Thank you for standing by. At this time, I would like to welcome everyone to today's fuboTV Inc. fourth quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to withdraw your question, press star one again. I'd now like to turn the call over to Ameet Padte, Senior Vice President of FP&A, Corporate Development, and Investor Relations. Ameet, please go ahead.

Thank you for joining us to discuss fuboTV Inc.'s fourth quarter and full year 2024 results. With me today is David Gandler, co-founder and CEO of fuboTV Inc., and John Janedis, CFO of fuboTV Inc. Full details of our results and additional management commentary are available in our earnings release and letter to shareholders, which can be found on the investor relations section of our website at ir.fubo.tv. Before we begin, let me quickly review the format of today's call. David Gandler will start with some brief remarks on the quarter and our business, and John Janedis will cover the financials and guidance. Then we will turn the call over to the analysts for Q&A. I would like to remind everyone that the following discussion may contain forward-looking statements within the meaning of the federal securities laws, including but not limited to statements regarding our financial condition, anticipated financial performance, business strategy and plans, including our pending business combination, industry and consumer trends, and expectations regarding growth and profitability. These forward-looking statements are subject to certain risks, uncertainties, and assumptions. Important factors that could cause actual results to differ materially from forward-looking statements are discussed in our SEC filings. Except as otherwise noted, the results and guidance we are presenting today are on a continuing operations basis, excluding the historical results of our former gaming segment, which are accounted for as discontinued operations. During the call, we may also refer to certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are also available in our Q4 2024 earnings shareholder letter, which is available on our website at ir.fubo.tv. Please note as well that during Q&A, the company will not provide any information related to the business combination with Hulu + Live TV and ongoing regulatory matters beyond what we have already shared. With that, I will turn the call over to David Gandler.

Thank you, Ameet, and good morning, everyone. Appreciate you joining us today to discuss fuboTV Inc.'s fourth quarter and full year 2024 results. 2024 was a record year for the company. We delivered double-digit revenue growth in North America, closing the year just shy of $1.6 billion in total revenue, up 19% year over year. Paid subscribers in the region hit 1,676,000, up 4% year over year. Both full-year metrics were all-time highs and in line with our guidance. In the fourth quarter, total revenue in North America was approximately $434 million, up 8% year over year, also in line with guidance. We delivered a record $87.90 of average revenue per user in the fourth quarter, marking an expansion of 1.4% year over year. As we continue to drive towards our 2025 profitability goal, we improved full-year adjusted EBITDA and free cash flow by over $100 million for the second consecutive year. These results reflect our team's focused execution amidst an industry in disruption. Continuing with our strong operating performance into the new year, we have also fostered a more competitive environment, one that benefits the consumer. In early January, we announced a definitive agreement with the Walt Disney Company to combine Hulu + Live TV. Under the combination, both fuboTV Inc. and Hulu + Live TV will operate as separate and distinct consumer brands under fuboTV Inc., which will continue to trade on the NYSE. fuboTV Inc.'s existing management team will continue to lead the company, and I will remain CEO. This combination will make fuboTV Inc. the sixth largest player in the pay TV space by subscribers, behind larger players like Comcast, Charter, DIRECTV, YouTube TV, and Dish Sling. As a result, we anticipate the ability to offer more competitive offerings at more competitive price points. We are…

Thank you, David, and good morning, everyone. Our fourth quarter and full year 2024 results highlight fuboTV Inc.'s continued execution of our long-term strategy, maximizing our aggregated content platform amid a fluid media landscape and evolving consumer trends. This progress is reflected across just about every financial and operational metric, validating our initiatives and positioning fuboTV Inc. for success in a dynamic and evolving operating landscape. Taking a look at the results for the quarter, we continued to see healthy top-line growth—North America revenue growth of 8% and rest of world revenue growth of 12%. The primary drivers behind this continued growth in North America have been our ability to attract, retain, and monetize subscribers. To that end, I am pleased to report North America subscriber growth of 4%, ending the quarter with 1,676,000 subscribers, and the rest of world subscribers of 362,000. With respect to monetization, we attained all-time high ARPU in both markets, with North America ARPU of $87.90 and the rest of world ARPU of $8.50. From an advertising standpoint, we delivered global ad revenue of $34.4 million, an 11.8% decline year over year. This was primarily due to a decline in ad-insertable content as a result of our content portfolio adjustments in 2024. Taking a look at the operational side of the business, our laser focus on improving efficiency while expanding top-line growth is reflected in our continued progress in our profitability metrics. In Q4, net loss improved to $40.9 million compared to a net loss of $71 million in Q4 2023. Adjusted EBITDA loss was $8.7 million, comparing favorably to a loss of $50.1 million in the fourth quarter of 2023. Adjusted EPS loss was $0.02, an improvement compared to an adjusted EPS loss of $0.18 in Q4 2023. Turning to cash, I am excited…

