FOX Q1 2024 Earnings Call Transcript

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Provided by Quartr
November 2, 2023

There are 9 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Fox Corporation's First Quarter Fiscal Year 20 24 Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. I would like to emphasize that the functionality for the question and answer queue will be given at that time. As a reminder, this conference is being recorded.

Operator

I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Speaker 1

Thank you, operator. Good morning, and welcome to our fiscal 2024 Q1 earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer John Mallon, 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.

Speaker 1

These statements are based on management's current expectations and actual results could differ from what is stated as a result of and in the company's SEC filings. Additionally, this call will include certain non GAAP financial measures, including adjusted EBITDA or EBITDA as we refer to it on this call. Reconciliations of non GAAP financial measures included in our earnings release and our SEC filings, which are available in the Investor Relations section of our website. And with that, I'm pleased to turn the call over to Lachlan.

Speaker 2

Thank you, Gabby, and thanks, everyone, for joining us this morning. I just want to start with a comment And a note of thanks. We are living through tumultuous times. And at the outset, I want to acknowledge the work our journalists are doing covering the horrific October 7 terrorist attack and the subsequent ongoing war in the Middle East. From the reporting of Trey Yinkst, Greg Palcok, Mike Tobin and Lucas Tomlinson in Israel and Steve Harrigan in Barut to the deep analysis and insightful commentary by our reporters and hosts, including John Roberts and Trace Gallagher, to the essential and brave work of our on the ground producers and camera crews, Fox is fulfilling its mission to find, report and analyze the news of the day without fear or favor.

Speaker 2

News reporting is hard and war reporting is perhaps the hardest. And while the horror is central to this news cycle and we're heavily on those we ask to expose them, their exposure is necessary. And so our team deserves our admiration and our gratitude as they continue to work tirelessly and under demanding conditions to keep us up to date on events far away and on their impact closer to home. My sincere thanks to them all. Now turning to today's Q1 earnings release.

Speaker 2

Against the backdrop of an active news cycle and a robust sports schedule, Fiscal 2024 has started off on a solid operational and financial footing. Fox's focused portfolio of assets continues to distinguish itself and deliver exceptional results. Financially, we are now comparing against the fiscal 2023 cycle of events that delivered then record revenues and EBITDA. Despite this comparison, we posted total revenues this year slightly ahead of last year's record. On the affiliate side, we reported 2% total affiliate growth led by 8% growth of the TV segment in the quarter.

Speaker 2

Importantly, we have continued to secure constructive renewals, which deliver for our partners and reinforce the value of our brands and program. Advertising revenues in the quarter decreased by around 2%, principally due to a comparative quarter last year that was much heavier in political ad revenues at our local TV stations. We understand there is inconsistency around the broader addition to continued momentum at Tubi. Underpinning revenue are our core brands, which consistently resonate with viewers. And the consumption data clearly shows this, with total viewing of Fox brands up 2% in the quarter.

Speaker 2

Fox Sports was a big driver of that consumption, especially with its broadcast of the Women's World Cup, where the U. S. Versus the Netherlands on Fox was the most watched Women's World Cup Game match ever on U. S. English Language Television.

Speaker 2

From summer to fall, our lineup is bolstered by our football packages Led by the NFL and FOX, we are averaging over 17,000,000 viewers through Wegate. Based on the strength of our remaining schedule, especially from Thanksgiving through Christmas, We expect that engagement to improve significantly. In college football, interest is reaching new highs. Fox's big noon Saturday is progressing to a 3rd straight year as the number one game window in all of college football, averaging almost 6,000,000 viewers. At Tubing, we had another enviable quarter delivering 30% revenue growth driven by an impressive 65% lift in total view time.

Speaker 2

Tubi surpassed 70,000,000 monthly active users in September, logged nearly 4,000,000,000 streaming hours in the first half of calendar year and remains the number one AVOD player and most watched free ad supported TV streaming service in the United States. Additionally, Tubi has beaten Pluto, Max, Paramount Plus and Peacock in Buton for 5 consecutive months. One reason for the high engagement levels of Tubi is its extensive content library that now exceeds 60,000 titles, which translates into more than 225,000 movies and TV episodes, in addition to approximately 300 fast channels. And during the quarter, Tubi introduced Rabbit AI, a chat GPT-four powered recommendation engine to help users navigate this incredible range of titles. Tubi also offers a unique and compelling proposition to advertisers.

