Earnings call transcript Q3 2023

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the FOX Corporation Third Quarter Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. [Operator Instructions] as a reminder, this conference is being recorded.

conference Chief the Gabrielle Relations turn Brown. now over Investor to Officer, I'll Ms. go Please ahead, Brown.

Gabrielle Brown

Kiley. you, XXXX earnings fiscal and third call. Thank morning, quarter Good welcome to our

and are on Officer; Operating Tomsic, Officer. Murdoch, call me Financial Steve Officer; today Chief Joining Executive Nallen, the and Chair Chief our Chief Executive John Lachlan

then give from questions the community. Steve First, remarks the take Lachlan will and most we'll on prepared some recent quarter, and investment

results. this call results financial may include statements regarding management's statements on Corporation's the operating what could is actual that forward-looking performance stated result FOX current and on identified company's as and note factors today's These from and in based filings. are SEC a Please expectations, certain call of differ

adjusted on as refer filings, in included our website. Additionally, Relations this call which call. will this in and section available of include financial including or to our we EBITDA certain measures it SEC of are measures, non-GAAP non-GAAP Reconciliations release are Investor earnings EBITDA, the our financial

And Lachlan. with call over to to pleased that, the turn I'm

Lachlan Murdoch

Gabby, and thanks, third brands this results. fiscal underpins the strong once content repeated you, operating the of our our to joining capability strategy deliver for and solid results of FOX's demonstrate quarter morning. again it us and focused the everyone, power Thank financial

record a a In the was growth Television revenue advertising revenue across LVII of XX% and top key solid revenue. businesses XX% advertising this at the approximately million our and grew by driver line the $XXX of gross performance on X% Broadcast our segment. advertising XX%, revenue quarter, remarkable in Network FOX generated we which our Bowl growth in led by growth the Underpinning Super affiliate was

watched across year delivered City of in Bowl extraordinary matchup pinnacle an program LVII FOX most U.S. for Super the million viewers FOX year's Kansas and history television the making Super Bowl and platforms, This Philadelphia between XXX Sports.

which Nations includes continues FOX XXXX League UEFA the NASCAR Baseball's the USFL, lineup second quarter, season, our advertising return the demand Major season the into programming finals fourth and The of for of of the of Next Sports be League reach Belmont strong start the of which of from and Bowl of the Level promises season a first FOX partnership. Leveraging next lead-in, Stakes. our Chef, the we big second lifestyle to a the Ramsay the launched Studio franchise Super for

top entertainment for new series new has drama Our World's the FOX Accused X one the series series the Forces: the Test. Special success over seasons. unscripted year found unscripted business also consecutive one number Toughest number new with and new in in debuted now and

our in one In combined programming key fact, of season the power places FOX the sports to network broadcast XX demo. date number to and XX entertainment amongst at

halo had the verticals local Our bedding, be In continues telecom. a categories, in at other are to including saw are by across the what strong sports higher effect calendar growth encouraged which market advertising retail many in and but including stations, entertainment, watchful local mixed auto, and restaurants advertising Television FOX we also categories, quarter. conditions,

time just over TBT of total fourth XX% marked the year-on-year. the and grown was in by Tubi by of April quarter, of gains this for of still stellar across as revenue Having where progress XXX% supported the third show engagement, performance having platform the over accelerating. acquisition time quarterly Tubi, nothing impressive longer-term revenue growth momentum XXX%. recently our our by the results X-year Tubi's Meanwhile, in is anniversary frame increased short while sustained quarter early view the and with And XX%

Tubi Just has as importantly, broader the asserted itself on landscape. brand the media

X% our first X fast Tubi's strong press led engagement of watched massive and Nielsen's the inclusion service making in has Gauge, the viewing most billion And spot total Bowl, Tubi the Super United viral coverage, TV to States. The impressions. in reached has in Tubi marking the almost Our and received growth minutes which had time now Tubi

announced FOX the help our digital at drive a strong properties. better of Media X Paul terrific an team thank coordinated last last all the Tubi before formalized brings touch month, years way over Tubi And formation Group, Farhad more the just entrepreneurial our We of us together we and shape and, with his growth. outstanding for continued points monetize leaves digital our to under Cheesbrough, in course, across he leadership to capabilities in which business