Thank you so much. And at this time, I would like to remind everyone, in order to ask a question, please press star one on your telephone keypad. And in the interest of time, we ask that you please limit yourself to one primary question and one follow-up. Now we will pause just a moment to compile the Q&A roster. Okay. Looks like our first question today comes from the line of David Joyce with Seaport Research Partners. David, please go ahead.

Thank you. With your pending Disney relationship and with Disney's ESPN possibly opting out of Major League Baseball after next year, what is the opportunity for fuboTV Inc. going forward with those rights? Is that something that could fit into your strategy somehow? And related to that, how would you manage any type of programming conflicts between ESPN flagship or the Disney offerings when they're still going to be partners with you on the renewal MVPDs? Thank you.

Yeah, thank you. Why don't I take this one, John? So, obviously, we attempt to partner with all of the programmers out in the market, as well as the leagues. So we have a relationship with Major League Baseball, but I think the primary goal is to continue distributing live channels. Should Major League Baseball decide to go in that direction, as it did managing some of the local sports teams such as the Padres, we will certainly look to figure out a way to work together. And then as for the second part of your question, yeah, we don't really see any issues at all with Disney. We're in the ordinary course. Yeah. We have a relationship. We have a licensing distribution deal with them, and that deal is over multiple years, and we'll continue to distribute Disney channels for the contract.

Alright. Thank you.

Thanks, David. And our next question comes from the line of Patrick Scholl with Barrington Research. Patrick, please go ahead.

Good morning. I was wondering if you could talk about, like, maybe the relative pricing and content costs for, I guess, the core fuboTV Inc. service and the broadcast and sports service. Like, I just with a narrower offering, the relative importance of those networks and the potential for, I guess, the higher cost assigned there.

Hey, Pat. It's John. Maybe I'll start. On the pricing, like, I would say it's too soon to get specific, but I think it's fair to say that the difference will be significant on a percentage basis. And as we look to what potential subscribers are looking for, I think we have another opportunity to reach them along the demand curve. So I do think it should widen the funnel for us. Is there a second part? I may miss the second part of the question. Was that on programming cost or Yeah. Programming costs. Yeah. Look. Under auto programming costs, like, they're certainly gonna be lower. But I would just say give us another quarter or two to give you more context around that as we kinda get deeper into the offering.

Okay. And then just on the subscriber guidance that you provided, is it that are the sub losses year over year mostly within the fuboTV Inc. Latino offering, or is that more broad-based in terms of the challenges results of the programming shift.

Yeah. Let me unpack that for you a bit. And so for the first quarter, subscribers on a year-over-year basis, we would have expected to grow subscribers. When adjusting for the impact of Univision. To give you a ballpark figure, growth could be in, say, the mid-single digits, similar to, I'd say, it might be better than the 4% year-over-year growth that reported in the fourth quarter. And let me also just take a step back and unpack it a bit more. Because as you know, there is seasonality to our business, meaning we typically see a decline in subs on a sequential basis in the first half of the year and then growth in the second half of the year. And so, again, I think we feel pretty good about the trajectory for Q1, actually, in division. In terms of the overall year, I would tell you that we expect growth in subscribers with over value division.

Okay. Thank you.

Alright. Thanks, Pat. And our next question comes from the line of Laura Martin with Needham. Laura, please go ahead.

Good morning. The first one is on these, the Z Family is sort of an interesting sort of pivot away from sports for you guys. Do you see that as mostly an upsell opportunity for existing subs, or do you think that could be a whole new TAM for you? And if so, how big could that be as an onboarding process to new subscribers that maybe would have been additive to the sports-focused subscribers.

Hi, Laura. This is David. Look, I wouldn't say we're moving away from sports. Not at all. You know, I think we announced last year the addition of cricket to our sports offering. And so this was a natural extension. As John just stated, our goal is really to attract customers along the demand curve. This expands our funnel and also fits very well with our super aggregation strategy. So we want to provide slimmer bundles of programming. And the way we've been sort of developing our product, we think that we're gonna have some very interesting capabilities around upselling consumers once we get them in. And I think over the years, we've built an excellent trap on the platform where we've attracted customers through sports and been able to drive monetization through entertainment. This is similar in strategy. So we're excited to sort of test that out. Potentially, there could be lower acquisition costs, better retention, and, overall, we're very happy with where we are today. The business is significantly healthier than it's ever been.

