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.

Thanks, Sean. 2021 was a pivotal year for Fubo. Our team executed on our business plan, and we have increased confidence in our long-term strategy. Looking ahead to 2022 and beyond, we expect losses to improve in our core domestic streaming business, led by continued share gains and operating leverage. Our high-margin advertising business is expected to scale with very strong double-digit growth fueled by further improvements in subscribers, ARPU, and CPMs. And we will continue to lay the foundation for our wagering business, which we expect will become a major beneficiary of our flywheel and a contributor to our growth in 2023. Finally, I hope you will be able to join us in the second quarter for our first Investor Day. We plan to share more details about our long-term strategy and our targets for our businesses. The agenda will follow in the coming weeks. Thank you for joining our call today, and we will now take your questions. Allison?

Thank you, David. Thank you, John. We're now going to turn to the Q&A portion of our call. We ask that in the spirit of timing, you restrict your questions to two. And our first question comes from Laura Martin with Needham. Laura?

Hi there. Hi, guys.

Hi, Laura.

Hi, Laura. That's the rule. Hi. Welcome, John. Hi. Hey, Laura. Welcome to the stage. Hi. So, I'm going to stick to two. CT the ad revenue of 98%. Go, go. You know I'm going to ask you about CPMs. Are we still at $20 CPMs? Are we moving up the ranks as we hoped? And was the core driver more viewer engagement, more viewers, or was it more CPM or sellout? I'm curious as to what really drove that upside of ad revenue. That's my first one.

Sure. I'll take it. Well, CPM... is up to about $22 in the fourth quarter. So we're starting to see some movement there. We've also seen advertisers starting to move into different buckets of programmatic, going more direct. So we think that trend will continue over time. In terms of viewership hours, as you already know, we clocked in just under 130 hours per customer. So it was really more about just the demand side and the CPMs that really have been the key driver for this quarter.

Perfect. And then I'm very interested in the fact that you had a three-month pricing model, and then a couple weeks ago you went back to month-to-month. Could you tell us what you learned from that experiment of three-month minimum versus month-to-month?

Sure. Well, you know us well now. This is a company that is predicated on its ability to manage its data effectively you know, focus on different capabilities and try to better understand how to optimize all of the components of our service. And so that certainly was an experiment. We're still going through the data now. You should anticipate that we'll continue to experiment just to better understand sort of what the value is for us and also what the expectations are for consumers.

Thank you very much. Thank you, Laura. Our next question comes from Jed Kelly with Oppenheimer. Jed, good to see you. Please go ahead.

Hey, great to see you. Hey, Dave. Hey, Jed. Welcome aboard. First question, just on subscriber-related expenses, you were seeing nice leverage the first three quarters. It was up significantly year over year, so you saw some of the leverage there. Can you kind of just talk about how we should use subscriber-related expenses, what happened in 4Q? And then can you kind of give us any guidance to gross profit into 2022? Want to start with you?

Yeah, why don't I start on the sports side, Jed? Hopefully you like that little video with the product features that we continue to improve. You know, with respect to the SRE line, what you're seeing is that we've added some regional sports networks. We've acquired some sports rights. Again, very light. We're getting ready to test some new things. We want to better understand what the value proposition is for our customers and the impact on all of our key performance indicators.

And, Ted, I would just add there, there were a couple of one-timers, not one-timers, but we added some content in the fourth quarter, some affiliates, also some content from Canada. And so that was a bit of a tick up there. But going forward, you'll see that deleverage on a same-store basis.

And then my second question, David, you mentioned sports betting being a significant revenue driver in 2023. Is that pushing it out a year, or just where are you in terms of the progress?

Yeah, so I'm sure you've noticed we continue to add more market access licenses. I think, you know, given the macro situation, we've decided that our sub-base is large enough where we don't plan to compete with DraftKings and FanDuel head-to-head for customers. We've decided that We have over a million customers right now on the platform. And the more market access licenses we get, the easier it is for us to leverage our subscriber base to drive customers. And the idea really is to reduce the cost of entry into each market and to create attractive user economics. And we think that given the early data points that we've seen, again, very early, we've had about, I think it's just under 2 million of handle subscribers. But, you know, the results are certainly interesting and support our thesis for the, you know, the goals that we've set for the company.

Thank you.

Thanks, Jed. Great questions. Next, we have Darren with Roth. Darren, please go ahead.

Hi, David. Hi, John. Thanks for your questions. First, just a second. To clarify, in the newsletter, we talked about the ad sales. You talked about kind of a demand-driven scalability issue on the advertising business. I'm just kind of curious if we could expand on that one and then two, like when do you think you'll have a resolution on that?

