Streaming-video service FuboTV is seeing shares surge on better-than-expected second-quarter results, and boosted guidance.
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FuboTV stock is trading sharply higher on Wednesday after the streaming-video service posted better-than-expected second-quarter results, and boosted its full-year guidance.
For the quarter, FuboTV (ticker: FUBO) posted revenue of $130.9 million, up 196% from a year ago, and ahead of the company’s guidance range of $120 million to $122 million. In a letter to shareholders, the company said it finished the quarter with 681,721 subscribers, well above the company’s projection of 600,000 to 605,000, up 138% from a year ago, with 91,291 net new subscribers in the quarter. Average revenue per user was $71.43, up 30% from a year ago. On an adjusted basis, FuboTV lost 38 cents a share in the quarter, while under generally accepted accounting practices, the company lost 68 cents a share.
FuboTV stock is up 8% to $30.90 in recent Wednesday trading, down from $33.68 earlier in the session.
FuboTV provides a cable-replacement service like Sling and Alphabet ‘s (GOOGL) YouTube TV, but with a particular focus on sports programming. The company said customers streamed 245 million hours of video in the quarter, up 148% from the year-ago quarter. Advertising revenue was $16.5 million, up 281%.
“Our record second quarter reflects continued strong execution in support of our vision to define a new category of interactive sports and entertainment television,” the company said in the letter. “Within the quarter we made meaningful advancement towards our long-term growth and margin targets, while also capitalizing on the favorable trends we are seeing in the category.”
For the third quarter, FuboTV projects revenue of $140 million to $144 million, above consensus at $127 million. The company sees subscribers increased to between 810,000 and 820,000.
For the full year, the company now sees revenue ranging from $560 million to $570 million, up from a previous forecast of $520 million to $530 million. Fubo boosted its full year subscriber guidance to a range of 910,000 to 920,000, from a previous projection of 830,000 to 850,000.
FuboTV also said it remains on target to launch its planned sportsbook operation in the fourth quarter.
Evercore ISI analyst Shweta Khajuria responded to the results by repeating her Outperform rating and lifting her target price to $40 from $33.90. “We continue to view Fubo as a key beneficiary to three industry trends,” she writes in a research report. “Cord cutting, as viewers shift away from linear TV to streaming; mix-shift of advertising dollars from linear TV to [streaming]; and growing demand for online sports betting.”
Likewise, Oppenheimer analyst Jed Kelly reiterated his Outperform rating, while lifting his price target to $42 from $32. Kelly cited stronger-than-expected subscriber growth, driven by a “strong sports calendar,” and improved churn. “Most OTT providers have focused on low-cost entertainment offerings, forcing sports fans to remain tethered to pay TV,” he writes. “FuboTV is exploiting the opportunity in sports by providing a comparable viewership experience at a lower cost than its pay TV counterparts.”
Write to Eric J. Savitz at [email protected]
