Fox Corporation Class A ((FOXA)) has held its Q1 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Fox Corporation’s recent earnings call painted a mixed picture of the company’s financial health and strategic initiatives. While the sentiment was generally positive, with strong revenue and advertising growth, significant achievements at Tubi, and successful sports programming, there were notable challenges such as a decline in net income, negative free cash flow, and subscriber decline.
Revenue and EBITDA Growth
Fox Corporation reported a commendable 5% growth in revenue and a 2% increase in EBITDA for the first quarter of fiscal 2026. This growth underscores the company’s ability to navigate a competitive media landscape and deliver financial performance.
Strong Advertising Revenue
Advertising revenue saw a 6% increase, driven by robust trends across news, sports, entertainment, and Tubi. This growth was achieved despite the absence of political revenue from the previous year, highlighting the strength of Fox’s diverse advertising portfolio.
Tubi’s Performance
Tubi emerged as a standout performer with a 27% revenue growth and reached profitability in the first quarter. This was fueled by an 18% increase in total view time, showcasing Tubi’s growing appeal and market presence.
Cable Networks Revenue
Fox’s Cable Networks revenue grew by 4%, with cable advertising revenues up 7%, primarily driven by strong pricing at FOX News. This performance reinforces FOX News as a key revenue driver within the company’s portfolio.
FOX Sports Success
FOX Sports reported impressive viewership gains, with a 12% increase in NFL viewership and a 22% rise in college football viewership. These figures contributed significantly to the strong performance of Fox’s sports programming.
Share Buyback Program
In a move reflecting confidence in its business outlook, Fox announced a $1.5 billion accelerated share repurchase transaction. This strategic decision underscores the company’s commitment to returning value to shareholders.
Net Income Decline
Despite positive revenue trends, net income attributable to stockholders fell to $599 million, down from $827 million in the prior year period. This decline highlights ongoing challenges in maintaining profitability.
Free Cash Flow Negative
The quarter saw a negative free cash flow of $234 million, consistent with the seasonality of the working capital cycle. This negative cash flow is a point of concern, reflecting the financial pressures faced by the company.
Subscriber Declines
Subscriber numbers continued to decline, remaining below 7% for the third consecutive quarter. This trend indicates persistent challenges in retaining subscribers in a competitive market.
Forward-Looking Guidance
Fox Corporation’s forward-looking guidance suggests a strong start to fiscal year 2026, with a 5% increase in revenue and a 2% growth in EBITDA. The company remains optimistic about its advertising revenue, which rose by 6%, and the performance of Tubi, which achieved a 27% revenue growth. Despite subscriber declines, Fox is confident in its financial outlook, as evidenced by the $1.5 billion share repurchase program.
In conclusion, Fox Corporation’s earnings call revealed a company navigating both opportunities and challenges. While there are strong growth areas, such as advertising and Tubi, the decline in net income and subscriber numbers presents hurdles that need addressing. Overall, the sentiment was cautiously optimistic, with strategic initiatives in place to bolster future performance.