Fox Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation fourth 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 the 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, Operator. Good morning, and welcome to our fiscal 2023 fourth quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer, John Mallon, 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 will take questions from the investment community. Please note that this call may include forward-looking statements regarding Fox Corporation's financial performance and operating results. 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.

Thanks, Gabby, and thanks, everyone, for joining us this morning. With this morning's earnings release, we closed out a very strong fiscal 2023, fueled by successes across every aspect of our business. While Steve will cover the details of the fourth quarter in just a moment, for the full year, we generated record annual revenue and EBITDA. Notably, we reported revenue growth of 7%, including 12% advertising growth, supported by major tentpole events like the midterm election, Super Bowl 57, and the FIFA Men's World Cup, as well as outstanding growth of Tubi, and 3% affiliate growth, led by the first third of our distribution renewal cycle. These results demonstrate that Fox's differentiated strategy continues to deliver engaged audiences at scale for our advertising and distribution partners across our sports and news verticals, while also driving exceptional growth across our digital businesses. In a world of increasing audience fragmentation, Fox's collective linear and digital viewership was up 8% year over year. The on-screen reflection of that strategy was clearly apparent throughout fiscal 23 across our networks and platforms. Fox's broadcast of Super Bowl 57 was the most watched TV show of all time. Our Thanksgiving Day game was the most watched NFL regular season game of all time. And the U.S.-England match was the most watched U.S. Men's World Cup match of all time. Fox News maintained its lead as both a top-rated national cable news channel as well as a top-rated network across the entire cable ecosystem and ranks as the number two national network in all of U.S. television. And on the streaming front, Tubi made its debut in Nielsen's The Gauge. growing total consumption in fiscal 2023 by 79%, making it the number one AVOD player with consumption levels equal to a top five cable network. 2B's fiscal 23 was nothing short of spectacular, underpinned by growth in total view time, which in turn powered revenue growth. It was a year of increased awareness and engagement for 2B, whether that was being recognized by Nielsen as America's most-watched AVOD service, its expanding content library and TBT metrics, or the five Cannes Lions Awards bestowed upon Tubi's Super Bowl spot. Each quarter during the year saw successive gains at Tubi, and the fiscal fourth quarter was its most impressive of all, with revenue growth of 47% driven by strong engagement, with total viewer time growing by 65%. Each month of the quarter set new records for monthly viewers. With Tubi's revenue and engagement accelerating in fiscal 23, we are looking to further strengthen Tubi's position in fiscal 24. To that end, we are very excited to welcome Anjali Sood as the new CEO of Tubi and look forward to seeing Tubi flourish further under her leadership. At Fox News Media, we continue to lead both in ratings and engagement. The Fox News channel ended the fourth quarter as the most watched cable network in total day for the ninth consecutive quarter, while maintaining its lead as the most watched cable news network, beating CNN and MSNBC in both total viewers in the demo for both prime time and total day. Fox News debuted its tweaked prime time lineup last month. We are pleased with the initial results and are confident that our deep bench of talent will continue to set the standard for all news services as we move towards the 2024 presidential election. This past year, Fox News leadership position was never at risk. We sustained double digit advantages in total viewership over our nearest competitors for the entire fiscal year, even during the period where our prime time lineup was in transition. In fact, since its mid July debut, Fox News' new prime time lineup is up over 35% in total viewers and up over 40% in the 25 to 54 demographic versus the June schedule. Meanwhile, the Fox Business Network ended the quarter as the most watched business cable news network, beating CNBC in total viewers during the business day for the fifth consecutive quarter. Across at Fox Entertainment, We had a solid year, notching multiple wins, including the number one entertainment telecast with Next Level Chef, the number one new drama of 2023 with The Accused, and the number one new unscripted series with Special Forces, World's Toughest Test. Our local TV station group delivered a record midterm election sales cycle that was just shy of the last presidential cycle. We are very pleased with fiscal 23. a year where Fox again delivered best-in-class results and further differentiated itself from its peers. We enter fiscal 24 from a position of strength, despite headwinds facing our industry and the lingering effect of some macroeconomic uncertainty. We will renew the next third of our distribution agreements and navigate a variable ad environment supported by solid results from the recent upfront for our unique content offering, which distinguishes itself in any marketplace. You've heard me say this many times. Fox's focus strategy is different from our peers. It's uniquely good. Nowhere is that more evident than in the current environment where Fox's leadership position is proven. In this year's Upfront, we believe Fox led the market in both price and volume across our live sports and news offerings. While it's early in the quarter, underlying ad trends have shown signs of improvement over last quarter. We are seeing an uptick in scatter, driven largely by sports, and national news is solid. And at Tubi, we saw further momentum in both revenue and TBT growth in July. This promises to be another strong year for Fox as we wrap up the Women's World Cup in a few weeks with stellar advertising support. before kicking off American football in early September with the Big Ten and the NFL. We're already seeing our live sporting events continue to break records with the Women's World Cup broadcast. The U.S. versus the Netherlands on Fox was the most watched Women's World Cup group stage match ever on U.S. English language television. We'll also broadcast our first UEFA European Soccer Championship later this year. Further, we expect that our relaunched news lineup will continue its momentum as we head into the presidential election cycle, which will also be a boon to our local stations. And, of course, we expect Tubi's growth and scale to extend even further. Underpinning all of this, we can't forget our balance sheet, which remains robust even after this year's legal costs. We ended the quarter with $4.3 billion in cash and approximately 7.2 billion in debt, giving us a net leverage ratio of roughly one times, the best balance sheet in the business. We have said it time and time again, our mix of assets puts us in a uniquely stronger position than our peers. With this strength and our relentless focus on our core business, we are committed to delivering value for our shareholders in a thoughtful and disciplined manner as we look forward to 2024. And with that, I'll turn it over to Steve to take you through the operating details of the quarter and full year.