Earnings call transcript: Fox Corp Q4 2025 beats forecasts, stock reacts

Fox Corporation reported its fourth-quarter earnings for 2025, showcasing a significant earnings per share (EPS) beat and robust revenue growth. The company reported an EPS of $1.27, surpassing the forecast of $0.98 by 29.5%. Revenue also exceeded expectations, coming in at $3.29 billion against the forecasted $3.12 billion, marking a surprise of 5.45%. According to InvestingPro analysis, Fox Corp appears undervalued based on its Fair Value assessment, with the stock currently trading at a P/E ratio of 12.4. Despite these strong results, Fox Corp’s stock saw a decline of 3.16% following the earnings announcement, closing at $56.98, although it showed a slight uptick of 1.79% in premarket trading.

Key Takeaways

• Fox Corp’s EPS exceeded expectations by 29.5%.
• Revenue reached $3.29 billion, a 5.45% surprise over forecasts.
• Stock price dropped by 3.16% post-earnings.
• Tubi’s performance and FOX One launch are key growth drivers.
• Increased share repurchase authorization by $5 billion.

Company Performance

Fox Corporation reported a strong performance in Q4 2025, with total revenues reaching a record $16 billion, a 17% increase year-over-year. The company’s adjusted EBITDA rose by 26% to $3.6 billion, while free cash flow hit $3 billion. Net income attributable to stockholders was $2.3 billion, translating to $4.91 per share. The adjusted net income rose by 39% to $2.2 billion or $4.78 per share. InvestingPro data reveals Fox maintains excellent financial health with an overall score of 3.18 (rated as "GREAT"), supported by a healthy current ratio of 2.45 and strong return on equity of 17%.

Financial Highlights

• Revenue: $16 billion, up 17% year-over-year
• Adjusted EBITDA: $3.6 billion, up 26% year-over-year
• Free cash flow: $3 billion
• Net income: $2.3 billion ($4.91 per share)
• Adjusted net income: $2.2 billion ($4.78 per share), up 39% year-over-year

Earnings vs. Forecast

Fox Corp’s EPS of $1.27 exceeded the forecast of $0.98 by a significant margin, marking a 29.5% surprise. This performance is a notable improvement compared to previous quarters, reflecting the company’s strong operational execution. Revenue also surpassed expectations, with a 5.45% surprise, indicating robust business growth.

Market Reaction

Despite the positive earnings surprise, Fox Corp’s stock fell by 3.16% post-earnings, closing at $56.98. The stock had reached a 52-week high of $58.74 earlier but remains above its 52-week low of $36.85. In premarket trading, the stock showed a modest recovery, increasing by 1.79%.

Outlook & Guidance

Looking ahead, Fox Corp anticipates continued growth with the launch of the FOX One streaming platform and an expected improvement in Tubi’s profitability. The company has also announced a $5 billion increase in its share repurchase authorization, signaling confidence in its financial health. InvestingPro identifies several positive indicators, including four consecutive years of dividend growth and strong returns over multiple timeframes. For deeper insights into Fox’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, along with 10+ additional ProTips and detailed financial metrics.

Executive Commentary

Lachlan Murdoch, CEO, stated, "Fiscal twenty twenty five was another outstanding year for FOX, demonstrating the strength operationally and financially across all of our businesses." He emphasized the unmatched power of live sports, saying, "The power of live sports remains unmatched, and our sports portfolio is in increasing demand by advertisers and viewers alike."

Risks and Challenges

• Rising operational expenses, up 14%, could pressure margins.
• Competitive CTV market may impact growth in streaming services.
• Economic uncertainties could affect advertising revenues.
• Potential regulatory challenges in new markets.
• Execution risks related to new product launches like FOX One.

Q&A

During the earnings call, analysts focused on Fox Corp’s digital investment strategy and the potential for bundling the new FOX One platform. Questions also addressed the strength of the advertising market and potential mergers and acquisitions, reflecting investor interest in the company’s future growth strategies.

Full transcript - Fox Corp Class A (FOXA) Q4 2025:

Conference Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Fourth Quarter Fiscal Year twenty twenty five Earnings Conference Call. At this time, all participants are in a 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.