Media, CNN news quarter Channel watched day FOX day quarter. as lead FOX most cable while FOX total MSNBC most cable our peers. cable News the viewers retained and its leading ended leadership The News Business in prime position and time the combined. hours amongst during network watched network quarter business the we the the notably, CNBC business watched the in Network beating maintaining for the most At total ended and the as network, consecutive our Also third fourth market as

dispute divisive and settlement the resolve our We Dominion address with appeal acrimony briefly trial process. to and a me of made of multiyear dispute Systems. decision the Let the avoid a business this Voting

the of passion team, in in and The the their their shareholders. exceptional news way News decision or company our the settlement to brand. FOX We're unabashedly of and Our clearly the FOX our the journalism no journalistic the best for across stewardship company of News interest proud alters of quality our day. FOX's the standards highest of its commitment reporting

only one this news politics and war it one as network number such the by issues, number reporting The the events network day. be cable cable. in our world bring at all domestic of in the compelling the crisis the what to of home elections, border, every are our not journalists such behind as viewers coverage our us or makes news Ukraine Whether standards

most In respondents FOX trusted fact, in a their recent network poll, XX% news. chose News as of

you to industry not headwinds are future we as growth. the our Nonetheless, the to even we confident the given immune differentiation. reinforce balance are we base the focused us be while for economy, the strategy of brands as completely and our to well can broader our look So general strength the more we our strength on in And FOX ahead, look expect cost facing we areas of of sheet. are positioned and

We adjacencies long-term and management value new remain committed returning the thoughtful capital to business, and exciting creation through pursuit shareholders. the of our of shareholder to driving existing our

With that, I'll Steve the take you turn through the to details it over quarter. to of

Steven Tomsic

EBITDA third morning, record-breaking by with our Thanks, everyone. good Lachlan, Super bolstered and quarter a and Bowl growth, in LVII. again underlying revenue financials strong FOX delivered XX% X% growth fiscal

by of growth accelerating Our advertising led volume the revenues Super playoff increased at windows along NFL and the higher XX%, with Bowl, Tubi.

year $XX renewals associated of subscriber XX-month Super from run and over $XXX rights Quarterly X% by recent X% on continuing trailing pricing range. playoff million benefits with adjusted partially back offset increases Meanwhile, were expenses. NFL, production our these quarter affiliate million, partially grew revenues schedule. due by losses to was prior the revenue our the EBITDA higher up amortization offset This costs was the Bowl as higher sports to primarily and in

offset other loss prior to was per income by of $XX the fair the attributable with negative we share the $X.XX net per company's The stockholders or due reported period. to The million $XXX partially in News variance compared share $X.XX primarily associated litigation, value in Media FOX year was change with or net recognize million investments. to net of the the charges gain associated where

items, income adjusted X% of $X.XX noncore per growth Excluding these and $XXX adjusted with to year's growing share, against earnings $X.XX per share. million other was up last net and EPS strong $X.XX

revenues which, Television impressive Bowl Now advertising mentioned, in grew LVII, our generated revenue led in this increase starting revenue. XX% Lachlan Super a as an segments, turning the over XX% fueled to million with gross quarter. where $XXX growth with Television, by

wildcard the X less We timing additional regular also benefited playoff games, partially by offset season NFL game. of from divisional and X X X

advertising tailwinds market when Momentum FOX XX% on excluding operated unchanged at owned with to stations revenues as $XXX Super prior ratings in the impact our engagement the affiliated offset These affiliate back the by year and in conditions and growth were prime and revenues were quarter. from strong outpace the segment Bowl. pricing partially to Other stable local Network declines. revenues at subscriber increased Television base healthy remained across up mixed Tubi stations from Television X% million the remained fee continued lower advertising at the strong time and pricing. FOX and of up essentially

the EBITDA in costs certain by programming at the Super Expenses the volume a our segment Entertainment, of costs increase Television prior FOX absence at of to in related by million. scripted quarter was of lower up increased year driven million NFL The to partially including in $XX a offset and $XXX higher write-down expenses was quarter. the games. higher Bowl

line being in other partially FOX XX% were prior revenues. Classic revenues X% benefit were with networks. FOX in while growth at broadly in Tubi News of rate with Nation line offset At Cable investment the $XX the fee year. a of we Cable, flat, in the the World by prior $X.X revenues revenues EBITDA by direct offset to declines. by the softer revenues broadly net national were broadly at million on in higher billion impact saw marketplace generally subscription affiliate response Cable Our was sports led coming year quarter. subscriber of the Baseball down Cable due the up quarter Media, advertising with approximately

at due at the revenue reported last Cable with impacts compared of season these $XXX Baseball $XXX legal USFL was World million the and second costs at along our associated expenses News and FOX FOX Sports. higher with Media million EBITDA elevated segment the largely to year to the Classic

