Fox Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the Fox Corporation second quarter fiscal year 2026 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 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, Krista. Good morning and welcome to our fiscal 2026 second quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer, John Nallen, President and Chief Operating Officer, 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. 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. 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, Gabby, and thank you all for joining us this morning. As you can see from our release, the operating and financial momentum that we have delivered over the last several years has continued to build over the first half of fiscal 2026. It is the product of both the highly differentiated strategy and high-quality execution that reflect the power of our leadership brands across news, sports, streaming, and entertainment. Our favorable results were broad-based, including notable strength in advertising revenue, where despite high political advertising a year ago, we still adroitly grew total company advertising revenue. I made the comment last quarter that we were experiencing the most robust advertising market we have seen for some time. That remained true during the second quarter, and it continues to be true today, where we are seeing unabated healthy trends and positive metrics across our portfolio. In sports, We achieved record-breaking ad revenue for the Major League Baseball postseason, capped off by a seven-game World Series, while we also generated records for both the National Football League and college football regular seasons. Looking forward, we've had a strong NFL postseason, and we're now gearing up for our marquee motorsports events, the Daytona 500 and Indy 500, and, of course, the highly anticipated FIFA Men's World Cup, which starts in June. At News, despite comparisons to a heavy political news cycle in the prior year, we not only grew advertising revenue in the second quarter, but also achieved our highest second quarter advertising revenue ever. News business, further demographic expansion, and pricing growth in both direct response and national advertising all contributed to this strong result. Distribution revenue grew 4% during the quarter, with subscriber declines notably improving sequentially, even when excluding the contribution from Fox One, which continues to exceed our expectations, driven by both direct sign-ups as well as partnerships. At this point, we have not observed any noticeable cannibalization of traditional subscribers, a result of our targeted marketing to cord cutters and cord nevers. Although Fox One launched just five months ago, we are encouraged by consumer reception to the product. and we've already gained meaningful insights into audience engagement trends. While live sporting events continue to drive the majority of engagement, news accounts for approximately one-third of total minutes viewed on Fox One. Notably, news viewers engage with the platform twice as many days per week as non-news viewers and watch it nearly three times as many minutes per week on average. These patterns reinforce our view that Fox One is not only the premier destination for live sports, but also the leading platform for timely, relevant live news streaming. Whether streaming, linear, social, or digital, Fox News Media continues to meet our audiences where they are. Over the past 12 months, a fast-moving and consequential news cycle has reinforced Fox News Media's leadership position with audiences turning to the network for live coverage and in-depth analysis. Fox News again finished the quarter as the most watched cable network in total day, while maintaining its lead as the most watched cable news network and producing the top 11 cable news programs. Again, according to recent Nielsen data, Fox News is the number one cable news network among all three political parties, which bodes well for the upcoming political election cycle. On the digital side, social media views for Fox News Digital were up an astounding 170% over the prior year, and both Fox News and Fox Business ranked number one in YouTube video views amongst their peers during the quarter. There is no question that Fox News Media remains front and center with today's audiences while actively engaging with the next generation of news consumers. We are focused on expanding our podcast content and talent across Fox News and the broader Fox platform, supporting our strategy to meet our audiences wherever they are. Underscoring fan engagement across the Fox brands, Fox Sports ended 2025 as the leader in live sports event viewing, a title it has held for six of the last seven years. From the World Series that drew over 27 million viewers for Game 7 to To a 10-year high in NFL regular season viewership and the Big Ten Championship setting the record for any conference championship game on any network, the strength of the Fox Sports portfolio is unmatched. We capped the season with the Seattle Seahawks' NFC Championship victory over the LA Rams, drawing 46 million viewers and providing a powerful lead-in to Fox Entertainment's Memory of a Killer, the most watched series premiere on any network this season with over 11 million viewers across multiple platforms. The trend of strong engagement was further extended at Tubi. Tubi delivered its most streamed quarter of all time and grew total view time 27% year over year, supported by an expanding content slate, including the NFL Thanksgiving game simulcast and the premiere of Sideline 2, a Tubi original that has become a fan favorite. This engagement growth was the strongest in seven quarters and powered by an on-demand viewer, which is over 95% of consumption on Tubi. Tubi's most streamed quarter translated into record quarterly revenue, which grew 19% in the quarter on an absolute basis. And this revenue growth once again translated to the bottom line. with Tubi achieving EBITDA profitability for the second quarter in a row. Meaningful audience engagement is a consistent and enduring theme across our results, highlighting Fox's unique cultural position. Ensuring that we constantly and deeply connect with fans across our brands is at the forefront of our strategy. As an example of this strategy in action, total minutes viewed across sports, news, entertainment, and Tubi increased 15% year over year, in calendar year 2025. Amid strong competition, Fox stands out through compelling storytelling and deliberate investment in fan-driven content that delivers unmatched real-time reach. Together, these elements reinforce Fox's position as a trusted destination for audiences today while building lasting connection with future fans. We enter the second half of our fiscal year with strong momentum and with confidence in our strategic direction. Our emphasis on live sports and news, together with the strength of Tubi and increasingly Fox One, has driven exceptional performance and reinforced our leadership position across the portfolio. This focus, together with our strong financial position and best-in-class balance sheet, underpin our ability to deliver sustained growth and shareholder value. And with that, I will turn the call over to Steve to take you through the details of the quarter.