Fox Corporation

Ladies and gentlemen, thank you for standing by and welcome to the Fox Corporation's first quarter fiscal year 2024 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. Should you 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 2024 first 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'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 filings. 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. I just want to start with a comment and a note of thanks. We are living through tumultuous times. And at the outset, I want to acknowledge the work our journalists are doing covering the horrific October 7th terrorist attack and the subsequent ongoing war in the Middle East. From the reporting of Trey Yingst, Greg Palcott, Mike Tobin, and Lucas Tomlinson in Israel, and Steve Harrigan in Baruch, to the deep analysis and insightful commentary by our reporters and hosts, including John Roberts and Trace Gallagher, to the essential and brave work of our on-the-ground producers and camera crews, Fox is fulfilling its mission to find, report, and analyze the news of the day without fear or favor. News reporting is hard, and war reporting is perhaps difficult. the hardest. And while the horror central to this news cycle can wear heavily on those we ask to expose them, their exposure is necessary. And so our team deserves our admiration and our gratitude as they continue to work tirelessly and under demanding conditions to keep us up to date on events far away and on their impact closer to home. My sincere thanks to them all. Now, turning to today's first quarter earnings release, against a backdrop of an active news cycle and a robust sports schedule, fiscal 2024 has started off on a solid operational and financial footing. Fox's focused portfolio of assets continues to distinguish itself and deliver exceptional results. Financially, we are now comparing against the fiscal 23 cycle of events that delivered then record revenues in EBITDA. Despite this comparison, we posted total revenues this year slightly ahead of last year's record. On the affiliate side, we reported 2% total affiliate growth led by 8% growth of the TV segment in the quarter. Importantly, we have continued to secure constructive renewals which deliver for our partners and reinforce the value of our brands and programming. Advertising revenues in the quarter decreased by around 2%, principally due to a comparative quarter last year that was much heavier in political ad revenues at our local TV stations. We understand there is inconsistency around the broader advertising market, particularly in entertainment, but our focus on live sports and news continues to deliver. with healthy national pricing and demand in addition to continued momentum at Tubi. Underpinning revenue are our core brands, which consistently resonate with viewers. And the consumption data clearly shows this, with total viewing of Fox brands up 2% in the quarter. Fox Sports was a big driver of that consumption, especially with its broadcast of the Women's World Cup, where the US versus the Netherlands on Fox was the most watched Women's World Cup game match ever on U.S. English language television. From summer to fall, our lineup is bolstered by our football packages, led by the NFL and Fox, where we are averaging over 17 million viewers through week eight. Based on the strength of our remaining schedule, especially from Thanksgiving through Christmas, we expect that engagement to improve significantly. In college football, interest is reaching new highs. Fox's Big Noon Saturday is progressing to a third straight year as the number one game window in all of college football, averaging almost six million viewers. At Tubi, we had another enviable quarter, delivering 30% revenue growth driven by an impressive 65% lift in total view time. Tubi surpassed 70 million monthly active users in September, logged nearly four billion streaming hours in the first half of the calendar year, and remains the number one Ava player and most watched free ad-supported TV streaming service in the United States. Additionally, Tubi has beaten Pluto, Max, Paramount+, and Peacock in view time for five consecutive months. One reason for the high engagement levels of Tubi is its extensive content library that now exceeds 60,000 titles, which translates into more than 225,000 movies and TV episodes. in addition to approximately 300 fast channels. And during the quarter, Tubi introduced Rabbit AI, a chat GPT-4 powered recommendation engine to help users navigate this incredible range of titles. Tubi also offers a unique and compelling proposition to advertisers. A recent MRI study of streaming peers concluded that Tubi saw the fastest growth amongst young and diverse populations. and the Tubi is able to deliver high value net new audiences with 33% of Tubi streamers unreachable on other top AVOD services. Now turning back to Fox News, the strength of our overall news coverage and the reach of our linear audio and digital content is unmatched. Whether it is the conflict in the Middle East, the upcoming 2024 election cycle, or volatility in the financial markets, Fox News is increasingly the viewer's first choice. The launch of our new expanded primetime lineup in mid-July further solidified Fox News' leadership position, not only in cable news, but in all of cable, finishing the quarter as the most watched cable network in both total day and primetime. Fox News maintained its lead as the most watched cable news network, beating CNN and MSNBC in total viewers, and in the demo for both prime and total day. We have seen this lead continue and expand in the current quarter, with October viewership increasing over 20% from the first quarter, with over 30% growth in the key demo. Ratings leadership during the quarter was achieved across the platform. The Fox News Channel had the top six cable news programs, with P2+, and the top seven programs within the demo. In P2+, the five led the way in terms of viewers, followed by Jesse Waters Primetime and Hannity, while the five, Gutfeld, Hannity, and Jesse Waters Primetime were the top four programs in the demo. And Fox Business News ended the quarter as the most-watched business cable network, beating CNBC in total viewers during the business day for the sixth consecutive quarter. The election cycle started off with a successful Republican presidential primary debate, which was Fox News Channel's highest-rated telecast since Election Day 2020 and the highest-rated non-sports telecast of the year across cable. While the debate kicked off the election cycle, once we get deeper into it, our local station group will benefit greatly from increased political spend in the coming quarters. Over at Fox Entertainment, we started the 2023 to 2024 broadcast season as the number one network in the key adult 18 to 49 demo, and Fox ranks as the top network in entertainment programming, a first in at least 10 years. Fox has three of the top four highest rated premieres, of the 2023-24 season to date in Krepopolis, the Simpson, and the Masked Singer, and the season's number one new game show with Snake Oil. Across the company, fiscal 24 is shaping up nicely. We look forward to a great enthusiasm across the fall sports season, underpinned by the NFL, college football, and now the completed World Series. Continued viewing growth at Tubi, and renewed momentum at Fox News and our local stations as the election cycle heats up. Our balance sheet remains a core asset for Fox, and we will continue to deploy it in a disciplined and thoughtful manner that delivers value for our shareholders. Finally, I would like to congratulate my father on his 70-year career at News Corp and Fox. His enduring legacy can be felt in both of these companies, and I can assure you that he is still very much involved and will continue to be for years to come. With that, I'll turn it over to Steve to take you through the operating details of the quarter.