Q1 2025 Fox Corp Earnings Call

November 4, 2024

[music].

Ladies and gentlemen, thank you for standing by woke up to the Fox Corporation first quarter fiscal year 'twenty to 'twenty five earnings conference call.

At this time all participants are in listen only mode. Later, we will conduct a question and answer session.

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

Thank you operator, and we apologize for the technical difficulties, but good morning, and welcome to our fiscal 2025 first quarter earnings call. Joining me on the call today are Lachlan Murdoch Executive Chair and Chief Executive Officer, John Nolan Chief operating Officer.

Steve <unk>, our Chief Financial Officer, first Lachlan and Steve will give some prepared remarks on the most recent quarter and then we'll take questions from the investment community.

Please note that this call may include forward looking statements regarding Fox Corporation's financial performance and operating results.

Speaker Change: These statements are based on management's current expectation and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company S E SEC filings.

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

With that I'm pleased to turn the call over to Lachlan.

Thank you Gary and thank you all for joining US this morning to discuss our fiscal first quarter earnings today.

Lachlan: Today, we again reported strong operating and financial results, we had a great quarter and a great start to our fiscal year.

Lachlan: Our EBITDA over $1 billion was up 21% on the back of sustained revenue growth, which this quarter reached 11% demonstrating the power of our content and brands and the ability of our strategy to consistently deliver outstanding results.

Lachlan: In the month of October alone Fox networks reached over 145 million people.

Lachlan: During this election cycle Americans are turning to Fox news more than any other service to cover the key issues and events, leading up to tomorrows election.

Among those events were Fox news hosted programming that in and of themselves made news and clearly resonated with viewers.

Lachlan: For example, gutfeld delivered its highest rated telecasts in history with almost 5 million viewers tuning in.

Lachlan: Of our 18th episode with President Trump joining the studio.

This was followed by the Trump town Hall hosted by Harris, Falconer, which also garnered exceptionally strong ratings.

But as notable as these were it was break their interview with Vice President Harris as our.

A new bar for political interviews generating over 9 million viewers on October 16th.

Lachlan: And while the election that was top of mind today, our new stores have done a brilliant job continuously reporting on events across the world for our audience.

Lachlan: Our dedication to news fair and balanced delivered almost 4 billion hours of Fox News media content consumed across linear and digital platforms during Q1.

Lachlan: During the quarter news total audience grew more than 40% year over year and more than 60% in the key 25 to 54 year old demo.

Lachlan: With engagement like this it's no surprise that the Fox News channel was the second most watched networks in all of the BK TV. This past quarter trailing only the summer Olympics enhanced NBC.

Once again Fox news ended the quarter at the most watched cable network in total day and in Prime time, while maintaining a fleet over peers as the most watched cable news network.

Additionally, <unk>.

Lachlan: During the quarter Fox News was the number one cable news channel.

Number one among all major political parties in the demo.

Lachlan: That's right the number one news channel with Republicans.

The number one news channel with Democrats and the number one news channel with independents.

Lachlan: We are number one in all the key swing space and we are number one with Asian and Hispanic viewers.

Lachlan: Our audience is as diverse as it is valuable.

Lachlan: It is as engaged as it is remarkably loyal.

Lachlan: Laurel through news and election cycles.

Yeah.

Ratings momentum at Fox News continued through October with second quarter to date total Dave you win totally ratings up 20% and prime ratings up over 30% over prior year.

Obviously this election is not limited to the presidential race. We have also seen highly contested down ballot and issue propositions across our strategic local station footprint.

From a revenue perspective, it's a local stations that are our election heroes.

But it's not just our stations that are benefiting from strong political spend.

Lachlan: This cycle, we have truly become a material recipient of political advertising.

Two of these large but hard to reach audience, coupled with its with its advanced targeting and geo targeting capabilities have clearly differentiated truly as campaigns look to maximize reach and efficiency.

Lachlan: Now I'm happy to report that companywide, we have achieved record political revenue for both the first quarter and the full fiscal year inclusive of the very substantial and dramatic impact of the <unk>, Georgia Senate runoff.

Strong engagement, coupled with healthy direct response growth resulted in 19% revenue growth at <unk> during the quarter, which has accelerated in Q2, thus far.

Based on the current revenue run rate.

Lachlan: For to the to cross the $1 billion revenue Mark this fiscal year.

Lachlan: Turning to Fox sports, we're having a strong fall season across our renowned portfolio of rights.

Lachlan: For example, just last week, our sports roster featured Greenbay, Detroit and America game of the week, Ohio State and Penn State and our Big New College football window, and a Yankees Dodgers' World series.

Lachlan: The MLB postseason had been both impressive and dramatic.

Lachlan: <unk> had the highest rated divisional series ever on Fox Sports one the most watched league championship series in the past five years.

Lachlan: The Best Major League Baseball post season on Fox in 2017.

Lachlan: And of course, the World series Dream matchup.

Lachlan: <unk> versus the Dodgers preacher into iconic franchises at some major league Baseball's biggest stars.

Lachlan: We saw an average of 16 million viewers tuned in each line of the five <unk> series across our networks with almost 19 million viewers watching game five making it the most watched world series and gained five and seven years.

Lachlan: Moving on to football and the NFL on Fox is off to its best start in five years with American game of the week. The number one program on all television, averaging almost 26 million viewers, including a strong 28% increase in viewership and younger demos versus last season.

Lachlan: Additionally, we successfully launched our new Fox College football Fridays in September, which is averaging nearly 3 million viewers each week handily outpacing our prior Friday night programming by over 40% in its first month.

Lachlan: And we still have a pretty robust football calendar, yet become culminating with our broadcast of Super Bowl 59, where I'm sorry to say, we are already sold out and at record pricing.

Lachlan: The excitement continues at Fox Entertainment default premiere of Universal basic guys with TV. Most watch animation dip debut of the past decade, and mosquitoes number one comedy among adults 18 to 49.

Lachlan: Rescue high surf with TV Tv's highest rated drama debut in four years.

Lachlan: Back to your first quarter results once again highlight the strength of our leadership brands and demonstrate the merits of our differentiated strategy.

Lachlan: Our momentum is supported by outstanding content across our platforms and advertising market that it's healthy for us across the board.

Lachlan: This operating effectiveness, coupled with the strength of our balance sheet to support our commitment to delivering long term shareholder value whether that be through growing our existing business thoughtful M&A or returning capital to our shareholders.

Lachlan: With that let me now turn it over to Steve for some further details.

Steve: Thanks, a lot Glenn and good morning, everyone.

Steve: As Lachlan just described Fox is off to a strong start to fiscal 2025.

Financially. This is highlighted by broad based top line growth with total company revenues grew 11% to 356 billion.

Steve: This revenue growth converted to a 21% increase in EBITDA, which reached $185 billion.

Lachlan: Total company advertising revenues were up 11% year over year boosted by political advertising at the station continued momentum at TV and strong audience growth at Fox News media.

Lachlan: Total company affiliate fee revenues grew 6% over the prior year quarter with 10% growth at our television segment and 3% growth at cable <unk>.

Lachlan: This industry, leading affiliate revenue growth underscores the strength of our brands and focused portfolio of content.

