10-K: Fox Corp. Soars on Strong FY25 Results, Boosts Buyback

Fox Corporation reported a significant 48% increase in net income for fiscal year 2025, driven by robust advertising and affiliate fee growth, and authorized an additional $5 billion in stock repurchases.

Summary

• Total revenues increased by 17% to $16.3 billion in fiscal year 2025, up from $13.98 billion in fiscal year 2024.
• Net income attributable to Fox Corporation stockholders surged by 51% to $2.263 billion in fiscal year 2025, compared to $1.501 billion in fiscal year 2024.
• Advertising revenue grew by 26% to $6.865 billion, primarily due to the broadcast of Super Bowl LIX, higher NFL pricing, political advertising from the 2024 elections, and continued digital growth led by Tubi.
• Affiliate fee revenue increased by 5% to $7.656 billion, driven by higher average rates per subscriber, partially offset by a lower average number of subscribers across all networks.
• Operating expenses rose by 16% to $10.518 billion, mainly due to higher sports programming rights amortization and production costs, including NFL and college football, partially offset by the absence of WWE.
• The company ended fiscal year 2025 with approximately $5.4 billion in cash and cash equivalents and reduced its total borrowings to $6.602 billion from $7.197 billion.
• A non-cash impairment charge of approximately $70 million was recorded for intangible assets, primarily related to FCC licenses, due to updated market data and lower expected future advertising revenue.
• The joint venture 'Venu Sports' with ESPN and Warner Bros. Discovery Inc. was discontinued on January 10, 2025, resulting in a $80 million settlement payment by Fox and a write-off of previously capitalized costs.
• Tubi, the AVOD service, experienced 13% growth in total view time in fiscal 2025 and streamed approximately 11 billion hours of content, expanding its library with over 70 new original titles and 40 new channels.
• Fox announced 'FOX One,' a wholly-owned, direct-to-consumer subscription streaming service, expected to launch by Fall 2025.
• The company repurchased approximately $1 billion of Class A Common Stock during fiscal 2025, and the Board authorized an additional $5 billion in stock repurchases, bringing the total authorization to $12 billion.

Sentiment

Score: 8

Explanation: The filing indicates strong financial performance with significant increases in revenue and net income, robust digital growth, and a substantial increase in capital return to shareholders. While there are ongoing legal challenges and industry headwinds, the company's strategic initiatives and financial health present a positive outlook.

Positives

• Net income attributable to stockholders increased by a substantial 51% year-over-year, demonstrating strong profitability.
• Total revenues grew by 17%, indicating healthy top-line expansion across segments.
• Advertising revenue saw a significant 26% increase, boosted by major sports events like Super Bowl LIX, higher NFL pricing, and political advertising.
• Digital growth, particularly from the Tubi AVOD service, contributed positively to advertising revenue and audience engagement, with Tubi's total view time growing 13% and streaming 11 billion hours.
• Affiliate fee revenue increased by 5% due to higher average rates per subscriber, reflecting the continued value of Fox's content to distributors.
• The company maintains a strong liquidity position with approximately $5.4 billion in cash and cash equivalents and an unused $1.0 billion revolving credit facility.
• Debt was reduced from $7.197 billion to $6.602 billion, improving the balance sheet.
• The Board authorized an additional $5 billion in stock repurchases, increasing the total program to $12 billion, signaling confidence in future cash flow and commitment to shareholder returns.
• Fox News Media maintained its leadership as the top-rated national cable news channel for over 20 consecutive years in Monday to Friday primetime viewing.
• Fox Sports secured long-term contracts for marquee sports rights, including NFL, MLB, and NASCAR, and expanded its portfolio with INDYCAR and LIV Golf rights.
• Fox Entertainment continues to attract a young and diverse audience and produced two of the top three season debuts in the 2024-2025 broadcast season.

Negatives

• Subscriber declines across all networks partially offset gains from higher average affiliate rates, indicating ongoing challenges in traditional distribution models.
• Operating expenses increased by 16%, primarily due to higher sports programming rights amortization and production costs, impacting profitability margins.
• A non-cash impairment charge of approximately $70 million was recorded for FCC licenses, reflecting a downward revision in fair value due to updated market data and lower expected future advertising revenue.
• The discontinuation of the Venu Sports joint venture resulted in a $80 million settlement payment and a write-off of previously capitalized costs.
• Selling, general and administrative expenses increased by 7%, mainly due to higher employee costs.
• Interest expense, net, increased by 5%, primarily due to lower interest income from reduced interest rates, despite a lower average amount of debt outstanding.

