Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation fourth quarter fiscal year 2026 earnings conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. I would like to emphasise that functionality for the question and answer queue will be given at that time. If you require assistance during the call, please press star then zero on your touchtone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Thank you, Polly. Good morning, and welcome to our fiscal 2026 fourth quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer, John Nallen, President and Chief Operating Officer, and Steve Tomczyk, our Chief Financial Officer. First, Lachlan and Steve will give some prepared remarks on the most recent quarter, and then we'll take questions from the investment community. Please note that this call may include forward-looking statements regarding Fox Corporation's financial performance and operating results. These statements are based on management's current expectations and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filings. Additionally, this call will include certain non-GAAP financial measures, including adjusted EPS and adjusted EBITDA, or EBITDA as we refer to it on this call. Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filings, which are available in the Investor Relations section of our website. We also refer to free cash flow, which we define as net cash provided by operating activities, less capital expenditures. And with that, I'm pleased to turn the call over to Lachlan.

Thank you, Gabby, and thank you all for joining us today. Our fiscal 2026 was a notable year for Fox. We successfully launched our direct-to-consumer streaming service, Fox One, broadcast the FIFA Men's World Cup to record audiences in the U.S., continue to keep America informed through a dynamic and fast-moving news cycle, enhanced Tubi's position as a leading streaming service, and announced the next chapter in Fox's digital evolution for their pending acquisition of Roku. These milestones were underpinned by a year of record financial performance. Revenue grew by five percent to over 17 billion dollars, driven by record advertising and distribution revenue, while EBITDA grew 8% to a record $3.9 billion. These are excellent results, made even more impressive by comparison to the especially strong prior year, which benefited from the Super Bowl and the presidential election. We closed the year with outstanding top and bottom-line momentum. Our fiscal fourth quarter total revenue increased 28% to $4.2 billion, dollars, and EBITDA improves 27 percent to 1.2 billion dollars. On the distribution side, revenue in the fourth quarter increased five percent, supported in part by the strong momentum of FOX1, which continues to exceed our expectations. Advertising revenue during the quarter was notably strong, increasing 78 percent, with growth fueled by continued strength of Tubi, healthy advertising trends across the broader Fox portfolio, and our broadcast of the first stages of the 2026 FIFA Men's World Cup. At a time when audiences are increasingly fragmented, the World Cup demonstrated the unique power of Fox to deliver live premium sports that bring people together at scale. I am proud of what team achieved through the broadcast of the entire world cup across the entirety of fox as we have shown time and again we excel at mobilizing the whole company to deliver outstanding experiences for viewers advertisers and distributors what is not explicit on screen or in the financial results is the intense amount of skillful work preparation promotion production marketing, and ad sales that goes on behind the scenes. We had thousands of colleagues directly involved in the production of all of our programming over the course of the tournament. We deployed all of our platforms, including the stations, the network, Fox Sports, Fox News, Fox One, Tubi, and our other digital assets to proactively drive record-breaking broadcasts from Fox. From the flawless simulcast of the opening matches on Tubi right through to the historic final, we brought the 104 matches and shoulder programming to American homes and watch parties like no other World Cup before. The success of the World Cup led Fox to top all networks in live event sports consumption in fiscal 26, a remarkable achievement given that the next highest rated broadcast network benefited