Fox Q2 2026 Fox Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q2 2026 Fox Corp Earnings Call
Speaker #1: Ladies and gentlemen, thank you for standing by. Welcome to the Q2 fiscal year 2026 earnings conference call. At this time, all participants are in a listen-only mode.
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Second Quarter, Fiscal Year 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I would like to emphasize the functionality for the question-and-answer queue will be given at that time. If you require assistance during the call, please press star, then zero on your touch tone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation Second Quarter, Fiscal Year 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I would like to emphasize the functionality for the question-and-answer queue will be given at that time. If you require assistance during the call, please press star, then zero on your touch tone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.
Speaker #1: Later, we will conduct a question-and-answer session. The Fox Corporation second answer queue will be given at that functionality for the question and time.
Speaker #1: If you require assistance during the call, please press star, then zero on your touch-tone keypad. As a reminder, this now turn the conference over to Chief Investor Relations Officer Ms. conference is being recorded.
Speaker #1: Gabrielle Brown. Please go
Speaker #1: ahead, Ms. Brown. Thank
Gabrielle Brown: Thank you, Krista. Good morning and welcome to our Fiscal 2026 Second Quarter Earnings Call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer, John Nallen, President and Chief Operating Officer, Steve Tomsic, 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. 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 filing. Additionally, this call will include certain non-GAAP financial measures, including adjusted EPS and adjusted EBITDA, or EBITDA as we refer to it on this call.
Gabrielle Brown: Thank you, Krista. Good morning and welcome to our Fiscal 2026 Second Quarter Earnings Call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer, John Nallen, President and Chief Operating Officer, Steve Tomsic, 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. 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 filing. Additionally, this call will include certain non-GAAP financial measures, including adjusted EPS and adjusted EBITDA, or EBITDA as we refer to it on this call.
Speaker #2: welcome to our fiscal twenty you, Krista. Good morning and twenty-six second quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair
Speaker #2: John Nallen, President and and Chief Executive Officer Chief Operating Officer. First, Officer Steve Tomsic, our Chief Financial Lachlan and Steve will give some prepared remarks on the on the most recent quarter.
Speaker #2: And then we'll take questions from the investment community. I'll Please note that this call may include forward-looking statements regarding
Speaker #1: Corporation's These operating statements are Fox management's results . performance and actual and current results could from what is stated . a financial certain factors on identified based current actual and management's expectations as a result from what of factors certain identified today's could in the call differ on company's .
Speaker #1: Additionally , include filings measures adjusted EPs adjusted , including EBITDA . As it on call . and this refer to non-GAAP this call included financial in our are earnings our release and SEC filings , measures Investor Relations section of our which are website also available cash refer to flow , which .
Gabrielle Brown: 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. We also refer to free cash flow, which we define as net cash provided by operating activities, plus capital expenditures. And with that, I'm pleased to turn the call over to Lachlan.
Gabrielle Brown: 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. We also refer to free cash flow, which we define as net cash provided by operating activities, plus capital expenditures. And with that, I'm pleased to turn the call over to Lachlan.
Speaker #1: we as define net cash provided operating activities . Less We capital expenditures I'm with that , turn the pleased to Lachlan call over to .
Lachlan Murdoch: Thank you, Gabby, and thank you all for joining us this morning. As you can see from our release, the operating and financial momentum that we have delivered over the last several years has continued to build over the first half of fiscal 2026. It is the product of both a highly differentiated strategy and high-quality execution that reflect the power of our leadership brands across news, sports, streaming, and entertainment. Our favorable results were broad-based, including notable strength in advertising revenue, where despite high political advertising a year ago, we still adroitly grew total company advertising revenue. I made the comment last quarter that we were experiencing the most robust advertising market we have seen for some time. That remained true during the second quarter, and it continues to be true today, where we are seeing unabated healthy trends and positive metrics across our portfolio.
Lachlan Murdoch: Thank you, Gabby, and thank you all for joining us this morning. As you can see from our release, the operating and financial momentum that we have delivered over the last several years has continued to build over the first half of fiscal 2026. It is the product of both a highly differentiated strategy and high-quality execution that reflect the power of our leadership brands across news, sports, streaming, and entertainment. Our favorable results were broad-based, including notable strength in advertising revenue, where despite high political advertising a year ago, we still adroitly grew total company advertising revenue. I made the comment last quarter that we were experiencing the most robust advertising market we have seen for some time. That remained true during the second quarter, and it continues to be true today, where we are seeing unabated healthy trends and positive metrics across our portfolio.
Speaker #1: .
Speaker #2: thank you
Speaker #2: for joining us this . As you can see from morning release , the financial
Speaker #2: that we all momentum operating and have delivered years continued to has over the over the first build It fiscal 2026 . is the product several of both differentiated a highly and high half of quality execution that reflect last our leadership power of news across , streaming and , sports entertainment .
Speaker #2: that we all momentum operating and have delivered years continued to has over the over the first build It fiscal 2026 . is the product several of both differentiated a highly and high half of quality execution that reflect last our leadership power of news across , streaming and , sports entertainment strategy results favorable broad based , including notable strength in were revenue where advertising despite high political a year advertising ago , still we grew adroitly total company advertising revenue .
Speaker #2: made the comment last quarter that we were experiencing the most robust market advertising have seen for some time we that Our , Gabby , and I true second quarter , and And true today , where we are seeing during the healthy trends metrics across our and portfolio In sports .
Lachlan Murdoch: In sports, we achieved record-breaking ad revenue for the Major League Baseball postseason, capped off by a seven-game World Series, while we also generated records for both the National Football League and College Football regular seasons. Looking forward, we've had a strong NFL postseason, and we're now gearing up for our marquee motorsports events, the Daytona 500, Indy 500, and, of course, the highly anticipated FIFA Men's World Cup, which starts in June. At news, despite comparisons to a heavy political news cycle in the prior year, we not only grew advertising revenue in the second quarter but also achieved our highest second quarter advertising revenue ever. News business, further demographic expansion, and pricing growth in both direct response and national advertising all contributed to this strong result.
Lachlan Murdoch: In sports, we achieved record-breaking ad revenue for the Major League Baseball postseason, capped off by a seven-game World Series, while we also generated records for both the National Football League and College Football regular seasons. Looking forward, we've had a strong NFL postseason, and we're now gearing up for our marquee motorsports events, the Daytona 500, Indy 500, and, of course, the highly anticipated FIFA Men's World Cup, which starts in June. At news, despite comparisons to a heavy political news cycle in the prior year, we not only grew advertising revenue in the second quarter but also achieved our highest second quarter advertising revenue ever. News business, further demographic expansion, and pricing growth in both direct response and national advertising all contributed to this strong result.
Speaker #2: We had a positive Baseball Major League season, capped off by a seven-game World Series. We also generated records for both the Football League and college football regular seasons.
Speaker #2: We positive Baseball Major League , capped off by a seven game World Series . While we also generated records for both the Football League and .
Speaker #2: we've had a strong NFL now up for and we're our postseason marquee motorsports events . The 500 and Indy 500 of course , the anticipated FIFA gearing Cup , June starts in news .
Speaker #2: Daytona business further demographic expansion and pricing highly growth in both direct response which and national advertising all contributed to this strong the second .
Speaker #2: . At Despite comparisons to a heavy political news cycle in the year , only grew not advertising revenue in quarter , but also a achieved highest second quarter advertising prior revenue ever .
Lachlan Murdoch: Distribution revenue grew 4% during the quarter, with subscriber declines notably improving sequentially, even when excluding the contribution from Fox One, which continues to exceed our expectations, driven by both direct signups as well as partnerships. At this point, we have not observed any noticeable cannibalization of traditional subscribers, a result of our targeted marketing to cord cutters and cord nevers. Although Fox One launched just five months ago, we are encouraged by consumer reception to the product, and we have already gained meaningful insights into audience engagement trends. While live sporting events continue to drive the majority of engagement, news accounts for approximately 1/3 of total minutes viewed on Fox One. Notably, news viewers engage with the platform twice as many days per week as non-news viewers, and watching it nearly three times as many minutes per week on average.
Lachlan Murdoch: Distribution revenue grew 4% during the quarter, with subscriber declines notably improving sequentially, even when excluding the contribution from Fox One, which continues to exceed our expectations, driven by both direct signups as well as partnerships. At this point, we have not observed any noticeable cannibalization of traditional subscribers, a result of our targeted marketing to cord cutters and cord nevers. Although Fox One launched just five months ago, we are encouraged by consumer reception to the product, and we have already gained meaningful insights into audience engagement trends. While live sporting events continue to drive the majority of engagement, news accounts for approximately 1/3 of total minutes viewed on Fox One. Notably, news viewers engage with the platform twice as many days per week as non-news viewers, and watching it nearly three times as many minutes per week on average.
Speaker #2: Distribution revenue grew 4% during the quarter , with subscriber declines notably improving even when excluding the contribution sequentially from Fox one , which continues to exceed our expectations , driven by both direct signups as well as partnerships At this .
Speaker #2: we have point , not any noticeable observed traditional subscribers . result A of our targeted cannibalization of cord and nevers cord . Although Fox one launched just ago , five months we are encouraged by consumer the product and we've already gained meaningful insights into marketing to engagement audience trends .
Speaker #2: live While sporting events continue to majority of News accounts for approximately one third of total engagement drive the Viewed on Fox one . news Notably , engaged with the platform viewers as many twice days as non-news viewers watching , and as many per week average three times .
Lachlan Murdoch: These patterns reinforce our view that Fox One is not only the premier destination for live sports but also the leading platform for timely, relevant live news streaming. Whether streaming, linear, social, or digital, Fox News Media continues to meet our audiences where they are. Over the past 12 months, a fast-moving and consequential news cycle has reinforced Fox News Media's leadership position, with audiences turning to the network for live coverage and in-depth analysis. Fox News again finished the quarter as the most-watched cable network in total day, while maintaining its lead as the most-watched cable news network and producing the top 11 cable news programs. Again, according to recent Nielsen data, Fox News is the number one cable news network among all three political parties, which bodes well for the upcoming political election cycle.
