Total Revenue Growth: 27% increase in total revenues. Advertising Revenue: 65% growth, driven by the Super Bowl and Tubi. Affiliate Fee Revenue: 3% growth over the prior year quarter. Other Revenue: 20% year-over-year growth, driven by high sports sub-licensing revenues. Adjusted EBITDA: $856 million, compared to $891 million in the prior year quarter. Net Income: $346 million or $0.75 per share, compared to $666 million or $1.40 per share in the prior year. Adjusted Net Income: $507 million with adjusted EPS of $1.10. Cable Network Revenue Growth: 11% revenue growth and 7% EBITDA growth. Cable Advertising Revenue: 26% growth over the prior year. Cable Other Revenue: 79% growth due to high sports sub-licensing revenues. Television Segment Revenue Growth: 40% growth. Television Advertising Revenue: 77% growth, led by Super Bowl 59. Television Affiliate Fee Revenue: 4% increase in the quarter. Free Cash Flow: Record quarterly free cash flow of over $1.9 billion. Share Buyback Program: $800 million repurchased fiscal year-to-date, totaling $6.4 billion since 2019. Cash and Debt: Ended the quarter with $4.8 billion in cash and $7.2 billion in debt.

Warning! GuruFocus has detected 6 Warning Sign with FOX.

Release Date: May 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Fox Corp (NASDAQ:FOX) reported a 65% increase in total company advertising revenue, driven by the Super Bowl and strong engagement across platforms. The Super Bowl broadcast on Fox platforms attracted 128 million viewers, making it the most-watched telecast in US history. Fox News Channel achieved record audience share, with a 48% increase in total day audience and a 58% increase in the demo. Tubi experienced a 35% year-on-year revenue growth, with significant engagement and retention post-Super Bowl. Fox Corp (NASDAQ:FOX) generated a record quarterly free cash flow of over $1.9 billion, demonstrating strong financial health.

Negative Points

Net income attributable to Fox stockholders decreased to $346 million from $666 million in the prior year period. Quarterly adjusted EBITDA decreased to $856 million from $891 million in the prior year, due to higher sports rights amortization and production costs. Expenses at the television segment increased by 47%, driven by the Super Bowl broadcast and continued investment in Tubi. The company faces ongoing challenges with subscriber declines, although the rate of decline is improving. Fox Corp (NASDAQ:FOX) is preparing for potential regulatory challenges, such as FCC considerations on capping reverse retrans.

Story Continues

Q & A Highlights

Q: Can you provide details on Fox One, including pricing, addressable market, and potential partnerships? Also, any insights into fiscal '26 projections? A: Lachlan Murdoch, CEO, explained that Fox One will be priced in line with wholesale pricing, targeting the cordless market. Partnerships with distributors are planned to broaden distribution. Steve Tomsic, CFO, noted that fiscal '26 will be influenced by political advertising absence, Super Bowl costs, and FIFA events, with positive trends in advertising and affiliate revenue.

Q: How is Fox News performing in terms of brand advertising and direct response? A: Lachlan Murdoch, CEO, highlighted that over 200 new advertisers have joined since the election, with continued engagement. Direct response advertising grew over 30%, and scatter pricing increased by over 50% compared to upfront pricing, driven by strong audience ratings.

Q: Can you discuss Tubi's path to profitability and the company's balance sheet strategy? A: Lachlan Murdoch, CEO, emphasized Tubi's strong growth, with an 18% increase in total viewing time and a 35% revenue improvement. Steve Tomsic, CFO, mentioned the company's strong cash position and commitment to share buybacks, while continuing to invest in Tubi and other ventures like Fox One.

Q: What is Fox's strategy for direct-to-consumer services and affiliate revenue growth? A: Lachlan Murdoch, CEO, stated that Fox remains supportive of traditional cable distribution while launching D2C services targeting cord-nevers. The company sees value in skinny bundles and aims to leverage Tubi's expertise in reaching cordless audiences.

Q: What are the plans for Fox One's launch and potential bundling opportunities? A: Lachlan Murdoch, CEO, confirmed Fox One's launch before the football season, with plans to bundle with other services. The service will be available to traditional subscribers, ensuring no competition with existing distributors.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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