FOX Corporation (NYSE: FOX / FOXA)
Q3 FY2025 Financial Analysis | May 12, 2025
Executive Summary
FOX Corporation reported exceptional Q3 FY2025 results with revenues surging 27% to $4.37 billion, primarily driven by the broadcast of Super Bowl LIX in February 2025, which generated approximately $700 million in advertising revenue. Despite this revenue growth, net income decreased 48% to $346 million due to significantly higher sports programming costs and legal settlements. For the nine-month period, FOX demonstrated strong momentum with revenues increasing 20% to $13.01 billion and net income growing 31% to $1.55 billion, benefiting from political advertising during the 2024 election cycle and continued digital growth led by Tubi.
Q3 FY2025 Highlights
Financial Performance
FOX Corporation’s Q3 FY2025 performance was dominated by the broadcast of Super Bowl LIX in February 2025, which generated approximately $700 million in advertising revenue after agency commissions. This major sporting event drove total revenues up 27% to $4.37 billion, with advertising revenue alone increasing 65% to $2.04 billion compared to the prior year quarter.
However, the revenue surge came with substantial costs. Operating expenses increased 45% to $2.97 billion, primarily due to higher sports programming rights amortization and production costs associated with the Super Bowl broadcast, as well as elevated college football costs. These increased costs significantly impacted profitability, with net income attributable to stockholders declining 48% to $346 million and diluted earnings per share falling 46% to $0.75.
The nine-month results tell a more balanced story, with revenues increasing 20% to $13.01 billion and net income growing 31% to $1.55 billion. This strong performance was driven by approximately $850 million in sports-related advertising revenue, including the Super Bowl and higher NFL pricing, plus significant political advertising revenue from the 2024 presidential and congressional elections, particularly at FOX’s owned and operated television stations.
FOX’s balance sheet remains robust with $4.82 billion in cash and cash equivalents as of March 31, 2025, providing substantial financial flexibility for strategic investments and capital allocation. During the nine months ended March 31, 2025, FOX repurchased approximately 17 million shares for $750 million, demonstrating continued commitment to returning capital to shareholders.
The company also faced some one-time charges during the period, including $251 million in restructuring, impairment and other corporate matters for the nine months, primarily related to legal settlement costs and the discontinuation of the Venu Sports joint venture with Disney and Warner Bros. Discovery.
Segment Performance
Segment | Q3 Revenue ($M) | YoY Change | Segment EBITDA ($M) | EBITDA Change |
---|---|---|---|---|
Cable Network Programming | $1,636 | +11% | $878 | +7% |
Television | $2,704 | +40% | $60 | -59% |
Corporate and Other | $58 | +9% | $(82) | -12% |
Cable Network Programming delivered steady performance with revenues increasing 11% to $1.64 billion in Q3 FY2025. The segment benefited from higher affiliate fee revenue (+3%) driven by higher average rates per subscriber, partially offset by a decrease in the average number of subscribers. Advertising revenue increased 26% primarily due to higher news ratings, pricing, and digital advertising revenue. Segment EBITDA grew 7% to $878 million despite higher sports programming costs.
Television was the standout segment with revenues surging 40% to $2.70 billion, driven almost entirely by Super Bowl LIX and continued digital growth led by the Tubi AVOD service. However, Segment EBITDA declined 59% to just $60 million as the revenue increases were more than offset by significantly higher sports programming rights amortization and production costs related to the Super Bowl broadcast.
For the nine-month period, the Television segment showed remarkable resilience with revenues increasing 22% to $7.62 billion and Segment EBITDA growing 78% to $637 million. This strong performance reflects the segment’s ability to capitalize on major sporting events, political advertising during the 2024 election cycle, and continued growth in digital advertising through Tubi.
The segments demonstrate FOX’s strategic positioning in premium content, particularly sports and news, which commands high advertising rates and strong affiliate fees. The company’s investment in digital platforms, especially Tubi, continues to show positive momentum and provides a growth avenue beyond traditional linear television.
Revenue Component Analysis
Revenue Type | Q3 2025 ($M) | Q3 2024 ($M) | YoY Change | 9M 2025 ($M) | 9M 2024 ($M) | YoY Change |
---|---|---|---|---|---|---|
Affiliate Fee | $2,005 | $1,938 | +3% | $5,748 | $5,465 | +5% |
Advertising | $2,036 | $1,235 | +65% | $5,787 | $4,437 | +30% |
Other | $330 | $274 | +20% | $1,478 | $986 | +50% |
Affiliate Fee Revenue showed steady growth of 3% in Q3 and 5% for the nine months, reflecting FOX’s strong negotiating position with distributors. The growth was driven by higher average rates per subscriber and increased fees from television stations affiliated with the FOX Network, partially offset by cord-cutting pressures that reduced the average number of subscribers across all networks.
Advertising Revenue was the star performer, surging 65% in Q3 to $2.04 billion, with the Super Bowl LIX broadcast contributing approximately $700 million after agency commissions. For the nine months, advertising revenue increased 30% to $5.79 billion, benefiting from higher sports content pricing, significant political advertising during the 2024 election cycle, and continued digital growth led by Tubi.
