Fox(FOXA) - 2024 Q4 - Annual Results

Financial Highlights Fourth Quarter Fiscal 2024 Performance For the fourth quarter of fiscal 2024, Fox Corporation reported a 2% year-over-year revenue increase to $3.09 billion, driven by 5% growth in affiliate fees. Advertising revenue remained flat as growth at Tubi and soccer broadcasts were offset by lower performance at the FOX Network. Adjusted EBITDA grew 5% to $773 million, benefiting from revenue growth and lower entertainment programming costs, despite higher sports rights and Tubi investment expenses | Financial Metric | Q4 FY2024 | Q4 FY2023 | Change | | :--- | :--- | :--- | :--- | | Revenues | $3.09 Billion | $3.03 Billion | +2% | | Net Income | $320 Million | $369 Million | -13.3% | | Adjusted EBITDA | $773 Million | $735 Million | +5% | | Adjusted EPS | $0.90 | $0.88 | +2.3% | - Quarterly revenue growth was primarily driven by a 5% increase in affiliate fee revenues, stemming from 9% growth in the Television segment and 2% in the Cable Network Programming segment[4] - Advertising revenues were flat, as contributions from the UEFA European Championship, CONMEBOL Copa América, and continued growth at Tubi were offset by lower ratings and pricing at the FOX Network[4] Full Year Fiscal 2024 Performance For the full fiscal year 2024, revenues decreased to $13.98 billion from $14.91 billion in the prior year. This was mainly due to a significant drop in advertising revenue from the absence of Super Bowl LVII, the FIFA Men's World Cup, and midterm election political ads, which were present in fiscal 2023. Net income increased to $1.55 billion, largely due to the absence of prior-year legal settlement costs. Adjusted EBITDA declined to $2.88 billion | Financial Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Revenues | $13.98 Billion | $14.91 Billion | -6.2% | | Net Income | $1.55 Billion | $1.25 Billion | +24.0% | | Adjusted EBITDA | $2.88 Billion | $3.19 Billion | -9.7% | | Adjusted EPS | $3.43 | $3.51 | -2.3% | - The decline in full-year advertising revenue to $5.44 billion from $6.61 billion was primarily due to the absence of Super Bowl LVII, the Men's World Cup, and lower political advertising revenues compared to the prior year's midterm elections[6] - Full-year net income rose to $1.55 billion, reflecting the absence of prior year charges related to legal settlement costs at FOX News Media[7] Management Commentary CEO Lachlan Murdoch highlighted fiscal 2024 as a successful year, emphasizing strong affiliate revenue growth, Tubi's establishment as the leading free streaming service in the U.S., and revitalized ratings at FOX News. He expressed confidence for fiscal 2025, which will feature a major event cycle including the Presidential Election and the Super Bowl, underscoring the company's sound strategy and financial strength - Key achievements in fiscal 2024 include strong quarterly affiliate revenue growth, cementing Tubi's position as the most-watched free TV and movie streaming service in the U.S., and reinvigorated ratings and share growth at FOX News[3] - The company anticipates carrying its momentum into fiscal 2025, which will feature major events like the Presidential Election and Super Bowl, underpinning confidence in future shareholder value delivery[3] Review of Operating Results Consolidated Financial Performance This section provides a detailed breakdown of the company's revenues and Adjusted EBITDA by segment for both the fourth quarter and the full fiscal year. For the full year, the Television segment saw a significant drop in advertising revenue and Adjusted EBITDA, while the Cable Network Programming segment's Adjusted EBITDA grew despite a slight revenue decline | (in $ Millions) | Q4 FY2024 | Q4 FY2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $3,092 | $3,032 | $13,980 | $14,913 | | - Affiliate fee | $1,859 | $1,771 | $7,324 | $7,051 | | - Advertising | $1,007 | $1,008 | $5,444 | $6,606 | | Total Adjusted EBITDA | $773 | $735 | $2,883 | $3,191 | | - Cable Network Programming | $703 | $585 | $2,693 | $2,472 | | - Television | $148 | $227 | $506 | $1,009 | Cable Network Programming Segment The Cable Network Programming segment reported a 20% increase in Q4 EBITDA to $703 million, driven by a 2% revenue increase and lower expenses. For the full year, EBITDA grew 9% to $2.69 billion, as lower programming and legal costs, particularly from the absence of the Men's World Cup, more than compensated for a slight revenue decrease - Q4 affiliate fee revenue grew 2% due to contractual price increases, partially offset by net subscriber declines. Advertising revenue rose 3% from soccer broadcasts and improved pricing/ratings at FOX News Media[12] - The 20% increase in Q4 segment EBITDA was due to revenue growth and lower expenses, driven by the deconsolidation of the USFL and reduced programming costs at FOX News Media[13] - Full-year segment EBITDA increased 9% to $2.69 billion. The improvement was primarily due to lower expenses, including the absence of the prior year's Men's World Cup broadcast and reduced legal costs at FOX News Media[15] Television Segment The Television segment's Q4 EBITDA declined to $148 million from $227 million year-over-year, as a 2% revenue increase was outweighed by higher expenses for sports programming and Tubi investments. For the full year, EBITDA was nearly halved to $506 million, primarily due to a significant drop in advertising revenue from the absence of major events like Super Bowl LVII and the midterm elections - Q4 affiliate fee revenue grew 9% from higher fees from third-party