FOXA - Earnings call 1 2023

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the FOX Corporation First Quarter Fiscal Year 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Ms. ahead, go Please Brown.

Gabrielle Brown

for reference thank fiscal our us, in across for on dad happy first trying an by footing our in that's a I growth joke and by fact, way, momentum but morning X% led nothing household. the affiliate a has sports we at there's in has Fiscal our Halloween, us started Financially, line X% to delivered was scary Halloween X% of think discuss quarter impressive growth in results. to revenues. a by off a started supported you increase Gabby, and my joke, joining in 'XX and at Actually, revenue in viewership all these TUBI. this revenues, everyone. and or top 'XX Thanks, called results growth healthy -- solid news, and off platforms advertising

in quarter results the pricing advertising FOX. revenue local Our at to standout where by in Sports, News stations revenues almost pressure, and of industry-wide These strong FOX XX%. and at under revenues be a to the first political have appear great advertising FOX growth posted quarter growth record quarter digital are was been driven for

of lot recognize is market looking as a we last evolves. However, that advertising call. broader there to earnings national advertising more time of headwinds Yes, the around commentary our is the compared the macro environment fluid

our However, impact the uniform macro not verticals. is across

entertainment not to that does observed have over-index scatter the some marketplace, entertainment. we softness remember linear While in network FOX

digital more is has there by TUBI. nominal and impact been So delivered than the offset by strength us entertainment any to

record underscore sports the political local seeing of economic news a over headwinds, generated revenues revenue flight across and led quality dynamics streaming sports we pharmaceutical, live by despite September portfolios, quarter. focus At of news. our with strength the our content categories. linear the live stations, our continued These and the and importance to Additionally, X/X are advertising our on restaurant we by generated for and

revenues excluding political go quarter. across the year stations, the Meanwhile, in sales I have have still advertising our given stations very first election local too the stable strong, a will still uncertainty our already to combination market market Georgia early impact day, the and quarter-to-date And Second been beat can we quarter. It's runoffs. XXXX record of how have confirm ballot week races gauge before also the at on with issues markets. the base at to of local-based the December were an macro in much local fiscal

encouraged advertiser. we we are by continued health the recognize wagering are automotive dynamics and that as seeing government category, the public are positive impacting growth but such sectors But in industry-specific

of business, our of round first side distribution have the multiyear On completed affiliate we our renewal cycle. the

our So far, we value and recognizes deliver that for they customers. the results are pleased of consistent our are expectations, as market with their brands the the

highest hours fiscal first cable and with quarter News, hours Turning quarter television had on all viewed prime our growth watched. FOX third making in quarter almost NBC engagement the performance, of standout the the in FOX for finishing year, subscribers watched last stellar business units. fiscal total and #X first CBS. XX% and weekday FOX to ever over subscription a north our Nation only most as and XX% in turned network channel total quarter behind for another of Nation's up

that great XX.X of got viewers, pleased the million calendar college a off out viewers FOX million XXXX Alabama, also exciting or America's The for new over very calendar game. to is we're first the start, big start season off the of of this game a football with has had very has it report exciting is ahead on season's year. fall. a XX The Sports FOX NFL last and to week Texas outstanding up X% nearly to averaging an and

the this Saturday And that Fox #X our postseason, in in window the over coverage world surprise big XX% series last remains be baseball's year. culminates viewership primary college no up It's with across and where FOX continues football the for FOX's news to with October home started throughout week.

a barracking always, series. for As X game we're tight

them You men's the will in Thanksgiving, between later on Friday, on of we of Game State X America's Sunday month the Thanksgiving biggest an Giants when on year's Saturday array weekend, full sports Cup the display of many afternoon week and of have present know assembled that is this be and will during and, the will a well England this quite U.S. the Cowboys afternoon the the World soccer Michigan which marquee course, team and rights of matchups, on Chiefs. vs Ohio host Rams on versus FOX play of

TUBI extraordinary terrific with slate holiday breathtaking nicely year. last over revenue as Bowl us XX% broadcast to prepare quarter Elsewhere, This almost February. be story reaccelerating will game. weekend first the It a at is in we sets Super to up LVII growth

a XX%. a This way. the the looks pacing across which that December TUBI time, marks currently XX%. continuation the quarter ahead for up was TUBI revenue the Driving KPIs, revenue be surpassed total of revenue is major to September first Entertainment momentum all that advertising And nearly viewing at revenue rate over TUBI time by in quarter generated growth meaningful FOX at particularly has in with strength of