Yeah, so look, I think we've mentioned before in many of our meetings that we've been very focused on the consumer side, developing a platform with the quality of service that consumers deserve. But we really haven't had a chance to really focus on the ad tech side. We have begun to focus on the ad tech side since fourth quarter. And, you know, we think many of the, you know, the items that we're working on will be completely resolved within the next, call it, you know, two to three months. But as you can see, the demand is there and we continue to grow the ad side of the business.

And I would just say, Darren, to piggyback on that, if I look at, say, our January numbers and then also February to date, Yeah, I feel pretty confident that some of those issues are being resolved. And so if I look at the top, call it 10 advertisers through January, all of triple digits, and the ones that are down are frankly advertisers that are less than $5,000 in terms of spend. So feeling good about trajectory.

Great. And then just on your OEM channel relationships, like LG and Vizio, can you speak to how those are performing? And then can we expect to see additional OEM relationships this year?

Yeah, sure. Why don't I start? The OEM relationships are very important. I think if you look back two or three years, we were very focused on, you know, two or three platforms. And now as we continue to expand beyond those major platforms, we're starting to see more leverage. And I think that's the name of the game, leverage with content partners as well as with our platform partners. So those relationships are going really well. In some cases, you know, we're going to start getting access to actually the code so that we'll be able to build out better experiences, faster experiences, higher quality experiences. So we're very excited about the newer platforms, and you can see that it has certainly had an impact on NetApps.

Great. Thank you, Darren. Our next question, or questions, I should say, comes from Shweta Kajuria with Evercore. Shweta, it's always good to see you. Please go ahead with your questions.

You too, Alison. Thanks for the questions. Two for, yeah, I'll stick with two. First is, you mentioned losses will improve and continue to improve. Just help us with, you know, the drivers of how you're thinking about the investments you're making versus efficiencies that you're gaining. Just help us with how we should think about free cash flow and EBITDA. Just the overall trajectory and then the Second question I have is on improving churn. So churn has been improving, or retention rates have been improving. In other words, help us with what you've seen as being the most important drivers of improving churn. Is it the product improvement content, what have you? Please spell that up for us. Thank you.

So why don't I start with the second question first. And so when we look at churn, I would tell you that for the last three years, it's been better year over year every quarter. And so we're pretty pleased with that. A lot of that's driven by product development. And I would tell you that three of the past four quarters are the best churn quarters in the history of the company. So feeling good on the churn side. From a retention perspective, I think it's also a great story. And so if I look at the six-month cohort churn retention, sorry, and the 12-month retention, it's been up several hundred basis points for both trajectory-wise. And I think importantly – The increase in retention of the six-month cohort and the 12-month cohort is the same in terms of percentage-wise. And so it actually suggests that we're seeing almost no drop-off from six months to 12 months from a subscriber perspective. So we're very pleased there. On your first question, maybe I can start there. Go ahead. No, go ahead. So on your first question, what I would just say is, look, from a leverage perspective in terms of on the expense side, You know, if we look at, call it the biggest levers going forward to drive improvement, it's going to be the sales and marketing line, and first and foremost, and then G&A, and then subscriber-related expense there. But all of them should improve going forward. Now, in Mr. David's form, we're going to do the investor day sometime later this year, over the next few months. And so we'll have more to talk to, but every lever on the expense front should improve going forward.

Okay. Thanks a lot. Do you have a – sorry, I may have missed this in the release, but do you have a date for the investor there that you know?

We're still working on it, but, you know, we'll have more information for you shortly. We plan to do it in the next, call it, you know, two months.

Okay.

We'll have the exact time for you.

Thank you.

Have a good one, Shweta.

Great. Thank you, Shweta. It's good to see you. Our next question comes from Anna Lazul with J.P. Morgan. Anna, please go ahead with your question.

Hi, thank you so much for the question. And also related to churn, leading up to this Google, we noticed that you had required new customers to prepay for three months of the service to mitigate churn. And just given that Q1 has a large lineup in sports content on Turner Networks, which you no longer carry, how do you view the balance of content going forward on the Google platform?

Thank you. Anna, that's a good question. Again, with respect to the three-month offer, you know, you'll typically see us test different offers throughout the year. And, you know, given the excitement around the Super Bowl, we thought it was a great time to test how sports fans would react to an offer that you typically don't see. So that data is still coming in. We're looking at the numbers. But, you know, as John said, our retention levels have improved every year, as you said, in Q4, improvement of 269 basis points. All of our cohort retention, is extremely healthy and continues to improve. And we believe that, you know, over the long term, you should see, you know, churn somewhere in the, call it 4% to 5% range. So very happy about that. With respect to sports content, as you know, we didn't have Turner last year either. And we managed pretty well. The teams are using all the data coming in. And the platform is, is also, you know, providing the type of content today that we think will keep consumers engaged. But, you know, obviously we have to be a little bit conservative because really sometimes it really depends on the type of tournament, the teams, and, you know, I guess the storyline. But we're keeping a close eye on it, but we feel very comfortable, you know, with the results going into, you know, end of February. Okay.