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, Carly. Good morning, and welcome to our fiscal twenty twenty five fourth quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer John Nallen, Chief Operating Officer and Steve Tomcic, 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 filings. 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 very much, Gabby. Before we start, preemptively apologize for my coughing from the end of a a cold. Gabby and Steve are thrilled to be locked in a in a in a JV closet with me, but you guys should all be thankful that you’re this is telephonic. Well, Gabby, thank you very much, and thank you all for joining us this morning as we discuss our fourth quarter and full year earnings results. Fiscal twenty twenty five was another outstanding year for FOX, demonstrating the strength operationally and financially across all of our businesses and delivering our best year yet.

The year was highlighted by our strong financial performance with revenue growth of 17% to $16,000,000,000 EBITDA growth of 26% to $3,600,000,000 adjusted EPS growth of 39% to $4.78 per share and free cash flow growth of 100 to $3,000,000,000 all records for Fox. We also generated record political advertising revenue of well over $400,000,000 across the Fox platforms. Fox’s broadcast of Super Bowl fifty nine broke viewership and advertising records as the most watched telecast in U. S. History, generating over $800,000,000 of gross advertising revenue.

And engagement at Fox News led to record audience share, reaching over 70% of the cable news audience at times during the year. Our noteworthy fiscal twenty twenty five results were underpinned by a 26% lift in total advertising revenue to $7,000,000,000 The momentum we have reported over the first ’3 quarters of our fiscal year continued unabated during the fourth quarter with 7% growth over last year despite tougher comparisons from last year’s UEFA Euros and Copa America soccer tournaments. As we look to fiscal twenty twenty six, the overall advertising market for Fox continues to be healthy and robust, as evidenced by our recently concluded upfront, where we achieved record setting double digit volume growth and strong pricing growth across our portfolio. The power of our brands and our ability to deliver engaged audiences at scale across our platforms is exceptionally strong. Nowhere is that scale and engagement more evident than at Fox News.

Fox News ended the fiscal year as it began, as the most watched cable network in total day and in prime time. In the fourth quarter, total day audience was up 25% in total viewers and 31% in the demo, while maintaining over 60% share of the cable news audience. And now for the second quarter in a row, Fox News was the second most watched network in Monday through Friday Prime in all of television, surpassing all but one broadcast network. But it’s not only linear news driving that performance. Fox News Digital achieved new records for engagement during the quarter with over 1,500,000,000 YouTube views and over 3,700,000,000 social media video views, our highest totals ever.

Engagement trends are off to a good start in the first quarter of this new year with Fox News finishing as the highest rated television network in America for the month of July, no doubt aided by must watch programming like Jesse Waters’ Primetime and Gutfeld, the leading late night program on television. Fox Sports once again cemented its position, finishing the year first among all networks in live sports. That engagement was driven by an impressive portfolio of sporting events, including a riveting Major League Baseball postseason, the launch of Fox College Football Fridays, the NFL on Fox, and, of course, the record breaking Super Bowl fifty nine. And while our fourth quarter has a lighter sports calendar, Fox’s first presentation of the Indianapolis five hundred was an unqualified success, averaging over 7,000,000 viewers, a 41% gain over last year and the most watched running of the race in seventeen years. The power of live sports remains unmatched, and our sports portfolio is in increasing demand by advertisers and viewers alike.

We expect that to continue as we charge ahead to autumn when we welcome back postseason baseball, the NFL and college football on Fox. Fox’s big noon Saturday kicks off on August 30 with a highly anticipated rematch of last season’s college football playoffs semifinal Texas versus Ohio State. By then, you will be able to watch our entire sports portfolio along with our news and entertainment programming on FOX One, our direct to consumer streaming platform. FOX One is a truly innovative digital offering launching across The U. S.

On August 21 for $19.99 per month. While FOX one will be marketed to the cordless market, current pay TV subscribers will also have access to FOX one on an authenticated basis. And yes, we will be offering bundling opportunities that make sense to achieve our targeted objectives. We have said before that our aspirations for Fox One subscribers are modest, and our measured investment towards this initiative will match these long range goals. Speaking of the cordless market, Tubi notched multiple achievements in fiscal twenty twenty five, including delivering the most streamed Super Bowl in history, exceeding 100,000,000 monthly active users, generating over $1,100,000,000 in revenue and reaching an all time high of 2.2% share of total U.

S. Television viewings. The sustained momentum we have seen at Tubi throughout this fiscal year continued into the fourth quarter with 17% growth in total view time, along with favorable progress in our direct response and partner channels combining to drive revenue growth of 32% in the quarter. Tubi’s hard to reach audience resonates with advertisers looking to tap into the cordless market, as evidenced by this year’s upfront results that saw TV volume grow over 35% year on year while holding rates stable in a competitive connected TV market. Fiscal twenty twenty five was a decent year for FOX and a clear demonstration of the efficacy of our differentiated strategy, and there’s more to come.