cash first foreshowed reflecting generated seasonal our our collecting normal share flow our perspective, fall the repurchase million on as approximately accelerated quarter, cost $XXX to additional to Now our in cycle payments March the half the concentrated remainder of advertising being in rights flow of continued our capital our with and $X.XX in an the sports free ASR with quarter turning coupled cash to last programming of we year. repurchase from billion months. expect a settle fiscal deployed revenues major transaction. we XX% we retired strong associated the billion From of quarter We where the of coming the buyback in $X call, share with activity shares in normal the and of

measures repurchased current outstanding we XX% $X.X debt. financial with now We of return remain program in our approximately $X.X by quarter meaningful committed in cash are billion where November These to the representing of billion, capital total fully the authorization, $X.X in position, utilizing buyback the billion launch our of $X cumulatively since strength we the our enabled where closed billion XXXX. shares and

commitment settlement, While flexibility investment. robust supports this the our returns pursue that balance continue Dominion maintain we as sheet capital value-accretive not does balance ongoing to to of include the as reported impact to a cash very well

turn Q&A. that, open with And me to let Gabby to it back

Gabrielle Brown

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

Operator

line [Operator the Instructions] MoffettNathanson. with We'll go to Robert of Fishman

Robert Fishman

related can settlement understand the I And Lachlan, will of if a is potential strategy can. more you that couple the have questions, there to you time risk? for of Carlson and then can programming advertising? related, changes future I prime anything after national better Dominion the whether Tucker discuss to in the departure opportunities lead then share settlement,

John or early just the cord-cutting And partners? confidence to and And acceleration your can from you can of have outpace growth then retrains after the Steve, on pricing you you expand levels better quarter, more insight from renewals? on in elevated for any affiliate if more economics whether seeing MVPD this just the get recent

Lachlan Murdoch

where start. about Thanks, questions. X don't I know Robert. I'll to talk the

from much, very hand questions. you. start -- you and suppose, good for thank but On to that hear Steve, -- I me and so to final the -- over, let So

to can prepared So And referred . the to some I but ongoing I'm Dominion. what say comments obviously any in of I can this regards my limited make in following I about litigation, about remarks.

allegations times, news We the acted by the reporting newsworthy as day. the events made aftermath the stated States United presidential of Look, a sitting lawyers included hotly-contested many of we his election. being organization we've and on the as President in of always a certainly

being our remain made been by States. confident protects of President first a merits have the position sitting and the the United organization's amendment allegations news of reporting and we a that in Now

the our severely trial rulings, of court point not and limited of example to allegations. to defenses pre-trial Delaware nature one the being being the able However, through newsworthy

with we of settle or best of X determined even for appeals. the and to years proceeding X the trial of that X-week its was and action course So instead potentially shareholders a company

trial, different likely events fundamentally case you and Smartmatic, newsworthy we be and to defend pending goes case case As a complement have year our of this with extremely of not Amendment calendar is it when know, full First a defenses that XXXX. Dominion than remain, until ready surrounding which all to we'll the

change FOX do. prime our that's and no And our continue to It's strategy. what regards in strategy always, adjusting as a As programming are we programming successful and our our there's we programming obviously News. at to lineup, strategy time, to

are of throughout demand schedule, We strength the prime pleased advertising time. our the but with particularly

Steve, want to to do you MVPD? talk the

Steven Tomsic

the Yes, sure, affiliate. on

pleased listen, we're negotiations are going. So Robert, the with our yes, way affiliate

You up FOX benchmarks roughly been we know new total establishing retrains had for that the Sports or this and successful the network in book Fox in Sports XX% pricing year, We've negotiations. renewal. in for affiliate and those generating

stays growth gains to renewal we X/X revenue at continue expect And feel company. confident If ongoing pretty during the touch with in subscribers. of of rate for affiliate so pricing fiscal the 'XX a another we under in book for and deliver attrition we level, subscriber sort XX% post that the fiscal our same due to of 'XX, can

Operator

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

Ben Swinburne

to just advertising. about want ask I

that's and you As least, your head demand Tubi environment head year Tubi rest as new an the look of the think us would kind as the describe a of the trying properties, with you I as what we going maybe upfront, into into into advertising advantage Media you wondering to for if it to give Group, guys this particularly the drive notice enough guys and is, pricing go at just for soft year to in across fall. matter to you does

at of the get to that's any guys of what Any around do FOX updated some improving are? FOX the on drivers in And direct whether you have here sort then wanted broader just relationship your on or weakness visibility that of the thoughts QX to on response that. sort News, News? volatility Just of

