FuboTV ends Q1 with 1.06M North American subscribers

Virtual MVPD fuboTV ended the first quarter of 2022 with 1.056 million streaming subscribers in North America, a tally that came in above its own expectations of 1.028-1.033 million in Q1.

However, in the previous quarter fuboTV had touted a milestone of hitting 1.13 million total paid subscribers at the end of 2021, including 185,000 net customers in Q4. While North American subs were down versus the end of Q4, the metric was up 81% year over year. FuboTV, a sports-first service that has expanded to news and entertainment channels, reports subscriber metrics on year over year basis due to the seasonality in sports content.  

It’s forecasting fewer North American subscribers in Q2, between 965,000-975,000, but gains for the full year to end 2022 with 1.465 million-1.485 million.  A letter to shareholders pointed to a recent move to drop its lowest-cost plan and migrate existing Starter plan customers to its Pro plan (which costs about $5 more per month), along with seasonality as reasons for the guidance.

“While this represents a sequential decline, it is consistent with normal seasonal trends in our businesses,” wrote fuboTV’s CEO David Gandler and executive chairman Edgar Bronfman. “We remain confident in our long-term trajectory of driving growth, as we advance towards our goal of turning cash flow and AEBITDA positive in 2025.”

In Q1 fuboTV for the first time announced results for its operations in France and Spain (categorized as "Rest of World" or ROW), which ended March ahead of expectations with around 305,000 paid subscribers and $5.5 million in revenue. It marks the first full quarter of full operations in France, after the company acquired Molotov in December. FuboTV expects to have about the same number of ROW subs in Q2.

The live TV streaming service generated $242 million in total revenue, an increase of 102% year over year. However, operating expenses soared 104% year over year to $377 million, resulting in a net loss of about $141 million for the period, down 101% from Q1 2021. Adjusted EBITDA was down 127% year over year to a loss of $105.5 million. FuboTV ended the quarter with over $456 million in cash.

In North America, total revenue was up 98% to $236.7 million and advertising revenue was up 81% to $22.8 million.

In a letter to shareholders executives said that engagement on the platform remained strong and that fuboTV is happy with ongoing reductions in churn.

“We are committed to a business which replaces the decades-old basic cable package by giving consumers increased and improved content, ‘anytime anywhere’ access and mobility, increased choice and flexibility, personalization and interactivity - including gaming,” said Bronfman in  a statement. “Wagering remains an important pillar in our path to profitability and strategy to integrate interactivity into our live TV streaming experience. While striving to be the most compelling destination for cord cutters, fuboTV has started to enact a series of approaches to increase monetization, accelerate our ad sales business and further strengthen our unit economics.”

Subscription average revenue per user (ARPU) for North America was up 2% to $64.16.  FuboTV is taking steps to drive adoption of higher ARPU products and migrate customers to higher value bundles, it said in the letter to shareholders, with the earlier mentioned migration to Pro plans which started in Q2.

“We are also launching additional upsell pathways to drive attachment sales, such as our recently launched News Plus product,” said Gandler and Bronfman. “These strategies are already yielding meaningful ARPU expansion, which we expect to continue in the quarters to come.”

On the ad sales side, fubo TV said market conditions impacted advertiser demand and the company had delays in improving its own ad technology and launching new capabilities.  In Q1 advertising ARPU declined 4.5% year over year, although the vMVPD expects current efforts will see that improve as the year progresses.

During its NewFronts presentation earlier on Thursday, fuboTV highlighted enhanced custom audience segments for addressable ads across content on its platform.

Increasing FAST channels

As part of fuboTV’s content strategy, it plans to increase the number of free ad-supported TV (FAST) channels it offers, executives said in the sharholder letter. Recently it’s launched Fox Weather, Revry, Revry News, Tastemade en Espanol, and Tastemade Travel.

“We believe these channels will enable us to grow profitable ad revenue as they bring premium programming to our customers with minimal expected content costs,” fuboTV told investors.