Are DOGE layoffs set to resume?
FuboTV (FUBO) reported its first-quarter 2025 earnings, surpassing EPS expectations with a reported loss of $0.02 per share against a forecasted loss of $0.11. Despite the earnings beat, the company’s revenue of $407.9 million fell short of the $440.24 million forecast. This mixed financial performance led to a premarket stock price decline of 9.56%, with shares trading at $2.65, down from the previous close of $2.93. According to InvestingPro data, 4 analysts have recently revised their earnings expectations upward for the upcoming period, suggesting potential optimism about the company’s future performance.
Key Takeaways
- FuboTV’s EPS outperformed expectations, reporting a loss of $0.02 compared to the expected $0.11.
- Revenue fell short of forecasts, reaching $407.9 million versus the anticipated $440.24 million.
- The company’s stock dropped 9.56% in premarket trading following the earnings release.
- North American revenue increased by 3.5% year-over-year.
- The company aims for profitability by 2025 despite current challenges.
Company Performance
FuboTV experienced a mixed quarter, with improved earnings but revenue falling below expectations. The company’s North American revenue rose by 3.5% year-over-year, demonstrating growth despite a challenging economic landscape. However, subscriber numbers in North America decreased by 2.7% year-over-year, reflecting increased competition and market fragmentation.
Financial Highlights
- Total North American revenue: $407.9 million, up 3.5% year-over-year.
- Net income from continuing operations: $188 million ($0.55 per diluted share).
- Adjusted EBITDA: -$1.4 million, a $37 million year-over-year improvement.
- Ad revenue: $22.5 million, down 17% year-over-year.
Earnings vs. Forecast
FuboTV reported a loss of $0.02 per share, beating the forecasted loss of $0.11 per share. This represents a significant earnings surprise, as analysts had anticipated a larger loss. However, the revenue shortfall of $407.9 million compared to the $440.24 million forecast tempered the positive EPS result.
Market Reaction
Despite the EPS beat, FuboTV’s stock fell 9.56% in premarket trading, reflecting investor concerns about the revenue miss and competitive pressures in the streaming market. The stock is trading near its 52-week low of $1.10, significantly below its high of $6.45, indicating broader market challenges. InvestingPro data shows the stock has demonstrated significant volatility, with a remarkable YTD return of 132.54%. The company’s Financial Health Score stands at 2.21, rated as ’FAIR’ by InvestingPro analysts. For deeper insights into FUBO’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Outlook & Guidance
FuboTV provided guidance for the second quarter of 2025, expecting North American revenue between $340 million and $350 million and subscriber numbers between 1,225,000 and 1,255,000. The company remains focused on achieving profitability by 2025, with strategic initiatives including product innovation and international expansion.
Executive Commentary
CEO David Gendler stated, "We remain focused on achieving profitability in our streaming business this year," emphasizing the company’s commitment to financial improvement. CFO John Janidis highlighted the growth in interactive ads, noting they are up 37% year-over-year.
Risks and Challenges
- Increased competition in the streaming market could pressure subscriber growth.
- Economic uncertainties may impact consumer spending and advertising revenue.
- The ongoing fragmentation of the streaming landscape poses strategic challenges.
- Execution risks associated with international expansion and new product launches.
- Potential delays in content licensing agreements could affect future offerings.
Q&A
During the earnings call, analysts inquired about the company’s international expansion strategy and advertising trends. Executives noted stable customer and advertising trends in the macro environment and highlighted better-than-expected reactivations in April. However, no updates were provided on discussions with Televisa Univision regarding content agreements.
Full transcript - Fubotv Inc (FUBO) Q1 2025:
Tiffany, Conference Operator: Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fubo First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.
Thank you. I would now like to turn the call over to Amit Pateh, SVP, FP and A, Corporate Development and Investor Relations for Fubo. Please go ahead.
Amit Pateh, SVP, FP&A, Corporate Development and Investor Relations, Fubo: Thank you for joining us to discuss Fubo’s first quarter twenty twenty five results. With me today is David Gendler, Co Founder and CEO of Fubo and John Janidis, CFO of Fubo. Full details of our results and additional management commentary are available in our earnings release and letter to shareholders, which can be found on the Investor Relations section of our website at ir.fubo.tv. Before we begin, let me quickly review the format of today’s call. David will start with some brief remarks on the quarter and our business, and John will cover the financials and guidance.
