8-K: Fox Corp Q3 FY26 Earnings: Revenue Down, Adjusted EBITDA Up

Fox Corporation reported third quarter fiscal 2026 results, with total revenue decreasing to $3.99 billion, while Adjusted EBITDA increased 11% to $954 million.

Summary

• Fox Corporation announced its financial results for the third quarter ended March 31, 2026.
• Total quarterly revenue was $3.99 billion, a decrease from $4.37 billion in the prior year quarter.
• Advertising revenue declined to $1.56 billion from $2.04 billion, largely due to the absence of Super Bowl LIX broadcast, though partially offset by an additional NFL Wild Card game and digital growth.
• Net income attributable to stockholders was $166 million ($0.38 per share), down from $346 million ($0.75 per share) in the prior year.
• Adjusted net income attributable to stockholders rose to $570 million ($1.32 per share) from $507 million ($1.10 per share).
• Adjusted EBITDA increased by 11% to $954 million from $856 million in the prior year quarter, driven by lower expenses that more than offset the revenue decrease.
• Cable Network Programming revenue increased 6% to $1.74 billion, with Segment EBITDA up 1% to $884 million.
• Television segment revenue decreased to $2.20 billion from $2.70 billion, but Segment EBITDA significantly increased to $191 million from $60 million due to lower expenses.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a mixed result; while headline revenue and net income are down, the increase in Adjusted EBITDA and Adjusted Net Income, driven by effective cost management and growth in specific segments, indicates underlying operational strength.

Positives

• Adjusted EBITDA increased by 11% to $954 million, driven by effective cost management.
• Adjusted net income attributable to stockholders increased to $570 million ($1.32 per share) from $507 million ($1.10 per share).
• Cable Network Programming revenue saw a 6% increase to $1.74 billion.
• Television segment EBITDA saw a substantial increase of $131 million, reaching $191 million, due to lower expenses.
• Continued digital growth led by the Tubi AVOD service contributed positively to advertising revenue.
• The company has a remaining authorization of $3.5 billion for its share repurchase program.

Negatives

• Total quarterly revenue decreased to $3.99 billion from $4.37 billion in the prior year quarter.
• Advertising revenue declined significantly to $1.56 billion from $2.04 billion, primarily due to the absence of the Super Bowl LIX broadcast.
• Net income attributable to stockholders decreased to $166 million ($0.38 per share) from $346 million ($0.75 per share).
• Distribution revenue in the Television segment was down slightly to $858 million from $870 million due to net subscriber declines.
• Cash and cash equivalents decreased to $3.601 billion from $5.351 billion year-over-year.

Risks

• Changes in economic, business, competitive, technological, strategic, and/or regulatory factors could cause actual results to vary materially from forward-looking statements.
• Net subscriber declines impacting distribution revenue.
• Reliance on major sporting events like the Super Bowl for advertising revenue, the absence of which significantly impacts results.
• Costs associated with the launch of new initiatives like Fox One.

Future Outlook

The company remains steadfast in its commitment to delivering long-term shareholder value supported by its strong balance sheet. Specific forward-looking statements are subject to various risks and uncertainties as detailed in the cautionary statement.

Management Comments

• "Our fiscal third quarter results once again demonstrate continued strength and momentum across our business."
• "This strong performance, led by robust core advertising trends, underscores FOXs leadership in live programming, bolstered by continued strength at our leading free streaming service, Tubi."
• "Against this backdrop, we are proud to be bringing the worlds biggest sporting event to American homes with the FIFA Men's World Cup hosted here in North America across June and July."
• "Meanwhile we remain steadfast in our commitment to delivering long-term shareholder value supported by our strong balance sheet."

Industry Context

StockSavvy.ai notes that Fox Corporation's results reflect the cyclical nature of major sporting event advertising revenue, particularly the impact of the Super Bowl's absence. The growth in digital platforms like Tubi and the strategic acquisition of sports sublicensing revenue highlight a broader industry trend towards diversifying revenue streams and leveraging streaming services.

Stakeholder Impact

• Shareholders: Potential for continued value creation through share repurchases and focus on long-term value, though current quarter net income is down.
• Employees: Continued operational strength may support employment, but cost management could imply efficiency drives.
• Advertisers: The absence of major sporting events impacts advertising inventory and pricing, but digital growth offers alternative opportunities.
• Content Providers/Affiliates: Continued revenue from distribution and content deals, with increased sports sublicensing revenue noted.

Next Steps

• Continue to leverage leadership in live programming.
• Focus on continued strength at the Tubi AVOD service.
• Broadcast the FIFA Men's World Cup in North America in June and July.
• Deliver long-term shareholder value.

Key Dates

Recommendation

The results show a mixed performance with declining top-line revenue and net income, largely due to the cyclical absence of major sporting events. However, the significant increase in Adjusted EBITDA and Adjusted Net Income, driven by strong cost controls and growth in specific segments like Cable Network Programming and digital platforms, indicates operational resilience. The company's commitment to shareholder value and upcoming major events like the FIFA Men's World Cup provide a stable outlook, warranting a 'hold' recommendation pending further clarity on advertising market recovery and sustained growth.

Keywords

Fox Corporation, Q3 FY26 Earnings, Revenue, Adjusted EBITDA, Net Income, Advertising Revenue, Cable Network Programming, Television Segment