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01/11 04:05
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance, with significant revenue and EPS growth, record advertising revenue, and robust cash flow. The Q&A section confirms positive trends in cable advertising and digital investments, particularly Tubi's growth. The management's strategic focus on organic growth and digital investments, along with a significant share repurchase plan, further supports a positive outlook. Despite some uncertainties, such as the NFL-ESPN rumor, the overall sentiment is strong positive, likely leading to a stock price increase over the next two weeks.
Revenue Revenue grew 17% year-over-year to $16 billion, driven by strong financial performance across all businesses.
EBITDA EBITDA increased 26% year-over-year to $3.6 billion, attributed to operational and financial strength.
Adjusted EPS Adjusted EPS rose 39% year-over-year to $4.78 per share, reflecting strong financial results.
Free Cash Flow Free cash flow doubled year-over-year to $3 billion, supported by operational efficiency and revenue growth.
Political Advertising Revenue Generated over $400 million, a record, due to strong political advertising demand.
Super Bowl LIX Advertising Revenue Generated over $800 million, breaking viewership and advertising records.
Total Advertising Revenue Increased 26% year-over-year to $7 billion, driven by events like Super Bowl LIX and strong core advertising.
Tubi Revenue Tubi revenue grew 32% in Q4, driven by 17% growth in total view time and favorable direct response and partner channels.
Net Income Net income attributable to stockholders was $2.3 billion, up from $1.5 billion in fiscal '24, reflecting strong operational performance.
Affiliate Fee Revenues Grew 5% year-over-year, led by 7% growth in the Television segment, due to successful distributor renewals.
Cable Advertising Revenue Grew 15% year-over-year in Q4, driven by FOX News engagement and strong pricing.
Television Advertising Revenue Grew 3% year-over-year in Q4, led by Tubi growth, offsetting tough comparisons from prior year events.
Cable Other Revenues Increased 39% year-over-year in Q4, led by higher Fox Nation subscribers.
Television Other Revenues Increased 34% year-over-year in Q4, driven by higher content revenues tied to entertainment production studios.
FOX One: Launching across the U.S. on August 21 for $19.99 per month. It is a direct-to-consumer streaming platform offering bundling opportunities and targeting both cordless and pay TV subscribers.
Tubi: Achieved over 100 million monthly active users, $1.1 billion in revenue, and 2.2% share of total U.S. television viewing. Delivered the most streamed Super Bowl in history and saw 17% growth in total view time.
Advertising Revenue: Generated record political advertising revenue of over $400 million and $800 million from Super Bowl LIX. Total advertising revenue grew 26% to $7 billion.
FOX News: Maintained over 60% share of the cable news audience and achieved record engagement with 1.5 billion YouTube views and 3.7 billion social media video views.
Financial Performance: Revenue grew 17% to $16 billion, EBITDA grew 26% to $3.6 billion, and free cash flow doubled to $3 billion.
Affiliate Fee Revenues: Achieved 5% growth in total company affiliate fee revenues, led by 7% growth in the Television segment.
Share Repurchase: Announced a $5 billion increase to share repurchase authorization, bringing total capital returned to shareholders to $8.5 billion since 2019.
Digital Investments: Focused on Tubi's path to profitability and launching FOX One to expand digital offerings.
Advertising Revenue Dependency: The company's heavy reliance on advertising revenue, which constitutes a significant portion of its income, poses a risk. Any downturn in the advertising market or shifts in advertiser preferences could adversely impact financial performance.
Subscriber Declines: The company faces ongoing challenges with net subscriber declines, which could affect affiliate fee revenues and overall financial stability.
Sports Rights Costs: Higher sports rights amortization and production costs, including those associated with major events like the Super Bowl, could pressure profit margins if not offset by corresponding revenue growth.
Cordless Market Competition: The launch of FOX One and the company's focus on the cordless market face competitive pressures from other streaming platforms, which could limit subscriber growth and profitability.
Tubi Profitability: While Tubi has shown growth, its path to profitability remains a challenge, especially in a competitive connected TV market.
Economic Uncertainty: Broader economic uncertainties could impact advertising revenues and consumer spending on subscription services, affecting overall financial performance.
Regulatory Risks: Potential regulatory changes in the media and broadcasting industry could pose challenges to the company's operations and strategic plans.
Advertising Market Outlook: The overall advertising market for FOX is expected to remain healthy and robust in fiscal 2026, with record-setting double-digit volume growth and strong pricing growth across the portfolio.
FOX One Launch: FOX One, a direct-to-consumer streaming platform, will launch on August 21, 2025, for $19.99 per month. It will target the cordless market and offer bundling opportunities. The company has modest subscriber aspirations and plans measured investments for this initiative.
Tubi Growth and Profitability: Tubi is expected to achieve substantial profitability improvement in fiscal 2026, weighted toward the second half of the year. The platform continues to grow, with a 35% year-on-year volume increase in upfront results and stable rates in a competitive connected TV market.
FIFA Men's World Cup Impact: FOX anticipates strong results from broadcasting the 2026 FIFA Men's World Cup, which will span the fiscal fourth quarter of 2026 and the first quarter of 2027. This event is expected to generate significant advertising revenue.
Capital Allocation and Share Repurchase: The company announced a $5 billion increase in share repurchase authorization and plans to continue repurchasing shares while investing in organic growth and new businesses.
Digital Investments: FOX plans to continue investing in digital-led growth initiatives, including Tubi and FOX One, to drive ROI and expand its digital footprint.
Dividend Increase: The company announced an increase in its semiannual dividend to $0.28 per share.
Share Repurchase Authorization: The company announced a $5 billion increase to its share repurchase authorization.
Capital Returned to Shareholders: Since November 2019, the company has returned $8.5 billion to shareholders, including $6.65 billion in share repurchases, representing 31% of total shares outstanding.
The earnings call presents a mixed sentiment. Positive aspects include strong advertising market outlook, FOX One launch, Tubi's growth, FIFA World Cup impact, and a $5 billion share repurchase plan. However, the Q&A reveals significant uncertainties, such as unpredictable holiday demand, competition in wooden toys, and vague management guidance. The lack of specific guidance and the cautious outlook on Q4 performance temper the positive elements, resulting in a neutral prediction for stock movement.
The earnings call shows a positive outlook with strong advertising revenue growth, a successful FOX One launch, and Tubi's profitability. The $5 billion share repurchase plan further boosts investor confidence. Despite a decline in net income due to non-core items, adjusted metrics show growth. The Q&A highlights positive subscriber uptake for FOX One and strong pricing for FOX News, with strategic investments planned for Tubi. The overall sentiment is positive, though tempered by free cash flow concerns and lack of specific guidance for FOX One subscribers.
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