Speaker 2

A recent MRI study of streaming peers concluded that Tubi saw the fastest growth amongst young and diverse populations And that Tubi is able to deliver high value net new audiences with 33% of Tubi streamers unreachable on other top AVOD services. Now turning back to Fox News, the strength of our overall news coverage and the reach of our linear audio and digital content is unmatched. Whether it is the conflict in the Middle East, the upcoming 2024 election cycle or volatility in the financial markets, Fox News is increasingly the viewers' first choice. The launch of our new expanded primetime lineup in mid July further solidified Fox News' leadership position not only in cable news, but in all of cable, finishing the quarter as the most watched cable network in both total day and prime time. Fox News maintained its lead as the most watched cable news network, beating CNN and MSNBC in total viewers and in the demo for both Prime and Total Day.

Speaker 2

We have seen this thing continue and expand in the current quarter with October viewership increasing over 20% from the Q1 with over 30% growth in the key demo. Ratings leadership during the quarter was achieved across the platform. The Fox News Channel had the top 6 cable news programs with P2 +uss and the top 7 programs within the demo. In P2 Plus, the 5 led the way in terms of viewers, followed by Jesse Waters 5 Time and Hannity, while the 5, Gutfeld, Hannity and Jesse Waters 5 times were the top 4 programs in the demo. And Fox Business News ended the quarter as the most watched business cable network, beating CNBC in total viewers during the business day for the 6th consecutive quarter.

Speaker 2

The election cycle started off with a successful Republican presidential primary debate, which is Fox News Channel's highest rated telecast While the debate kicked off the election cycle, once we get deeper into it, our local station group will benefit greatly from increased political spend in the coming quarters. Over at Fox Entertainment, we started the 2023 to 2024 broadcast season as as the number one network in the key adult 18 to 49 demo and Fox ranks as the top network in entertainment program, a first in at least 10 years. Fox has 3 of the top 4 highest rated premieres of the 2023-twenty 24 season to date in Crapopolis, The Simpsons and The Masked Singer and the season's number one new game show with snake oil. Across the company, fiscal 2024 is shaping up nicely. We look forward to a great enthusiasm across the fall sports season underpinned by the NFL, college football and now the completed World Series.

Speaker 2

Continued viewing growth at Tubi and renewed momentum at Fox News and our local stations as the election cycle heats up. Our balance sheet remains a core asset for Fox and we will continue to deploy it in a disciplined and thoughtful manner that delivers value for our shareholders. Finally, I would like to congratulate my father on his 70 year career at News Corp and Fox. His enduring legacy can be felt in both of these companies. And I can assure you that he is still very much involved and will continue to be for years to come.

Speaker 2

With that, I'll turn it over to Steve to take you through the operating details of the quarter.

Speaker 3

Thanks, Lachlan, and good morning, everyone. Fox reported total 1st quarter company revenues of $3,210,000,000 which is slightly above the prior year quarter. This was led by a 2% increase in affiliate fee revenues as the pricing gains from recent distribution renewals more than offset the impact from industry subscriber declines. From an advertising perspective, we of course faced the tough comparison to last year's record mid term political revenues at our local stations. This coupled with continued softness in the direct response marketplace of Fox News more than offset the benefits we saw from the broadcast Taken as a whole, our advertising revenues declined 2%.

Speaker 3

Meanwhile, total company other revenues increased 2% or $6,000,000 Quarterly adjusted EBITDA was $869,000,000 as compared to the $1,090,000,000 reported in the prior year quarter. Expenses increased this quarter driven by higher rights amortization and production costs associated with the Women's World Cup, the 1st year step up from our NFL rights renewal and increased expenses at our digital businesses. Net income attributable to stockholders of $407,000,000 or $0.82 per share compares to the $605,000,000 or $1.10 per share reported in the prior year period. This move largely reflects the EBITDA impact I just mentioned along with the change in fair value of the company's investment in flutter recognized in other net. Excluding this impact and other non core items, Adjusted EPS was $1.09 versus last year's $1.21 Turning to our operating segment results, starting with television, where we delivered total quarterly revenues of $1,780,000,000 or a 4% increase year over year.

