FuboTV, the provider of streaming pay TV packages, ended 2022 with 1.445 million subscribers in North America and delivered solid fourth-quarter profits across many financial categories.
Despite these positive developments, Fubo’s shares fell 17% shortly after the opening bell. The day after the company announced $68.1 million in new financing, the stock traded at $1.96 on twice normal trading volume. The market hike was unorthodoxly announced just before the Q&A portion of a quarterly conference call with Wall Street analysts. The company reiterated its earlier expectation that it would report positive cash flow by 2025 and said the cash inflow would enable it to meet that goal.
The startup posted a negative adjusted EBITDA of $75.4 million in the fourth quarter, up about 3% in red ink from the same quarter last year, but revenue rose 38% to $319.3. Year-over-year, Fubo has now crossed two key thresholds, with total revenue of $1 billion and advertising revenue of $100 million.
CEO David Gandler said in a conference call with analysts that Fubo is marketing a “differentiated” service, particularly in the esports space. Founded in 2015 as a sports-focused offering, Fubo has since expanded, but has become an exceptionally receptive home for regional sports networks. With their business model under tremendous pressure, many RSNs — especially Diamond Sports Group — have found themselves in a long-term deadlock with streaming bundles like YouTube TV, Hulu + Live TV, and Sling.
When asked about comparisons to YouTube TV, which surpassed 5 million subscribers last year, Gandler said they are “two companies positioned to take the top spot.” YouTube recently struck a deal with the NFL to provide the Sunday Ticket package, which has been with DirecTV since its inception in 1994.
“We went down two very different paths,” Gandler said of Fubo and YouTube TV. The total available market that Fubo expects to benefit from its efforts to secure RSNs is “significantly larger than NFL Sunday Ticket.” Subscribers to the NFL Premium plan don’t need to also subscribe to YouTube TV, he noted.
However, a recent hiatus in Fubo’s programming occurred when CBS stations dropped and were replaced with a national network feed. Asked for an update on the call, Gandler said the company is optimistic they don’t see customers running out of the situation. Local news programs are common on FAST channels and online, Gandler said. “It’s great to have local programming, but the great thing is that this local news is available,” he said. “This programming is not required under any circumstances given the retention levels we have observed.”
Both the stations and the network are trying to get paid, Gandler complained. “The problem is that everyone is looking for a double dip,” he said.
Source: Deadline
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