On these calls, we have long said that we aspire to engage with our viewers wherever suits them best. The traditional cable bundle remains our favorite distribution channel as we believe it continues to provide exceptional value to consumers. Tubi, with twothree of its users cordless and outside of the bundle, serves a massive market hungry for free premium content. And soon, Fox One will additionally serve us another important audience segment, those wanting a paid, targeted offering encompassing all Fox brands. These pillars of our distribution strategy provide us access to the largest audience possible and will underpin our growth in the years ahead.

We enter fiscal twenty twenty six with solid operational and financial momentum across our company, and we look forward to another exciting year that will see the launch of FOX one in just a few weeks, the renewal of one quarter of our distribution revenue, a healthy advertising environment and, of course, FOX broadcast of the FIFA Men’s World Cup beginning later this fiscal year. Underscoring our confidence in the trajectory of the business, this morning, we are announcing a $5,000,000,000 increase to our share repurchase authorization. With our balance sheet having never been stronger, we expect to continue repurchasing our shares while still accommodating our continued program of organic investment and preserving flexibility to thoughtfully invest in new businesses. And with that, let me turn over to Steve.

Steve Tomcic, Chief Financial Officer, Fox Corporation: Thanks, Lachlan, and good morning, everyone. With a strong fourth quarter capping off what is already shaping up to be a strong year, Fox delivered record financial results in fiscal twenty twenty five, with record total company revenues of over $16,000,000,000 growing 17% year over year and record adjusted EBITDA of $3,600,000,000 growing an impressive 26% year over year, converting to record free cash flow of $3,000,000,000 Advertising revenues across the company were up 26% with strong growth at both our television and cable network programming segments. This growth was driven by both our banner year of events, including record breaking advertising revenues for both Super Bowl fifty nine and the presidential election cycle, as well as strength in our underlying core, highlighted by accelerating TV growth, robust news pricing and engagement growth and very healthy advertising demand for our sports programming. We successfully completed renewals with distributors representing approximately one quarter of our overall affiliate revenues this year, with the financial benefits of these renewals driving 5% growth in total company affiliate fee revenues, led by 7% growth at the television segment. Total company other revenues were up 47% year over year, driven by higher sports sublicensing revenues in our Cable Network segment.

As we’ve previously mentioned, this growth in revenue was largely offset by a corresponding increase in rights costs, with no material impact on year over year overall EBITDA growth. Total company expenses increased 14%, largely due to high sports rights amortization and production costs, including costs associated with Super Bowl fifty nine and the sub licensing revenues I just mentioned. Net income attributable to stockholders was $2,300,000,000 or $4.91 per share, up versus the $1,500,000,000 or $3.13 per share reported in fiscal ’twenty four. Excluding non core items, full year adjusted net income was $2,200,000,000 and adjusted EPS was $4.78 per share, up 39% year over year. Turning to our fiscal fourth quarter.

Fox delivered another quarter of impressive results, highlighted by a 6% increase in total revenues and 21% growth in adjusted EBITDA. Our advertising revenues increased 7%, led by continued growth at Tubi and strong engagement and pricing at News. Total company affiliate fee revenues grew 3% over the prior year quarter, once again demonstrating the strength of our brands and focused portfolio of channels. Other revenues grew 33% driven by higher content revenues. Net income attributable to Fox stockholders was $717,000,000 or $1.57 per share as compared to the $319,000,000 or $0.68 per share reported in the prior year period.

Excluding non core items, adjusted net income was $581,000,000 and adjusted EPS was 1.27 up 41% compared to the $0.90 per share recorded in the prior year. Now let’s turn to the Q4 performance of our operating segments, starting with the Cable Network programming segment, which delivered 7% revenue growth and six percent EBITDA growth. Cable advertising revenues grew 15% over the prior year, driven by the strength in Fox News engagement and supported by healthy national and direct response pricing. Cable affiliate fee revenues grew 2% over the prior year quarter as pricing gains from our affiliate renewals outpaced the impact from net subscriber declines, which were consistent with the prior quarter at under 7%. Cable Other revenues grew 39% led by higher Fox Nation subscribers.

Revenue growth at Cable segment was partially offset by a 7% increase in expenses, primarily attributable to an increase in sports rights amortization and production costs. Turning to our television segment, which delivered 6% revenue growth. Advertising revenues at television grew 3% over the prior year, led by continued growth at Tubi, which more than offset the tough comparison against the U. S. European Championships and Conva Vault Cover America in the prior year.

