Streaming pay-TV provider FuboTV reported second-quarter results far better than Wall Street analysts expected, showing a gain of 91,000 subscribers compared with the year-ago quarter.
Given the widespread lockdowns and closing of movie theaters and other out-of-home options in the 2020 quarter, when Covid-19 lifted most streaming players, the rise in subscribers was noteworthy. FuboTV, which launched as a sports-focused offering in 2015 but has since added general entertainment, now has 682,000 total subscribers. Analysts had expected the company to add just 12,000 subscribers.
Total revenue nearly tripled to a record $130.9 million and adjusted losses of 38 cents a share came in more than a dime lower than forecasts. Advertising revenue leaped 281% to $16.5 million.
FuboTV went public last fall and its stock has generally been volatile, though it has more than doubled since the IPO. Investors hailed the quarterly results, sending shares up 10.5% in after-hours trading, to $31.65.
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Some media and entertainment entities blamed softer second-quarter results in some areas on the reopening of the economy as Covid restrictions ease. Asked during a videoconference with analysts why FuboTV was able to show higher engagement and add subscribers as non-screen-related options proliferated for customers, co-founder and CEO David Gandler credited improvements in the Fubo product. “We believe engagement will continue to improve over time,” he said.
In 2020, he added, Fubo averaged 7.2 hours per subscriber per day, during a time when few people were going anywhere but the grocery store due to Covid. In 2021 to date, by comparison, the average is about 7 hours. Steady increases in penetration for smart-TVs and connected-TV devices are another tailwind, with about 94% of Fubo’s subscriber base coming from those sources.
The company now estimates it will end 2021 with 915,000 subscribers, which would be a 67% improvement over 2020 levels. It has outlined ambitions to integrate sports betting into the pay-TV platform, reducing friction for avid sports fans inclined to wager as they stream live sports. A demonstration video played during a videoconference with analysts.
Rivals like YouTube TV, Hulu + Live TV and Dish Network’s Sling all have more than twice the number of subscribers as Fubo, but Fubo has focused on over-delivering on 4K and certain sports. It parted ways with WarnerMedia last year, though, which stranded NBA fans over spring and summer. Like many internet pay-TV operators, it has reached an impasse with Sinclair’s Bally regional sports networks. As programming costs continue to rise, it gets harder to keep a lid on costs for customers.
Despite those challenging economics, Gandler said FuboTV is positioned to take advantage of larger trends in streaming. “There will be a major shift back to aggregation and bundling,” he predicted, “as the proliferation of SVOD services becomes increasingly burdensome and costly.”
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