Fubo’s Battered Stock Rockets After Q1 Earnings Beat, Improved Outlook

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Fubo’s beleaguered stock, which has been in free fall since the end of 2021, shot up 35% in early trading Friday after the streaming TV provider reported strong results for the first quarter.…

The company posted revenue of $324.4 million and a loss of 37 cents a share. Both exceeded Wall Street analysts’ consensus, with revenue increasing 34% from the year-ago period and losses cut by more than half from 81 cents. Subscriptions increased 37% to almost 1.3 million.

In its quarterly letter to shareholders, CEO David Gandler and Executive Chairman Edgar Bronfman Jr. said the company it had raised its full-year guidance and also now expects to be cash-flow positive by 2025. Subscriber levels should be between 1.55 million to 1.57 million and revenue at $1.235 billion to $1.265 billion. The company ended the first quarter with 379,000 subscribers outside of the U.S., mostly as a result of acquiring top French provider Molotov SAS in 2022.

“While the macro uncertainty continues, the second quarter has started well, with customer engagement ongoing and advertising accelerating sequentially,” the letter said. Ad revenue was fairly flat in the quarter, Fubo said, but churn was lower than expected and average revenue per user increased. The improvement in certain metrics was due to the company’s “sports-first” approach to streaming TV bundling, including its inclusion of regional sports networks in its offering. Most RSNs have lost carriage on rival services like YouTube TV, Hulu + Live TV and Sling after rising fee demands from programmers became unsustainable.

The volume of trading of Fubo shares Friday morning was more than twice its normal level. After surging past $40 in 2020 and continuing the momentum in 2021 amid optimism about companies positioned to benefit from the shift to streaming, Fubo stock fell back to earth. Even after today’s upswing, it was still trading at just $1.54, giving the company a market value of around $440 million.

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