Speaker 3

This was driven by an 8% increase in TV affiliate revenues as healthy growth in fees across all Fox affiliated stations more than offset the impact from industry Advertising revenues at our TV segment grew 1% led by the benefits from the broadcast of the Women's World Cup, Continued growth of Tubi and the timing of college football broadcasts, partially offset by the absence of last year's midterm political revenues and lower ratings at the Fox Television and other revenues increased 6% in the quarter, primarily a result of the timing of participations tied to our entertainment production initiatives. The growth in revenue at our Television segment was more than offset by a 10% increase in expenses, including costs associated with the Women's World Cup, the 1st year step up associated with the renewal of our NFL rights and continued investment at Tubi. Together, these revenue and expense Impacts led to quarterly adjusted EBITDA of $351,000,000 in our Television segment compared to the $409,000,000 reported in the prior year quarter. Our Cable segment reported total quarterly revenues of $1,390,000,000 a 3% decrease year over year. Cable affiliate revenues were down 2% in the quarter, largely a result of industry subscriber declines, which continue to run-in the 8% range.

Speaker 3

Cable advertising revenues were down 8% as the broadcast of the Women's World Cup and the Men's CONCACAF Gold Cup were more than offset by the continued impact of the softer direct response marketplace and lower ratings at Fox News Media. Notably though, we continue to see healthy national linear and digital demand from advertisers of Fox News Media. Cable other revenues increased by $6,000,000 in the quarter due to the timing of sports sublicensing revenues. Meanwhile, expenses at our segment increased 13%, led by higher programming rights amortization and production costs for the Women's World Cup and Gold Cup, the timing of college football broadcast at FOX SPORTS 1 and contractual rights increases across our sports portfolio. All in all, this resulted in adjusted EBITDA at our cable segment of $607,000,000 compared to the $742,000,000 reported in the prior year period.

Speaker 3

Turning to cash flow, where free cash flow, which we define as net cash provided by operating activities less CapEx was negative $70,000,000 in the quarter. This is consistent with the seasonality of our working capital cycle with the first half of our This year is characterized by a concentration of payments for sports rights and the buildup of advertising related receivables, both of which reversed in the second half of our fiscal year. From a capital deployment perspective, Fiscal year to date, we have repurchased a further $300,000,000 through our share buyback program. We've now cumulatively repurchased $4,900,000,000 representing approximately 24% of our total shares of $7,000,000,000 This is supported by the strength of our balance sheet where we ended the quarter with approximately $3,800,000,000 in cash and $7,200,000,000 in debt. This excludes the $1,250,000,000 of senior notes that we issued in early October, the proceeds from which we intend to use to pay down the corresponding maturity coming due in January 2024.

Speaker 3

And with that, I'll turn the call back over to Gabby.

Speaker 1

Thank you, Steve. And now we will be happy to take questions from the investment community.

Operator

Thank you. Ladies and gentlemen, I'd like to emphasize the functionality for the question and answer You may remove yourself from queue at any time by repeating the 1 0 command. If you're using a speakerphone, and it has been requested that you limit yourself to one question. And one moment for our first question. And that will come from Robert Fishman from Moffett Anderson.

Operator

Please go ahead.

Speaker 4

Thank you. Good morning, everyone. After deciding on passing on the WWE renewal, can you share anything specific on how you evaluated the ROI of the deal in the context of driving higher advertising and affiliate fee revenue? And then maybe just more broadly, Can you discuss whether you expect to see any impact on future sports rights negotiation if the Disney Charter renewal impacts The industry rate of cord cutting or affiliate fee growth going forward? Thank you.

Speaker 2

Hey, good morning, Rob. There's a lot in there. So let me unpack it bit by bit and I hope I don't miss anything. So, how we I think we've talked about this before, but how we analyze the WWE renewal, And we look at all of our sports portfolio in the same way and on all new rights Our opportunities to acquire new rights in the same way. We on the basis of that analyst Analysis, sorry.

Speaker 2

We on both an advertising point of view, we were not hitting The advertising numbers due to the audience of the WWE to make to return for our return on investment To be above the levels that we would accept, but also we didn't attribute enough

Speaker 3

significant

Speaker 2

Retransmission revenue to the WWE either. So it made sense for us to move off and they've been a great partner for many years. But just quite simply, we're very disciplined and the RR didn't meet

Speaker 3

our pretty disciplined

Speaker 2

So we wish them luck and we've moved on from them. We're currently in, I think the final Stages of a very constructive negotiation for our NASCAR renewal. We look forward to continuing that partnership With NASCAR, it's been a great partnership for many years. And obviously, NASCAR Sees our expectations from a ROI point of view. In terms of Disney and Charter and How that affects our view going forward?

Speaker 2

I think it's a net positive for us. I think that we want our distributors To do well, we want them to continue investing in high quality programming and high quality brands and obviously between Fox News and Fox Sports, our station group and our network, we have a very focused, Very valuable set of core brands that distributors such as Charter value. So net net, the Disney Charter deal has been positive for us and positive for our strategy.

