Cable news and media network Fox (NASDAQ:FOXA) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 26.8% year on year to $4.37 billion. Its non-GAAP profit of $1.10 per share was 22.6% above analysts’ consensus estimates.
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FOX (FOXA) Q1 CY2025 Highlights:
- Revenue: $4.37 billion vs analyst estimates of $4.19 billion (26.8% year-on-year growth, 4.3% beat)
- Adjusted EPS: $1.10 vs analyst estimates of $0.90 (22.6% beat)
- Adjusted EBITDA: $856 million vs analyst estimates of $734.9 million (19.6% margin, 16.5% beat)
- Operating Margin: 10.8%, down from 22.9% in the same quarter last year
- Free Cash Flow Margin: 44.4%, up from 40.4% in the same quarter last year
- Market Capitalization: $21.95 billion
Company Overview
Founded in 1915, Fox (NASDAQ:FOXA) is a diversified media company, operating prominent cable news, television broadcasting, and digital media platforms.
Sales Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, FOX’s 5.4% annualized revenue growth over the last five years was sluggish. This was below our standard for the consumer discretionary sector and is a rough starting point for our analysis.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. FOX’s recent performance shows its demand has slowed as its annualized revenue growth of 3.9% over the last two years was below its five-year trend. 
We can better understand the company’s revenue dynamics by analyzing its most important segments, Advertising and Affiliate, which are 46.6% and 45.9% of revenue. Over the last two years, FOX’s Advertising revenue (marketing services) averaged 4.5% year-on-year growth while its Affiliate revenue (licensing and retransmission fees) averaged 4.2% growth.
This quarter, FOX reported robust year-on-year revenue growth of 26.8%, and its $4.37 billion of revenue topped Wall Street estimates by 4.3%.
Looking ahead, sell-side analysts expect revenue to decline by 5.2% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
FOX’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 17.4% over the last two years. This profitability was top-notch for a consumer discretionary business, showing it’s an well-run company with an efficient cost structure.
In Q1, FOX generated an operating profit margin of 10.8%, down 12 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
FOX’s EPS grew at a decent 12.1% compounded annual growth rate over the last five years, higher than its 5.4% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t expand.
In Q1, FOX reported EPS at $1.10, in line with the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects FOX’s full-year EPS of $4.41 to shrink by 10.1%.
Key Takeaways from FOX’s Q1 Results
We enjoyed seeing FOX beat analysts’ revenue, EPS, and EBITDA expectations this quarter. Zooming out, we think this quarter featured some important positives. The stock traded up 1.4% to $51 immediately following the results.
FOX put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.