Risks

• Changes in consumer behavior and evolving technologies, including SVOD, AVOD, and FAST services, continue to challenge existing business models and may adversely affect the company's business, financial condition, or results of operations.
• Declines in advertising expenditures due to factors such as economic conditions, audience fragmentation, and shifts towards digital advertising may cause revenues and operating results to decline.
• The company derives a significant portion of its revenues from a limited number of distributors, and the failure to renew affiliation and carriage agreements on favorable terms could have a material adverse effect.
• Continued or accelerated declines in the number of subscribers to MVPD services could negatively affect affiliate fee and advertising revenues.
• The company operates in a rapidly evolving and highly competitive industry, facing competition for content, talent, audiences, advertisers, and distribution, including from new entrants and vertically integrated companies.
• Acceptance of the company's content by the public is difficult to predict, and low acceptance or failure to obtain/retain popular content could adversely affect revenues.
• The business depends on the popularity of special sports events and the continued popularity of sports leagues and teams for which programming rights are held; a decline in popularity or fewer games could negatively impact revenues.
• The inability to renew programming rights, particularly sports programming rights, on sufficiently favorable terms, or at all, could cause advertising and affiliate fee revenues to decline significantly.
• Damage to the company's brands, particularly the FOX brand, or its reputation due to incidents, perception of low quality, or misuse of AI could have a material adverse effect.
• Acquisitions, investments, and other strategic initiatives present risks, including insufficient revenues, failure to meet projections, integration difficulties, and loss of key personnel or customers.
• The loss of key personnel, including news, sports, and entertainment personalities, could disrupt management or operations and adversely affect revenues.
• Labor disputes involving writers, directors, actors, musicians, production crew members, or professional sports leagues could disrupt operations, increase costs, and reduce revenues.
• The company could continue to recognize asset impairment charges for goodwill, intangible assets, programming, and other assets and investments if fair values decline.
• The degradation, failure, or misuse of the company's network and information systems and other technology could cause service disruptions or improper disclosure of personal data, resulting in increased costs, liabilities, or loss of revenue.
• Technological developments, including AI, may increase the threat of content piracy and signal theft and limit the company's ability to protect its intellectual property rights.
• The company is subject to complex and evolving laws, regulations, rules, industry standards, and contractual obligations related to privacy and personal data protection, which are costly and inconsistent.
• Changes in laws and regulations, or their interpretation or enforcement, particularly regarding federal communications and AI, may have an adverse effect on the company's business.
• The Communications Act and FCC regulations limit the ability of non-U.S. citizens to invest in the company, and the company's Board may take action to prevent or cure ownership above foreign ownership thresholds.
• The failure or destruction of satellites or transmitter facilities the company depends on to distribute programming could materially adversely affect its businesses.
• The company could be subject to significant tax liabilities due to changes in tax laws, audits, or litigation outcomes.
• Unfavorable litigation or governmental investigation results, including ongoing defamation claims, could require significant payments or lead to onerous operating procedures.
• Certain directors and significant stockholders may have actual or potential conflicts of interest due to their equity ownership in News Corp or dual service as directors of News Corp.
• Certain provisions of the company's Amended and Restated Certificate of Incorporation, bylaws, and Delaware law, along with the Murdoch Family Trust's ownership concentration, may discourage takeovers and affect voting results.

Future Outlook

The company expects to launch its wholly-owned, direct-to-consumer subscription streaming service, FOX One, by Fall 2025, aiming to expand the reach of its programming. It anticipates continued investment in and expansion of digital distribution offerings and direct engagement with consumers, including through Tubi, FOX Nation, and FOX Weather. The company expects to continue to provide compelling news, sports, and entertainment programming across platforms to increase audience engagement and drive growth in distribution, affiliate, and advertising relationships. Future plan contributions to pension plans are not expected to be material for the immediate future, but voluntary contributions may be made. The Credible minority interest shareholder's put transaction is expected to be completed in the first half of fiscal 2026. The Smartmatic lawsuit trial is not expected to commence until late 2025 or early 2026 at the earliest. The One Big Beautiful Bill Act of 2025, including changes to the U.S. corporate income tax system, will generally be applicable for the company beginning in fiscal 2026.

