program was announced.

Company Performance

Fox Corporation demonstrated significant resilience and growth in its fiscal Q1 2026. The company’s strategic focus on digital expansion and advertising revenue growth proved effective. Despite challenges in the media landscape, Fox managed to maintain subscriber declines below 7% for the third consecutive quarter, showcasing its ability to retain a stable customer base. The launch of the Fox One streaming platform, along with profitable operations from Tubi, further bolstered its competitive position.

Financial Highlights

• Revenue: $3.74 billion, up from $3.57 billion forecasted.
• Earnings per share: $1.51, a 4% increase year-over-year.
• Free cash flow: Negative $234 million, consistent with seasonal trends.
• Cash and debt: $4.4 billion in cash and $6.6 billion in debt.

Earnings vs. Forecast

Fox Corp exceeded expectations with an EPS of $1.51, compared to the forecasted $1.11, representing a 36.04% surprise. This strong performance is attributed to robust advertising revenue and strategic partnerships. The revenue of $3.74 billion also surpassed the forecast of $3.57 billion, a 4.76% surprise, indicating effective operational execution.

Market Reaction

Following the earnings release, Fox’s stock rose 4.52% in pre-market trading, reaching $63.56. This positive movement reflects investor confidence in the company’s growth prospects and operational efficiency. The stock’s performance is notable as it approaches its 52-week high of $65.3, indicating strong market sentiment.

Outlook & Guidance

Fox Corp anticipates continued growth in distribution revenue for fiscal 2026, with Tubi margins expected to stabilize in the 20-25% range long-term. The company is also exploring potential mergers and acquisitions in areas with favorable market conditions, aiming to strengthen its strategic position.

Executive Commentary

CEO Lachlan Murdoch stated, "This is the strongest advertising market we have seen in our verticals," highlighting the robust demand in national advertising sectors. CFO Steve Tomsic added, "We would expect those margins to be in the 20% to 25% range ultimately," reflecting confidence in Tubi’s profitability. Murdoch also indicated potential for increased M&A activity, emphasizing strategic growth.

Risks and Challenges

• Market saturation in streaming services could impact growth.
• Economic fluctuations may affect advertising revenues.
• Rising competition in digital media poses a strategic challenge.
• Potential regulatory changes in media ownership could affect operations.
• Debt levels remain a consideration for financial strategy.

Q&A

During the earnings call, analysts inquired about subscriber growth for Fox One, with management noting that acquisition rates exceeded expectations. Questions also focused on the impact of sports and news content on platform engagement, with executives affirming their significant contributions. Additionally, analysts raised concerns about advertising CPMs, which remain lower than traditional broadcast networks, but Fox emphasized its expanding client base with 350 new national clients on Fox News.

Full transcript - Fox Corp Class A (FOXA) Q1 2026:

Polly, Conference Call Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation first quarter fiscal year 2026 earnings conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. I would like to emphasize that functionality for the question and answer queue will be given at that time. If you require assistance during the call, please press star then zero on your touch-tone keypad. As a reminder, this conference is being recorded. I’ll now turn the conference over to Chief Investor Relations Officer Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Gabrielle Brown, Chief Investor Relations Officer, Fox Corporation: Thank you, Polly. Good morning and welcome to our fiscal 2026 first quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer, John Nallen, President and Chief Operating Officer, and Steve Tomsic, our Chief Financial Officer. First, Lachlan and Steve will give some prepared remarks on the most recent quarter and then we’ll take questions from the investment community. Please note that this call may include forward-looking statements regarding Fox Corporation’s financial performance and operating results. These statements are based on management’s current expectations and actual results could differ from what is stated as a result of certain factors identified on today’s call and in the company’s SEC filing. Additionally, this call will include certain non-GAAP financial measures, including adjusted EPS and adjusted EBITDA or EBITDA as we refer to it on this call.

Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filings, which are available in the Investor Relations section of our website. We also refer to free cash flow, which we define as net cash provided by operating activities, less capital expenditures, and with that I’m pleased to turn the call over to Lachlan.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Thank you, Gabby, and thank you all for joining us this morning to discuss our fiscal first quarter earnings. Fiscal 2026 started strong across our businesses with revenue growth of 5% and EBITDA growth of 2%. Advertising revenue grew 6% during the quarter despite not having last year’s political revenue, with robust trends at news, sports, entertainment, and Tubi. This was supported by a gain in engagement across the portfolio, which distinguishes us from our peers and again underscores the strength of our brands and of the leading positions they hold in our ecosystem. Distribution revenue grew by 3% with subscriber declines remaining below 7% for the third consecutive quarter. The momentum in Q1 is continuing into Q2, led by a very healthy advertising market for us, stemming from both the upfront and from a strong scatter market.

In fact, we are enjoying the most robust advertising market we have seen for some time. Also, in this quarter we launched Fox One. Though it’s only been two months, we are encouraged by the enthusiastic response to the product. Subscriber trends have exceeded our expectations with those subscribers coming to direct acquisition and partnerships. We continue to believe that our content is best served as part of a bundle, whether it’s in the pay TV bundle or direct-to-consumer bundle, as it provides value and choice to the consumer. At Fox, we are distribution agnostic. We are committed to ensuring our networks and content reach as many households as possible. With that in mind, we launched two Fox One bundle partners earlier this month, ESPN and Verizon. These will build upon the strong momentum we have achieved with our groundbreaking Amazon Prime Channels partnership.

Kudos to everyone at Amazon, from Andrew Jassy down, for their tremendous and brilliant support of the service. You all have done just a tremendous job. Unsurprisingly, in terms of engagement, we have a balanced mix on Fox One with news driving audience and reach during the week and sports events doing the same over the weekend across all forms of distribution. Interest and engagement in Fox’s portfolio of live sports is increasing. Fox Sports kicked off the fall season with solid momentum. The NFL on Fox is off to a great start, averaging almost 22 million viewers in September, a 12% increase over last season and Fox’s best start to an NFL season ever. Fox’s America’s Game of the Week ranked as TV’s number one show through the end of September with an average of 30 million viewers.

Our schedule only looks better from here right through to the NFC Championship at the end of the season. Interest in college football continues to reach new heights as well. Through the end of September, Fox’s Big Noon Saturday window averaged over 6 million viewers, up 22% over last season. The strong start was punctuated by nearly 17 million viewers tuning in to watch Ohio State versus Texas, the most watched week one college football game ever on any network. Like with the NFL, we head into the back half of the college season with a strong roster of Big Ten and Big 12 matchups, highlighted by the Michigan Ohio State game and capped off by both the Big Ten and Mountain West Conference championship games. Last year’s Dodgers Yankees World Series was a tough act to follow. Major League Baseball has once again performed well for us.

Regular season ratings were up 3%, and as we go into Game 6 of a spectacular World Series, our total postseason advertising revenues will likely surpass last year’s. Speaking of revenue, Tubi achieved 27% revenue growth in the first quarter driven by an 18% increase in total view time. This overall engagement trend has continued into Q2. Our expansive content library and our differentiated user base have solidified Tubi’s position as the top premium AVOD platform in the U.S. Tubi reached profitability this past quarter. It’s a great milestone, a credit to the Tubi brand, to our viewer experience, and to the revenue momentum we are seeing. This will likely lead to a partial moderation in the overall net investment we expected to deploy across our digital initiatives this year. Fox News sustained its strong ratings and audience momentum throughout the quarter.

