Fox Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation third quarter fiscal year 2025 earnings conference call. At this time, all participants are in the listen-only mode. Later, we will conduct a question and answer session. And I would like to emphasize that functionality for the question and answer queue will be given at that time. If you 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, Polly. Good morning and welcome to our fiscal 2025 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 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. It's a particularly beautiful spring morning in New York this morning. I hope everyone's had a chance to enjoy it. Our fiscal third quarter underscored the central role Fox plays in informing and entertaining America, and our financial performance once again illustrates the strength of the Fox platform. Whether it be our market-leading coverage, what has been a sustained active news cycle, or our record-breaking broadcast of the Super Bowl, we delivered across-the-board milestones during the third quarter. Total company advertising revenue grew 65% in the quarter, including the Super Bowl, which generated over $800 million of gross advertising revenue across our businesses, a record for both our national broadcast network and our local TV stations. This year's matchup between Kansas City and Philadelphia delivered 128 million viewers across Fox platforms, making Super Bowl 59 the most watched telecast in US history. Our affiliate revenues also had a notable quarter, with total revenue growth of 3% on the back of higher rates and improved subscriber declines for the third consecutive quarter. These robust results continue to build upon Fox's noteworthy first half and put us on track to complete a strong fiscal year. Notably, these third quarter results reflected the highest free cash flow in Fox's history. While we recognize the commentary around the macro environment, we have seen no impact to our business. Our ratings and engagement are strong. National advertising scatter pricing is outpacing last year's upfront rates with solid demand, and Tubi continues its top-line momentum. We remain confident that our best-in-class assets, disciplined approach, and fortress-like balance sheets will continue to set us apart. In fact, in just a few hours, we will host America's top advertisers at this year's Upfront presentation here in New York. We approach this Upfront cycle on uniquely strong footing, knowing that our focus on live sports and news programming combined with Tubi's commanding position in the AVOD segment and our exceptional entertainment offering will continue to offer rare value to our advertising partners. Nowhere is Fox's leadership more evident than Fox News, where once again, the Fox News channel finished the quarter as the most watched cable network. But even more remarkable, During the quarter, Fox News was the second most watched network in Monday through Friday prime in all of television, surpassing all but one broadcast network. This combination of an engaged audience and a dynamic news cycle led to record audience share in the quarter. Fox News Channel had one of the highest rated quarters in cable news history, growing total day audience 48%. in total viewers and 58% in the demo and reaching our highest quarterly share of cable news audience ever. In fact, since the election, Fox News has delivered the top 1,013 cable news telecasts. This ratings and share momentum has carried into the current quarter with April total ratings up nearly 30%, prime time ratings up over 30% and prime time cable news audience share in the 60% range. I should also highlight our digital consumption trends, which demonstrate our news content is resonating with an expanded audience beyond the linear world. Fox News Digital grew page views 18% year on year to a record 11 billion views and closed the quarter with the highest number of YouTube views in its history. Engagement at Fox Sports is also unmatched in the industry, especially after a solid NFL postseason. For the 2024-2025 television season to date, Fox Sports ranks as the industry leader in live sports event viewership, accumulating 3.3 billion hours of sports event viewing, 17% better than our closest competitors. While the sports calendar and our fiscal fourth quarter trends tend to be quieter, we see strong audience and advertiser demand for our schedule, including NASCAR, the inaugural season of IndyCar and Fox, and the start of the baseball season. Turning to digital, Tubi delivered another outstanding quarter with revenue growth of 35% year on year. This marks an acceleration compared to the 31% growth we posted in the December quarter, which is even more impressive when considering the last quarter benefited from political revenue. As you know, Tubi played an essential role in extending the reach of the Super Bowl, bringing in over 24 million unique viewers on game day and 16 million peak concurrent viewers during the game. Of those unique viewers, 40% were in the 18 to 34 demo, and half of those were female. Reciprocally, the Super Bowl provided a unique promotional opportunity for Tubi, which attracted over 8 million new registered viewers. While engagement on the platform was certainly helped by the Super Bowl, retention and consumption trends at Tubi post the Super Bowl are also very encouraging, with total view time up 24% year over year in April. Tubi has established itself as a leading player in the streaming world, offering premium on-demand entertainment and original content that is 100% free for consumers. We think this, combined with Tubi's large, young and diverse, highly engaged audience of mostly cordless viewers, offers advertisers an unrivaled value proposition. Also well positioned for the upfront is Fox Entertainment, which had a strong broadcast season, levering the Super Bowl lead-in to launch the third season of The Floor. This, along with other top-rated shows like Doc and Universal Basic Guys, helped propel Fox to the top spot in primetime season to date among adults 18 to 49. As we wrap up another successful quarter, it is clear that Fox's differentiated and focused strategy continues to outperform. The reach of our brands and our compelling programming led to impressive annual consumption growth of 34% across the entire Fox portfolio during the third quarter. When it comes to live events and news, Fox's leadership has never been clearer. There's a lot to be excited about as we look ahead. of our dedicated team of journalists and staff at Fox News and at our local stations, across which we make substantial investments in news reporting nationally and locally, a compelling spring sports schedule, taking viewers from the racetrack to the ballpark, and the leverage the elevated brand awareness of Tubi has to drive increased engagement in homes across America. We're also excited about our direct-to-consumer plans. Since the formation of Fox, we have created a unique platform of America's best-known media brands across the key verticals of news, sports, and entertainment. These are the brands that resonate with our audiences and that advertisers value so highly. Whether it's the Super Bowl, the election cycle, or the upfront, our company is at its best when we work together as one. That key attribute is the basis of our upcoming D2C offering, named Fox One, where targeted consumers, the cordless market outside of pay TV, can find all the Fox brands they love. Fox One is on track to launch before the football season this fall, and we look forward to sharing further detail about the service in the coming months. With the brisk tailwinds from both our strong operating momentum and financial results, we will continue to focus on execution and remain committed to delivering long-term value for our shareholders in a thoughtful and disciplined manner. And with that, I will turn the call over to the thoughtful and disciplined Steve Hoffman to take you through the details of the quarter.