Television affiliate fee revenues increased 4% in the quarter as healthy growth in fees across both Fox owned and affiliated stations more than offset the impact from industry subscriber declines. Television and other revenues were up 34% year over year, primarily due to higher content revenues tied to our entertainment production studios. Expenses at the television segment decreased 5%, primarily reflecting the absence of the prior year broadcast of the UEFA Euros. All in EBITDA at our TV segment was $3.00 $8,000,000 an increase of over 100% as compared to the prior year quarter. Turning to cash flow where we generated robust quarterly free cash flow of nearly $1,400,000,000 This strong quarterly free cash flow delivery is consistent with the seasonality of our working capital cycle, where the first half of our fiscal year reflects the concentration of payments for sports rights and buildup of advertising related receivables, both of which reversed in the second half of our fiscal year.

Before we get to capital allocation and balance sheet, it is worth noting some key items for this coming fiscal year. From an affiliate revenue perspective in fiscal twenty twenty six, we have another relatively light year of renewals with approximately one quarter of our total company distribution revenues up for renewal. In fiscal twenty twenty six, we expect to continue to invest in our digital led growth initiatives. The excellent progress we’ve made at Tubi reinforces our confidence in Tubi’s path to profitability and its obvious asset value underscores the opportunity to drive ROI from our digital investments more broadly. Tubi delivered moderate improvement in profitability in fiscal twenty twenty five in line with the expectations we laid out at the start of the year and we anticipate a more substantial improvement in Tubi profitability in fiscal twenty twenty six, which will be weighted towards the second half of the year.

This total improvement will support our initial incremental investment in new opportunities, including LATAM Sports and more notably the launch of FOX one, which will be more concentrated in the first half of our fiscal year as we launch this offering this month. From a cyclical event perspective, we look forward to our broadcast of the twenty twenty six FIFA Men’s World Cup, which will span our 2026 and 2027. We are encouraged by the momentum we are already generating and expect this North American World Cup to drive strong results for Fox. And finally, as we look at free cash flow, the strong working capital tailwind from the Super Bowl in fiscal ’twenty five will give way to a working capital timing headwind from the World Cup, where rights payments for the tournament will land in fiscal ’twenty six, while advertising receivables will be collected early in fiscal ’twenty seven. In terms of capital allocation, in fiscal twenty twenty five, we repurchased an additional $1,000,000,000 through our share buyback program and made approximately $245,000,000 in dividend payments.

As Lachlan mentioned, underscoring our commitment to return capital to shareholders, today we announced both an incremental buyback authorization of $5,000,000,000 and an increase in our semi annual dividend to $0.28 per share. With the payment of this dividend and taking into account share repurchase activity since year end, we will have cumulatively returned $8,500,000,000 of capital to our shareholders since the spin. This includes $6,650,000,000 of share repurchases, representing 31% of our total shares outstanding since the launch of the buyback program in November 2019. This is all supported by the strength of our balance sheet, where we ended the quarter with approximately 5,400,000,000 in cash and $6,600,000,000 in debt. With that, I’ll turn the call back over to Gabby.

Gabrielle Brown, Chief Investor Relations Officer, Fox Corporation: Thank you, Steve. And now we will be happy to

Conference Operator: take questions from the investment community. If you wish to ask a question, please press star then one on your touch tone 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. You.

We have a question from Ben Swinburne with Morgan Stanley.

Ben Swinburne, Analyst, Morgan Stanley: Good morning.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: I’m going

Ben Swinburne, Analyst, Morgan Stanley: to ask Steve a question because I can’t ask Lockwood a question. That’d be cruel.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Thank you. Hope you better.

Ben Swinburne, Analyst, Morgan Stanley: Steve, you gave us a lot of good color thinking about fiscal twenty twenty six. I know you’re not going to guide. I’m sure you also know that consensus is expecting like a, I think, 10% decline in EBITDA. Obviously, you lap political in the Super Bowl, but I don’t know if your revenue trends have been this strong in a long time. So I’m just wondering if there’s any way you could help us think about fiscal twenty twenty six, maybe a little more specifically.

One way might be just to talk about the sort of net drag on EBITDA from investments. If you sort of put it all together, all the puts and takes, that digital drag in 2026 versus 2025 or anything else you can tell us to help us think about your expectations for EBITDA in the year ahead? Thank you.

