It’s billed itself as a “sports-first” cable TV replacement product, and when FOX Corporation, Warner Bros. Discovery and ESPN parent The Walt Disney Company announced they were teaming for a proposed “Hulu for Sports” OTT platform, Fubo didn’t take the news lightly.
“The underlying motives and implication of this joint venture also command our scrutiny,” the company said on February 7. Then came the February 20 filing of an antitrust lawsuit in a New York federal district court against the trio of media giants — a move designed to put a stop to its plans.
Now, Fubo has released Q4 2023 results that beat analysts’ estimates and show healthy subscriber growth. Yet, it appears the specter of the FOX/Disney/WBD platform-to-be is still making investors skittish.
On heavy volume, Fubo’s NYSE-traded shares were off by 17 cents to $1.90 on Friday, continuing a sub-$2 trend that was largely precipitated by the “Hulu for Sports” news that has shaken the broadcast and vMVPD sectors — largely due to misunderstandings among some investors of just how the FOX/Disney/WBD plans will move forward.
For broadcast television companies, the story is that they can perhaps benefit from the OTT’s creation, as their local channels that now offer sports play-by-play would likely be included in the lineup found on the proposed platform.
Fubo, however, has a much different tale. With a federal judge now called on as arbiter, how the case transpires could very much impact how Fubo’s 2024 and beyond will play out. Comments from the company’s leadership that the “Hulu for Sports” initiative is on the edge of “racketeering” and emblematic of a “cartel” have also permeated the conversation.
Based on the fourth quarter of 2023, investors should be cheering.
- Subscription revenue increased to $370.09 million, from $284.86 million
- Advertising revenue grew to $38.99 million, from $33.85 million
This puts the North America monthly average revenue per user at $86.65, up from $75.20.
And, revenue was up to $410.2 million, from $319.3 million — a feat that easily beat the consensus estimate of $397.77 million based on the predictions of 9 analysts polled by Yahoo! Finance.
The results helped Fubo lower its net loss attributable to common shareholders to -$70.09 million (-$0.24 per share), from -$151.98 million (-$0.76), while also improving its adjusted EBITDA to -$50.7 million, from -$75.4 million. Eight analysts polled by Yahoo! Finance offered EPS estimates, putting the consensus at -$0.31.
The other key metric is subscribers, and Fubo as of the end of 2023 had 1.62 million, up from 1.445 million a year earlier. The FY 2024 subscriber guidance projects 1,665,000 to 1,685,000 subscribers, representing 4% year-over-year growth at the midpoint. “This reflects conservatism in our outlook, and in particular, our exposure to potential industry volatility, and our intention to maintain discipline in subscriber acquisition costs relative to monetization,” the company said in an investor letter distributed early Friday by co-founder and CEO David Gandler.
“As we enter 2024, we remain focused on continuing to provide consumers a differentiated experience, while also balancing profitability targets and growth,” he continued. “We believe that our balance sheet, which includes $251 million in cash, cash equivalents and restricted cash, provides us with liquidity to both continue to strategically support the business and reach positive cash flow in 2025. Our company has never been more aligned in its vision and strategy, and we are excited about the opportunities ahead of us to deliver long-term value to our employees, partners, customers, and shareholders.”
