Exchange: NASDAQ | Sector: Communication Services | Industry: Entertainment
Q3 2025
Published: May 12, 2025
Earnings Highlights
Revenue of $4.37B up 26.8% year-over-year
EPS of $0.75 decreased by 46.1% from previous year
Gross margin of 100.0%
Net income of 346.00M
""pricing will be in line with our wholesale pricing. So, the pricing will be healthy. It will not be a discounted price and very much as targeted to the cordless market... we will be entering partnerships with other distributors and services to offer Fox One"" - Lachlan Murdoch
Fox Corporation (FOXA) QQ3 2025 Results: Record Free Cash Flow, 65% Advertising Growth Driven by Super Bowl and Tubi Momentum; Fox One D2C Initiative on Track
Executive Summary
Fox Corporation delivered a standout QQ3 2025 on a headline-driven revenue surge and a record-free-cash-flow (FCF) milestone, underpinned by a record Super Bowl LIX and the accelerating performance of Tubi. Total revenues rose approximately 27% year over year, supported by an 65% increase in company-wide advertising revenue, including over $800 million of gross advertising generated by the Super Bowl and related events. The quarter also showcased robust affiliate fee growth (3% YoY) and meaningful expansion in other revenues (up 20%), largely driven by sports sub-licensing in the Cable segment. Net income declined versus the prior-year period due to higher rights amortization and Super Bowl production costs, but adjusted metrics remained resilient with adjusted net income of roughly $507 million and adjusted EPS around $1.10, up modestly year over year.
Strategically, Fox reinforced its high-value asset portfolio across News, Sports, and Entertainment, reiterated the importance of live events and news, and advanced its D2C agenda via Fox One. Fox One is targeted at cordless subscribers with pricing aligned to wholesale-distributor economics and is planned for launch before the upcoming football season, signaling a material shift toward cord-cutting monetization while preserving traditional affiliate economics. The balance sheet remains fortified with roughly $4.8 billion in cash and about $7.2 billion in debt, enabling continued buybacks (>$6.4 billion since 2019) and a flexible capital allocation stance. Going forward, management highlighted ongoing tailwinds from News and Tubi, potential FIFA-related timing in the back half of the fiscal horizon, and a deliberate, high-quality investment pace in digital initiatives. Investors should monitor ad-market strength, right-cost dynamics (sports rights amortization), subscriber trends in both cable and D2C ecosystems, and regulatory/licensing developments around FanDuel and affiliate arrangements.
Overall, Fox is navigating a complex media environment with a differentiated asset mix, meaningful free-cash-flow generation, and a clear path to monetizing cord-nevers through Fox One, while preserving the core economics of its traditional distribution relationships.
Key Performance Indicators
Revenue
4.37B
QoQ: -13.92% | YoY:26.81%
Gross Profit
4.37B
1.00% margin
QoQ: -13.92% | YoY:26.81%
Operating Income
760.00M
QoQ: 11.76% | YoY:-3.68%
Net Income
346.00M
QoQ: -7.24% | YoY:-48.05%
EPS
0.76
QoQ: -7.32% | YoY:-46.10%
Revenue Trend
Margin Analysis
Key Insights
Revenue: 4,371.0; YoY +26.8%; QoQ -13.9%
Gross Profit: 4,371.0; YoY +26.8%; QoQ -13.9%
Operating Income: 760.0; YoY -3.7%; QoQ +11.8%
EBITDA: 663.0; EBITDA Margin 15.2%
Net Income: 346.0; YoY -48.1%; QoQ -7.2%
Financial Highlights
Revenue and profitability metrics (USD in millions, except per-share data):
- Revenue: 4,371.0; YoY +26.8%; QoQ -13.9%
- Gross Profit: 4,371.0; YoY +26.8%; QoQ -13.9%
- Operating Income: 760.0; YoY -3.7%; QoQ +11.8%
- EBITDA: 663.0; EBITDA Margin 15.2%
- Net Income: 346.0; YoY -48.1%; QoQ -7.2%
- EPS (GAAP): 0.75; Diluted 0.75; YoY -46.1%; QoQ -7.3%
- Adjusted Net Income: 507.0; Adjusted EPS: 1.10 (YoY up modestly)
- Advertising Revenue Growth (Total Company): +65% (SB LIX contributed notably)
- Affiliate Revenues: +3% YoY; Other Revenues: +20% YoY
- Free Cash Flow: Record >1,900.0; Operating Cash Flow: 2,015.0; Capex: 74.0; Free Cash Flow: 1,941.0