Steve Tomcic, Chief Financial Officer, Fox Corporation: Sure. Thank Ben. Thank you for sparing Lachlan. So yes, there’s a ton of puts and takes for ’26. And you’re right, listen, when we assemble our plan for ’26, it starts with the really strong foundation of what the underlying momentum in the business is, particularly with respect to audience and advertising demand for our sports and news verticals.

So that’s the starting point. From an affiliate revenue perspective, as I called out, it’s relatively light in this coming fiscal year. So only a quarter of the book is up for renewal. So will be more driven by where subscribers land over the course of the year. And if you look at sort of the next thing that sort of drives the results into next year, we’ve got a lot of moving parts from a cyclical event perspective.

So we’ll obviously have the political headwinds, and particularly we’ll see that in the TV segment from the stations. And that’s a real sort of first quarter, second quarter phenomenon for us. And so to give you some dimensioning of that, like I think the stations in the first half of the year in fiscal twenty twenty five did $270,000,000 of political revenue. So we’ll be sort of swimming against that. We’ve obviously Super Bowl in Q3, which will be an ad revenue negative for us, but from an EBITDA perspective, a bit of a push.

And then we complete the year from a cyclical event perspective. We’ve got FIFA, which we have high hopes for in Q4 of the coming fiscal year and Q1 of the next fiscal year. The other put and take is MLB. We had a massive MLB in Q1 and Q2 of fiscal twenty twenty five. We hope for a blockbuster postseason again, but who knows?

And then to sort of address your digital growth, you’ll remember, I think at the start of fiscal ’twenty four, we called out an envelope of about $350,000,000 of EBITDA deficit that would be used towards funding our digital growth initiatives. And you’ll remember that we had expected that investment envelope to decrease in fiscal twenty twenty five and it has largely on the back of things like 2B improving profitability. And so think when you look at fiscal ’twenty six from that digital investment perspective, you should expect 2B to improve quite a lot. But then we and that will happen in the back half of our fiscal year. And then Q1 and Q2, we will be looking to invest in things like Latin America and Fox One.

And when you put that all together, I think we’ll on a conservative sort of forecasting basis, I’d imagine that sort of collective investment portfolio moves back towards that $350,000,000 mark.

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

Conference Operator: We have a question from John Hodulik with UBS.

Ben Swinburne, Analyst, Morgan Stanley: Great. Thank you. I don’t know if this is for Lachlan or maybe Steve can handle it. But just an update on the cable advertising trends and the average sort of expand the advertising base and the receptivity you’re getting from advertisers there. And then maybe, Steve, can you just follow-up on the LatAm comments?

Just what’s the strategy there? I don’t know if you can give us a sense of how much spending, but just what the plan is and potential growth opportunities in LatAm? Thanks.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Thanks, John. On the cable advertising trends, and we’ll probably talk more later, someone asked about the sort of overall advertising market. But if you’re speaking specifically about, I believe, the incredibly positive momentum at Fox News, advertising is very strong, both from a upfront perspective, from a CPM perspective and direct response. So and this is all obviously driven off tremendous ratings. I think in the fourth quarter, our P2 plus ratings were up in both total day and prime about 25% and even better in the kind of all important demo 25% to 54%, which we obviously sell to, where in total day, we were up 31%.

And in prime time, we were up, I think, 4%. So these this rating strength has really flown directly through to the 25% of advertising revenue increase. I think as you go forward and think about sort of the quarters ahead, obviously, this time last year, there was the horror of the Butler assassination attempt on July 13 against then candidate Trump and then Biden dropping out of the race, I think, in a couple weeks later, July 21. And so there was a big uplift in ratings then, which we’ve been able to sustain since then. But the comps do get harder.

Having said that, if you think about our share in July, so as we’ve started this first quarter, our share has actually marginally increased against our competitors. So in P2 plus in total day, I think we’re up to 64% of our cable news audience share versus MSNBC at 21%, CNN at 15%. And also in prime, the numbers are roughly the same. So we feel very good about maintaining our share and our elevated ratings, to be frank. And obviously, that will flow through the advertising revenue line.

