Fubo on Monday released financial outlook and targets for profitability metrics in the coming years, after the virtual MVPD paused guidance for investors in its Q1 earnings report as it awaited more visibility into impacts from the combination with Disney’s Hulu + Live TV business.
Fubo released an Adjusted EBTIDA outlook for fiscal 2026 and 2028 and affirmed expectations for positive Free Cash Flow expected in fiscal 2027 and 2028 under its current operating plan.
In an accompanying letter to shareholders, Fubo CEO and co-founder David Gandler said that the streaming pay TV provider’s financial stability has continued to improve – a trajectory it expects to continue but doesn’t believe is reflected in the company’s current stock price.
“We believe that our share price has not yet reflected the operational progress we have made nor the intrinsic value of the combined business. I hope today’s updates help to close that gap,” wrote Gandler to shareholders.
With the business combination of Hulu + Live TV, Fubo now expects to deliver between $80 and $100 million in Pro Forma Adjusted EBITDA in fiscal 2026, and is targeting at least $300 million in Adjusted EBITDA in fiscal 2028.
It’s projecting to end this fiscal year (year-end September 2026) with at least $200 million in cash. It expects to be free cash flow positive starting in fiscal 2027 and does not anticipate needing additional outside financing through fiscal 2028.
Prior to the Hulu + Live TV combo, Fubo had improved net loss and Adjusted EBITDA by approximately $100 million annually for three consecutive years, the letter noted.
And as it focuses on profitability, subscriber growth is expected to potentially take a back seat.
“As we look ahead, we are applying that same disciplined approach to how we balance growth and profitability for the combined company. While subscriber growth remains a key long-term driver of value, we are focused on pursuing that growth in an efficient and profitable manner,” said the letter to shareholders. “In the near term, this means prioritizing margin expansion and sustainable cash flow, which may result in periods of flat or modestly declining subscriber levels.”
Together Hulu + Live and Fubo ended Q1 with 6.2 million North American subscribers.
The projection for at least $300 million in Adjusted EBITDA in fiscal 2028 is partially driven by contractually obligated wholesale fees that will expand over time.
Per the disclosure, in addition to revenue Fubo receives a wholesale fee at a ratio to Hulu + Live TV’s carriage costs – currently at a 95% ratio in 2026, increasing to 97.5% in 2027 and growing to 99% in 2028 and beyond.
“This step up is contractual and gives us strong visibility into our earnings profile and expected Adjusted EBITDA expansion,” Gandler told shareholders.
Fubo also believes it can structurally lower content costs over time, ultimately leading to potential for lower subscriber-related expenses and boosted Adjusted EBITDA. Part of that involves aligning legacy Fubo and Hulu + Live TV content agreements as they come up for renewal “to optimize for our increased scale.”
The guidance also includes future ad synergies, which Fubo said it’s on pace to achieve, that come from the shift and integration of Fubo’s ad inventory to the Disney Ad Server.
On the content front, Fubo acknowledged that while available on the Hulu + Live TV service, its namesake vMVPD offering doesn’t currently include NBCUniversal content after a carriage impasse last November that saw the channels get dropped.
However, the impact to Fubo’s service has been lower than expected, leading to modest impacts on the overall company.
The letter noted it has started marking Hulu + Live TV to Fubo customers “who may prefer Hulu + Live TV’s more comprehensive channel lineup” and anticipates finding additional avenues to more prominently feature the service to Fubo customers.
At the same time, it’s working to strengthen the content offering on each service, such as Fubo recently adding coverage of 17 professional baseball teams ahead of Opening Day.
The letter also touched on Fubo’s decision to initiate a reverse stock split. The company emphasized the move does not change the fundamentals of a business – but rather how stock is structure and perceived in the market - and is meant to position Fubo for long-term success in the public financial markets.
Gandler previously commented on the reverse stock split on Fubo’s Q1 earnings call in February.
“People get nervous around hearing reverse splits. But the reality is, it was important for us to align with our operational scale. We wanted to reduce volatility and also attract institutional investment. These are natural things that have to take place,” he said during Q1 earnings. “And it really is part of the corporate hygiene that we're trying to put in place, particularly after we've dealt with the convert. So again, all of this is sort of trying to prepare Fubo for a very bright future and this is just one of those steps.”
In Monday’s letter, the CEO also affirmed the decision does not signal an intent “to issue dilutive, additional equity for capital raising purposes,” as Fubo doesn’t not currently have any plans to do so.
And Gandler appealed directly to Fubo’s retail shareholders in the letter, reiterating confidence and encouraging patience as the vMVPD works to realize the potential of its new scale and business combination with Hulu + Live TV.
“Given our combined scale, we remain extremely confident in the opportunity in front of us,” wrote Gandler. “Integrating two businesses of this scale is not instantaneous; it requires time, coordination, and a deep understanding of how to unlock the value that we outlined at the outset of this combination. We are working diligently every day to execute against that vision.”