FuboTV Reports Lower Churn as Q1 Revenue Jumps 135%
Sports-centric virtual MVPD fuboTV reported 43,000 sequential net subscriber additions in Q1 to 590,430 vs. a loss of 28,000 in largely pre-COVID-19 pandemic Q1 2020, said the company shareholder letter Tuesday. Revenue rose 135% year on year to $119.7 million in the quarter ended March 31. Advertising revenue jumped 206% year on year to $12.6 million; monthly average revenue per user (ARPU) grew 28% to $69.09. Net loss narrowed to $40.7 million from $66.6 million in the year-ago quarter, it said.
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On a Tuesday earnings call, CEO David Gandler called the quarter an “inflection point” for fuboTV, as the first time it saw sequential subscriber and revenue growth in a March quarter. The company raised full-year 2021 revenue guidance to $520 million-$530 million, a 101% bump, vs. prior guidance of 78% growth. It expects to end the year with at least 282,000 net additions vs. 232,000 net adds last year. Q2 guidance is for $120 million-$122 million with 600,000-605,000 subscribers.
Fubo bought sports betting company Vigtory in Q1 for $37.2 million, which includes “merger consideration and equity compensation vesting over future periods.” It’s on track to launch free-to-play gaming in Q3 and sports betting and interactive gaming through Fubo Sportsbook in Q4, subject to regulatory approvals. Fubo will begin beta tests for predictive, free-to-play gaming in coming weeks, Gandler said.
The vMVPD has had eight consecutive quarters of decreasing churn, Gandler said. He credited personalization features, better onboarding and improved targeting of “higher quality subscribers” by the marketing team. Monthly active users watched 129 hours per month on average, up 8% year over year, said the company, “demonstrating strong engagement” with sports, news and entertainment content.
Gandler said the NFL’s recent carriage deals with the major broadcasters, and by extension, vMVPDs, is good for the future of the vMVPD bundle. Increasing SVOD choices mean the streaming experience is becoming more “costly and fractured.” Consumers who care about sports and live TV will want aggregation and bundling in a “seamless, curated” experience, he said. Fubo believes the bundle “will undergo a revival, and we’ll see a major shift back to aggregation and bundling as individual services begin to raise prices" -- and it becomes more burdensome for consumers to manage numerous services.
FuboTV is taking market share from “trillion-dollar companies,” said Gandler, citing Amazon, Disney’s Hulu and Google. Its share of the vMVPD market has grown to 5% from below 3% in 2019. Gaming will be a differentiator, he said, saying 30% of fuboTV subscribers who have watched at least two hours of sports on the platform are willing to participate in its free-to-play offering. Twenty-two percent of the subscriber base is willing to place bets on the platform, he said.
FuboTV’s comprehensive entertainment and sports offering is a “real differentiator,” Wedbush analyst Michael Pachter wrote investors Wednesday, saying the vMVPD’s focus on the sports viewer/bettor will likely accelerate subscriber growth. “As the company learns more about the viewing habits of its audience, it should be able to exploit its data set to drive ad ARPU even higher,” Pachter said, saying he expects the company to break even by the end of 2023 or early 2024. Shares closed 9.7% higher Wednesday at $19.38.