On LatAm, Steve can talk to the numbers, but we’re very excited about our purchase of Caliente TV, a streaming service in Mexico. The Fox brand remains incredibly strong, both in Mexico and Latin America, and we see it as an opportunity for us to sort of further grow with a relatively modest investment spend in those markets. Steve, do want to

Steve Tomcic, Chief Financial Officer, Fox Corporation: Yes. Add to So John, in the quarter so LatAm is kind of been two things for us. We have organically assembled some sports rights there, which impacted the P and L in this fiscal year and in this quarter, and that’s in the sort of the low to mid-10s in terms of expenses on those. And then very recently, you would have noticed that we acquired Kelly Enter TV, which gives us a running start or a really fast start in terms of it’s already got an SVOD platform there and already has distribution arrangements. And so we would expect some investment spend over the course of this current fiscal year.

But then once we get monetization into sort of full force, then we’ll start to see that come back to us.

Gabrielle Brown, Chief Investor Relations Officer, Fox Corporation: Operator, we’re ready for the next question.

Conference Operator: We have a question from Michael Morris with Guggenheim.

John Hodulik, Analyst, UBS: Thank you. Good morning. Two if I could please. First, I just wanted to ask on Tubi. Appreciate the color and the strength you’re seeing there.

You’re outpacing the broader CTV market pretty meaningfully. So I’d love to hear any detail on why you think you’ve been able to do that and how you feel about the ability to continue to beat the market in the coming year. And then just bigger picture, there’s been some press reports that ESPN and the NFL might enter an agreement that would give the NFL an ownership stake in ESPN. And I’m curious if you could comment at all on what that might mean for FOX Sports and your relationship with the NFL or sports leagues more broadly. Thank you.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Thanks, Mike. So first on Tubi. You’re correct. Tubi is competing very well in the CTV market. I obviously said this is obviously for a number of reasons that we’ve I think we’ve spoken about before, the the core technology, the ad tech tech tech technology.

I think we’ve now, you know, grown, the library to over 300,000, movies and and television, titles. So it’s clearly clearly, by a wide margin, the largest television and movie library in the country. It reaches two thirds of its users are outside of the traditional cable bundle. Cordless. This is a very difficult market for advertisers to reach.

And so it makes Tubi’s engagement with our users incredibly valuable and coveted by our clients. So all of these things come together to really make it a tremendous and exciting product that we are enjoying the growth of and the growth that we see continuing into the future. Obviously, in the quarter, we’ve announced 17% total viewing time growth in the fourth quarter. We believe this sort of growth is relatively sustainable and 32% our revenue growth in the quarter and which is our highest growth of any of our segments. QB now, I think, achieves in the upfront about 25% of our upfront committed revenue.

So it’s really become a significant part of the business. And if you look at our competitors, I think that stat on the cordless market, we reach more cordless viewers than sort of any of our competitors set. So it’s not something that’s actually, simply applicable to the CTV market. The 2B audience really does skew cordless and younger. And we saw that very much in our Super Bowl broadcast or somnocast earlier in the year, we are at our median age, watching the Super Bowl was 38 years old.

It was younger and more female significantly than the broadcast audience. I think 40% of that audience was between 18 and 34. And really, it was with the help of QB that really pushed the audience for the Super Bowl to the record highs of 128,000,000 viewers that the Super Bowl achieved. I don’t think broadcast would have achieved that. Statistically, broadcast wouldn’t have achieved that alone without Tumi simulcasting the streaming.

So we’re incredibly excited about Toomey as we go forward. On the NFL, they’re rumored I don’t know if they’ll announce something tomorrow, but they’re rumored investment into ESPN. We have a tremendous relationship with the NFL. You know, we we appreciate that they are they’re fans of the of the broadcast and and cable networks, and we look forward to work with them and deepening our relationship with them as we move forward.

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

Conference Operator: We have a question from Michael Ng with Goldman Sachs.

Michael Morris, Analyst, Guggenheim: Hey. Good morning. Thank you for the question. I just wanted to follow-up with Steve on the comments around the collective investments for fiscal twenty twenty six. I think that implies at least $100,000,000 to maybe $150,000,000 of additional investments in LATAM and FOX1 next year, just given the 50,000,000 to $75,000,000 improvement this year and the comments you made about 2B profits further improving next year.

I just wanted to ask, is that kind of like the ballpark of the incremental investment levels that we’re talking about? And maybe you can just help frame some of the expected returns on those investments, whether that be for LatAm or FoxOne subscribers to just give a little bit more transparency there? Thank you very much.

Steve Tomcic, Chief Financial Officer, Fox Corporation: Thanks, Mike.

Michael Ng, Analyst, Goldman Sachs: I have to work through your math.