Then we will turn the call over to the analysts for Q and A. I would like to remind everyone that the following discussion may contain forward looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding our financial condition, anticipated financial performance, business strategy and plans, including our pending business combination and our products and subscription packages, market, industry and consumer trends and expectations regarding growth and profitability. These forward looking statements are subject to certain risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from forward looking statements are discussed in our SEC filings. Except as otherwise noted, the results and guidance we are presenting today are on a continuing operations basis, excluding the historical results of our former Gaming segment, which are accounted for as discontinued operations.
During the call, we may also refer to certain non GAAP financial measures. Reconciliations of these non GAAP measures to the most directly comparable GAAP measures are also available in our Q1 twenty twenty five earnings shareholder letter, which is available on our website at ir.fubo.tv. Please note as well that during Q and A, the company will not provide any information related to the pending business combination with Hulu plus Live TV and ongoing regulatory matters beyond what we have already shared. With that, I will turn the call over to David. Thank you, Amit, and good morning, everyone.
David Gendler, Co-Founder and CEO, Fubo: Thank you all for joining us today to discuss Fubo’s first quarter twenty twenty five results. In the first quarter, our global streaming business exceeded our subscriber forecast and achieved our revenue guidance. We are pleased with these results, which came against a typically lighter first quarter sports calendar and a broader backdrop of economic uncertainty. Looking at our North American streaming business, we delivered 1,470,000 paid subscribers down 2.7% year over year, but exceeding our Q1 guidance of 1,460,000 at the high point. Total revenue in the region was $407,900,000 and that was up 3.5 year over year.
Notably, we once again improved our global profitability metrics by more than $100,000,000 for the trailing twelve months. These results demonstrate our team’s ongoing execution as we focus on profitability in 2025 for our global streaming business. We remain excited about our agreement with The Walt Disney Company to combine Fubo with Hulu plus Live TV and the potential to increase competition and consumer choice in the pay TV space. We continue to work through the regulatory process and look forward to sharing more information when we are able. The streaming landscape continues to evolve and grow more fragmented further demonstrating the importance and relevance of Fubo’s aggregation model.
We remain committed to providing customers multiple and flexible packaging options from skinny bundles to the full virtual pay TV bundle and everything in between. In recent months, we’ve seen the industry follow our lead and introduce skinnier content bundles. We are gratified by this because we believe a streaming landscape with multiple options benefits all consumers. We continue to focus on meeting consumer needs at every point along the demand curve. As we have previously communicated, our skinny bundle offering will include a sports and broadcasting service.
In addition to featuring content from The Walt Disney Company, we are working hard to secure content from non Disney programmers for the new service. It is critical for Fubo subscribers that we are able to negotiate content licensing agreements at fair rates and terms. Our goal remains to launch this service for the fall sports season. In closing, we continue to focus on consumers and what they expect from a streaming service, namely premium content and innovative product experience, value and above all choice. At the same time, our priority is providing value for our shareholders and we remain focused on achieving profitability in our streaming business this year.
We look forward to keeping you updated on our progress. I will now turn the call over to John Janitas, CFO to discuss our financial results in greater detail. John?
John Janidis, CFO, Fubo: Thank you, David, and good morning, everyone. Our performance during the first quarter validates our strategy to optimize our aggregated content platform even amidst changes in the media landscape and a potentially cautious consumer outlook. We achieved North America revenue growth of 3.5% within our guidance range and our North America subscriber count of 1,470,000 was ahead of expectations. From an advertising revenue standpoint, ad revenue for the quarter was $22,500,000 down 17% year over year, largely due to the discontinuation of Warner Bros. Discovery and TelevisaUnivision Networks.
Excluding these impacts, our underlying performance improved year over year. Net income from continuing operations was $188,000,000 or $0.55 per diluted share compared to a net loss of $56,300,000 and a loss per share of $0.19 in the prior year period. It is important to note that net income includes the $220,000,000 gain on settlement of litigation. Adjusted EPS loss improved to $02 a marked improvement compared to a loss of $0.14 a year ago as we made meaningful progress reducing non operating expenses and narrowing adjusted losses. Adjusted EBITDA was negative $1,400,000 a $37,000,000 improvement year over year highlighting our ongoing focus on cost control, efficient growth and driving leverage in the model.
Turning to cash flow. Net cash provided by operating activities was $161,000,000 reflecting the $220,000,000 impact of the gain on settlement of litigation. Free cash flow improved by $9,000,000 year over year to negative $62,000,000 as we remain disciplined in our capital allocation and working capital management. On a trailing twelve month basis, we improved both adjusted EBITDA and free cash flow by more than $100,000,000 underscoring the effectiveness of our profitability initiatives and operating efficiency. Looking ahead, our North America guidance for 2Q twenty twenty five calls for subscribers of $1,225,000 to $1,255,000 or a 14% year over year decline at the midpoint and revenue of $340,000,000 to $350,000,000 a 10% decline at the midpoint.