And, Laura, I would just add one thing on that is no, sorry, Laura. We're a weekend, and I would say we're happy with what we're seeing in terms of that package.

Okay. And is it different subscribers or an upsell to the existing subscribers.

I think it's too soon to tell. I think it would be largely an upsell or a different set of subscribers.

Okay. And then can we drill down on advertising a little bit? Really, and you had these intriguing words in the press release talking about you expanded your suite of ad formats with dynamic and could you talk about what's going on with advertising and how you see advertising unfolding in 2025? Is there CPM pressure in your world? Down with CPM pressure. And could you just sort of drill down into the app, what's going on with the advertising piece in the fourth quarter and into the first quarter here. That's what I thought.

Yeah. Yeah. Sure, Laura. I'll start. Look, on the fourth quarter, I would say results were impacted by both the drop of Discovery and Univision. And so I'd say adjusting for those, we performed at, say, likely more so in line with the broader marketplace. But in terms of what we saw during the quarter, I would say our direct business was up double digits as you'd expect led by the sports vertical. On the pricing front, I would say that sports remain healthy. On this pricing and sell out, but we are seeing some relative weakness or softness in entertainment as it relates to CPMs. I would say anecdotally, we did see some uncertainty in the market post the election. I said that continued into the first quarter. Heading into March, I see our team feels like the tone has improved somewhat. So from a growth perspective, I'd say March should look better than February. And maybe at least directionally, although it's early. We're starting to see some good early interest as it relates to the 2025 upfront.

Thank you.

Thank you, Laura. You're welcome. And our next question comes from the line of Clark Lampen with BTIG. Clark, please go ahead.

Thanks. Good morning. I just have one. John, you were talking about mid-single-digit growth for Q1 and Q4 not being very different. I know there were some headwinds from Univision and Discovery throughout the year. But if we sort of pull back and take a bigger pay view of your growth relative to industry. We've seen deceleration over the last two years in both. And I'm curious, one, if you and David could sort of provide some thoughts around the slowdown, what's happening? Are we hitting, perhaps a dead rock level of sports enthusiasts and traditional cable? Or maybe more importantly, what are the avenues for sort of reaccelerate the migration rate as we go forward? Do we need price and package adjustments? And if so, how do you guys think about being able to offer something sort of different and better later in the year? Thanks a lot.

Yeah. Sorry. There was a lot in that question, so let me see if I can break that down a little bit. So, in terms of the deceleration, I think the United States is a relatively mature market. You have about 70 million households between traditional pay TV and virtual, of which, I would say the traditional side probably represents around 50 million or so. So for us, we still think that there's pretty significant growth. The streaming side, the SVOD side of the business, I think, is also a which I think bodes well for fuboTV Inc. and the virtual MVPD space in general. There's still a strong secular tailwind of consumers moving from traditional cable to streaming. But what I think has changed dramatically over the last 24 months is the number of ad-supported services coming out of the likes of Netflix and other SVOD services. So what I think has happened is over the last four or five years, seen sort of an escalation of about 7% growth or I should say cost or pricing from these SVOD services, which is almost in line with the type of escalators that we've seen over the last five or six years in the virtual MVPD space. But our product is becoming more competitive. There's fewer programming. TV shows or I think they're more sparse on SVOD services. Our programming, we continue to maintain about 100 or so hours of viewership. So I think it's just a more competitive product and, you know, we've done an excellent job getting people to convert. You may have also noticed we've reduced our marketing spend as a percentage of revenue over the last couple of years. And so we've really been focused on ensuring that we have a healthy business. And fourth-quarter cash flow clearly highlights the fact that we are still on track to deliver 2025, as we said, back then, but I think it's a I think people are probably having a much harder time now deciding whether they should go to an SVOD service or, you know, look at a Pay TV platform or streaming TV platform like fuboTV Inc. Ultimately, when you aggregate the cost of three or four of these services without ad products, you're getting into the sort of $100 price point. So, I think over time, we're gonna be a little bit more competitive with those services. And as I said in my opening comments, you know, this an aggregated streaming service probably provides the best value for consumers, it provides the best value for media companies, and, you know, it allows us to maintain lower churn, it allows media companies to reduce the amount of marketing they're spending, and allows everybody to take advantage of sparse hits from each of these different media providers.