from both the Super Bowl and the Winter Olympics. The tournament also proved to be a customer acquisition opportunity for FOX1, driving incremental subscriber acquisition and strong retention rates that surpassed our expectations. Importantly, through FOX1, we continue to see minimal cannibalization of our traditional pay TV business, reinforcing our strategy of targeting the cordless population, which has delivered meaningful additional distribution revenue across the company. We are a nimble, purposeful company, expert at delivering complex events at scale. We'll demonstrate this expertise again as we begin another broadcast season of the NFL on Fox, starting next month. In advance of the season, we've had a recent thorough and productive discussions with the league. week, and as a result, we will not be making any amendments to our existing contractual relationship which extends to the completion of the 20-29 season. We'll be ready to engage with the NFL on the opt-out seasons and beyond at a date closer to the 20-30 season, which has been the customary timetable. While our sports calendar had the most attention in the quarter, Fox News remained the leader in live news, finishing the quarter and the year as both the most watched cable network in total day and in primetime, while continuing to reinforce its leadership position with market share levels well ahead of all of its competitors combined. This robust audience engagement, combined with the addition of another 400 new advertisers to the platform during the year, helped drive record revenue of Fox News Media in both the fourth quarter and the fiscal year. Tubi delivered its most streamed and highest revenue quarter ever. Fourth quarter revenue growth accelerated to 35%, fueled by a 17% increase in total viewing time. Tubi's World Cup hub attracted over 20 million viewers across the tournament, while, additionally, the simulcast of two early-round matches generated two of the highest traffic days in the platform's history, in addition to promoting the tournament in the broadest way possible. That momentum helped to be closed the fiscal year with 110 million monthly active users. TUBI and FOX1 are the result of a successful strategy and skill execution. Our pending acquisition of Roku is an extension of these. This transaction will bolster our position in connected TV distribution and advertising, which have compelling long-term growth profiles. has deep digital resources and skills, most notably seen in our consumer-facing products such as Tubi, Fox One, Fox Nation, and Fox News and Fox Sports Digital. We have developed these businesses across their growth path to become important digital brands. For example, when we acquired Tubi in its early stages, we have turned it into a leading streaming platform with 10 times the revenue from when we started. The addition of Roku to Fox will expand our digital footprint and offerings even further. Roku brings us streaming at scale through its open, partner-friendly platform that makes it a leading TV streaming platform in the U.S. Together, Fox and Roku combine premium live content, deep market relationships, scale distribution, and leading platform capabilities, including subscriptions, to respond to the evolving needs of consumers and advertisers. I know I see for Anthony in saying that we are eager to get the transaction closed and for our teams to get started. While we are in the early approval process, only in the early approval process, the transaction is on track, and we expect closing in the first half calendar. We have had an outstanding fiscal 2026, and fiscal 2027 is also off to an excellent start. The success of the World Cup, combined with the early stages of the midterm political cycle, has driven continued advertising momentum across our national, local, and digital portfolio during our fiscal first quarter. The healthy advertising environment we saw throughout fiscal 2026 has carried into the new year, culminating in one of the strongest upfronts in our history with double-digit growth in volume. These results underscore the strength of the Fox portfolio and our unmatched ability to deliver premium highly engaged audiences at scale across linear digital and streaming platforms while also delivering sustained growth and shareholder value. I'll now turn it over to Steve to discuss the financial.