Lachlan Murdoch: These patterns reinforce our view that Fox One is not only the premier destination for live sports but also the leading platform for timely, relevant live news streaming. Whether streaming, linear, social, or digital, Fox News Media continues to meet our audiences where they are. Over the past 12 months, a fast-moving and consequential news cycle has reinforced Fox News Media's leadership position, with audiences turning to the network for live coverage and in-depth analysis. Fox News again finished the quarter as the most-watched cable network in total day, while maintaining its lead as the most-watched cable news network and producing the top 11 cable news programs. Again, according to recent Nielsen data, Fox News is the number one cable news network among all three political parties, which bodes well for the upcoming political election cycle.
Speaker #2: These patterns reinforce our view that FOX One is not only the premier destination for live sports, but also the leading platform, timely, for relevant, live news streaming.
Speaker #2: Whether streaming , linear , social or Fox News Media digital , continues to meet our audiences where they are . Over the past 12 months , a moving and consequential news fast News reinforced Fox Media's leadership with position audiences turning to the for network live and coverage in-depth analysis .
Speaker #2: news again Fox quarter as the most watched network cable in total while maintaining its most lead as the day , watched news network and producing the top 11 cable news programs .
Speaker #2: Again , according to Nielsen recent data Fox . news is the number one cable news network among three political parties , which well for the bodes upcoming political election cycle all .
Lachlan Murdoch: On the digital side, social media views for Fox News Digital were up an astounding 170% over the prior year, and both Fox News and Fox Business ranked number one in YouTube video views among their peers during the quarter. There is no question that Fox News Media remains front and center with today's audiences while actively engaging with the next generation of news consumers. We are focused on expanding our podcast content and talent across Fox News and the broader Fox platform, supporting our strategy to meet our audiences wherever they are. Underscoring fan engagement across the Fox brands, Fox Sports ended 2025 as the leader in live sports event viewing, a title it has held for six of the last seven years.
Lachlan Murdoch: On the digital side, social media views for Fox News Digital were up an astounding 170% over the prior year, and both Fox News and Fox Business ranked number one in YouTube video views among their peers during the quarter. There is no question that Fox News Media remains front and center with today's audiences while actively engaging with the next generation of news consumers. We are focused on expanding our podcast content and talent across Fox News and the broader Fox platform, supporting our strategy to meet our audiences wherever they are. Underscoring fan engagement across the Fox brands, Fox Sports ended 2025 as the leader in live sports event viewing, a title it has held for six of the last seven years.
Speaker #2: digital side , social media views for Digital were up and 170% over the Fox News On the and both News and Fox Fox Business ranked number one in YouTube video views amongst their peers during the quarter There is no Fox News Media remains front and center with today's audiences , while question that actively .
Speaker #2: consumers of news are . We content and podcast talent across Fox focused on and the expanding our Fox platform , strategy supporting our to meet our audiences are wherever they .
Speaker #2: Underscoring fan engagement across the Fox Fox sports brands , ended 2025 as the leader in live sports event viewing . A title . It is for held last six of the seven years from the World drew over 27 million viewers for game seven Series that to a ten year high .
Lachlan Murdoch: From the World Series that drew over 27 million viewers for Game 7 to a 10-year high in NFL regular season viewership and the Big Ten Championship setting the record for any conference championship game on any network, the strength of the Fox Sports portfolio is unmatched. We capped the season with the Seattle Seahawks' NFC championship victory over the LA Rams, drawing 46 million viewers and providing a powerful lead-in to Fox Entertainment's Memory of a Killer, the most-watched series premiere on any network this season, with over 11 million viewers across multiple platforms. The trend of strong engagement was further extended at Tubi. Tubi delivered its most-streamed quarter of all time and grew total view time 27% year-over-year, supported by an expanding content slate, including the NFL Thanksgiving game simulcast and the premiere of Sidelined 2, a Tubi original that has become a fan favorite.
Lachlan Murdoch: From the World Series that drew over 27 million viewers for Game 7 to a 10-year high in NFL regular season viewership and the Big Ten Championship setting the record for any conference championship game on any network, the strength of the Fox Sports portfolio is unmatched. We capped the season with the Seattle Seahawks' NFC championship victory over the LA Rams, drawing 46 million viewers and providing a powerful lead-in to Fox Entertainment's Memory of a Killer, the most-watched series premiere on any network this season, with over 11 million viewers across multiple platforms. The trend of strong engagement was further extended at Tubi. Tubi delivered its most-streamed quarter of all time and grew total view time 27% year-over-year, supported by an expanding content slate, including the NFL Thanksgiving game simulcast and the premiere of Sidelined 2, a Tubi original that has become a fan favorite.
Speaker #2: In NFL regular season viewership and the Big Ten Championship, for any conference championship record on any setting, the strength of the Fox Sports portfolio is unmatched.
Speaker #2: We capped the the Seattle season with Seahawks , NFL , NFC LA over the victory drawing Rams , 46 million viewers and providing a Championship in to Fox Entertainment's memory of a watched most The killer .
Speaker #2: Series premiere on any season. With network, this had over 11 million viewers across multiple platforms. The trend of strong further extended engagement was at Tubi.
Speaker #2: Tubi delivered streamed quarter of all and grew its most total viewer time 27% year time year by an expanding content , supported including the Thanksgiving game simulcast and the of NFL premiere over two , sideline a two be original that become a has fan favorite growth engagement strongest quarters , in seven and powered by an on demand viewing , which is over 95% of consumption Tubi on .
Lachlan Murdoch: This engagement growth was the strongest in 7 quarters and powered by on-demand viewing, which is over 95% of consumption on Tubi. Tubi's most-streamed quarter translated into record quarterly revenue, which grew 19% in the quarter on an absolute basis. This revenue growth once again translated to the bottom line, with Tubi achieving EBITDA profitability for the second quarter in a row. Meaningful audience engagement is a consistent and enduring theme across our results, highlighting Fox's unique cultural position. Ensuring that we constantly and deeply connect with fans across our brands is at the forefront of our strategy. As an example of this strategy in action, total minutes viewed across sports, news, and entertainment on Tubi increased 15% year-over-year in calendar year 2025. Amid strong competition, Fox stands out through compelling storytelling and deliberate investment in fan-driven content that delivers unmatched real-time reach.
Lachlan Murdoch: This engagement growth was the strongest in 7 quarters and powered by on-demand viewing, which is over 95% of consumption on Tubi. Tubi's most-streamed quarter translated into record quarterly revenue, which grew 19% in the quarter on an absolute basis. This revenue growth once again translated to the bottom line, with Tubi achieving EBITDA profitability for the second quarter in a row. Meaningful audience engagement is a consistent and enduring theme across our results, highlighting Fox's unique cultural position. Ensuring that we constantly and deeply connect with fans across our brands is at the forefront of our strategy. As an example of this strategy in action, total minutes viewed across sports, news, and entertainment on Tubi increased 15% year-over-year in calendar year 2025. Amid strong competition, Fox stands out through compelling storytelling and deliberate investment in fan-driven content that delivers unmatched real-time reach.
Speaker #2: Tubi's most streamed quarter . Translated into record quarterly revenue , grew which 19% in the quarter on an absolute basis . And this revenue growth once again to the line with to B EBITDA achieving translated bottom profitability for the .
Speaker #2: audience . Meaningful engagement is a and consistent enduring theme across our results , This highlighting Fox's cultural position , ensuring that we . Constantly and unique deeply fans connect with across our is at the forefront of brands our strategy .
Speaker #2: As an example of this strategy and action , total minutes across sports , viewed news , entertainment Tubi on 15% year over increased year , calendar and year 2025 amid strong competition .
Speaker #2: Fox through compelling out storytelling stands deliberate and investment fan in driven content that time delivers reach . Together , these elements reinforce Fox's position as a trusted destination for audiences today .
Lachlan Murdoch: Together, these elements reinforce Fox's position as a trusted destination for audiences today while building lasting connection with future fans. We enter the second half of our fiscal year with strong momentum and with confidence in our strategic direction. Our emphasis on live sports and news, together with the strength of Tubi and increasingly Fox One, has driven exceptional performance and reinforced our leadership position across the portfolio. This focus, together with our strong financial position and best-in-class balance sheet, underpin our ability to deliver sustained growth and shareholder value. And with that, I will turn the call over to Steve to take you through the details of the quarter.
Lachlan Murdoch: Together, these elements reinforce Fox's position as a trusted destination for audiences today while building lasting connection with future fans. We enter the second half of our fiscal year with strong momentum and with confidence in our strategic direction. Our emphasis on live sports and news, together with the strength of Tubi and increasingly Fox One, has driven exceptional performance and reinforced our leadership position across the portfolio. This focus, together with our strong financial position and best-in-class balance sheet, underpin our ability to deliver sustained growth and shareholder value. And with that, I will turn the call over to Steve to take you through the details of the quarter.
Speaker #2: While building lasting connection with future fans . We enter the second half of our fiscal year with strong momentum and with confidence in our strategic Our direction .
Speaker #2: emphasis on live news , sports and together strength with the of Tubi and increasingly , Fox one has exceptional driven performance and reinforced our leadership across the portfolio position .
Speaker #2: This focus , together with our strong financial position and best in class balance sheet , underpin our ability to deliver sustained growth and shareholder value .
Steve Tomsic: Thanks, Lachlan, and good morning, everyone. Fox delivered yet another strong quarter, with our fiscal second quarter total revenues reaching $5.18 billion, a 2% increase from the prior year quarter. Distribution revenues grew a healthy 4%, reflecting the strength of our brands and must-have nature of our channels. Advertising revenues grew 1% despite facing a difficult comparison to last year's record political cycle, driven by strong linear pricing across our portfolio, continued robust revenue growth at Tubi, and a 7-game World Series at sports. Content and other revenues were flat compared to the prior year quarter, as higher sports sublicensing revenues were offset by lower entertainment content revenues. Quarterly Adjusted EBITDA was $692 million as compared to the $781 million reported in the prior year quarter, as the increase in revenues was offset by higher expenses.