Fox News once again cemented its status as the most watched cable network in total day and in prime time. Even more impressive, Fox News is the most viewed network in all television in weekday prime calendar year to date. This engagement and share led to the highest first quarter ad revenue in Fox News Media history with higher pricing across both direct response and national advertising during the quarter. Breaking news coverage throughout the quarter also drove strong engagement at Fox News Digital, fueling growth in page views and minutes versus last year. Fox News Digital closed the quarter with over 6.5 billion social media video views, its highest total ever. The strong Q1 results we have just reported, coupled with the ongoing trends we are seeing across the company, give me great confidence in the positive outlook for Fox.

This is particularly underpinned by the strength of the advertising market, our leadership position across news and sports, and by Tubi reaching quarterly profitability earlier than expected coming off a record fiscal 2025. Fiscal 2026 will again highlight the uniqueness of our strategy, the quality of our assets, our ability to deliver on screen and financially, and the overall strength of our financial position. This confidence is clearly demonstrated by this morning’s announcement of a $1.5 billion accelerated share repurchase (ASR) transaction. Consistent with our track record, we remain committed to delivering value for our shareholders in a thoughtful and disciplined manner, and now let me turn over to Steve.

Steve Tomsic, Chief Financial Officer, Fox Corporation: For more on the results.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Thanks Lachlan and good morning everyone. Fox has made a strong start to fiscal 2026, highlighted by robust total company revenue growth of 5%. Advertising revenues were up 6% over the prior year, even with the tough comparison to the start of last year’s record political cycle. Driven by continued momentum at Tubi, strength in pricing at news, and pricing and ratings growth at sports. Distribution revenues, which now include both affiliate fees for our linear channels as well as subscription fees for our direct to consumer streaming services, grew 3% over the prior year. Content and other revenues grew 12%, primarily due to higher entertainment content deliveries in the quarter. Total company expenses were up 6% year over year, largely due to investments in our digital led growth initiatives and higher entertainment programming costs. This was partially offset by lower sports programming costs.

As a result, quarterly EBITDA grew 2% to $1.07 billion. Net income attributable to stockholders to $599 million or $1.32 per share compared to the $827 million or $1.78 per share reported in the excluding non core items, adjusted net income was $686 million and adjusted EPS was $1.51, equating to a year over year increase of 4%. Now turning to our operating segments, for our Cable Networks, revenue grew 4% over the prior year. Cable advertising revenues were up 7%, driven by robust pricing at Fox News, which more than offset the advertising impact from the absence of Copper America at our cable sports networks. Cable distribution revenues grew 3% in the quarter as pricing growth from our affiliate renewals outpaced the impact from industry subscriber declines, which continue to run at under 7%. Cable content and other revenues increased $13 million, led by higher sports sub licensing revenues.

Cable expenses grew 2%, primarily due to high sports programming rights and production costs led by international soccer rights. This was partially offset by lower news gathering costs relating to our coverage of last year’s presidential election cycle. All in, EBITDA at our Cable segment was $800 million, an increase of 7% over the prior year quarter. Turning to our television segment, where we delivered 5% growth in revenues, television advertising revenues were up 6%, driven by continued growth at Tubi and strong sports pricing and engagement led by the NFL. This was partially offset by the absence of last year’s political advertising revenues. Television distribution revenues grew 2% over the prior year quarter, as healthy growth in fees across Fox owned and affiliated stations more than offset the impact from industry subscriber declines.

Looking forward, with stable to improving subscriber erosion trends, we expect continued total company distribution revenue growth for the full year, reflecting the flow of our commercial terms with distributors in fiscal 2026. We would expect this growth to be driven by our cable segments. Television content and other revenues increased 17%, primarily as a result of high content revenues tied to our entertainment production studios. Expenses at the television segment grew 4% year over year, driven by higher entertainment programming costs and higher content costs at Tubi. This growth was partially offset by lower sports programming costs, primarily from the absence of WWE and last year’s broadcast of the UEFA Euros. All in, quarterly EBITDA in our television segment grew 7% to $399 million. Now, turning to cash flow, free cash flow was negative $234 million in the quarter.