Thanks Lachlan and good morning everyone. Fox has just delivered an exceptionally strong fiscal 26, highlighted by record annual revenue of over $17 billion and record EBITDA of $3.9 billion. Advertising revenue across the company grew 7%, which is particularly noteworthy when measured against last year's Super Bowl 59 and presidential election cycle. This growth was led by a broadcast of the 2026 FIFA Men's World Cup, along with continued growth at Tubi. Despite it being a relatively light year of renewals, distribution revenue increased 4%, led by 5% growth at our cable segment. Content and other revenue was up 4%, primarily due to higher sports hub licensing revenue at our cable segment. Total expenses increased 4%, mainly a result of World Cup rights and production costs, Fox One first year costs, and higher digital content costs. Net income attributable to stockholders was $1.7 billion or $3.84 per share as compared to the $2.3 billion or $4.91 per share reported in Fiscal 25. Excluding non-core items, full-year adjusted net income was $2.4 billion and adjusted EPS was $5.42 per share, up 13% compared to the $4.78 per share reported in the prior year. Our financial delivery has been strong throughout Fiscal 26, and we ended the year with tremendous momentum, with our fiscal fourth quarter results headlined by 28% growth in total revenue and 27% growth in EBITDA. This was driven by a 78% increase in advertising revenue, primarily a result of this year's broadcast of the World Cup and accelerating growth at Tubi. Distribution revenue grew 5%, once again demonstrating the strength of our brands and focused portfolio of channels content and other revenue is 262 million dollars as compared to the 269 million dollars reported in the prior year quarter primarily due to the timing of sports sub-licensing revenue expenses increased 28 percent driven by higher sports programming rights amortization and production costs led by the world cup as well as costs associated with the growth of FOX1. Net income attributed to FOX stockholders was $691 million, or $1.61 per share, as compared to the $717 million, or $1.57 per share reported in the prior year period. Excluding non-core items, adjusted net income was $765 million, and adjusted EPS was $1.79, up 41% compared to the $1.27 per share recorded in the prior year period. Now let's turn to the quarterly results of our operating segments. Starting with the cable network programming segment, where revenue grew 9% and EBITDA declined 3%. Cable advertising revenue grew 22% over the prior year, driven by this year's broadcast of the World Cup. Cable distribution revenue grew 7% over the prior year quarter, as pricing gains from our affiliate renewals outpaced the impact from net subscriber declines which remained consistent with the prior quarter at under 6.5% across our third-party distributors. This is before taking into account the meaningful positive contribution from FOX1. Cable content and other revenue declined 39% due to the timing of sports sub-licensing revenue. Revenue growth of the cable segment was more than offset by a 20% increase in expenses, primarily attributable to an increase in sports programming, rights amortisation and production costs led by the World Cup. Turning to our television segment, which delivered 45% revenue growth and 129% EBITDA growth. Advertising revenue at our television segment grew 108% over the prior year, led by the current year broadcast of the World Cup, higher political advertising revenue at our television stations and continued growth at Tubi, which was EBITDA positive in each quarter of fiscal 2026. Television distribution revenue was essentially flat compared to the prior year. Television content and other revenue was up 14%, primarily due to higher content revenues tied to our entertainment production studios. Expenses at the television segment increased 27%, primarily reflecting higher sports programming rights amortisation and production costs, led by the broadcast of the World Cup. Turning to cash flow, where we generated robust quarterly free cash flow of $726 million. As expected, quarterly free cash flow was impacted by the timing of working capital related to the World Cup, where rights payments for the tournament landed in Fiscal 26, while advertising receivables will be collected early in Fiscal 27. Before we get to capital allocation and balance sheet, it is worth noting some key items for this coming fiscal year. From a cyclical event perspective, we will continue to have the benefit of the World Cup in the first quarter of 27, with total tournament revenues weighted towards fiscal 26 versus 27, and with 2027 revenues strongly weighted towards our television segment, which carried the majority of the knockout stage matches. The other major cyclical tailwind will be the midterm elections, which are expected to boost advertising revenues, particularly at our local stations and Tubi within our TV segment. From a distribution revenue perspective, we return to a more normalised level of renewals in Fiscal 27, which will be more skewed towards TV. We continue to expect both our cable and TV segments to contribute to distribution revenue growth in Fiscal 27. With Tubi and Fox 1 running ahead of expectations, the level of investment in digital-led growth initiatives moderated in fiscal 26 versus the prior year and we expect to see continued bottom line improvement in this portfolio going into fiscal 27. In terms of capital allocation in fiscal 26 we repurchased an additional two billion dollars through our share buyback program and distributed approximately 243 million dollars in dividend payments. As Lachlan mentioned underscoring our commitment to return capital to shareholders today we announced an increase in our semi-annual dividend to 29 cents per share with the payment of this dividend and our share repurchase activity we will have cumulatively returned 10.7 billion dollars of capital to our shareholders since the spin this includes 8.6 billion dollars of share repurchases representing approximately 36 percent of our total shares outstanding since the launch of the buyback program in November 2019 this is all supported by the strength of our balance sheet where we ended the quarter with approximately four point two billion dollars in cash and six point six