Lachlan Murdoch

a seeing bit advertising, of I a I'm we quieter our as demand Ben. us Robert to strong, Thanks, we the the across quiet sports on are slower sports think I'll -- you've it's acquired, programming detail. give market. market. -- national The question. Obviously, robust. us very platforms. the But not for our alluded we fall the air, sports for market until We're summer, in glad robust a in major that left look, very your softness period time seeing when market, on really for is a the key but is the enter always you marquee and is availability a pretty

sports. So we're very confident with

not the news, is a News issues, market In which a has response FOX stabilized. issue, issue, it's direct

deterioration we're not So response seeing direct any more in pricing.

that think So has oversupply platform ability we've or us revenue. that it's we been has issue, to. we really product feel pretty our confident in direct affected the much used stabilized, of News stabilization and our piece result achieve of but so again, that It's certainly not FOX forward. to in something premium pricing issue with a of that Again, But with good pretty it the a offers response. a a -- that's competitors going

news, It's which it seeing small, on than the of in cycle. earlier just unheard still to we've this before. political revenue it's point, ever to of we're is data sort Another seen early mention have thing but a small political

So for that again, fall as significant the cycle. the think the well and of we we more enter political part bodes

It then revenue to pretty want me is give would TBT. keeping a It's TBT And the not -- of great to your the even -- coming number. it's accelerating which with most strongly faster, -- it's is to is while But on metric. accelerating continues revenue models. doesn't grow Gabby Tubi, pace there. break

going to but driver a an the It's avails. us for our We're negotiations. being have strategic of part been Tubi forward. have central important not clearly forward we a So driver only upfront looking

down seeing with weakness auto such get and retail, where is different you we're continuing sports offset markets, more auto, The where wagering betting. results categories again, when revenue. local growth also restaurant kind growth this of to we're the seeing mixed other in verticals in base we're rebound category. and But of the the see to telecom, in. category, by entertainment and growth that's We're seeing category, in across as pleased Then strong its very

market a But and news, we're decent to fall strong a -- in local feel a for looking we're forward and Particularly summer the season. does looking sports -- our businesses. forward overall. So again, strong

all questions. I that's Ben. Thanks, the think

Operator

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

Phil Cusick

it A And legal the couple then your starting legal one. direction and tub, on like is the revenue, of bit. quick profit questions any On side, outgrowing still you little and are there sounds then a a TBT to from here? unleash expenses on but revenue

should here? how this? and still on then of get capital going should And on cash the about until between sit and Are now think we Or appreciate then? but to view? appropriate thoughts the billion, We one happen something leverage to from legal sort we any $X the return you stand-alone, next

Lachlan Murdoch

me apologies, Thanks of capital Phil. the the start very On much, question. with and -- Tubi let Steve, for management element

invest So just or the continue on a to It's levels. over last Tubi. it's investing us. Tubi, the at been We for we're think We've opportunity same tremendous so. going year in to

As has fact to of sort Nielsen's -- continued the hit, us X% over Gauge is growth and there. U.S. I in mentioned that have comments, now I we're tremendous see of television benchmark viewing now a the my

library team but So last alone. an a last before think becoming U.S. we the with with titles nearly not not really in of years personalized focus of sort there is driving marketer's because done our the in more obviously, more Tubi's incredible opportunity. years aspect, the has experience, job sort is from best-in-class of that the building tremendous but a really sort a X Tubi the involvement, only an central AVOD XX,XXX consumer over -- it aspect or and X from of a And usage of part had the and this over and

that's way. Netflix times size put context, X now viewing that more being really a And that in of the library again, better to in to and able the efficient, monetize

So -- would of And invest we're and say an for results we're the I to the are us think in. area appropriate performance tb going forward, incredibly it's optimistic. pleased we and with continue to incredibly

look, the capital by on -- of it, just a On over $X authorization. I'll on sort -- Steve buyback I'll have it just to saying, management. start But turn on billion the we

about I $X.X of spent think that. we billion

of expect So has of all. litigation impact any of shareholders this We fully Steve. time math's remaining And $X.X our the morning, all no incorrect my through a that we've authorization. capital -- buyback. the on back deploy to billion to Yes, that at

Steven Tomsic

Thanks, Lachlan.

So to two Phil, in last legal have preparation been back on for go legal over orthreeX the Obviously, just the pretrial depositions quarters costs, we've been costs Dominion. elevated. and deep

or So billion, on just the we've the on listen, which Lachlan's leverage leverage quarters. got we a -- as up to I'd we about to But refinance. subside a expect maturity in call make couple whether we is the to repay debt are over $X.X of the pick have, that next then And at the January, feels to right moment. point, where we'll

position cash our is strong. And

inorganic be us about company. of or saying we've invest as flexibility of the as balanced take well we'll whatever our continue with in now to And so the a been any since buyback pacing now to can the of years business over as last future or years go leaving anticipate to has it we with opportunities, formation the continue couple we but few would happens litigation, as been advantage it

Operator

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

John Hodulik

you viewership to how how theme, strike? say, success sports the USFL? remains the sports strong, a the on appetite what I'd the writer could about tell then all, given to entertainment First Second, where across of you back of And guys rights, mean sort be protracted gauge programming board. of getting us fill weighting I you anything months? would the does Maybe additional position sports the could versus for in your especially relative summer Great.

