10-QPeriod: Q3 FY2024

Fox Corp Quarterly Report for Q3 Ended Mar 31, 2024

Filed May 8, 2024For Securities:FOXAFOX

Summary

Fox Corporation (FOXA) reported a significant recovery in net income for the third quarter of fiscal year 2024, swinging from a net loss of $54 million in the prior year to a net income of $666 million. This turnaround was primarily driven by the absence of substantial legal settlement costs incurred in the previous year, alongside a gain on asset contribution. Total revenues, however, saw a notable decline of 16% to $3.45 billion, largely attributed to the lapping of major sporting events like the Super Bowl LVII and fewer NFL games in the current year's advertising revenue. The company's operating expenses also decreased by 25%, benefiting from the absence of these large event costs and lower programming amortization. For the nine-month period, net income attributable to stockholders grew by 37% to $1.18 billion, despite an 8% decrease in total revenues to $10.89 billion. The advertising revenue decline was a significant factor, impacted by the absence of Super Bowl LVII and the FIFA Men's World Cup. Cable Network Programming showed resilience with Segment EBITDA up 3% for the quarter, while the Television segment's Segment EBITDA saw a substantial 54% decrease for the nine-month period, heavily influenced by the timing of major sporting events and programming costs. The company maintained a strong liquidity position with $3.8 billion in cash and cash equivalents and an undrawn $1 billion revolving credit facility.

Financial Statements
Beta
Revenue$3.45B
SG&A Expenses$510.00M
Interest Expense$99.00M
Net Income$666.00M
EPS (Basic)$1.41
EPS (Diluted)$1.40
Shares Outstanding (Basic)474.00M
Shares Outstanding (Diluted)475.00M

Key Highlights

  • 1Net income attributable to Fox Corporation stockholders surged to $666 million in Q3 FY24 from a $54 million loss in Q3 FY23, a substantial turnaround.
  • 2Total revenues declined 16% to $3.45 billion in Q3 FY24, primarily due to a 34% drop in advertising revenue, heavily influenced by the lapping of Super Bowl LVII and fewer NFL games.
  • 3Operating expenses decreased by 25% in Q3 FY24, primarily driven by the absence of Super Bowl LVII costs and lower sports programming amortization.
  • 4Cable Network Programming Segment EBITDA increased by 3% to $819 million in Q3 FY24, demonstrating segment resilience.
  • 5Television Segment EBITDA experienced a significant 54% decrease to $358 million for the nine-month period ended March 31, 2024, impacted by major sporting event comparisons and programming costs.
  • 6The company maintained a strong liquidity position with $3.8 billion in cash and cash equivalents and an undrawn $1.0 billion revolving credit facility as of March 31, 2024.
  • 7Fox Corporation repurchased approximately $750 million of Class A Common Stock during the nine months ended March 31, 2024, as part of its ongoing share repurchase program.

Frequently Asked Questions

The significant increase in net income to $666 million from a net loss of $54 million in the prior year's third quarter was primarily driven by the absence of substantial legal settlement costs related to FOX News Media that were incurred in the prior year, as well as a gain recognized from a contribution of assets.

Total revenues decreased by 16% to $3.45 billion primarily due to a substantial 34% decline in advertising revenue. This was largely because the prior year's quarter benefited from the broadcast of Super Bowl LVII and more NFL games, which were absent in the current year's comparable period.

Fox Corporation maintained a strong liquidity position, reporting $3.8 billion in cash and cash equivalents as of March 31, 2024. The company also has an undrawn $1.0 billion unsecured revolving credit facility, indicating ample financial flexibility.

The Television segment's performance has been mixed. While its Segment EBITDA saw a 24% increase in the third quarter due to lower operating expenses offsetting revenue declines, the nine-month performance shows a significant 54% decrease in Segment EBITDA. This is primarily attributed to the lapping of major sporting events like Super Bowl LVII and the FIFA Men's World Cup in the prior year and impacts from industry guild labor disputes on programming.