Fox Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation second 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 the functionality for the question and answer session. 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 would now like to 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 second 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 filing, which are available in the Investor Relations section of our website. And with that, I'm pleased to turn the call over to Lachlan.

LACHLAN COLLINS- Thank you, Gaby, and thank you all for joining us this morning. Against the backdrop of an active news cycle and another robust fall sports schedule, our fiscal second quarter again illustrated the strength of Fox. The growth we delivered in affiliate fee revenues was the standout this quarter, with the television segment growing by 10% and the cable segment returning to growth, once again demonstrating the power of our brands and our programming. We have now largely completed our fiscal 24 affiliate renewal cycle. having achieved our commercial goals without disruption and setting a solid foundation for renewals in fiscal 2025 and beyond. As expected, advertising revenues in the quarter were down, primarily due to comparisons to last year's major cyclical events, including the midterm elections at the TV stations and the broadcast of the Men's World Cup in the cable and television segments. Parsing through the cyclical comparisons, our concentration in news and sports, coupled with the outstanding performance at Tubi, is clearly an advantage in a mixed advertising environment. More specifically, sports advertising was very healthy during the quarter, and we saw particularly strong demand for the NFL and college football, which continued into the NFL playoffs. At news, the second quarter was more nuanced. While preemptions and the direct response market adversely impacted quarterly growth, we sequentially narrowed the gap between the current and prior year in ratings and in pricing. We were also able to increase our viewing share over the previous quarter, and the positive trends in share, ratings, and pricing have carried over into the current quarter. Last week, I visited our bureau in Jerusalem, met with our talented and dedicated staff there, and saw firsthand the devastation wrought by Hamas on October 7th. Our hearts, our thoughts, and our prayers go out to the victims of that day, the innocents killed in Israel and in Gaza, and the hostages still denied the embrace of their families and loved ones. The work our correspondents, our camera people, and our producers do Reporting on these events is important, outstanding, and deeply appreciated. Now on to sports. In calendar 2023, 96 of the year's 100 most watched telecasts were live sports. Fox was responsible for 29 of the year's 100 most watched shows, more than any other network. This marks the fifth straight year that Fox has topped the industry in live sports viewing and demonstrates the unparalleled reach and engagement our content achieves. The 30th NFL regular season on Fox concluded with an average of 19 million viewers across all games, with America's Game of the Week averaging 25 million viewers, an eight-year high. And Fox NFL Sunday logged its 30th straight year as the number one NFL pregame show. That strength continued into the postseason, with Fox's three postseason windows delivering a best-ever playoff average of almost 45 million viewers across the wildcard, divisional, and championship games. In digital, we saw strong engagement of Tubi, which finished with a very impressive 62% growth in total view time, and 17% growth in revenue. Tubi's library of over 240,000 movies and TV episodes, coupled with ubiquitous distribution, drove engagement, helping Tubi reach 78 million monthly active users, log almost 2.5 billion streaming hours in the quarter, and set a new monthly record of 855 million total viewing hours in December alone. Tubi has consolidated its position in the streaming landscape, ranking as the most watched free TV and movie streaming service in the United States, according to Nielsen, and surpassing Peacock, Max, Paramount+, and Pluto TV in view time for seven consecutive months. At Fox Entertainment, the second quarter saw programming strength, with Fox having the season's number one new broadcast entertainment series in Crapopolis. Hats off to Dan Harmon. the number one new game show debut in Snake Oil, and the number one cooking series in Hell's Kitchen. We're also pleased with the very strong start of our mid-season lineup and the early success of We Are Family and The Floor. Before I hand over to Steve, I'll comment on the sports platform we announced last night between Fox, Disney, and Warner Brothers Discovery. This new and unique digital distribution platform is focused on sports fans outside of existing pay TV offerings. Upon launch in the fall of 2024, the platform will offer a broad suite of sports, including those from a combined 14 linear networks that broadcast sports today. The inclusion of our networks in the platform is consistent with our strategy, being proudly consumer-first, and distribution agnostic. Across the distribution ecosystem, our traditional pay TV market will remain our dominant customer base for some time to come. As such, we remain committed to our existing distribution partners, where our strong portfolio of leadership sports, news, and entertainment brands thrive in their bundled offerings. This unique new platform opens up a new market for us, one that we at Fox have not accessed before, and that we're excited to participate in. As always, we are focused on delivering value for our shareholders in a thoughtful and disciplined manner. And we will continue to explore every opportunity to maximize that value over the long term. Let me now turn it over to Steve for his comments on the quarter's financial results.