Steve Tomsic: Thanks, Lachlan, and good morning, everyone. Fox delivered yet another strong quarter, with our fiscal second quarter total revenues reaching $5.18 billion, a 2% increase from the prior year quarter. Distribution revenues grew a healthy 4%, reflecting the strength of our brands and must-have nature of our channels. Advertising revenues grew 1% despite facing a difficult comparison to last year's record political cycle, driven by strong linear pricing across our portfolio, continued robust revenue growth at Tubi, and a 7-game World Series at sports. Content and other revenues were flat compared to the prior year quarter, as higher sports sublicensing revenues were offset by lower entertainment content revenues. Quarterly Adjusted EBITDA was $692 million as compared to the $781 million reported in the prior year quarter, as the increase in revenues was offset by higher expenses.
Speaker #2: And with that , I will turn the call over to Steve to take you through the details quarter of the . Thanks , Lachlan , and good morning , everyone .
Speaker #3: delivered yet Fox another strong our fiscal second quarter revenues total reaching $5.18 billion , a 2% increase from the prior year quarter . revenues Distribution grew a healthy 4% , reflecting the strength of our brands , and must have nature of our channels .
Speaker #3: Advertising revenues grew 1% despite facing a difficult comparison to year's last record political linear , driven by strong pricing portfolio across our , continued robust revenue growth at Tubi seven game World and a Series at Sports cycle revenues were content and compared flat prior year quarter , other as high sports club revenues were offset by lower entertainment content revenues .
Speaker #3: Quarterly adjusted EBITDA was $692 million , as compared to the the prior $781 million reported in year quarter . As the increase in revenues was offset by higher expenses .
Steve Tomsic: This included growth-driven spend at our digital-led growth initiatives and higher sports programming and production costs, partially offset by lower entertainment programming and production costs. Net income attributable to stockholders was $229 million or 52 cents per share compared to the $373 million or 81 cents per share reported in the prior year period. Excluding non-core items, Adjusted net income was $360 million, and Adjusted EPS was 82 cents. Turning to our segments, starting with cable, which delivered revenues of $2.28 billion and Adjusted EBITDA of $687 million, both representing growth of 5% versus the prior year quarter. Cable advertising revenues grew a robust 7%, driven by higher pricing at news and sports. Cable distribution revenues increased 5% as pricing gains from our affiliate renewals outpaced the impact from net subscriber declines, which continue to improve both inclusive and excluding the contribution from Fox One.
Steve Tomsic: This included growth-driven spend at our digital-led growth initiatives and higher sports programming and production costs, partially offset by lower entertainment programming and production costs. Net income attributable to stockholders was $229 million or 52 cents per share compared to the $373 million or 81 cents per share reported in the prior year period. Excluding non-core items, Adjusted net income was $360 million, and Adjusted EPS was 82 cents. Turning to our segments, starting with cable, which delivered revenues of $2.28 billion and Adjusted EBITDA of $687 million, both representing growth of 5% versus the prior year quarter. Cable advertising revenues grew a robust 7%, driven by higher pricing at news and sports. Cable distribution revenues increased 5% as pricing gains from our affiliate renewals outpaced the impact from net subscriber declines, which continue to improve both inclusive and excluding the contribution from Fox One.
Speaker #3: This included growth driven spend an our digital led growth initiatives and sports higher programming and production costs partially offset by lower entertainment programming and production costs .
Speaker #3: Net income attributable to stockholders was $229 million, or $0.52 per share, compared to the $373 million, or $0.81 per share reported in the prior year period.
Speaker #3: Excluding non-core items , adjusted net income was adjusted $360 million and EPs was $0.82 . Turning to our segments . Starting with cable , which delivered revenues of $2.28 billion and adjusted EBITDA of $687 million , both representing growth of 5% versus the prior year quarter .
Speaker #3: Cable advertising revenues grew a robust 7% , driven by higher pricing at and sports news distribution revenues cable increased 5% as gains from our pricing affiliate renewals outpaced the impact from net subscriber declines , which continued to improve both and inclusive excluding the contribution from Fox cable and other one revenues content grew 4% , to higher sports sublicensing revenues , which were offset by a corresponding level of sports rights expenses .
Speaker #3: Cable advertising revenues grew a robust 7% , driven by higher pricing at and sports news distribution revenues cable increased 5% as gains from our pricing affiliate renewals outpaced the impact from net subscriber declines , which continued to improve both and inclusive excluding the contribution from Fox cable and other one revenues content grew 4% , to higher sports sublicensing revenues , which were offset by a corresponding level of sports rights expenses predominantly due Reported expense growth at cable with was 5% , higher sports programming and production costs partially offset by lower newsgathering costs relating to our coverage of last year's presidential election .
Steve Tomsic: Cable content and other revenues grew 4%, predominantly due to higher sports sublicensing revenues, which are offset by a corresponding level of sports rights expenses. Reported expense growth at cable was 5%, with higher sports programming and production costs partially offset by lower news gathering costs relating to our coverage of last year's presidential election. Now turning to our television segment, which reported $2.94 billion in quarterly revenues. Advertising revenues at television were unchanged, as continued growth at Tubi, the impact of additional MLB postseason games, and pricing strength across our sports schedule were offset primarily by the absence of last year's political advertising revenues. Television distribution revenues increased 1% in the quarter, as healthy growth in fees across Fox-owned and affiliated stations more than offset the impact from industry subscriber declines.
Steve Tomsic: Cable content and other revenues grew 4%, predominantly due to higher sports sublicensing revenues, which are offset by a corresponding level of sports rights expenses. Reported expense growth at cable was 5%, with higher sports programming and production costs partially offset by lower news gathering costs relating to our coverage of last year's presidential election. Now turning to our television segment, which reported $2.94 billion in quarterly revenues. Advertising revenues at television were unchanged, as continued growth at Tubi, the impact of additional MLB postseason games, and pricing strength across our sports schedule were offset primarily by the absence of last year's political advertising revenues. Television distribution revenues increased 1% in the quarter, as healthy growth in fees across Fox-owned and affiliated stations more than offset the impact from industry subscriber declines.
Speaker #3: Now , turning to our television segment , which reported $2.94 billion in quarterly revenues . revenues at television were unchanged as continued growth Tubi , at the impact of additional MLB postseason games pricing strength and across our sports schedule were offset primarily by the absence of last year's political advertising revenues Television distribution revenues .
Speaker #3: 1% in the quarter, as healthy growth in fees across Fox-owned and affiliated stations more than offset the impact from industry subscriber declines.
Steve Tomsic: Television content and other revenues were down 19% year-over-year, primarily due to lower revenues tied to our entertainment production studios, which were impacted by the timing of deliveries. Expense growth at our television segment was held to a modest 1%, driven by higher sports programming rights and production costs, and continued investment at Tubi, partially offset by lower entertainment programming and production costs. All in, EBITDA at our television segment was $143 million compared to the $205 million in the prior year quarter. Turning to free cash flow, where we recorded a deficit of $791 million this quarter. This is consistent with the seasonality of our working capital cycle, where the first half of our fiscal year reflects the concentration of payments for sports rights and buildup of advertising-related receivables, both of which reverse in the second half of our fiscal year.
Steve Tomsic: Television content and other revenues were down 19% year-over-year, primarily due to lower revenues tied to our entertainment production studios, which were impacted by the timing of deliveries. Expense growth at our television segment was held to a modest 1%, driven by higher sports programming rights and production costs, and continued investment at Tubi, partially offset by lower entertainment programming and production costs. All in, EBITDA at our television segment was $143 million compared to the $205 million in the prior year quarter. Turning to free cash flow, where we recorded a deficit of $791 million this quarter. This is consistent with the seasonality of our working capital cycle, where the first half of our fiscal year reflects the concentration of payments for sports rights and buildup of advertising-related receivables, both of which reverse in the second half of our fiscal year.
Speaker #3: Television content and other revenues were down 19% year over year , primarily due to revenues tied to our lower entertainment production studios , which were impacted by the timing of deliveries .
Speaker #3: Expense growth at our television segment was to a held modest 1% , driven by higher sports rights and programming production costs , and continued investment at Partially Tubi .
Speaker #3: Offset by lower entertainment programming and production costs. All in, EBITDA at our television segment was $143 million, compared to the $205 million in the prior year quarter.
Speaker #3: free cash Turning to flow , where we recorded a deficit of 790 $791 million this . This quarter is with the seasonality of our working capital cycle , where the first half of our fiscal year reflects the concentration of payments for sports rights and build up of advertising related receivables , both of which reverse in the second half of our fiscal year .
Steve Tomsic: In terms of capital allocation, demonstrating our commitment to utilizing our full buyback authorization, fiscal year to date, we have repurchased an additional $1.8 billion through our share buyback program. This brings the total cumulative amount repurchased to $8.4 billion, or approximately 35% of our total shares outstanding since the launch of the buyback program in 2019. This includes $1.5 billion of the accelerated share repurchase transaction we announced last quarter, for which the initial tranche of approximately 8.5 million Class A and 10.9 million Class B shares have been retired, with the remainder to be settled during the second half of this fiscal year. In addition, today we announced a $0.28 per share semiannual dividend. With this dividend distribution, our total cumulative cash return to shareholders in the form of both dividends and share buybacks will have reached approximately $10.4 billion since the establishment of Fox Corp.
Steve Tomsic: In terms of capital allocation, demonstrating our commitment to utilizing our full buyback authorization, fiscal year to date, we have repurchased an additional $1.8 billion through our share buyback program. This brings the total cumulative amount repurchased to $8.4 billion, or approximately 35% of our total shares outstanding since the launch of the buyback program in 2019. This includes $1.5 billion of the accelerated share repurchase transaction we announced last quarter, for which the initial tranche of approximately 8.5 million Class A and 10.9 million Class B shares have been retired, with the remainder to be settled during the second half of this fiscal year. In addition, today we announced a $0.28 per share semiannual dividend. With this dividend distribution, our total cumulative cash return to shareholders in the form of both dividends and share buybacks will have reached approximately $10.4 billion since the establishment of Fox Corp.
Speaker #3: In capital allocation terms of , demonstrating our commitment to full utilizing our buyback authorization , fiscal year to date , we have repurchased an additional $1.8 billion through our share buyback program .
