fuboTV Inc. Q2 FY2026 earnings call

• Delivered strongest second quarter on adjusted EBITDA basis, with trailing 12-month pro forma adjusted EBITDA exceeding $100 million, reinforcing confidence in $300 million adjusted EBITDA by 2028. - Record revenue driven by expansion of Fubo and Hulu Plus Live TV offerings, content differentiation, and product innovations. - Migration of advertising business to Disney ad server began in February, with fill rates and CPMs showing healthy increases. - Business combination expands strategic position, allowing aggregation and delivery of content packages at different price points to serve distinct consumer segments. - Executing on strategies like offering Spanish-speaking customers clear options, having Fubo Sports Service alongside core bundle, and comprehensive entertainment offering through Hulu Live. - Successfully navigated loss of NBCU, with minimal incremental churn. - Unlocking synergies post-business combination, including aggregated storefront offering full Fubo and Hulu plus live TV content portfolios, integration with ESPN for new acquisition channel, and plan to integrate Fubo Sports service into ESPN's e-commerce flow in first half of 2027. - Intend to launch first AI conversational feature in Fubo app this fall, starting with sports, to drive deeper engagement.

In North America, revenue for the second quarter was $1.566 billion compared to $1.125 billion in the prior year period. Pro forma revenue in the prior year period was $1.556 billion representing 1% growth year over year. User base ended the quarter with 5.7 million total subscribers in North America compared to 5.9 million in the prior year period. Net loss for the second quarter was $6.2 million compared to a reported net loss of $40.9 million in the prior year period. Pro forma net income in the prior year period was $120.6 million. Adjusted EBITDA was $37.7 million in the second quarter compared to pro forma adjusted EBITDA of $1.4 million in the prior year period. FUBO ended the quarter with $244 million in cash, cash equivalents, and restricted cash on hand.

• For fiscal 2026, continue to expect pro forma adjusted EBITDA of $80 to $100 million. - Aim for at least $300 million in adjusted EBITDA by 2028. - Expect positive free cash flow in fiscal 2027 and 2028 under current operating plan. - Contractual step up in wholesale fee from 95% in 2026 to 99% by 2028 provides visibility into earnings profile and adjusted EBITDA expansion. - Ad monetization improvement tracking in line to better.

Q: There's a lot to talk about, but I want to focus on advertising. With Fubo's inventory having moved over to Disney's ad platform, curious about early indicators on CPMs, fill rates, etc., and how much of medium-term EBITDA plan assumes ad monetization improvement vs stabilization.

A: John says short answer is yes, seen improvement in CPMs and fill rate since migration started less than 90 days ago, migration expected to be fully completed by end of year, FUBO Ad ARPU expected to converge with Hulu Lives, largest component of adjusted EBITDA improvement from contractual increase in wholesale fee but ad monetization improvement tracking in line to better and quarter came in ahead of expectations.

Q: Given combination with Hulu Live TV expanding subscriber base and content cost leverage, frame timing of scale benefit in content cost structure.

A: John says historically haven't spoken to timing of specific deals, had couple of small renewals since business combination close, content cost scale benefit has longer tail as typically have about one renewal per year.

Q: On fiscal 26 adjusted EBITDA guidance, $79 million in first half suggesting step down in second half, reconcile and address driving deceleration.

A: David says business is sports-first table replacement service with seasonality, typically 40 - 50% of gross ads in last fiscal quarter, expect to spend more in marketing and with initiatives, also had $6.5 million above-the-line tax-related benefit during quarter, plan is to focus on $300 million of EBITDA in 2028 and work with Disney on initiatives.

Q: Unpack organic growth trends, especially subscriber trends, split between Hulu Live and Fubo, and ARPU.

A: David says don't separate sub count going forward, focused on combined entity, utilizing storefront to drive sales for Hulu Live, array of products offers opportunity for growth across packages, lower pricing yields greater subscriber growth and top of funnel conversions, focused on enhancing product capabilities to drive engagement, seasonality of Fubo Sports Service and Hulu Live similar in sequential subscriber change from 1Q to 2Q over past two years.

Q: Broader view on maintaining advantage in local sports as ecosystem evolves and plans to push Hulu Live into RSN space.

A: David says done well navigating industry changes, added local baseball teams to offset losses from NBCU drop, focus on football season next, World Cup and then football season after, will evaluate situation as things change.

Q: Provide more color on Olympics, Super Bowl, NBC Universal retention experience and technological work remaining on ad integration.

A: David says done well on retention, navigated NBC loss in dominant months with good retention and growth, reactivations strong, John says on tech front, fair amount of tech work done and largely complete.

Q: On World Cup, level of subscription uplift in guidance and participation outside subscriptions in advertising.

A: John says think there may be incremental opportunity on Fubo Sports due to lower price point, previous World Cups haven't majorly impacted ad revenue, this time have several sponsorships as selling hubs and friendlier time zone could bring more advertising opportunity, haven't shared subscriber outlook specific in guidance but marketing team expects uplift in trials.

Q: Outline capital allocation priorities with pre-cash flow expectations for 2027 or sooner.

A: John says investing in product and tech, seeing fruits in retention, churn, content, marketing to drive customer delight and growth, tracking in line to slightly better relative to expectations, no leverage target, expect north of $200 million of cash on balance sheet at end of fiscal year with manageable net debt level.

Q: Talk about how AI is affecting costs and revenue, and international subs and strategy.

A: David says post business combination focused on domestic growth, on AI, about 35% of code completed with AI, 200 employees use ChatGPT or Cloud Code, external facing, start with AI assistant in Fubo app this fall, looking to compress discovery to purchase journey.