This is consistent with the seasonality of our working capital cycle, where the first half of our fiscal year is characterized by a concentration of payments for sports rights and the buildup of advertising related receivables, both of which reverse in the second half of our fiscal year. We remain active with our share buyback program, where we have repurchased a further $300 million so far this fiscal year. In addition, as you’ll have seen in this morning’s release, underscoring our confidence in the outlook for the business and our commitment to create value for shareholders, we will enter into a $1.5 billion accelerated share repurchase (ASR) transaction consisting of $700 million of Class A common stock and $800 million of Class B common stock. This transaction will commence tomorrow, and we anticipate it being completed during the second half of fiscal 2026.

This is all supported by the strength of our balance sheet, where we ended the quarter with approximately $4.4 billion in cash and $6.6 billion in debt. With that, I’ll turn the call back over to Gabby.

Gabrielle Brown, Chief Investor Relations Officer, Fox Corporation: Thank you, Steve. We will be happy to take questions from the investment community.

Polly, Conference Call Operator: Thank you. Ladies and gentlemen, I would like to emphasize the new functionality for the question and answer queue. If you wish to ask a question, please press star then 1 on your touchtone keypad. You will hear a tone indicating that you have been placed in queue. You may remove yourself from queue at any time by once again pressing star then 1. If you are using a speakerphone, please pick up the handset before pressing the numbers. It has been requested that you limit yourself to one question. Once again, if you have a question, please press star then 1 at this time. One moment please. For the first question, we have a question from John Hotelick of UBS. Please go ahead. Great.

Thanks and good morning, guys. Maybe just a couple questions on the digital efforts first. Any other color you can provide on Fox One in terms of, I know you don’t want to give sub numbers, but just sort of sub uptake, the engagement you’re seeing, what are people watching on the platform? Did you guys see an acceleration in growth when you launched the ESPN bundle and then on Tubi?

Yeah.

Congrats on turning positive there. From a margin standpoint, how should we think of the long term margin trajectory on that platform?

Steve Tomsic, Chief Financial Officer, Fox Corporation: Thanks.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Hey, thanks, John. Starting on Fox One, it’s early days, right?

Steve Tomsic, Chief Financial Officer, Fox Corporation: The launch was only a couple months ago, but the uptake has, as I mentioned before, absolutely exceeded expectations. Perhaps it shouldn’t have exceeded expectations because it’s a great platform. The team’s done a brilliant job in developing a tremendous service, and obviously the content and the brands are absolutely a premium. Having said that, we are incredibly pleased with the early days and its progress from a subscriber and from an engagement.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Point of view, you see a healthy.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Mix between sports and news viewing. Also, obviously some entertainment viewing, but really the engagement is driven by sports over the weekend and news viewing during the week. We’ve seen no deceleration of that. As we go through the busy autumn sports season, we’re seeing subscriber acquisitions flowing very effectively and efficiently through both football, be it NFL or college football, and also with postseason baseball. It is very pleasing. It is also pleasing to see those subscribers and viewers engaging with our other content on the platform, primarily news.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: As for.

Steve Tomsic, Chief Financial Officer, Fox Corporation: I think the other question.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Was on to be.

Steve Tomsic, Chief Financial Officer, Fox Corporation: We’ve said it before, we expect margins to, you know, be pleased with hitting profitability in this past quarter.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: You’ve got to expect some seasonality with this.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Certainly growing profitability where we expect Tubi to be a meaningful contributor to EBITDA in the medium term. We would expect those margins to be in the 20% to 25% range ultimately.

Gabrielle Brown, Chief Investor Relations Officer, Fox Corporation: Operator, next question, please.

Polly, Conference Call Operator: We have a question from Michael Morris of Guggenheim. Please go ahead. Thank you.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Good morning.