Speaker #3: This brings the total cumulative amount repurchased to or $8.4 billion , approximately 35% of our total shares outstanding since the launch of the buyback in program 2019 .
Speaker #3: This includes $1.5 billion of accelerated of the accelerated share repurchase transaction . We announced last quarter , for which initial the tranche of approximately 8.5 million class A and 10.9 million class B shares have been retired , with the remainder to be settled during the second half of this fiscal year .
Speaker #3: Today, we, in addition, announced a $0.28 per share semi-annual dividend. With this dividend distribution, our total cumulative cash return to shareholders in the form of dividends and share buybacks will have reached approximately $10.4 billion since the establishment of Fox Corp.
Steve Tomsic: These capital return measures are supported by the strength of our balance sheet, where we ended the quarter with approximately $2 billion in cash and $6.6 billion in debt. With that, I'll turn the call back over to Gabby.
Steve Tomsic: These capital return measures are supported by the strength of our balance sheet, where we ended the quarter with approximately $2 billion in cash and $6.6 billion in debt. With that, I'll turn the call back over to Gabby.
Speaker #3: These capital return measures are strength of our supported by the balance sheet , ended the where we quarter with approximately $2 billion in cash and $6.6 billion in debt .
[Company Representative] (Fox Corporation): Great. Thanks, Steve. And now we would be happy to take questions from the investment community.
Gabrielle Brown: Great. Thanks, Steve. And now we would be happy to take questions from the investment community.
Speaker #3: And with that , I'll turn the call back over to Gaby .
Operator: Ladies and gentlemen, I would like to emphasize the functionality for the question-and-answer queue. If you wish to ask a question, please press star, then one, on your touch-tone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from queue at any time by pressing the star, then one. If you are using a speakerphone, please pick up the handset before pressing the numbers. It has been requested that you limit yourself to one question. Once again, if you have a question, please press star, then one, at this time. One moment for the first question. Our first question comes from John Hodulik with UBS. Please go ahead.
Operator: Ladies and gentlemen, I would like to emphasize the functionality for the question-and-answer queue. If you wish to ask a question, please press star, then one, on your touch-tone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from queue at any time by pressing the star, then one. If you are using a speakerphone, please pick up the handset before pressing the numbers. It has been requested that you limit yourself to one question. Once again, if you have a question, please press star, then one, at this time. One moment for the first question. Our first question comes from John Hodulik with UBS. Please go ahead.
Speaker #1: Great . Thanks , Steve . And now we'll be happy to take questions from the investment community
Speaker #4: and Ladies
Speaker #4: I would like to emphasize the . functionality question for the and answer queue . If you wish to ask a question , please press star .
Speaker #4: Then one on your touch tone phone . You will hear a tone indicating you have been placed in queue . You may remove yourself from queue at any by time pressing star .
Speaker #4: the Then one . If you are using a speakerphone , please pick up the handset before pressing the numbers . It has been requested that you limit yourself to one question .
Speaker #4: Once again , if you have a question , please press star . Then one at this time . One moment for the first question .
[Analyst] (UBS Securities LLC): Great. Thanks. Good morning, everyone. It looks like cable advertising is really the standout. Can we talk a little bit about that? First, on the news side, are you guys closing the gap in terms of CPMs with broadcasting? And how should we expect that to sort of move forward as the comps get easier, as we move into the midterm elections? That's on the news side. For sports, any color there in terms of pricing? And how should we think of how you guys look at profitability of the World Cup this year versus what you've had it in the past, given it's in the US? Thanks.
John Hodulik: Great. Thanks. Good morning, everyone. It looks like cable advertising is really the standout. Can we talk a little bit about that? First, on the news side, are you guys closing the gap in terms of CPMs with broadcasting? And how should we expect that to sort of move forward as the comps get easier, as we move into the midterm elections? That's on the news side. For sports, any color there in terms of pricing? And how should we think of how you guys look at profitability of the World Cup this year versus what you've had it in the past, given it's in the US? Thanks.
Speaker #4: Our first question comes from John Huddle with UBS. Please go ahead.
Speaker #5: Thanks . Great . Good morning everyone . It looks like cable is advertising really the standout . Can we talk a little bit about that first on the side .
Speaker #5: Are you guys closing the gap with in terms of CPMs with broadcasting and how should we new expect that to to move forward as the comps get easier as into we move the to midterm elections ?
Speaker #5: That's on the new side for sports . Any color there in terms of pricing and how should we think of the how you guys look at profitability of the World Cup this year versus what you've had in the past , given it's in the Thanks US ?
Lachlan Murdoch: Hey. Good morning, John. Thank you. Good to hear your voice. First, on cable advertising, the news I wouldn't say the news advertising market, but certainly the advertising market for Fox News has been incredibly robust. This half, we've added about 200 new advertisers. And you have to remember, that's on top of the 350 new advertisers that we added last year. So the demand for the product and the demand for the audience remains incredibly strong. That's also reflected in our scatter pricing for news, which is up sort of an embarrassing 6% or 47% year-on-year. We don't compare scatter pricing and news to the upfront because news doesn't have traditionally large upfront. So we compare it sort of on year-on-year pricing. So scatter pricing is very strong. Direct response pricing is strong.
Steve Tomsic: Hey. Good morning, John. Thank you. Good to hear your voice. First, on cable advertising, the news I wouldn't say the news advertising market, but certainly the advertising market for Fox News has been incredibly robust. This half, we've added about 200 new advertisers. And you have to remember, that's on top of the 350 new advertisers that we added last year. So the demand for the product and the demand for the audience remains incredibly strong. That's also reflected in our scatter pricing for news, which is up sort of an embarrassing 6% or 47% year-on-year. We don't compare scatter pricing and news to the upfront because news doesn't have traditionally large upfront. So we compare it sort of on year-on-year pricing. So scatter pricing is very strong. Direct response pricing is strong.
Speaker #5: .
Speaker #2: Hey , good morning John . Thank you . Good to hear your voice . First on cable advertising the the news I wouldn't say the news advertising market , but certainly the advertising market for Fox News has been incredibly robust .
Speaker #2: This half . We've added about 200 new you have to that's on remember top of the 350 new advertisers that we added last year .
Speaker #2: So the demand for , for for the and the product demand for for the audience are remains incredibly strong . That's also , you know , reflected in our in our scatter pricing news , which know , is , you which is up sort of an embarrassing 46 or 47% year on year .
Speaker #2: We don't compare scatter pricing and news to the upfront because news doesn't have traditionally large upfronts. So we compare it, sort of, on year-on-year pricing.
Lachlan Murdoch: And we couldn't be more pleased with the performance of advertising sales at Fox News. Moving forward into the political cycle, we expect that's only a positive for us. We expect a robust political advertising cycle. Of course, we benefit from that primarily at our local station group. But if you'll remember from the last political cycle, news has started to see a growing appetite for national political advertising. And we would expect to be the primary beneficiary of that at Fox News. And why do we expect to be the primary beneficiary? Because Fox News is not only the number one news source for Republicans and Conservatives, but it's also the number one has more Democrats and more independents watching Fox News than watching our competitors. So we feel that we're in a very good position going forward into this political cycle.
Steve Tomsic: And we couldn't be more pleased with the performance of advertising sales at Fox News. Moving forward into the political cycle, we expect that's only a positive for us. We expect a robust political advertising cycle. Of course, we benefit from that primarily at our local station group. But if you'll remember from the last political cycle, news has started to see a growing appetite for national political advertising. And we would expect to be the primary beneficiary of that at Fox News. And why do we expect to be the primary beneficiary? Because Fox News is not only the number one news source for Republicans and Conservatives, but it's also the number one has more Democrats and more independents watching Fox News than watching our competitors. So we feel that we're in a very good position going forward into this political cycle.
Speaker #2: So scatter pricing is very strong . Direct response pricing is strong . You know , we couldn't be more pleased with the performance of advertising sales at Fox News .
Speaker #2: Moving forward into the political cycle, we expect that that's only a positive for us. We expect a robust political advertising cycle.
Speaker #2: course , we Of benefit from primarily at our that local station group , but if you remember from the last political cycle , you know , news has started to see a growing for appetite national political advertising .
Speaker #2: And we would expect to be the primary beneficiary of that Fox News . And why expect to be do we the primary beneficiary ?
Speaker #2: Because Fox News is not only the number one news source for Republicans and conservatives , but it's also the number one has more Democrats and more independents watching Fox News than watching our our competitors .
Lachlan Murdoch: As for the, I think, your second question was on the World Cup. Will it be profitable? Yes, it will. There's a tremendous excitement around the World Cup by the sponsors and other traditional advertisers. We're looking forward to a great competition and to a sort of robust advertising market on our sports platforms.
Steve Tomsic: As for the, I think, your second question was on the World Cup. Will it be profitable? Yes, it will. There's a tremendous excitement around the World Cup by the sponsors and other traditional advertisers. We're looking forward to a great competition and to a sort of robust advertising market on our sports platforms.
Speaker #2: So we feel that we're in a very good position going forward into this political cycle. As for the—I think your second question was on the World Cup.
Speaker #2: Will it be profitable ? Yes , it will . There's a tremendous excitement around around the World Cup by , you , the sponsors and other traditional advertisers .
Speaker #2: We're looking forward to a great competition and to a sort of robust advertising market on our sports platform.
[Company Representative] (Fox Corporation): Great. Next question, please.
Gabrielle Brown: Great. Next question, please.
Operator: Your next question comes from the line of Jessica Reif Ehrlich with Bank of America Securities. Please go ahead.
Operator: Your next question comes from the line of Jessica Reif Ehrlich with Bank of America Securities. Please go ahead.
Speaker #1: Great . Next question please .
Speaker #4: Your next question comes line from the of Jessica Reif with Bank of America go ahead Please .
