Fox Corporation (FOXA) Q1 2027 earnings review
Fox carriage fees and ad sales jump, but buybacks stop
Fox Corporation, the owner of Fox News, the Fox broadcast network and the Tubi streaming service, posted record summer sales while halting its share buybacks. Total revenue rose 22% from a year ago, and profit per share excluding one-offs jumped 68% as World Cup soccer and election ads outpaced programming costs. Chief executive Lachlan Murdoch highlighted 9% growth in carriage fees, where both cable and broadcast television added subscribers.
| Revenue | $4.57B +22% from a year ago |
|---|---|
| Distribution revenue | $2.08B +9% from a year ago |
| Profit per share, excluding one-offs | $2.54 +68% from a year ago |
| Share buybacks | $0 $250M a year ago |
⚖️ Verdict: 🟢 Bullish
The story got better because Fox's steady carriage-fee business accelerated to 9% growth as subscriber counts turned positive. That gives the company a stronger foundation that does not depend on four-year sports and political calendars. The bad news: Fox spent nothing on share buybacks ahead of its pending Roku acquisition, and digital news ad sales fell.
The question now is how much of the subscriber and advertising jump came from durable streaming gains at Fox One and Tubi versus the summer World Cup. Either Fox One is permanently reversing pay-TV customer losses, or tournament viewers signed up for July and will soon cancel. Disclosures on the earnings call and next quarter's post-tournament subscriber trends will tell.
🐂 Bull Case
Pay-TV Subscribers Grew, Lifting Carriage Fees 9%
Distribution revenue — the fees Fox charges cable and satellite operators to carry its channels — makes up nearly half of company sales. For the past year, third-party pay-TV subscribers shrank by about 6.5% a year, and rate increases barely outran the customer losses.
This quarter, total distribution sales jumped 8.8% from a year ago to $2.08 billion, the fastest pace in over a year. Both the cable network division (up 10.1%) and the broadcast television division (up 3.5%) grew because of "contractual price increases and an increase in the average number of subscribers".
Because Fox One, the company's direct-to-consumer streaming bundle, pays an internal fee to the cable and television divisions, its growth is now lifting reported subscriber counts. Revenue in Corporate and Other, where Fox One sits, nearly tripled by our math to $246 million, while intercompany eliminations tripled to $191 million.
What to watch: the third-party pay-TV subscriber change on the conference call. A smaller drop outside Fox One would prove that traditional cable cord-cutting is actually slowing down.
World Cup and Elections Cut Cost Ratios
Chief executive Lachlan Murdoch said "FOX has had an outstanding start to fiscal 2027 with first-quarter records for revenue and Adjusted EBITDA underpinned by robust growth in both advertising and distribution revenue." Adjusted EBITDA — profit before interest, taxes, depreciation and non-operating items — rose 54% from a year ago to $1.64 billion.
- Adjusted EBITDA margin: 35.9% of sales, up 7.4 percentage points from a year ago by our math
- Operating expenses (programming and production costs): 51.7% of sales, down 5.1 percentage points by our math
- Selling, general and administrative expenses (marketing and overhead): 12.4% of sales, down 2.4 percentage points by our math
Even though Fox paid more for "higher sports programming rights amortization and production costs, led by the current year broadcast of the World Cup", ad revenue grew much faster, rising 47% to $2.08 billion. Meanwhile, the EBITDA loss in Corporate and Other, which houses Fox One startup costs, narrowed from $238 million last quarter to $152 million.
What to watch: full-year net digital investment commentary on the call. A number well below the $200 million ceiling from last year would show that Tubi and Fox One are funding their own growth.
🐻 Bear Case
Fox Paused Buybacks Ahead of Roku Deal
In June, the broadcaster agreed to acquire Roku, the connected-TV platform, in a cash-and-stock deal backed by $12 billion of committed debt facilities. Fox wants the deal to expand its connected-TV reach, and executives previously said share buybacks would continue unabated while the acquisition awaits regulatory approval.
In the first quarter, however, the media group spent nothing on share repurchases, down from $250 million a year ago and $100 million last quarter. It held $4.54 billion in cash and $6.61 billion in long-term debt at the end of September, while cautioning that results depend on "the impact of the Roku transaction and related risks".