Steve Tomcic, Chief Financial Officer, Fox Corporation: But in terms of the investment, I think where we were for this fiscal when you look at it collectively across the P and L, if I look at our digital growth investments, is not just to be, it’s to be plus things like nation, weather across the portfolio. We are a touch under 300 across those for fiscal twenty five. And what I’m basically saying is as we get improvement in those kind of businesses, those growth businesses have become more mature, we’ll give some of that back towards these new initiatives and in particular, Fox One and Latin America, where the collective goes back towards that $350,000,000 mark. Now how we break that up and how we see that going through, I think we’ll look at over the course of the year, but that’s kind of the envelope we’re looking at. And then when you look at, I think, return profile, I think you should expect like 2P is probably the best benchmark that we have, right, which is we’ve been investing in that.

And as we’ve continued to see growth in that business and opportunity continue to build in it, we’ve continued to invest in it. And now we’re seeing at a point where we can continue to drive the growth and start to see sort of real meaningful profitability improvement over and that’s been over three to four years. I imagine for both of those two new investments, it be Latin America or FOX1, you should be thinking around that same sort of profile.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Can I just answer that in a non math part of your question and a non math answer just on FOX1 because FOX1 is is the larger piece of the the new investment? And it’s important just to remember that none of the investment in Fox one is original programming or exclusive programming to that platform. FoxOne will encompass all of our existing Fox content with the addition as well of as as of of their Fox Nation content on a on a a tier. But none of that will will will include any incremental and, you know, sort of a sticky sort of additional spend. So the the the new spend in in in Fox One, other than some overhead and some relatively modest tech costs, is really the marketing and launch costs of Fox one.

And it’s important to remember that our our subscriber expectations or aspirations for Fox one are modest, and therefore, our marketing spend, we can is is is relatively modest compared to our peers as well, and it’s something that we can toggle up and down depending on how Fox one is going and if we’re we’re meeting our our our relatively modest goal. So I think that’s that’s an important context when we think about both the initial upfront cost of launching Fox one, but the sustainability of that business and the return profile of that business going forward. Okay.

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

Conference Operator: We have a question from Jessica Rife Elvis with Bank of America Securities.

Jessica Rife Elvis, Analyst, Bank of America Securities: Thank you. I guess the first question is on your balance sheet. Even if you did your full newly announced buyback, you still have flexibility. And clearly, the industry is going to go through M and A in the current year or the coming year. How will Fox participate or not?

Your investment needs, as you guys just outlined very specifically, very modest at $350,000,000 So just curious, it seems like it’s finally going to happen maybe as soon as next week. So, so that’s one. And then, Latham, maybe just to go back to something you mentioned on advertising, just kind of bigger picture. You guys are, like, clearly outpacing the market. And so you you you gave us some color on to be in Fox News, just overall television, what would you guys assume?

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Yep. So so I was I sorry, Jessica. The beginning of your question, called for you. Your your first question is on m and a overall and whether or not we how we participate in any M and A activity. But the short answer is we don’t have anything to announce.

We look at all sorts of opportunities. We have a very high internal benchmark for the use of our capital. And so obviously, we reject out of hand anything that we think would not be a prudent use of that and our shareholders’ capital as well. But we we we we are, we’re always looking at opportunities, but we haven’t found anything yet that sort of surpasses our our sort of benchmarks in terms of what we feel we would need to do to, like, inorganically kind of grow the business. So we’re pretty focused on our organic growth at the moment.

In terms of the overall ad market, the ad sales are across the business very strong. Again, we’ve talked before about the ad market that we see versus the ad market maybe that the rest of the market sees is a little bit different because of the fortune of being so focused on the segments that we’re in, particularly live news, live sports and obviously a successful free streaming platform such as Tubi. Ad sales nationally, Jessica, are very strong, really led by pharma category, financial services category, consumer packaged goods category. And this really played out in the upfront where we saw double digit volume increases and strong pricing growth across all of our businesses. I think we’ve what I called out earlier that FOX Sports had the record breaking upfront.

If you exclude the impact of the Super Bowl, I think over $2,000,000,000 committed in the upfront. Tubi saw 35% volume increase with stable pricing. I think the stable pricing on Tubi is important to call out because the CTV market is I know other people have mentioned this on their earnings calls. The CTV market is incredibly competitive, but Tubi has been competing and winning very strongly in that market. I think while that market this is as an industry comment, while that market is competitive, it will remain the beneficiary of advertising revenue shifting from linear cable entertainment programming into digital and, frankly, also into news and sports.

