NEW YORK, Feb. 4, 2025 /PRNewswire/ -- Fox Corporation (Nasdaq: FOXA, FOX; "FOX" or the "Company") today reported financial results for the three months ended December 31, 2024.
The Company reported total quarterly revenues of $5.08 billion, an increase of $844 million or 20% from the amount reported in the prior year quarter. Affiliate fee revenues increased 6%, driven by 9% growth at the Television segment and 4% growth at the Cable Network Programming segment. Advertising revenues increased 21%, primarily due to higher political advertising revenues, the impact of higher MLB postseason ratings and NFL pricing, continued digital growth led by the Tubi AVOD service, and stronger news ratings and pricing. Other revenues increased 70%, primarily due to higher sports sublicensing revenues.
The Company reported quarterly net income of $388 million as compared to the $115 million reported in the prior year quarter. Net income attributable to Fox Corporation (FOX) stockholders was $373 million ($0.81 per share) as compared to the $109 million ($0.23 per share) reported in the prior year quarter. Adjusted net income attributable to Fox Corporation stockholders1 was $442 million ($0.96 per share) as compared to the $165 million ($0.34 per share) reported in the prior year quarter.
Quarterly Adjusted EBITDA2 was $781 million, an increase of $431 million or 123% from the amount reported in the prior year quarter, primarily due to the revenue increase noted above, partially offset by higher expenses. The increase in expenses was primarily driven by higher sports programming rights amortization and production costs, and higher digital costs.
Commenting on the results, Executive Chair and Chief Executive Officer Lachlan Murdoch said:
"A compelling fall sports schedule combined with a record-breaking presidential election news cycle resulted in second quarter results that reflect the strength and breadth of FOX. Whether measured in terms of engagement, monetization or profitability, our focused strategy of live news and sports programming, coupled with our growing digital initiatives, continues to deliver. We remain committed to sustained long-term value creation for our shareholders through our thoughtful and disciplined strategy for growth."
REVIEW OF OPERATING RESULTS
|
Three Months Ended |
Six Months Ended |
||||||
|
2024 |
2023 |
2024 |
2023 |
||||
|
$ Millions |
|||||||
|
Revenues by Component: |
|||||||
|
Affiliate fee |
$ 1,900 |
$ 1,787 |
$ 3,743 |
$ 3,527 |
|||
|
Advertising |
2,422 |
2,002 |
3,751 |
3,202 |
|||
|
Other |
756 |
445 |
1,148 |
712 |
|||
|
Total revenues |
$ 5,078 |
$ 4,234 |
$ 8,642 |
$ 7,441 |
|||
|
Segment Revenues: |
|||||||
|
Cable Network Programming |
$ 2,165 |
$ 1,658 |
$ 3,762 |
$ 3,045 |
|||
|
Television |
2,961 |
2,542 |
4,914 |
4,322 |
|||
|
Corporate and Other |
58 |
49 |
123 |
103 |
|||
|
Eliminations |
(106) |
(15) |
(157) |
(29) |
|||
|
Total revenues |
$ 5,078 |
$ 4,234 |
$ 8,642 |
$ 7,441 |
|||
|
Adjusted EBITDA: |
|||||||
|
Cable Network Programming |
$ 657 |
$ 564 |
$ 1,405 |
$ 1,171 |
|||
|
Television |
205 |
(138) |
577 |
213 |
|||
|
Corporate and Other |
(81) |
(76) |
(153) |
(165) |
|||
|
Adjusted EBITDA3 |
$ 781 |
$ 350 |
$ 1,829 |
$ 1,219 |
|||
|
Depreciation and amortization: |
|||||||
|
Cable Network Programming |
$ 25 |
$ 19 |
$ 45 |
$ 37 |
|||
|
Television |
30 |
28 |
59 |
57 |
|||
|
Corporate and Other |
42 |
50 |
84 |
99 |
|||
|
Total depreciation and amortization |
$ 97 |
$ 97 |
$ 188 |
$ 193 |
|||
CABLE NETWORK PROGRAMMING
|
Three Months Ended |
Six Months Ended |
||||||
|
2024 |
2023 |
2024 |
2023 |
||||
|
$ Millions |
|||||||
|
Revenues |
|||||||
|
Affiliate fee |
$ 1,076 |
$ 1,031 |
$ 2,113 |
$ 2,036 |
|||
|
Advertising |
460 |
348 |
781 |
638 |
|||
|
Other |
629 |
279 |
868 |
371 |
|||
|
Total revenues |
2,165 |
1,658 |
3,762 |
