Summary of Fox (NasdaqGS:FOX) FY Conference Call - March 09, 2026 Company Overview - **Company**: Fox Corporation - **Fiscal Year**: The company is more than halfway through its fiscal year 2026 Key Highlights - **Revenue Growth**: Fox has reported revenue growth year-to-date compared to the previous year, despite a slight decline in EBITDA [3][4] - **Strong Performance**: FOX News has seen significant rating gains, while FOX Sports has achieved record-breaking revenues, particularly from NFL, college football, and baseball [4][6] - **New Initiatives**: The launch of FOX One has been a significant initiative, contributing positively to subscriber growth and engagement [4][6][72] - **Tubi's Growth**: Tubi has shown great engagement and revenue gains, becoming a key contributor to EBITDA [4][6] Advertising Market - **Healthy Advertising Environment**: The advertising market remains robust, with Fox experiencing seven consecutive quarters of advertising growth [56][60] - **Key Categories**: Nine out of the top ten advertising categories are growing, led by finance, pharma, and tech [60] - **Political Advertising**: Anticipation of a record-breaking political advertising cycle in the upcoming midterms, with an estimated market spend of $11 billion [45][56] Subscriber Trends - **Improvement in Subscriber Decline**: The rate of subscriber decline has improved, with seven consecutive quarters of better trends [10][12] - **Pricing Power**: Fox has maintained pricing power, allowing it to outpace the overall decline in subscribers [16][21] FOX One and Tubi - **FOX One Performance**: FOX One has attracted subscribers primarily from the cordless community, with a focus on not cannibalizing pay TV subscribers [72][82] - **Tubi's Profitability**: Tubi turned profitable two quarters ago, with a 19% revenue growth and a focus on original content to attract younger audiences [83][87] Capital Allocation - **Prudent Capital Management**: Fox has returned over $10 billion to shareholders through buybacks and dividends since 2019, with a focus on organic investments [142][144] - **M&A Strategy**: The company has not found attractive M&A opportunities recently, focusing instead on internal growth [145][146] Sports Rights and NFL Relationship - **NFL Contract**: Fox has four years left on its current NFL contract, with a strong relationship that has been built over 31 years [111][113] - **Concerns Over Value Transfer**: There are concerns about potential value transfer from Fox to the NFL, but the company emphasizes its historical ability to monetize rights increases [115][117] World Cup Expectations - **FIFA Men's World Cup**: The upcoming World Cup is expected to be a significant event for Fox, with increased advertiser demand and potential subscriber growth for FOX One [120][123] Digital Portfolio and Future Outlook - **Path to Profitability**: The digital investments, including FOX One and Tubi, are expected to contribute positively to EBITDA in the near term [100][102] - **Long-term Strategy**: Fox aims to continue investing in journalism, sports, and entertainment to maintain its competitive edge in a changing media landscape [27][31] Conclusion - **Overall Confidence**: Fox expresses confidence in its current momentum and strategic direction, with a focus on maintaining strong relationships with advertisers and viewers while navigating the evolving media landscape [6][7][31]