Lachlan Murdoch

with pleased fans. Thanks, the on the both of start ticket very it's USFL, a and engagement with just season. and also, ground its sales ratings, its with the And performance television games, John. frankly, Look, We're quality the it. it's second performance on -- still pleased the football We're ratings. it's with of

early with today. it but happy we -- So couldn't tracking be more how days, it's with

they look appropriate In sports efficient terms a to as our rights of get they managing portfolio as sports at and responsible come look at additional rights. We we they that across make We're are sports paying for constantly renewed we look them for just up. rights, amount And us those and also we're sure them. of rights. that

a what we we're adjusting, of discipline So to acquire constantly of. or do think, in but real we I it with, would rights terms dispose commitment

expect a that it's it's moving dramatic -- always all at wouldn't in I anything area. feast, a moving but So

was strike. What the question? last The writer

you. thank So

the sports for that for also are writer On we we they're sort you as the audience strike. will the scripted with on television the have writer but well to remember hours X mixture are of strike, us, and when by entertainment, of strike. only both strategic entertainment in a of night. We think content. priorities writer those areas program to that watching affected not pivot positioned That's strengths X unscripted at look, I are And think our -- news, well, and a these categories. In in

scheduling this us. it's to descriptive financial not writer something we with well positioned of There'll some So content, a very on be the some significant not be at but with impact that'll strike really affected changes by that feel all. have there

Operator

the will Jessica question America. line of Bank that And Reif Ehrlich last come of with from

Jessica Reif Ehrlich

unscripted overly dependent wanted -- writers for Lachlan's not unscripted, you're maybe I I entertainment. last on and overly to on follow-up mean, you're on and just live that dependent live not given point you're the

the then but like, So also the mean, TV time? in and about say in people the about just the you over given decline than universe. is, transitioning see you for different your be position FOX very sports upfront, I paid macro, talk you most given Can given that, market you News choppy, a can seem to also outlook talk people, most and how

Lachlan Murdoch

the on agree I strike. look, you writer with So

network frankly, on news, unscripted us a scripted healthy and in on us, live the for think sports, network and puts balance tremendous I the position. of content sort focus live, a of live our

present timing upfronts creates the exact in it I'm hard -- what strike, in not if I to week obviously the you're think what's and news word with you're I sport. the entertainment, only an right? It's of? of some next schedule, the it's hesitancy

as us think mentioned be very going well in forward. I strength of the this So Tubi and Tubi before And well. the upfront I of will course, going including it center presentations, not our all also our front negotiations in upfront. but positions of upfront that's, And certainly as in to

So, we feel very well positioned. It's we're we early with think as the possibly, I for. upfront, could, you these negotiations in know, will take hope time, but position best a

In know, universe sort cable any terms plan terms of know, or kind forward you and news to and do the, the you direct-to-consumer in distribution of of so going of what alternative we strategy. sport, a with

I before, know, we ready we've you You to know, said think as are go.

place. We the technology in have

for of I prudent. we to continue have know, that the moment deem teams and and or go the the, know, people you think out drive you But, we the pricing the to industry when in we necessary universes. MVPD place leading DXC DMVPD

before, mentioned pricing it's Steve our been, not has theoretical. this

Our forward. contracts, pricing set in going now has been

products for -- our a be established technology that third, third ultimately scaled brand business this of have year. any will our price market fiscal very you, deliver to business we of brands. deals the we've The, third news speaking when So these next best and brands, fiscal sit -- where content this and used And and the is another pleased the part of for year, volume a are with brand, right, regardless the where and when that platform, when the platform. you by best year, of just that have, and we what sports we're and you distribution have

the will But platforms in or it our as one to eventually, it's distribution technologies, those DXC a hard component see any come not strategy. and broader our we across platforms. sports of those of on see and having just certainly news so And future, it's

Jessica, So, we well feel pretty positioned,

Gabrielle Brown

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

Operator

ladies your teleconference. that does Executive participation Thank for for conference call ATT And today. and conclude using for gentlemen, and your you

You may now disconnect.

Fox (FOX) 9 May 232023 Q3 Earnings call transcript