3,045 |
|||
|
Operating expenses |
(1,354) |
(942) |
(2,056) |
(1,591) |
|||
|
Selling, general and administrative |
(158) |
(156) |
(309) |
(291) |
|||
|
Amortization of cable distribution investments |
4 |
4 |
8 |
8 |
|||
|
Segment EBITDA |
$ 657 |
$ 564 |
$ 1,405 |
$ 1,171 |
|||
Cable Network Programming reported quarterly segment revenues of $2.17 billion, an increase of $507 million or 31% from the amount reported in the prior year quarter. Affiliate fee revenues increased $45 million or 4% as contractual price increases were partially offset by the impact of net subscriber declines. Advertising revenues increased $112 million or 32%, primarily due to higher news ratings, pricing and digital advertising revenues, and higher MLB postseason ratings. Other revenues increased $350 million, primarily due to higher sports sublicensing revenues.
Cable Network Programming reported quarterly segment EBITDA of $657 million, an increase of $93 million or 16% from the amount reported in the prior year quarter, primarily due to the revenue increase noted above, partially offset by higher expenses. The increase in expenses was driven by higher sports programming rights amortization and production costs.
TELEVISION
|
Three Months Ended |
Six Months Ended |
||||||
|
2024 |
2023 |
2024 |
2023 |
||||
|
$ Millions |
|||||||
|
Revenues |
|||||||
|
Advertising |
$ 1,962 |
$ 1,654 |
$ 2,970 |
$ 2,564 |
|||
|
Affiliate fee |
824 |
756 |
1,630 |
1,491 |
|||
|
Other |
175 |
132 |
314 |
267 |
|||
|
Total revenues |
2,961 |
2,542 |
4,914 |
4,322 |
|||
|
Operating expenses |
(2,499) |
(2,440) |
(3,832) |
(3,638) |
|||
|
Selling, general and administrative |
(257) |
(240) |
(505) |
(471) |
|||
|
Segment EBITDA |
$ 205 |
$ (138) |
$ 577 |
$ 213 |
|||
Television reported quarterly segment revenues of $2.96 billion, an increase of $419 million or 16% from the amount reported in the prior year quarter. Advertising revenues increased $308 million or 19%, primarily due to higher political advertising revenues, the impact of higher MLB postseason ratings and NFL pricing, and continued digital growth led by the Tubi AVOD service. Affiliate fee revenues increased $68 million or 9%, driven by higher average rates at the Company's owned and operated television stations and increases in fees from third-party FOX affiliates. Other revenues increased $43 million or 33%, primarily due to higher content revenues.
Television reported quarterly segment EBITDA of $205 million, an increase of $343 million, primarily due to the revenue increase noted above, partially offset by higher expenses. The increase in expenses was driven by higher digital costs.
DIVIDEND
The Company has declared a dividend of $0.27 per Class A and Class B share. This dividend is payable on March 26, 2025 with a record date for determining dividend entitlements of March 5, 2025.
SHARE REPURCHASE PROGRAM
As of December 31, 2024, the Company has repurchased approximately $5.1 billion of its Class A common stock and approximately $1 billion of its Class B common stock, with a remaining authorization of $900 million. During the quarter, the Company repurchased approximately $250 million of its Class A common stock.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "should," "likely," "anticipates," "expects," "intends," "plans," "projects," "believes," "estimates," "outlook" and similar expressions are used to identify these forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements in this press release due to changes in economic, business, competitive, technological, strategic and/or regulatory factors and other factors affecting the operation of the Company's businesses. More detailed information about these factors is contained in the documents the Company has filed with or furnished to the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q.
