Yahoo Finance FuboTV Inc (FUBO) Q1 2024 Earnings Call Transcript Highlights: Strong Revenue Growth and ...
Total Revenue: $394 million, up 24% year over year.
North American Ad Revenue: $27.2 million, increased by 21% year over year.
Adjusted EBITDA Margin: Improved to -10%, a 796 basis point increase.
Free Cash Flow: Improved for the fifth consecutive quarter.
Subscriber Acquisition Costs to Average Revenue Per User Ratio: Below target range of 1 to 1.5 times.
Churn Rate: Lowest for any March on record.
Subscriber Growth: Paid subscribers at 1,511,000, up 18% year over year.
Content Costs: Approximately 90% of total revenue.
Net Loss: $56.3 million, a 32% reduction year over year.
Adjusted EPS Loss: Improved to -$0.11 from -$0.27 in Q1 2023.
Release Date: May 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
FuboTV Inc (NYSE:FUBO) reported a strong start to 2024 with total revenue of $394 million, up 24% year over year, and paid subscribers at 1,511,000, up 18% year over year.
North American ad revenue increased by 21% year over year to $27.2 million, demonstrating an accelerating business.
Adjusted EBITDA margin reached minus 10%, a significant improvement of 796 basis points or an increase of approximately $18 million in absolute dollars compared to the first quarter of 2023.
FuboTV Inc (NYSE:FUBO) achieved its lowest subscriber acquisition costs to average revenue per user ratio, demonstrating increased efficiency in customer acquisition.
March 2024 represented the lowest churn rate for any March on record for the company, indicating improved customer retention.
Negative Points
FuboTV Inc (NYSE:FUBO) spent approximately 90% of its total revenue on content, with exorbitant fees imposed by programmers well above the market average.
The company is engaged in litigation against major media companies alleging anti-competitive practices, which poses risks and uncertainties.
The pending launch of a joint venture by competitors is seen as an existential challenge, potentially impacting FuboTV Inc (NYSE:FUBO)'s market position.
FuboTV Inc (NYSE:FUBO) lost the Discovery Networks due to unsuccessful contract negotiations, impacting content availability.
Despite improvements, the company still reported a net loss of $56.3 million for the quarter, although this is a 32% year-over-year reduction.
Q & A Highlights
Q: Could you first start on churn lower and SAC customer acquisition costs lower? Could you talk about what's driving that? A: John Janedis, CFO of FuboTV, highlighted the effective marketing strategies and timing adjustments as key factors driving the improvements in churn and SAC. David Gandler, CEO, added that overlapping sports and entertainment programming and the unexpected positive impact of Women's College Basketball also contributed to these improvements.
Q: Advertising was very strong in the quarter. Could you relate that to a better sales force order, programmatic improvements, and how do you see these trends continuing? A: David Gandler explained that strategic investments in monetization capabilities and new ad formats have driven the advertising success. He emphasized the focus on high-quality, engaging content and partnerships for better ad targeting. John Janedis mentioned the positive impact of the new sales leadership and the visibility in the advertising trajectory.
Q: Regarding the North America subs guide for the year, how much of the current license negotiation headwind are you factoring in, especially with Discovery coming offline? A: John Janedis acknowledged that the guidance includes the impact of Discovery content going offline, although specific details of content renewals were not disclosed.
Q: Given the strong customer acquisition efficiency and the tailwind in advertising, would you consider leaning more into your target range of ag sector? A: David Gandler responded that while the efficient acquisition costs would normally encourage more investment, the focus remains on achieving profitability by 2025, hence maintaining a disciplined approach.
Q: Can you discuss the significant outflows of cash in the first quarter? Was it related to investments in new ad units or the fubo free tier? A: John Janedis clarified that the cash flow is highly seasonal, with Q1 typically showing the highest cash usage. He reassured that the cash usage was better than internal forecasts and expected to improve throughout the year.
Q: Could you give your thoughts on the free tier launch later this year and the contribution of FastChannels to the ad business? A: David Gandler discussed the positive performance of FAST channels behind the paywall and the potential of the free tier to engage consumers more broadly across the demand curve. John Janedis added that FAST channels are becoming a significant profit driver for the company.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
