Financial Data and Key Metrics Changes - Fox Corporation reported total revenues of $3.21 billion for Q1 2024, slightly above the prior year quarter, driven by a 2% increase in affiliate fee revenues [15][16] - Adjusted EBITDA for the quarter was $869 million, down from $1.09 billion in the prior year quarter [16] - Net income attributable to stockholders was $407 million, or $0.82 per share, compared to $605 million, or $1.10 per share, in the prior year period [16] Business Line Data and Key Metrics Changes - Television segment revenues increased by 4% year-over-year to $1.78 billion, with an 8% increase in TV affiliate revenues [17] - Cable segment revenues decreased by 3% year-over-year to $1.39 billion, with cable affiliate revenues down 2% due to industry subscriber declines [19][20] - Tubi achieved 30% revenue growth, driven by a 65% increase in total view time, surpassing 70 million monthly active users [9][16] Market Data and Key Metrics Changes - Advertising revenues decreased by around 2%, primarily due to a comparative quarter last year that had higher political ad revenues [7][15] - Fox News maintained its position as the most-watched cable news network, with viewership increasing over 20% from the first quarter [11][12] - The local station group is expected to benefit from increased political spending in the coming quarters [12] Company Strategy and Development Direction - The company is focused on maintaining strong partnerships with distributors and has successfully renewed several distribution contracts, achieving rate increases [46][48] - Fox Corporation aims to leverage its core brands, particularly in sports and news, to drive advertising revenue and viewership [31][36] - Tubi is positioned as a key part of the company's strategy, focusing on organic growth and enhancing user engagement [32][41] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the mixed advertising market but noted strong demand for sports and news advertising, with pricing above upfront levels [36][52] - The company is optimistic about the future of linear advertising, particularly in sports and news, despite challenges in the direct response advertising market [52] - The upcoming election cycle is expected to provide a boost to local station revenues due to increased political ad spending [12][40] Other Important Information - The company has repurchased $300 million in shares year-to-date, with a total of $4.9 billion repurchased since the buyback program began in 2019 [21][22] - Fox Corporation ended the quarter with approximately $3.8 billion in cash and $7.2 billion in debt [22] Q&A Session Summary Question: Evaluation of WWE renewal and impact on future sports rights negotiations - Management explained that the decision to pass on WWE renewal was based on insufficient advertising and retransmission revenue, indicating a disciplined approach to ROI [24][26] Question: Maximizing returns on college football rights and Tubi's value - Management acknowledged the high demand for college football advertising and emphasized the importance of building value through core brands, while Tubi's growth is seen as a key part of the strategy [29][31] Question: Outlook for political advertising and Tubi's long-term vision - Management provided a mixed outlook for the advertising market but noted strong demand in sports and news, with Tubi positioned for continued growth as a free AVOD service [35][41] Question: Update on affiliate renewal process and implications of Charter Disney renewal - Management reported successful affiliate renewals with rate increases, emphasizing the importance of maintaining premium content within the cable bundle [44][46] Question: Future of linear video advertising and direct response challenges - Management expressed confidence in the future of linear advertising, particularly in sports and news, while expecting improvements in direct response pricing in the coming quarters [52]
Fox(FOXA) - 2024 Q1 - Earnings Call Transcript