Summary of Fox Corporation 2026 Conference Call Company Overview - **Company**: Fox Corporation (NasdaqGS: FOX) - **Date of Conference**: March 02, 2026 - **Speaker**: Lachlan Murdoch, Executive Chairman and CEO Core Industry Insights - **Industry**: Media and Entertainment - **Key Focus Areas**: News, Sports, Digital Platforms, Advertising, Direct-to-Consumer Services Strategic Priorities - **Business Performance**: Fox has experienced record revenue and profitability across various segments, including sports, news, and Tubi, indicating strong operational performance [12][13][14] - **Digital Expansion**: Emphasis on digital platforms, particularly FOX One and Tubi, as key growth areas. The focus is on direct-to-consumer strategies and enhancing advertising revenue [16][17] - **News Coverage**: Investment in news gathering is crucial, with Fox News achieving its highest Saturday ratings in over 23 years, highlighting the importance of timely and skilled news coverage [14][16] Financial Performance - **Stock Performance**: The stock has had a choppy period recently, but overall business performance remains strong [12][13] - **Share Buybacks**: Fox has a buyback capacity of $12 billion, with approximately $8.6 billion executed to date, indicating a commitment to returning capital to shareholders [25][26] - **Advertising Revenue**: Strong growth in advertising, particularly for Fox News, with over 200 new advertisers attracted due to competitive CPM rates [75][76] Market Position and Competition - **Scale vs. Focus**: Fox does not believe in scale for its own sake, preferring to focus on core competencies in news and sports rather than expanding into less profitable areas [30][31] - **Competitive Landscape**: Fox News continues to outperform competitors like CNN and MSNBC, with a strong audience base and engagement metrics [34][75] Challenges and Risks - **Subscriber Declines**: Traditional pay TV subscriber declines are improving, with a reported decline of just under 6.5%, but the sustainability of this trend remains uncertain [41][44] - **NFL Negotiations**: Concerns about potential renegotiations of NFL contracts, but Fox maintains a strong relationship with the NFL and believes current pricing is market-competitive [38][39] Digital and Streaming Initiatives - **Tubi's Growth**: Tubi has seen a 27% growth in total viewing time and is EBITDA positive, benefiting from a large content library and strong advertising engagement [97][100] - **FOX One Launch**: Launched in August 2025, FOX One has exceeded expectations in subscriber growth and engagement, with users watching an average of 10 hours per week [62][64] Future Outlook - **Political Advertising**: Anticipation of strong political advertising revenues in the upcoming election cycle, with Tubi expected to attract significant political ad dollars due to its targeted audience [90][92] - **Sports Betting**: Fox holds a 2.5% stake in Flutter and an 18.6% option in FanDuel, viewing sports betting as a valuable growth area, while emphasizing the need for regulatory guardrails [116][120] Conclusion - **Overall Performance**: Fox Corporation is positioned strongly across its various segments, with a focus on digital growth, advertising revenue, and maintaining a competitive edge in news and sports [123][125]

Financial Data and Key Metrics Changes - Total revenues for the second quarter reached $5.18 billion, a 2% increase from the prior year quarter [14] - Adjusted EBITDA was $692 million, down from $781 million in the prior year quarter due to higher expenses [15] - Net income attributable to stockholders was $229 million or $0.52 per share, compared to $373 million or $0.81 per share in the prior year [15] Business Line Data and Key Metrics Changes - Cable segment revenues were $2.28 billion with an Adjusted EBITDA of $687 million, both representing a 5% growth year-over-year [16] - Television segment reported revenues of $2.94 billion, with advertising revenues unchanged due to the absence of last year's political advertising [17] - Distribution revenue grew 4% during the quarter, with subscriber declines improving sequentially [6] Market Data and Key Metrics Changes - Advertising revenue grew 1% despite a difficult comparison to last year's political cycle, driven by strong linear pricing and robust revenue growth at Tubi [14] - FOX News Digital saw a 170% increase in social media views over the prior year [8] - Tubi achieved its most streamed quarter of all time, with total view time growing 27% year-over-year [10] Company Strategy and Development Direction - The company emphasizes a strategy focused on live sports and news, alongside the growth of Tubi and FOX One [11] - FOX One has exceeded expectations with strong consumer engagement, particularly among sports fans [39] - The company is committed to maintaining a strong balance sheet and delivering sustained growth and shareholder value [12] Management's Comments on Operating Environment and Future Outlook - Management noted robust advertising market conditions and expects continued strength in political advertising as the midterm elections approach [25] - The company is optimistic about the upcoming FIFA Men's World Cup and its potential profitability [27] - Management expressed confidence in the strategic direction and the ability to offset increased costs in the NFL contracts [33] Other Important Information - The company repurchased an additional $1.8 billion in shares, bringing the total cumulative amount repurchased to $8.4 billion since the buyback program began [19] - A semiannual dividend of $0.28 per share was announced, contributing to a total cumulative cash return to shareholders of approximately $10.4 billion [19] Q&A Session Summary Question: Can you discuss the standout performance in cable advertising? - Management highlighted a robust advertising market for Fox News, with a significant increase in new advertisers and strong scatter pricing [25] Question: How do you plan to offset increased costs in the NFL? - Management indicated that they can offset some costs by balancing their sports portfolio and expect a robust political advertising cycle to benefit them [33] Question: What is the performance outlook for FOX One? - Management reported that FOX One has exceeded expectations, with a significant portion of its audience being sports fans, and they are on track to meet subscriber benchmarks [39] Question: Can you elaborate on the improvement in subscriber declines? - Management noted a 6.3% decline in subscribers, which is an improvement, and attributed it to the emergence of skinny bundles in the cable universe [45] Question: What are the growth drivers for Tubi? - Management stated that Tubi's growth is driven by a 27% increase in total view time and strong advertising trends, particularly among younger audiences [48]

