Fox(FOX) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total company advertising revenue grew 65% in the quarter, driven by a record-breaking Super Bowl generating over $800 million in gross advertising revenue [6][17] - Total revenue increased by 27%, with record free cash flow achieved [17] - Adjusted EBITDA was$ 856 million, down from $891 million in the prior year quarter, primarily due to higher expenses [18] - Net income attributable to Fox stockholders was$ 346 million, or $0.75 per share, compared to$ 666 million, or $1.40 per share in the prior year [18] Business Line Data and Key Metrics Changes - Cable Network Programming segment revenue grew 11%, with advertising revenues up 26% due to strong Fox News ratings [19] - Television segment revenue increased by 40%, with advertising revenues up 77%, largely due to the Super Bowl [20] - Tubi's revenue grew 35% year on year, with total viewing time up 24% year over year in April [12][41] Market Data and Key Metrics Changes - Fox News finished the quarter as the most-watched cable network, with total day audience growth of 48% and demo growth of 58% [9] - Fox Sports ranked as the industry leader in live sports event viewership, accumulating 3.3 billion hours of viewing, 17% better than the closest competitor [11] - Digital consumption trends showed Fox News digital grew page views by 18% year on year, reaching a record 11 billion views [10] Company Strategy and Development Direction - The company is focused on launching a direct-to-consumer service named Fox One, targeting the cordless market [15][66] - Fox aims to leverage its strong assets in live sports and news programming to attract advertisers [7][8] - The company plans to continue investing in Tubi and its digital properties while maintaining a strong balance sheet [41][76] Management Comments on Operating Environment and Future Outlook - Management noted no impact from the macro environment on business performance, with strong ratings and engagement [7] - The company is optimistic about the upcoming fiscal year, despite the absence of political advertising in fiscal 2026 [30] - Management highlighted the importance of maintaining traditional cable distribution while launching new digital services [52] Other Important Information - The company repurchased$ 800 million in shares, bringing the total repurchased to $6.4 billion since the buyback program began [22] - The company ended the quarter with approximately$ 4.8 billion in cash and $7.2 billion in debt [22] Q&A Session All Questions and Answers Question: Inquiry about FOX One pricing and addressable market - Management indicated that pricing for FOX One will be in line with wholesale pricing, targeting the cordless market and avoiding traditional cable subscribers [27][28] Question: Update on demand from brand advertisers on Fox News - Over 200 new advertisers have been added since the election, with direct response advertising up over 30% and scatter pricing up over 50% [34][36] Question: Path to profitability for Tubi and balance sheet considerations - Tubi's revenue improved by 35% with total viewing time up 18%, and the company plans to continue investing in Tubi while maintaining a strong balance sheet [41][44] Question: Strategy around direct-to-consumer and affiliate revenue growth - The company remains supportive of traditional cable distribution while launching a D2C service targeting cord-nevers, with a focus on maintaining healthy affiliate relationships [52][55] Question: Update on digital investments and Disney's plans for the Fox Lot - Digital investments are expected to decrease slightly, and Disney will vacate office space on the Fox Lot, which is expected to be filled easily due to high demand [76][78]