affiliates and owned stations. Advertising revenue was slightly down as Tubi's growth and soccer broadcasts were offset by lower ratings and pricing at the FOX Network[17] - The decline in Q4 segment EBITDA was driven by higher costs for the UEFA European Championship and CONMEBOL Copa América, along with increased digital investment at Tubi[18] - Full-year advertising revenue fell from $5.20 billion to $4.18 billion, driven by the absence of Super Bowl LVII, the Men's World Cup, and lower political advertising. This was the primary cause for the segment's EBITDA dropping from $1.01 billion to $506 million[19][20] Shareholder Returns Dividends The Company's Board of Directors has approved an increase to the semi-annual dividend, signaling confidence in its financial health and commitment to returning capital to shareholders - The Board declared an increased semi-annual dividend of $0.27 per Class A and Class B share[21] - The dividend is payable on September 25, 2024, with a record date of September 4, 2024[21] Share Repurchase Program Fox continued its share repurchase program, buying back $250 million of its Class A common stock during the quarter. The company has $1.4 billion remaining under its current repurchase authorization - The Company repurchased approximately $250 million of its Class A common stock during the fourth quarter[22] - As of June 30, 2024, a total of $5.6 billion in stock has been repurchased under the program, with a remaining authorization of $1.4 billion[22] Consolidated Financial Statements Consolidated Statements of Operations The consolidated income statement shows a full-year revenue of $13.98 billion and net income attributable to stockholders of $1.50 billion, or $3.13 per share. This compares to revenue of $14.91 billion and net income of $1.24 billion, or $2.33 per share, in the prior fiscal year. The increase in net income was primarily due to lower restructuring and legal costs compared to the prior year | (in $ Millions) | Twelve Months Ended June 30, 2024 | Twelve Months Ended June 30, 2023 | | :--- | :--- | :--- | | Revenues | $13,980 | $14,913 | | Operating expenses | ($9,089) | ($9,689) | | Restructuring, impairment and other | ($67) | ($1,182) | | Income before income tax expense | $2,104 | $1,736 | | Net income attributable to Fox Corp. stockholders | $1,501 | $1,239 | | Net income per share | $3.13 | $2.33 | Consolidated Balance Sheets As of June 30, 2024, Fox Corporation's balance sheet remained stable with total assets of $21.97 billion. Cash and cash equivalents stood at $4.32 billion. Total liabilities decreased to $11.16 billion from $11.42 billion in the prior year, primarily due to a reduction in current borrowings. Total stockholders' equity increased to $10.71 billion | (in $ Millions) | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,319 | $4,272 | | Total current assets | $7,501 | $7,257 | | Total assets | $21,972 | $21,866 | | Total current liabilities | $2,952 | $3,763 | | Total liabilities | $11,158 | $11,421 | | Total Fox Corporation stockholders' equity | $10,714 | $10,378 | Consolidated Statements of Cash Flows For the twelve months ended June 30, 2024, the company generated $1.84 billion in net cash from operating activities, a slight increase from the prior year. Net cash used in investing activities was $452 million. Financing activities used $1.34 billion, primarily for $1.0 billion in share repurchases and $281 million in dividend payments. The company ended the year with a net increase in cash of $47 million | (in $ Millions) | Twelve Months Ended June 30, 2024 | | :--- | :--- | | Net cash provided by operating activities | $1,840 | | Net cash used in investing activities | ($452) | | Net cash used in financing activities | ($1,341) | | Repurchase of shares | ($1,000) | | Dividends paid and distributions | ($281) | | Net increase in cash and cash equivalents | $47 | | Cash and cash equivalents, end of year | $4,319 | Notes to Financials (Non-GAAP Reconciliations) Note 1 – Adjusted Net Income and Adjusted EPS This note provides a reconciliation from GAAP Net Income to the non-GAAP measure of Adjusted Net Income. For the full fiscal year 2024, Adjusted Net Income was $1.65 billion ($3.43 per share), compared to $1.87 billion ($3.51 per share) in the prior year. The adjustments primarily remove the effects of restructuring charges and non-operating items to better reflect core operational performance | (in $ Millions, except per share) | Twelve Months Ended June 30, 2024 | Twelve Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net income attributable to Fox Corp. stockholders (GAAP) | $1,501 | $1,239 | | EPS (GAAP) | $3.13 | $2.33 | | Adjusted Net Income (Non-GAAP) | $1,645 | $1,866 | | Adjusted EPS (Non-GAAP) | $3.43 | $3.51 | Note 2 – Adjusted EBITDA This note defines Adjusted EBITDA and reconciles it from GAAP Net Income. For the full fiscal year 2024, Adjusted EBITDA was $2.88 billion, down from $3.19 billion in the prior year. For the fourth quarter, Adjusted EBITDA was $773 million, an increase from $735 million year-over-year. Management uses this metric to evaluate the operating performance of its business portfolio - Adjusted EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. It excludes items like depreciation, amortization, restructuring, and interest to provide insight into operational performance[36] | (in $ Millions) | Q4 FY2024 | Q4 FY2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Income (GAAP) | $320 | $369 | $1,554 | $1,253 | | Adjusted EBITDA (Non-GAAP) | $773 | $735 | $2,883 | $3,191 |