The paragraph is an introduction to the Fox Corporation's Second Quarter Fiscal Year 2025 Earnings Conference Call. The call is led by Gabrielle Brown, the Chief Investor Relations Officer, and features remarks from Lachlan Murdoch, the Executive Chair and CEO, John Nallen, COO, and Steve Tomsic, CFO. The call involves discussions about the company's financial performance, including forward-looking statements and non-GAAP financial measures. Lachlan Murdoch expresses concern about the impact of recent Los Angeles wildfires on Fox's staff, prioritizing support for affected employees.

The paragraph discusses Fox's efforts to support the community after a tragic event, highlighting a $5 million donation and long-term recovery focus. It then shifts to Fox's strong fiscal second-quarter financial performance, noting a record $781 million EBITDA, 20% revenue growth to over $5 billion, and leading affiliate and advertising growth. The results were bolstered by successful coverage of the presidential election, high sports viewership, and Tubi's audience expansion. Affiliate revenue grew by 6% while advertising revenue rose by 21%, driven by record political revenue, particularly from local stations, during the presidential cycle.

In the quarter, Tubi significantly boosted advertising revenue, with a 31% increase, even excluding political ads, and continues to see strong trends into the next quarter. Sports advertising, particularly for NFL games, remains robust, with record pricing for Super Bowl 59. Fox News also experiences strong advertising demand. In Entertainment, high scatter pricing and low cancellation rates highlight success, with Fox's new medical drama "Doc" achieving the best series debut in five years. Tubi's diverse, largely cordless audience is a key focus, as it will host its first Super Bowl livestream, which aims to engage a new audience and provide access to its vast library of content.

The paragraph highlights FOX News' significant growth across various platforms. It emphasizes FOX News' dominance in viewership, particularly during the second quarter and key events like the election night and the inauguration, where it consistently outperformed competitors. FOX News achieved high ratings and audience shares in both total day and PrimeTime cable news sectors, with impressive digital engagement evidenced by YouTube views and increased consumption through non-traditional media sources. This growth aligns with FOX's strategy of leveraging diverse content delivery methods to reach large audiences.

The paragraph highlights FOX News' achievements and commitment to journalism, particularly in sports coverage during Autumn 2024, with significant viewership in the MLB World Series, College Football, and the NFL. Despite deciding not to proceed with the Venu sports streaming venture due to legal challenges, FOX remains focused on maximizing content distribution across traditional and digital platforms. The recent trend of distributors launching smaller, cost-effective bundles that include FOX's sports and news channels is seen as beneficial for the company, boosting confidence in its long-term prospects.

The paragraph provides a financial update on Fox's strong performance in the second quarter. It highlights a 20% revenue increase and a 123% rise in EBITDA to $781 million. Advertising revenue grew by 21%, driven by political ad spend, MLB ratings, sports properties, Tubi's growth, and news engagement. Affiliate fee revenues increased by 6%, and sports sublicensing revenues boosted other revenues by 70%. Net income attributable to stockholders rose significantly to $373 million or $0.81 per share, with adjusted net income at $442 million or $0.96 per share, marking a 180% increase from the previous year. The paragraph concludes by noting the benefits to sports advertising revenues from higher ratings.

The cable segment saw a 4% revenue increase due to affiliate pricing gains, despite a 7% decline in subscribers, with other revenues up $350 million from higher sports sublicensing. However, this growth was offset by a 38% rise in expenses mainly from increased sports amortization. The television segment experienced 16% revenue growth, with a 19% increase in advertising revenue driven by political ads, strong MLB ratings, and growth at Tubi. Television affiliate fees grew 9%, offsetting subscriber declines, while Television Other revenues rose 33% due to entertainment studio content. Despite a 3% increase in expenses from Tubi investments, the television segment's EBITDA rose by $343 million to $205 million. The company recorded a $436 million free cash flow deficit, reflecting typical early-year working capital seasonality.

The paragraph discusses Fox Corp's capital allocation, highlighting a $550 million share buyback this fiscal year, totaling $6.15 billion since 2019, and their commitment to a $7 billion buyback authorization. They also announced a 27% per share semiannual dividend, amounting to $120 million. Combined, these efforts have returned approximately $7.9 billion to shareholders through dividends and buybacks. The company's financial health is supported by a $3.3 billion cash reserve and $7.2 billion in debt. The conversation then transitions to a Q&A, where John Hodulik from UBS asks about the Direct-to-Consumer (D2C) service launch, seeking details on its timing, content, needed rights, and associated costs, as well as insights into affiliate renewal acceleration. Lachlan Murdoch responds, emphasizing the ongoing value of the traditional cable bundle.

