Business Context and Reporting Period
Company: Fox Corporation (FOX/FOXA)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended June 30, 2026
Business Overview: Fox is a news, sports, and entertainment company operating primarily in the U.S. through two reportable segments: Cable Network Programming (FOX News, FOX Business, FOX Sports networks) and Television (FOX broadcast network, Tubi AVOD service, and 29 owned-and-operated stations). Other operations include Credible (consumer finance) and the FOX Studio Lot, reported under Corporate and Other.
Key Financial Metrics
| Metric (in millions) | Fiscal 2026 | Fiscal 2025 | Change |
|---|---|---|---|
| Total Revenues | $17,126 | $16,300 | +5% |
| Net Income | $1,727 | $2,293 | -25% |
| Net Income Attributable to Stockholders | $1,685 | $2,263 | -26% |
| Adjusted EBITDA | $3,906 | $3,624 | +8% |
| Operating Cash Flow | $1,970 | $3,324 | -41% |
| Cash and Cash Equivalents | $4,205 | $5,351 | -21% |
| Total Borrowings | $6,606 | $6,602 | ~0% |
| Capital Returned to Shareholders | ~$2.3 billion | N/A | N/A |
Note: Capital returned includes dividends and stock repurchases. The company repurchased approximately 32 million shares for ~$2 billion in fiscal 2026.
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 5% driven by higher distribution fees (due to rate increases) and advertising revenue (up 7%). Advertising growth was led by sports programming (FIFA Men's World Cup, NFL, MLB) and digital growth at Tubi, partially offset by the absence of the 2024 election cycle and Super Bowl LIX.
- Profitability Decline: Net income dropped 25% primarily due to a $773 million loss in "Non-operating other, net," driven by a change in the fair value of equity securities (specifically the investment in Flutter Entertainment). This non-operating loss significantly impacted the bottom line despite an 8% increase in Adjusted EBITDA.
- Segment Performance:
- Television Segment: EBITDA surged 52% to $1.438 billion, driven by lower sports rights amortization (absence of Super Bowl LIX) and strong advertising.
- Cable Network Programming: EBITDA grew 2% to $3.099 billion, with revenue up 6% but offset by higher sports rights costs (FIFA World Cup).
- Corporate and Other: EBITDA declined 80% to a loss of $631 million, largely due to costs associated with the launch of the new streaming service, FOX One.
- Impairments: The company recorded non-cash impairment charges of approximately $64 million related to FCC licenses in the Television segment.
Guidance, Outlook, and Material Events
- Roku Acquisition: On June 14, 2026, Fox entered a definitive agreement to acquire Roku, Inc. for a combination of cash ($96.00 per share) and Fox Class A Common Stock (0.9693 shares per share). The transaction is subject to regulatory approvals and stockholder votes. Fox has secured a $12 billion bridge facility and a $1 billion term loan to fund the cash portion.
- FOX One Launch: The company launched its direct-to-consumer subscription streaming service, FOX One, in August 2025. Costs associated with this launch significantly impacted the Corporate and Other segment in fiscal 2026.
- Capital Allocation: The Board authorized a total stock repurchase program of $12 billion. As of June 30, 2026, approximately $3.4 billion remained available. A semi-annual dividend of $0.29 per share was declared subsequent to the fiscal year end.
- Risks and Contingencies:
- Legal: Ongoing defamation and disparagement litigation (e.g., Smartmatic) remains a significant contingency, though the company believes these claims are without merit.
- Regulatory: The Roku transaction faces antitrust scrutiny. Additionally, the FCC is considering eliminating the 39% national audience reach cap for television station ownership.
- Market: Continued industry-wide decline in MVPD subscribers and shifting advertising spend to digital platforms pose long-term risks to traditional linear revenue models.
Investor Verification Checklist
- Roku Transaction Status: Verify the progress of regulatory approvals (Hart-Scott-Rodino) and stockholder votes required to close the Roku acquisition.
- Equity Investment Volatility: Assess the impact of the Flutter Entertainment investment valuation on future earnings, as fair value changes caused a significant non-operating loss in 2026.
- FOX One Economics: Monitor subscriber growth and unit economics for the new FOX One streaming service to determine if it can offset the current heavy investment costs.
- Legal Exposure: Review updates on the Smartmatic defamation lawsuit and other pending litigation to gauge potential settlement costs or reputational damage.
- Debt Capacity: Confirm the final terms of the debt financing for the Roku deal and the company's leverage ratios post-closing.