FuboTV Inc. Class A

Thank you for joining us to discuss FuboTV's fourth quarter and full year 2020. With me today is David Gandler, CEO and co-founder of Fubo, and Simone Iannardi, CFO of Fubo. Before we begin, let me quickly review the format of today's presentation. David is going to start with some brief remarks on the quarter and Fubo's strategy, and Simone will cover the financials and guidance. Then I'm going to turn the call over to the analysts to dig into Q&A. Before we begin, I'd like to remind everyone that this call may contain forward-looking statements, including statements about revenue, non-GAAP net loss and adjusted EBITDA, subscribers, recent acquisitions, development of a wagering offering, and other non-historical statements, as further described in our press release. These forward-looking statements are subject to certain risks, uncertainties, and assumptions, including those related to Fubo's growth, evolution of our industry, product development and success, our ability to realize the anticipated benefits of recent acquisitions, our access to capital and fundraising prospects to fund our ongoing operations, our ability to capitalize on market trends and develop a market wagering offering, and general economic and business conditions, such as effects of industry market, economic, political, or regulatory conditions, future exchange and interest rates, and changes in taxes and other laws, regulations, rates, and policies, including the impact of COVID-19 on the broader market. These statements reflect our current expectations based on our beliefs, assumptions, and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Description of these and other risks that could cause actual results to affirm materially from these forward-looking statements are discussed in our reports filed with the SEC, including our most recent quarterly and annual reports and our press release that was issued this afternoon. During the call, we also referred to certain non-GAAP financial measures. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. Reconciliations with the most comparable GAAP measures are also available in the press release, which is available at ir.fubo.tv. With that, I'll turn it over to David.

Thank you, Brinley, and thank you all for joining us today. I am very excited to present to you our Q4 and full year 2020 results. The company has exceeded previously raised guidance with solid growth in revenue, subscription, and viewership. Our mission is to provide the world's most thrilling sports-first live TV experience with the greatest breadth of premium content, interactivity, and wagering. We believe Fubo sits firmly at the intersection of three megatrends. The secular decline of traditional television, the shift of TV ad dollars to connected devices, and online sports wagering, a market opportunity we believe to be complementary to our sports-first live TV streaming platform. Fourth quarter revenues were up 98% year over year, exceeding for the first time $100 million of quarterly revenue. For those who are new to FuboTV, top line revenue consists of two primary revenue streams. Subscription revenue, which was up 91% year over year, from $47.9 million to $91.4 million. And advertising revenue, which was up 157% year over year, from $5.1 million to $13.1 million. Paid subscribers at quarter end totaled 547,880, and that's an increase of 73% year over year. Given our sports-first differentiated position, we experienced continued momentum from the start of the fall sports calendar, that was back in Q3, and throughout Q4, adding an impressive 92,800 net additions in the fourth quarter, and that's up 237% from the prior year. Sports draws premium audiences, and advertisers are increasingly coming to us to reach highly engaged viewers. For the full year, advertising revenue grew to represent 11% of total revenues, compared to 8% in the prior year, helping to contribute to a record adjusted contribution margin of 11.7% in the fourth quarter. And that's up 1,100 basis points from the prior year. We believe our sports-focused market position will help to further grow our business, and our KPIs continue to improve. In 2020, average revenue per user per month increased 17% year-over-year to $62.84. And annualized ARPU increased by $109 to $754 per customer per year. And within that annualized ARPU of $754, we grew advertising ARPU to $81.76 per customer per year. And that's an increase of 54% year over year, largely driven by an increase in per user engagement and investments in our advertising operations. Our customers continue to be our number one focus, and we continue to invest in our proprietary data to surface relevant content for our subscribers, driving engagement and retention. Our customers streamed over half a billion hours in 2020. That's an 82% increase year over year. Equally noteworthy, customers streamed an average of 7.2 hours of Fubo per day, indicating that we own significant timeshare in households. Over the long term, we believe this level of daily engagement will provide numerous opportunities for us to further expand monetization on the platform. We continue to invest in our product and into expanding access to more streaming devices such as Samsung TV and Xbox. In fact, Churn improved 56 basis points year over year in the fourth quarter. And for the full year, Churn improved over 200 basis points over the prior year. Only one quarter ago, I announced our intent to expand Fubo into the online sports wagering market. And I am very pleased to finally report that we have officially closed our acquisition of sports betting and interactive gaming company, Victory. This acquisition enables us to accelerate the launch of our owned and operated sports betting platform called Fubo Sportsbook. We've secured our first market access deal for our sportsbook in Iowa through Casino Queen. And in connection with our launch in Iowa, we are also excited to announce agreements with Major League Baseball and the NBA to become authorized gaming operators for each league. These agreements will provide access to official data and the rights to MLB and NBA league marks and logos within the Fubo Sports app once it's rolled out. In addition to our sportsbook, free-to-play predictive games mark the beginning of Fubo's innovative gaming roadmap. We believe it will enhance the sports streaming experience while also providing a bridge between our video product and our sportsbook. And we expect the integration of gaming with our expansive live sports coverage will create a flywheel that improves engagement and retention and consequently drives advertising revenue. In the third quarter of 2021, we plan to launch free gaming, first to FuboTV subscribers and then later to all consumers. And in the fourth quarter of this year, we expect to launch the Fubo Sportsbook. We don't see wagering simply as an add-on product to FuboTV. Instead, we believe there are significant synergies between streaming consumers who enjoy wagering and wagering customers who enjoy streaming live sports. So in 2021 and beyond, we are laser focused on bringing to life our vision of a streaming platform that transcends the industry's current virtual MVPD model and experience. In conclusion, we are very proud of our 2020 results. And as you've seen from our shareholder letter, we are raising our 2021 guidance we laid out for you last quarter. The team is focused on delivering the best streaming experience to our customers, which will drive top-line growth, and the power of our model will enable us to further our progress on our path to profitability. In 2021, we will continue to expand the breadth of our sports programming while introducing interactivity and wagering to further differentiate our service in the marketplace. And now I'll pass it over to Simone to discuss our 2020 financial highlights and guidance for 2021. Simone.

