Fox's Record Quarter Was the World Cup; the Real Test Is Fox 1
A FIFA-and-midterm sugar high masks the more important inflection: Fox 1 is now offsetting pay-TV declines—at least for one quarter.
FOX · Earnings Call · 2026-11-02
A record quarter with an expiration date
Fox's fiscal first quarter was, on paper, a blowout: revenue rose 22% to $4.6 billion, EBITDA rose 54% to $1.64 billion, and advertising jumped 47%. Lachlan Murdoch called it a direct result of the focused strategy, saying “Fiscal 27 is off to an outstanding start... Both our first quarter records” — Lachlan Keith Murdoch, Executive Chair and Chief Executive Officer · 2026-11-02 were driven by content and brands. The engine was the FIFA World Cup, which produced the most-watched soccer telecast in US history, plus a record midterm political advertising haul above $350 million. Murdoch noted the company had “now over $350 million in political revenue” — Lachlan Keith Murdoch, Executive Chair and Chief Executive Officer · 2026-11-02 across the cycle. That is real money, but it is also calendar-driven. The World Cup lands in Q1 FY27; the midterms are a two-quarter event; neither repeats next year.
The last filed quarter, through early August, shows the base business more clearly: total revenue of $4.2 billion was up 28% year over year, but operating margin was 21.9%, down 7.3 percentage points. That is the recurring tension in Fox's model: event quarters can be spectacular, but they do not smooth the P&L.
Fox 1 turns from experiment into offset
The more important number may be buried in the distribution line. Cable distribution revenue rose 10%, helped by pricing and a net increase in subscribers. Fox 1, the direct-to-consumer service launched just over a year ago, is now big enough that management says it produced positive subscriber growth for the trailing 12 months when included. Murdoch was emphatic:
Fox 1 has hit it out of the park... 97% do not have a cable subscription.
He also said subscriber acquisitions rose more than 30% in September versus the start of last year's football season. This is not a new theme—Fox 1 has been the top company keyword for several quarters and was already framed as incremental. What is new is the magnitude of the proof. On the May call, Lachlan was still saying “it has exceeded our expectations, but it's still early days.” — Lachlan Murdoch, Executive Chair and Chief Executive Officer · 2026-05-11 The prior aspiration was 'low to mid-single-digit millions' of subscribers. Now Fox 1 is being credited with offsetting traditional declines in a reported quarter. That is a meaningful shift from option value to operating contributor.
The caveat is equally important. Lachlan immediately warned that the Fox 1 base will be 'somewhat seasonal with sports seasons coming and going,' and that it may not always supplant traditional subscriber losses. In other words, one quarter of positive net subs does not prove a perpetual hedge. The market should watch the next two quarters, when the NFL and College Football seasonality rolls off.
Tubi is still the growth engine, but the law of large numbers looms
Tubi grew revenue 35% and total view time 23%, with a record quarter and 10 new originals. Management says momentum continued into the current quarter and that political campaigns are buying Tubi to reach a mostly cordless audience. The long-term margin target is a 20% range at maturity. The risk is that Tubi's growth rate has been in the mid-30s for several quarters; it is still impressive, but it is no longer a surprise. growth at Tubi is now a consensus positive rather than an undiscovered asset.
What Fox stopped boasting about: Fox News
The tonal shift on Fox News is the most underrated part of the call. In prior quarters, management led with ratings dominance and pricing upside. On the May call: “Our CPMs and national pricing for FOX News are up over 45%.” — Lachlan Murdoch, Executive Chair and Chief Executive Officer · 2026-05-11 On this call, Michael Morris asked about Nielsen ratings declines ahead of the midterms, and Lachlan acknowledged “some viewer fatigue... They are not switching to MSNBC... They are just, you know, fatigued and watching, you know, slightly less television overall.” — Lachlan Keith Murdoch, Executive Chair and Chief Executive Officer · 2026-11-02 That is a different message. Cable advertising still rose 8%, but the release attributed it to sports and the World Cup, partially offset by lower digital news advertising. The record political number masks a softer core news ratings cycle. If the midterm sugar high fades, Fox News' advertising comps get harder.
The Roku elephant and the buyback reversal
Fox spent the call refusing to discuss Roku, but the transaction is the capital-allocation backdrop. All Fox and Roku shareholder approvals and foreign regulatory approvals are in; the company is working with the DOJ on HSR clearance. Meanwhile, the buyback was 'temporarily inactive' in the quarter, and Steven Tomsic said Fox expects to return to repurchases this quarter. He also preemptively denied a link: “you should not draw that linkage between us restarting the buyback and our expected timing for the transaction to close.” — Steven Silvester Tomsic, Chief Financial Officer · 2026-11-02 That denial is notable because the prior call said the buyback would continue “unabated through the pendency of the transaction and beyond.” — Steven Tomsic, Chief Financial Officer · 2026-08-06 The current balance sheet still carries effective net cash of -$2.4 billion, and repurchases fell to $100 million from a $1.6 billion peak. Fox has $4.5 billion cash and $6.6 billion debt. It can do Roku and buybacks, but not without discipline.
The tape is not fully convinced
FOX stock is up 21.9% over the last 90 trading days, but it is still 10.7% below its August high and 17.4% below its January peak. The market has rewarded the Fox 1/Tubi narrative, yet it is not paying a record multiple for a World Cup quarter. That is probably right: the quarter proves Fox can monetize events at scale, but the durable story is whether Fox 1 can keep bending the pay-TV curve and whether Tubi can grow into its margin target. The record headline is the sugar high; the distribution line is the substance.