Statements in this press release speak only as of the date they were made, and the Company undertakes no duty to update or release any revisions to any forward-looking statement made in this press release or to report any events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events or to conform such statements to actual results or changes in the Company's expectations, except as required by law.
To access a copy of this press release through the Internet, access Fox Corporation's corporate website located at http://www.foxcorporation.com.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
Three Months Ended |
Six Months Ended |
||||||
|
2024 |
2023 |
2024 |
2023 |
||||
|
$ Millions, except per share amounts |
|||||||
|
Revenues |
$ 5,078 |
$ 4,234 |
$ 8,642 |
$ 7,441 |
|||
|
Operating expenses |
(3,776) |
(3,393) |
(5,794) |
(5,255) |
|||
|
Selling, general and administrative |
(525) |
(495) |
(1,027) |
(975) |
|||
|
Depreciation and amortization |
(97) |
(97) |
(188) |
(193) |
|||
|
Restructuring, impairment and other corporate matters |
(170) |
(18) |
(196) |
(9) |
|||
|
Equity earnings of affiliates |
4 |
1 |
7 |
2 |
|||
|
Interest expense, net |
(80) |
(72) |
(130) |
(114) |
|||
|
Non-operating other, net |
81 |
(29) |
314 |
(205) |
|||
|
Income before income tax expense |
515 |
131 |
1,628 |
692 |
|||
|
Income tax expense |
(127) |
(16) |
(408) |
(162) |
|||
|
Net income |
388 |
115 |
1,220 |
530 |
|||
|
Less: Net income attributable to noncontrolling interests |
(15) |
(6) |
(20) |
(14) |
|||
|
Net income attributable to Fox Corporation stockholders |
$ 373 |
$ 109 |
$ 1,200 |
$ 516 |
|||
|
Weighted average shares: |
462 |
482 |
463 |
488 |
|||
|
Net income attributable to Fox Corporation stockholders per share: |
$ 0.81 |
$ 0.23 |
$ 2.59 |
$ 1.06 |
|||
CONSOLIDATED BALANCE SHEETS
|
December 31, |
June 30, |
||
|
$ Millions |
|||
|
Assets: |
|||
|
Current assets: |
|||
|
Cash and cash equivalents |
$ 3,322 |
$ 4,319 |
|
|
Receivables, net |
3,492 |
2,364 |
|
|
Inventories, net |
1,171 |
626 |
|
|
Other |
252 |
192 |
|
|
Total current assets |
8,237 |
7,501 |
|
|
Non-current assets: |
|||
|
Property, plant and equipment, net |
1,671 |
1,696 |
|
|
Intangible assets, net |
3,020 |
3,038 |
|
|
Goodwill |
3,543 |
3,544 |
|
|
Deferred tax assets |
2,729 |
2,878 |
|
|
Other non-current assets |
3,822 |
3,315 |
|
|
Total assets |
$ 23,022 |
$ 21,972 |
|
|
Liabilities and Equity: |
|||
|
Current liabilities: |
|||
|
Borrowings |
$ 600 |
$ 599 |
|
|
Accounts payable, accrued expenses and other current liabilities |
2,697 |
2,353 |
|
|
Total current liabilities |
3,297 |
2,952 |
|
|
Non-current liabilities: |
|||
|
Borrowings |
6,600 |
6,598 |
|
|
Other liabilities |
1,314 |
1,366 |
|
|
Redeemable noncontrolling interests |
200 |
242 |
|
|
Commitments and contingencies |
|||
|
Equity: |
|||
|
Class A common stock, $0.01 par value |
2 |
2 |
|
|
Class B common stock, $0.01 par value |
2 |
2 |
|
|
Additional paid-in capital |
7,650 |
7,678 |
|
|
Retained earnings |
3,949 |
3,139 |
|
|
Accumulated other comprehensive loss |
(108) |
(107) |
|
|
Total Fox Corporation stockholders' equity |
11,495 |
10,714 |
|
|
