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Fox Surpasses Quarterly Estimates, Increases Buyback Authorization by $5 Billion

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Fox Corp (FOXA.O) reported quarterly revenue and profit that exceeded Wall Street expectations, driven by strong advertising growth, rising affiliate fees, and the expanding audience of its free ad-supported streaming service, Tubi. The company also announced an increase of $5 billion to its share repurchase authorization.

In the fiscal fourth quarter, revenue from affiliate fees rose 2.6%, supported by growth across both cable and television segments. Despite challenging comparisons with last year’s major international sports events like Copa America and the UEFA European Championship, Fox benefited from improving advertising trends. Advertising revenue grew 7.1%, fueled primarily by digital growth led by Tubi and higher news ratings and pricing.

Tubi’s growth strengthens Fox’s position in the fast-expanding ad-supported streaming sector, attracting younger, cord-cutting viewers who are less reachable via traditional TV. Building on this momentum, Fox plans to launch a subscription-based streaming service, Fox One, on August 21 at $19.99 per month to extend its reach beyond cable TV.

In June, Fox expanded its sports broadcasting footprint in Mexico by acquiring Caliente TV, a sports-focused streaming platform and television channel.

Fox’s total revenue for the quarter rose 6.3% to $3.29 billion, beating estimates of $3.12 billion. The cable network programming unit posted nearly 7% revenue growth to $1.53 billion amid the ongoing shift to digital streaming.

Adjusted earnings per share came in at $1.27, surpassing analysts’ estimates of 99 cents.

X to Report First Annual Ad Revenue Growth Since Musk’s Takeover

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Elon Musk’s social media platform X is on track to achieve its first year of advertising revenue growth since Musk acquired the company in 2022. Data from research firm Emarketer, released on Wednesday, suggests that X’s U.S. ad revenue will increase by 17.5% in 2025, reaching $1.31 billion, while its global ad sales are expected to rise 16.5%, totaling $2.26 billion. This growth marks a significant turnaround for the platform, which had struggled to attract advertising revenue following Musk’s acquisition.

Factors Driving Growth

The growth in ad revenue is partly attributed to the return of brands to the platform, bolstered by Musk’s growing influence, particularly within the U.S. Department of Government Efficiency. Jasmine Enberg, principal analyst at Emarketer, noted that some of the growth is driven by a sense of caution, with many advertisers viewing spending on X as necessary to mitigate potential legal or financial risks.

X has also successfully attracted more small- and medium-sized businesses, which had historically been a challenge for the platform to engage. This shift in advertiser behavior is a positive sign for X as it seeks to rebuild its advertising revenue stream.

Industry Competition and Economic Uncertainty

Despite the growth, X’s advertising business remains smaller than it was when Musk took over, as Emarketer’s data points out. In 2021, prior to Musk’s acquisition, X reported ad revenue of $4.51 billion as a publicly traded company. Even with the projected growth in 2025, X’s ad business still lags behind its previous levels.

In the broader social media landscape, platforms like Meta-owned Instagram and TikTok are competing for a larger share of the ad market. However, the overall advertising market could be impacted by factors such as U.S. tariffs and ongoing economic uncertainty. Research firm MoffettNathanson recently revised its U.S. advertising growth forecast, lowering it from 6.9% to 5.8%, citing the disruptive changes brought on by the new administration.

Outlook for X

Despite these challenges, X’s hiring of NBCUniversal’s former advertising chief, Linda Yaccarino, as CEO in 2023 signals a strategic effort to revitalize its ad business. As X looks to grow its advertising revenue, the platform is focusing on broadening its advertiser base and navigating the complexities of an uncertain economic environment.