Streaming pay-TV bundle provider FuboTV closed 2022 with 1.445 million subscribers in North America and posted healthy numbers in many financial categories in the fourth quarter.
Despite those positives, shares in Fubo fell 17% just after the opening bell. The stock was at $1.96 on twice its normal trading volume day after the company revealed $68.1 million in new fundraising. The at-the-market raise, via a stock sale at an implied discount, was announced during a quarterly earnings call with Wall Street analysts. The company affirmed its prior guidance that it will begin to report positive cash flow by 2025, saying the influx in financing would enable it to reach that goal.
Another drag on the stock was the company’s guidance for 2023, which was more conservative than many analysts had expected. Fubo expects to take in between $1.195 billion and $1.225 billion in revenue, which would be 23% year-over-year growth at the midpoint. North American subscriber levels will reach 1.51 million to 1.53 million, which would be 5% growth.
The company posted negative adjusted EBITDA of $75.4 million in the fourth quarter, about 3% more red ink than in the year-ago period, but revenue surged 38% to $319.3. On an annual basis, Fubo has now cleared two significant thresholds, passing $1 billion in total revenue and $100 million in advertising revenue.
In a conference call with analysts, CEO David Gandler said Fubo is bringing a “differentiated” service to market, especially in the sports arena. Founded in 2015 as a sports-centric offering, Fubo has since broadened out but has along the way become a surprisingly receptive home for regional sports networks. With their business model under immense pressure, many RSNs — notably Diamond Sports Group — have been in protracted carriage disputes with streaming bundlers like YouTube TV, Hulu + Live TV and Sling.
Asked about comparisons with YouTube TV, which last year said it has surpassed 5 million subscribers, Gandler said they are “two companies positioned to be sports-first.” YouTube recently closed a deal with the NFL to provide the Sunday Ticket package that had been with DirecTV since its inception in 1994.
“We’ve taken two very different roads,” Gandler said of Fubo and YouTube TV. The total available market Fubo expects to benefit from with its efforts to secure RSNs is “significantly bigger than NFL Sunday Ticket.” Subscribers to the NFL premium offering need not also subscribe to YouTube TV, he noted.
A gap in Fubo’s programming lineup recently opened up, however, when CBS stations went dark, replaced by a national network feed. Asked for an update during the call, Gandler said the company is optimistic that it hasn’t seen customers defect over the situation. Local news programming is widely available 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. “Under no circumstances is this programming required given the retention levels we’ve seen.”
Stations and the network are both trying to get paid, Gandler complained. “The problem is that everyone is looking to double-dip,” he said.
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