I wanted to ask you first about the stronger pricing on Fox News and really trying to understand where you see this pricing relative to your potential and what’s driving the strength in pricing there. I think at the end of last year you discussed a pretty large number of incremental advertisers coming in with interest and trying to understand where we are in the cycle on pricing and what you think the potential is. Second, you did mention moderation in the investment level. Given the success that you’re seeing at Tubi, which is great, would you be willing to give us some parameter of where you think that may come in, perhaps relative to the investment levels last year or something else that can help us size what you’re thinking at this point.

Thank you.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Thank you very much, Michael.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: I’ll handle both questions on Fox News pricing. The strength of the Fox News pricing.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Really obviously comes from the share that we’re achieving in the marketplace, you know, consistent with the past quarters. I think in total day for Q1 in P2+, we’re up 63% share versus our news competitors. I think for prime time we’re up 65%. We’re at 65% share versus our news competitors. Equally important is, you know, we are the number one channel in all.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Of television year to date.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Obviously, as you go into fall and you have fall entertainment programming and football, they’re tough comps coming. Number one year to date in all of television is a tremendous, tremendous achievement.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: You have to remember that our CPMs are effectively half of what broadcast’s are.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Advertisers and clients, goodbye.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: We still on? Hello.

Polly, Conference Call Operator: Yep, you’re still connected.

Steve Tomsic, Chief Financial Officer, Fox Corporation: We heard a goodbye, so I was on a roll.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Our advertising is about half of.

Steve Tomsic, Chief Financial Officer, Fox Corporation: What the networks are able to achieve from a CPM point of view, it’s a very, very efficient buy for our clients who are experimenting on the channel and are coming back and continue to spend more.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: I think we’ve had three. We’re at about 350 new national clients on.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Fox News this year, and they continue to spend and, in most cases, increase their spending.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Pricing, that’s driving pricing up both.

Steve Tomsic, Chief Financial Officer, Fox Corporation: From a direct perspective of partnerships but also in direct response where we’re seeing very, very healthy, very strong pricing. When we don’t see that, there’s no reason for that to change that.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Momentum to change in terms of moderation.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Of our investment level in our new.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Businesses.

Steve Tomsic, Chief Financial Officer, Fox Corporation: To be hitting profitability earlier in the spectrum will absolutely moderate the conservative number that Steve Tomsic gave last quarter. We’re very pleased by that. We will continue to invest in these businesses as we see fit. It’s a modest investment for us in our future, and we will continue to invest where we think it’s important strategically to build those businesses.

Gabrielle Brown, Chief Investor Relations Officer, Fox Corporation: Next question, please.

Polly, Conference Call Operator: Your next question is from the line of Michael Ng of Goldman Sachs. Please go ahead.

Hey, good afternoon, good morning. I just have one and a quick follow-up just on the comment around distribution growth for the company for this year. I was wondering if you could just expand a little bit on what you think the key drivers of the stable to improving subscriber erosion trends are. You know, how important is Fox One to your outlook on distribution growth? Just as a follow-up, I was wondering if you could explain a little bit more about the accelerated share repurchase (ASR) program, why now, and also why the composition between Class A’s and B’s, just given the more limited float on these. Thank you.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Great, thanks, Mark. On distribution growth, I think what we’re seeing is we’re seeing the early days.

Steve Tomsic, Chief Financial Officer, Fox Corporation: A benefit is flowing through from skinny bundles, which we are, you know, participate in all of them. I think we’re beginning to see, and this is the third quarter now of sort of reduced subscriber erosion, which is pleasing as we see subscriber erosion ameliorate to some degree. It’s a combination of the consumer having more flexibility and getting the ability to, where they don’t want to be in an overall bundle, to participate in these skinny bundles. What really drives these skinny bundles are bundles that are based around entertainment, news, and sports. I think it’s pleasing to see. Also, obviously, the digital distributors continue to do well.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Fox One really won’t have a material impact on that. It is additive to our subscriber numbers.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Because we are targeting subscribers that are.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Outside of the bundle that are cord.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Cutters or cord nevers. As we said before, our aspirations in Fox One remain in the low to mid single digit millions of subscribers. Overall, it’s not certainly in the short term going to have a material impact.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Steve?