But the CTV market, there’s people fighting for that advertising revenue. We’re the beneficiary of that, but we see the volume of advertising dollars continue to stream into that market pretty heavily. Our sports upfront, as I mentioned, was very strong and remains healthy. It’s a single data point, but we had record revenue for the Major League All Star Game. The demand far outstripped the supply of spots in that game.

NFL, college football, all are pacing very well. And we’re incredibly encouraged by the demand, the kind of incredible demand for the FIFA World Cup later on in the year. News, we’ve talked about before. Doctor pricing is up 30%. Scatter pricing in News is up 54% above the upfront.

So all very good. The local market is the one that remains mixed with gains from, again, like national, a strong pharmaceutical segment, but that’s offset by telecom and, I believe, restaurants are offsetting those gains in pharmaceutical. And then just finally, we talked about Tubi, but on entertainment, very healthy with double digit increases in scatter pricing. So the advertising market is robust for us and strong and really is propelling us forward.

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

Conference Operator: We have a question from Steven Kahal with Wells Fargo.

Michael Ng, Analyst, Goldman Sachs: Thanks. So first, Lachlan, sorry to make you speak, but you did mention that there could be some bundles coming I was just wondering how you think about different partners there. Know, what one partner has probably the most sports rights. There’s some others that could be kind of complementary to your afternoon NFL package.

And also how you think about sort of integrating apps versus just having them be sort of more pricing bundles for consumers? And then over on the TV side of things, the FCC has been much more vocal around, I think, it’s kind of expecting in terms of reverse comp and splits between networks and affiliates. Do you think things have changed in this outlook for your network business and your relationship with affiliates? And is there any meaningful financial impact we need to think about for the next couple of years from that? Thank you.

Lachlan Murdoch, Executive Chair and Chief Executive Officer, Fox Corporation: Thanks, Steve. Let me start with the obviously, within the order of your question, with with Fox One and and bundling. On what we we will bundle Fox one with other services. That that’s absolutely in our marketing and and and and sort of launch plans, but it’ll also be obviously available, the 1999 as a standalone as a standalone service. One thing is with the bundles that that we’re cognizant of, well, there’s two factors.

One is to offer the consumer the most convenient package of of our content and channels and and and others that that they, you know, they desire to subscribe to. And so the most convenient, the most, you know, sort of valuable bundles that that you could put together, we know we’ll be in a position to help them do that. But we’re also, you know, very focused at keeping Fox One as a very targeted service that’s targeted on on a on a the cord cordless audience. And and sometimes those two things can conflict with each other. So we we wanna stay very targeted, but we also wanna make it easy for for our consumers and our viewers to gain our content, whether it’s in conjunction with with with other services, or not.

We don’t really see, and you’ll you’ll understand this on on the twenty first when you see Fox one. We we don’t really see this as a as a service that is that you can compare to a separate bundle of channels only. The Fox one user interface is is incredibly innovative innovative. It can be, you know, very highly personalized and relies on on some really very clever technology to offer something that’s truly unique in the in in the marketplace. So so we see Fox one as, you know, all of our brands, all of our content, but in a in a in a truly kind of unique and, I think, important user interface that that we’d be very cutting edge.

On FCC and affiliates, look, we are well, first of I should say on on the FCC, we’re very pleased that under the new leadership of the FCC, the FCC is pro local stations, is pro competitive. They bring a lot of fresh ideas to the regulatory environment, and we’re very pleased to see that. As regards to how it affects our affiliates, we remain, I think, the most affiliate focused company, sort of certain broadcasting company in in this country. And we don’t really see it impacting, in any way with on our our affiliate our relationships. If anything, it could improve them.

I should mention, because it joins the two questions together, you know, Fox One will uniquely, combine both our Fox ten content but our local affiliates’ content. If you’re a Fox one our aspiration is if you’re a Fox one, subscriber, will be getting your local sports and local news, not just our through our own and own stations, but our affiliate stations as well avail available to you on that app. So, you know, we’re we’re excited and we’re very happy to be, you know, pro our our local affiliate groups and and and local independent stations. I think that’s that’s an important place for us to be in the marketplace.

Gabrielle Brown, Chief Investor Relations Officer, Fox Corporation: Great. At this point, we’re out of time. But if you have any further questions, please give me or Charlie Costanza a call. Thanks again for joining us today.

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

Conference Operator: Ladies and gentlemen, that does conclude the Fox Corporation Fourth Quarter Fiscal Year twenty twenty five Earnings Conference Call. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.