[Analyst] (Bank of America Securities): Thank you. Good morning, everybody. Two questions. On the NFL step-up, we all know that's coming. And obviously, the positive is it will give you certainty. But we're also expecting a big step-up in costs. I don't know if you can address that or not. But how do you think about offsetting increased costs? Are there any new ways to monetize? How are you thinking just about the NFL new contract? And then separately, this is a little bit weird, but I mean, unusual for me. But we never talk about entertainment on this call. But it seems like you've been making a lot of talent deals in the last few months. And it just seems notable. So how are you thinking about the entertainment business overall? Are there any changes that you're contemplating? Thank you.
Jessica Reif Ehrlich: Thank you. Good morning, everybody. Two questions. On the NFL step-up, we all know that's coming. And obviously, the positive is it will give you certainty. But we're also expecting a big step-up in costs. I don't know if you can address that or not. But how do you think about offsetting increased costs? Are there any new ways to monetize? How are you thinking just about the NFL new contract? And then separately, this is a little bit weird, but I mean, unusual for me. But we never talk about entertainment on this call. But it seems like you've been making a lot of talent deals in the last few months. And it just seems notable. So how are you thinking about the entertainment business overall? Are there any changes that you're contemplating? Thank you.
Speaker #6: you . Good Thank morning everybody . Two questions on the NFL . Like step up . We all know that's coming . And obviously it's a positive .
Speaker #6: Is it will give you certainty . But you know we're also expecting like a big step up in cost I don't know if you can address that or not , but how do you think about offsetting increased costs .
Speaker #6: You're thinking are there any new ways to monetize ? How are you thinking just about the NFL ? Like new contracts . And then separately , there's bit a little weird , but it unusual for me .
Speaker #6: But we never talk about entertainment on this call . But it seems like you've you've been making a lot of talent deals last few months .
Speaker #6: And it just seems notable . How are you thinking about the entertainment business overall ? Are there any changes that you're contemplating ? Thank you .
Lachlan Murdoch: Hey, Jessica. I hope you're well. So, starting with the NFL, we don't want to speculate in terms of how the NFL will choose to move forward in terms of their option to renegotiate their rights. I would agree with you that, obviously, the great benefit of that is giving us certainty as we move forward. It's obviously tremendous content for us. And they've been a really fantastic partner. And although this year's Super Bowl is not ours, we're certainly looking forward to it as we're all fans. So, again, without speculating, we have the ability to offset a portion of any kind of cost increases because we look at our sports portfolio as a whole. So we would certainly consider balancing or rebalancing our portfolio as we move forward when those opportunities become available. So we feel pretty comfortable about sort of the sports business as we move forward.
Lachlan Murdoch: Hey, Jessica. I hope you're well. So, starting with the NFL, we don't want to speculate in terms of how the NFL will choose to move forward in terms of their option to renegotiate their rights. I would agree with you that, obviously, the great benefit of that is giving us certainty as we move forward. It's obviously tremendous content for us. And they've been a really fantastic partner. And although this year's Super Bowl is not ours, we're certainly looking forward to it as we're all fans. So, again, without speculating, we have the ability to offset a portion of any kind of cost increases because we look at our sports portfolio as a whole. So we would certainly consider balancing or rebalancing our portfolio as we move forward when those opportunities become available. So we feel pretty comfortable about sort of the sports business as we move forward.
Speaker #2: Hey , Jessica , hope you're well . So starting with the the NFL , look , we don't want to speculate in terms of what the you know , how the choose to NFL will will move forward in terms of their option to .
Speaker #2: Renegotiate their rights . We I would agree with you that obviously , the great benefit of that is giving us certainty as we move forward .
Speaker #2: It's obviously , you know , tremendous , tremendous content for us . And they've been a really fantastic partner . And although this year's Super Bowl is not is not ours , you know , we're certainly looking forward to it as we're all all fans .
Speaker #2: So again , without speculating , you know , we have the ability to offset portion of any kind of cost increases because we look at our sports portfolio as a whole .
Speaker #2: know , we So , you would certainly , you know , consider , you know , balancing or rebalancing our portfolio as we move forward .
Speaker #2: know , when You those those , when opportunities become available . So so we feel we feel pretty comfortable about sort of the the sports business as we as we move forward .
Lachlan Murdoch: On entertainment, we continue with our existing strategy on the entertainment network. As you know, we balance scripted and non-scripted programming efficiently to maintain sort of an efficient and sort of ultimately sort of profitable cost base in that business. But we will always sign first-look deals and their creative deals with the best content creators, producers, and writers in the industry. The proof is in the pudding because this past season, with the launches of Good Medicine, with the launch of Fear Factor, with the launch of Memory of a Killer, all these launches achieved over 10 million viewers in their first week across multiple platforms. This is the best season launch we've had in approximately 13 years. That's also reflected in revenue at the entertainment network, which was up in this quarter or this half for the first time in many years.
Lachlan Murdoch: On entertainment, we continue with our existing strategy on the entertainment network. As you know, we balance scripted and non-scripted programming efficiently to maintain sort of an efficient and sort of ultimately sort of profitable cost base in that business. But we will always sign first-look deals and their creative deals with the best content creators, producers, and writers in the industry. The proof is in the pudding because this past season, with the launches of Good Medicine, with the launch of Fear Factor, with the launch of Memory of a Killer, all these launches achieved over 10 million viewers in their first week across multiple platforms. This is the best season launch we've had in approximately 13 years. That's also reflected in revenue at the entertainment network, which was up in this quarter or this half for the first time in many years.
Speaker #2: On entertainment , you know , we we we continue with our , our existing strategy on the entertainment network . You know , as you know , we balance scripted and non-scripted programming efficiently to maintain sort of an efficient and , you know , sort of ultimately sort of profitable cost base in that business .
Speaker #2: But we will always sign first look deals and our creative deals , you know , with the best content creators and producers and writers in the , in the industry .
Speaker #2: And , you know , the proof is in the pudding because you know , this past season with the launches of Good Medicine , with the launch of Fear Factor , with the launch of memory of a killer , all these launches achieved over 10 million viewers in their first week across multiple platforms .
Speaker #2: This is the best season launch we've had in approximately 13 years , so and that's that's also reflected in revenue at the entertainment network , which was up in this quarter or this half for the first time in in many years .
Lachlan Murdoch: So we're pleased with that strategy. Signing first-look deals or signing creative deals is something that we've always done and will continue to do so.
Lachlan Murdoch: So we're pleased with that strategy. Signing first-look deals or signing creative deals is something that we've always done and will continue to do so.
Speaker #2: So we're pleased with that strategy . It's not a signing . First look deals or signing a creative deals is something that we've always done and will continue to do .
[Company Representative] (Fox Corporation): Great. Next question, please, operator.
Gabrielle Brown: Great. Next question, please, operator.
Operator: Your next question comes from Michael Ng with Goldman Sachs. Please go ahead.
Operator: Your next question comes from Michael Ng with Goldman Sachs. Please go ahead.
Steve Tomsic: Hey. Good morning. Thank you for the question. I just have two. First, Lachlan, I was just wondering if you could talk a little bit more about the performance of FOX One, what's been driving the upside relative to your expectations? And as we go into the rest of the year and think about things like sports seasonality, do you expect any of the subscriber momentum to be impacted by that? And then second for Steve, relatedly, could you just explain where FOX One sits in the P&L? Is it in distribution revenue? Is it in corporate and other or both, perhaps? But I think there have been some disclosure changes. So just wanted to make sure we understood how FOX One was flowing through the P&L. Thank you very much.
Michael Ng: Hey. Good morning. Thank you for the question. I just have two. First, Lachlan, I was just wondering if you could talk a little bit more about the performance of FOX One, what's been driving the upside relative to your expectations? And as we go into the rest of the year and think about things like sports seasonality, do you expect any of the subscriber momentum to be impacted by that? And then second for Steve, relatedly, could you just explain where FOX One sits in the P&L? Is it in distribution revenue? Is it in corporate and other or both, perhaps? But I think there have been some disclosure changes. So just wanted to make sure we understood how FOX One was flowing through the P&L. Thank you very much.
Speaker #4: Your next question comes from Michael Ng with Goldman Sachs . Please go ahead .
Speaker #7: Hey . morning . Good Thank you for the question . I just have two . First , Lachlan , I wondering could was just talk a if you little bit more about the performance of Fox one .
Speaker #7: You know , what's been driving the the upside relative to your expectations . And as we go into the rest of the and think year about things sports like seasonality , do you expect any of the subscriber momentum to be impacted by that ?
Speaker #7: And then second , for Steve , relatedly , could you just explain where where Fox one sits in the PNL , you know , is it in distribution revenue ?
Speaker #7: Is it in corporate and other or ? Perhaps . I think But both there have been some disclosure changes . So just wanted to make sure we understood how Fox one was the PNL .
Lachlan Murdoch: Thanks, Mike. All right. I'll start with the first question. So we are incredibly pleased with the performance of FOX One. It has exceeded our expectations in terms of its enthusiastic takeup by consumers. I think, as I might have mentioned in my comments, and you would know, about 2/3 of the audience are sports fans and come to the platform first for sports. And about 1/3 are news fans and regular news viewers. I'll say we'd maintain our expectations of having sort of low to mid-single-digit millions of subscribers over the next three or four years. We're well on track to hit those benchmarks for us. And we'll see as we move forward with sports seasonality.
Lachlan Murdoch: Thanks, Mike. All right. I'll start with the first question. So we are incredibly pleased with the performance of FOX One. It has exceeded our expectations in terms of its enthusiastic takeup by consumers. I think, as I might have mentioned in my comments, and you would know, about 2/3 of the audience are sports fans and come to the platform first for sports. And about 1/3 are news fans and regular news viewers. I'll say we'd maintain our expectations of having sort of low to mid-single-digit millions of subscribers over the next three or four years. We're well on track to hit those benchmarks for us. And we'll see as we move forward with sports seasonality.
Speaker #7: flowing through very Thank you much .
Speaker #2: Thanks , Mike . All right . I'll start with the first question . So , you know , we are incredibly pleased with the performance of Fox one .
Speaker #2: It has exceeded our expectations in terms of its enthusiastic take up by by consumers . I think , as I might have mentioned in my in my comments and but you would know two thirds of the about are is , audience sports fans and come to platform the first for sports .