The paragraph discusses the company's support for traditional cable bundles while also acknowledging the need to reach consumers who have moved away from these bundles, such as cord-cutters and cord-nevers. They are developing a new offering aimed at these consumers without turning traditional customers into direct-to-consumer (D2C) customers. The service will use existing content, keeping costs low and pricing modest, with a target launch by the end of the year. Additionally, Steve Tomsic mentions a decrease in attrition rates and emphasizes the importance of skinny bundles and a focused channel portfolio, which align with the company's distribution strategy.

The paragraph discusses strong performance and growing demand for FOX News advertising. Lachlan Murdoch highlights that the network is attracting numerous new advertisers, driven by strong ratings even after major political events like the election and inauguration. Over 100 new major national clients have joined, boosting demand and pricing. Murdoch expresses optimism about this trend continuing, with ratings and revenue expected to increase further in the third quarter. Additionally, Michael Morris inquires about the FOX Super Bowl live stream on Tubi, questioning its impact, costs, and potential service quality concerns.

In this paragraph, the discussion centers on Tubi's strategy during the Super Bowl, emphasizing that it's not a change in direction but rather a great opportunity for exposure and marketing. Tubi aims to capture first-party data as viewers register, which is valuable for programmatic advertising and can drive future CPMs. Lachlan Murdoch responds to questions from Thomas Yeh, who is inquiring about Tubi's growth and investment needs, particularly regarding content, and when it might positively affect FOX's EBITDA. Additionally, there's a question about the progress and timeline on obtaining sports betting licenses in various states.

The paragraph discusses the profitability and growth prospects of Tubi, indicating that investments have decreased as the platform scales and experiences positive advertising growth. Tubi is expected to reach profitability according to business plans. Additionally, the company is working on obtaining sports betting licenses in 26 states, anticipating no major obstacles and planning for completion well before 2030. The company's sports betting investments, including holdings in FanDuel and its parent company Flutter, have shown significant valuation gains. The paragraph ends with a question from Michael Ng of Goldman Sachs regarding subscriber trends and digital losses, specifically about sub declines and expectations for digital losses to decrease from mid-$300 million to high $200 million.

In the paragraph, Lachlan Murdoch discusses subscriber trends and the performance of FOX's channel bundles. He notes a positive trend in reducing subscriber declines over consecutive quarters, partly influenced by the excitement of the sports season. Murdoch highlights that FOX's offerings in bundles like DIRECTV's MySports and Comcast's Xfinity Sports and News TV are comprehensive, including major FOX channels, and refers to them as "lean and mean" rather than "skinny." Financially, FOX benefits as much from these bundles as from traditional ones, and they are seen as appealing to both cord-cutters and traditional cable subscribers.

The paragraph discusses Fox's optimism about a new business strategy and digital investment plans. Steve Tomsic mentions that the company is successfully reducing digital investments, with significant savings realized, mainly from better EBITDA at Tubi. Tubi plans to increase investment during the Super Bowl period to capitalize on marketing and user acquisition opportunities. Robert Fishman from MoffettNathanson inquires about Fox's strategy to compete for sports broadcasting rights after Netflix's acquisition of Women's World Cup rights, as well as the inclusion of FOX News or FOX Nation in their D2C offering. Lachlan Murdoch emphasizes that Fox's reach remains a top priority for securing sports rights.

The paragraph discusses Fox Corporation's strategy to enhance consumer engagement by making its content available across various platforms, including traditional linear TV, cable, digital MVPDs, and its own direct-to-consumer (D2C) services. This strategy aims to reach a broad audience, targeting both current cable subscribers and those who have cut the cord or never subscribed to traditional TV. The company plans to offer a comprehensive D2C package that includes sports and news content. The paragraph ends with closing remarks from Gabrielle Brown, Lachlan Murdoch, and Steve Tomsic, as well as the conference call's conclusion by the operator.

This summary was generated with AI and may contain some inaccuracies.