billion dollars in debt and with that I'll turn the call back over to Gabby great thank you Steve and now we would be happy to take questions from the investment community please note that we are limited in what we can say regarding Fox's pending Roku transaction at this time we have filed materials about the transaction including the merger agreement with the SEC when we file the registration statement for the transaction it will provide additional information for today we would ask that questions focus on Fox's standalone results ladies and gentlemen I would like to emphasize the functionality for the question and answer queue if you wish to ask a question please press star

then one on your touchtone keypad you will hear a tone indicating you have been placed in queue you may remove yourself from the queue at any time by once again pressing star then one if you were using a speakerphone please pick up the handset before pressing the numbers and it has been requested that you limit yourself to one question once again if you have a question please press star then one at this time one moment please for the first question we have a question from john hodlick of ubs please go ahead great thanks and good morning everyone um lachlan any color you can provide on the underlying ad market you know some of your

peers and during the earnings season here have sort of talked about sort of mixed results maybe first on the linear side you know what what you saw in the up front in terms of pricing and then sort of overall demand for sports and news inventory and then any comments you could you you could provide on the health of the CTV market. You know, you had some positive trends there with 2B, but just anything you could provide in terms of pricing and fill rates. And then lastly, just a quick clarification on your comments on the NFL. I guess at this point, we shouldn't expect a change in pricing of those rights until 2030.

And if you could provide any color in terms of how that came to be, I think there's a lot of expectations that you would see a price increase either up for this season or for next season. so so any color there would be great too thanks all right thanks john uh and good morning uh so first on the ad market you know we we're seeing a very strong uh ad market for us and i can't speak for the the total ad market but certainly for our our businesses and really across our entire portfolio uh we are we're you know very pleased with the with the strength um of the demand uh for impressions across sports, news, the local stations, Tubi, and also entertainment. So it's a strong market. Our upfronts we completed some time ago with double-digit volume growth across sports, news, and Tubi. And we achieved rates of change, which we believe are sort of leading amongst our peers. It's always difficult to tell, but certainly that's what our facing sort of ad sales team is telling us. They believe we've both achieved this double-digit volume growth in addition to, you know, leading rates of change. So we're pleased with that. When I look at the categories that we're benefiting from, I think of the 10 categories that we track, you know, we're up in sort of eight of the 10 categories in the upfront. So entertainment, financial, auto, pharma, dining, retail, technology, and telecom all have very strong upfronts for us. So that's from an upfront perspective. Moving into where we are today, we're seeing that momentum and that strength continue into the first quarter. So we are very pleased. The CTV market remains very competitive. There's a lot of new inventory available in that market, but in that segment, Tubi has seen a 35% revenue growth, so has competed exceedingly well despite the heavy competition, and we're seeing that momentum continue in the first quarter. On the NFL, you're correct. We don't see any changes to our contractual terms until the 2030 season, but I can't really give you any color in terms of the background of how.

Next question, please.

We have a question from Michael Morris of Guggenheim.

Please go ahead. thank you uh good morning and um thanks for all the work on the world cup it was a very enjoyable event as a fan um i want to ask you about that first of all can you help us any more with the size of the contribution to add revenue and profitability both in the fiscal fourth quarter and what you're expecting from a contribution perspective in the fiscal first quarter. And then bigger picture, Lachlan, maybe for you, I'd love to hear how the strength of a unique event like the World Cup in the U.S. and North America, which is not recurring, does help the business on a sustainable basis. How do you keep momentum for this and from this? And what else does this fuel for Fox going forward post-World Cup?