Speaker 1

Next question, please.

Operator

The next question is from Vin Swinburne from Morgan Stanley. Please go ahead.

Speaker 5

Thanks. Good morning. My one question is on sort of unlocking value, although it does admittedly have 2 pieces It might be connected. I guess first, it's a confession. I wanted to ask about sports and Tubi.

Speaker 5

So Arguably, the popularity of sports, particularly football and even more particularly college football has probably never been higher. I mean, your college rights are probably more valuable today than ever. I'm just wondering if you guys have ideas on Capitalizing and maximizing the return on those rights beyond the kind of stuff we always think about with advertising on the live rights and retrans fees. And then kind of related maybe, is leveraging Tubi, both in terms of sports, but also just broadly like your stock Doesn't have, I think, probably objectively credit for what to be is worth and it continues to grow. Are you guys thinking about ways to try to highlight that value more or scale it up maybe through some strategic activity?

Speaker 5

I don't know, any thoughts on helping to unlock some value around an asset that's obviously doing quite well and probably would be worth a lot more as a public company than what it is currently priced at inside of Fox. So I know that's a lot, but would love your thoughts.

Speaker 2

No, that's fine, Ben. Good morning. Good morning. So I think the best way I can answer both questions sort of with one answer, I suppose, which is the value you're 1,000 percent right. College football has never been more popular.

Speaker 2

It's rating extremely well. And one of the things we haven't talked about Frankly, advertisers have found it. Advertisers are pouring in to call triple, with tremendous rates and with tremendous Appetite for volume because they can see the value in this audience. And perhaps it's Underpriced in past years, I'm not sure. But certainly advertisers are recognizing the opportunity in college football and Obviously, we're the leader.

Speaker 2

But ultimately, we build value through our brands and through the Fox Sports brand and Fox Sports and station distribution. And so we'll continue to build value through college football, through the Fox Sports And monetizing it that way. The same thing with Tubi. First of all, we don't envisage any kind of significant live Sports on Tubi in the near or frankly medium perhaps even long term future. But Tubi is Very focused on primarily entertainment, particularly in video on demand entertainment, which makes Content and then engaging with their users all the more valuable.

Speaker 2

And I think it'll be a long time before we see Significant live sports on Tubi. In terms of how we Unlock the value in Tubi, Tubi will be the way our audiences engage Primarily engaged with entertainment in the future. It's a core part of our business and a core part of our strategy. And So we're building value there organically through driving its growth. I couldn't be more pleased with The arrival of our new CEO, Anjali Sood, she's doing a tremendous job and has a very clear and Strategic sort of attention and view for how we continue to drive 2B's success.

Speaker 2

So thank you, Ben.

Speaker 1

Operator, we'll take the next question.

Operator

And that's from Jessica Reif Ehrlich from Bank of America Securities. Please go ahead.

Speaker 1

Thank you. First of all,

Speaker 6

I want to say I really appreciate your introductory comments regarding news reporting and of course about your father who It's definitely one of a kind. But my question, I guess, 2 part 2 as usual from all of us. First on advertising, Can you give us your outlook for political advertising and what the current tone of sports advertising is? We know the general marketing still seems pretty tepid. And then maybe a kind of a nuance on what Ben just asked, but the longer term vision for 2B, like it's clear just Tremendous growth near term, but is this the vehicle as you think about possibly transitioning to streaming Given the decline in the universe or how are you thinking about it?

Speaker 2

Thank you, Jessica, and then thanks for Sure. Thanks for my comments. So let me start with advertising. We also hear and understand that the advertising market appears to be I used the word mixed, right, or sort of unsettled. However, we are Not seeing that to the same extent due to our focus on sports and news.

Speaker 2

So let me start with sports, where we're seeing high demand around Our NFL and we just discussed our college football schedule, particularly in the national sort of market, Pharmaceuticals, auto, quick service restaurants and CPG categories have all been quite active. And I think importantly, our Pricing has been at a premium to our upfronts. It's a modest premium, but we are pricing above our upfronts, which shows Certainly in the sports category, the market remains healthy. This will be Somewhat tempered by postseason baseball, including the conclusion of the World Series last night. I think sometimes you get lucky and you get 7 series 7 game series With match ups that insight the imagination of a national audience and sometimes you're less lucky.

