Core Insights - Fox Corporation reported a total revenue of $5.18 billion for the fiscal second quarter, reflecting a 2% increase from the prior year, driven by distribution revenue growth of 4% and advertising revenue growth of 1% despite a challenging comparison to last year's political advertising cycle [5][6][16] Television Segment - The Television segment generated revenue of $2.94 billion, with television advertising revenue remaining unchanged due to growth in Tubi and additional MLB postseason games being offset by the absence of prior-year political advertising [1] - Television distribution revenue increased by 1%, while television content and other revenue declined by 19% due to lower entertainment production studio revenue [1] - Segment EBITDA was reported at $143 million, down from $205 million a year earlier [1] Cable Segment - The Cable segment posted revenue of $2.28 billion and adjusted EBITDA of $687 million, both up 5% from the previous year [2] - Cable advertising revenue rose by 7%, attributed to higher pricing in news and sports, while cable distribution revenue also increased by 5% [2] Advertising Performance - Fox experienced robust advertising demand across news, sports, and streaming, with record-breaking ad revenue for the MLB postseason and strong performance in NFL and college football [7][8] - The company added approximately 200 new advertisers in the first half of the fiscal year, building on 350 new advertisers from the previous year [9] Distribution Trends - Distribution revenue rose by 4%, with subscriber declines improving sequentially, reported at a decline rate of 6.3% [11] - Fox One, launched five months ago, exceeded expectations, with no noticeable cannibalization of traditional subscribers [11] Tubi Performance - Tubi achieved its most-streamed quarter ever, with total view time up 27% year over year and quarterly revenue up 19%, achieving EBITDA profitability for the second consecutive quarter [13][14] - The platform's audience composition shows that 70% of Tubi's user base consists of cord cutters or cord nevers [14] Financial Position - Fox reported a free cash flow deficit of $791 million for the quarter, consistent with seasonal working capital tied to sports rights payments [15] - The company repurchased $1.8 billion of shares fiscal year-to-date, with cumulative repurchases since 2019 totaling $8.4 billion, representing about 35% of total shares outstanding [16]

Financial Data and Key Metrics Changes - Total revenues for the second quarter reached $5.18 billion, a 2% increase from the prior year quarter [14] - Adjusted EBITDA was $692 million, down from $781 million in the prior year quarter due to higher expenses [15] - Net income attributable to stockholders was $229 million or $0.52 per share, compared to $373 million or $0.81 per share in the prior year [15] Business Line Data and Key Metrics Changes - Cable segment revenues were $2.28 billion with an Adjusted EBITDA of $687 million, both representing a 5% growth year-over-year [16] - Television segment reported revenues of $2.94 billion, with advertising revenues unchanged due to the absence of last year's political advertising [17] - Distribution revenue grew 4% during the quarter, with subscriber declines improving sequentially [6] Market Data and Key Metrics Changes - Advertising revenue grew 1% despite a difficult comparison to last year's record political cycle, driven by strong linear pricing and robust revenue growth at Tubi [14] - Fox News Media achieved the highest ad revenue in its history for the first half of the fiscal year, adding 200 new advertisers [62] - Tubi's total view time grew 27% year-over-year, leading to record quarterly revenue growth of 19% [10] Company Strategy and Development Direction - The company emphasizes a strategy focused on live sports and news, alongside the growth of Tubi and Fox One, to maintain its leadership position [11] - Fox One has exceeded expectations with strong consumer engagement, particularly among sports fans [39] - The company is committed to utilizing its full buyback authorization, having repurchased $1.8 billion in shares year-to-date [19] Management's Comments on Operating Environment and Future Outlook - Management noted robust advertising market trends and expects continued strength in political advertising as the midterm elections approach [25] - The company is optimistic about the upcoming World Cup and its potential profitability due to strong advertiser interest [27] - Management expressed confidence in the strategic direction and financial position, highlighting the ability to deliver sustained growth and shareholder value [12] Other Important Information - The company announced a $0.28 per share semiannual dividend, bringing total cumulative cash return to shareholders to approximately $10.4 billion since establishment [19] - The balance sheet remains strong, with approximately $2 billion in cash and $6.6 billion in debt [20] Q&A Session Summary Question: Can you discuss the standout performance in cable advertising? - Management highlighted a robust advertising market for Fox News, with significant new advertiser additions and strong scatter pricing [25] Question: How do you plan to offset increased costs associated with the NFL? - Management indicated that they can offset some costs by balancing their sports portfolio and expect a robust political advertising cycle to benefit local stations [33] Question: What is driving the performance of Fox One? - Management noted that Fox One has exceeded expectations, with a significant portion of its audience being sports fans, and they are actively promoting upcoming sports events [39] Question: Can you elaborate on the improvement in subscriber declines? - Management reported a 6.3% decline in subscribers, attributing the improvement to the emergence of skinny bundles in the cable universe [45] Question: What categories are seeing strength in advertising? - Management observed significant demand across various categories, particularly financial and pharma, with eight of the top ten categories showing growth [61]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported 1,470,000 paid subscribers in North America, a decrease of 2.7% year over year, but exceeding the guidance of 1,460,000 [6][7] - Total revenue in North America was $407.9 million, reflecting a year-over-year increase of 3.5% [7] - Net income from continuing operations was $188 million, or $0.55 per diluted share, compared to a net loss of $56.3 million and a loss per share of $0.19 in the prior year [12] - Adjusted EBITDA was negative $1.4 million, showing a $37 million improvement year over year [12] - Free cash flow improved by $9 million year over year to negative $62 million [13] Business Line Data and Key Metrics Changes - Advertising revenue for the quarter was $22.5 million, down 17% year over year, primarily due to the discontinuation of Warner Bros. Discovery and TelevisaUnivision Networks [11] - The company is focused on offering multiple packaging options, including skinny bundles, to meet consumer demand [9][10] Market Data and Key Metrics Changes - The company anticipates a decline in subscribers for Q2 2025, projecting North America subscribers to be between 1,225,000 and 1,255,000, a 14% year-over-year decline at the midpoint [13][14] - For the Rest of World segment, Q2 guidance projects subscribers of 325,000 to 335,000, down 17% year over year [14] Company Strategy and Development Direction - The company is committed to achieving profitability in 2025 and is focused on optimizing its aggregated content platform [11][15] - The pending business combination with Hulu plus Live TV is expected to enhance competition and consumer choice in the pay TV space [8][10] - The company aims to launch a new service featuring content from both Disney and non-Disney programmers by the fall sports season [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainty and evolving streaming landscape [6][8] - The focus remains on profitability over growth, particularly in international markets [32][34] Other Important Information - The company has made significant investments in technology and strategic content changes, resulting in improved profitability and cash flow [14][15] - The company is exploring the integration of GenAI tools for creative and advertising purposes [30] Q&A Session Summary Question: Update on content discussions with Televisa Univision and skinny package programming contracts - Management indicated no new updates on discussions with Televisa Univision but remains open to negotiations under acceptable terms [18][19] - The company is focused on releasing skinny bundles and is optimistic about growth opportunities for the fall [21][22] Question: Impact of macroeconomic factors on subscriber growth and advertising demand - Management noted that churn in the Latino package is ongoing, but overall churn for the English package is slightly better year over year [26][27] - April was the best month for advertising growth year to date, indicating a positive trend [28] Question: Concerns about the Rest of World segment and GenAI integration - Management emphasized the importance of profitability for the Rest of World segment and is preparing for international expansion [32][34] - The company is seeing good traction with interactive ads, which are up 30% year over year [40][41] Question: Clarification on advertising revenue decline due to lost networks - Management explained that losing ad-insertable hours from networks directly impacts ad revenue, but normalizing for that would show slight year-over-year growth [36]