X.X we engagement ever monetization Collier investment strategy In that with our with indicating saw nicely. At impressive reaching Fox fact, is and hours. is and new in moving working operational challenges. focus progress billion Entertainment, last to TUBI's changes audience growing this month highest was on TUBI's viewership some quarterly Charlie TBT

tremendous will We to Rob into of those that of steward a will are happy entertainment view stepped Entertainment has be and businesses. Rob that who role my CEO FOX the Wade our know share he

September Our a brands. quarter for promises fiscal start. leadership the strength FOX. year quite once highlight again what our year a started getting just we of banner are is results off And to The to on be

trends across its And continue encouraged by and uncertainty. one remains and returns the differentiated FOX digital mindful with months investments. sheet leverage, to navigate remains how balance are our potential the while during ahead, we media of When We the positioned paired any the be environment peers. and a to on early low amongst macroeconomic the FOX our the portfolio evolves strong operating outperform through well story

me Corporation. the Finally, this and month on News of made earlier FOX let a comment combination announcement potential regarding

special letters received from FOX Corporation potential father, a following committees Murdoch made been has News Rupert and Trust. combination explore public, As both to and my the formed Murdoch have separate Family

a will vote combination of by nonaffiliated a proceed, For majority to shareholders of company. each it the committees the and transaction the both special minority of approval supportive need

be company time, The at there that special such committee can engage any no has certainty the this and a determination in transaction. will not made

Given the the quarter. a work committees, this the any in position transaction time. the take on financial importance of proposed take And of the at I'm highlights now to the questions you through special of will not Steve

Steven Tomsic

good and Thanks, everyone. Lachlan, morning,

our demand revenues, line our for meaningful we properties company and revenue momentum start TUBI. have As news total in advertising continue in to of top at leading to revenue sports XXXX, where quarter, X% delivering growth Lachlan This the growth and was X%. reacceleration solid healthy made led scatter generated we by fiscal a mentioned, see

from stations. quarter owned advertising record We political television for also benefited our a revenues and fiscal first at operated

our and as by Notably, growth affiliate and quarter billion, initiatives FOX $X.XX significant was continued X%. in expenses was XX-month X% by trailing able Sports. fee up increased the partially running higher renewals any losses impacting benefit our offset the revenue at amortization we EBITDA rights to of at investment approximately digital adjusted drive led are X% without revenue growth subscriber Quarterly

per the in Net or income impacted or of investment in company's Once attributable the of share Qatar, recognize fair share the million period. net. was to prior which compared stockholders we again, in $XXX reported value this per in other to by change the $XXX $X.XX $X.XX million

of rate assets to tax effective state our our associated slightly primarily due in the tax deferred with quarter net taxes. the Additionally, in reduction a higher remeasurement was

had the This cash our quarter. impact in no taxes on

year's up last items, impact was Excluding this over and EPS $X.XX, adjusted other noncore $X.XX. X%

cable starting advertising our Turning FOX drive X% News channel. news programming. network continue market now at our Cable as leadership to revenues to were up in with linear the segments, pricing gains

year's This as was well affiliate the lower quarter. news at by Copa digital offset impact the from at Cup last and America benefited Concacaf as our revenues Cable the partially effects were revenues properties prior programmatic cable with consistent our revenues where tournaments. fee current period networks scheduling in national sports Gold of the

distribution next the we days have previously, are our As in early signaled renewal cycle. we of

higher $XXX to EBITDA to segment. the the us Media. continue other with pleased reported in initially breaking fiscal News year prior period of renewals, half at our impact the the year these are our expect take see quarter, compared our of Cable of subscription included Cable increased was costs Nation and in we million the segment effect timing elevated FOX benefits revenues. the FOX back towards concentrated outcomes to and $XXX investments the primarily million in television to due X% and of earliest of the and digital revenues We

At by increase in advertising X% an revenues. led XX% television, delivered revenue growth, we

additional network quarter while continued for Our benefited offset FOX revenues, in strength a Fox and softer September record MLB broadcast television of station ratings. saw political partially Sports, by advertising pricing from the

TUBI, offset quarter, growth of of of X% were than on $XXX offset of sequential we increase including renewal, reflecting revenues by lower marketing Notably, at XX% segment reacceleration affiliate growth typical seasonal increase timing of impact marquee revenues saw view FOX our was healthy stable fee where saw more FOX-affiliated programming X% up rights fees the of the in XX% affiliate and partially increased XX% the revenues EBITDA all acquisitions, subscriber was Television CPMs. a the any Sports quarter, million. in time Other costs from in declines. our the at by we stations MLB the TMZ the of Entertainment. impact total with across impact at a expenses partially Box. the up and up Bento as Fox This Television in FOX back MarVista offset of primarily approximately in our and to deliveries

monetization and in in confidence We growth at making long-term asset. TUBI audience both progress are this the our underscores strong value which of clearly

the Television worth segment in EBITDA incorporates investment broadly, it we the that So TUBI. million EBITDA $XX approximately at more is an FOX delivered the noting in and quarter

receivables, to cash in rights by characterized reversed is cash first both a where the the of of flow quarter. our second half for sports generated where we the cycle, year. which of advertising-related fiscal our working half concentration of $XXX flow, Consistent year the seasonality the turning of capital buildup with our fiscal free million Now of of and payments in

