Formula One Group's Steady Q3 2024 Earnings: EPS Holds at US$0.50

Formula One Group (F1) reported its third-quarter 2024 earnings, with earnings per share (EPS) remaining steady at US$0.50, matching the figure from the same period in 2023. Despite a decrease in total revenue due to one fewer race, F1's income increased by 11% from $132m to $146m, demonstrating the group's resilience and growth potential.

The change in race schedule significantly impacted F1's media rights and sponsorship revenue. With one fewer race in Q3 2024 compared to 2023, media rights revenue recognized decreased due to the lower proportion of season-based revenue. Sponsorship revenue also declined due to the mix of races affecting event-specific fees. However, the decline in media rights revenue was partially offset by contractual increases in fees and growth in F1 TV subscription revenue.



F1's profit increase can be attributed to effective cost management strategies, such as lower hospitality and travel costs, which were influenced by the mix of events held during the period. This reduction in expenses, combined with higher licensing revenue and growth in F1 TV subscription revenue, helped offset the decline in media rights and sponsorship revenue.

The group's ability to secure new sponsorships and licensing agreements, coupled with increased F1 TV subscription revenue, has played a significant role in boosting F1's profitability. Despite a reduction in races from eight to seven in the third quarter of 2024, F1's income increased by 11% from $132m to $146m. This growth can be attributed to several strategic partnerships, including a ground-breaking deal with LVMH for 2025, expanded relationships with Lenovo and American Express, and licensing agreements with LEGO and Mattel's Hot Wheels.



The "thrilling racing" and increased viewership and digital engagement have also impacted F1's earnings. Despite a decrease in revenue due to fewer races, F1's EPS remained steady at US$0.50. The exciting on-track competition has driven up race attendance, with 5.8 million fans attending races so far this season, and has also boosted digital engagement. This increased interest has helped offset the revenue decline from the reduced number of races, demonstrating the power of F1's brand and the appeal of its product.

In conclusion, Formula One Group's steady earnings per share in the third quarter of 2024, despite a revenue drop, highlight the group's adaptability and growth potential. Effective cost management, strategic partnerships, and increased viewership have all contributed to F1's resilience and solid fundamentals. As an investment opportunity, F1 offers a low-risk business model, effective management, and favorable market trends, making it an attractive choice for investors seeking undervalued opportunities with strong growth potential.