What Happened?
Shares of cable news and media network Fox (NASDAQ: FOXA) jumped 6.2% in the morning session after the company reported third-quarter 2025 results that significantly beat Wall Street's expectations. For the quarter, Fox posted total revenue of $3.74 billion, a 4.9% increase year on year, surpassing analyst estimates of $3.57 billion. The company's profitability was a standout, with adjusted earnings of $1.51 per share, which was 37.4% higher than the consensus forecast of $1.10. Adjusted EBITDA also substantially outperformed, coming in at $1.07 billion against an expected $843.3 million. The strong performance was supported by higher operating margins, which improved to 28.5% from 26.7% in the same quarter last year, reflecting greater operational efficiency.
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What Is The Market Telling Us
FOX’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 5.5% on the news that the company reported strong third-quarter earnings that blew past analysts' sales and EPS expectations.
The topline benefited from a 6% year on year growth in affiliate revenue, largely driven by a 10% growth in the Television business. The advertising business did even better, growing 11% year on year due to higher political advertising revenues at FOX Television. This highlights FOXA's ability to optimize its ad inventory, given the audience growth powered by its relatable content during the election season. Other relevant factors explaining the improved growth include higher ratings and pricing, growth at Tubi (FOXA's streaming platform), and the impact of sports revenues such as broadcasts of the UEFA European Championship and CONMEBOL Copa América. Zooming out, we think this was a solid quarter. The broad-based sales improvement flowed to the bottom line as the company's EBITDA exceeded Wall Street's expectations. Overall, this was a strong quarter, highlighting significant improvements across the board.
FOX is up 34.3% since the beginning of the year, and at $65.79 per share, has set a new 52-week high. Investors who bought $1,000 worth of FOX’s shares 5 years ago would now be looking at an investment worth $2,481.
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