Speaker #2: And about a third are are news fans and regular news viewers . The you know , we would maintain our I'll say we'd maintain our expectations of having sort of low to mid single digit millions of subscribers over the next 3 or 4 years .
Speaker #2: We're well on track to hit those . Those benchmarks for us . And we'll see as we move forward with sports seasonality , what we're actively doing very proactively doing is , you know , promoting the sports .
Lachlan Murdoch: What we're actively doing, very proactively doing, is promoting the sports now that the football season's over, promoting the tremendous sports slate that we have on FOX One on the platform, whether it's Daytona 500 or Indy 500, the start of the baseball season, and obviously, moving forward into the World Cup. So it's too early to tell what sort of, how significant the seasonality will be. But we're actively working to ameliorate any sort of declines that we might have.
Lachlan Murdoch: What we're actively doing, very proactively doing, is promoting the sports now that the football season's over, promoting the tremendous sports slate that we have on FOX One on the platform, whether it's Daytona 500 or Indy 500, the start of the baseball season, and obviously, moving forward into the World Cup. So it's too early to tell what sort of, how significant the seasonality will be. But we're actively working to ameliorate any sort of declines that we might have.
Speaker #2: football Now that the season is over , promoting , you know , the tremendous sports slate that we have on the on , on Fox one , on the platform , whether it's Daytona 500 or Indy 500 , the start of the baseball season , and obviously moving forward into the Cup .
Speaker #2: World So early it's too to to tell what sort of how significant the seasonality will be . But we're actively working to ameliorate any sort of declines that we might have .
Steve Tomsic: Hey, Mike. It's Dave. Just on how we treat Fox One through the P&L. So the best way to think about it is the platform cost, the cost of sort of running Fox One as a business. It sits in our corporate segment. And so you'll see in the corporate segment, the EBITDA negativity there has gone from $81 to $138. That's predominantly sort of the Fox One cost. It then pays almost like a virtual MVPD. It then pays an affiliate fee to the networks for the programming. And we record that in the two segments, cable and TV.
David Joyce: Hey, Mike. It's Dave. Just on how we treat Fox One through the P&L. So the best way to think about it is the platform cost, the cost of sort of running Fox One as a business. It sits in our corporate segment. And so you'll see in the corporate segment, the EBITDA negativity there has gone from $81 to $138. That's predominantly sort of the Fox One cost. It then pays almost like a virtual MVPD. It then pays an affiliate fee to the networks for the programming. And we record that in the two segments, cable and TV.
Speaker #3: it's Hey Mike , Steve just on how we treat Fox one through the PNL . So the best way to think about it is the platform cost , the cost of sort of running Fox one as a business our sits in corporate segment .
Speaker #3: And so you’re seeing that the Corporate segment EBITDA negativity there has gone from $81 million to $138 million. That’s from predominantly sort of the FOX One costs.
Speaker #3: It . Then pays like almost like a virtual mvpd . It then pays an affiliate fee to the networks for the programming . And we record that in the two .
[Company Representative] (Fox Corporation): Great. Next question, please.
Gabrielle Brown: Great. Next question, please.
Operator: Your next question comes from Michael Morris with Guggenheim. Please go ahead.
Operator: Your next question comes from Michael Morris with Guggenheim. Please go ahead.
Speaker #3: In the two segments , cable and TV
Speaker #3: .
Speaker #1: Question please. Okay, next.
[Analyst] (Guggenheim Securities LLC): Thank you. Good morning. I want to ask one about distribution and then one about Tubi, if I could. On distribution, can you share a bit more detail on the improvement in the rate of subscriber declines that you saw? How much did that improve? What do you think the drivers are there? And I think you're in your last year of renewals under your current contract vintages. How do you see yourself positioned for the upcoming renewals? So that's the first question. And then second on Tubi, can you share some more detail about the growth rate that you saw there on advertising during the quarter, how that's pacing for the balance of the year, and what some of the drivers there are? Thank you.
Michael Morris: Thank you. Good morning. I want to ask one about distribution and then one about Tubi, if I could. On distribution, can you share a bit more detail on the improvement in the rate of subscriber declines that you saw? How much did that improve? What do you think the drivers are there? And I think you're in your last year of renewals under your current contract vintages. How do you see yourself positioned for the upcoming renewals? So that's the first question. And then second on Tubi, can you share some more detail about the growth rate that you saw there on advertising during the quarter, how that's pacing for the balance of the year, and what some of the drivers there are? Thank you.
Speaker #4: next Your question comes from Michael Morris with Please go Guggenheim . ahead .
Speaker #8: Thank you . Good morning . One ask one about distribution and then one about Tubi . If I could on on distribution , can you share a bit more detail on the improvement in the rate of subscriber declines that you saw ?
Speaker #8: How much did that improve ? you think the drivers What do are there . And and I think you're in your last year of renewals under your current contract vintages .
Speaker #8: How do you see yourself positioned for the upcoming renewals? So that's the first question. And then second, on Tubi, can you share some more detail about the growth rate that you saw there on advertising during the quarter?
Lachlan Murdoch: Thanks, Michael. On distribution, we're pleased to see the sub-6.5% decline in our subscriber base. That's 6.3%. But it's a, I don't know why we don't say 6.3. But it's sub-6.5, 6.3. And that's a great improvement and consistent improvement, actually, over some quarters. So we're very pleased to see that. That number excludes FOX One. So if we were to include our FOX One subscribers that are paying subscribers of our content just in the way that the cable subscribers are, that number would be better. But we've chosen, out of an abundance of caution, not to include the FOX One subscribers in that subscriber number. And nevertheless, we're very pleased with the 6.3% decline and improving. What's driving that? It's too early to say.
Lachlan Murdoch: Thanks, Michael. On distribution, we're pleased to see the sub-6.5% decline in our subscriber base. That's 6.3%. But it's a, I don't know why we don't say 6.3. But it's sub-6.5, 6.3. And that's a great improvement and consistent improvement, actually, over some quarters. So we're very pleased to see that. That number excludes FOX One. So if we were to include our FOX One subscribers that are paying subscribers of our content just in the way that the cable subscribers are, that number would be better. But we've chosen, out of an abundance of caution, not to include the FOX One subscribers in that subscriber number. And nevertheless, we're very pleased with the 6.3% decline and improving. What's driving that? It's too early to say.
Speaker #8: How that's pacing for the the balance of year and what some of the drivers there are ? Thank you .
Speaker #2: Thanks , Michael . On distribution , we were pleased to see the sub 6.5% decline in our in our subscriber base . That's 6.3% .
Speaker #2: But it's I don't know why we don't say 6.3 , but it's sub 6.56.3 . And that's you and know that's a that's a great improvement .
Speaker #2: You know and and consistent improvement actually over over over some quarters . So we're very pleased to see that that number excludes Fox one .
Speaker #2: So if we were to include our Fox one subscribers that are paying subscribers of our just in the way that the content cable subscribers that number would be would be better .
Speaker #2: we've But chosen out of an abundance of caution not to include the Fox one subscribers in that in that subscriber numbers . And nevertheless , we're very pleased with the 6.3% decline and improving what's driving that .
Lachlan Murdoch: But we would expect that the emergence of skinny bundles in the cable universe will be playing a factor and potentially an increasing factor in keeping sub-declines down. It's early because a lot of the distributors are only launching now or planning launch soon their skinny bundle packages. For us, for Fox, we like skinny bundles. We are in the skinny bundles. We are paid by the distributors for all of our channels. We bundle our channels when we sell them to distributors. And we give them some flexibility in how they want to take those channels and market them to their consumers. So for us, skinny bundles are a positive. And we look forward to distributors continuing to make their packages more effective, more efficient to the consumer. On Tubi, Tubi has continued to grow.
Lachlan Murdoch: But we would expect that the emergence of skinny bundles in the cable universe will be playing a factor and potentially an increasing factor in keeping sub-declines down. It's early because a lot of the distributors are only launching now or planning launch soon their skinny bundle packages. For us, for Fox, we like skinny bundles. We are in the skinny bundles. We are paid by the distributors for all of our channels. We bundle our channels when we sell them to distributors. And we give them some flexibility in how they want to take those channels and market them to their consumers. So for us, skinny bundles are a positive. And we look forward to distributors continuing to make their packages more effective, more efficient to the consumer. On Tubi, Tubi has continued to grow.
Speaker #2: It's too early to say, but we would expect that the emergence of skinny bundles in the cable universe would be playing a factor, and potentially an increasing factor, in keeping sub declines down.
Speaker #2: Early, it's because a lot of distributors are only launching now, or planning to launch their skinny bundle packages for us—for Fox. Skinny, we like bundles.
Speaker #2: We are in the skinny bundles . We are paid by the distributors for all of our channels . We bundle our channels when we sell them to distributors , and we give them some flexibility in how they want to take those channels and market them to their consumers .
Speaker #2: for So us , skinny are a positive and we look forward to continuing distributors to make their more effective , more packages efficient for to to the consumer on on Tubi know , , you Tubi has to continued to grow .
Lachlan Murdoch: Obviously, TVT growth is the lead sort of indicator of what we can then translate into revenue. TVT growth of 27% coupled with a very strong upfront for Tubi, a healthy direct response, partner trends, and also direct advertiser trends with big clients, all of that really drove that revenue growth of 19% in Q2. You have to remember that Tubi's audience is younger. It's more diverse. And it's hard to reach. 70% of Tubi's user base are cord cutters or cord nevers. This is higher than any of our competitive set and really puts us in a prime position with our advertising clients.
Lachlan Murdoch: Obviously, TVT growth is the lead sort of indicator of what we can then translate into revenue. TVT growth of 27% coupled with a very strong upfront for Tubi, a healthy direct response, partner trends, and also direct advertiser trends with big clients, all of that really drove that revenue growth of 19% in Q2. You have to remember that Tubi's audience is younger. It's more diverse. And it's hard to reach. 70% of Tubi's user base are cord cutters or cord nevers. This is higher than any of our competitive set and really puts us in a prime position with our advertising clients.
Speaker #2: TVT growth is a Obviously lead indicator of what then we can into , translate into into revenue growth at 27% . Coupled with , you know , a strong upfront very for a Tubi , healthy response , direct and partner trends .
