10-QPeriod: Q2 FY2021

Fox Corp Quarterly Report for Q2 Ended Dec 31, 2020

Filed February 9, 2021For Securities:FOXAFOX

Summary

Fox Corporation's Form 10-Q for the quarter ended December 31, 2020, reveals a mixed financial performance, with overall revenue growth driven by strong advertising, particularly from political campaigns and the inclusion of Tubi. However, net income attributable to stockholders saw a notable decline compared to the prior year's quarter, primarily due to lower unrealized gains on equity investments. The company continues to navigate the impacts of the COVID-19 pandemic, which has disrupted sports schedules and content production, leading to affiliate fee credits for under-delivered college football games. Despite these challenges, the company maintains a solid liquidity position with substantial cash reserves and an undrawn revolving credit facility.

Financial Highlights

48 data points
Beta

Revenue

$4.09B

Net Income

$224.00M

5.5% Net Margin

EPS (Diluted)

$0.37

Total Assets

$22.75B

Cash & Equivalents

$4.50B

Free Cash Flow

-$155.00M

Financial Statements
Beta
Revenue$4.09B
SG&A Expenses$442.00M
Interest Expense$99.00M
Net Income$224.00M
EPS (Basic)$0.38
EPS (Diluted)$0.37
Shares Outstanding (Basic)595.00M
Shares Outstanding (Diluted)598.00M

Key Highlights

  • 1Total revenues increased by 8% for the three months ended December 31, 2020, driven by strong advertising and affiliate fee growth.
  • 2Advertising revenue saw a significant 14% increase, largely boosted by political advertising related to the 2020 elections and the consolidation of Tubi.
  • 3Net income attributable to Fox Corporation stockholders decreased by 25% ($76 million) for the three-month period compared to the prior year.
  • 4The Cable Network Programming segment reported a 3% increase in Segment EBITDA, driven by higher advertising revenue.
  • 5The Television segment showed a substantial improvement in Segment EBITDA, increasing by 14% for the quarter, benefiting from political advertising and Tubi's performance.
  • 6The company held approximately $4.5 billion in cash and cash equivalents as of December 31, 2020, with an undrawn $1.0 billion revolving credit facility, indicating a strong liquidity position.
  • 7COVID-19 continues to impact the business, leading to affiliate fee credits for under-delivered college football games and affecting sports event scheduling and content production.

Frequently Asked Questions

Revenue growth was primarily driven by a significant increase in advertising revenue, particularly from political advertising related to the 2020 elections, and the inclusion of Tubi's performance. Affiliate fee revenue also contributed positively due to higher average rates per subscriber, although this was partially offset by affiliate fee credits related to the under-delivery of college football games.

The decrease in net income attributable to Fox Corporation stockholders for the quarter was primarily due to lower unrealized gains related to changes in the fair value of the company's investments in equity securities compared to the same period in the prior fiscal year. While Segment EBITDA showed improvement, this was not enough to offset the decline in investment gains.

The COVID-19 pandemic continues to cause disruptions, including the cancellation or postponement of sports events and suspension of entertainment content production. This led to affiliate fee credits for under-delivered college football games and potential future impacts on advertising and affiliate revenues. The company also noted lower ratings at the FOX Network due in part to COVID-19-impacted schedules.

Fox Corporation maintained a strong liquidity position, with approximately $4.5 billion in cash and cash equivalents. Additionally, the company had an unused $1.0 billion unsecured revolving credit facility, and it was in compliance with all related covenants.