The paragraph introduces the Fox Corporation's Third Quarter Fiscal Year 2025 Earnings Conference Call. The operator initiates the call by informing participants it is in listen-only mode and mentions the session will later include a Q&A segment. Gabrielle Brown, Chief Investor Relations Officer, welcomes attendees and introduces key executives, including Lachlan Murdoch, John Nallen, and Steve Tomsic, who will present prepared remarks on the recent quarter's performance. The call may discuss forward-looking statements and non-GAAP financial measures, with reconciliations available on Fox's website. Lachlan Murdoch then begins his remarks by acknowledging the significance of Fox's role in informing and entertaining the public and comments on the pleasant spring weather in New York.

Fox's financial performance in the third quarter highlights the platform's strength, with total advertising revenue growing 65%, boosted by a record-breaking Super Bowl LIX that generated over $800 million in gross advertising revenue. This event, featuring Kansas City and Philadelphia, became the most-watched telecast in U.S. history with 128 million viewers. Affiliate revenues also increased by 3%, continuing a trend of improved financial results. Despite ongoing macroeconomic commentary, Fox has not seen negative business impacts, maintaining strong ratings and engagement. The company feels poised for a robust fiscal year-end, underpinned by strong demand in national advertising and growth in Tubi. Fox is confident in its competitive positioning due to its focus on live sports, news programming, and commanding presence in the AVOD segment, as it prepares for its upfront presentation to advertisers.

The paragraph highlights Fox News' strong performance, with the network finishing as the most-watched cable network and the second most-watched across television during prime time. Fox News experienced significant growth in audience share and ratings, especially following the election, and saw digital engagement increase with record page views and YouTube views. Fox Sports also led in live sports viewership, with impressive numbers for the 2024-2025 season. Additionally, their digital platform, Tubi, achieved notable revenue growth of 35% year-on-year.

The paragraph highlights the impressive growth and success of Fox and its streaming platform, Tubi. It notes a significant acceleration in growth for both, driven partly by the Super Bowl, which attracted millions of viewers and new registered users to Tubi. Tubi's large, young, and diverse audience offers valuable opportunities for advertisers. Additionally, Fox Entertainment has outperformed in the broadcast sector, leveraging popular shows and live events to secure the top spot in primetime viewership among adults 18 to 49. Overall, Fox's strategic focus and strong programming have led to a 34% growth in annual consumption across its portfolio.

The paragraph discusses Fox's business strategies and achievements. It highlights the company's substantial investments in national and local news reporting, a robust spring sports schedule, and leveraging Tubi's brand awareness to increase viewer engagement. Fox is launching a direct-to-consumer platform called Fox One, targeting consumers outside pay TV. This initiative is scheduled to launch before the upcoming football season. The company aims to continue delivering long-term value for shareholders, driven by strong operational momentum and financial results. Steve Tomsic then takes over to report a successful quarter, noting a 27% increase in total revenues and a 65% rise in advertising revenues, boosted by a record-breaking Super Bowl, growing Tubi engagement, and strong News pricing.

In the reported quarter, the company's affiliate fee revenues grew by 3% year-over-year, reflecting the strength of their brands and channel portfolio, while other revenues rose by 20% due to increased sports sub-licensing at the Cable segment. However, revenue increases were largely offset by higher costs, particularly sports rights and production expenses, linked to events like the Super Bowl, resulting in a slight decline in adjusted EBITDA to $856 million from $891 million a year earlier. Net income was $346 million or $0.75 per share, down from $666 million or $1.40 per share in the previous year, but adjusted net income rose to $507 million with an EPS of $1.10. The Cable Network Programming segment achieved 11% revenue growth and 7% EBITDA growth, with advertising revenues up 26% thanks to strong Fox News ratings and digital engagement. Despite a 16% rise in expenses due to increased sports rights and production costs, particularly from high sports sub-licensing revenues, the Cable segment's performance was strong.

The Television segment experienced 40% revenue growth, with a 77% increase in advertising revenues largely driven by Super Bowl LIX, which generated over $800 million in gross revenues. Excluding the Super Bowl, there was still strong growth, particularly from Tubi. Affiliate fee revenues grew by 4%, and other revenues increased by 3% due to higher content revenues. Expenses rose 47%, mainly due to the Super Bowl broadcast and Tubi investments. EBITDA fell to $60 million from $145 million the previous year. The company generated record quarterly free cash flow of over $1.9 billion, consistent with seasonal working capital changes. Year-to-date, $800 million was spent on share repurchases, totaling $6.4 billion since 2019, with plans to use the full $7 billion buyback authorization. The company ended the quarter with $4.8 billion in cash and $7.2 billion in debt.

In the paragraph, during an investor call, Lachlan Murdoch discusses the upcoming launch of "Fox One", a new product aimed at the cordless market, set to be released before the football season. He emphasizes that the pricing will align with their wholesale pricing to prevent loss of traditional cable subscribers. The aim is to attract cordless consumers without offering discounted prices. Murdoch also mentions they will provide more detailed information closer to the launch date. Additionally, there is a brief mention of financial matters, including the repayment of a $600 million debt, followed by Michael Morris of Guggenheim asking about future fiscal considerations for 2026.