From a launch remain a year-to-date, program repurchased authorization via the buyback capital buyback approximately outstanding repurchased $XXX our $X.X utilizing our now in deployment share have the committed of since to XXXX. shares further We we full perspective, cumulatively XX% representing $X fiscal Having of billion, billion. our total buyback program. million of

placed Finally, ended debt. turn we And where strongest over our now program with back the events balance and robust sheet I'm is cash come, approximately quarter to Fox in industry, with navigate underway a shareholders. the uncertainty Gabby. well in is maintain still any billion the and we sheet, with happy to strong to macro to showcase uniquely and continue that, of with a in value to very call the balance deliver coupled Fiscal to XXXX billion $X.X $X

Gabrielle Brown

Thank to questions you, community. investment Steve. take from happy And now we'll be the

Operator

like question-and-answer America will and That Instructions] Ladies queue. line Jessica you. gentlemen, the Ehrlich [Operator Thank of come to the Bank of emphasize Reif functionality for I'd of from Securities. the

Jessica Reif Cohen

question. One

Okay.

impacts me about using Let I sheet about out it's you you balance you in do the what incredibly just Lachlan, and you and Can the on is then little combination? affiliate why obviously, the but cable the so reliance both about on this. maybe And say now, side? talk you universe. the the -- talk sheet about can pay-TV that discussions, first, you bit your And want Well, balance there's. about there, think strong, do How are bundle? retrans maybe And about hedging from you're don't talk on so but how News to decline balance sheets? pay-TV think heard how thinking broadcast Corp, a your is those the benefits think your

Lachlan Murdoch

But out, called that, And seeing talk recent we've any very universe, you remiss the about. that a thank pay-TV X% a the of because much. appreciate thank on getting decline seen your decline not know questions, about lot to keeping I Steve it's I we're questions there's in as number worse. of a Jessica, decline most short, just the of tough sort you.

was year. it So X%, really looks last this seen news it's in to to in and to particularly time but down sport, our continuing we've essential at X% focus last the which is invest stabilized tick to our have year obviously This bundle. this really X%. year, pay-television are brands, And

in general place that and a you can type whereas entertainment of News So SVOD I get one position, at there's cable think Sports. get people streaming a as we're are you can to risk FOX to get not to only place FOX channels, and lot content, of only going which one that the services there's more

their and invest pay-television for for So our of distributors be continue essential strategy to our bundles. all is to

our And massive I in Cable it's X-year at 'XX, up next the renewals. 'XX, we've fiscal is XX%. also play our through fiscal our revenue negotiation. cycle. fact, out a think, We're distribution segment cycle, in XX% aggregate up still XX% year, it's it's beginning and seen of Television And renegotiation, And fiscal that for of in renewal

years, we renew cable our So refresh agreements. and extend and completely next the over X distribution almost

are because the with bring our outcome underway well renewals. our and And the say I are value bundle. what do to to the the We round extremely distribution first those of completed on we we to -- first renewals have commitment those the with bundle partners pleased having of

and gone expectation split them. and have revenue Television met cable The segment we've very shift every will affiliate well have affiliate renewals revenue for those had So between slightly.

I with affiliate a think terms the cable television at you'll distributors. revenue. that's grow just agreements affiliate the how those see the segment pace in faster we And of than negotiate

me corporation. about process know well, In discuss don't they're recombination with news I having independent them. It's the conversations I can with actually independent it's for going to talk it. terms through committees, the of and conversation, the can't a really an potential not nor or I discuss

that, about So Jessica. sorry

Operator

to the Robert go MoffettNathanson. of We'll line Fishman with

Robert Fishman

as the sports to? can can already the you about, Maybe in focus having alluded to there smaller the cable importance a and broadly, where media Or just you negotiations about portfolio just assets to more discuss are talk network especially scale on advantages that news you thinking industry? started of you core the when

Lachlan Murdoch

media is acquisitions. focused, getting to important Look, few we've seen be over years, I our think scale has peers right? and last the bigger what And our amongst scale peers through and mergers

