10-QPeriod: Q3 FY2022

Fox Corp Quarterly Report for Q3 Ended Mar 31, 2022

Filed May 10, 2022For Securities:FOXAFOX

Summary

Fox Corporation (FOXA) reported its fiscal third-quarter and nine-month results ending March 31, 2022. For the quarter, total revenues increased by 7% to $3.46 billion, driven by growth in affiliate fees, advertising, and other revenues across its Cable Network Programming and Television segments. However, net income attributable to stockholders experienced a significant 50% decline to $283 million, largely impacted by a change in the fair value of its investment in Flutter Entertainment plc and lower Segment EBITDA in the Television segment. For the nine-month period, total revenues grew 9% to $10.94 billion, while net income attributable to stockholders fell 53% to $899 million, also affected by a prior year's $462 million reimbursement from Disney and the Flutter investment change. The Cable Network Programming segment showed modest 2% revenue growth and 5% EBITDA growth for the nine months, demonstrating resilience. In contrast, the Television segment, which includes Tubi and broadcast stations, saw revenue increases but a substantial 70% drop in Segment EBITDA for the nine months, primarily due to increased investments in digital platforms like Tubi, higher sports programming costs, and a write-down of production costs. The company maintained a strong liquidity position with $4.6 billion in cash and cash equivalents and an undrawn $1 billion revolving credit facility.

Financial Highlights

50 data points
Beta

Revenue

$3.46B

Net Income

$283.00M

8.2% Net Margin

EPS (Diluted)

$0.50

Total Assets

$22.02B

Cash & Equivalents

$4.63B

Free Cash Flow

$1.54B

Financial Statements
Beta
Revenue$3.46B
SG&A Expenses$485.00M
Interest Expense$92.00M
Net Income$283.00M
EPS (Basic)$0.50
EPS (Diluted)$0.50
Shares Outstanding (Basic)563.00M
Shares Outstanding (Diluted)567.00M

Key Highlights

  • 1Total revenues increased 7% year-over-year for the quarter to $3.46 billion and 9% for the nine months to $10.94 billion.
  • 2Net income attributable to stockholders decreased significantly by 50% for the quarter to $283 million and 53% for the nine months to $899 million.
  • 3Cable Network Programming segment revenue grew 8% for the quarter and 8% for the nine months, with Segment EBITDA increasing 2% and 5% respectively, indicating stable performance.
  • 4Television segment's Segment EBITDA saw a substantial decline of 74% for the quarter and 70% for the nine months, primarily due to increased digital investments (Tubi), higher programming costs, and production write-downs.
  • 5Advertising revenue showed strength, increasing 9% for the quarter and 9% for the nine months, driven by FOX News Media and Tubi.
  • 6The company ended the period with a strong liquidity position, holding $4.6 billion in cash and cash equivalents and having an undrawn $1.0 billion revolving credit facility.
  • 7Significant factors impacting net income included a change in the fair value of the Flutter Entertainment investment and, for the nine-month period, the absence of a $462 million reimbursement from Disney received in the prior year.

Frequently Asked Questions

The substantial decrease in net income was primarily attributed to a significant unfavorable change in the fair value of the Company's investment in Flutter Entertainment plc. For the nine-month period specifically, the absence of a $462 million reimbursement from The Walt Disney Company, received in the prior year, also contributed to the decline.

The Cable Network Programming segment demonstrated resilience, with revenues growing 8% for the nine months and Segment EBITDA increasing 5%. In contrast, the Television segment, which includes Tubi and broadcast stations, saw revenue growth but experienced a significant 70% drop in Segment EBITDA for the nine months. This decline was driven by increased investments in digital platforms like Tubi, higher sports programming costs, and production write-downs.

Fox Corporation maintains a strong liquidity position with approximately $4.6 billion in cash and cash equivalents as of March 31, 2022. The company also has an undrawn $1.0 billion unsecured revolving credit facility. The company repaid $750 million of senior notes that matured in January 2022 and has credit ratings of Baa2 (Stable) from Moody's and BBB (Stable) from Standard & Poor's.

Operating expenses increased due to higher sports programming rights amortization and production costs (especially related to the NFL, MLB, and college basketball/football), increased digital investments at Tubi and FOX News Media, and higher entertainment programming rights amortization. These increases were partially offset by certain factors like the absence of prior year COVID-19 impacted events and divestitures.