Noncontrolling interests |
116 |
100 |
|
|
Total equity |
11,611 |
10,814 |
|
|
Total liabilities and equity |
$ 23,022 |
$ 21,972 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Six Months Ended |
|||
|
2024 |
2023 |
||
|
$ Millions |
|||
|
Operating Activities: |
|||
|
Net income |
$ 1,220 |
$ 530 |
|
|
Adjustments to reconcile net income to cash used in operating activities |
|||
|
Depreciation and amortization |
188 |
193 |
|
|
Amortization of cable distribution investments |
8 |
8 |
|
|
Restructuring, impairment and other corporate matters |
196 |
9 |
|
|
Equity-based compensation |
68 |
48 |
|
|
Equity earnings of affiliates |
(7) |
(2) |
|
|
Cash distributions received from affiliates |
13 |
— |
|
|
Non-operating other, net |
(314) |
205 |
|
|
Deferred income taxes |
145 |
29 |
|
|
Change in operating assets and liabilities, net of acquisitions and dispositions |
|||
|
Receivables and other assets |
(1,198) |
(853) |
|
|
Inventories net of programming payable |
(431) |
(405) |
|
|
Accounts payable and accrued expenses |
(75) |
(180) |
|
|
Other changes, net |
(17) |
(117) |
|
|
Net cash used in operating activities |
(204) |
(535) |
|
|
Investing Activities: |
|||
|
Property, plant and equipment |
(138) |
(150) |
|
|
Purchase of investments |
(79) |
(6) |
|
|
Other investing activities, net |
(23) |
13 |
|
|
Net cash used in investing activities |
(240) |
(143) |
|
|
Financing Activities: |
|||
|
Borrowings |
— |
1,232 |
|
|
Repurchase of shares |
(500) |
(500) |
|
|
Dividends paid and distributions |
(134) |
(142) |
|
|
Other financing activities, net |
81 |
(62) |
|
|
Net cash (used in) provided by financing activities |
(553) |
528 |
|
|
Net decrease in cash and cash equivalents |
(997) |
(150) |
|
|
Cash and cash equivalents, beginning of year |
4,319 |
4,272 |
|
|
Cash and cash equivalents, end of period |
$ 3,322 |
$ 4,122 |
|
NOTE 1 – ADJUSTED NET INCOME AND ADJUSTED EPS
The Company uses net income attributable to Fox Corporation stockholders and earnings per share ("EPS") attributable to Fox Corporation stockholders excluding net income effects of Restructuring, impairment and other corporate matters, adjustments to Equity earnings (losses) of affiliates, Non-operating other, net, Tax provision and Noncontrolling interest ("Adjusted Net Income" and "Adjusted EPS" respectively) to evaluate the performance of the Company's operations exclusive of certain items that impact the comparability of results from period to period.
Adjusted Net Income and Adjusted EPS may not be comparable to similarly titled measures reported by other companies. Adjusted Net Income and Adjusted EPS are not measures of performance under GAAP and should be considered in addition to, and not as substitutes for, net income attributable to Fox Corporation stockholders and EPS as reported in accordance with GAAP. However, management uses these measures in comparing the Company's historical performance and believes that they provide meaningful and comparable information to management, investors and equity analysts to assist in their analysis of the Company's performance relative to prior periods and the Company's competitors.