Lachlan: Total company other revenues grew 47% a result of the highest splits sub licensing revenues at our cable segment.

Lachlan: This growth in revenue was largely offset by a corresponding increase in rights cost with no material impact on year over year overall EBITDA growth.

Lachlan: As I mentioned quarterly EBITDA was $1 5 billion up 21% over the prior year with a revenue growth, partially offset by an 8% increase in expenses due to high school as programming rights amortization and increased cost of TV <unk>.

Lachlan: Net income attributable to stockholders of $827 million or $1 78 per share compares to the $407 million.

Lachlan: Or <unk> 82 per share reported in the prior year period.

Lachlan: This increase was underpinned by our EBITDA growth coupled with the change in fair value of the company's investment in Fletcher recognizing non operating other Nic.

Lachlan: Excluding noncore items adjusted net income was $672 million and adjusted EPS was $1 45, equating to a year over year increase of 33%.

Lachlan: Now turning to our operating segments were in our cable networks revenue grew 15% year over year.

Lachlan: This was led by advertising revenue growth, which was up 11% predominantly driven by Fox News media, where we saw high ratings direct response pricing and digital advertising revenue, partially offset by higher preemption associated with breaking news coverage.

Lachlan: Cable affiliate fee revenues grew 3% in the quarter with growth in pricing from your affiliate renewals.

Lachlan: Facing the impact from industry subscriber declines running at a touch under 8% a slight improvement from last quarter.

Lachlan: Cable other revenues increased $147 million due to the high splits have licensing revenues I mentioned earlier.

Lachlan: <unk> expenses increased 9%, primarily due to high sports programming rights amortization and increased news gathering costs at Fox News media, including coverage in the U S presidential election cycles.

Lachlan: All in EBITDA at our cable segment grew 23% over the prior year quarter to reach $748 million.

Lachlan: Turning now to our television segment, where we delivered 10% growth in revenues.

Lachlan: Television advertising revenues were up 11% led.

Lachlan: Led by the strong political cycle at our local stations continued growth at <unk> and the benefit of higher NFL ratings and NFL scheduling with weak for the season sliding back into into the September quarter.

Lachlan: The benefit of the UEFA euros, and Copa America, and the current year quarter were more than offset by the absence of the FIFA Women's World Cup.

Lachlan: Television affiliate fee revenues grew 10% year over year as healthy growth in fees across Fox owned and affiliated stations more than offset the impact from industry subscriber declines.

Lachlan: TV and other revenues increased 3%, primarily a result of higher third party content revenues tied to our entertainment production Studios.

Lachlan: Expenses at the television segment grew 11% over the prior year quarter, driven by higher programming rights amortization at Fox sports and increased cost of TV.

Lachlan: Collectively these revenue and expense movements resulted in quarterly EBITDA at our television segment, increasing 6% to $372 million.

Lachlan: Now turning to cash flow.

Lachlan: Free cash flow, which we define as net cash provided by operating activities less capex was positive $94 million in the quarter.

Lachlan: This is consistent with the seasonality of that working capital cycle with the first half of our fiscal year is characterized by a concentration of payments for sports rights.

Lachlan: And the buildup of advertising related receivables.

Lachlan: Of which reversed in the second half of our fiscal year.

Lachlan: We remained active with our share buyback program, where we have repurchased a further $300 million satisfy this fiscal year.

Lachlan: We have now cumulatively repurchased $5 9 billion.

Lachlan: Representing approximately 29% of our total shares outstanding since the launch of the buyback program in 2019.

Lachlan: And we remain committed to utilizing our full buyback authorization of $7 billion.

Lachlan: This is supported by the strength of our balance sheet, where we ended the quarter with approximately $4 $1 billion in cash and $7 2 billion in debt and with that I'll turn the call over there again.

Lachlan: And now we would be happy to take questions from the investment community.

Speaker Change: Ladies and gentlemen, I'd like to emphasize the functionality for the question queue.

Speaker Change: If you wish to ask a question. Please press Star then one on your touch time funding.

Lachlan: You will hear an announcement, indicating your hand is being raised you may remove yourself from the queue at any time by once again pressing star one.

Lachlan: If you are using a speakerphone please pick up the handset before pressing the numbers. It has being requested that you limit yourself to one question.

Lachlan: Once again, if you have a question. Please press star one now.

Speaker Change: And we have a question from Michael Morris from Guggenheim Partners. Please go ahead.

Michael Morris: Thank you excuse me good morning, guys.

Michael Morris: Comcast said last week that they are considering separating their cable network business from the rest of the company and so broadly would be great to get your thoughts on how that may impact you or the industry at large have Fox clearly has been a consistent supporter of the video bundle. So I'm curious if this seems like one of your major partners as maybe a little less committed.

Lachlan: Good.

Lachlan: And if I could just one other topic do you have seen this modest acceleration in affiliate revenue growth cable and television for two quarters in a row now Steve you mentioned the slight improvement in the underlying subscriber trends do you feel any more comfortable maybe that we are getting closer to a bottom in the rate of bundled subscriber declines. Thank you.

Speaker Change: Thanks, Michael So I don't want to comment.

Speaker Change: Specifically on Comcast plans may or may not be on the only read in the press and heard what they said on their call.

Lachlan: But.

Lachlan: I don't I don't think it affects us in any way at all.

Lachlan: I think what.

Lachlan: From our perspective at Fox and we can drive tremendous amount of synergy across all of our platforms. So between.

Lachlan: The Entertainment network, obviously, Fox Sports Fox Sports, one or two share rights with the entertainment network.

Lachlan: The football for instance in baseball that's on that's on broadcast the local television stations that underpin that.

Lachlan: They are our relationship.

Lachlan: Our promotional capabilities and synergies with Fox news.

Lachlan: And now obviously with the incredible growth opportunity, which is really.

Lachlan: Sure.

Lachlan: Assistant and driven by <unk>.

Lachlan: The strength and the reach of our kind of marketing platform across across.

Lachlan: Broadcast cable and and sports and so from my perspective.

Lachlan: I don't see how we could ever do that I think breaking apart part of the business would be would be very difficult. Both from a cost point of view on from a revenue and a promotional synergy point of view.

Speaker Change: In terms of the sub declines on a per auto Steve wants to add.

Steve: Add to this but.

Lachlan: Obviously, you sometimes have declined the rate has declined somewhat in this quarter, because it's pleasing to see.

Lachlan: And we do believe.

Lachlan: That there is a sub floor, we don't know where it is but we do believe that there is a sub floor and there will always be.

Lachlan: Consumers and subscribers who will want.

Lachlan: Core package and a core package that includes all of our brands. When you are number one in news.

Lachlan: Want to sports.

Lachlan: You have.

Lachlan: An incredible base of local.

Lachlan: TV stations re transmitted in that core package. It's a package that people will always I'm always wanted and it's very valuable to that to that.

Lachlan: That consumer base and market listen I think very pleased with where the revenue growth about two in the quarter luck.

Lachlan: Cable ticking up to plus 3% and TV plus Canada excellent results for US most of that I think really driven by the pricing increases with golf and as Lachlan said the motivation and subscribe declines is is obviously helpful. Theres most seasonality obviously injured injury he nowadays.