Speaker 2

So That's how the cookie crumbles. And so I think we would like to see more games and we'd like to see a bit more the national excitement around these games, but it is what it is. Having said that, we should congratulate Texas Rangers for a great season and winning the World Series. At Fox News Media, national advertising is solid with growing pricing. And it's important to note that we have over 80 new national advertisers in Prom Town specifically in our 8 p.

Speaker 2

M. Hour in the Q1. The refreshing of our schedule and our lineup has worked from both a ratings perspective, but also from an advertising perspective really, really very well. Direct response continues to face some headwinds Really from last year from the previous upfront where there was which technically created sort of an oversupply in the market for direct response and put downward pressure on pricing. We would expect as we go forward for that pressure to Be relieved.

Speaker 2

There will be some and we've got increased audiences due to the news cycle, which Positive from a ratings point of view, but that's partially offset by an increased level of preemptions due to our kind of Really in-depth and incredible reporting. So overall, I should just overall at Sports and news. We are very happy with the overall performance of both of those verticals in our business. We're also very happy at Tubi. We announced we had 30% revenue gains, which is We've driven off the 65% growth in total ViewTime.

Speaker 2

I think going forward, we'll see continued growth In due time, Anshulie is very focused on that. And what there is softness in the entertainment Advertising market and Tubi is not immune from that softness, but Anjali is focused on how we Better monetize, we've ridden this incredible growth in audience and viewership and now it's time to really focus on how we more Effectively and efficiently monetize that huge audience. We've earned the right because of the audience growth to really start to take A greater share of wallet from our advertising partners. Finally, the local stations, we are pacing slightly ahead of last year in the base market, if you exclude political. You have to remember this Our quarter last year, October particularly, and I think it had over $125,000,000 worth of political revenue in the month of October alone, so it's a huge year on year comparison.

Speaker 2

At ex political, we're very pleased that the base market is strong. And that's really led by the auto and Recently, retail categories are very strong, also financial services. That's offset with bedding, wagering and also entertainment, right? There's not a lot of but due to the strike in Hollywood, there's no movie launches. So that's Offsetting some of the growth in auto, retail and financial services.

Speaker 2

Now I should go on to some of your the other part of your question in the So the longer term strategy for Tubi, look, I think we have a multi time strategy. I think Tubi is in an enviable position. It's The leading, AVA player, it's free, it's focused, it's entirely advertising driven. That's appreciated by all of our clients and obviously by our audiences. And I couldn't be happier with our transition from Farhad who is an incredible Entrepreneur who deserves all the credit for founding and building and driving to be to date.

Speaker 2

It's always a difficult transition when you move from a founder to a new leadership. So far, it's early days, but Anjali is very focused on all the issues and all the opportunities that Tubi has in front of it to continue to grow at impressive levels. But to be is our Free AVOD streaming service, that does not it's not our only strategy in the streaming space. No, direct to consumer is obviously something that we look at closely. We have a small direct to consumer SVOD service in Fox Nation, and we have optionality of expanding those services further into news and potentially sports.

Speaker 2

I hope I answered most of your questions, Jessica.

Speaker 1

Operator, next question please.

Operator

The next question is from John Hodulik from UBS. Please go ahead.

Speaker 7

Okay, great. Good morning, everyone. First, can we just get an update on the affiliate renewal process? I You guys had said that it would be more weighted on the TV side, but I think a lot of the new agreements kick in, in January. So just any color on the trends we should see there?

Speaker 7

And then getting back to the Charter Disney renewal, you guys seem to be somewhat unique in that you don't Really have any long tail networks or I would say a major SVOD platform. Lachlan, you talked about Fox Nation, but it's obviously very different than what The rest of the industry, just any thoughts on the implications for Fox, if this model that we Seeing out of this renewal, it would be broadly adopted over time for the industry. Thanks.

Speaker 2

Thanks, John. On affiliate renewal, Let me start with the big picture and Steve can talk to any of the numbers going forward, but Or not depending on. But look, the main thing on affiliate renewal is we Really due to our focus strategy, our focus on our core brands. Also, I think our focus on Being good partners with our distributors and wanting their businesses to succeed, because frankly from a Fox The cable bundle, the cable distribution or pay TV distribution remains Our largest and really most important revenue stream. And that we believe that it will remain our largest for years to come.

Speaker 2

So we are we feel the success of our distribution partners is our success as well. We want them to We want them to do well, which is one reason why we've kept our premium content within the cable bundle. We are not interested in at this stage moving premium content away from our cable distribution partners. That would be, I think, a mistake for us and for them. And so due to that, since our last call a quarter ago, we have renewed a number of distribution contracts.