Management Comments

• Management believes that the expectations reflected in any of the company's forward-looking statements are reasonable, though actual results could differ materially.
• Management believes that Segment EBITDA is an appropriate measure for evaluating the operating performance of the company's operating segments because it is the primary measure used by the company's chief operating decision maker, the Chief Executive Officer, to monitor actual versus budget and prior fiscal year financial results, forecast future periods and perform competitive analyses to evaluate performance and allocate resources.
• The company's management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025.
• Management determined that, as of June 30, 2025, Fox Corporation maintained effective internal control over financial reporting.

Industry Context

The media and entertainment industry is undergoing rapid and significant change, characterized by evolving consumer behavior towards direct-to-consumer offerings (SVOD, AVOD, FAST), increased audience fragmentation, and a shift in advertising expenditures from linear to digital platforms. Fox Corporation is actively responding to these trends by investing in and expanding its digital distribution offerings like Tubi and the upcoming FOX One service, and by focusing on live and appointment-based content (news and sports) which remains resilient amidst linear viewership declines. The industry also faces intensified competition for content rights, particularly sports, driving up costs. The increasing use of AI presents both opportunities for content creation and risks related to unauthorized replication and intellectual property infringement. Regulatory scrutiny, especially concerning privacy and data protection, continues to increase, adding compliance complexities and costs across the sector.

Comparison to Industry Standards

• FOX News Media's consistent #1 ranking in national cable news for over 20 consecutive years (Monday-Friday primetime) and #1 cable network for 10 consecutive years (Monday-Friday primetime and total day) positions it as a dominant leader compared to competitors like CNN and MSNBC.
• Tubi's 13% growth in total view time in fiscal 2025 and its 2.2% share of all television viewing (according to Nielsen's The Gauge) demonstrates strong performance and growth among free ad-supported streaming services, competing effectively with platforms like Peacock, Amazon Prime Video, and Roku.
• FOX Entertainment's ability to deliver the youngest and most diverse audience among broadcast networks for over two decades, along with featuring top-rated new comedies and cooking shows, indicates strong content appeal relative to traditional broadcasters like ABC, CBS, and NBC.
• FOX Sports' long-term agreements for marquee rights (NFL, MLB, NASCAR, FIFA World Cup) and recent additions like INDYCAR and LIV Golf, while concluding WWE, reflect a strategic portfolio optimization in a highly competitive sports rights market against rivals like ESPN and league-owned networks.
• The company's strong cash position and increased stock repurchase authorization suggest a robust financial health and shareholder return strategy that compares favorably to peers navigating industry transitions.

Corporate Governance

Legal Proceedings

• The company's FOX News business and certain current and former employees have been subject to allegations of sexual harassment and discrimination on the basis of sex and race; many claims resolved, others contested, with no material impact to date.
• Smartmatic USA Corp. filed a lawsuit in February 2021 seeking $2.7 billion in damages for defamation or disparagement; motions for summary judgment filed April 30, 2025, with a trial not expected before late 2025 or early 2026, and the company is unable to estimate the amount of loss.
• Dominion Voting Systems, Inc. filed a lawsuit in March 2021 seeking $1.6 billion in damages, which was settled for approximately $800 million in April 2023.
• Consolidated derivative lawsuits (In re Fox Corporation Deriv. Litig.) were filed by stockholders in Delaware Court of Chancery in April and September 2023, alleging breach of fiduciary duties by certain directors and officers related to election fraud allegations, with a motion to dismiss denied in December 2024.
• A putative class action lawsuit, Campos v. Tubi, alleging violation of the federal Video Privacy Protection Act (VPPA) was settled in July 2024, with the final order approved in January 2025 and appeal dismissed in June 2025, with no material adverse effect.
• Tubi settled arbitration claims brought on behalf of approximately 23,000 individuals in May 2025, involving alleged misuse of personal information, with no material adverse effect.
• An antitrust lawsuit filed by FuboTV Inc. against the company and others related to the Venu Sports joint venture was settled in January 2025, resulting in an approximately $80 million settlement payment by the company.
• The company has an outstanding liability of approximately $30 million as of June 30, 2025, related to the U.K. Newspaper Matters Indemnity, assumed from the 21CF separation.
• The company is jointly and severally liable for U.S. federal and certain state tax liabilities of the former 21CF consolidated group, though 21CF and/or Disney are required to indemnify the company for such liabilities.