Lachlan: We're very pleased with the trains both revenue and <unk>.

Operator: Operator next question please.

Speaker Change: Have a question from Ben Swinburne from Morgan Stanley. Please go ahead.

Ben Swinburne: Thank you. Good morning wanted to ask you guys about political advertising and or if you would.

Ben Swinburne: Would agree it feels like the sort of connected TV streaming market is really participating this cycle in a way at least I haven't noticed in the past and to be clearly is.

Operator: Is <unk> gaining share in the political advertising market. So what are you guys seeing in terms of advertiser demand like how do they look at local station buys versus to be are there. Other are you solving sort of different equations for.

Operator: <unk> campaigns and candidates and is it do you think there's any cannibalization in other words just to be taking money out of the station group I don't know, Steve. If you are willing to sort of quantify kind of holistically. The political dollars youre seeing in the quarter or for the cycle that would be helpful. Too. Thanks, so much.

Operator: So.

Operator: Despite good morning benefits by way of background.

Operator: Political spend this cycle.

Operator: Different.

In some significant ways from four years ago four years ago, there was more sort of national.

Operator: Yes.

Operator: Dollar spent.

Operator: There was.

Operator: Somewhat of a shift the majority of it.

Operator: Yeah.

Operator: Some shift for years ago towards national from local.

Operator: First I think we talked about and those quarterly calls back then for.

Operator: For the first time seeing national political dollar spend was was unique four years ago. This year, the cycle sort of reverting to form and their campaigns.

Operator: <unk>.

Operator: Size of all types of politics have shifted back to being more local and targeted spend.

Operator: That has assessed.

Operator: As discussed both in the station group, which will have a record political revenues, but also in as I mentioned in my in my.

Operator: Earlier comments also in TUI that can target them very efficiently and specifically geo target as advertisers as well so.

Operator: In fact, we haven't seen any evidence of a cannibalization.

Operator: From stations into into Interdigital, Orange, <unk> and fastest quite the reverse soobee was able to capture money that frankly, we couldnt take entire mistakes and there is such there.

Operator: Tidal wave of political dollars to have.

Operator: To have.

Operator: March that caught fire are captured.

Operator: Captured by.

Operator: Activity as well as really pleasing to see I think it also shows the obviously the strength of <unk>. It's obviously, it's not just the.

Operator: So youre targeting those valuable but this is a very hard.

Operator: Demographic to reach.

Operator: Most of them are cord nevers, they're younger they're very diverse.

Operator: And as a very valuable are very valuable audience and it shows now that <unk> had the scale and has the market.

Operator: Marketplace.

Operator: Awareness to be SaaS or graduated into.

Operator: To your advertisers.

Operator: Bye for people, who wanted to reach some reach this audience. So it's very very pleasing to see.

Operator: Okay, and then just just to put some numbers around it if I look at just the quarter local like it really is more similar in terms of it's not cannibalistic at all between TV and the stations the.

Operator: The stations were up in Q1 by sort of tens of millions of dollars and then if I look at the half remember that the stations benefit from the Georgia right now post the election.

Operator: They have already done more than what they did that last half in Q, sorry, Q1, and Q2 of fiscal 'twenty one.

Operator: We sort of just north of $260 million in that half in four years ago and north of that already in in this current fiscal year. So the stations have had an unbelievable first half in terms of political and then as Lachlan mentioned TV went from virtually nothing four years ago to it to a meaningful number for us.

Operator: We call that sort of absolutely local or national is sort of yieldco.

Speaker Change: And then just finally assess for us right.

Speaker Change: <unk> of our sports.

Operator: Programming over the last few weeks.

Operator: As we have driven that's where the national political dollars that have come in.

Operator: Apologize to anyone who is enjoying their football over the weekend.

Operator: Yeah, Omar to by political ads, but but but sports has really been the.

Operator: Beneficiary of national political advertising.

Operator: Later next question please.

Speaker Change: We have a question from Robert Fishman of Moffett Nathanson. Please go ahead.

Robert Fishman: Hey, good morning, everyone, maybe just a follow up on to be more broadly.

Robert Fishman: It's on track to reach $1 billion in revenue can you just help us.

Robert Fishman: For investors think about like what the future of that that that really look like and how big it can get with its current momentum and then maybe just secondly, any updates you can provide on the future of that.

Speaker Change: If it doesn't launch do you have a willingness to license Fox sports content to other potential partners. Thank you.

Speaker Change: Thanks, Robert first on.

Speaker Change: On <unk>.

Speaker Change: Look the growth as it continues to be.

Operator: So very impressive we were very pleased with the growth.

Operator: I won't give you the October revenue number because.

Operator: Gary will.

Operator: We've taken out.

Operator: Halo, obviously is the beneficiary of a tremendous amount of political money. So it would be must have been misleading misleading.

Operator: Misleading.

Operator: Staggering statistic.

Operator: Sure.

Operator: And yet and yet ex political.

Operator: We continue to see growth in the second quarter and we think beyond this has driven I think and we're announcing a very sustainable model.

Operator: Largest.

Operator: Avon.

Operator: Our library.

Operator: At 95% of the library is revenue share, although only 65% of the of the viewing is revenue share of the 5% that we spend in our sort of direct.

Operator: Content.

Operator: Purchase content is.

Operator: You drive about 30% of that.

Operator: <unk>. So the business continues to grow as a fantastic platform and then when we see a growing from a from strength to strength and really will.

Operator: Increasingly be the way Americans wash off Recalibration, that's absolutely the case.

Operator: And of course, the fact that it's <unk>.

Operator: Video on demand.

Operator: Not a vast vast channel platform.

Operator: Also adds to that.

Operator: The value of that audience.

Operator: Choosing <unk>.

Operator: Proactively choosing to watch to watch our content.

Operator: At increasingly high levels.

Operator: Hi.

Speaker Change: On venue. Obviously, we are we are awaiting our appeal of the injunction and we'll see.

Speaker Change: Where we go from there if we continue to believe venue is a tremendous pro consumer pro competition our platform we're very.

Speaker Change: Very excited to launch it.

Operator: When we have the ability to do so.

Operator: And then on licensing content.

Operator: And we are in the business of building brands.

Operator: Are producing.

Operator: Programming.

Operator: <unk>.

Operator: We're not a sublicense sub licensee or licensor license or.

Operator: I'll sort of sports rights, and any sort of substantial or significant way.

Operator: Great.

Speaker Change: Operator next question please.

Speaker Change: We have a question from John Hodulik from UBS. Please go ahead.

John Hodulik: Great. Thanks, two if I could first.

John Hodulik: Can you guys comment on sort of how you see the AD environment shaping up post election, and maybe what Youre seeing now in terms of pricing from a from a direct response standpoint, and then obviously ratings and very strong it looks like you guys have some.

John Hodulik: Easier, maybe not quite as easy, but easier comps over the next couple of quarters.

Operator: News.

Operator: How should we think about the outcome of the election and maybe historically do you expect to keep the same momentum we have.