- Net Cash Provided by Operating Activities: 2,015.0; Net Change in Cash: 1,493.0; Cash at End of Period: 4,815.0
- Balance Sheet: Cash & equivalents 4,815.0; Total Debt 8,107.0; Net Debt 2,992.0; Total Stockholders’ Equity 11,526.0; Total Assets 23,367.0
- Liquidity/Leverage: Current ratio 2.45; Debt/Capitalization 0.413; Long-Term Debt to Capitalization 0.364; Debt to Equity 0.703
- Shareholder Returns: Buybacks YTD +$800M; Cumulative buyback since 2019 ≈ $6.4B; Dividends paid ≈ $133M
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
4.37B
26.81%
-13.92%
Gross Profit
4.37B
26.81%
-13.92%
Operating Income
760.00M
-3.68%
11.76%
Net Income
346.00M
-48.05%
-7.24%
EPS
0.76
-46.10%
-7.32%
Key Financial Ratios
currentRatio
2.45
grossProfitMargin
100%
operatingProfitMargin
17.4%
netProfitMargin
7.92%
returnOnAssets
1.48%
returnOnEquity
3%
debtEquityRatio
0.7
operatingCashFlowPerShare
$4.45
freeCashFlowPerShare
$4.28
dividendPayoutRatio
38.4%
priceToBookRatio
2.22
priceEarningsRatio
18.53
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key themes from the QQ3 2025 earnings call:
- Strategy and D2C execution:
- Lachlan Murdoch: Fox One will launch before the football season; pricing to be in line with wholesale/distributor economics; cordless-focused addressable market; partnerships with distributors to broaden reach.
- Steve Tomsic: Fox One’s value hinges on licensing and distribution, with licensing options (FanDuel) evolving through 2030; select bundling with other services is anticipated.
- Quotes: “pricing will be in line with our wholesale pricing... targeting the service entirely to the cordless community.” (Lachlan Murdoch)
- Advertising and content leadership:
- 65% ad revenue growth driven by the Super Bowl LIX; SB revenue of over $800M and SB audience reach of 128 million viewers (most watched telecast in US history).
- Fox News delivered a standout quarter: “the most watched cable network” with record audience share in cable news; April ratings up nearly 30% YoY.
- Digital and streaming momentum:
- Tubi revenue grew 35% YoY; 24 million unique viewers on game day for SB; 8+ million new registered viewers from the SB promotional push; total view time up 24% YoY in April; YouTube views at record highs.
- Operational cash flow and capital allocation:
- Record quarterly FCF (> $1.9B) and ongoing buybacks; debt maturity repayment of $600M post-quarter; strong balance sheet with $4.8B cash and $7.2B debt.
- Regulatory and market dynamics:
- Murdoch emphasized continued support for traditional cable bundles but also identified the opportunity in D2C for cord-nevers; sub erosion improving (Q4’24 to Q2’25 declines trending lower: 8.7% → 7.8% → 7.2% → 6.5%).
- FanDuel option licensing remains a multi-year path to monetization; licensing progress across 26 states with intrinsic value estimated at ~$2.8B.
"pricing will be in line with our wholesale pricing. So, the pricing will be healthy. It will not be a discounted price and very much as targeted to the cordless market... we will be entering partnerships with other distributors and services to offer Fox One"
— Lachlan Murdoch
"FanDuel licensing... we have until the end of 2030 to exercise our option over 18.6% of that business... it’s absolutely in our interest to get licensed, and we will get licensed over the coming years"
— Steve Tomsic
Forward Guidance
Outlook and management commentary (qualitative):
- Fox One D2C: On track for launch before the football season; pricing aligned with wholesale economics; bundling discussions with multiple distributors ongoing; the cordless market remains the strategic target.
- Advertising and content cadence: The company expects continued strong demand in live sports and news advertising, with Tubi continuing to monetize a cord-never audience at scale. FIFA-related rights timing could influence FY26–FY27 dynamics.
- Costs and profitability: Despite higher sports rights amortization and production costs (notably from SB LIX), adjusted EBITDA showed resilience; management expects the gross effect of the SB cost to recede in FY26 as some seasonal costs unwind.
