Live sports and TV streaming service fuboTV (NYSE:FUBO) announced better-than-expected results in Q4 FY2023, with revenue up 28.5% year on year to $410.2 million. It made a non-GAAP loss of $0.17 per share, improving from its loss of $0.76 per share in the same quarter last year.
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fuboTV (FUBO) Q4 FY2023 Highlights:
- Revenue: $410.2 million vs analyst estimates of $397.8 million (3.1% beat)
- EPS (non-GAAP): -$0.17 vs analyst estimates of -$0.24
- Free Cash Flow was -$5.16 million compared to -$29.5 million in the previous quarter
- Gross Margin (GAAP): 9.7%, up from 0.8% in the same quarter last year
- Subscribers: 2.04 million
- Market Capitalization: $606.1 million
MediaThe advent of the internet changed how shows, films, music, and overall information flow. As a result, many media companies now face secular headwinds as attention shifts online. Some have made concerted efforts to adapt by introducing digital subscriptions, podcasts, and streaming platforms. Time will tell if their strategies succeed and which companies will emerge as the long-term winners.
Sales GrowthA company's long-term performance can indicate its business quality. Any business can enjoy short-lived success, but best-in-class ones sustain growth over many years. fuboTV's annualized revenue growth rate of 78.8% over the last five years was incredible for a consumer discretionary business. Within consumer discretionary, a long-term historical view may miss a company riding a successful new product or emerging trend. That's why we also follow short-term performance. fuboTV's recent history shows its momentum has slowed as its annualized revenue growth of 46.4% over the last two years is below its five-year trend.
We can better understand the company's revenue dynamics by analyzing its number of subscribers, which reached 2.04 million in the latest quarter. Over the last two years, fuboTV's subscribers averaged 49.8% year-on-year growth. Because this number is higher than its revenue growth during the same period, we can see the company's monetization has fallen.
This quarter, fuboTV reported remarkable year-on-year revenue growth of 28.5%, and its $410.2 million of revenue topped Wall Street estimates by 3.1%. Looking ahead, Wall Street expects sales to grow 19.1% over the next 12 months, a deceleration from this quarter.
Cash Is KingAlthough earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can't use accounting profits to pay the bills.
Over the last two years, fuboTV's demanding reinvestments to stay relevant with consumers have drained company resources. Its free cash flow margin has been among the worst in the consumer discretionary sector, averaging negative 20.6%.
fuboTV burned through $5.16 million of cash in Q4, equivalent to a negative 1.3% margin, increasing its cash burn by 77.6% year on year. Over the next year, analysts predict fuboTV will continue burning cash, albeit to a lesser extent. Their consensus estimates imply its LTM free cash flow margin of negative 12.9% will increase to negative 5.5%.
Key Takeaways from fuboTV's Q4 ResultsWe were impressed by how significantly fuboTV blew past analysts' EPS expectations this quarter. We were also glad its revenue outperformed Wall Street's estimates. Zooming out, we think this was an impressive quarter that should delight shareholders. The stock is up 14.5% after reporting and currently trades at $2.37 per share.