Operator: We have seen recently, regardless of the outcome just any perspective, you have there would be great.

Operator: Okay.

Operator: Thanks, a lot for the question Charles is that helpful.

Operator: What's going to happen, what's going to happen Tomorrow I don't know.

Operator: So for Mike.

Operator: Our advertising revenues.

The advertising marketplace that we participate in is very healthy right.

Operator: It helps them, but we're not.

Operator: Overly exposed to general entertainment, Okay General Entertainment attainment cable inventory and programming.

Operator: So all of the markets that we participate in.

Operator: We're seeing very healthy growth and we're seeing healthy growth obviously not in the quarter that we've just reported.

Operator: But going forward.

Operator: And if you look at sports we had a.

Operator: Just a tremendous our world series I think it's probably.

Operator: Our.

Operator: I haven't checked this but I'm pretty sure.

Operator: Five game World series is probably a record amount of revenue within five games.

Operator: It outperformed our budget and our expectations.

Operator: We have the Super Bowl coming up.

Operator: Football has sold very well regular season and of course, we're sold out.

Operator: For the Super Bowl.

Operator: We had record where we believe our record pricing.

Operator: News ratings, we've talked about how strong news ratings are particularly in the key 25 54 by demographics.

Operator: That's also.

Operator: Health care.

Operator: At a significant sort of multiplier effect by direct pricing being up.

Operator: Very significantly significantly in the first quarter and almost double significantly in the second quarter. So.

Operator: Very strong for R. R.

Operator: Our pricing for direct response.

Operator: Entertainment scatter is strong and we've talked about the local political spend already obviously one thing that happens there. If you if you will.

Speaker Change: Can you point anything up local political pushes out some local based market advertising.

Speaker Change: Only have so much inventory and so if you look at the local base markets.

Speaker Change: You have auto is soft retail is soft are betting that one is the one category. That's that's pretty strong so betting has sort of returned to.

Speaker Change: To grow and I think we've talked about to you already being up 19% and an accelerating in the second quarter. So.

Speaker Change: What happens this week with the election.

Speaker Change: And how that would impact I don't think it would impact us I think.

Speaker Change: Again in the markets that we're seeing we're seeing tremendous amount of growth in health.

Operator: Okay. Operator next question please.

Speaker Change: We have a question from Jessica Reif Ehrlich with Bank of America Securities. Please go ahead.

Speaker Change: Alright, Thank you and good morning, everyone, maybe switching gears a little bit.

Speaker Change: To flutter intangible can you talk about how long it will take you to get through the approval process and once you too, but what would make you exercise earlier or later.

Speaker Change: And ultimately what do you think you'd do with this asset and then one last thing if we could just go back to be which is phenomenal.

Speaker Change: And you said it's accelerating.

Speaker Change: Can you walk through all the characteristics.

Speaker Change: But you had that before so why is it accelerating are you selling differently youre using different advertising tools.

Speaker Change: Okay.

Speaker Change: So.

Speaker Change: On <unk>.

Speaker Change: Flutter and tangible so we have.

Speaker Change: Six years I think.

Speaker Change: And our options so.

Speaker Change: Although there is no.

Speaker Change: There is no immediate.

Speaker Change: No need to rush the process, what we have now engaged on this decade talking 26 state.

Speaker Change: States, we have to get licensed in every state with annual operation and so it is a in depth process. It will take some time I don't think it will take.

Speaker Change: Amount of time, but.

Speaker Change: But we expect that process to go.

Speaker Change: Relatively smooth smoothly.

Speaker Change: And.

Speaker Change: We'd be able to.

Speaker Change: A complete the process within a year.

Speaker Change: And Jessica sorry, what was the second question to the <unk>.

Speaker Change: Why is it yet so.

Speaker Change: So this year this quarter.

Speaker Change: Never seen Jessica.

Speaker Change: We've talked before about the fill rate.

Speaker Change: <unk> and what we're really being able to do is actually.

Speaker Change: Reduce our forever.

Speaker Change: Great.

Speaker Change: Improve the fill rate.

Speaker Change: Very significantly.

Speaker Change: So we've been.

Speaker Change: In a very competitive market, we've been able to hold pricing above we've really been able to drive our fill rate.

Speaker Change: Two.

Speaker Change: Accelerate that revenue growth.

Speaker Change: Operator, we have time for one more question.

Speaker Change: Your final question comes from the line of Michael <unk> from Goldman Sachs. Please go ahead.

Speaker Change: Hi, good morning, Thanks for the question.

Speaker Change: Just was wondering if you could talk about some of the EBITDA bridge components at TV for fiscal 'twenty five.

Speaker Change: <unk>.

Speaker Change: Specifically I know you talked about digital losses.

Speaker Change: <unk> to the high $200 million this year, given the <unk> outperformance.

Speaker Change: Is that does that number better and then anything else that you would flag for us as we think about the build for television. Thank you.

Speaker Change: Yes, so if I look at Mark Thanks for the question if I look at the balance of the year.

Speaker Change: For the company and a lot of these TV, but if you look at we've obviously got an enormous cyclical tailwind with political.

Speaker Change: Those fts number then including the TV revenue plus the sport political revenue that Lachlan mentioned in his opening.

Speaker Change: We're going to be beneficial to the TV segment.

Speaker Change: From a trading momentum perspective, obviously for Qs is benefiting in the cable segment from top line growth you got TV underlying momentum and then you've had an amazing MLB post season, which is going to be in at least first both from a revenue and margin perspective.

Speaker Change: If I look at Q3, specifically.

Speaker Change: From an from a football perspective, NFL scheduling will be a headwind from an advertising revenue perspective, because we were.

Speaker Change: We're down the Christmas game, which we had last year in college as a whole sort of the reorder or re orientation of sports rights is a big shift for us in Q2, particularly in Q2, we can expansion, which will be cost up for us in the quarter.

Speaker Change: You got increased right space across the board, but then with that.

Speaker Change: To partially offset that.

Speaker Change: WWE in for the remainder of the year and with US also obviously discontinued with Pac 12, if I look further out.

Speaker Change: We got Super Bowl in.

Speaker Change: In Q3, which will be a big driver be very very cash flow accretive for the company, but will not be from an EBITDA perspective for US and then we also have the impact of the Q3 entertainment schedule coming back. This is where we were last year generally speaking we feel very.

Speaker Change: <unk> TV is going to have a really really strong sort of second third and fourth quarter.

Speaker Change: And obviously in Q4, when we look at it from a socket perspective, which can knock us around we don't have any the UEFA copper or FIFA. So that can be helpful in that final quarter.

Speaker Change: I think that gives you enough break comes to trough.

Speaker Change: But now there's a really nice tailwind without television segment across all of those.

Speaker Change: Okay. At this point, we are out of time, but if you have any further questions. Please give me a or Charlie can stanzel. Thanks.

Speaker Change: Thanks, so much for joining us on today's call.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen that does conclude your conference call for today. Thank you for joining US you may now disconnect.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yes.

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Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to the Fox Corporation first quarter fiscal year 2025 earnings Conference call.

Speaker Change: At this time all participants are in listen only mode. Later, we will conduct a question and answer session.

