Fox Corp (FOXA, Financial) released its 8-K filing on November 4, 2024, reporting impressive financial results for the first quarter of fiscal 2025, ending September 30, 2024. The company achieved revenues of $3.56 billion, surpassing the analyst estimate of $3.37 billion, and reported a net income of $832 million. This performance highlights Fox Corp's strategic focus on live news and sports, with significant contributions from political advertising and sports events.
Company Overview
Fox Corp operates in two primary segments: cable networks and television. The cable networks segment includes Fox News, Fox Business, and various pay-TV sports channels. The television segment encompasses the Fox broadcast network, 29 owned and operated local television stations, and the ad-supported streaming platform Tubi. Following the sale of most entertainment assets to Disney in 2019, Fox Corp has concentrated on live news and sports content, largely tied to the pay-TV bundle. The Murdoch family maintains control over the company.
Performance Highlights and Challenges
Fox Corp's quarterly revenues increased by 11% year-over-year, driven by a 6% rise in affiliate fee revenues and an 11% boost in advertising revenues. The growth in advertising was fueled by higher political advertising at Fox Television Stations, increased viewership and pricing at Fox News Media, and successful sports broadcasts, including the UEFA European Championship and CONMEBOL Copa América. However, the absence of the prior year's FIFA Women's World Cup broadcast partially offset these gains.
Financial Achievements
The company's net income of $832 million marked a significant increase from $415 million in the prior year quarter. Adjusted EBITDA rose by 21% to $1.05 billion, reflecting the strong revenue growth despite higher expenses, particularly in programming rights amortization and costs at Tubi. These financial achievements underscore Fox Corp's effective strategy in leveraging its core strengths in news and sports broadcasting.
Key Financial Metrics
| Metric | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Total Revenues | $3.56 billion | $3.21 billion |
| Net Income | $832 million | $415 million |
| Adjusted EBITDA | $1.05 billion | $869 million |
Segment Performance
The Cable Network Programming segment reported revenues of $1.60 billion, a 15% increase from the previous year, driven by higher affiliate fees and advertising revenues. The Television segment saw a 10% revenue increase to $1.95 billion, supported by political advertising and sports programming. Both segments experienced higher expenses, primarily due to increased programming rights amortization.
Executive Commentary
“Fiscal 2025 is off to a solid start across our portfolio with strong audience growth at FOX News, record political advertising across the company, accelerating revenue growth at Tubi and a compelling start to our fall sports calendar. Collectively these contributions have combined to deliver particularly strong financial results in our fiscal first quarter led by notable top line revenue and earnings growth. Our strategy and our focus are delivering for our audiences, advertising and distribution partners, and the FOX shareholders.” - Lachlan Murdoch, Executive Chair and CEO
Analysis and Outlook
Fox Corp's strong financial performance in Q1 fiscal 2025 reflects its strategic emphasis on live news and sports content, which continues to attract audiences and advertisers. The company's ability to capitalize on political advertising and major sports events has been pivotal in driving revenue growth. However, the reliance on these segments also poses challenges, particularly in maintaining viewership and managing costs associated with programming rights. As Fox Corp navigates these dynamics, its focus on core strengths and strategic investments will be crucial in sustaining growth and shareholder value.
Explore the complete 8-K earnings release (here) from Fox Corp for further details.
