Cord Cutting Helps FuboTV -- Not Enough to Boost Stock Post-Q4
FuboTV executives say the over-the-top content provider should benefit from trends like cord cutting and consumers never signing up for pay TV in the first place. They said Tuesday that the company increased 2021 financial forecasts. There was a caution on Q1. The stock closed down 19% Wednesday to $34.14.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Chief Financial Officer Simone Nardi told analysts about what he called the "seasonality" of the current quarter. "Historically, Q1 has been softer than Q4" on revenue, the streaming company noted. The Q1 forecast of $101 million-$103 million would be 98%-102% year-over-year growth and a sequential 2%-4% decline. The guidance of 520,000-530,000 subscribers would be an 81%-84% year-over-year gain and a 3%-5% sequential decline. For 2021, it expects revenue to rise more than it expected, to $460 million-$470 million.
CEO David Gandler noted 75 million U.S. households have an MVPD service, and January Parks Associates data says 43% of cable TV households are likely to switch to a virtual MVPD streaming product in the next 12 months. “The market is very large," he said. "We think that we're going to be very successful in this market, particularly as we combine some of these other capabilities that we've talked about today.”
Fubo “sits firmly at the intersection of three megatrends,” Gandler told investors, citing the decline of traditional TV, the shift of advertising to connected devices, and online sports wagering. It expanded to Microsoft Xbox and Samsung smart TVs, he noted. On whether fubo plans to license its wagering technology to an MVPD or vMVPD, Gandler told a questioner it's focused now on its direct-to-consumer business, but he wouldn’t close the door to future pay-TV potential opportunities.
Wedbush expects cord cutting and cord shaving to continue for the foreseeable future, analyst Michael Pachter wrote investors. The market is 30 million now and “likely growing by 3 million per year for the next 10 years," he predicted Wednesday.
On ViacomCBS adding more live sports content to Pluto TV subscriptions, Gandler said fubo “does not compete with $4 services” or $10 services. “If you're a CBS customer and you really love CBS and you don't watch anything else, I would actually urge you to go pick up your CBS Paramount+ subscription because it is phenomenal content. But if you're looking for a more robust package that includes all the sports that you want with great content from other media companies, then you're probably going to be in the market for a product like ours.”
Fubo Q4 revenue grew 98% year on year to $105.1 million. Content hours streamed, including paid and trial, rose 66% to 205.9 million. Monthly active users averaged 127 viewing hours monthly, up 3%.