The following table reconciles net income attributable to Fox Corporation stockholders and EPS attributable to Fox Corporation stockholders to Adjusted Net Income and Adjusted EPS for the three months ended December 31, 2024 and 2023:
|
Three Months Ended |
|||||||
|
December 31, 2024 |
December 31, 2023 |
||||||
|
Income |
EPS |
Income |
EPS |
||||
|
$ Millions, except per share data |
|||||||
|
Net income attributable to Fox Corporation stockholders |
$ 373 |
$ 0.81 |
$ 109 |
$ 0.23 |
|||
|
Restructuring, impairment and other corporate matters |
170 |
0.37 |
18 |
0.04 |
|||
|
Non-operating other, net |
(81) |
(0.18) |
29 |
0.06 |
|||
|
Tax provision |
(20) |
(0.04) |
9 |
0.02 |
|||
|
Rounding |
— |
— |
— |
(0.01) |
|||
|
As adjusted |
$ 442 |
$ 0.96 |
$ 165 |
$ 0.34 |
|||
NOTE 2 – ADJUSTED EBITDA
Adjusted EBITDA is defined as Revenues less Operating expenses and Selling, general and administrative expenses. Adjusted EBITDA does not include: Amortization of cable distribution investments, Depreciation and amortization, Restructuring, impairment and other corporate matters, Equity earnings (losses) of affiliates, Interest expense, net, Non-operating other, net and Income tax expense.
Management believes that information about Adjusted EBITDA assists all users of the Company's Unaudited Consolidated Financial Statements by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from non-operational factors that affect Net income, thus providing insight into both operations and the other factors that affect reported results. Adjusted EBITDA provides management, investors and equity analysts a measure to analyze the operating performance of the Company's business and its enterprise value against historical data and competitors' data, although historical results, including Adjusted EBITDA, may not be indicative of future results (as operating performance is highly contingent on many factors, including customer tastes and preferences).
Adjusted EBITDA is considered a non-GAAP financial measure and should be considered in addition to, not as a substitute for, net income, cash flow and other measures of financial performance reported in accordance with GAAP. In addition, this measure does not reflect cash available to fund requirements and excludes items, such as depreciation and amortization and impairment charges, which are significant components in assessing the Company's financial performance. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
The following table reconciles net income to Adjusted EBITDA for the three and six months ended December 31, 2024 and 2023:
|
Three Months Ended |
Six Months Ended |
||||||
|
2024 |
2023 |
2024 |
2023 |
||||
|
$ Millions |
|||||||
|
Net income |
$ 388 |
$ 115 |
$ 1,220 |
$ 530 |
|||
|
Add: |
|||||||
|
Amortization of cable distribution investments |
4 |
4 |
8 |
8 |
|||
|
Depreciation and amortization |
97 |
97 |
188 |
193 |
|||
|
Restructuring, impairment and other corporate matters |
170 |
18 |
196 |
9 |
|||
|
Equity earnings of affiliates |
(4) |
(1) |
(7) |
(2) |
|||
|
Interest expense, net |
80 |
72 |
130 |
114 |
|||
|
Non-operating other, net |
(81) |
29 |
(314) |
205 |
|||
|
Income tax expense |
127 |
16 |
408 |
162 |
|||
|
Adjusted EBITDA |
$ 781 |
$ 350 |
$ 1,829 |
$ 1,219 |
|||
|
1 |
Excludes net income effects of Restructuring, impairment and other corporate matters, adjustments to Equity earnings (losses) of affiliates, Non-operating other, net, Tax provision and Noncontrolling interest adjustments. See Note 1 for a description of adjusted net income attributable to Fox Corporation stockholders and adjusted earnings per share attributable to Fox Corporation stockholders, which are considered non-GAAP financial measures, and a reconciliation of reported net income attributable to Fox Corporation stockholders and earnings per share attributable to Fox Corporation stockholders to adjusted net income attributable to Fox Corporation stockholders and adjusted earnings per share attributable to Fox Corporation stockholders. |
|
2 |
Adjusted EBITDA is considered a non-GAAP financial measure. See Note 2 for a description of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA. |
|
3 |
Adjusted EBITDA is considered a non-GAAP financial measure. See Note 2 for a description of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA. |
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SOURCE Fox Corporation