- Digital investments: Tubi investment to moderate over the back half of the year; ongoing expansion of Fox One and related digital initiatives to support long-term profitability.
- Monitoring factors for investors: (1) Advertising demand and scatter pricing vs upfront, (2) Sports rights amortization and content costs, (3) Sub declines vs bundle/skinny-bundle opportunities, (4) The licensing progress for FanDuel and related capital allocation implications, (5) The profitability path for Tubi and the timing of D2C profitability.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
FOXA Focus
1.00%
17.40%
3.00%
18.53%
FWONA
34.70%
12.10%
-31.70%
-1.83%
IPG
17.20%
5.06%
0.54%
147.10%
NWSA
1.00%
8.76%
1.26%
37.47%
PARAA
35.50%
5.01%
0.01%
3,645.16%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Fox remains well-positioned to translate a diversified asset base into durable cash flow and shareholder value. The QQ3 2025 results validate the platform’s resilience: ad demand is robust (65% YoY ad revenue growth), Tubi is converting engagement into revenue growth (35% YoY), and the balance sheet supports aggressive capital deployment (net debt ~$2.99B; buybacks ~ $6.4B since 2019). The Fox One D2C initiative offers a meaningful long-term upside by monetizing cord-nevers and complementing traditional affiliate economics, provided wholesale pricing and distribution partnerships scale as planned. The most critical near-term catalysts are the successful launch and monetization of Fox One, sustained advertising demand post-Super Bowl dynamics, and the pace of FanDuel licensing. Management’s guidance signals a stable trajectory with cyclical headwinds from sports rights costs receding in FY26 and FIFA timing potentially contributing in the following year. Investors should monitor (i) advertising pricing momentum and scatter vs upfront dynamics, (ii) sports-rights amortization trends and overall content costs, (iii) affiliate revenue stability in the face of sub declines and skinny-bundle adoption, and (iv) regulatory progress on licensing and affiliate negotiations.
Key Investment Factors
Growth Potential
Catalysts include: (a) Fox One monetizing cord-cutters at scale with healthy wholesale pricing and broad distributor partnerships; (b) Tubi monetization and audience expansion, with cord-never penetration at 65% of users, offering a scalable AVOD monetization model; (c) Continued News leadership and higher scatter pricing, and (d) FIFA-related rights maturation in FY26–FY27 providing optionality on long-term rights costs and revenue opportunities.
Profitability Risk
Key risks include: (a) Sports rights amortization and higher production costs continuing to pressure EBITDA; (b) Subcriber declines in traditional pay-TV ecosystems and potential regulatory/regulatory-licensing shifts (e.g., FCC matters around affiliate dynamics and FanDuel licensing pace); (c) Competitive dynamics in streaming and AVOD monetization; (d) Macro ad-market cycles impacting advertising demand and pricing; (e) Execution risk in D2C rollout and bundling strategies with external distributors.
Financial Position
Financier health remains robust: approximately $4.8B in cash, $7.2B in debt, and net debt around $2.99B; liquidity supports ongoing buybacks (>$6.4B since 2019), debt maturation management (repaid $600M in April post-quarter), and flexible capital allocation to balance buybacks, organic investments (Tubi, Fox One), and potential M&A opportunities. Key liquidity ratios are solid (current ratio 2.45; debt/capitalization ~0.41).
SWOT Analysis
Strengths
Leading market position in live sports and breaking news (Fox News Channel) with record audience shares
Strong cash generation with record quarterly free cash flow (> $1.9B) and robust balance sheet
Diversified asset mix across Cable Network Programming, Television, and AVOD (Tubi) with meaningful upside from ad demand and content franchises
D2C initiative (Fox One) targeting cord-nevers, leveraging 65% cord-never audience on Tubi as a proof point
Weaknesses
Significant sports-rights amortization and production costs create EBITDA headwinds in peak quarters
Revenue sensitivity to large live events (e.g., Super Bowl) which can produce volatility in quarterly results
D2C launch risk if subscriber acquisition costs or churn exceed expectations; potential tension with MVPD affiliate economics during bundle negotiations
Opportunities
Fox One rollout and broader distribution partnerships to monetize cord-cutters at wholesale economics
Tubi monetization acceleration and broader advertiser reach due to large, engaged audience
Continued leadership in news advertising and direct response growth in Fox News
Potential FIFA-related rights timing could provide upside in FY26–FY27
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