Thank you uh thanks mike um i'm glad you enjoyed the world cup as a fan we also enjoyed it as as as a business even even uh even more question it really was a uh a unique uh event and you know i think you know in addition to the um which i think speaks to the second part of your question in addition to the sort of the strength of fox our focus you know our ability to amplify uh the world cup across our entire portfolio and tremendous amount of planning on and work went into this i think i think uh it illustrated that really only fox can take events like this and uh and amplify them in a way that's um that's you know frankly unique and in in the market um so uh uh you know we're very pleased with the world cup um obviously though it's it's a you know an american world cup It came in the summer months without a lot of sports competition, and I had tremendous enthusiasm by both our viewers and fans, but also by, you know, our clients and advertising partners. So, you know, the stars really aligned to deliver, you know, a tremendous result for both FIFA and for fans and for us. I think that goes to the second part of your question, how we move forward. I think we can show all sports leagues the value of Fox and the value of what we bring. Obviously, leagues are intent and focused on monetizing their IP and their properties most efficiently, but it's important to realize the strength of the marketing, the reach, the planning, the production that we put behind eventually.

Great. Next question, please.

We have a question from Michael Ng of Goldman Sachs.

Please go ahead. Hey, good morning. Thank you very much for the question. I have two as well. Just first on 2B and the very strong 35% year-over-year growth, maybe you could just help us break that down between you know benefits from things like the World Cup, World Cup hub versus underlying and then could you just remind us what the digital loss number or digital investment number was for fiscal 25 so we could we can model off of that and could you just comment on the free cash flow outlook for next year thank you.

Oh great thanks Mike good morning I'll talk to the um the 2b momentum and steve can talk to investment excuse that use your word losses but it's a really really important and sort of discipline investment uh in our digital categories uh actually so to the to be grew uh as you mentioned 35 percent um that momentum's continued into the first quarter that's driven off a number of things obviously um uh it's a uh total viewing time which grew 17% that's the key metrics if we can continue to grow the engagement and the viewing time you know the impressions and ad revenue flow from that you know why if you just take a step back and think about you know why 2B has been so successful you know in addition to its sort of really industry-leading library and sort of user interface and platform, it's that I think it's close to 70% of two of these viewers are cordless, right? Are either cord nevers or cord cutters. And this far exceeds any of our competitors in the marketplace. So we have the largest cohort of cordless, which means very hard to reach audience, viewers for the advertising market. So when you add Tubi to a media buy, you really are getting, expanding your reach dramatically. It's a very valuable position to be in. In addition to that, you have to remember that Tubi's viewing is like 96% of video on demand. Someone is actually choosing proactively choosing to watch that content in their in their living room or in their home it's not a fast channel or driven by fast channels which is uh you know which is um you know much more akin to a to a linear stream which makes its advertising you know even more valuable on to you know for the high engagement with the consumer so so we're very pleased with to be able to see its momentum continue into the new fiscal year Steve Thanks Lachlan.

Hey Mike, just in terms of the digital investments just to remind people in fiscal 25 we were just under 300 million in digital investments. This current year just picking up the comments Lachlan had about to be in the outperformance there plus the incredible app performance we saw at Fox 1 so that that digital investment number collectively come in at less than 200 million in the most recent fiscal year so fiscal 26 and we'd expect as I mentioned in my remarks, for that improvement to continue going into fiscal 27.

And Mike, I didn't answer your part about the Tubi World Cup revenue. It was important revenue, good revenue, but it's relatively small in the context of the overall revenue growth of Tubi.

Next question, please.

We have a question from Peter Cipino of Wolf Research. Please go ahead.

Hi, good morning. Another one on Tubi. I wondered if you could discuss ad sales at Tubi from the perspective of sellout and CPM trends and whether you can share levels, especially on sellout, to give us a sense of how that's going and obviously relates to your proposed acquisition of Roku, even though the question isn't directly about Roku. And as a brief second one, if you could talk about FOX1 subscriber retention, how important has been bundling FOX1 to your churn rate?

