Fox Corporation (FOXA) Q2 2026 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call revealed strong advertising and distribution revenue growth, particularly in cable segments. Tubi's revenue growth and profitability are notable positives. Despite a decline in adjusted EBITDA and net income, optimistic guidance on political ad spending and sports betting, along with successful new content launches, contribute to a positive outlook. However, concerns over NFL contract costs and free cash flow deficit slightly temper enthusiasm, leading to an overall positive sentiment.

Key Financial Performance

Total Revenues $5.18 billion, a 2% increase from the prior year quarter. The increase was driven by growth in distribution revenues (4%) and advertising revenues (1%), despite a challenging comparison to last year's record political cycle.

Distribution Revenues Grew 4% year-over-year, reflecting the strength of FOX's brands and the must-have nature of its channels.

Advertising Revenues Grew 1% year-over-year, driven by strong linear pricing across the portfolio, robust revenue growth at Tubi, and a 7-game World Series of Sports.

Adjusted EBITDA $692 million, compared to $781 million in the prior year quarter. The decline was due to higher expenses, including growth-driven spend at digital-led initiatives and higher sports programming and production costs, partially offset by lower entertainment programming and production costs.

Net Income Attributable to Stockholders $229 million or $0.52 per share, compared to $373 million or $0.81 per share in the prior year period. The decline was attributed to higher expenses and other factors.

Adjusted Net Income $360 million, with adjusted EPS of $0.82.

Cable Segment Revenues $2.28 billion, a 5% increase year-over-year. Advertising revenues grew 7%, driven by higher pricing in News and Sports. Distribution revenues increased 5%, and content and other revenues grew 4%.

Television Segment Revenues $2.94 billion. Advertising revenues were unchanged year-over-year, while distribution revenues increased 1%. Content and other revenues declined 19% due to lower revenues tied to entertainment production studios.

Tubi Revenue Grew 19% year-over-year, translating into record quarterly revenue. Tubi also achieved EBITDA profitability for the second quarter in a row.

Free Cash Flow Recorded a deficit of $791 million for the quarter, consistent with the seasonality of the working capital cycle, including payments for sports rights and buildup of advertising-related receivables.

You have reached the limit. Sign up to access full content

Get started

Operating Highlights

FOX One: Launched 5 months ago, FOX One has exceeded expectations with strong consumer reception, driven by direct sign-ups and partnerships. It has shown no noticeable cannibalization of traditional subscribers. Live sports dominate engagement, but News accounts for 1/3 of total minutes viewed, with News viewers engaging more frequently and for longer durations.

Tubi: Achieved its most streamed quarter ever, with total view time up 27% year-over-year. Revenue grew 19% in the quarter, and Tubi achieved EBITDA profitability for the second consecutive quarter. Engagement growth was driven by on-demand viewing, which constitutes over 95% of consumption.

Advertising Revenue: Despite a high political advertising base last year, total company advertising revenue grew. Record-breaking ad revenue was achieved for the MLB Postseason, NFL, and College Football Regular Season. FOX News achieved its highest second-quarter advertising revenue ever.

Distribution Revenue: Grew 4% during the quarter, with subscriber declines improving sequentially. FOX One contributed significantly to this growth.

Digital Engagement: FOX News Digital saw a 170% increase in social media views year-over-year. FOX News and FOX Business ranked #1 in YouTube video views among peers.

Content Performance: FOX Sports maintained its leadership in live sports event viewing, with record-breaking viewership for events like the World Series and NFL games. FOX Entertainment's 'Memory of a Killer' became the most-watched series premiere this season.

Focus on Live Content: Emphasis on live sports and news has driven exceptional performance and reinforced FOX's leadership position. Investments in fan-driven content and storytelling have increased total minutes viewed across platforms by 15% year-over-year.

Capital Allocation: Repurchased $1.8 billion in shares fiscal year-to-date, bringing total buybacks to $8.4 billion since 2019. Announced a $0.28 per share semiannual dividend, with cumulative cash returns to shareholders reaching $10.4 billion.

You have reached the limit. Sign up to access full content

Get started

Risk or Challenges

Subscriber Declines: Despite improvements, there are still ongoing subscriber declines in traditional cable, which could impact distribution revenue.

Higher Expenses: Increased costs in sports programming, production, and digital-led growth initiatives have offset revenue growth, potentially pressuring margins.

Free Cash Flow Deficit: A deficit of $791 million in free cash flow this quarter, driven by seasonality in working capital, could pose liquidity challenges if not reversed in the second half.

Lower Entertainment Content Revenues: Declines in entertainment content revenues, particularly in the television segment, could impact overall revenue growth.

Impact of Political Advertising Cycles: The absence of last year's political advertising revenues has negatively affected advertising revenue growth in the television segment.

Economic Sensitivity of Advertising Revenue: Advertising revenue, a significant contributor to overall revenue, remains sensitive to broader economic conditions and market trends.

You have reached the limit. Sign up to access full content

Get started

Guidance & Outlook

Advertising Revenue: The company anticipates continued robust advertising revenue trends, supported by strong NFL postseason performance and upcoming marquee Motorsports events like the Daytona 500 and Indy 500, as well as the FIFA Men's World Cup starting in June.

FOX One: FOX One, launched 5 months ago, is exceeding expectations with no noticeable cannibalization of traditional subscribers. The company is encouraged by consumer reception and has gained meaningful insights into audience engagement trends.

Tubi: Tubi achieved its most streamed quarter of all time, with total view time growing 27% year-over-year. The company expects continued growth in engagement and revenue, supported by an expanding content slate.