Halting buybacks preserves cash for the Roku payout, so the balance sheet takes on less debt at closing. But the pause contradicts the earlier promise of uninterrupted repurchases and removes a major support for per-share profit growth, which got a 6% lift from a lower share count this quarter by our math.
What to watch: the Fox and Roku shareholder votes due in the second quarter. A completed vote and clarity on when buybacks resume will show how much cash the merger actually ties up.
One-Off Events Drove the Ad Boom
Murdoch credited the quarter's record sales to "the focused strategy we are executing and the strength of our content and brands". Advertising sales jumped 47% overall and 60% in the television segment, which management attributed to "the current year broadcast of the FIFA Men's World Cup ("World Cup"), higher political advertising revenue, and continued digital growth led by the Tubi AVOD service".
The release did not disclose how much ad money came from the World Cup knockout matches in July or the US midterm elections, nor did it give a growth rate for Tubi, its free ad-supported streaming service. Meanwhile, cable network ad sales rose 8.1%, held back by "lower digital news advertising revenue".
That drop in digital news ads cuts against the claim of broad strength across every brand, and shows that online ad pricing remains under pressure outside live events. Because the World Cup happens once every four years and midterm elections every two, most of this quarter's $669 million ad gain will not repeat next year.
What to watch: Tubi's standalone revenue growth rate on the earnings call. Growth below 20% would mean the summer soccer tournament, rather than everyday streaming demand, carried the quarter.
Risks this quarter didn't answer
Four standing concerns from last year received no new numbers or updates in the first-quarter earnings release.
- Fox One standalone numbers: still no subscriber count, revenue, or cancellation rate more than a year after launch; any disclosed figure on the call would test whether it truly adds new viewers.
- NFL rights after 2029: the league holds an option to end its broadcast contract after the 2029 season, and any early renewal talks would set the long-term cost base.
- Smartmatic and Delaware lawsuits: no reserve is booked against Smartmatic's $2.7 billion defamation claim; the quarterly 10-Q filing's legal footnote will show if a trial date or summary-judgment ruling has landed.
- Broadcast station licence values: carrying values had little cushion at year-end, and the 10-Q filing will show whether higher interest rates triggered any write-downs.
💲 Other KPIs
Cash left after capital spending swung to a $503 million inflow by our math, compared with a $234 million outflow a year ago. Operating cash flow reached $616 million while property and equipment spending was $113 million. Collecting cash from June's World Cup broadcasts began reversing last year's working-capital drain.
Money owed by customers — mostly advertisers and pay-TV distributors — rose 30.1% from a year ago and 5.8% from June by our math, outpacing the 22.3% revenue increase. The $202 million quarterly rise shows that much of the third-quarter World Cup and political ad billing has not yet turned into cash.
The average share count fell 5.9% from 455 million a year ago by our math, lifting per-share profit growth above net income growth. However, the count was unchanged from the fourth quarter of fiscal 2026 because the broadcaster bought back no stock during the summer.
❓ Key Questions
How fast did Tubi grow without the World Cup?
The release noted digital growth at Tubi, the free streaming service, but gave no percentage. Because Tubi grew 35% last quarter and 27% a year ago, the standalone rate will show whether underlying streaming demand is still accelerating.
What was the third-party pay-TV subscriber decline rate?
Fox said average subscribers rose across both television and cable, which includes its own Fox One streaming app. Investors need the traditional cable and satellite decline rate, which sat just under 6.5% for the past three quarters, to check cord-cutting trends.
How much revenue and profit came from the World Cup?
Television ad sales jumped 60% on the soccer tournament and political ads. Sizing the tournament's exact revenue and rights cost in the first quarter is necessary to work out what Fox's base earnings will look like when it laps the event next year.
Why did Fox pause share buybacks this quarter?
Management previously said share repurchases would continue unabated during the Roku acquisition process, yet Q1 buybacks dropped to zero despite $4.54 billion in cash. Shareholders need to know if buybacks are frozen until the Roku merger closes.