Thanks, Peter. So let me start with Tubi. So, you know, as we mentioned, the CCB ad market remains, you know, very active and very competitive, which means, you know, very price sensitive. 2B, though, has always been priced very efficiently for the current environment. And so while I think other platforms in the market have had to reduce price to compete or compete for volume in the market, you know, 2B has not had to drop rates of change or advertising rate in order to compete. so because we're already you know a tremendously efficient um uh advertising uh uh vehicle for on um box one um you know bundling is important for fox one you know we will continue uh to bundle uh fox one uh where it makes sense uh for consumers uh consumers are either self bundling obviously as they um as they choose their their streaming services uh but where it makes sense you know we will continue to bundle uh to make it more efficient uh for consumers and more effective uh for consumers um where there's a natural fit product so that will continue uh and the um the pleasing thing with fox one in addition to the fact that the subscribers to date are truly incremental uh we've seen that um through our our data and our numbers um uh you know we are not um churning, any tradition. And so that looks like it's continuing that in the first quarter.

Next question, please.

We have a question from Sean Diffley of Morgan Stanley. Please go ahead.

Great. Thanks very much, team. Two, if I may. First on political, any thoughts on how ad revs are shaping up into this cycle relative to prior?

And then on capital allocation, obviously uh roku deal uh announced you're still buying back stock anything we should think about in terms of being able to buy back more stock uh over the course of the next fiscal year thanks uh sure hey sean so uh i'll answer political so you can talk to the rest of the question so uh political uh ad sales uh you know it looks like well i'll start i'll start by saying the um Independent political ad tracking firms are estimating over $11 billion of political ad spending in the upcoming midterm election. This combined with what we're already seeing in an off cycle year, strong political revenue, we believe this will be a record midterm cycle for us. Just to put that in context, in the presidential election, so not the midterm cycle, but the presidential election in 2024, we saw over $400 million of political revenue. And then two years before that, the last midterm cycle, we did over $260 million in revenue. And we would expect this midterm cycle to beat that via record cycle.

Yeah, so Sean, in terms of capital allocations, we ended the year with the balance sheet exactly where we expected it to be as we were planning out the Roku transaction. You remember the Roku, sort of the coordinates on the deal from a leverage perspective, see us close the deal at about net leverage of 2.8 times. And so the structure of that deal gives us an incredible amount of capital allocation flexibility.

So you should expect that our buyback program continues unabated through the pendency of the transaction and beyond it we have time for one more question we have a question from david karnovsky of jp morgan please go ahead okay thank you uh lachlan i appreciate you can't give comments around the nfl conversations but can you maybe shed any light into what you're thinking was around engaging with the league now versus entering a more open market after 29 and then when we look at the rights landscape there's a lot in pipeline in the next couple years including some things that you know you're the incumbent on like mlb or world cup just assuming the nfl would opt out how are you thinking about you know your rights

portfolio ahead of them uh thanks david um so you know it's air on the side of you know not going into you know specifics about discussions uh with our partners uh but suffice to say that you know our relationship with the NFL is an incredibly positive one. We engage with them all the time. Obviously, we've been talking with them over the last period about, you know, the future of our rights, certainly, you know, for the next four years and then beyond the opt-out period. But we feel, you know, we continue to have a great relationship with them in a good place. You know, when we sit down and talk about the contractual extension of our rights after 2029 and the 2030 season or 2029 season, I think, you know, we'll do that much closer to that date. You know, I point to the fact that we might have talked about on the last earnings call that in Mexico, you know, we've just taken the NFL rights for Mexico. So, you know, we continue to promote and amplify, you know, their games and the league, which we've been doing for the last 30 years. So, we're very pleased with the relationship, and we think we can see a clear path forward, certainly through the 29th season and also beyond.

Thank you. At this point, we are out of time, but if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us today. Thanks, everyone.

Ladies and gentlemen, that does conclude the Fox Corporation fourth quarter fiscal year 2026 earnings conference call. Thank you.