Fox Corporation

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 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 touchstone 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, Carly. Good morning and welcome to our fiscal 2025 fourth 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. Additionally, this call will include certain non-GAAP financial measures, including adjusted EPS and adjusted EBITDA, or EBITDA as we refer to it on this call. Reconciliation 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. We also refer to free cash flow, which we define as net cash provided by operating activities plus capital expenditures. And with that, I'm pleased to turn the call over to Lachlan.

Thank you very much, Gabby. Before we start, I preemptively apologize for my coughing from the end of a cold, which Gabby and Steve are thrilled to be locked in an AV closet with me, but you guys should all be thankful that you're this is telephonic. Well, Gabby, thank you very much and thank you all for joining us this morning as we discuss our fourth quarter and full year earnings results. Fiscal 2025 was another outstanding year for Fox, demonstrating the strength, operationally and financially across all of our businesses and delivering our best year yet. The year was highlighted by our strong financial performance with revenue growth of 17% and $16 billion, EVADOT growth of 26% to $3.6 billion, adjusted EPS growth of 39% to $4.78 per share, and free cash flow growth of 100% to $3 billion. All records for Fox. We also generated record political advertising revenue of well over $400 million across the Fox platforms. Fox's broadcast of Super Bowl 59 broke viewership and advertising records as the most watched telecast in U.S. history, generating over $800 million of gross advertising revenue. And engagement at Fox News led to record audience share, reaching over 70% of the cable news audience at times during the year. Our noteworthy fiscal 2025 results were underpinned by a 26% lift in total advertising revenue to $7 billion. The momentum we have reported over the first three quarters of our fiscal year continued unabated during the fourth quarter, with 7% growth over last year despite tougher comparisons from last year's UEFA Euros and Copa America soccer tournaments. As we look to fiscal 26, the overall advertising market for Fox continues to be healthy and robust as evidenced by our recently concluded upfront, where we achieved record-setting double-digit volume growth and strong pricing growth across our portfolio. The power of our brands and our ability to deliver engaged audiences at scale across our platforms is exceptionally strong. Nowhere is that scale and engagement more evident than at Fox News. Fox News ended the fiscal year as it began, as the most watched cable network in total day and in primetime. In the fourth quarter, total day audience was up 25% in total viewers and 31% in the demo, while maintaining over 60% share of the cable news audience. And now, for the second quarter in a row, Fox News was the second most watched network in Monday through Friday Prime in all of television, surpassing all but one broadcast network. But it's not only linear news driving that performance. Fox News Digital achieved new records for engagement during the quarter with over 1.5 billion YouTube views and over 3.7 billion social media video views, our highest totals ever. Engagement trends are off to a good start in the first quarter of this new year, with Fox News finishing as the highest rated television network in America for the month of July, no doubt aided by must-watch programming like Jesse Waters' Plinetime and Gutfeld, the leading late-night program on television. Fox Sports once again cemented its position, finishing the year first among all networks in live sports. That engagement was driven by an impressive portfolio of sporting events including a riveting Major League Baseball postseason, the launch of Fox College Football Fridays, the NFL and Fox, and of course, the record-breaking Super Bowl 59. And while our fourth quarter has a lighter sports calendar, Fox's first presentation of the Indianapolis 500 was an unqualified success, averaging over 7 million viewers, a 41% gain over last year and the most-watched running of the race in 17 years. The power of live sports remains unmatched, and our sports portfolio is in increasing demand by advertisers and viewers alike. We expect that to continue as we charge ahead to autumn, when we welcome back postseason baseball, the NFL, and college football on Fox. Fox's big noon Saturday kicks off on August 30th with a highly anticipated rematch of last season's college football playoffs, semifinal Texas versus Ohio State. By then, you will be able to watch our entire sports portfolio along with our news and entertainment programming on Fox One, our -to-consumer streaming platform. Fox One is a truly innovative digital offering launching across the U.S. on August 21st for $19.99 per month. While Fox One will be marketed to the cordless market, current PayTV subscribers will also have access to Fox One on an authenticated basis. And yes, we will be offering bundling opportunities that make sense to achieve our targeted objectives. We have said before that our aspirations for Fox One subscribers are modest and our measured investment toward this initiative will match these long-range goals. Speaking of the cordless market, Tubi notched multiple achievements in fiscal 2025, including delivering the most streamed Super Bowl in history, exceeding 100 million monthly active users, generating over $1.1 billion in revenue, and reaching an all-time high of .2% share of total U.S. television viewings. The sustained momentum we have seen at Tubi throughout this fiscal year continued into the fourth quarter with 17% growth in total view time, along with favorable progress in our direct response and partner channels, combining to drive revenue growth of 32% in the quarter.