Speaker #2: also And direct advertiser trends big with with clients . All of that really drove revenue growth 19% of in the second in the quarter .
Speaker #2: have to You remember that Tubi's audience is more younger . It's diverse , and it's hard to reach 70% of Tubi's base user are cord or cord nevers .
Speaker #2: cutters higher This is any of our than competitive set . And really puts us a prime position in a in with our advertising clients .
Steve Tomsic: Yeah. Mike, just to pick up, I think you asked also about vintages in terms of renewals coming. We're pretty much done for the year. So there's not much in the back end of our current fiscal year. But then we ran in 2027 and 2028. 2027 will be more skewed towards TV and 2028 more skewed towards cable.
Steve Tomsic: Yeah. Mike, just to pick up, I think you asked also about vintages in terms of renewals coming. We're pretty much done for the year. So there's not much in the back end of our current fiscal year. But then we ran in 2027 and 2028. 2027 will be more skewed towards TV and 2028 more skewed towards cable.
Speaker #2: .
Speaker #3: And Mike , just just to pick up , I think also about you asked vintages in terms of renewals coming . We're pretty much done for the years .
Speaker #3: not much in There's end of the back our current fiscal year , but then we ramp in 27 and 28 , 27 will be more skewed towards TV and 28 more skewed towards cable .
[Company Representative] (Fox Corporation): Great. Next question, please, operator.
Gabrielle Brown: Great. Next question, please, operator.
Operator: Your next question comes from the line of Robert Fishman with MoffettNathanson. Please go ahead.
Operator: Your next question comes from the line of Robert Fishman with MoffettNathanson. Please go ahead.
Speaker #1: question Okay . Next please . Operator .
[Analyst] (MoffettNathanson): Good morning, everyone. Can I just follow up on the skinny bundles? We've talked about this for many years and waiting for these launches. The upcoming launch with YouTube TV's sports pack, depending on how aggressively they price it, I'm curious if you can talk specifically about the Fox News economics, which I don't think is included in that specific package. And if there is a trade-down from other pay-TV subscribers who might only want sports, are there protections in place that you were just kind of referencing to limit that downside? And then on the sports betting side, just curious your updated thoughts on the prediction market, whether this is a new opportunity to license or how you see this playing out, like the partnership ESPN did with DraftKings, how you think you'd want to approach the whole FanDuel partnership in general. Thank you so much.
Robert Fishman: Good morning, everyone. Can I just follow up on the skinny bundles? We've talked about this for many years and waiting for these launches. The upcoming launch with YouTube TV's sports pack, depending on how aggressively they price it, I'm curious if you can talk specifically about the Fox News economics, which I don't think is included in that specific package. And if there is a trade-down from other pay-TV subscribers who might only want sports, are there protections in place that you were just kind of referencing to limit that downside? And then on the sports betting side, just curious your updated thoughts on the prediction market, whether this is a new opportunity to license or how you see this playing out, like the partnership ESPN did with DraftKings, how you think you'd want to approach the whole FanDuel partnership in general. Thank you so much.
Speaker #4: Next, your question comes from the line of Fishman with Robert Moffett. Please go ahead.
Speaker #9: Good morning , everyone . Can I just follow up on the skinny bundles ? What we've talked about this for many years and waiting for these launches , the upcoming launch with YouTube TV's Sports Pack .
Speaker #9: Depending on how aggressively they price it . I'm curious if you can talk specifically about the Fox News economics , I don't think is which included in that specific package .
Speaker #9: And if there is a trade down from other pay-TV subscribers who might only want sports, are there protections in place that you kind of referenced just to limit that downside?
Speaker #9: And then on the sports just betting side , curious , your updated thoughts on the markets , whether prediction this is a opportunity new to license or how you see this out , like playing the partnership ESPN did with DraftKings ?
Lachlan Murdoch: Thanks, Robert. So on skinny bundles, as I said, we are a net beneficiary of skinny bundles. The short answer to your question is yes. As we sell to our distributors our entire bouquet of channels, we are not impacted by whether they choose to offer a sports bundle or a news bundle, or another type of bundle. They acquire our channels as a bundle. And then they have flexibility in terms of how they market them to their consumers. So we do have that downside protection when it comes to how skinny bundles are offered as each distributor chooses to uniquely offer them to their customer base. I should just say that we are a fan of the bundle, right, of the core bundle. We think consumers and sort of our consumers want to enjoy all of our content and enjoy all of our brands.
Lachlan Murdoch: Thanks, Robert. So on skinny bundles, as I said, we are a net beneficiary of skinny bundles. The short answer to your question is yes. As we sell to our distributors our entire bouquet of channels, we are not impacted by whether they choose to offer a sports bundle or a news bundle, or another type of bundle. They acquire our channels as a bundle. And then they have flexibility in terms of how they market them to their consumers. So we do have that downside protection when it comes to how skinny bundles are offered as each distributor chooses to uniquely offer them to their customer base. I should just say that we are a fan of the bundle, right, of the core bundle. We think consumers and sort of our consumers want to enjoy all of our content and enjoy all of our brands.
Speaker #9: you think to approach you want FanDuel whole the general . Thank you so How how partnership in much .
Speaker #2: Robert Thanks , . So on bundles skinny , as I said , we we are net are a beneficiary . Skinny bundles . The short answer to your question is yes , as we we our sell to distributors our entire bouquet of channels , we are not impacted by whether they choose to offer a sports bundle or a or another bundle bundle .
Speaker #2: acquire . They type of channels as as a bundle , and then they are they have flexibility in terms of how they market them to their consumers .
Speaker #2: So so we do have that downside protection when it comes to how skinny bundles are offered as each distributor chooses to , you know , uniquely offer them to their customer base .
Speaker #2: I should just say that it's we are a fan of the of the bundle the core of bundle . You know , we think and sort consumers our consumers want to enjoy all of our content and enjoy all of our brands , and that's why we have number one sports brand and the number one news brand in the in the market .
Lachlan Murdoch: That's why we have the number one sports brand and the number one news brand in the market. So I should note that YouTube, post this football season, is offering a discounted bundle for all traditional channels. So before they launch their Sports Pack, they're actually offering a bundle including news, including sports, and other channels to retain their customers. So we're a big fan of the big bundle. Obviously, YouTube and others are big fans of the big bundle. But when ultimately these skinny bundles roll out, we think we're a net beneficiary of them. In terms of sports betting and prediction markets, I should preface this with saying that we continue to be big fans of Flutter and FanDuel. Our 2.5% of Flutter is worth about $700 million.
Lachlan Murdoch: That's why we have the number one sports brand and the number one news brand in the market. So I should note that YouTube, post this football season, is offering a discounted bundle for all traditional channels. So before they launch their Sports Pack, they're actually offering a bundle including news, including sports, and other channels to retain their customers. So we're a big fan of the big bundle. Obviously, YouTube and others are big fans of the big bundle. But when ultimately these skinny bundles roll out, we think we're a net beneficiary of them. In terms of sports betting and prediction markets, I should preface this with saying that we continue to be big fans of Flutter and FanDuel. Our 2.5% of Flutter is worth about $700 million.
Speaker #2: So I should note that YouTube post this football season is offering a discounted bundle for for all traditional channels . So before they launch their sports pack , they're actually offering a bundle including news including sports and other channels to to to retain their their customers .
Speaker #2: So we're a big fan of the big bundle . You know others obviously YouTube and are big fans of the big bundle . But when ultimately the skinny bundles roll out , we think we're a net beneficiary of them in terms of sports betting and prediction markets , I should preface this with saying that , you know , we know , you we continue to be big fans of flutter and FanDuel , our 2.5% of flutter is worth about $700 million .
Lachlan Murdoch: Our option, if you look at the sort of average sort of buy-side valuation of our option of 18.6% in FanDuel, remains worth about $2.1 billion. If you take the two of those together, $2.8 billion, that's worth about 6 to 7 dollars per share on our share price, which we don't think is reflected today. So we're big fans of sports wagering, particularly of Flutter and FanDuel. We're watching the prediction markets growth with interest. It is an opportunity for us in terms of advertising and sort of deals with these emerging prediction markets. And I think over time, you'll see revenue flowing to us from an advertising significant revenue flowing to us from an advertising perspective from these clients.
Lachlan Murdoch: Our option, if you look at the sort of average sort of buy-side valuation of our option of 18.6% in FanDuel, remains worth about $2.1 billion. If you take the two of those together, $2.8 billion, that's worth about 6 to 7 dollars per share on our share price, which we don't think is reflected today. So we're big fans of sports wagering, particularly of Flutter and FanDuel. We're watching the prediction markets growth with interest. It is an opportunity for us in terms of advertising and sort of deals with these emerging prediction markets. And I think over time, you'll see revenue flowing to us from an advertising significant revenue flowing to us from an advertising perspective from these clients.
Speaker #2: And our option , if you look at the sort of average sort of buy side valuation of our option of 18.6% in FanDuel remains worth about $2.1 billion .
Speaker #2: If you take the two of those together at $2.8 billion , that's worth about 6 to $7 per share on our price , which share we don't think is reflected today .
Speaker #2: So so , so , so we are we're big fans of of sports wagering , particularly flutter and FanDuel watching the . And we're prediction markets growth with with interest .
Speaker #2: an It is opportunity for us in of terms . Advertising and sort of deals with these with these these emerging prediction markets . And I think over time you'll see revenue to flowing us from an advertising revenue following us from an advertising significant perspective from these clients .
[Company Representative] (Fox Corporation): Great. We'll take the last question, operator.
Gabrielle Brown: Great. We'll take the last question, operator.
Operator: The last question comes from Thomas Yeh with Morgan Stanley. Please go ahead.
Operator: The last question comes from Thomas Yeh with Morgan Stanley. Please go ahead.
Speaker #1: We'll last question . Operator
[Analyst] (Morgan Stanley): Good morning. Yeah. Back on the ad market, Lachlan, you mentioned new advertisers coming into news. Can you just help unpack which categories you're seeing particular strength in? Or are these new categories like the prediction market one that you just mentioned or GLP-1s and consumer AI services being additive? And then on the midterms, is there a view on whether more political spend, either at the national or local level, migrates towards CTV? And how do you position Tubi in that particular instance to capture more of that political revenue opportunity?