Financial Data and Key Metrics Changes - Total revenues for the second quarter reached $5.18 billion, a 2% increase from the prior year quarter [14] - Adjusted EBITDA was $692 million, down from $781 million in the prior year quarter, due to higher expenses [15] - Net income attributable to stockholders was $229 million or $0.52 per share, compared to $373 million or $0.81 per share in the prior year [15] Business Line Data and Key Metrics Changes - Cable segment revenues were $2.28 billion with an Adjusted EBITDA of $687 million, both representing a 5% growth year-over-year [16] - Television segment reported revenues of $2.94 billion, with advertising revenues unchanged due to the absence of last year's political advertising [17] - Distribution revenue grew 4% during the quarter, with subscriber declines improving sequentially [6] Market Data and Key Metrics Changes - Advertising revenue grew 1% despite tough comparisons to last year's political cycle, driven by strong linear pricing and robust revenue growth at Tubi [14] - FOX News Digital saw a 170% increase in social media views over the prior year, indicating strong audience engagement [9] - Tubi achieved its most streamed quarter ever, with total view time growing 27% year-over-year [11] Company Strategy and Development Direction - The company emphasizes a strategy focused on live sports and news, alongside the growth of Tubi and FOX One, to reinforce its leadership position [12] - FOX One is positioned as a premier destination for live sports and news streaming, with targeted marketing to cord-cutters [6] - The company is committed to maintaining a strong balance sheet and delivering sustained growth and shareholder value through share buybacks and dividends [19][20] Management's Comments on Operating Environment and Future Outlook - Management noted a robust advertising market and expects continued strength in political advertising as the midterm elections approach [25] - The company anticipates profitability from the upcoming FIFA Men's World Cup, driven by strong advertiser interest [26] - Management expressed confidence in the strategic direction and the ability to connect with audiences across various platforms [12] Other Important Information - The company repurchased an additional $1.8 billion in shares, bringing the total repurchased to $8.4 billion since the buyback program began [19] - A semiannual dividend of $0.28 per share was announced, contributing to a total cumulative cash return to shareholders of approximately $10.4 billion [19] Q&A Session Questions and Answers Question: Can you discuss cable advertising performance and expectations for the political cycle? - The advertising market for Fox News has been robust, with 200 new advertisers added this half, reflecting strong demand [24] - The company expects to benefit from a robust political advertising cycle, particularly at local stations [25] Question: How does the company plan to offset increased costs associated with the NFL? - The company is confident in its ability to offset costs by balancing its sports portfolio and leveraging its strong content [30] Question: What is the performance of FOX One and its impact on the P&L? - FOX One has exceeded expectations, with a significant portion of its audience being sports fans, and the platform's costs are recorded in the corporate segment [38][40] Question: Can you elaborate on the improvement in subscriber declines and the drivers behind it? - The subscriber decline improved to 6.3%, driven by the emergence of skinny bundles in the cable universe [45] - The company is optimistic about the impact of skinny bundles on subscriber retention [46] Question: What are the growth drivers for Tubi's advertising revenue? - Tubi's revenue growth of 19% was driven by a 27% increase in total view time and strong advertiser demand [48]

Core Insights - Fox Corporation (FOXA) is expected to report second-quarter fiscal 2026 results on February 4, with earnings estimated at 46 cents per share, reflecting a 52.08% decline year over year, and revenues projected at $5.06 billion, indicating a 0.41% decrease from the previous year [2][10] Financial Performance - The company has consistently beaten the Zacks Consensus Estimate in the past four quarters, with an average surprise of 33.54% [3] - The earnings estimate for Q4 2025 remains unchanged over the past 30 days, with an Earnings ESP of 0.00% and a Zacks Rank of 2 (Buy) [11][10] Factors Influencing Results - Fox Corporation entered the second quarter following solid revenue growth in the first quarter, with Tubi achieving its first profitable quarter [4] - The company is expected to benefit from strong sports and news programming, although year-over-year comparisons are affected by the absence of political advertising revenues from the previous year [4][10] Key Growth Drivers - FOX Sports is anticipated to be a significant growth driver, with notable viewership for NFL games and partnerships enhancing audience reach [5] - FOX News Media maintained its status as the most-watched cable network, positively influencing advertising pricing despite softer market conditions [6] - Entertainment programming saw benefits from returning franchises and new acquisitions, although development costs may have impacted operating margins [7] Tubi's Performance - Tubi's strong performance from the first quarter is expected to continue, bolstered by new partnerships enhancing content offerings [8]