Speaker Change: I'd like to emphasize that functionality for the question and answer queue will be given at that time.

Speaker Change: If you should require assistance during the call. Please press Star then zero as a reminder, this conference is being recorded.

Speaker Change: I will now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead Ms Brown.

Gabrielle Brown: Thank you operator, and we apologize for the technical difficulty, but good morning, and welcome to our fiscal 2025 first quarter earnings call. Joining me on the call today are Lachlan Murdoch Executive Chair and Chief Executive Officer, John Nolan, Chief operating Officer and.

Gabrielle Brown: Steve <unk>, our Chief Financial Officer, first Lachlan and Steve will give some prepared remarks on the most recent quarter and then we will take questions from the investment community. Please note that this call may include forward looking statements regarding Fox Corporation's financial performance and operating results.

Gabrielle Brown: These statements are based on management's current expectations and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filings.

Speaker Change: With that I'm pleased to turn the call over to Lachlan.

Lachlan: Thank you Gabby and thank you all for joining US this morning to discuss our fiscal first quarter earnings.

Lachlan Murdoch: Today, we again reported strong operating and financial results, we have had a great quarter and a great start to our fiscal year.

Lachlan: Our EBITDA of over $1 billion was up 21% on the back of sustained revenue growth, which this quarter reached 11% demonstrating the power of our content and brands and the ability of our strategy to consistently deliver outstanding results.

Lachlan: In the month of October alone Fox networks reached over 145 million people.

Lachlan: During this election cycle Americans alternative Fox news more than any other service to cover the key issues and events, leading up to tomorrows election.

Lachlan: Among those events were Fox news hosted programming that in and of themselves made news and clearly resonated with viewers.

Lachlan: For example, gutfeld delivered its highest rated telecast in history with almost 5 million viewers tuning in on September 18th <unk> with President Trump joining the studio.

Lachlan: This was followed by the Trump town Hall hosted by Harris, Falconer, which also garnered exceptionally strong ratings.

Lachlan: But as notable as these were it was Brent Bears interview with Vice President Harris our.

Lachlan: A new bar for political interviews generating over 9 million viewers on October 16th.

Lachlan: And while the election is top of mind today, our new teams have done a brilliant job continuously reporting on events across the world for our audience.

Lachlan: Our dedication to news fair and balanced delivered almost 4 billion hours of Fox News media content consumed across linear and digital platforms during Q1.

Lachlan: During the quarter news total audience grew more than 40% year over year and more than 60% in the key 25 to 54 year old demo.

Lachlan: With engagement like this it's no surprise that the Fox News channel was the second most watched network in all of the pay TV. This past quarter trailing only the summer Olympics enhanced NBC.

Lachlan: Once again Fox news ended the quarter as the most watched cable network in total day and in primetime while maintaining its lead over our peers as the most watched cable news network.

Speaker Change: Additionally, Joanne.

Joanne: During the quarter Fox News was the number one cable news channel.

Joanne: Number one among all major political parties in the demo.

Speaker Change: That's right the number one news channel with Republicans.

Speaker Change: The number one news channel of Democrats, and the number one news channel with independents.

Speaker Change: We are number one in all the key swing states and.

Speaker Change: We are number one with Asian and Hispanic viewers.

Lachlan: Our audience is as diverse as it is valuable.

Speaker Change: It is as engaged as it is remarkably loyal.

Lachlan: Laurel through news and election cycles.

Lachlan: Ratings momentum at Fox News continued through October with second quarter to date total, Dave given totally ratings up 20% and prime ratings up over 30% over prior year.

Lachlan: Obviously this election is not limited to the presidential race. We have also seen highly contested down ballot and issue propositions across our strategic local station footprint.

Lachlan: From a revenue perspective, it's a local stations that are our election heroes.

Speaker Change: But it's not just our stations that are benefiting from strong political spend.

Lachlan: This cycle, we have seen to be become a material recipient of political advertising.

Lachlan: To be as large or hard to reach audience, coupled with its with its advanced targeting and geo targeting capabilities have clearly differentiated to be as campaigns look to maximize reach and efficiency.

Lachlan: Now I am happy to report that company wide, we have achieved record political revenue for both the first quarter and the full fiscal year inclusive of the very substantial and dramatic impact of the <unk>, Georgia Senate runoff.

Lachlan: Strong engagement, coupled with healthy direct response growth resulted in 19% revenue growth at <unk> during the quarter, which has accelerated in Q2, thus far.

Lachlan: Based on the current revenue run rate.

Lachlan: And for <unk> to cross the $1 billion revenue Mark this fiscal year.

Lachlan: Turning to Fox sports, we're having a strong fall season across a rundown portfolio of rights.

Lachlan: For example, just last week, our sports roster featured Greenbay, Detroit and Americas game of the week, Ohio State and Penn State and our Big News College football window, and a Yankees Dodgers' World series.

Lachlan: The MLB postseason had been both impressive and dramatic.

Speaker Change: Box at the highest rated divisional series ever on Fox Sports one the most watched league championship series in the past five years.

Lachlan: The Best Major League Baseball post season on Fox since 2017.

Lachlan: And of course, the World series Dream matchup.

Lachlan: <unk> versus the Dodgers featuring two iconic franchises.

Lachlan: Major League Baseball's biggest stars.

Lachlan: We saw an average of 16 million viewers tuned in each line of the five game series across our networks with almost 19 million viewers watching game, 5%, making it the most watched world series in game five and seven years.

Lachlan: Moving on to football the NFL on Fox is off to its best start in five years with America game of the week. The number one program on all television, averaging almost 26 million viewers, including a strong 28% increase in viewership and younger demos versus last season.

Speaker Change: Additionally, we successfully launched our new Fox College football Fridays in September, which is averaging nearly 3 million viewers each week handily outpacing our prior Friday night programming by over 40% in its first month.

Speaker Change: And we still have a pretty robust football calendar, yet become culminating with our broadcast of Super Bowl 59, where I'm sorry to say, we are already sold out and at record pricing.

Lachlan: The excitement continues at Fox Entertainment default Premier of Universal basic guys with TV, most watched animation the debut of the past decade, and the season's number one comedy among adults 18 to 49.

Lachlan: Rescue high surf with TV Tv's highest rated fall drama debut in four years.

Lachlan: <unk> first quarter results once again highlight the strength of our leadership brands and demonstrate the merits of our differentiated strategy.

Lachlan: Our momentum is supported by outstanding content across our platforms and advertising market that is healthy for us across the board.

Speaker Change: With that let me now turn it over to Steve for some further details.

Steve: Thanks, a lot Glenn and good morning, everyone.

Speaker Change: As Lachlan just described Fox is off to a strong start to fiscal 2025.

Lachlan: Financially. This is highlighted by broad based top line growth with total company revenues grew 11% to 356 billion.

Lachlan: This revenue growth converted to a 21% increase in EBITDA, which reached 185 billion.

Lachlan: Total company advertising revenues were up 11% year over year boosted by political advertising at the stations continued momentum at TV and strong audience growth at Fox News media.

Lachlan: Total company affiliate fee revenues grew 6% over the prior year quarter with 10% growth at our television segment and 3% growth at cable <unk>.

