FOXB is the ticker symbol for Fox Corporation Class B Common Stock, which is traded on the Nasdaq Global Select Market. Fox Corporation is a media company that operates various businesses, such as Fox News, Fox Sports, Fox Entertainment, Fox Television Stations, and Tubi. In this blog post, we will explore the financial performance, competitive advantages, and growth prospects of FOXB.
Financial Performance of FOXB
FOXB has been showing strong financial performance in recent quarters, despite the challenges posed by the COVID-19 pandemic and the changing media landscape. According to its latest earnings report for the fourth quarter of fiscal year 2021, which ended on June 30, 2021, FOXB achieved the following results:
- Revenue increased by 20% year-over-year to $2.89 billion, beating analysts’ expectations of $2.76 billion.
- Net income increased by 64% year-over-year to $253 million, or $0.43 per share.
- Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 29% year-over-year to $878 million.
- Free cash flow increased by 51% year-over-year to $1.15 billion.
The main drivers of FOXB’s revenue growth were its affiliate fees, which increased by 14% year-over-year to $1.64 billion, and its advertising revenue, which increased by 38% year-over-year to $922 million. The affiliate fees were boosted by higher rates and contractual increases from cable and satellite distributors, as well as from virtual multichannel video programming distributors (vMVPDs). The advertising revenue was boosted by the return of live sports events, such as the NFL, MLB, and NASCAR, as well as by the growth of Tubi, its free streaming service.
Competitive Advantages of FOXB
FOXB has several competitive advantages that differentiate it from its peers in the broadcasting industry, such as:
- Its strong brand recognition and loyal audience base, especially for its news and sports programming. Fox News is the most-watched cable news network in the U.S., with an average of 2.3 million viewers in prime time in July 2021. Fox Sports is the leader in live sports coverage, with rights to broadcast major events such as the Super Bowl, the World Series, and the FIFA World Cup.
- Its diversified revenue streams and stable cash flow generation, thanks to its dual revenue model of affiliate fees and advertising revenue. FOXB has long-term contracts with its distributors that provide predictable and recurring revenue, as well as annual escalators that increase its rates over time. FOXB also has a diversified advertising portfolio that spans across different platforms, genres, and demographics.
- Its strategic investments and partnerships in the digital space, such as Tubi, Bento Box Entertainment, Credible Labs, and Flutter Entertainment. Tubi is a fast-growing free streaming service that offers over 35,000 titles of movies and TV shows to more than 33 million monthly active users. Bento Box Entertainment is a leading producer of animated content for platforms such as Hulu, Netflix, Apple TV+, and HBO Max. Credible Labs is a consumer finance marketplace that connects borrowers with lenders for various products such as mortgages, student loans, and personal loans. Flutter Entertainment is a global leader in online gaming and sports betting that owns brands such as FanDuel, PokerStars, Betfair, and Sky Bet.
Growth Prospects of FOXB
FOXB has several growth prospects that could enhance its future performance and value creation, such as:
- Expanding its content offerings and distribution channels to reach new audiences and markets. FOXB plans to launch Fox Weather, a new ad-supported streaming service that will provide comprehensive weather coverage and forecasts. FOXB also plans to launch Fox Sports Radio on SiriusXM satellite radio service in September 2021. Additionally, FOXB aims to grow its international presence by leveraging its existing assets and partnerships in regions such as Latin America, Europe, Asia-Pacific, and Africa.
- Leveraging its data capabilities and technology innovations to improve its customer experience and monetization opportunities. FOXB intends to use its first-party data from Tubi and other platforms to enhance its advertising effectiveness and efficiency. FOXB also intends to use its advanced technology solutions such as artificial intelligence (AI), machine learning (ML), cloud computing, and blockchain to optimize its operations and deliver personalized content to its users.
- Pursuing strategic acquisitions and collaborations that could add value to its portfolio and create synergies with its existing businesses. FOXB has a history of making opportunistic and accretive deals that enhance its competitive position and growth potential. For example, in 2019, FOXB acquired a 67% stake in Credible Labs for $265 million, and in 2020, FOXB acquired Tubi for $440 million. FOXB also has a history of forming strategic alliances with other media and technology companies that expand its reach and capabilities. For example, in 2019, FOXB entered into a multi-year partnership with Amazon Web Services (AWS) to use its cloud services for its media platforms, and in 2020, FOXB entered into a multi-year partnership with Google to use its ad technology for its digital platforms.
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Conclusion
FOXB is a stock to watch in the broadcasting industry, as it has demonstrated strong financial performance, competitive advantages, and growth prospects. FOXB has a diversified and resilient business model that generates stable and growing revenue and cash flow from its affiliate fees and advertising revenue. FOXB also has a differentiated and loyal customer base that enjoys its news and sports programming. Moreover, FOXB has a visionary and innovative strategy that focuses on expanding its content offerings and distribution channels, leveraging its data capabilities and technology innovations, and pursuing strategic acquisitions and collaborations. FOXB is well-positioned to capitalize on the opportunities and challenges in the evolving media landscape.
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