Industry Overview - Streaming has evolved into a primary viewing choice for many households, driven by faster connectivity and changing audience habits, creating opportunities for companies like Sony, Fox, and Roku [2] - The appeal of streaming includes convenience and control, leading platforms to invest in original programming and technology to enhance viewer engagement [3] - Industry projections suggest global streaming revenues could approach $190 billion by 2029, supported by nearly 2 billion subscriptions worldwide [4] Company Insights: Sony Group Corporation - Sony's strategic move into streaming began with the acquisition of Crunchyroll for approximately $1.17 billion, creating a global anime platform [7] - By mid-2025, Crunchyroll had over 17 million paid subscribers, showcasing the growth of anime as a mainstream category [8] - Sony Pictures Core focuses on delivering premium film content directly to consumers, enhancing the value of Sony devices [9] - Sony is expanding geographically through partnerships, including launching dedicated subscription channels on platforms like Prime Video [10] Company Insights: Fox Corporation - Fox's streaming strategy gained momentum with the acquisition of Tubi, a free ad-supported platform, which has become central to its direct-to-consumer approach [11] - Tubi reached quarterly profitability in Q1 of fiscal 2026, achieving 27% revenue growth driven by an 18% increase in viewership [13] - Tubi aims for a long-term margin framework of 20-25%, positioning it as a significant future earnings growth engine [14] - The platform is capitalizing on younger viewers migrating to free streaming, enhancing its content slate and advertising capabilities [15] Company Insights: Roku - Roku transitioned from hardware to an end-to-end streaming platform, enhancing its ecosystem for content distribution and advertising [16] - In Q3 2025, Roku's total streaming hours reached 36.5 billion, a 14% year-over-year increase, supporting ad inventory growth [17] - Roku's streaming services distribution is gaining traction, with improved content discovery and a focus on live sports to drive subscriber growth [18] - The launch of Howdy, a low-cost ad-free service, broadens Roku's audience and enhances margins as subscriptions scale [19]

Core Insights - The U.S. cable network industry has officially entered a decline stage characterized by falling revenues, shrinking viewership, and significant restructuring of legacy assets [2][4] Industry Trends - The high-stakes bidding war for Warner Bros. Discovery (WBD) represents a pivotal moment for the future of cable television, with Netflix and Paramount Skydance pursuing different strategies [2][3] - Paramount Skydance aims to acquire WBD entirely, while Netflix is focused on its film studio and streaming assets, potentially leading to the separation of WBD's cable assets [3] Financial Data - In 2024, gross advertising revenue for cable networks decreased by 5.9% to $20.2 billion, marking the lowest level since 2007 [6] - Affiliate fee revenue fell nearly 3% to approximately $38.7 billion, indicating a decline in what TV operators pay to carry cable networks [6] - The average cable network experienced a 7.1% decline in subscriber base, dropping to 31.4 million homes [6] Strategic Movements - Major media conglomerates are increasingly abandoning cable networks in favor of streaming services, as evidenced by Comcast's planned spinoff of its cable networks into a standalone entity named "Versant" [5] - The launch of ESPN Unlimited and FOX One streaming platforms in August 2025 further accelerates this trend [5]

Core Viewpoint - Guggenheim raised its price target on FOX Corp. to $85.00 from $75.00 while maintaining a Buy rating, highlighting FOX as a top investment idea in the media sector due to its focus on sports and news programming, which are driving revenue and profit growth despite industry challenges [1] Group 1: Financial Performance and Projections - Guggenheim increased its second-quarter adjusted EBITDA forecast to $452 million from $439 million, and raised its fiscal 2026 EBITDA estimate to $3.29 billion from $3.27 billion, driven by stronger-than-expected advertising trends at Fox News and continued pricing power in sports [3] Group 2: Market Position and Growth Drivers - FOX is positioned to benefit from strong advertising demand and moderating subscription declines compared to peers, aided by the rise of "skinny bundles" and an upcoming cycle of distributor renewals where FOX is expected to gain market share [2] - Additional growth catalysts for FOX include a robust content slate featuring the FIFA World Cup and U.S. elections, along with disciplined investments in growth initiatives such as Tubi, FOX One, and sports gambling [2] Group 3: Industry Context - The firm acknowledged that NFL contracts are likely to be renewed at higher costs ahead of their 2027 expiration, but believes the expense increase will be manageable and provide long-term visibility into the 2030s [3]

