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01/11 03:35
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Fox's earnings call reflects strong financial performance with a 27% revenue increase and record free cash flow. The share buyback program and dividend announcement further bolster shareholder confidence. Although there are competitive pressures and regulatory risks, the optimistic guidance for Tubi and expected strong advertising growth mitigate these concerns. The Q&A section highlighted continued advertiser engagement and strategic partnerships, enhancing future growth prospects. Despite some unclear responses, the overall sentiment remains positive, likely resulting in a stock price increase of 2% to 8%.
Total Company Advertising Revenue $800,000,000 (65% increase year-over-year) driven by the Super Bowl and strong engagement.
Affiliate Revenues 3% growth year-over-year due to higher rates and improved subscriber declines.
Free Cash Flow Record high of over $1,900,000,000, attributed to the seasonal working capital cycle.
Total Revenues 27% increase year-over-year, driven by advertising revenue growth and Tubi's performance.
Adjusted EBITDA $856,000,000 (decrease from $891,000,000 year-over-year) due to higher expenses from sports rights and production costs.
Net Income Attributable to Fox Stockholders $346,000,000 ($0.75 per share, down from $666,000,000 or $1.40 per share year-over-year) due to increased costs.
Cable Network Programming Revenue Growth 11% increase year-over-year, with 26% growth in cable advertising revenues.
Television Segment Revenue Growth 40% increase year-over-year, with advertising revenues growing 77% due to the Super Bowl.
Television Segment EBITDA $60,000,000 (down from $145,000,000 year-over-year) due to increased expenses from the Super Bowl.
Digital Revenue Growth (Tubi) 35% year-over-year growth, driven by increased engagement and viewership.
Share Buyback Program $800,000,000 repurchased year-to-date, totaling $6,400,000,000 since 2019.
Cash Position $4,800,000,000 in cash, with $7,200,000,000 in debt.
Tubi Revenue Growth: Tubi delivered another outstanding quarter with revenue growth of 35% year on year, marking an acceleration compared to the previous quarter.
Fox One Launch: Fox One, a direct-to-consumer service targeting the cordless market, is on track to launch before the football season this fall.
Super Bowl Advertising Revenue: The Super Bowl generated over $800 million in gross advertising revenue, a record for both the national broadcast network and local TV stations.
Fox News Ratings: Fox News finished the quarter as the most watched cable network, with a 48% increase in total viewers and a 58% increase in the demo.
Free Cash Flow: Fox reported the highest free cash flow in its history, exceeding $1.9 billion for the quarter.
Affiliate Revenue Growth: Total affiliate revenues grew by 3% due to higher rates and improved subscriber declines for the third consecutive quarter.
Direct-to-Consumer Strategy: Fox is focusing on launching Fox One to target the cordless community while maintaining strong relationships with traditional cable distributors.
Advertising Strategy: Fox has seen over 200 new advertisers since the election, indicating a shift towards brand advertising.
Competitive Pressures: Fox Corporation is facing competitive pressures in the advertising market, particularly with the rise of digital platforms and streaming services. The company is focusing on maintaining its audience engagement and advertising revenue, especially in the context of its upcoming direct-to-consumer service, Fox One.
Regulatory Issues: There are potential regulatory risks associated with the FCC's discussions around capping reverse retransmission fees, which could impact Fox's affiliate revenue model.
Supply Chain Challenges: While not explicitly mentioned, the increase in sports rights amortization and production costs indicates potential supply chain challenges related to content acquisition and production.
Economic Factors: The macroeconomic environment was acknowledged, with management noting that they have seen no impact on their business thus far. However, the potential for economic downturns could affect advertising revenue and overall financial performance.
Investment Risks: The company is balancing its investments in digital properties like Tubi and the upcoming Fox One service, which could pose risks if these investments do not yield expected returns or if market conditions change.
Fox One Launch: Fox One is on track to launch before the football season this fall, targeting the cordless market.
Tubi Growth: Tubi delivered a 35% year-on-year revenue growth, with total view time up 24% year-on-year in April.
Direct-to-Consumer Strategy: Fox is focusing on a direct-to-consumer strategy with Fox One, aimed at the cordless audience.
Advertising Partnerships: Fox plans to enter partnerships with other distributors to broaden the distribution of Fox One.
Fiscal Year 2026 Outlook: Fiscal 2026 will see a lack of political advertising revenue, but strong tailwinds from advertising business, particularly at Fox News and Tubi.
Free Cash Flow: Fox generated record quarterly free cash flow of over $1.9 billion.
Share Buyback Program: Fox has repurchased $800 million in shares this fiscal year, totaling $6.4 billion since the buyback program began.
Debt Position: Fox ended the quarter with approximately $4.8 billion in cash and $7.2 billion in debt.
Share Buyback Program: Fiscal year to date, Fox Corporation has repurchased an additional $800,000,000 through its share buyback program, bringing the total cumulative amount repurchased to $6,400,000,000, which is approximately 30% of total shares outstanding since the launch of the buyback program in 2019. The company remains committed to utilizing its full buyback authorization of $7,000,000,000.
Fox's earnings call reflects strong financial performance with a 27% revenue increase and record free cash flow. The share buyback program and dividend announcement further bolster shareholder confidence. Although there are competitive pressures and regulatory risks, the optimistic guidance for Tubi and expected strong advertising growth mitigate these concerns. The Q&A section highlighted continued advertiser engagement and strategic partnerships, enhancing future growth prospects. Despite some unclear responses, the overall sentiment remains positive, likely resulting in a stock price increase of 2% to 8%.
The earnings call highlights strong financial performance with significant year-over-year growth in revenue, EBITDA, and net income, alongside a robust share buyback program and increased dividend payout. Despite some uncertainties around regulatory challenges and economic factors, optimistic guidance on Tubi's profitability and Fox's competitive positioning in sports rights are positive indicators. The Q&A revealed some concerns about management's transparency, but overall sentiment remains positive due to strong financial metrics and shareholder returns.
The earnings call reflects a mixed but generally positive sentiment. While total revenue declined due to lack of marquee events, adjusted EBITDA and net income showed resilience. The launch of new products like Venue and strategic partnerships highlight growth potential. Shareholder returns remain strong, with significant buybacks and dividends. Despite some uncertainties in the Q&A, notably around Venue's financial impact, the overall guidance and market strategy suggest a positive outlook. The stock price is likely to see a positive movement given these factors, especially with the strong political advertising forecast.
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