fuboTV (NYSE: FUBO) Q3 2020 Earnings Highlights

 

 

 

fuboTV (NYSE: FUBO) Q3 2020 Earnings Highlights

David Gandler, CEO

“…We closed our public offering last month, raising total gross proceeds of $197 million before commissions and fees. And from an execution standpoint, Q3 was by far the strongest quarter in the company’s history. Our results have exceeded previously raised guidance with solid growth across every KPI we track. Revenues were up 47% to $61 million. That’s well ahead of the guidance range we provided of $52 million to $55 million. Our business is really comprised of 2 components: subscription revenue, which was up 64%; and advertising revenue, which was up an amazing 153%. Ad revenue for the quarter exceeded 12%. And to put that into context, 2019 ad revenue represented roughly about 8%. So you can see why we’re so excited about the quarter and about our guidance in Q4 and for full year 2021. Paid subscribers at quarter end totaled 455,000, and that’s 58% above the 288,000 last year. Net additions came in at 167,000. That’s up almost 100% year-over-year. Acceleration of net adds also came in at a lower SAC, which was a brilliant job by the team given the fact that we were already really efficient. We are encouraged with the increase in market share from a net adds perspective relative to our peers. Margin expansion for the first 3 quarters of the year also came in ahead of estimates.

In January, I said that our goal was really to expand our margins by about 150 basis points on a quarterly basis sequentially going forward. Adjusted contribution margin came in at a whopping 16%, and that’s really due to the timing of content drops and the addition of Disney and ESPN. But from a normalized basis, that’s roughly about 10% to 10.5% . And this result was really driven by 3 things. We had a price increase of $5. We had better merchandising. And I think the team did a phenomenal job selling 800,000 attachments versus 235,000 attachments in the year prior. That’s an increase of 240% year-over-year. And advertising sales, which I’ve already highlighted earlier, clearly plays an important role in margin expansion. At the end of the day, we made some really bold moves in the quarter, and that really speaks to our ability to leverage our proprietary data. And to — it also speaks to our — the quality of our execution. As you all know, it’s tough to expand margins while growing your sub base at this current pace. The tailwinds have never been stronger. FUBO sits firmly at the intersection of 3 megatrends: The first is the secular decline of traditional television viewership; the second is the shift of TV ad dollars to connected devices; and the third is online sports wagering, a market we absolutely intend to enter. Our growth opportunities are numerous, and there are great many reasons for us to be optimistic given the optionality in the business. Since some of you are new to the story, it might be helpful for me to provide a quick background on who we are.

In 2015, we founded FUBO, introducing a live streaming platform to serve the needs of U.S. soccer fans that were unable to watch international soccer leagues. We quickly learned that soccer fans wanted 3 things: They wanted a greater breadth of sports and entertainment content; they wanted an intuitive user experience; and they, of course, wanted exceptional value. In a very short period of time, FUBO is becoming a leading sports-first cable TV replacement service for the entire family. We offer a wide variety of premium sports and entertainment content at a very affordable price with over 110 channels and 50,000 live sporting events. And that also includes both the regular season and the post season for leagues like the NFL, the NBA and the NHL. Supporting our offering is our proprietary data and technology platform that we really have optimized for live TV and sports.

Our platform has enabled us to regularly offer new features and functionality for our subscribers. To the best of my knowledge, we are still the only virtual MVPD to stream live sports in 4K. As a matter of fact, we stream Thursday Night Football as well as most recently, the World Series that’s on Fox in 4K. We’re also the only virtual MVPD where customers can watch up to 4 live streams simultaneously through our recently updated multi-view feature on Apple TV. We believe our platform offers a more differentiated, a more personalized premium viewing experience for sports apps, and that’s really reflected in the recent reports highlighting customer satisfaction relative to our peers. And it also is reflected in our app ratings. And most importantly, it’s reflected in our improving retention. We are indeed expanding into the online sports wagering market. Our goal with wagering is to develop a very robust revenue stream.

We believe wagering could be as valuable as our growing ad sales business, and FUBO has an opportunity to combine a sports wagering service with a leading live sports streaming package. We’ve nailed down our strategy, and we expect to share tactical details as appropriate. As you will hear from Simone shortly, the outlook for Q4 is extremely solid. We are raising full year guidance not only for 2020 but also for 2021. The growth of our advertising business, coupled with our strong attachment rates on value-added services, such as our Cloud DVR and the ability to stream on multiple devices, continues to improve margins. The team is laser-focused on driving both the top line growth and making progress on our path to profitability. We believe FUBO’s differentiation in the marketplace, which is sports-focused programming and a tech-first user experience firmly positions the company for long-term growth and massive success.”

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