Lachlan: This industry, leading affiliate revenue growth underscores the strength of our brands and focused portfolio of content.

Lachlan: Total company other revenues grew 47% a result of highest sports sub licensing revenues at our cable segment.

Lachlan: This growth in revenue was largely offset by a corresponding increase in rights cost with no material impact on year over year overall EBITDA growth.

Lachlan: As I mentioned quarterly EBITDA was $1 5 billion.

Lachlan: Up 21% over the prior year with a revenue growth, partially offset by an 8% increase in expenses due to high sports programming rights amortization and increased cost of TV.

Lachlan: Net income attributable to stockholders of $827 million or $1 78 per share compared to the $407 million.

Lachlan: Or <unk> 82 per share reported in the prior year period.

Lachlan: This increase was underpinned by our EBITDA growth coupled with the change in fair value of the company's investment in Florida, recognizing non operating other net.

Lachlan: Excluding noncore items adjusted net income was $672 million and adjusted EPS was $1 45, equating to a year over year increase of 33%.

Lachlan: Now turning to our operating segments were at our cable networks revenue grew 15% year over year.

Lachlan: Cable affiliate fee revenues grew 3% in the quarter with growth in pricing from area of affiliate renewals.

Lachlan: Facing the impact from industry subscriber declines running at a touch under 8% a slight improvement from last quarter.

Lachlan: Cable other revenues increased $147 million due to the high splits have licensing revenues I mentioned earlier.

Lachlan: Total expenses increased 9%, primarily due to higher sports programming rights amortization and increased news gathering costs at Fox News media, including coverage of the U S presidential election cycles.

Lachlan: All in EBITDA at our cable segment grew 23% over the prior year quarter to reach $748 million.

Lachlan: Turning now to our television segment, where we delivered 10% growth in revenues.

Lachlan: Television advertising revenues were up 11%.

Lachlan: The benefit of the UEFA euros, and Copa America, and the current year quarter were more than offset by the absence of the FIFA Women's World Cup.

Lachlan: Television affiliate fee revenue grew 10% year over year as healthy growth in fees across Fox owned and affiliated stations more than offset the impact from industry subscriber declines.

Lachlan: TV and other revenues increased 3%, primarily a result of higher third party content revenues tied to our entertainment production Studios.

Lachlan: Expenses at the television segment grew 11% over the prior year quarter.

Lachlan: Driven by higher programming rights amortization at Fox sports and increased cost of TV.

Lachlan: Collectively these revenue and expense movements resulted in quarterly EBITDA at our television segment, increasing 6% to $372 million.

Lachlan: Now turning to cash flow.

Lachlan: Free cash flow, which we define as net cash provided by operating activities less capex was positive $94 million in the quarter.

Lachlan: This is consistent with the seasonality of our working capital cycle with the first half of the fiscal year is characterized by a concentration of payments for sports rights and the buildup of advertising related receivables both of which reversed in the second half of our fiscal year.

Lachlan: We remained active with our share buyback program, where we have repurchased a further $300 million so far this fiscal year.

Lachlan: We have now cumulatively repurchased five 9 billion.

Lachlan: Representing approximately 29% of our total shares outstanding since the launch of the buyback program in 2019.

Lachlan: And we remain committed to utilizing our full buyback authorization of $7 billion.

Speaker Change: This is supported by the strength of our balance sheet, where we ended the quarter with approximately $4 $1 billion in cash and $7 2 billion in debt and with that I'll turn the call over to Ken. Thank you, Steve and now we would be happy to take questions from the investment community.

Speaker Change: Ladies and gentlemen, I would like to emphasize the functionality for the question to Max Q.

Speaker Change: If you wish to ask a question. Please press Star then one on your touch time funding.

Speaker Change: You will hear an announcement, indicating your hand is being raised you may remove yourself from the queue at any time by once again pressing star one.

Speaker Change: If you are using a speakerphone please pick up the handset before pressing the numbers. It has being requested that you limit yourself to one question.

Speaker Change: Once again, if you have a question. Please press star one now.

Speaker Change: And we have a question from Michael Morris from Guggenheim Partners. Please go ahead.

Michael Morris: Thank you excuse me good morning, guys.

Speaker Change: Comcast said last week that they are considering separating their cable network business from the rest of the company and so broadly it would be great to get your thoughts on how that may impact you or the industry at large Fox clearly has been a consistent supporter of the video bundle. So I'm curious if this seems like one of your major partners as maybe a little less committed.

Lachlan: Good.

Lachlan: And if I could just one other topic you have seen this modest acceleration in affiliate revenue growth cable and television for two quarters in a row now Steve you mentioned the slight improvement in the underlying subscriber trends do you feel any more comfortable maybe that we are getting closer to a bottom in the rate of bundled subscriber declines. Thank you.

Speaker Change: Thanks, Michael.

Speaker Change: Look I don't want to comment.

Speaker Change: Specifically on Comcast plans may or may not be on the only read in the press and heard what they said on their call.

Lachlan: But I.

Lachlan: I don't I don't think it affects us.

Lachlan: In any way at all.

Lachlan: I think what.

Lachlan: From our perspective at Fox and we can drive tremendous amount of synergy across all of our platforms. So between.

Lachlan: The Entertainment network, obviously, Fox Sports Fox Sports, one or two share rights with the entertainment network.

Lachlan: The football for instance in baseball that's on that's on broadcast their local television stations that underpin that.

Lachlan: They are our relationship.

Lachlan: Our promotional capabilities and synergies with Fox news.

Lachlan: And now obviously with the incredible growth of <unk>, which is really.

Lachlan: Assistant and driven by <unk>.

Lachlan: The strength and the reach of our kind of marketing platform across across.

Lachlan: Broadcast cable and in sports and so from my perspective.

Lachlan: I don't see how we could ever do that I think breaking apart part of the business would be would be very difficult. Both from a cost point of view and from a revenue and a promotional synergy point of view.

Lachlan: In terms of the sub declines on a per auto Steve wants to.

Lachlan: Add to this but.

Speaker Change: Obviously, you sometimes have decline the rate has declined somewhat in this quarter. It is pleasing to see.

Speaker Change: We do believe.

Speaker Change: That there is a sub floor, we just don't know where it is but we do believe there is a there is a sub floor and there will always be.

Lachlan: Consumers and subscribers who will want.

Lachlan: Core package and a core package that includes all of our brands one of your number one.

Lachlan: News.

Lachlan: On a sports.

Lachlan: You have.

Lachlan: An incredible base of local.

Lachlan: TV stations were transmitted in that core package.

Lachlan: Package that people will always on always wanted and it's very valuable to that to that.

Lachlan: That consumer base and market listen I think very pleased with where the revenue growth about two in the quarter luck.

Lachlan: Cable picking up to plus 3% and TV plus Canada excellent results for US most of that I think really driven by the pricing increases were felt that as Lachlan said the moderation in subscriber declines.

Lachlan: Is obviously helpful. Theres, most seasonality, obviously injured injury Ian Nowadays.

Lachlan: We're very pleased with the trains both revenue and <unk>.

Speaker Change: Operator next question please.