Thomas Yeh: Good morning. Yeah. Back on the ad market, Lachlan, you mentioned new advertisers coming into news. Can you just help unpack which categories you're seeing particular strength in? Or are these new categories like the prediction market one that you just mentioned or GLP-1s and consumer AI services being additive? And then on the midterms, is there a view on whether more political spend, either at the national or local level, migrates towards CTV? And how do you position Tubi in that particular instance to capture more of that political revenue opportunity?
Speaker #4: question
Speaker #4: from Thomas . The last Morgan Stanley . Please go ahead .
Speaker #10: Good morning . Yeah . Back on the ad market , you mentioned Lachlan , you advertisers coming into news . Can you just help unpack which categories you're seeing particular strength in , or are these new categories like the prediction market , one that you just or GLP mentioned one .
Speaker #10: And consumer AI services being additive . then on the And is there a view midterms , on whether more political either at spend the national or local level , migrates towards CTV ?
Speaker #10: And how do you position to be in that instance to particular political of the revenue capture more opportunity ?
Lachlan Murdoch: Sure. Thanks, Thomas. So on the ad market, if I just step back one step for some perspective, if you look at the Fox portfolio of brands and businesses, about 94% of our ad, sorry, I should preface this as our national advertising sales. 94% come from sports, news, and streaming. 6% comes from entertainment. Of course, what we know is the live news, live sports, and streaming are the segments where there is growth and there is a great advertiser appetite for those segments. And the vast majority of our business is in those segments. When I look at the category spend and again, I'm just talking national. And you didn't ask about it. But I can touch briefly on local in a minute.
Steve Tomsic: Sure. Thanks, Thomas. So on the ad market, if I just step back one step for some perspective, if you look at the Fox portfolio of brands and businesses, about 94% of our ad, sorry, I should preface this as our national advertising sales. 94% come from sports, news, and streaming. 6% comes from entertainment. Of course, what we know is the live news, live sports, and streaming are the segments where there is growth and there is a great advertiser appetite for those segments. And the vast majority of our business is in those segments. When I look at the category spend and again, I'm just talking national. And you didn't ask about it. But I can touch briefly on local in a minute.
Speaker #2: Thanks , Thomas Sure . the ad market , if I just . So on back step one step for some perspective , if you at look the Fox , of portfolio brands and businesses about 94% of our ad of sorry , I our preface our national advertising sales , 94% come from sports news and streaming , 6% comes from entertainment .
Speaker #2: Of course , you know , what we know is that live news , live sports and streaming are the segments where there is where there is growth and there is a , you know , great advertiser appetite for those those segments and the vast our , of majority our of , of our , our of our is in business those segments .
Speaker #2: When I look at the category national talking and again , and I I'm just spend you didn't can ask about it , but I briefly on can touch on local in a minute .
Lachlan Murdoch: But if I look at advertising category across our sort of national portfolio, this includes sports and news. Of the top 10 categories that we track, financial, pharma, retail, packaged goods, etc., automotive, 8 of the top 10 categories are significantly up. We've had significant demand for the 8 of the top 10 categories. Leading that is financial, which is obviously really led by the insurance companies. So great strength across all categories. The ones that are modestly down, entertainment, which is just movie premieres, and then sort of government and some sort of corporate political spending, which we expect to obviously increase as we get into the political cycle. So what does that translate to? Well, at Fox News Media, we've had the highest ad revenue in Fox News Media's history for the first half with, as I mentioned, 200 new advertisers added.
Steve Tomsic: But if I look at advertising category across our sort of national portfolio, this includes sports and news. Of the top 10 categories that we track, financial, pharma, retail, packaged goods, etc., automotive, 8 of the top 10 categories are significantly up. We've had significant demand for the 8 of the top 10 categories. Leading that is financial, which is obviously really led by the insurance companies. So great strength across all categories. The ones that are modestly down, entertainment, which is just movie premieres, and then sort of government and some sort of corporate political spending, which we expect to obviously increase as we get into the political cycle. So what does that translate to? Well, at Fox News Media, we've had the highest ad revenue in Fox News Media's history for the first half with, as I mentioned, 200 new advertisers added.
Speaker #2: But if I look at advertising category across our sort of national portfolio, this includes sports and news, you know, of the top ten categories that we track.
Speaker #2: You know , financial , pharma , retail , packaged goods , etcetera , automotive . Eight of the top ten categories are significantly up .
Speaker #2: We've had significant demand for the eight of the top categories , leading that is financial , which is obviously a really led by the insurance companies .
Speaker #2: So a great strength across across all categories . The ones that are modestly down entertainment , which is just , you know , movie premieres and then sort of .
Speaker #2: Government and some sort of corporate political spending , which we expect to obviously increase as we get into the into the political cycle .
Speaker #2: You know , does that it translate Fox News Well , so what we've had the highest ad revenue . Fox Media , News Media is history for the first half with , as I mentioned , 200 new advertisers added for Tubi , the highest quarterly , weekly and daily ad revenue .
Lachlan Murdoch: For Tubi, the highest quarterly, weekly, and daily ad revenue in Tubi history. On Fox Sports in the NFL, the highest ad revenue for any Sunday package in history, the highest ad revenue for postseason at an NFC Championship game in Fox Sports history, the highest full-season ad revenue on college football in Fox history, and in Major League Baseball, the highest postseason ad revenue in Fox Sports history. So tremendous strength across our portfolio. I should also mention, not to leave them out, at Fox Entertainment, we had ad revenue exceeding prior year for the first time in four years. Locally, as I mentioned, the local market is more mixed. This is really a factor of the Super Bowl and the Olympics in this quarter we're now entering.
Steve Tomsic: For Tubi, the highest quarterly, weekly, and daily ad revenue in Tubi history. On Fox Sports in the NFL, the highest ad revenue for any Sunday package in history, the highest ad revenue for postseason at an NFC Championship game in Fox Sports history, the highest full-season ad revenue on college football in Fox history, and in Major League Baseball, the highest postseason ad revenue in Fox Sports history. So tremendous strength across our portfolio. I should also mention, not to leave them out, at Fox Entertainment, we had ad revenue exceeding prior year for the first time in four years. Locally, as I mentioned, the local market is more mixed. This is really a factor of the Super Bowl and the Olympics in this quarter we're now entering.
Speaker #2: And to history on Fox Sports in the NFL. The highest ad revenue for any Sunday package in history, the highest ad revenue for postseason and NFC Championship Game in Fox Sports history.
Speaker #2: The highest full season ad revenue on college football in Fox history and in Major League Baseball . The highest postseason ad revenue in Fox Sports history .
Speaker #2: So tremendous strength across our portfolio . I should also mention not to leave them out at Fox Entertainment . We had ad revenue exceeding prior year for the first time in four years .
Speaker #2: You locally , as I mentioned , the local market is more mixed . This is a really a factor of of the Super Bowl and the Olympics in this in this quarter .
Lachlan Murdoch: But we feel pretty good about the local market, although it is mixed, as historically, as always true. Super Bowls and Olympic cycles absorb some of that local advertising revenue. Now, it's a great quarter for us. And the momentum continues into Q3. But I should just say that if you look at the sustainability of this strategy, if I look back over 4 years or 5 years to 2021, if I look at our peer set, excluding Fox, total advertising including streaming as a group, it's obviously mixed within it. It's down about 4% CAGR in advertising revenue each year over those 4 or 5 years. At Fox, we're up about 8%, of course, including streaming, over those 4 or 5 years, 8% per year on CAGR.
Steve Tomsic: But we feel pretty good about the local market, although it is mixed, as historically, as always true. Super Bowls and Olympic cycles absorb some of that local advertising revenue. Now, it's a great quarter for us. And the momentum continues into Q3. But I should just say that if you look at the sustainability of this strategy, if I look back over 4 years or 5 years to 2021, if I look at our peer set, excluding Fox, total advertising including streaming as a group, it's obviously mixed within it. It's down about 4% CAGR in advertising revenue each year over those 4 or 5 years. At Fox, we're up about 8%, of course, including streaming, over those 4 or 5 years, 8% per year on CAGR.
Speaker #2: Where now we're now entering . But we feel pretty good about the local market . Although there it is mixed as as as historically is always true .
Speaker #2: Super Bowls and and Olympic cycles absorb some of that local advertising revenue . Now it's a great quarter for us and the the the momentum momentum continues into the third quarter .
Speaker #2: But I should just say that if you look at the sustainability of this strategy , if I look back over years or four five years to 2021 , if I look at our peer set , excluding Fox total advertising , including streaming for as a group , it's obviously mixed within it .
Speaker #2: It's down about 4% . Kager in advertising over those revenue year , over those 4 or 5 years at up we're about 8% .
Lachlan Murdoch: I think that just shows the strength of the strategy, the sustainability of the strategy, and why we're so excited about Fox's future.
Steve Tomsic: I think that just shows the strength of the strategy, the sustainability of the strategy, and why we're so excited about Fox's future.
Speaker #2: Of course , including , you streaming know , over those 4 or 5 years , 8% per year on Kager . And I think that just shows that the strength of the strategy , the sustainability of the strategy and why we're so excited about Fox's future .
[Company Representative] (Fox Corporation): Great. Thank you so much. At this point, we're out of time. But if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us.
Gabrielle Brown: Great. Thank you so much. At this point, we're out of time. But if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us.
Speaker #1: Great . Thank you At this so much . point , we're time . out of But if you have any further questions , please give me or Charlie Costanzo a call .
Lachlan Murdoch: Thank you, everyone. Have a good day.
Lachlan Murdoch: Thank you, everyone. Have a good day.
Operator: Ladies and gentlemen, that does conclude the Fox Corporation second quarter fiscal year 2026 earnings conference call. Thank you.
Operator: Ladies and gentlemen, that does conclude the Fox Corporation second quarter fiscal year 2026 earnings conference call. Thank you.
Speaker #1: Thanks so much for joining us .
Speaker #2: Thank you everyone . Have a good day .