Political Advertising: FOX News Media is well-positioned for the upcoming political election cycle, with strong audience engagement and leadership in cable news viewership across all political parties.

Capital Allocation: The company plans to continue its share buyback program, with $1.8 billion repurchased fiscal year-to-date and a total of $8.4 billion repurchased since 2019. A $0.28 per share semiannual dividend was also announced.

You have reached the limit. Sign up to access full content

Get started

Shareholder Return Plan

Semiannual Dividend Announcement: Fox Corporation announced a $0.28 per share semiannual dividend.

Cumulative Cash Returned: The total cumulative cash returned to shareholders in the form of dividends and share buybacks has reached approximately $10.4 billion since the establishment of Fox Corp.

Share Buyback Program: Fox Corporation has repurchased an additional $1.8 billion in shares fiscal year-to-date through its share buyback program.

Cumulative Share Repurchase: The total cumulative amount repurchased since the launch of the buyback program in 2019 is $8.4 billion, representing approximately 35% of total shares outstanding.

Accelerated Share Repurchase: An accelerated share repurchase transaction was announced last quarter, with an initial tranche of approximately 8.5 million Class A and 10.9 million Class B shares retired. The remainder will be settled during the second half of this fiscal year.

You have reached the limit. Sign up to access full content

Get started

Key Q&A

Q:Can you discuss the performance of cable advertising, particularly in News and Sports, and the profitability of the World Cup?

A:The advertising market for FOX News has been robust, with 200 new advertisers added this half on top of 350 last year. Scatter pricing for News is up 46-47% year-on-year. FOX News expects to benefit from a robust political advertising cycle due to its broad audience appeal. The World Cup is expected to be profitable, with strong excitement from sponsors and advertisers.

Q:How do you plan to offset increased costs from the NFL contracts, and what is your strategy for the Entertainment business?

A:The company is not speculating on NFL contract renegotiations but plans to offset cost increases by balancing its sports portfolio. For Entertainment, the strategy includes balancing scripted and non-scripted programming efficiently and signing deals with top content creators. Recent launches have been highly successful, achieving over 10 million viewers in their first week, leading to increased revenue for the first time in years.

Q:What is driving the performance of FOX One, and how is it reflected in the P&L?

A:FOX One has exceeded expectations, with 2/3 of its audience being sports fans. The company expects low to mid-single-digit millions of subscribers over the next 3-4 years. Platform costs are recorded in the Corporate segment, while affiliate fees are recorded in the Cable and TV segments.

Q:Can you provide details on the improvement in subscriber decline rates and the growth of Tubi?

A:Subscriber decline improved to 6.3%, excluding FOX One subscribers. Skinny bundles are expected to play a role in reducing declines. Tubi saw 27% TVT growth and 19% revenue growth in Q2, driven by a younger, diverse audience and strong advertiser demand.

Q:What are the economics of FOX News in skinny bundles, and what is your approach to sports betting and prediction markets?

A:FOX News is included in bundled channel sales to distributors, providing downside protection. The company supports the core bundle and sees itself as a net beneficiary of skinny bundles. FOX is optimistic about sports betting, particularly its stake in Flutter and FanDuel, and expects significant advertising revenue from prediction markets.

Q:What categories are driving advertising growth, and how is FOX positioned for political ad spending?

A:Financial, pharma, retail, packaged goods, and automotive are among the top categories driving growth. FOX News Media achieved its highest ad revenue in history for the first half, with 200 new advertisers. FOX is well-positioned for political ad spending due to its strong audience base and diverse portfolio.

Q:Review of Unclear Management Responses

A:Management avoided directly addressing the potential cost increases from NFL contracts, stating they would not speculate on the NFL's decisions. Additionally, while discussing FOX One's seasonality impact, they mentioned it was too early to determine its significance, providing limited clarity.

You have reached the limit. Sign up to access full content

Get started

Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

FOX Transcript

Fox Corporation (FOXA) Q2 2026 Earnings Call Transcript

Positive2-4

Fox Corporation (FOXA) Presents at UBS Global Media and Communications Conference 2025 Transcript

Neutral12-8

Spin Master Corp. (TOY:CA) Q3 2025 Earnings Call Transcript

Unknown10-30

The earnings call presents a mixed sentiment. Positive aspects include strong advertising market outlook, FOX One launch, Tubi's growth, FIFA World Cup impact, and a $5 billion share repurchase plan. However, the Q&A reveals significant uncertainties, such as unpredictable holiday demand, competition in wooden toys, and vague management guidance. The lack of specific guidance and the cautious outlook on Q4 performance temper the positive elements, resulting in a neutral prediction for stock movement.

Fox Corporation (FOXA) Q1 2026 Earnings Call Transcript

Positive10-30

The earnings call shows a positive outlook with strong advertising revenue growth, a successful FOX One launch, and Tubi's profitability. The $5 billion share repurchase plan further boosts investor confidence. Despite a decline in net income due to non-core items, adjusted metrics show growth. The Q&A highlights positive subscriber uptake for FOX One and strong pricing for FOX News, with strategic investments planned for Tubi. The overall sentiment is positive, though tempered by free cash flow concerns and lack of specific guidance for FOX One subscribers.

Frequently Asked Questions

Where does this earnings call transcript come from?

All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.

How soon is the transcript available after the earnings call ends?

Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.

Is the transcript edited or altered in any way?

No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.

Why do some answers appear as “Unclear” or “Inaudible”?

When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.

Who creates the AI Summary and Key Q&A highlights shown above the transcript?

They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.