FuboTV Inc. Class A

Thank you for joining us to discuss FuboTV's fourth quarter and full year 2021. With me today is David Gambler, co-founder and CEO of Fubo, and John Giannidis, CFO of Fubo. 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 presentation. David is going to start with some brief remarks on the quarter and Fubo's strategy, and John will cover the financials and guidance. I'd 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, market opportunity, business strategy and plans, including our acquisition strategy and ability to integrate any such acquisitions, the expected continued rollout of FUBO Sportsbook, and the continued shifts in consumer behavior. 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 can be found in the Risk Factors section of our annual report on Form 10-K for the period ended December 31, 2021, to be filed with the Securities and Exchange Commission and our other periodic filings with the SEC. 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. During the call, we also refer to non-GAAP financial measures including certain metrics excluding the impact of a Molotov acquisition. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are also available in our Q4 2021 Earnings Shareholder Letter, which is available on our website at ir.hubo.tv. With that, I will turn the call over to David.

Thank you, Allison, and thank you all for joining us today. Our fourth quarter closes out an extraordinary year defined by triple-digit year-over-year growth in total revenue, advertising revenue, and subscription revenue, all while expanding adjusted contribution margin. Within 2021, we achieved several notable milestones representing meaningful advancements towards our mission to build the world's leading global live TV streaming platform with the greatest breadth of premium content, interactivity, and integrated wagering. Importantly, our performance over the course of the year reaffirms our thesis. that an aggregated offering with multiple monetization levers remains the most attractive option to drive retention and to create strong unit economics. Notably, we have over 1 million subscribers validating that FuboTV is delivering tremendous value to them. In Q4, we delivered significant year-over-year growth in total revenue of 119% year-over-year to $637 million, and that's excluding the impact of our Molotov acquisition. We added approximately 185,000 net subscribers, bringing our total base to over 1.1 million. That's an increase of 106% year-over-year compared to just 38% growth for the entire virtual MVPD market over the same period. These numbers also exclude Molotov. We achieved this strong subscriber growth with the efficient deployment of sales and marketing dollars, which came in at 21% of revenue in the quarter, and that's down significantly from the 28% in the fourth quarter of 2020. Subscriber acquisition costs also came in at the low end of our target range of 1 to 1.5 times monthly ARPU for the quarter. In addition to dramatically growing our subscriber base, we made great strides in attracting high-quality cohorts who were staying longer, with churn improving by 269 basis points year over year. Our rapidly growing advertising business allows our partners to reach high-quality audiences in a targetable and measurable way. As a result, the fourth quarter was also a record. Ad revenue grew 98% year over year and accounted for 11% of total revenue in the quarter, excluding the impact of the Molotov acquisition. Repeat advertiser spend grew 170% in 2021, with increased spend among our top five advertisers between 3 and 10x, and a meaningful increase in the number of advertisers spending above $1 million each. During the fourth quarter, we closed two important acquisitions, Molotov, France's leading live TV streaming service with over 3 million monthly active users, and Edison AI, an AI-powered computer vision platform with patent-pending video recognition technologies. These transactions provide the foundational technology and the human capital to accelerate development across infrastructure and our products. We are enacting a disciplined approach to these assets in order to leverage global synergies while also gaining operating leverage. We continue to bring interactive product features to market to differentiate our live TV streaming service. Since the quarter ended, we launched a new version of our popular multi-view feature on Apple TV, integrating it with our new fan view widget. With this latest evolution, subscribers can mix and match up to four live channels and game stats widgets, plus a scoreboard of all live sporting events. And they can do this simultaneously. We believe this is the most personalized and customized TV viewing experience available in the market. Our wagering business also continues to evolve. Less than a year after we announced our intention to expand into sports wagering, we launched the first iteration of Fubo Sportsbook in two states, Iowa and Arizona. We now have market access deals in 10 states, and we expect to launch Fubo Sportsbook in additional markets soon. We believe entry into new markets will allow us to more effectively monetize our existing subscriber network, and we will create efficiencies in customer acquisition and retention, and a deliberate, measured approach to growing our sportsbook with limited marketing spend. We believe the ability to watch and wager within a single ecosystem is a feature that only FuboTV has brought to market. In summary, I am very optimistic and confident. Going forward, given our exceptional execution this quarter, which closed out an outstanding year, we are undoubtedly well on our way to building a category-defining company with attractive unit economics. We delivered a record fourth quarter and full year across a number of key financial and operational metrics. We continue to benefit from our position at the intersection of three industry megatrends, the secular decline of traditional paid television, the shift of TV ad dollars to connected devices, and the rapid adoption of online sports wagering. I am more excited than ever about Fubo's future as we aim to transcend the industry's current TV model. And now, I am pleased to introduce you to John Janius, our new CFO. John brings more than two decades of experience leading equity research, investor relations, capital markets, and M&A for some of the world's preeminent financial institutions. He's a seasoned financial leader in the media space and will be a critical partner as we craft Fubo's strategic and financial plan for this year and beyond. We are all very excited to have him on board.