Note that this guidance includes the continued impact of our recent drop of Televis and Univision content and reflects the benefit of one time sports events in 2Q twenty twenty four. For Rest of World, our Q2 guidance projects subscribers of 325,000 to 335,000, down 17% year over year and revenue of $6,500,000 to $7,500,000 reflecting a 15% decline at the midpoint. In closing, for several years, we’ve been driving important investments in Fubo’s technology and have made strategic content changes resulting in significantly improved profitability and cash flow under challenging circumstances. Looking ahead, we are energized by what we believe we can achieve through added scale with our pending transaction with Hulu plus Live TV. In the meantime, we remain firmly focused on achieving profitability in 2025 alongside executing on our long term strategic priorities.
I would now like to turn the call over to the operator for Q and A.
Tiffany, Conference Operator: Your first question comes from the line of Dave Joyce with Seaport Research Partners. Please go ahead.
Dave Joyce, Analyst, Seaport Research Partners: Thank you. On the little bit more color on the content front, please. Given the Televisa Univision did say on their earnings call that they would look forward to being in discussions with you again. Is there anything new that you can report on that front since they expressed that interest? And also on the content side, how are you progressing on getting your programming contracts all realigned for skinnier packages in time for the football season?
John Janidis, CFO, Fubo: Hey, David. This is John. I’ll take the first one, and maybe Dave will talk to the skinny package progression. Look, on Television and Univision, I would say no updates to share. But as you know, look, there’s been content we’ve dropped in the past that we brought back.
Consistent with what we said last quarter, I think we’re certainly open to those discussions with acceptable terms, and that’s important. But in the interim, we’ve lowered the price on our Latino package. We’re seeing solid interest, and we’re always looking to improve our offerings to our customers. But I’d also say, as we mentioned, the impact will continue into the second quarter. We’re now about four point five months since the drop.
But as the time goes on, the impact on the subscriber base will be more modest.
David Gendler, Co-Founder and CEO, Fubo: Yes. And this is David. As to the second part of your question, look, we’re we are very focused on releasing skinny bundles. We’ve stated this many times. We started offering some standalone services and, early indications, you know, really, I think, create a situation for us where we feel very comfortable that there’s probably a growth opportunity headed into the fall.
So we’re very focused on, you know, completing our content deals with the non Disney partners. But, of course, we’ve made it very clear that it has to be on acceptable terms, at a fair market price with the same flexibility as other distributors. So that’ll be our focus, in the short term, and we look forward to providing you more information as we move forward on that front.
Tiffany, Conference Operator: Your next question comes from Clark Lampin with BTIG. Please go ahead.
Clark Lampin, Analyst, BTIG: Thank you. Good morning. For David or John, I’ll sort of ask the obligatory macro question and curious if you guys have seen any impact 2Q to date or whether maybe you expect as a result of some lag effect impact, any impact on your gross additions churn or on the ad side of your business demand in The U. S? And then for 2Q, John, I don’t know if it’s possible to quantify for us or give us a sort of even directional sense for what 2Q growth would have looked like had you not had the Copa America and Televisa impact?
It might be challenging to quantify, but would just be curious, guess, if you have a sense for what like for like performance across The U. S. Is looking like right now? Thank you.
John Janidis, CFO, Fubo: Yes, sure. I’ll take those, Clark. So maybe I’ll start with the second question first. Look, on 2Q, to your question, look, we have ongoing churn in the Latino package as we referenced. And then to your point, we had Copa last year.
If I were to kind of clean it up and calculate the same store, if you will, I would say on a same store basis, our subscriber growth looks to be relatively flattish. On the macro side, what I would say is, look, short answer, nothing stands out in terms of tone from both our customers and our advertising partners. I’d say on the customer side, to your question, I think overall churn for our English package is relatively in line or actually slightly better on a year over year basis even with the price increase. I would say also that reactivations were better than we expected for the month of April, which I think is relevant given the timing of some of the macro headlines out there. And then on the advertising side, I would say if I look at what I would just call year to date on a monthly basis, April is actually our best month in terms of growth.
And I would say that as a reminder, in terms of modeling that we lapped the Discovery scripts drop as of the April. And so we’ll see more of a normalization of our advertising business starting now.
Tiffany, Conference Operator: Your next question comes from Laura Martin of Needham. Please go ahead.
