Fox Corporation Shines With Record Results and CTV Push

Fox Corporation Class A ((FOXA)) has held its Q4 earnings call. Read on for the main highlights of the call.

Claim 55% Off TipRanks

• Unlock powerful investing tools with TipRanks Premium to make smarter, more confident investment decisions
• Subscribe to TipRanks Smart Investor Newsletter, and discover new investing opportunities with data-backed stock picks

Fox Corporation Class A’s latest earnings call painted a broadly upbeat picture, with management emphasizing record annual and quarterly results, robust advertising demand, and accelerating digital momentum. While World Cup costs, higher digital spending, and some cable softness weighed on certain metrics, executives argued that top-line growth, margin expansion, and shareholder returns more than offset these pressures.

Record Annual Revenue and EBITDA

Fox reported fiscal 2026 revenue up 5% to more than $17 billion, while adjusted EBITDA climbed 8% to a record $3.9 billion. Management stressed that this combination of steady top-line growth and faster profit expansion reflects operating leverage across the portfolio despite a tougher cost backdrop.

Outstanding Fiscal Q4 Growth

The fourth quarter was particularly strong, with revenue jumping 28% to $4.2 billion and EBITDA rising 27% to $1.2 billion. Executives credited standout advertising performance and the FIFA World Cup as core drivers, underscoring the value of live sports in Fox’s model.

Advertising Revenue Surge

Advertising revenue increased 7% for the full year, but the real spike came in Q4 with a 78% surge. Management cited broad-based demand spanning sports, news, local stations, and digital, highlighted by Tubi, and noted that upfront volume grew at a double-digit rate.

Tubi Performance and Engagement

Tubi delivered its best quarter ever, with Q4 revenue up 35%, total viewing time up 17%, and monthly active users reaching 110 million. Importantly for investors, Tubi was EBITDA positive in every quarter of fiscal 2026, showing that scale streaming can be profitable for Fox.

Successful Launch and Adoption of FOX One

The company’s new direct-to-consumer offering, FOX One, launched ahead of expectations and is already driving incremental subscriber growth. Executives said retention trends are strong and cannibalization of traditional pay-TV has been minimal, supporting the view that FOX One adds rather than replaces value.

Television Segment Outperformance

Fox’s Television segment stood out, with revenue up 45% and EBITDA surging 129% year over year. Advertising in this segment rose 108%, fueled by World Cup broadcasts, elevated political spending, and a growing contribution from Tubi.

Strategic M&A and Digital Expansion

Management highlighted the pending acquisition of Roku as a cornerstone of its connected TV strategy, expected to close in the first half of 2027. The deal is designed to marry Fox’s premium live content with Roku’s platform scale and ad technology, deepening the company’s digital and CTV footprint.

Strong Capital Returns and Balance Sheet

Fox continued to return capital aggressively, repurchasing $2 billion of stock in fiscal 2026 and raising its semiannual dividend to $0.29 per share. Since the spin, the company has returned $10.7 billion to shareholders, including $8.6 billion of buybacks that have retired about 36% of shares, and it ended the quarter with roughly $4.2 billion in cash versus $6.6 billion of debt.

Improving Digital Investment Discipline

Executives underscored a more disciplined approach to digital spending, with investment falling from just under $300 million in fiscal 2025 to under $200 million in 2026. This pullback is helping the digital portfolio contribute more meaningfully to the bottom line without slowing growth at key assets like Tubi.

Robust Free Cash Flow

The company generated $726 million of free cash flow in the quarter, reinforcing its capacity to fund content, acquisitions, and shareholder returns. Management noted that some volatility in cash flow reflects timing of major sports rights payments and related receivables rather than underlying weakness.

Higher Expenses Driven by World Cup and FOX One

Total expenses rose 4% for the year and 28% in Q4, reflecting the cost of World Cup rights and production, first-year spending on FOX One, and higher digital content costs. While these pressures trimmed reported margins, management framed them as targeted investments tied to significant revenue opportunities.

Net Income Fluctuations

Despite operational strength, GAAP net income attributable to stockholders declined to $1.7 billion, or $3.84 per share, from $2.3 billion, or $4.91 per share, in the prior year. Fourth-quarter net income slipped to $691 million from $717 million, though adjusted net income and EPS improved, highlighting the impact of one-time and timing items.

Segment-Specific Pressures in Cable

The Cable Network Programming segment showed some strain, with EBITDA down 3% even as revenue grew 9%. Cable content and other revenue fell 39% due to timing in sports sublicensing, while expenses jumped about 20% on higher sports programming amortization and production costs.

Timing Impact on Free Cash Flow

Management emphasized that free cash flow was temporarily dampened by working capital timing related to World Cup rights payments booked in fiscal 2026. The associated advertising receivables will largely be collected early in fiscal 2027, creating noise in quarter-to-quarter comparisons but not altering the underlying cash profile.

Competitive CTV Environment and Pricing Visibility

Executives acknowledged that the connected TV market remains highly competitive, with growing ad inventory and price-sensitive buyers. While Tubi is performing well, management was cautious on detailing CPMs and sellout rates, citing an environment where pricing and demand visibility can be uneven.

Regulatory and Execution Risk Around Roku Deal

The Roku acquisition is still in the early stages of regulatory review, and management stressed that closing is expected in the first half of 2027. Until approvals are secured, there is execution risk and limited ability to share detailed integration plans, leaving investors to watch the process closely.

Forward-Looking Guidance and Outlook

Looking ahead, Fox said fiscal 2027 is off to an excellent start, with advertising strength continuing into the first quarter, boosted by lingering World Cup benefits and a heavy political ad cycle. The company expects more normalized distribution renewals, ongoing improvement from moderating digital investment, continued buybacks and dividends, and a balance sheet positioned for the targeted leverage at Roku close.

Fox’s earnings call ultimately presented a company leaning into live sports, news, and ad-supported streaming while carefully managing costs and capital returns. Despite some segment-level pressures, regulatory uncertainty around Roku, and timing noise in cash flow, management’s confidence in growth, profitability, and shareholder payouts suggests a constructive outlook for investors following the stock.