Steve Tomsic, Chief Financial Officer, Fox Corporation: Yeah. Just to elaborate, Mike, in terms of that distribution growth, as I just to reiterate in what I said, we absolutely, given where subscriber trends are growing and to Lachlan’s point, Fox One, we expect to be totally additive to where we’re at. We’re expecting total company distribution revenue to grow this year at the TV segment. Given the timing or given the timing of our rate increases, we’d expect that our full year FY26 TV affiliate revenue to be at or about where we were in 2025. Given those timing of those rate increases, we’d expect overall TV overall total company distribution revenue growth to be up in 2027 coming from both segments. We feel pretty good about where the book is there.

To capture your question on ASR in terms of the splits, the way that the way the ASR will work is we’ll enter into the transaction tomorrow, we’ll get 80% of the shares back on settlement straight away, and it’ll take the better part of the current fiscal year to work through that. The split between the A’s and the B’s, I think it talks to the fact that the B’s are currently trading at a 10% or 11% discount to the A’s. There’s just an outright efficiency of buying with respect to the B’s versus the A’s. If you look at the balance of our ASR, not our ASR, our buyback activity since spin, right now we’re at about $6.9 billion cumulatively bought back, of which $5.9 billion has been the A’s and only $1 billion has been the B’s.

We think that’s the appropriate mix for the balance of the fiscal year.

Gabrielle Brown, Chief Investor Relations Officer, Fox Corporation: Operator, we can go to the next question, please.

Polly, Conference Call Operator: We have a question from Jessica Reif Ehrlich of Bank of America. Please go ahead.

Thank you. Good morning, everybody. I guess the first question is even with the accelerated share repurchase (ASR) program, you have tons of balance sheet flexibility. Could you just talk about how you may use that? Do you think your asset mix will change in coming years? It seems pretty clear there will be M&A activity in the industry. How, whether you participate or not, just the impact on Fox Corporation and then, you know, on advertising. Lachlan, you talked about strength in both upfront and scatter. Can you give us some color? You gave some color on Fox News on the news side, just on the broader advertising, sports and entertainment. And Tubi, like this would be great.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Sure. Good morning, Jessica. You know, Steve, to speak specifically to the.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Balance sheet, but you’re 1000% correct as usual. It’s an industry-leading balance sheet. We’re very proud of it, and we work hard to maintain its strength. Having said that, ultimately it has to be utilized and utilized with M&A activity.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: You know, we continue to look at.

Steve Tomsic, Chief Financial Officer, Fox Corporation: All opportunities that come to us and that we identify internally as well. We would expect to be doing more M&A activity over the coming period. Having said that, there’s nothing on the table now, but we think M&A activity is going to be.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: An important part of our growth going forward.

Steve Tomsic, Chief Financial Officer, Fox Corporation: will continue to be very disciplined with it. We are looking at areas where we believe there are tailwinds rather than headwinds. You will not see us investing in things that have high exposure, for instance, to the cable industry or certainly anything entertainment, sort of cable assets. That is broadly how we are viewing it and how we are filtering the opportunities that we assess.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: From an advertising point of view, Jessica, as I mentioned, this is the first time since 2019, since New Fox was created.

Steve Tomsic, Chief Financial Officer, Fox Corporation: This is the strongest advertising market we have seen in our verticals. The reason I make that.

Polly, Conference Call Operator: You.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Especially relate to what we’re seeing is because I think our.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Verticals in live news and live sports in particular.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Are really the beneficiaries of sort of the broad reach that we have, and money flowing from linear entertainment, particularly linear cable entertainment revenue, into the broad reach of live sports and live news supplies.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Having said that, we also Tubi has.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Had incredibly strong revenue growth, and it’s really sort of across the board.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: If I look specifically at national advertising, very.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Strong in pharma in the quarter, financial.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Services and in tech, driven by AI.