In the paragraph, Lachlan and Steve Tomsic discuss Fox's strategic partnerships and future plans. They mention that Fox will collaborate with other distributors to extend the reach of Fox One, similar to other streaming services. Steve Tomsic addresses the financial outlook for fiscal years '25 and '26, noting the cyclical nature of their business, including the impact of political advertising, the Super Bowl, and FIFA. He highlights strong advertising and affiliate revenue growth, notably from Fox News and Tubi. They are also evaluating investment levels in Tubi versus direct-to-consumer initiatives. John Hodulik from UBS asks about the demand from brand advertisers on Fox News and the differences in earnings between direct response (Dr.) and brand advertising.

In the paragraph, Lachlan Murdoch discusses the success of Fox News in attracting over 200 new advertisers since the election, emphasizing that these advertisers are continuing their campaigns, signaling a sustained recognition of the network's audience and programming power. He notes a significant increase in direct response sales and scatter pricing. Gabrielle Brown then introduces a question from Jessica Reif Ehrlich of Bank of America, who asks about the surprising success and path to profitability of Tubi, as well as the company's strong balance sheet and strategic options. Lachlan Murdoch prepares to respond to her inquiries.

The paragraph discusses the strong performance and growth prospects of Tubi, a free media service, emphasizing its increased engagement and revenue. It highlights that Tubi's total viewing time grew by 18% in the quarter, leading to a 35% revenue improvement. The service is gaining traction as a mainstream choice for entertainment in the U.S., particularly appealing to the cord-cutting audience. The speaker expresses frustration that Tubi's value isn't fully reflected in the company's stock valuation but remains optimistic about its future potential. Additionally, Steve Tomsic briefly mentions the company's healthy financial position, with $4.8 billion in cash and a comfortable debt level.

The paragraph discusses a company’s financial strategy, highlighting its plan to improve free cash flow in Q4 and use capital for buybacks and other investments, specifically mentioning investments in Tubi and a new Fox One venture. Gabrielle Brown prompts the next question, leading Ben Swinburne from Morgan Stanley to inquire about the company's direct-to-consumer (D2C) strategy and affiliate revenue growth, noting the company's success despite industry-wide cord cutting. He contrasts this with competitors who bundle streaming with linear networks, which sometimes results in reduced value. Swinburne is curious about the potential benefits and risks of launching D2C in relation to existing pay-TV relationships.

In the paragraph, Lachlan Murdoch discusses their strategy regarding traditional cable distribution and direct-to-consumer (D2C) services. He emphasizes their commitment to supporting the traditional cable model, which has been beneficial to the industry and their company. However, he acknowledges the importance of launching a D2C service targeted at "cord nevers," who are individuals that have never subscribed to traditional cable. Murdoch highlights that Tubi, their platform, has a significant percentage of cord nevers in its audience, even higher than competitors like Roku and Pluto, making it valuable to advertisers. This insight will inform their D2C strategy, focusing on attracting cord nevers rather than those leaving cable subscriptions.

The paragraph discusses Fox's positive outlook on "skinny bundles," which are contributing to a decline in subscriber erosion. The company notes that while it's too early to determine the full impact, the trend of declining sub erosion is viewed positively. Fox is optimistic about its unique position in the market due to its limited network broadcast hours, allowing for more local programming investment. There is also mention of Fox's non-speculative stance on FCC actions and its unique affiliate agreements. The conversation then shifts to Steven Cahall from Wells Fargo, who asks about the timing and bundling opportunities of Fox One, noting an accelerated schedule ahead of the football season.

The paragraph discusses Fox's plans for its Fox One service, which aims to cater to cord cutters and cord nevers by offering integrated subscription options across sports, including the NFL. Lachlan Murdoch confirms that the service is on track to be available before the football season, despite an aggressive timeline. They plan to bundle Fox One with other streaming services, although specific details and partnerships are not yet announced. The paragraph also briefly touches on the FanDuel licensing timeline and the considerations for when to exercise that option, acknowledging the need to balance it with other capital allocation priorities.

The paragraph discusses Fox's strategy regarding its new service, Fox One, which will be accessible to existing Fox cable subscribers without additional competition from distributors. Steve Tomsic mentions their ongoing licensing efforts across 26 states for an option to acquire 18.6% of FanDuel, emphasizing the intrinsic value of $2.8 billion in this venture. He notes that this decision is driven more by licensing completion than by strike price accretion. Gabrielle Brown invites Michael Ng from Goldman Sachs to ask about updates on digital investments, including Tubi's performance and Fox One's launch. Ng also inquires about reports of Disney planning to leave the Fox Lot in Century City.

Lachlan Murdoch discusses Fox's continued investment in Tubi, highlighting its financial improvement and revenue exceeding a billion dollars over the past year. The focus is on maintaining investment to ensure Tubi's future profitability without being constrained by immediate profit goals. The paragraph also touches on digital property investment levels and mentions Disney's vacating office space on the Fox Lot, which Fox plans to fill due to high demand in the Los Angeles area. Steve Tomsic adds that digital investment is expected to decrease from fiscal '24 to fiscal '25, despite a spike in spending on Tubi this quarter.

The paragraph discusses Fox Corporation's marketing strategy around the Super Bowl and its impact on user acquisition, acknowledging that digital growth investment will decrease when comparing year-over-year results. The conversation also touches upon future expectations for Tubi's improvement and its relation to Fox Lot investments. The Q&A session concludes with Gabrielle Brown inviting further inquiries via phone, followed by the operator ending the third-quarter fiscal year 2025 earnings call.

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