Fox Corporation Class A ((FOXA)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Fox Corporation’s recent earnings call painted a picture of strong financial performance, underscored by record revenue growth and impressive gains in advertising revenue. The call highlighted growth in viewership and revenue, particularly from political and sports events, despite facing challenges like the Los Angeles wildfires, subscriber declines, and the discontinuation of the Venu venture. Overall, the sentiment was positive, reflecting achievements in revenue and audience growth, along with responsible digital investment reductions.
Record Revenue Growth
Fox Corporation achieved remarkable revenue growth, with a 20% increase that pushed revenues to just over $5 billion. This growth was primarily driven by a robust increase in both affiliate and advertising revenues.
EBITDA Surge
Fox Corporation’s EBITDA more than doubled compared to the previous year, setting a second-quarter record of $781 million, which represents an impressive 123% increase.
Strong Political and Sports Advertising
The company saw a 21% rise in advertising revenue, driven by record political ad spending and strong pricing for sports events, including the NFL postseason and Major League Baseball.
Tubi’s Advertising Revenue Growth
Tubi, a key asset for Fox, experienced a significant 31% increase in advertising revenue, contributing substantially to the company’s overall advertising growth.
Fox News Audience and Advertising Growth
Fox News reported a 40% increase in its total day audience and a 45% growth in PrimeTime viewership. The advertising revenue also grew, supported by over 100 new national clients.
Television Segment Revenue Increase
The Television segment reported a 16% revenue growth, with advertising revenues increasing by 19%, further solidifying its strong market position.
Reduced Digital Investment
The company managed to cut digital investment by $40 million, with improved EBITDA at Tubi accounting for half of this reduction.
Capital Return to Shareholders
Fox Corporation announced a 27% per share semiannual dividend and has returned approximately $7.9 billion to shareholders since its inception.
Impact of Los Angeles Wildfires
The wildfires in Los Angeles had a profound impact on the community and Fox’s staff, necessitating significant efforts for long-term recovery.
Subscriber Decline
The cable segment experienced a net subscriber decline of about 7%, although this was an improvement compared to previous quarters.
Discontinuation of Venu
Fox decided against continuing with Venu, a joint sports streaming venture, due to legal distractions, opting instead to focus on other strategic areas.
Free Cash Flow Deficit
The company recorded a free cash flow deficit of $436 million, attributed to the seasonality of working capital cycles.
Forward-Looking Guidance
Fox Corporation’s forward-looking guidance remains optimistic, with a focus on strategic initiatives aimed at expanding audience engagement and capturing valuable data. The launch of Tubi’s first-ever Super Bowl Live Stream is expected to enhance audience interaction. The company also reaffirmed its commitment to shareholder value through a $550 million share buyback and a substantial increase in dividends.
In summary, Fox Corporation’s earnings call conveyed a positive outlook with strong financial results and strategic initiatives set to drive future growth. Despite certain challenges, the company’s focus on revenue growth, audience expansion, and shareholder returns signals a promising trajectory.
