• Revenue: Increased by 20% to just over $5 billion.
• EBITDA: More than doubled year-over-year to $781 million.
• Advertising Revenue: Grew by 21% in the quarter.
• Affiliate Revenue: Increased by 6%.
• Political Revenue: Over $400 million in the first half of fiscal 2025.
• Tubi Ad Revenue: Increased by 31%.
• Net Income: $373 million or $0.81 per share.
• Adjusted Net Income: $442 million or $0.96 per share.
• Cable Network Revenue Growth: 31%.
• Cable Advertising Revenue Growth: 32%.
• Television Segment Revenue Growth: 16%.
• Television Advertising Revenue Growth: 19%.
• Free Cash Flow: Deficit of $436 million.
• Share Buyback: $550 million repurchased fiscal year-to-date.
• Dividend: 27% per share semiannual dividend announced.
• Cash and Debt: $3.3 billion in cash and $7.2 billion in debt.

• Warning! GuruFocus has detected 5 Warning Sign with FOX.

Release Date: February 04, 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 record fiscal second quarter EBITDA of $781 million, more than doubling year-over-year.
• Revenue growth of 20% to over $5 billion was driven by strong affiliate and advertising revenue growth.
• Tubi achieved a 31% increase in ad revenues, contributing significantly to advertising growth.
• Fox News saw a 40% increase in total day audience and a 45% increase in prime time audience year-over-year.
• Fox Corp (NASDAQ:FOX) successfully completed all affiliate renewals impacting fiscal 2025, ensuring stable future revenue streams.

Negative Points

• Fox Corp (NASDAQ:FOX) recorded a free cash flow deficit of $436 million this quarter due to the seasonality of payments for sports rights.
• Subscriber declines were approximately 7%, although this was an improvement from the previous quarter.
• The Venue sports streaming joint venture with Warner Bros Discovery and Disney was discontinued due to legal distractions.
• There is ongoing investment in Tubi, which is expected to continue before reaching profitability.
• Fox Corp (NASDAQ:FOX) faces challenges in the sports rights market, competing with digital bidders like Netflix.

Q & A Highlights

Q: Can you provide more details on the upcoming direct-to-consumer (D2C) service, including timing, content, and costs? A: Lachlan Murdoch, Executive Chairman of the Board, explained that the D2C service is designed to target cord cutters and cord nevers, not traditional cable subscribers. The service will include existing content without additional rights costs and is expected to launch by the end of the calendar year. The incremental costs will be relatively low compared to peers.

Q: What is driving the strength in Fox News advertising, and is this sustainable? A: Lachlan Murdoch noted that Fox News is seeing strong ratings and over 100 new national advertisers, which is driving demand and pricing. This momentum is expected to continue, with third-quarter ratings and revenue accelerating from the second quarter.

Q: Can you discuss the Tubi Super Bowl livestream and its potential impact? A: Lachlan Murdoch stated that the Tubi Super Bowl livestream is an opportunity to capture first-party data and engage new users. The incremental costs are low, and the exposure is expected to drive future advertising revenue through enhanced programmatic capabilities.

Q: What are the investment needs for Tubi, and when will it become profitable? A: Lachlan Murdoch mentioned that investment in Tubi has decreased as the business scales and advertising grows. Tubi is on track to reach profitability according to business plans, with continued investment expected this year and next.

Q: How is Fox positioned to compete for future sports rights against digital bidders like Netflix? A: Lachlan Murdoch emphasized that Fox's broad reach across traditional and digital platforms is a key advantage. The D2C strategy will further enhance this reach, ensuring Fox remains competitive in securing sports rights.

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