Fox Corp. (NASDAQ: FOX) has reported strong financial results for the fourth quarter of fiscal year 2024, surpassing Fox’s analyst community earnings projections. This strong performance was fueled by the robust growth of Tubi, the company's free ad-supported streaming platform, and continued strength in affiliate fee revenue.
Fox Corp. Q4 2024 Earnings
Fox Corp.'s earnings fourth-quarter earnings report showed that the company earned $3.09 billion in revenue, marking a 2% increase from the same quarter last year. Affiliate fee revenue, a crucial component of Fox Corp.'s income, surged by 5% year-over-year. This increase was attributed to a combination of contractual price increases and expansion within cable and television packages. While remaining steady at $1.01 billion for the quarter, advertising revenue demonstrated resilience in a challenging entertainment sector environment. Notably, Tubi, Fox Corp.'s ad-supported streaming service, emerged as a significant growth driver, attracting a larger audience and contributing significantly to the overall advertising revenue.
Fox Corp. reported adjusted earnings per share (EPS) of $0.90, exceeding expectations of $0.81. Net income for the quarter reached $320 million, showcasing the company's ability to translate revenue growth into bottom-line profitability.
Fox Corp.'s cable network programming division, including channels like Fox News and Fox Sports 1, delivered a solid performance. The segment's revenue climbed by 2% to reach $1.44 billion in the fourth quarter. This growth was fueled by a combination of factors, including strong viewership numbers for live events and successful programming strategies. While the company's television segment faced some headwinds due to lower ratings on the FOX Network, the overall financial impact was mitigated by the positive contributions from other segments.
Analyzing the Impact of Tubi and Affiliate Fees
Fox Corp.'s recent earnings release highlighted two key revenue streams that have significantly impacted the company’s financial performance: Tubi and affiliate fees. Tubi, the company's free, ad-supported video-on-demand (AVOD) streaming service, continues to significantly contribute to revenue growth, while affiliate fees remain a consistent and reliable revenue source.
Tubi's success can be attributed to several factors, including its extensive library of content, user-friendly interface, and strategic investments in securing licensing agreements for popular movies and TV shows. The company's focus on building Tubi’s content offerings demonstrates a clear understanding of the shifting consumer preference toward flexible and ad-supported streaming options.
Affiliate fees, derived from agreements with cable and satellite providers for the right to carry Fox Corp.'s channels, continue to be a crucial source of revenue for the company. The recent 5% year-over-year increase in affiliate fees underscores the significant value that Fox Corp.'s content portfolio provides to distributors. This continued growth signifies the strong market demand for Fox Corp.'s programming and its ability to negotiate favorable terms with its distribution partners.
Political Advertising, Venu Sports, and Analyst Outlook
In fiscal year 2025, Fox Corp. is well-positioned for ongoing expansion and sustained financial success, primarily due to strategically planned initiatives and favorable market conditions. The upcoming 2024 presidential election cycle presents a significant opportunity for Fox Corp. to capitalize on increased political advertising spending. As a leading news provider through Fox News, the company is well-positioned to benefit from this trend. Industry analysts anticipate a substantial increase in revenue from this sector, which could potentially offset any potential slowdown in the broader advertising market.
Additionally, this fall’s launch of Venu Sports, Fox Corp.'s sports streaming venture with Disney (NYSE: DIS) and Warner Bros. Discovery (NASDAQ: WBD), represents a new revenue stream. Priced at $42.99 monthly, Venu Sports will offer a diverse range of live sports content, targeting the expanding sports streaming market.
Market analysts remain confident in Fox Corp.'s future prospects, assigning the company a "Strong Buy" consensus rating. This positive sentiment is fueled by Fox Corp.'s strategic position within the evolving media sector, its diverse revenue streams, and its demonstrated ability to adapt to the evolving consumer media consumption preferences.
Fox Corp.'s Continued Evolution
Fox Corp.'s robust fourth-quarter earnings demonstrate the company's ability to navigate the complexities of the media industry. Driven by Tubi's remarkable growth, affiliate fee revenue's enduring strength, and a positive outlook for political advertising, Fox Corp. is well-positioned for continued success. As the media sector continues to evolve, Fox Corp.'s strategic investments in streaming, live events, and news position the company to capitalize on emerging opportunities and deliver value to viewers and shareholders.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