Related Party Transactions

• Related party revenue and expense were not material for fiscal years 2025, 2024, and 2023.
• Amounts due to related parties were $67 million as of June 30, 2025, primarily included in accounts payable, accrued expenses, and other current liabilities.
• The company has a stockholders agreement with the Murdoch Family Trust, limiting the trust's and family members' combined voting power to no more than 44% of outstanding Class B Common Stock.
• The company's bylaws contain provisions regarding corporate opportunities that may simultaneously be of interest to the company and News Corporation, allowing 'Overlap Persons' (e.g., Murdoch Family) to refer opportunities to News Corp.

Stakeholder Impact

• Shareholders: Benefit from increased net income, a declared semi-annual dividend, and a significant increase in the stock repurchase program, indicating strong capital returns. However, the dual-class stock structure and Murdoch Family Trust's concentrated voting power limit influence for Class A shareholders and may deter certain acquisition proposals.
• Employees: Benefit from competitive compensation and comprehensive benefits, including health insurance, paid time-off, and a 401(k) plan. The company invests in learning and development programs and fosters workplace civility and inclusion through ERGs. However, labor disputes remain a potential risk.
• Customers/Viewers: Gain access to expanded content offerings through digital platforms like Tubi (with new original titles and channels) and the upcoming FOX One streaming service. The focus on live news and sports aims to increase engagement. However, declining MVPD subscribers could impact content availability or quality for some.
• Advertisers: Benefit from increased audience reach through digital platforms and the company's ability to deliver appointment-based viewing and scale audiences. The company's strong brands and innovative advertising platforms offer value. However, shifts in advertising expenditures and audience fragmentation pose ongoing challenges.
• Creditors: The company's reduced debt and strong cash position enhance its creditworthiness, providing greater security for lenders.
• Suppliers/Content Partners: Benefit from the company's continued investment in programming rights and content production, though competition for popular content can be intense.

Next Steps

• Launch of the FOX One direct-to-consumer subscription streaming service by Fall 2025.
• Completion of the Credible minority interest shareholder's put transaction in the first half of fiscal 2026.
• Continued defense against the Smartmatic lawsuit, with a trial not expected before late 2025 or early 2026.
• Continued defense against the consolidated derivative lawsuits, with a motion for summary judgment on director independence granted.
• Evaluation of the future impact of the One Big Beautiful Bill Act of 2025, applicable from fiscal 2026.
• Monitoring of FCC proceedings regarding C-Band spectrum reallocation and ATSC 3.0 simulcast requirements.
• Ongoing efforts to comply with evolving privacy and data protection laws and regulations.

Key Dates

Recommendation

Fox Corporation's fiscal year 2025 results demonstrate robust financial health, with significant increases in both revenue and net income, driven by strong advertising performance (including major sports events and digital growth) and solid affiliate fee increases. The company's strategic focus on live content and expanding its digital footprint through Tubi and the upcoming FOX One service positions it well for future growth in a dynamic media landscape. Furthermore, the substantial increase in the stock repurchase authorization to $12 billion signals a strong commitment to returning capital to shareholders and confidence in future cash flow generation. While legal proceedings and industry-wide subscriber declines present ongoing risks, the company's strong balance sheet, effective cost management, and strategic investments outweigh these concerns, making it an attractive investment.

Keywords

Media, Entertainment, News, Sports, Broadcasting, Streaming, AVOD, Tubi, FOX News, FOX Sports, SEC Filing, 10-K, Financial Results, Stock Repurchase, Dividends, Corporate Governance, Risk Management, Digital Media, Advertising, Affiliate Fees, FanDuel, UFL