Laura Martin, Analyst, Needham: Good morning. Okay. So, David, I wanted to ask you about rest of world. We’ve got the rest of world subs down 11% for the the last six months now. ARPU is down.
Revenue is down. I know this was, my recollection is sort of it was an occupier. But is this business is this business just gonna shrink structurally, and how are you thinking about rest of world? And then also for you, David, I wanted to know about GenAI. What are you guys doing with GenAI integrating some of the new forms?
Are you doing anything with creative or advertising with using GenAI tools? And then, John, for you, revenue down 17%, sort of disappointing. And I didn’t understand why it mattered if we dropped certain networks. You guys have plenty of networks. So why would did they have some kind of commitment where they had to advertise with you?
Because you have plenty of ad inventory, so I don’t understand why losing two big content players would actually drive ad revenue down 17% year over year. Thanks, guys.
David Gendler, Co-Founder and CEO, Fubo: Okay. Yeah. Laura, I’ll I’ll take that first question. There’s a lot in there. On the Molotov side, I think we’ve said this many times.
It’s really about team technology and and the synergies that we see with that business. As we’ve stated now since 02/2022, despite all of the, you know, whiplash that we’ve seen over this period of time from, you know, larger companies like Netflix and others and, you know, plus services, etcetera, our goal has always been profitability, profitability over growth. Molotov is like Fubo. We’ve set that same expectation, and they have to get to profitability. And, you know, we feel comfortable that they will get there.
And then on the other side of that coin is the fact that we are really focused on building out our unified platform. We feel very good about where the platform is today. Fubo itself is now on that platform. We are now onboarding Molotov. And, you know, in terms of subscriber growth, it’s very simple.
You know, it’s a it’s a relatively straightforward formula. You have to invest in marketing and we as we stated, investing in marketing is an upfront cost that has, you know, short term, you know, cost implications. And so that has not been on forefront, for us. But, yeah, international is a, an important piece to the long term trajectory of this business. We see what YouTube has been able to accomplish on a global basis and where the majority of, you know, viewership and revenue is coming from international.
We see the same trend with Netflix. I think even Reed Hastings, when he was still CEO, had mentioned that many, many times the importance of international. And we’re getting everything ready, you know, to expand at the right moment at at the right time. And so this will be a testing ground as it has been, and we’re we’re almost there. John, would you like to take the rest of this?
John Janidis, CFO, Fubo: Yes, sure. Laura, I would just add one thing to David’s comment that to your point, with the subscriber decline there, we had or the team had EBITDA that came in comfortably ahead of budget. So again, profitability remains the focus. In terms of your question on the ads, would say a couple of things. One is just don’t forget that we we do have ad insertion for those networks.
So for instance, both on the Univision nets and on the Discover scripts nets, you know, we’re losing ad insertable hours. And so and there’s a direct impact on that. If I were to normalize for that, I would tell you that Q1 would have actually been up slightly on a year over year basis. And I would tell you that 2Q looks to be a little bit better than Q1.
Tiffany, Conference Operator: Your final question comes from Alicia Reif of Wedbush. Please go ahead.
Alicia Reif, Analyst, Wedbush: Hey guys. Thanks for taking my question. I have a few as well. On the ad spend, was wondering if you could dig in a little bit on how your gamified ads are tracking and how can get more advertiser interest while the budgets are tightening with features such as that. If it’s gotten much traction so far, had heard in the quarter that it has.
If you just double click on that, I’d appreciate it.
John Janidis, CFO, Fubo: Yes. Sure. Hey, Lisa. This is John. I’ll take it.
Look, I’d actually broaden it out from Gamify to what I would just call interactive ads. Look, over the past, I’d say, couple of quarters or a few quarters, you’ve seen us and read about us launching various new formats that I would just call interactive, gamified, etcetera. We’ll also be launching shoppable. But if I take that as a larger bucket, would say that we’re really starting to see some good traction. And so our interactive ads are up 30% or 37% year over year.
And I’d say that interest is actually accelerating. I’d say ad products overall in terms of big picture, up 41% year over year for the first half. And so we’re seeing acceleration. Look, I would say candidly, the sales cycle was a little bit longer than I would have expected initially. But I’d say that we’re actually like what we’re seeing.
And then in terms of advertiser interest as budgets potentially shrink, look, I think that we need to innovate. And I would say our ad sales team was at a conference earlier in the week. We had very strong interest from a variety of parties, including the holdcos about a new ad format that we’ve just brought to market. And I expect that I’ll start talking about that on our next quarter’s call. But we feel like what we’re seeing from our pause ads, from marquee among others.
Tiffany, Conference Operator: There are no further questions at this time. Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.
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