John, please go ahead. Thank you, David. And good afternoon, everyone. I am really excited to be part of the Fubo team and joined because of my confidence in the vision of the team and the long-term growth opportunities in the company's streaming, advertising, and wagering businesses and the potential to deliver significant value to all of our stakeholders. I am very pleased with our strong fourth quarter results as we exceeded our guidance and made significant progress in delivering efficient top-line growth and margin improvements. In the fourth quarter, we delivered nearly triple-digit year-over-year growth in both subscription and advertising revenue, taking overall revenue up 119% to $229 million, excluding the impact of the Molotov acquisitions. Subscription revenue increased 123% year-over-year to $204 million, excluding the impact of the Molotov acquisition, driven by strong growth in subscriber numbers and ARPU. We also delivered this robust growth through acquisition efficiencies as well as improvements in retention, resulting from our interactive products and curated content offering. Subscription ARPU, excluding Molotov, expanded by 8% year-over-year, to $74.52 as we saw more subscribers taking our premium offerings. Advertising revenue grew 98% year-over-year to $25.49 million and accounted for 11% of total revenue, excluding Molotov. AdRFU decreased 4% year-over-year to $8.12. As expected, we saw a large influx of subscribers within the last few weeks of December. As these new subscribers become more familiar with the platform and mature into long-term subscribers, we expect to extend their monetization further. While that ARPU growth may have some variability from a quarter-to-quarter basis, our condition and growth on an annual basis remains high. Switching now to our path towards profitability, we reported adjusted contribution margin of 11%. We are well-positioned to drive long-term margin expansion with deliberate strategic investments in content, technology, and infrastructure. And as we lay the foundation for future growth, our strategic investments in programming, team, technology, and infrastructure resulted in expected increased expenses on an absolute dollar value basis in the fourth quarter compared to the prior year. However, expenses continue to decline in proportion to revenue year over year, resulting in a material improvement in adjusted EBITDA margin, which improved 5.7 percentage points in the fourth quarter of 2021 from the fourth quarter of 2020 as we improve our operating leverage and further advance on our path to profitability. Net loss in 4Q was $112 million. EPS in the fourth quarter was a loss of 76 cents, including a six-cent impact from expenses incurred for our range ring business, $0.05 from the acquisition to Molotov, and a $0.03 impact from deal-related expense. Adjusted EPS in the fourth quarter of 2021 was a loss of $0.57, which excludes the non-cash impact of stock-based compensation, the remeasurement of warrant liabilities, and the amortization of intangibles and debt discount. Now turning to the balance sheet, we ended the quarter with $379.4 million in cash, cash equivalents, and restricted cash. This included 70 million net proceeds in the fourth quarter from our at-the-market offerings, as well as 3.1 million in interest payments and 25 million cash outflow related to wagering, mainly in connection with our market access licensing deals. As we have previously highlighted, we plan to continue to evaluate our ongoing capital optimization plan to build optionality in order to fund growth initiatives. Operating cash flow in the quarter was negative 49.5 million, inclusive of 3.1 million non-recurring payments, 10.2 million associated with the wagering business, and 6.1 million operating cash flow associated with the Molotov business. Moving on to our outlook, we are thrilled with our performance in the fourth quarter of 2021 and remain well positioned to execute on our long-term revenue and margin goals, all while delivering a differentiated and world-class experience to the consumer. In order to provide greater visibility into our business, we will be breaking down these metrics by region, specifically North America and rest of the world, which includes our existing Spain and recently acquired Molotov operations. Note that this guidance does not include any projected revenue from online sports wagering. First, we will discuss North America streaming. Due to the seasonality in our business, Q1 has historically been softer than Q4 when viewed sequentially on revenue and subscribers. our Q1 2022 revenue guidance takes the seasonality into account with projected revenue of 232 to 237 million. Similarly, our Q1 2022 subscriber guidance includes 1,028,000 to 1,033,000 subscribers. On a full-year basis, we are guiding to projected revenue of $1.80 billion to $1.90 billion. We're also guiding to total year-end subscribers of 1.5 million to 1,510,000. And we also expect to see continued operating leverage and adjusted EBITDA improvement going forward. Now we will discuss rest of world streaming. We're guiding to Q1 2022 projected revenue of 3 to 6 million and subscribers of 235,000 to 240,000. On a full-year basis, we are guiding to projected revenue of $15 to $20 million and total year-end subscribers of $270,000 to $280,000. So to summarize, we are very pleased with our performance this quarter as we continue to efficiently drive robust growth and operating leverage. Before going to Q&A, David will end with some closing remarks.