And scale, lens, many ways. think so I flexibility in

grow to So continue we business. our

We continue look M&A it. be and how at very disciplined in at to look be we

also of deal next we particularly think, in to in emerge that I we when importance of be how over important. scale, flexible the at will do will couple the having marketplace opportunities, look years with be the them But scale the

Operator

come Morgan will from Stanley. that of Ben And the Swinburne of line

Benjamin Swinburne

earnings, around weakness particularly TUBI. We've only to during digital you quarter bit a into accelerating of revenue the December the there? a Can about revenue your in be broadly. drivers with lot advertising about little talk may seen guys You ones growth -- the advertising talk comments

your isn't stocks on little is I got I sitting free earning, what TVT one aspects $X you a that yield if QX? know can in. this seeing in sneak XX%-plus what and the you're cash allocation, advertisers And but other capital mentioned I X%. don't or and more come to just to offering strong a to Just there back are the know, buyback surprised I billion growth accelerating? you're I'm X% explains quarter guess TUBI like into cash

opportunity flow a the attractive of pretty given sort the the company's of increase like It to cash profile seems pace. position

you for have in you love you are your add just means of just what to anything if itself to want at there. the Steve, know, thoughts waiting or to don't resolve you aggressive conservative. I'd more maybe looking be more terms to I want to guys get environment So maybe hear

Lachlan Murdoch

about allocation. the Steve, capital and can the you and I'll with start TUBI talk obviously buyback

TUBI. to So start with

on If this best-in-class in entirely they've start a built you and several business team is as They're FOX, had there head business. AVOD, AVOD now a a the a combined and look have TUBI -- that's tech tech both but focused the proven also ad service, years what really at and stack with track advertising sales an record. a having team superior really with team established ad from and

that are taking the sports across off. executing library, States It You and that's tremendous couple that entertainment. platform opportunities the with absolutely available Xx we the provides news largest United and a by which, library way, titles, in cross-platform is with Netflix sort of XX,XXX really on the the

monetization We of really are as amount was through. it CPM, the of at XX%, tremendous pretty TUBI. rates TBT up sort steady a that our drives hold flows

-- it's So has pricing -- it's not but pricing. pricing it's not really increased, is accelerating. that's That

advertisers It's platform. clients opportunities and time on that's really TBT our offering the the more

we the So we about excited are tremendously sit as future TUBI here today.

Steven Tomsic

Ben, Steve. it's

I capital the the to more in management. conservative manage measured it's to itself on the environment nature sheet allocation, balance being But way be obviously on our with Just lends balance think the sheet. we

If you and Fox capital has been look establishment we've done directed. what of since at the where

sent shareholders, billion M&A, plus We've which billion in $X $X.X billion. at sits dividends below it the billion the back buybacks of us $X to $X.X versus sits over M&A net form in whether be

we so conservative haven't measured being feel is to at has I had place be. the the uses for more capital but right to shareholders return the far bias like a So we think other been to in where moment right it, touch alternative

Operator

Phil Cusick go to of the line We'll of JPMorgan.

Philip Cusick

know I you're in TUBI First, that you number maybe the over Those time? does today but helpful. looks what a to mode, evolve on discuss to positive potential a get what in it are business that EBITDA from to take of and investment Can points. the follow-up like data it specifically

negotiation on flutter timing of And there? the any second, sort then or update

Lachlan Murdoch

compared TUBI to a So it's to what and TUBI. modest investment think on market been a peers investment quarters, in opportunity are TUBI, there we really It's SVOD investment in think the absolutely modest but lead the we've opportunity this invest to their sage and our for prudent because the I taking. a decision platform, investing has past in the made profitable AVOD is in very to use to proactive, compared

to win absolutely We are but and of market, is above our the lead to cement AVOD that goal. leading in the sort market

in into the term invest we'll TUBI. to So short to medium continue

I think free will in where a -- service position a TUBI and frankly, feel. economic of potential are any having I particularly be in think is an great any environment sort households, stress economic there to benefit in from chills people that might from

the so it's to It's lead the best. their right our extend And right time and time flutter.

