FuboTV Inc. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• David Gandler: North American streaming business exceeded subscriber forecast and revenue guidance; improved global profitability metrics by more than $100 million for the trailing 12 months. Excited about the agreement with Disney to combine Fubo with Hulu + Live TV. Focus on meeting consumer needs with flexible packaging options, working on skinny bundles including sports and broadcasting service, aiming to launch for the fall sports season.
• John Janedis: North America revenue grew 3.5% within guidance, subscriber count 1.47 million ahead of expectations. Ad revenue down 17% year-over-year due to network discontinuation, but underlying performance improved. Net income from continuing operations included a $220 million gain on settlement of litigation. Adjusted EPS loss improved, and focus on cost control and profitability.

Segment Performance

• North American Streaming Business: Delivered 1.47 million paid subscribers, down 2.7% year-over-year but exceeding Q1 guidance of 1.46 million. Total revenue was $407.9 million, up 3.5% year-over-year. Ad revenue for the quarter was $22.5 million, down 17% year-over-year due to discontinuation of certain networks; excluding these impacts, underlying performance improved. Net income from continuing operations was $188 million, or $0.55 per diluted share. Adjusted EPS loss improved to $0.02. Adjusted EBITDA was negative $1.4 million, a $37 million improvement year-over-year. Net cash provided by operating activities was $161 million, free cash flow improved by $9 million year-over-year to negative $62 million.
• Rest of World: Q2 guidance projects subscribers of 325,000 to 335,000, down 17% year-over-year at the midpoint, and revenue of $6.5 million to $7.5 million, a 15% decline at the midpoint.

Guidance

• North America 2Q 2025 guidance: Subscribers 1.225 million to 1.255 million (14% year-over-year decline at midpoint), revenue $340 million to $350 million (10% year-over-year decline at midpoint).
• Rest of World 2Q 2025 guidance: Subscribers 325,000 to 335,000 (17% year-over-year decline at midpoint), revenue $6.5 million to $7.5 million (15% year-over-year decline at midpoint).

Risks

• Uncertainties related to the regulatory process for the pending business combination with Hulu + Live TV.
• Impact of content licensing agreements on the launch of skinny bundles.
• Potential continued impact of dropped content on ad revenue and subscriber base.

Question and Answer

Q: On the content front, given TelevisaUnivision's interest in discussions again, any new updates? And progress on programming contracts for skinnier packages?

A: John Janedis said no update on TelevisaUnivision but is open to discussions with acceptable terms; they've lowered the price on the Latino package. David Gandler said focused on releasing skinny bundles, working on content deals with non-Disney partners for fall launch.

Q: Macro impact on 2Q, like-for-like performance?

A: John Janedis said same-store subscriber growth relatively flat, customer churn in English package in line, reactivations better in April. Ad revenue year-to-date improving, normalization starting.

Q: Rest of World business, Gen AI?

A: David Gandler discussed Rest of World focus on profitability and unified platform. John Janedis talked about interactive ads up 30%-37% year-over-year, ad products up 41% year-over-year first half.

Q: Ad spend, gamified ads tracking?

A: John Janedis said interactive ads up, ad products accelerating, sales cycle longer but interest increasing