Fox Corp's 2025 10-K: Revenue Soars, But Costs and Legal Risks Rise

Fox Corp. just released its annual financial report, giving us a detailed look at its performance for the fiscal year that ended on June 30, 2025. The media giant, known for its portfolio of news, sports, and entertainment brands like FOX News and FOX Sports, reported a year of significant revenue growth, but also faced rising costs and ongoing industry challenges. Let's dive into the numbers from its latest 10-K filing to see what they reveal.

A Surge in Revenue, Led by Advertising

Fox Corp. posted strong top-line results, with total revenues climbing 17% to $16.3 billion, up from $14.0 billion in the prior year. This growth was powered by a remarkable 26% increase in advertising revenue, which reached $6.9 billion.

The company's other revenue streams also contributed positively:

• Affiliate Fees: These are the fees Fox charges cable and satellite providers (known as MVPDs) to carry its channels. This segment grew by a solid 5% to $7.7 billion.
• Other Revenues: This category saw a substantial 47% jump to nearly $1.8 billion, driven primarily by higher sports sublicensing revenue.

To better understand how these revenues translate into profit, the following flow diagram illustrates the company's income statement from revenues to the final net income.

Despite the healthy revenue growth from affiliate fees, the filing also reveals a persistent headwind: the decline in traditional television subscribers. For instance, estimated subscribers for the flagship FOX News channel dropped from 67 million to 61 million, and sports channel FS1 saw a similar decline. This trend underscores the ongoing pressure from cord-cutting that affects the entire media industry.

Profitability and Segment Highlights

On the bottom line, Fox's net income attributable to stockholders surged an impressive 51% to $2.26 billion. However, this figure was significantly boosted by a non-operating gain of $449 million from investments in equity securities.

A look at the company's two main business segments provides further clarity:

• Television: This segment, which includes the FOX broadcast network and local TV stations, was the star performer. Its revenue grew 18% to $9.3 billion, fueled by a 28% jump in advertising. Segment EBITDA—a measure of profitability—skyrocketed 87% to $945 million.
• Cable Network Programming: Home to FOX News, FOX Business, and the FS1/FS2 sports networks, this segment saw its revenue increase by 16% to $6.9 billion. Segment EBITDA rose by a more modest 13% to $3.0 billion.

While revenues were up, so were costs. Total operating expenses increased by 16% to $10.5 billion, largely due to higher sports programming rights costs and production expenses.

Legal Costs and Shareholder Returns

One notable item on the income statement was "Restructuring, impairment and other corporate matters," which jumped to $350 million from $67 million a year ago. A closer look at the notes reveals this includes $126 million in legal settlement costs. The company's auditors also flagged "defamation and disparagement claims" as a Critical Audit Matter, highlighting the significant judgment required to account for potential losses from such litigation.

On the capital allocation front, Fox continued to return cash to its investors. The company repurchased approximately 21 million shares of its Class A stock for $1 billion during the fiscal year and has authorization to buy back another $400 million worth.

In conclusion, Fox Corp. delivered a strong financial performance in fiscal 2025, driven by the power of its live news and sports content to attract advertisers. The company is effectively monetizing its core assets in a challenging media environment. However, investors will be watching closely to see how it navigates the long-term decline of traditional TV subscribers and manages the significant legal and reputational risks inherent in its business.