10-QPeriod: Q2 FY2022

Fox Corp Quarterly Report for Q2 Ended Dec 31, 2021

Filed February 9, 2022For Securities:FOXAFOX

Summary

Fox Corporation's (FOXA) filing for the second quarter ended December 31, 2021, indicates a mixed financial performance. Total revenues saw a healthy increase of 9% year-over-year to $4.44 billion for the quarter, driven by higher affiliate fees and advertising revenue, particularly from sports content and the growth of Tubi. However, the company reported a net loss of $73 million for the quarter, a significant reversal from a net income of $230 million in the prior year period. This net loss was primarily attributed to changes in the fair value of an investment and other net items, rather than core operational performance. Operationally, the Cable Network Programming segment demonstrated strong growth, with segment EBITDA increasing 17% year-over-year, fueled by higher affiliate fees and advertising, and a rebound in live sports events. Conversely, the Television segment experienced a significant decline in segment EBITDA, down 48%, as increased operating expenses, including higher sports programming rights and digital investments at Tubi, outpaced revenue growth. Despite the quarterly net loss, the company maintains a solid liquidity position with $4.3 billion in cash and cash equivalents and an undrawn $1.0 billion revolving credit facility.

Financial Highlights

49 data points
Beta

Revenue

$4.44B

Net Income

-$85.00M

-1.9% Net Margin

EPS (Diluted)

$-0.15

Total Assets

$22.88B

Cash & Equivalents

$4.25B

Free Cash Flow

-$753.00M

Financial Statements
Beta
Revenue$4.44B
SG&A Expenses$468.00M
Interest Expense$98.00M
Net Income-$85.00M
EPS (Basic)$-0.15
EPS (Diluted)$-0.15
Shares Outstanding (Basic)569.00M
Shares Outstanding (Diluted)573.00M

Key Highlights

  • 1Total revenues increased by 9% to $4.44 billion for the three months ended December 31, 2021, compared to the prior year quarter.
  • 2The company reported a net loss of $73 million for the three months ended December 31, 2021, compared to a net income of $230 million in the same period last year.
  • 3Cable Network Programming segment EBITDA increased by 17% to $668 million, driven by higher affiliate and advertising revenues.
  • 4Television segment EBITDA decreased by 48% to a loss of $273 million, primarily due to increased operating expenses for programming rights and digital investments.
  • 5Adjusted EBITDA saw a slight increase of 2% to $310 million for the quarter.
  • 6The company ended the quarter with $4.3 billion in cash and cash equivalents and an undrawn $1.0 billion revolving credit facility, indicating a strong liquidity position.
  • 7The company repurchased approximately $497 million of its common stock during the six months ended December 31, 2021.

Frequently Asked Questions

The decrease in net income for the quarter was primarily driven by changes in the fair value of the company's investment in Flutter Entertainment plc and other net items, rather than a decline in core operational performance. For the six-month period, a significant reimbursement received in the prior year from Disney related to a tax settlement also impacted the year-over-year comparison.

The Cable Network Programming segment showed strong performance, with a 17% increase in Segment EBITDA, benefiting from higher affiliate fees and advertising revenue, particularly from sports content. However, the Television segment's Segment EBITDA declined significantly by 48%, impacted by higher programming costs for sports and entertainment, and increased digital investments in Tubi.

Fox Corporation maintains a strong liquidity position with approximately $4.3 billion in cash and cash equivalents as of December 31, 2021. Additionally, the company has an undrawn $1.0 billion unsecured revolving credit facility, indicating ample financial flexibility.

Advertising revenue increased in the quarter, driven by higher pricing for NFL, MLB, and college football at the FOX Network, and growth at Tubi. However, this was partially offset by lower political advertising revenue due to the absence of prior year elections. The company's continued investment in its digital platforms like Tubi is a key driver for future advertising growth.