Speaker Change: We have a question from Ben Swinburne from Morgan Stanley. Please go ahead.

Speaker Change: Okay.

Ben Swinburne: Thank you good morning wanted to ask you guys about political advertising.

Ben Swinburne: Would agree it feels like the sort of connected TV streaming market is really participating this cycle in a way at least that I haven't noticed in the past and to be clearly is.

Ben Swinburne: Is gaining share in the political advertising market. So what are you guys seeing in terms of advertiser demand like how do they look at local station buys versus to be are there other you're solving sort of different equations for.

Ben Swinburne: Campaigns and candidates and is do you think there is any cannibalization in other words just to be taking money out of the station group I don't know, Steve if you'd be willing to sort of quantify kind of holistically. The political dollars youre seeing in the quarter or for the cycle that would be helpful. Too. Thanks, so much.

Speaker Change: So.

Speaker Change: Good morning, Ben first by way of background.

Speaker Change: The political spend this cycle is different.

Speaker Change: In some significant ways from four years ago four years ago, there was more sort of national.

Speaker Change: Dollar spent.

Speaker Change: There was.

Speaker Change: Somewhat of a shift the majority of it.

Speaker Change: Some shift for years ago towards national from local.

Lachlan: First of all I think we talked about and those quarterly calls back then.

Lachlan: For the first time seeing national political dollar spent was was unique four years ago. This year, the cycle sort of reverted to form and their campaigns.

Lachlan: <unk>.

Lachlan: Size of all kinds of politics have shifted back to being more local and targeted spend.

Lachlan: That has.

Lachlan: As discussed both in the station group, which will have a record political revenues, but also in as I mentioned in my in my.

Lachlan: Earlier comments also on TUI that can target them very efficiently and specifically geo target as advertisers as well so.

Lachlan: In fact, we haven't seen any evidence of a cannibalization.

Lachlan: From stations are into India into digital of our <unk> and fastest quite the reverse soobee was able to capture money that frankly, we couldnt take entire understatement, there is such there.

Lachlan: Tidal wave of political dollars to have.

Lachlan: To have.

Lachlan: Much of that call.

Lachlan: <unk> captured.

Lachlan: Activity as well as really pleasing to see I think it also shows the obviously the strength of <unk>. It's obviously, it's not just the <unk>.

Lachlan: So youre targeting those valuable but this is a very hard.

Lachlan: Demographic to reach.

Lachlan: Most of them are cord nevers, they're younger they're very diverse.

Lachlan: And as a very valuable are very valuable audience and it shows now that <unk> has the scale and has the.

Lachlan: The marketplace.

Lachlan: Awareness to be SaaS or graduated into.

Lachlan: To your advertisers.

Must buy for people, who wanted to reach some reach this audience. So it's very very pleasing to see.

Lachlan: And then just just to put some numbers around that if I look at just the quarter local it really is more is more in terms of cannibalistic at all between TV and the stations.

Lachlan: <unk> were up in Q1 by sort of tens of millions of dollars and then if I look at the half remember the stations benefit from the Georgia right now post the election.

Lachlan: Already done more than what they did that loss in Q, sorry, Q1, and Q2 of fiscal 'twenty one.

Lachlan: We did just north of $260 million in that half in four years ago and north of that already.

Lachlan: In this current fiscal year. So the stations have had an unbelievable first half in terms of political and then as Lachlan mentioned TV went from virtually nothing four years ago to a meaningful number for us what do you call that sort of absolutely local nationals sort of yieldco.

Lachlan: And then just finally assess for the strength of our sports.

Lachlan: Programming over the last few weeks.

Lachlan: <unk> has a good driven that's where the national political dollars that have come in.

Lachlan: I apologize to anyone who is enjoying their football over the weekend.

Lachlan: Omar to by political ads, but but but sports has really been the.

Lachlan: Beneficiary of.

Lachlan: National political advertising.

Speaker Change: Operator next question please.

Speaker Change: We have a question from Robert Fishman of Moffett Nathanson. Please go ahead.

Robert Fishman: Hi, Good morning, everyone, maybe just a follow up on to be more broadly now that.

Robert Fishman: On track to reach $1 billion in revenue can you just help investors think about like what the future of this asset really look like and how big it can get.

Lachlan: Its current momentum and then maybe just secondly, any updates you can provide on the future of that year.

Lachlan: It doesn't launch do you have a willingness to license Fox sports content to other potential partners. Thank you.

Speaker Change: Thanks Robert.

Speaker Change: First on.

Speaker Change: On <unk>.

Speaker Change: Look the growth as it continues to be.

Lachlan: So very impressive we were very pleased with the growth.

Lachlan: I won't give you the October revenue number because.

Lachlan: Gary will.

Lachlan: Kick me under the Halo, obviously is the beneficiary of a tremendous amount of political money, so it would be miss or being misleading.

Lachlan: Misleading.

Lachlan: Staggering statistic.

Lachlan: Yes.

Lachlan: And yet and yet.

Lachlan: Ex political we continue to see growth in the second quarter and we think beyond this has driven I think.

Lachlan: <unk> universe sustainable model the largest.

Lachlan: Our library.

Lachlan: At 95% of the library is revenue share, although only 65% of the viewing is revenue share of the 5% that we spend in our sort of direct.

Lachlan: Our content.

Lachlan: Purchase content is.

Lachlan: It drives about 30% of the <unk>. So the business continues to grow as a fantastic platform and then when we see a growing from a consensus around and really will.

Lachlan: Increasingly be the way Americans wash off retailers.

Speaker Change: That's absolutely the case.

Speaker Change: And of course, the fact that it's.

Lachlan: Video on demand.

Lachlan: Not a vast vast channel platform.

Lachlan: Also adds to the.

Lachlan: The value of that audience.

Lachlan: Yes.

Lachlan: Choosing <unk>.

Lachlan: Proactively choosing to watch to watch our content.

Lachlan: At increasingly high levels.

Lachlan: Sure.

Lachlan: On venue. Obviously, we are we are awaiting our appeal of the injunction and we will see.

Lachlan: Where we go from there we continue to believe venue is a tremendous pro consumer pro competition. Our platform, we're very excited to launch it.

Lachlan: When we have the ability to do so.

Lachlan: And then on licensing content.

Lachlan: We are in the business of building brands.

Lachlan: Our.

Lachlan: Producing.

Lachlan: Programming and.

Lachlan: We're not a sublicense sub licensee or licensor.

Lachlan: I'll sort of sports rights, and any sort of substantial or significant okay great.

Lachlan: Great.

Speaker Change: Operator next question please.

Speaker Change: We have a question from John Hodulik from UBS. Please go ahead.

John Hodulik: Great. Thanks, two if I could first.

Lachlan: Maybe not quite as easy, but easier comps over the next couple of quarters at Fox News.

Speaker Change: How should we think about the outcome of the election and maybe historically do you expect to keep the same momentum we have.

Speaker Change: We've seen recently, regardless of the outcome just just any perspective, you have there would be great.

Speaker Change: Okay.

Speaker Change: Thanks, a lot for the question John is that helpful.

Speaker Change: What's going to happen, what's going to happen Tomorrow I don't know.

