Streaming network platform Fubotv (NYSE:FUBO) stock has fallen nearly in half since it’s peak earlier in the year. The Company is a sports-first live and streaming platform for sports content which is expanding into other content. Through partnerships with various groups including The Cordish Companies out of Pennsylvania, fuboTV will be launching its own sportsbook which turns passive viewers into active participants creating an immersive sports entertainment experience. The Company is a play on two strong tailwinds cord cutting and sports betting. By merging the two together, it hopes to create a whole new category of interactive sports entertainment with plans to be the first live sync integration between video and sportsbook. The exclusive app will automatically update relevant bets in real-time based on the game being viewed and update as the user changes channels. Prudent investors looking to ride the two powerful tailwinds in the context of reopening trends can watch for opportunistic pullbacks.
Q2 Fiscal 2021 Earnings Release
On Aug. 10, 2021, fuboTV reported its fiscal Q2 2021 results for the quarter ending June 2021. The Company reported earnings-per-share (EPS) loss of (-$0.38) versus consensus analyst estimates for a loss of (-$0.49), a $0.11 beat. Revenues grew 196.2% year-over-year (YoY) to $130.9 million, beating analyst estimates for $121.43 million. Advertising revenue rose 281% YoY to $16.5 million. Subscription revenues rose 189% to $114.4 million. Subscribers grew 138% YoY and 15% quarter-over-quarter (QoQ) to 681,721. Average revenue per user (ARPU) rose 30% YoY to $71.43. fuboTV CEO David Gandler commented:
“fuboTV delivered a strong second quarter of 2021 across all of our key financial and operational metrics: subscribers, total revenue, and advertising revenue. Engagement also reached record highs as we added exclusive sports streaming rights with CONMEBOL and began beta testing predictive, free-to-play gaming integrated into our streaming platform ahead of our expected launch this fall. Our Fubo Sportsbook with real-money wagering remains on track for a fourth-quarter launch as we intend to further combine interactivity with streaming video. Our plans to launch a holistic and personalized user experience is evidenced by our sportsbook, which we’re excited to preview on our earnings call this afternoon.”
Upside Guidance
The Company raised its guidance and expects Q3 2021 revenues between $140 million to $144 million on 810,000 to 820,000 subscribers versus $127.69 consensus analyst estimates. For full-year 2021, fuboTV expects total revenues between $560 million to $570 million on subscribers of 910,000 to 920,000 versus $531.21 million consensus analyst estimates.
Conference Call Takeaways
CEO Gandler set the tone:
“As we’ve cited previously, our strategy is rooted in the intersection of three megatrends: the secular decline of traditional television; the shift of TV ad dollars to connected devices; and online sports wagering, a market opportunity which we believe complements our sports-first live TV streaming platform. We are laser-focused on staying ahead of these trends. Our vision is to activate a streaming platform that transcends the industry’s current virtual MVPD model and transforms passive viewers into active participants. Importantly, we achieved these results while also making significant progress towards our path to profitability, with adjusted contribution margin at 8.3%, that’s up 316 basis points year-over-year and 301 basis points sequentially. This growth was driven by ARPU expansion in our advertising and subscription businesses and is a result of strong execution associated with upsells and packaging. It’s also evidenced by the 1.5 million attachments sold at the end of the quarter.”
Capitalizing on Cord Cutting
CEO Gandler highlights that the cord-cutting trend continues:
“As they continue to cut the cord and go virtual, they are increasingly choosing fuboTV over more expensive legacy Pay-TV services due to our innovative product experience and customer-friendly approach and all for an affordable price. This dynamic, along with a heavy sports calendar, drove a healthy 91,291 net subscriber additions in the quarter compared to a decline of approximately 1,000 in the same period last year. We have added approximately 396,000 net subscribers since the second quarter of 2020, resulting in subscriber growth of 138% year-over-year compared to just 31% growth for the entire virtual MVPD market over the same period. Equally noteworthy, we drove strong subscriber growth with efficient deployment of sales and marketing dollars in the quarter, which came in at only 16% of revenue, down from 18% in the first quarter of 2021. We also improved churn by 203 basis points year-over-year.”
Sportsbook Launch
fuboTV will be partaking in the sportsbetting trend with various partnerships:
“The launch of our own Sportsbook is an important driver of the strategy as we aim to develop a flywheel turning passive viewers into active participants, defining a new category of interactive sports entertainment television. fubo Sportsbook will represent an industry-first live sync integration between video and the Sportsbook. We are building fubo Sportsbook to be a holistic and hyper-personalized betting experience, reflecting what the user is watching on fuboTV at that very moment.”
$500 Million Equity Sales Agreement
On Aug. 13, 2021, fuboTV entered into a $500 million at-the-market equity sales agreement. The Company will be using Evercore, Needham and Oppenheimer as agents to sell up to $500 million shares of stock paying 3% to the managers.
FUBO Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provide a precision view of the landscape for FUBO stock. The weekly rifle chart has a sloppy make or break set-up as the initial pup breakout stalled as the 5-period moving average (MA) flattens near the $26.80 Fibonacci (fib) level. The weekly 15-period MA is stalled at $27.29 as the weekly stochastic appears to be forming a mini inverse pup. The weekly formed a market structure high (MSH) sell trigger on the breakdown below $29.12. The daily rifle chart has a stalled downtrend with a rising 5-period MA at $26.93 and flat 15-period MA at $27.62. The daily stochastic is morning a mini pup through the 20-band triggering the daily market structure low (MSL) buy on a breakout back above $26.66. Prudent investors can watch for opportunistic pullback levels at the $25.15 fib, $24.31 fib, $22.91 fib, $22.13 fib, and the $20.35 fib. Upside trajectories range from the $31.58 fib to the $52.09 fib level.