Fox Corporation

ladies and gentlemen thank you for standing by welcome to the fox corporation third quarter fiscal year 2023 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 that functionality for the question and answer queue will be given at that time if you should require assistance during the call please press star then zero 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.

Thank you, Keely. Good morning, and welcome to our fiscal 2023 third quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer, John Nallen, Chief Operating Officer, and Steve Tomczyk, 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. This call will include certain non-GAAP financial measures, including adjusted EBITDA, or EBITDA as we refer to it on this call. Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filings, which are available in the investor relations section of our website. And with that, I'm pleased to turn the call over to Lachlan.

Thank you, Gabby, and thanks, everyone, for joining us this morning. Fox's strong fiscal third quarter operating results once again demonstrate the power of our content and the brands it underpins, and the repeated capability of our focus strategy to deliver solid financial results. In the quarter, we grew top-line revenue by 18%, led by the remarkable 43% growth in advertising and a solid 3% growth in affiliate revenue. Underpinning this performance was a record Super Bowl 57 on the Fox broadcast network, which generated approximately $650 million of gross advertising revenue across our businesses and was the key driver of our 61% advertising revenue growth at our television segment. This year's Super Bowl matchup between Kansas City and Philadelphia delivered 115 million viewers across Fox platforms, making Super Bowl 57 the most watched program in U.S. television history and the pinnacle of of an extraordinary year for Fox Sports. The strong lineup of programming and advertising demand for Fox Sports continues into our fourth quarter, which includes the return of NASCAR, the second season of the USFL, the start of Major League Baseball's 2023 season, the finals of the UEFA Nations League, and a first for Fox, the Belmont Stakes. Leveraging the reach of a Super Bowl lead-in, We launched the second season of Next Level Chef, which promises to be the next big lifestyle franchise from our Studio Ramsay partnership. Our entertainment business also found success with the number one new series and new drama of the year in Accused and the number one new unscripted series in Special Forces, World's Toughest Test. Fox has now debuted the top new unscripted series for five consecutive seasons. In fact, The combined power of our sports and entertainment programming places Fox at number one amongst broadcast network season to date in the key 18 to 49 demo. Our strong sports calendar also had a halo effect at the Fox television stations, which saw many local advertising verticals higher in the quarter. In what continues to be mixed local advertising market conditions, we are encouraged by growth in categories including auto, restaurants, and entertainment, but are watchful across other categories, including betting, retail, and telecom. Meanwhile, Tubi's performance in the third quarter was nothing short of stellar, with revenue growth of 31% supported by sustained gains in engagement, where total view time increased 38% year on year. And while still early in the fourth quarter, The April results for Tubi show the momentum across the platform accelerating. Having recently marked the three-year anniversary of our acquisition of Tubi, our progress over this longer-term timeframe is just as impressive, having grown quarterly TVT by over 200% and revenue by 400%. Just as importantly, the Tubi brand has asserted itself on the broader media landscape. our viral Tubi spot in the Super Bowl, which received massive press coverage, had almost 7 billion impressions. And our strong growth and engagement has now led to Tubi's inclusion in Nielsen's The Gauge, marking the first time Tubi has reached 1% of total Tubi viewing minutes and making Tubi the most watched fast service in the United States. And just last month, we announced the formation of Tubi Media Group under Paul Cheesbrough, which brings together our digital capabilities in a more formalized and coordinated way to help us better monetize our digital touchpoints across all our Fox properties. We thank Farhad for his entrepreneurial leadership at Tubi over the last three years and of course before. He leaves the business in terrific shape with an outstanding team to drive continued strong growth. At Fox News Media, we retained our leadership position amongst our peers. the Fox News Channel ended the third quarter as the most-watched cable network in total day and prime time, while maintaining its lead as the most-watched cable news network, beating CNN and MSNBC combined. Also notably, the Fox Business Network ended the quarter as the most-watched business cable network, beating CNBC in total viewers during the business day and market hours for the fourth consecutive quarter. Let me briefly address the settlement of our dispute with Dominion Voting Systems. We made the business decision to resolve this dispute and avoid the acrimony of a divisive trial and a multi-year appeal process, a decision clearly in the best interests of the company and its shareholders. The settlement in no way alters Fox's commitment to the highest journalistic standards across our company or our passion for unabashedly reporting the news of the day. We're proud of our Fox News team, the exceptional quality of their journalism, and their stewardship of the Fox News brand. Whether it be our coverage of politics and elections, world events such as the war in Ukraine, or domestic issues such as the crisis at the border, our journalists bring compelling news home to our viewers every day. The standards behind this reporting are not only what makes us the number one cable news network, but the number one network in all of cable. In fact, In a recent poll, 41% of respondents chose Fox News as their most trusted network news provider. So, as we look ahead, we are confident in the strength of the Fox brands and the strength of our balance sheet. And while we are not completely immune to the headwinds facing the broader industry and the general economy, we are well positioned given our areas of differentiation. Nonetheless, you can expect us to be even more focused on our cost base as we look to reinforce our strategy for future growth. We remain committed to driving long-term shareholder value creation through the thoughtful management of our existing business, the pursuit of new and exciting adjacencies, and returning capital to our shareholders. With that, I'll turn it over to Steve to take you through the details of the quarter.