Steve Tomsic, Chief Financial Officer, Fox Corporation: AI companies. Advertising in sports, NFL is strong.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Even this World Series.

Steve Tomsic, Chief Financial Officer, Fox Corporation: We believe if it did last night, in Game 6, it will likely surpass our revenue for postseason last year. Sports and college football is also going very well.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Fox News has seen strong price increases.

Steve Tomsic, Chief Financial Officer, Fox Corporation: In their direct response advertising as well as for the big premium, sort of branded advertising on the platform.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Local stations, if anything, has improved as a trend.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Where we said the market for.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Local stations was mixed in the past.

Steve Tomsic, Chief Financial Officer, Fox Corporation: It’s less mixed now, and that’s a really positive thing. We’ve seen, we saw very strong pharma.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Advertising in the quarter for local stations.

Steve Tomsic, Chief Financial Officer, Fox Corporation: The weaknesses at the stations are sort of restaurants. I think some telecom is slightly weaker, and on auto it is sort of flattish. We are very pleased with the outlook of the stations.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Tubi, you know, this time last year Tubi had a lot of political revenue.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Which we called out, you know, because of its targeting and because of its audience, which is very hard to reach for advertisers. It attracted, you know, significant amount of political advertising. Despite that, we’re still seeing tremendous growth in Tubi. We are pleased with the advertising outlook and particularly where we sit within that ecosystem.

Gabrielle Brown, Chief Investor Relations Officer, Fox Corporation: Operator, we have time for one more question.

Polly, Conference Call Operator: We have a question from Ben Swinburne of Morgan Stanley. Please go ahead. Thank you.

Good morning everyone. Maybe taking another stab just at the investment levels this year. I think Steve’s conservative estimate last quarter was $350 million, I believe, for 2026. I don’t know if maybe you’d give us an update based on how you guys are trending so far. Lachlan, kind of back to Fox One, just anything you called out and thanked Amazon Prime Channels for their contribution, but is there anything interesting or surprising to you in how you’re acquiring Fox One customers? When you look at all the different options and channels, I know it’s early, but we’ll be interested.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Thank you.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Let me start with Fox One. Thanks, Ben. I don’t think it’s that surprising.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Partnerships are very important. Obviously, partnerships will launch with ESPN and Verizon. We think they’re going to be a big part of Fox One’s growth.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: I have to say, and I.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Should just say Amazon Prime Channels has just been a brilliant partner at the launch, has done a tremendous job in distributing the product and acquiring subscribers. Give them a huge amount of credit and appreciate their partnership.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: You know, from a content perspective.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Broad perspective, you know, it’s probably not.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Surprising that sports and all sports.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Are tremendous.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Attraction on the product.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Really drive a lot of uptake over the weekends, and that flows into those people once they’re on the platform accessing news and entertainment content during the week.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: The sports season and then the.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Busy autumn sports season for us is a really important period to drive subscriber acquisitions.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: It’s early days, but we.

Steve Tomsic, Chief Financial Officer, Fox Corporation: You know, we couldn’t be more pleased with how well Fox One is doing. That’s a real credit to the team. I guess I have to hand this over to Steve.

Steve Tomsic, Chief Financial Officer, Fox Corporation: Yeah.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: You’re spot on.

Steve Tomsic, Chief Financial Officer, Fox Corporation: We did call out 350 on the Q4 call for what we expected to see in fiscal 2026. I think as we sit here today, we think that as we sort of qualify, we thought that was a conservative estimate. We still think it’s a conservative estimate, but I think it’s too early in the year to sort of put you onto a different number.

Gabrielle Brown, Chief Investor Relations Officer, Fox Corporation: Great. At this point we are out of time, but if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us today.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Thanks, everyone.

Polly, Conference Call Operator: Ladies and gentlemen, that does conclude the Fox Corporation first quarter fiscal year 2026 earnings conference call. Thank you.

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