And, Clark, I would just add one thing on top of what David said. At least on the packaging side, we actually rolled out two new packages in the fourth quarter, both lower priced and very pleased with what we've seen over the first two or three months of having them in the marketplace.

Thank you. You guys had all of that, you know, sort of eight-part question that I posed before. But just to make sure that I'm clear on sort of what you guys think is the sort of differentiator, what I guess is resonating with the market, it's filling gaps essentially in sort of important sports and, as you guys put it, broadcast programming at a better price point, is that am I oversimplifying, or do I have that right, I guess, in how you guys think about the go-to-market?

Yeah. I would say that's about 80%. I think the other 20% probably lies in the fact that we continue to improve our product. We continue to add additional features. Frankly, some features one feature in particular has really taken off similar. It might actually have the same impact as multi-view had on the industry, which is our team channels capability, which is our in-house developed AI feature. That seems to have really picked up traction in the hundreds of thousands of users relatively quickly. So, you know, we think we're gonna continue to develop our product and, obviously, as you said, fill in the gaps, you know, with more flexibility, better options, and, you know, as we renegotiate our deals and the market becomes accustomed to, you know, ensuring that virtual MVPD space can drive value for them, but, you know, we think we'll be able to create more value for consumers over time.

Alright.

Thanks, Clark. And our next question comes from the line of Nikhil Aluru with JPMorgan. Nikhil, go ahead.

Hey, guys. Good morning. How's it going? Thanks for taking the question. So I believe this should be the first kind of seasonal roll-off quarter where you have the fuboTV Inc. free tier active. So can you discuss any early insights there on how that's worked as a retention tool? And longer term, if you have any update to your thinking about if you would move the free tier in front of the paywall at some point.

Yeah. I think the one major point that we've seen through the free tier is the improved reactivation rates. Frankly, I think if you exclude the December COVID month, I think December was our best retention month in the history of the company. So, you know, we're continuing to work on the different tiers that we have and, you know, obviously, we're starting to feel pretty good about where we are. Payback periods are coming down. Retention is improving, which, by the way, not an easy task when you know, you remove a significant number of channels from the platform in a very short period of time. So again, we're very excited about the future and, you know, we think we're well-positioned for growth when we're ready. But as John said, it's really about sustainable growth going forward.

Understood. Thanks. And one more if I could, just unpacking the Q1 guide. You talked about the Univision impact. Was there any kind of material benefit maybe on a subscriber acquisition front related to the MSG Networks blackout at Optimum.

Yeah. Negative. Is John. I'll take that. I believe that was a Q1 event, not a Q4 event. In terms of when that blackout occurred. I would tell you that, you know, anecdotally, we've seen a modest benefit, but now that that's back on, we'll see how much it's been in terms of that has lagged on. But I'd say we saw modest improvement or benefit in Q1.

Got it. Thanks, guys.

Great. Thanks, Nikhil. And our final question today comes from the line of Doug Arthur with Huber Research. Doug, please go ahead.

Yeah. Just a quickie. John, on the operating expenses, there were some dips and doodles in terms of the categories. Like, G&A was down a lot. Was there any I haven't been through every document here. Is there anything unusual particularly in that line in the quarter?

Yeah, Doug. Thanks for the question. So to your point, on that line item, there were some ins and outs. I would tell you that on a run rate basis, it's probably more like a low double-digit million type of number for 2025. And so maybe there is a few million dollars in that benefit in the fourth quarter. You know, to David's comment before, I would just add that if we look at the other cost buckets, we saw an absolute improvement, if you will, year over year on a dollar basis. That they come across both marketing. We would have seen that in tech and dev, if not for some capitalized costs. And we also saw that in B&T. So the operating leverage continues to be moving in the right direction. I would just add, Nati, that you mentioned this, but since you're talking about the expenses, I would like to say that, you know, from a broader perspective, like, the team has been hyper-focused on balancing our investment in the business and reaching those cash flow targets. And so, you know, our incremental adjusted EBITDA margins were, call it, 34% in 2023 and then 45% in 2024. And so I do think even with the ins and outs, the incremental markets on the business and cash flow improvements are still very significant.

Okay. Great. Thank you.

Great. Thanks, Doug. And that concludes our Q&A session. That also concludes our call today. Thank you all for joining, and you may now disconnect. Have a great day, everyone.