Speaker 2

And in every case, we've been rewarded by that focus, rewarded by our partnerships with our affiliate partners, our distribution partners, with our rate increases and distribution agreements that fit absolutely in line with our plan. And that's because they value our brands, they value Fox News, they value Fox Sports Obviously, our local stations and network. So we are very pleased with our pace of renewal renewals and we haven't seen Any changes to the way we're able to work constructively with our partners. And that goes to the second part of your question with Charter and Disney, it's hard for me to say how I I don't want to talk about other people. A lot of people have their earnings calls Next week, I think we're early in the media cycle.

Speaker 2

They can talk about how that renewal affects Them and particularly the entertainment channels for us because we're not in that space, I think it's a net positive. We like to see our partners focus on the core brands, the

Speaker 3

Steve, do you want

Speaker 2

to?

Speaker 3

Yes. So John, just to reinforce Lachlan's point, we had just over a 3rd of our distribution renewals due this fiscal year and we're virtually through all of that. And so that's and as Lachlan mentioned, we've achieved our pricing objectives Against those renewals which goes to either the fact that we haven't gone dark with any distributors and the fact that we've been able to achieve objectives and I'm Assuming the distributors also have with those renewals, it goes to the constructive relationship we have with those distributors. And so We negotiate our full portfolio as a bundle. And I think you should expect to see that Coming into the new calendar year, you'll see the impact of those renewals and I suspect that the benefit of those will be skewed towards

Speaker 1

Operator, we have time for one more question.

Operator

Thank you. And that question will come from the line of Phil Cusick from JPMorgan. Please go ahead.

Speaker 8

Hi, thanks. A lot has been asked, but Lachlan, thinking about your comments on Doctor and recognizing that some of those upfront issues hopefully fade, But it makes me curious about your view on the future of the linear video ad landscape. You have 2B, which allows you to benefit from the shift to digital, but do you think we've reached a tipping point where linear video advertising is in secular, not just cyclical decline? Thank you.

Speaker 2

Thank you, Phil. The short answer is you have to, I think, break it up by category, right? And so if we look at sports and news. There's no sign of a Slow down in sort of demand for the really incredible and unique reach that those platforms deliver our advertising clients. I think the Doctor issue is a specific issue that really relates to Up from before last, we're there was a due to The negotiating strategy of some of our competitors, there was an oversupply of direct response in the market and that's driven pricing down.

Speaker 2

And we see we didn't see the same activity in This past upfront and so we expect the pricing pressure on Doctor to ameliorate or wash out in the coming quarters. So we We do see that as a shorter term problem and not a structural problem at all. And So it comes back to particularly in news and sports, there is no other content or platform that offers the reach that those categories offer. And so we are Optimistic is not a strong enough word. We are very confident in the future of linear advertising When you can deliver on the audiences that we deliver with the brands and the brand safety that we also can offer our clients.

Speaker 1

At this point, we are out of time. But if you have any further questions, please give me or Dan Carey a call. Thank you once again for joining today.

Speaker 2

Thank you, everyone. Thank you.

Operator

Ladies and gentlemen, that does conclude your conference call

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Key Takeaways

  • Solid Q1 financials: Fiscal Q1 total revenues of $3.21 billion were slightly ahead of last year’s record, driven by a 2% affiliate fee increase offsetting a 2% advertising decline, with adjusted EBITDA of $869 million and adjusted EPS of $1.09.
  • Fox Sports growth: Total viewing of Fox Sports brands rose 2%, highlighted by a record‐setting Women’s World Cup match and average NFL viewership of over 17 million, while “Big Noon Saturday” college football remained the #1 game window at nearly 6 million viewers.
  • Tubi expansion: Tubi delivered 30% revenue growth and a 65% lift in view time, surpassing 70 million monthly active users and retaining its position as the #1 AVOD service in the U.S., supported by a library of 60,000+ titles and the new Rabbit AI recommendation engine.
  • Fox News leadership: Fox News finished Q1 as the most‐watched cable network in both total day and primetime, beating CNN and MSNBC, with October viewership up over 20% year‐over‐year and more than 80 new national advertisers in its primetime lineup.
  • Entertainment network success: Fox Entertainment launched the 2023–24 broadcast season as the #1 network in Adults 18–49, featuring three of the top four premieres of the season (“Animal Control,” “The Simpsons,” “The Masked Singer”) and the #1 new game show.
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Earnings Conference Call
FOX Q1 2024
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