10-QPeriod: Q1 FY2023

Fox Corp Quarterly Report for Q1 Ended Sep 30, 2022

Filed November 1, 2022For Securities:FOXAFOX

Summary

Fox Corporation reported a 5% increase in total revenues for the first quarter of fiscal year 2023, reaching $3.19 billion, driven by growth in affiliate fees, advertising, and other revenue streams. Advertising revenue saw a notable 8% increase, largely due to political advertising at FOX Television Stations in anticipation of the mid-term elections and improved pricing at the FOX Network and FOX News Media. The company's net income attributable to stockholders decreased by 14% to $605 million compared to the prior year quarter, impacted by the absence of asset disposition gains and other non-operational factors. Adjusted EBITDA, a key performance indicator, saw a modest 3% increase to $1.09 billion, reflecting overall operational strength despite some segment-specific pressures. The Cable Network Programming segment experienced a 1% revenue increase, though Segment EBITDA declined by 4% due to higher expenses related to digital initiatives and breaking news coverage at FOX News Media. Conversely, the Television segment demonstrated stronger performance with an 8% revenue increase and a significant 14% rise in Segment EBITDA, benefiting from political advertising, growth at TUBI, and higher sports pricing. The company maintains a strong liquidity position with $5.0 billion in cash and equivalents and an undrawn $1.0 billion revolving credit facility.

Financial Highlights

48 data points
Beta

Revenue

$3.19B

Net Income

$605.00M

19.0% Net Margin

EPS (Diluted)

$1.10

Total Assets

$22.42B

Cash & Equivalents

$4.95B

Free Cash Flow

$196.00M

Financial Statements
Beta
Revenue$3.19B
SG&A Expenses$448.00M
Interest Expense$87.00M
Net Income$605.00M
EPS (Basic)$1.10
EPS (Diluted)$1.10
Shares Outstanding (Basic)550.00M
Shares Outstanding (Diluted)552.00M

Key Highlights

  • 1Total revenues increased 5% year-over-year to $3.19 billion, driven by affiliate, advertising, and other revenues.
  • 2Advertising revenue grew 8%, primarily boosted by political advertising at FOX Television Stations and improved pricing across key networks.
  • 3Net income attributable to stockholders decreased 14% to $605 million, influenced by the prior year's asset sale gains and other items.
  • 4Adjusted EBITDA, a measure of operational performance, increased 3% to $1.09 billion.
  • 5The Television segment showed robust growth with an 8% revenue increase and a 14% rise in Segment EBITDA.
  • 6Cable Network Programming segment revenue increased 1%, but Segment EBITDA decreased 4% due to higher operating expenses.
  • 7The company ended the quarter with a strong liquidity position, holding $5.0 billion in cash and cash equivalents and an undrawn $1.0 billion credit facility.

Frequently Asked Questions

Revenue growth was primarily driven by a 5% increase in total revenues to $3.19 billion. This was fueled by higher affiliate fee revenues (3% increase), advertising revenues (8% increase), and other revenues (5% increase). The advertising segment benefited significantly from political advertising related to the upcoming midterm elections and higher pricing across FOX Network and FOX News Media, while affiliate fees were supported by contractual rate increases, despite a slight subscriber decline.

Net income attributable to Fox Corporation stockholders decreased by 14% to $605 million. This decline was primarily due to the absence of significant gains on the disposition of assets recognized in the prior year's comparable period, a lower gain from the change in fair value of an investment, and an increase in certain expenses and liabilities (e.g., UK Newspaper Matters Indemnity).

The Television segment performed strongly, with revenues up 8% and Segment EBITDA up 14%, driven by political advertising, growth at TUBI, and increased sports programming. The Cable Network Programming segment saw a 1% revenue increase, but Segment EBITDA decreased by 4% due to higher investment in digital initiatives and breaking news coverage at FOX News Media, which offset revenue gains.

Fox Corporation maintains a strong liquidity position with $5.0 billion in cash and cash equivalents as of September 30, 2022. Additionally, it has an unused $1.0 billion unsecured revolving credit facility. The company was in compliance with all debt covenants, indicating good financial health and capacity for future operations and investments.

A notable development is the announcement on October 14, 2022, that the Board of Directors has formed a special committee to explore a potential combination with News Corporation. While this exploration has begun, no determination has been made, and there is no certainty that a transaction will occur.