Core Insights - Fox Corporation (FOXA) is scheduled to report its first-quarter fiscal 2025 results on October 30, with earnings estimated at $1.06 per share, reflecting a 26.9% year-over-year decline, while revenues are projected at $3.58 billion, indicating a marginal growth of 0.4% from the previous year [1][9] Financial Performance - The company has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 30.29% [2] - FOXA entered the first quarter of fiscal 2026 with strong operational and financial momentum, benefiting from a diversified portfolio across news, sports, and digital entertainment [3] Revenue Drivers - The performance of FOX News and steady affiliate fee trends are expected to have positively impacted results, alongside investments to expand its direct-to-consumer offerings [3] - The launch of FOX One, a unified streaming platform priced at $19.99 per month, is a significant step in the company's digital evolution, although initial marketing and content integration costs may have affected profitability [4] Advertising Revenue - Advertising revenues are anticipated to have moderated due to the absence of $270 million in political advertising from the prior year, but strong engagement at FOX News likely provided some offset [5][9] - Key shows and events, including the return of NFL on FOX and college football, are expected to have boosted viewership and pricing power [5] Challenges - FOXA is likely facing near-term headwinds from increased programming and production costs, softer entertainment ad demand, and additional digital spending related to FOX One, which may limit margin expansion [6] Earnings Expectations - According to the Zacks model, FOXA has an Earnings ESP of -7.55% and a Zacks Rank of 2 (Buy), indicating a lower likelihood of an earnings beat [7]

Core Insights - The article highlights Fox Corp (FOXA) as a strong investment opportunity due to its market leadership in cable broadcasting, particularly in live sports and news, which attract significant advertising revenue [3][8][12]. Business Segments - Fox operates two main segments: cable network programming and television, with cable network programming revenue projected to grow from $5.0 billion in fiscal 2018 to $6.9 billion in fiscal 2025, reflecting a 5% annual growth rate [4][5]. - The television segment, which includes the FOX broadcast network and Tubi, is expected to see revenue increase from $5.1 billion in fiscal 2018 to $9.3 billion in fiscal 2025, representing a 9% annual growth rate [6]. Market Position - Fox is the largest cable TV broadcaster in the U.S., with FOX News being the top-rated national cable news channel for over 20 years [9][11]. - In July 2025, FOX News averaged 2.4 million viewers in primetime, capturing 63% of the cable news share [17]. Live Sports and Events - Live sports events remain crucial for advertisers, with FOX holding rights to major events like the Super Bowl and FIFA World Cup, which attract massive viewership [12][13][14]. - The Super Bowl LVII in February 2023 had an estimated 113 million viewers, while Super Bowl LIX in February 2025 set a record with 128 million viewers [13]. Digital Distribution - Fox is expanding its digital offerings, including Tubi, which has 100 million monthly active users and a 2.2% market share of all television viewing [21]. - The recently launched FOX One service aims to attract "cordless" consumers by providing access to live events and entertainment without undercutting existing cable subscribers [22]. Financial Performance - Since fiscal 2020, Fox has achieved a 6% annual growth in revenue and a 5% growth in net operating profit after tax (NOPAT) [24]. - The company's NOPAT margin slightly decreased from 16% in 2020 to 15% in 2025, while its return on invested capital (ROIC) improved from 17% to 19% [25]. Shareholder Returns - Fox has returned $1.8 billion in dividends and repurchased $6.6 billion in shares since fiscal 2020, with a new authorization for an additional $5 billion in share repurchases [28][30]. - The combined yield from dividends and share repurchases could reach 4.7% [30]. Balance Sheet Strength - Fox reduced its total debt from $8.5 billion in fiscal 2020 to $7.6 billion in fiscal 2025, while increasing cash and equivalents from $4.6 billion to $5.4 billion [36]. - The adjusted debt net of cash fell from $3.5 billion to $1.4 billion over the same period, indicating a strong financial position [36]. Market Valuation - At a current price of $59/share, the market implies a permanent decline of 20% in NOPAT, which may be overly pessimistic given Fox's historical growth rates [41]. - If NOPAT grows at a modest rate of 1% annually, the stock could see a 39% upside to $82/share [43].