Speaker Change: So for Mike.

Lachlan: Our advertising revenues.

Lachlan: The advertising marketplace that we participate in is very healthy right.

Lachlan: It helps us that we're not.

Lachlan: Overly exposed to general Entertainment, particularly general entertainment attainment cable inventory and programming.

Lachlan: So all of the markets that we participate in.

Lachlan: We're seeing very healthy growth and we are seeing healthy growth obviously not in the quarter that we just reported.

Lachlan: But going forward.

Lachlan: And if you look at sports we had a.

Lachlan: Just a tremendous our world series I think it's probably.

Lachlan: Our.

Lachlan: I haven't checked this but I'm pretty sure.

Lachlan: Five game World series is probably a record amount of revenue within five games.

Lachlan: It outperformed our budget and our expectations.

Lachlan: We have the Super Bowl coming up.

Lachlan: Paul has sold very well regular season and of course, we're sold out.

Lachlan: For the Super Bowl at.

Lachlan: We had record what we believe our record pricing.

Lachlan: News ratings, we've talked about how strong news ratings are particularly in the key 25 54 by demographics.

Lachlan: That's also.

Speaker Change: Health care.

Lachlan: At our significant sort of multiplier effect by direct pricing being up.

Lachlan: Very significantly significantly in the first quarter and almost double significantly in the second quarter. So it's a <unk>.

Lachlan: Very strong for R. R.

Lachlan: Our pricing for direct response.

Lachlan: Entertainment scatter is strong and we've talked about the local political spend already obviously one thing that happens there. If you if you want.

Lachlan: Point anything up local political pushes out some local based market advertising.

Lachlan: I only have so much inventory and so if you look at the local base markets.

Lachlan: Auto is soft retail is soft bedding that one is the one category thats pretty strong so betting has sort of returned.

Lachlan: To grow and I think we've talked about to you already being up 19% and an accelerating in the second quarter. So.

Speaker Change: What happens this week with the election.

Speaker Change: And how that would impact I don't think it would impact us I think.

Speaker Change: Again in the markets that we're seeing we're seeing tremendous amount of growth in that health.

Speaker Change: Okay. Operator next question please.

Speaker Change: We have a question from Jessica Reif Ehrlich with Bank of America Securities. Please go ahead.

Speaker Change: Alright, Thank you and good morning, everyone, maybe switching gears a little bit.

Speaker Change: Two flutter intangible can you talk about how long it will take you to get through the approval process and once you too, but what would make you exercise earlier or later.

Speaker Change: And ultimately what do you think you'd do with this asset and then one last thing if we could just go back to be which is phenomenal.

Speaker Change: And you said its accelerating.

Speaker Change: Can you walk through all the characteristics.

Speaker Change: But you had that before so why is it accelerating are you selling differently youre using different advertising tools.

Speaker Change: Okay.

Speaker Change: So.

Speaker Change: On <unk>.

Speaker Change: Flutter and <unk>. So we have six years I think in our.

Speaker Change: Our options so.

Speaker Change: Although there is no.

Lachlan: There is no immediate.

Lachlan: Neither to rush the process, but we have nowadays this generated till August 26.

Lachlan: States, we have to get licensed in every state that <unk> operates in and so it is a in depth our process.

Speaker Change: We'll take some time I don't think it will take.

Speaker Change: <unk> amount of time, but.

Speaker Change: But we expect that process to go.

Speaker Change: Relatively smooth smoothly.

Lachlan: And.

Lachlan: We'd be able to.

Lachlan: A complete the process within a year.

Speaker Change: And Jessica sorry, what was the second question <unk>.

Lachlan: Why is it yet.

Lachlan: So this year.

Lachlan: This quarter.

Lachlan: Jessica.

Lachlan: We.

Lachlan: <unk> talked before about the fill rate.

Lachlan: In <unk> and what we're really being able to do is actually.

Speaker Change: Reduce our transient rate looking at it.

Lachlan: Improve the fill rate.

Lachlan: Very very significantly.

Lachlan: So we've been in are in a very competitive market, we've been able to hold pricing above we've really been able to drive our fill rate.

Lachlan: Two.

Lachlan: Accelerate that revenue growth.

Speaker Change: Operator, we have time for one more question.

Gabrielle Brown: Your final question comes from the line of Michael <unk> from Goldman Sachs. Please go ahead.

Speaker Change: Hi, good morning, Thanks for the question.

Speaker Change: Was wondering if you could talk about some of the EBITDA bridge components at TV for fiscal 'twenty five.

Speaker Change: Steve.

Speaker Change: Specifically I know you talked about digital losses.

Speaker Change: Going to the high $200 million this year, given the <unk> outperformance.

Speaker Change: Is that does that number better and then anything else that you would flag for us as we think about the build for television. Thank you.

Speaker Change: Yes, so if I look at Mike. Thanks for the question if I look at the balance of the year.

Speaker Change: For the company and a lot of it is TV, but if you look at we've obviously got an enormous cyclical tailwind with political.

Speaker Change: Those fts number then including the TB revenue plus the sport political revenue that Lachlan mentioned in his opening.

Speaker Change: We're going to be beneficial to the TV segment.

Speaker Change: From a trading momentum perspective, obviously Fox uses benefiting in the cable segment from top line growth <unk>.

Lachlan: Television underlying momentum and then you've had an amazing MLB post season, which is going to be an uplift for us both from a revenue and margin perspective.

Lachlan: If I look at Q3, specifically.

Lachlan: From an from a football perspective, NFL scheduling will be a headwind from an advertising revenue perspective, because where.

Lachlan: We're down to the Christmas game, which we had last year in college as a whole sort of the reorder or re orientation of sports rights is a big shift for us in Q2, particularly in Q2, <unk> 10 expansion, which will be cost up for us in the quarter.

Lachlan: You've got increased white space across the board, but then with that.

Lachlan: To partially offset that.

Lachlan: WWE in for the remainder of the year and then with US also obviously discontinued with Pac 12.

Speaker Change: I look further out.

Speaker Change: The ball.

Speaker Change: In Q3, which will be a big driver be very very cash flow accretive for the company.

Speaker Change: <unk> will not be from an EBITDA perspective for US and then we also have the impact of the Q3 entertainment schedule coming back versus where we were last year generally speaking we feel very.

Speaker Change: Think television is going to have a really really strong sort of second third and fourth quarter.

Speaker Change: And obviously in Q4, when we look at it from a software perspective, which can knock us around we don't have the UEFA copper or FIFA. So that can be helpful. In that final quarter. So hopefully that gives you enough break comes to truck.

Speaker Change: But now there's a really nice tailwind.

Speaker Change: Television segment across all of those.

Speaker Change: <unk>.

Speaker Change: Okay.

Speaker Change: This point, we are out of time, but if you have any further questions. Please give me a or Charlie can stanzel. Thanks.

Speaker Change: Thanks, so much for joining us on today's call. Thanks, everyone. Thank you.

Speaker Change: Ladies and gentlemen that does conclude your conference call for today. Thank you for joining US you may now disconnect.

Q1 2025 Fox Corp Earnings Call

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