Troubled Fubo stock, which has been in freefall since late 2021, soared 35% in early trade on Friday after the streaming TV provider reported strong first-quarter results.
The company reported revenue of $324.4 million and a loss of 37 cents a share. Both beat the consensus of Wall Street analysts, with revenue up 34% from the year-ago period and losses narrowing by more than half from 81 cents. Subscriptions grew 37% to nearly 1.3 million.
In their quarterly letter to shareholders, CEO David Gandler and Executive Chairman Edgar Bronfman Jr. said the company had raised its full-year guidance and now also expects to be cash flow positive through 2025. The number of subscribers should be between 1.55 million and 1.57 million and a revenue of $1.235-1.265 billion. The company ended the first quarter with 379,000 subscribers outside the US, largely due to its 2022 acquisition of top French operator Molotov SAS.
“While macroeconomic uncertainty persists, the second quarter has started well, with sustained customer retention and a sequential acceleration in advertising,” the letter said.
Ad revenue was fairly flat in the quarter, Fubo said, but churn was lower than expected and average revenue per user rose. The improvement in certain metrics was due to the company’s “sports-first” approach to streaming TV bundling, including the inclusion of regional sports networks in its offering. Most RSNs have lost promotion on competing services such as YouTube TV, Hulu + Live TV and Sling after programmers’ increasing fee demands became unsustainable.
Trading volume in Fubo shares on Friday morning was more than double normal. After surging above $40 in 2020 and continuing momentum in 2021 amid optimism about companies positioned to benefit from the shift to streaming, Fubo stock fell to the back to earth. Even after today’s rebound, it was still trading at just $1.54, giving the company a market value of around $440 million.