Other Revenue increased 20% in Q3 and 50% for the nine months, primarily driven by higher sports sublicensing revenue. This demonstrates FOX’s ability to maximize the value of its premium sports content through various monetization strategies.
The revenue mix demonstrates FOX’s strategic focus on premium content that commands high advertising rates and strong affiliate fees. The company’s diverse revenue streams provide resilience against market fluctuations, while its investment in digital platforms positions it well for future growth opportunities.
Digital Growth & Strategic Initiatives
FOX continued to demonstrate strong momentum in its digital transformation initiatives, with Tubi leading the charge as a significant growth driver:
Tubi Performance
- Digital Growth Leader: Tubi’s advertising revenue continued to show strong growth, contributing meaningfully to FOX’s overall digital advertising performance
- Content Investment: Higher digital content and marketing costs reflect FOX’s continued investment in building Tubi’s content library and user base
- Market Position: Tubi continues to strengthen its position in the competitive AVOD (advertising-supported video-on-demand) market
Sports Strategy
FOX’s sports strategy remains central to its success, with the company demonstrating its ability to maximize value from premium sports content:
- Super Bowl LIX generated approximately $700 million in advertising revenue, showcasing the immense value of marquee sporting events
- Higher NFL pricing for the nine-month period contributed significantly to advertising revenue growth
- Sports sublicensing revenue increased substantially, demonstrating FOX’s ability to monetize its sports rights across multiple platforms
- College football costs increased as FOX continues to invest in securing premium sports content
Discontinued Ventures
FOX made the strategic decision to discontinue the Venu Sports joint venture with Disney and Warner Bros. Discovery in January 2025. While this resulted in approximately $80 million in settlement costs for FOX, it allows the company to focus resources on its core strengths and strategic priorities.
The company’s approach to strategic initiatives demonstrates disciplined capital allocation, with a willingness to exit ventures that don’t align with long-term objectives while continuing to invest heavily in areas showing strong returns like Tubi and premium sports content.
Balance Sheet & Cash Flow
FOX maintains an exceptionally strong balance sheet that provides significant financial flexibility:
- Cash Position: $4.82 billion in cash and cash equivalents as of March 31, 2025, up from $4.32 billion at June 30, 2024
- Operating Cash Flow: $1.81 billion for the nine months ended March 31, 2025, compared to $941 million in the prior year, reflecting higher segment EBITDA and strong cash conversion
- Total Assets: $23.37 billion as of March 31, 2025
- Debt Position: Total borrowings of $7.20 billion, with a subsequent repayment of $600 million in senior notes that matured in April 2025
Capital Allocation
FOX demonstrated strong commitment to returning capital to shareholders while maintaining financial flexibility:
- $750 million in share repurchases during the nine months ended March 31, 2025, repurchasing approximately 17 million shares
- $246 million in dividends paid during the nine-month period
- Semi-annual dividend of $0.27 per share declared in Q3, representing a 4% increase from the prior year
- Approximately $650 million remaining under the current $7 billion share repurchase authorization
Investment Activity
The company made strategic investments totaling $407 million in net cash used for investing activities, including the acquisition of a controlling ownership interest in a digital media company in February 2025, demonstrating continued focus on digital growth opportunities.
Risks & Opportunities
Opportunities
Risks
Conclusion
Strengths
- Exceptional revenue growth driven by Super Bowl LIX ($700M impact)
- Strong nine-month performance with 31% net income growth
- Robust cash position of $4.82 billion providing financial flexibility
- Continued digital growth led by Tubi AVOD service
- Disciplined capital allocation with $750M in share repurchases
Areas to Monitor
- Rising sports programming costs impacting quarterly profitability
- Cord-cutting pressures on traditional subscriber base
- One-time legal and restructuring costs affecting earnings
- Cyclical nature of political advertising revenue
- Execution of digital transformation strategy
Summary
FOX Corporation delivered exceptional Q3 FY2025 results with revenues surging 27% to $4.37 billion, primarily driven by the broadcast of Super Bowl LIX which generated approximately $700 million in advertising revenue. While quarterly net income declined due to higher sports programming costs, the nine-month results demonstrate strong underlying business performance with 20% revenue growth and 31% net income growth.
The company’s strategic focus on premium sports content and news continues to deliver strong returns, with significant political advertising revenue during the 2024 election cycle and continued growth in digital platforms led by Tubi. FOX’s strong balance sheet with $4.82 billion in cash provides substantial flexibility for strategic investments and capital returns to shareholders.
While facing challenges from cord-cutting and rising content costs, FOX’s differentiated content portfolio, strong advertiser relationships, and digital growth initiatives position the company well for continued success. The decision to discontinue Venu Sports demonstrates disciplined capital allocation and focus on core strategic priorities.
Looking ahead, FOX’s combination of premium live content, growing digital presence, and strong financial position provides a solid foundation for navigating industry changes while continuing to generate substantial cash flows and returns for shareholders.