FuboTV Sees 20% Revenue Growth But $54.7 Million Net Loss And Global Subscriber Drop Raise Concerns
Sports-focused live TV streaming service FuboTV Inc. (NYSE: FUBO) reported strong third-quarter revenue growth, marked by improvements in core financial metrics alongside a substantial reduction in net losses.
Total revenue reached $386.2 million in Q3 2024, a 20% increase from the $320.9 million reported in the third quarter of 2023. This solid year-over-year performance was bolstered largely by growth in the North American segment, which accounted for $377 million of total revenue—an impressive 21% rise from $311.8 million in Q3 2023 and a 4.3% increase from $361.4 million in Q2 2024.
North American revenue growth has been driven by gains in average revenue per user (ARPU) and a steady increase in subscribers, reflecting strong consumer demand and Fubo’s ability to retain users in a competitive streaming environment. However, the sequential increase from last quarter suggests slower quarterly momentum, hinting that sustained revenue growth may be challenging without accelerating subscriber acquisition or ARPU increases.
Internationally, Fubo faced headwinds, with the ROW (Rest of World) segment generating $8.9 million in revenue, a modest 6% increase from $8.4 million in Q3 2023 but down sharply from the $12.6 million reported in Q2 2024. This marked decline in sequential revenue underscores ongoing retention issues and limited growth prospects in Fubo’s international operations, which include its French subsidiary Molotov.
The ROW segment’s performance, while slightly improved from a year ago, reveals substantial challenges in maintaining user engagement and subscriber numbers abroad, placing more pressure on North American operations to sustain Fubo’s revenue base.
North American subscriber growth continued its upward trend, reaching 1.613 million subscribers by the end of Q3 2024. This represents a 9% year-over-year increase from 1.482 million subscribers in Q3 2023 and a marginal quarterly rise from 1.6 million in Q2 2024.
Average revenue per user also presented a mixed outlook. North American ARPU rose by 2.5% year-over-year to $85.64 in Q3 2024, up from $83.51 in the same period in 2023, marking a positive trend for Fubo’s monetization strategy. Sequentially, however, ARPU increased only slightly from $85.10 in Q2 2024, signaling that future ARPU growth may plateau without additional pricing strategies or expanded content offerings.
In the ROW market, ARPU rose 7.5% year-over-year to $7.50, though this represents a steep decline from the $9.41 recorded in Q2 2024, reflecting the volatile revenue potential and user value in international markets.
In terms of profitability, Fubo made headway in reducing its net loss for Q3 2024, reporting a loss of $54.7 million compared to $84.4 million in Q3 2023, reflecting a $29.7 million reduction year-over-year. The quarterly net loss also narrowed from the $65.2 million reported in Q2 2024. On a per-share basis, Fubo’s loss narrowed to $0.17, compared to a loss of $0.29 per share in Q3 2023.
Adjusted EBITDA improved considerably, with a loss of $27.6 million compared to a $61.4 million loss in Q3 2023 and Q2 2024’s $36.8 million loss. While the adjusted EBITDA margin improved from -19.1% in Q3 2023 to -7.1% this quarter, the metric still falls in negative territory, highlighting that Fubo has yet to achieve profitability at the operating level.
Executive Chairman Edgar Bronfman Jr. expressed confidence in the company’s path to profitability, commenting, “Fubo’s third quarter of 2024 was notable for ongoing subscriber and revenue growth alongside improvements in key profitability metrics.”
Fubo achieved noteworthy progress in cash flow management, generating $2.4 million in cash from operating activities in Q3 2024, a marked improvement from a cash outflow of $24.9 million in Q3 2023. This positive shift is critical as Fubo targets cash-flow positivity by 2025, suggesting that its strategies to enhance operational efficiencies and reduce cash burn are gaining traction.
Free cash flow also improved, reducing to an outflow of just $1.1 million, compared to $32.4 million in Q3 2023 and $6.7 million in Q2 2024. Fubo ended the quarter with a cash position of $152.3 million, offering a solid liquidity buffer, though the limited growth in revenue and cash flow hints that further capital or debt might be necessary to maintain this trajectory if profitability remains elusive.
For Q4 2024, Fubo projects North American revenue of $426 million to $446 million, implying a year-over-year growth rate of around 9% at the midpoint. This conservative growth forecast suggests that while Fubo expects continued revenue increases, it acknowledges potential challenges in achieving the rapid gains seen in previous quarters.
North American subscriber estimates are similarly modest, with projections of 1.665 million to 1.705 million subscribers by year-end, representing a slight increase from Q3 2024 levels and a mere 4% growth year-over-year at the midpoint.
Internationally, Fubo’s guidance reflects subdued expectations, with anticipated revenue between $8 million and $9 million in Q4 2024, flat year-over-year, and a projected 14% decline in subscribers to between 345,000 and 355,000. T
Adding to its operational challenges, Fubo is embroiled in legal actions, filing an antitrust lawsuit against Disney (NYSE: DIS), Fox (NASDAQ: FOXA), and Warner Bros. Discovery (NASDAQ: WBD), alleging anti-competitive practices in the sports streaming market. The lawsuit contends that these companies’ sports streaming joint venture infringes on market fairness, limiting Fubo’s ability to provide a broad, user-driven sports streaming experience. Recently, Fubo scored a legal victory with a preliminary injunction against the venture, which could significantly impact future industry dynamics.
Bronfman views these legal maneuvers as critical for fostering a fair market, noting, “We are gratified by recent wins in our ongoing fight for a fair and competitive marketplace.”
FuboTV last traded at $1.74 on the NYSE.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
