Fox Corporation

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 on your touch-tone keypad. 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 2025 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 filings. Additionally, 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 thank you all for joining us this morning. Just to start, I want to comment on the devastating impact of the Los Angeles wildfires over the past few weeks. At Fox, our top priority has been to support our staff who have been profoundly affected in many ways, including losing their homes, and much, if not all, of their belongings. We are one family and we are truly with you. And to aid the broader community, Fox has donated and raised over $5 million across our platforms, thanks to the generosity of our audiences and employees. But sadly, as we have learned from past fires, the impact on the community is measured not in days or weeks, but in years. Our focus has now shifted to the longer-term recovery for those most affected and to the rebuilding of the community around them. I want to thank our colleagues at KTTV and Fox News who kept viewers comprehensively informed with their coverage of the tragedy as it unfolded. We are deeply grateful for their work and also for the efforts of firefighters and many other first responders. Thank you. Now onto our earnings. As you will have seen in the release this morning, our fiscal second quarter results again demonstrates the continued operating momentum and strong financial performance of Fox. Financially, Fox EBITDA more than doubled year over year to a second quarter record of $781 million, driven by revenue growth of 20% to just over $5 billion. These results are underpinned by industry-leading affiliate and advertising revenue growth and reflect strong on-screen delivery through our coverage of the presidential election, both at Fox News and across our local stations, strong NFL, college football, and Major League Baseball post-season viewership, and continued audience expansion at Tubi. We are firing on all cylinders. Total affiliate revenue grew by 6% on the back of higher rates, with subscriber declines improving for the second consecutive quarter. Notably, we have now successfully completed all affiliate renewals that will impact fiscal 2025. Total company advertising growth of 21% in the quarter was driven in part by record political revenue, led by our local stations. Looked at more holistically across this year's presidential cycle, our first half fiscal 2025 political revenue of over $400 million was also a record. Tubi was a strong contributor to advertising revenue growth in the quarter, achieving a 31% increase in ad revenues, showing acceleration even when excluding political revenue. And that advertising strength has continued into our fiscal third quarter, where we are seeing very healthy trends across our portfolio. Sports remains remarkably robust. Our NFL postseason broadcast of the Wild Card Divisional and NFC Championship saw our highest ever unit pricing at demand for these matches. We are sold out with record pricing for this Sunday's Super Bowl 59. We can't wait for the big game. Advertising trends at Fox News are also strong across the direct response and national advertising categories, where there is increased demand from existing blue chip advertisers as well as new clients coming to the network due to its record share of audience. At entertainment, scatter pricing is currently tracking at high single digits above upfront levels, and cancellation options are at historical lows, with Fox delivering its best series debut in five years with the launch of the medical drama Doc. And Tubi continues to monetize its hard-to-reach differentiated audience. Now, everyone on this call will know that Tubi's audience is diverse and it's young. And it is over 65% cordless, made up of cord nevers and cord cutters, not currently in the traditional cable universe. While in past years, we have always unlocked the Super Bowl for viewers across our digital platform, this year, we will focus these cordless viewers on Tubi, with Tubi's first-ever Super Bowl livestream and related shoulder programming. This will provide viewers a great service, broaden the reach of the game, and deliver Tubi an opportunity to engage a large cohort of new users. After the game, Tubi's viewers will have access to our library of over 275,000 movies and TV episodes, including the recently premiered The Z Suite, the hit original sidelined the QB and me, and much more. The game, the content, and the experience on Tubi will further support its stellar growth. The mission for all of our platforms is delivering unique content to large audiences. Nowhere is that more evident than at Fox News, where 4.5 billion hours of content was consumed across its platform during the second quarter. On election night, more viewers turned to Fox News Media than any other network, with over 13.5 million viewers tuning in during primetime. Fox News Channel once again ended the quarter as the most watched cable network in total day and primetime, growing total day audience by nearly 40% and primetime audience by 45% year over year. Fox News meaningfully outperformed its peers, more than doubling the viewing of its closest competitor and posting its highest quarterly share of primetime cable news audience in its history at over 60%, which includes a 70% share in December. Momentum in share and ratings has continued through and after the inauguration. On the day, Fox News Media's coverage of the inauguration drew close to 12 million viewers, making it the most watched coverage in all of television. This viewership has contributed to Fox News' third quarter-to-date ratings up over 50%, primetime ratings up over 40%, delivering Fox News a commanding share of the primetime cable news audience at 69%. And Fox News' share of the audience was not limited to the cable network. For example, on YouTube, Fox News generated nearly 410 million views in the month of January, beating our closest competitor, NBC, by nearly two and a half times. The continued growth of Fox News Digital underscores that audiences are consuming their news in different ways. We clearly saw this during the past election cycle, where there was an uptick in consumers who either supplemented or solely accessed their news and information from non-traditional media sources. We view these new media markets opportunistically and as essential to our growth strategy. Fox News outstanding achievements underscore our unwavering commitment to outstanding journalism, to our insightful coverage of politics and breaking news, and to our strong prime time lineup. Of course, our content leadership also extends to sport. Autumn is traditionally the strongest time of year for Fox Sports, and 2024 was no exception. With a thrilling Major League Baseball World Series, college football expanding to Friday nights, and the NFL remaining the most watched content in all of television, Fox was the leader in consumption of live sports events in the second quarter. Our only disappointment in sports is that we will not be moving forward with venues, our sports streaming joint venture with Warner Brothers Discovery and Disney. While the Venue team has done a tremendous amount of truly genius work preparing the digital platform for launch, in the end, the legal distractions around the business became increasingly difficult to bear. Venue was to be another distribution outlet for our brands to access consumers in the market wherever they are. And that is what we continue to be focused on, maximum distribution of our content, whether that be traditional, digital streaming, or our own D2C offering in the near future. Encouragingly, the distribution market has made some major strides recently. In the 12 months since we announced Venu, we have seen key distributors announce the launch of smaller, lower-cost bundles of sports, news, and broadcast networks. Three distributors have announced new skinny packages in recent months and we expect this trend to continue. We see this as a positive initiative by both our distribution partners and other content owners. The inclusion of our suite of channels, sports and news, in each of these offerings is a real economic benefit to us, even more so than the sports-specific venue, and so gives us greater confidence for Fox over the long term. We have had a very solid first half of our fiscal year, and we are excited for what is to come. Consistent with our track record, we remain committed to 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.