We once decision a the handed we we imminently. position, it. And decision that expect in and have an be we expect assess expect but by we'll flutter imminent our arbitration down, pleased to

Operator

Wells of come will line That Cahall of the Fargo. from Steven

Steven Cahall

I approve on majority itself, a know but not shareholders that need you're of commenting merger it. mentioned you I independent the think to

So going and are between provided with wondering at to I be shareholders information incremental as what now if some comment will I to guess, vote. was whether you least required could be shareholder a

And opinion, business. ask great is the in I Fox reason my that think I is a

different wondering just great want I why shareholders business think to mix a So a are they business. with

what's comment specifically to on Thank that you. envision help So not everybody if look education I like, at would you going think on. going but the deal, could that what investor net is least

Lachlan Murdoch

Thank much. you very

if we like. I As be there is what deal or deal, deal know a that there don't comment will really look it if because mentioned, would on a can't I

that comment to to it's So doesn't today. -- anything anything exist impossible hard comment I or that on

be see sorry have what you, to of committees wait processes. special their patient and and -- what like the discussions the outcome we, [ So to are ]

Gabrielle Brown

have question. for we Operator, more one time

Operator

Hodulik UBS. come And from that of the will John line of

John Hodulik

you investment first, we Lach, TBT driving XX% a $XX on of mean, that data. TUBI the million the Maybe I then forward? in of a the there? is may covered is that in but couple have increase guidance follow-ups this, is flattish first And saw not what imagine good content And and like quarter, would quarter. -- the I a constitute change rate in -- the in I digital doesn't mean, is going that that dilution sort for that that's run

you And seeing there. then about wondering ad especially a we into of sources say ad market, market. of what sort mean, head the the of of as there's I weakness market? quarter number lastly, just to just the in TV December that anything been because in back you're part local ex-political I'm could the again, trends,

Lachlan Murdoch

about So then the ad political let with me and start I'll run and local back market as come on TUBI well. and ex Steve talk rate, political the to can

TUBI been proposition It's growth the really previous has we've on calls, across on widespread. look, across TBT all pretty core video demand. been TUBI's So TUBI, the is as genres. discussed

and movies on their it's So their demand. series television

I channels. across combination fast are it's last but entertainment their over think, have has Steve, the They really the also this so, rapidly, both but channels are and a run now do is overall are the channels, worked over But platform. growing Those percentage hard news sports a to or year TBT. XXX of about been which want -- of entire launching, well fast general pleasing very fast you doing talk rate? the is smaller but growth are that

Steven Tomsic

year, in TUBI for across year the would terms TUBI, sort XX -- investment Just relatively year anticipate the case was in -- EBITDA EBITDA $XX the be whole the company. expect half. of second we the absolute of I more run where across we this the rate had the million for the XXXs last same in quarter. so deficit than half Last of deficit saw to first I year, year that this low

see portfolio that remains is we'll But the grow, that line listen, develop, expectations. the business our to of is. in exceeding Tubi as expect you blockchain, we digital pattern we dilution relatively see to that intact around as that. rest see company, the of whether continue whether consistent top -- as guidance I so our which with across investments listen, Tubi the doesn't that And to Nation, in change a continue -- of should we invest don't it terms And sort includes

Lachlan Murdoch

you And like the the of local outs sort it's as then where more the some market. the of look interesting market, categories and advertising at softness of some fluidity or on -- have sort in ins the might or the in market

up advertising same the seeing picked national You're in in it being category.

that and strong were So in sectors are national. now local in strong

of there. and roundabouts swings sort some there's So

the quality. But a brands trend and really our flight to around and Particularly is overall, news sports platforms.

So very a nationally, I pharmaceutical, particularly I called even a quick restaurants more well. category think particularly strong is very and restaurants, doing out pizza service

is I services know and of money spending lot the household more a my themselves are our is working advertising media, really and marketing streaming, SVOD on particularly as competitive. They're platforms. more

soft the in in but that On we're lot seeing of spend. more up and in softness that's softness we're wages, side, a sort of national of picking Again, betting local wagering. wagering a

On couple first a there in local services, seen it health the lot very remains year, significantly Again, is government now. very messaging still right? less as automotive from we've automotive was a governments. COVID-XX time And So strong. time as health obviously, is year last that's advertising years of of this round. advertising this Locally, that this strong

The elsewhere record other any year. to made which general political up more see. very is good services, And locally category by is this strong softness is than that's some

certainly seeing a our that XX through those of races tremendous to particularly there we I station spending remember tremendous in markets. Senate and amount we're flow the markets is in Georgia, Pennsylvania, think of out local one fall our have political you and footprint. hard and markets, have And a XX Arizona, are

I gubernatorial think, XX gubernatorial have, races But races, XX year, we in this also markets. our

time, busy incredibly and we'll flow an revenues. political in through see it's certainly it So our

Gabrielle Brown

call, out you give again Thank for Carey At Dan call. of this if point, are time. have me any or But questions, once you please today's a joining we everyone. further

Operator

conclude that for Executive conference Thank AT&T Teleconference. your you today. And gentlemen, ladies using and for does

now disconnect. may You

Fox (FOX) 1 Nov 222023 Q1 Earnings call transcript