Q1 2025 Earnings Summary
- Tubi is experiencing impressive growth, on track to surpass $1 billion in revenue this fiscal year , and is becoming a significant recipient of political advertising due to its large, hard-to-reach audience and advanced targeting capabilities . This growth is accelerating into Q2 .
- Strong advertising revenue growth across all platforms, driven by political advertising, record-breaking sports events (e.g., the most-watched World Series in 7 years with almost 19 million viewers for Game 5 ), and robust news ratings, especially in the key 25-54 demographics where total audience grew more than 60% year-over-year , leading to higher direct response pricing .
- Moderation in subscriber declines, with the rate of industry subscriber declines improving slightly to just under 8% , and the company believes there is a floor to these declines . Fox's strong brands across news, sports, and entertainment ensure continued demand for their core packages .
- Ongoing Subscriber Declines and Uncertainty: Despite slight improvements, Fox executives acknowledge that traditional cable subscriber declines persist, and they are unsure where the bottom is. Steven Tomsic noted that subscriber declines are "running at a touch under 8%," and while there is "moderation in subscriber declines," they rely heavily on pricing increases for revenue growth, which may not be sustainable long-term.
- Reliance on Cyclical Political Advertising Revenue: Fox's strong financial performance is significantly bolstered by political advertising, which is inherently cyclical and will decrease after the election cycle. Lachlan Murdoch admitted that political spend has "assisted us both in the station group, which will have record political revenues, but also in Tubi," but there may be a revenue gap once the election period ends.
- Rising Costs and Potential Margin Pressures: The company is facing increased costs due to higher sports programming rights fees. Steven Tomsic mentioned that "NFL scheduling will be a headwind from an advertising revenue perspective" in Q2, and while the Super Bowl will be "very cash flow accretive for the company," it will "not be from an EBITDA perspective," indicating that margins may be under pressure despite revenue growth.
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Advertising Revenue | Q1 2025 | “Significant growth in advertising revenues…” | $1,008 million(up from $910 millionIn Q1 2024) | Met |
Affiliate Revenue | Q1 2025 | “Light year of renewals, with 25% of distribution revenues up for renewal…” | $806 million(up from $735 millionIn Q1 2024) | Met |
Free Cash Flow | Q1 2025 | “Significant growth in free cash flow from Super Bowl 59 and election cycle…” | Net change in cash of –$267 million(improved from –$443 millionIn Q1 2024; FCF not listed) | Met |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Tubi’s growth and revenue milestones | Consistent double-digit growth each quarter (upper teens to above 20%), expansion in MAUs (over 80 million), most-watched free TV streaming service, steady pricing despite market competition | On track to surpass $1B in revenue, 19% Q1 growth, political advertising contribution, improved fill rates | Recurring, with accelerating momentum |
Political advertising cycles | Strong political cycle expectations for first half of FY25, emphasis on local stations, Tubi’s geo-targeting | Record political revenue in Q1, local focus, Tubi capture; no adverse post-election impact | Recurring, sentiment remains bullish |
Subscriber declines & affiliate fees | Subscriber declines around 8% but pricing outpaced losses; affiliate fee growth of 4%-5% | Decline rate at 8%; offset by higher pricing; affiliate fees up 6% | Recurring, stable with modest revenue growth |
‘Venue’ sports streaming platform | Launch plans, $42.99 price, 5M subs target over 5 years; previously discussed as a JV with limited legal concerns | Awaiting injunction appeal; positioned as pro-consumer; excitement to launch | Recurring, some legal uncertainty remains |
Cost savings from WGA/SAG strikes | In FY24, benefited from lower scripted content costs ($100M saved), not expected to continue | No mention | Mentioned previously, no current reference |
Major sports events driving ad revenue | Strong ad gains in prior sports events (MLB, UEFA, Copa America), absence of Super Bowl/NFL playoffs in some quarters led to steep YOY ad comps | Record World Series revenue for 5-game series, sold-out Super Bowl 59 at record pricing | Recurring, a key revenue driver |
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Tubi's Growth and Potential
Q: How big can Tubi get with current momentum?
A: Tubi's growth continues to be impressive, on track to reach $1 billion in revenue. Even excluding political advertising boosts, we foresee continued growth in the second quarter and beyond. We've significantly improved our fill rate while maintaining pricing, accelerating revenue growth. Tubi is becoming the way Americans watch free television, boasting the largest AVOD library and increasing viewer engagement. -
Advertising Outlook Post-Election
Q: How is the ad environment shaping up post-election?
A: Our advertising revenues remain very healthy, with strong growth across sports, news, and entertainment. We expect no significant impact from the election outcome. Sports programming, including a successful World Series exceeding expectations, and the upcoming Super Bowl—sold out at record pricing—bolster our outlook. News ratings are strong, especially in the key 25-54 demographics, leading to significant increases in direct pricing. -
TV EBITDA and Fiscal Outlook
Q: What are the EBITDA components for TV in fiscal '25?
A: We anticipate strong performance in our TV segment, driven by political advertising tailwinds and momentum in Tubi and Fox News. While increased sports rights fees and the absence of certain events may present headwinds, they're partially offset by cost reductions from discontinued content like WWE and TMZ. The Super Bowl in Q3 will be very cash flow accretive, though less impactful on EBITDA. -
Flutter and FanDuel Update
Q: How long to get through Flutter/FanDuel approval?
A: We need licensing in every state where FanDuel operates—an in-depth process we expect to complete within a year. We see tremendous potential in this asset and are progressing smoothly through approvals. -
Comcast Separation Impact
Q: How might Comcast's split impact FOX or the industry?
A: We don't think Comcast's potential separation affects us at all. At FOX, we derive tremendous synergy across our platforms—entertainment, sports, news, and local television stations—and breaking apart would be difficult from a customer and revenue synergy standpoint. -
Advertising Shift to Tubi
Q: Is Tubi cannibalizing ad dollars from local stations?
A: We haven't seen any evidence of cannibalization; in fact, it's the reverse. Tubi is capturing political ad dollars that couldn't be fully absorbed by our stations due to inventory limits. This demonstrates Tubi's scale and marketplace awareness have elevated it to a must-buy for advertisers aiming to reach a younger, diverse audience.
Research analysts covering Fox.