Fox(FOX) - 2026 Q2 - Earnings Call Transcript

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]