Thank you, David. And good evening, everyone. Our strong performance in the fourth quarter exceeded our outlook and kept off a great year for Fubo. We executed well and delivered record results. Before taking your questions, I will walk you through a few financial highlights and discuss our guidance for 2021. In the fourth quarter, we grew total revenue to $105 million, an increase of 98% year-over-year compared to FuboTV pre-merger. This growth was driven by continuous strength in both subscription revenue, which increased 91%, and advertising revenue, which increased 157%. It accounted for 12.4% of total revenue in the quarter. Revenue for the full year was $269 million on a pro forma combined basis, or $261.5 million excluding FaceBank AG, an increase of 78% compared to FuboTV's pre-merger 2019. Subscription revenue increased 73%, and advertising revenue was up 133%, accounting for 11% of total revenue in 2020. We continue to focus on both the top-line revenue growth as well as advancing on our path to a strong, sustainable margin in the long term. On a full-year basis, we reported a 10.1% positive adjusted contribution margin, up from negative 3.1% in 2019. We believe that over the long term, we're well-positioned to continue to drive year-over-year expansion. After our successful registered public offering in October 2020 and uplisting to the NYC, we further strengthened our balance sheet in February, with the issuance of $402.5 million of senior convertible notes. With this strong balance sheet, we plan to accelerate the investment in our team and further build our product development to continue to position the company for long-term growth. More broadly, in 2021, we will continue to be focused on investing in and executing on our growth strategies, which include growing our subscriber base, increasing advertising revenues, and expanding into sports wagering. Moving to our guidance, after our strong performance in 2020, we are excited about our outlook for 2021. Although we are very optimistic for what is in store for our future wagering business, our guidance does not include any potential wagering revenue at this point in time. Also, a comparison of guidance to prior real would refer to the combined pro forma FuboTV-Facebank 2020 numbers, excluding Facebank AG, a business that we sold last year. For the first quarter of 2021, we expect revenue between $101 and $103 million. These represent a growth of 100% year-over-year at the midpoint of the range and reflects the typical seasonality between Q4 and Q1. Historically, Q1 has been softer than Q4 when viewed sequentially on revenue as well as contribution margin. Similarly, we're guiding to Q1 end-of-the-period subscribers of 520,000 to 530,000. These represent growth of 82% year-over-year at the midpoint. For the full year, we're guiding to year-end subscribers of 760,000 to 770,000, an increase of 40% year-over-year at the midpoint of the range we provided. This strong subscriber growth, combined with increasing expansion in advertising revenue, give us confidence to increase our 2021 revenue guidance to $460 million to $470 million, up over 75% year-over-year. This is up also from our previous guidance of $415 to $435 million. In conclusion, we're very excited about our growth opportunities and remain focused on driving long-term expansion and profitability. Brinley will now open it up for questions.