Fox (FOXA) Q4 2026 Earnings Call Transcript

Fox reported record fiscal 2026 results: revenue up 5% to over $17B and adjusted EBITDA up 8% to $3.9B, with fiscal Q4 revenue up 28% to $4.2B and adjusted EPS up 41% to $1.79. Tubi delivered 35% quarterly revenue growth (17% higher total viewing time) and reached 110M monthly active users, while cable distribution revenue rose 7% and Cable/Television advertising were boosted by the 2026 FIFA World Cup. Management authorized an increased semiannual dividend to $0.29/share and repurchased $2B of stock in fiscal 2026, while its pending Roku acquisition remains on track for first-half 2027 closing with expected net leverage of ~2.8x—supporting continued buybacks.

Analysis

FOXA looks like a quality re-rating story rather than a one-quarter earnings pop. The key mechanism is mix shift: recurring distribution + ad-supported digital now matter more than one-off sports spikes, which should make cash flow less volatile and support a higher multiple if management keeps proving FOX One/Tubi are additive rather than cannibalistic. The market may still be underestimating how much free cash flow can compound when digital losses are already shrinking while buybacks continue.

Second-order winners are connected-TV monetization partners and ad buyers seeking reach outside subscription-only ecosystems; the clearest loser is any platform relying on pure subscription growth in a fragmented market. ROKU is the strategic wildcard: the deal gives FOX a distribution and ad-tech bridge, but it also means FOXA’s capital allocation is more constrained than the headline buyback cadence implies, so the stock may deserve a slightly lower near-term multiple until closing risk clears.

The contrarian risk is that the good news is front-loaded. World Cup, political spend, and easy digital comps create a favorable 1-3 month path, but 2027 will need evidence that Tubi growth and FOX One retention persist after event-driven demand normalizes. What would falsify the thesis is an ad-market slowdown or Tubi revenue growth decelerating sharply below the mid-20s, which would expose the fixed-cost leverage in sports rights.

Key Decisions for Investors

• Buy FOXA on any post-earnings weakness; 3-6 month horizon into midterm ad spend and Q1 cash collection, with upside from continued buybacks and a cleaner digital margin story.
• Pair trade: long FOXA / short NFLX for a 3-6 month relative-value expression on ad-supported reach and live-event monetization versus subscription-heavy streaming exposure.
• Treat ROKU as a merger-arb watch item, not a clean momentum long; only add if the spread widens on regulatory noise, because upside is capped by deal terms and timing into 1H27.
• Set a stop/thesis alert on FOXA if Tubi growth falls materially below 20% or upfront pricing turns flat; that would argue the current multiple re-rating is premature.