Release Date: November 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fox Corp (FOX, Financial) reported a strong start to fiscal 2025 with a 21% increase in EBITDA, reaching over $1 billion.
- Total company revenues grew by 11% to $3.56 billion, driven by political advertising, Tubi's growth, and strong audience growth at Fox News Media.
- Fox News maintained its position as the most-watched cable network, with significant audience growth in key demographics.
- Tubi experienced a 19% revenue growth during the quarter and is on track to cross the $1 billion revenue mark this fiscal year.
- Fox Sports had a successful fall season, with high ratings for MLB postseason and NFL games, contributing to strong advertising revenue.
Negative Points
- Subscriber declines in the cable segment continue to be a concern, although the rate of decline has moderated slightly.
- Increased expenses due to higher sports programming rights amortization and Tubi's costs partially offset revenue growth.
- The advertising environment post-election remains uncertain, with potential impacts on future revenue streams.
- Fox Corp (FOX) faces challenges in maintaining momentum at Fox News post-election, depending on political outcomes.
- The company is navigating regulatory processes for its investment in Flutter and FanDuel, which could impact future strategic decisions.
Q & A Highlights
Q: Comcast is considering separating its cable network business. How might this impact Fox, and do you see a bottom in bundled subscriber declines?
A: Lachlan Murdoch, CEO, stated that Comcast's plans do not affect Fox. Fox benefits from synergies across its platforms, making separation difficult. Subscriber decline rates have moderated, and there is a belief in a subfloor where core packages remain valuable. Steve Tomsic, CFO, added that revenue growth is driven by pricing increases and moderated subscriber declines.
Q: How is Tubi performing in the political advertising market, and is there any cannibalization from local stations?
A: Lachlan Murdoch noted that political spending has shifted back to local, benefiting both stations and Tubi. Tubi captures additional political dollars without cannibalizing station revenue. Tubi's audience is valuable and hard to reach, making it a must-buy for advertisers. Steve Tomsic highlighted that both stations and Tubi have seen significant revenue growth from political advertising.
Q: What is the future outlook for Tubi, and any updates on Venu?
A: Lachlan Murdoch expressed confidence in Tubi's growth, driven by its large AVOD library and sustainable model. Tubi is expected to continue growing as a major platform for free television. Regarding Venu, Fox is awaiting an appeal and believes it is a pro-consumer platform. Fox is not focused on sublicensing sports rights.
Q: How do you see the ad environment post-election, and can Fox News maintain its ratings momentum?
A: Lachlan Murdoch stated that Fox's advertising market remains healthy, with strong growth in sports and news. The World Series and upcoming Super Bowl have driven strong ad sales. News ratings are robust, particularly in key demographics, and direct response pricing is significantly up. The election outcome is not expected to impact Fox's momentum.
Q: Can you discuss the EBITDA bridge components for TV in fiscal '25, and is Tubi's performance affecting digital losses?
A: Steve Tomsic explained that political advertising and sports revenue will benefit the TV segment. Tubi's strong performance is reducing digital losses. The TV segment is expected to have a strong second half, with the Super Bowl being cash flow accretive. The absence of certain sports events in Q4 will also be beneficial.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