Thank you.

Thanks, Anna. It's good to hear from you. Our next question comes from James Goff with Barrington. James, please go ahead.

Thanks. You know, I'd start by extending this conversation because I think it's one of the key things about FUVO. Sports is obviously the driver to get your viewers, but then you do have this fall off at first quarter after football season. Is there any coal and ice sort of option you're considering to maybe create some other incentive for viewers to adopt the service, maybe other types, other demographics or whatever, just to balance things out a little so you don't have quite the same situation you continually have, even if it's being reduced?

Yeah. James, it's a good question. I mean, you're inherently going to have seasonality. given the amount of sports content we have. And then when you couple that with the number of sports fans on the platform, I think I may have mentioned on the last call that 96% of Fubo subscribers watch sports. That's more than on any other traditional or virtual platform. So we continue to differentiate ourselves, and that's evident in our continued advancement in market share. So the teams are working to ensure that we limit you know, the churn. But, you know, again, we look at these things on an annual basis. And as John said, you know, the cohorts are extremely healthy. And in fact, one interesting item of note is that when you look at our January viewership numbers in terms of engagement, you know, those have already ticked north of 130 hours. And we haven't seen 130 hours plus since February of 2020. right before, you know, COVID. I think that's sort of a normalized level. So we're starting to see the maturation of these cohorts. And again, the team is working on this daily, but we feel very comfortable with the limited seasonality that we'll see, you know, in March.

And should I would just add to David's point on the seasonality side, even with that, the churn levels in Q1 are have consistently been better year over year. And then if you look at, say, churn in 1Q versus 2Q, 3Q, 4Q, it's in the same zip code.

Okay. My other question would be international. I realize Molotov is sort of a speck on the horizon here, but what sort of ambitions do you have? Is that something you think you can grow into to any meaningful degree over some period of time? And how would you finance such a venture?

So, James, I'm going to decouple that. This company has tremendous ambitions to be the largest provider of live television in the world, hands down. That is our goal. We also realize that we have to take our time and use the data that we have to build this business in a very disciplined and measured way. And today, the focus with Molotov is really on two things. One is they have foundational technology. They have a similar operating model, which allows us to very quickly integrate human capital and continue to focus on the core Fubo product. But it's also important to note that having Molotov there, right behind Netflix with 3 million monthly active users, the number two app as of today in France, gives us that optionality. that window, that view into timing. And I actually feel we're actually better positioned than some of the other players that are in the market. Again, we are not a streaming player. We are not a plus service. This is an aggregation service. And, again, we're very comfortable with this acquisition, and we're very delighted with the progress that we're making on the integration front.

And, Jim, I would just add to David's point. If you look at the guidance for North America, as an example, we're looking at, call it, 70% plus organic growth in our North America streaming business. So we don't have to do anything, given that kind of growth that we have on the domestic side.

Okay. Thank you, David, and welcome aboard, Jim. Thanks, Jim.

Thanks, Jim. Great questions, as always. Our next question comes from Zach Silverberg with Barenburg. Zach, always good to see you. Please proceed with your questions.

Yeah, thanks for taking my question. Are there any internal discussions on inflation and how it could potentially impact consumers' purchasing power who are dealing with increased prices on goods and maybe other streaming services? Is there a feel to what subscribers' price elasticity would be maybe heading into a slower television or sports period during the summer?

Zach, that's a great question. I'm glad you brought it up. No one really talks about it. But, you know, Fubo, like many other stay-at-home companies took advantage of COVID. We were one of those companies. You see the growth. You see the retention. And now we are in excellent position to take advantage of inflation. As you know, we are a cable replacement service that is cheaper, less expensive, better quality, better product than the traditional service And, you know, there's still 75 million people out there. So if you're a consumer and you want to maintain your lifestyle and cut costs at the same time, this is your option. And we're going to continue to develop our brand, continue to proliferate with respect to platforms. And, you know, I think we're well positioned to take advantage of that. In terms of pricing, we still have some ways to go. As you know, we started our service at $6.99. We've been pricing up. for the last five years. And, you know, there's a huge demand for sports. People love sports content, whether they love to wager, whether they love to watch, whether they like to buy, you know, paraphernalia, jerseys, et cetera. So, again, we're well positioned. We think that our product is priced well for the value that we provide. And we think there's probably a little bit more room there, you know, given that we still are facing some inflationary pressure.

Gotcha, that's helpful. And just one more. You talk about in the shareholder letter crossover users who have placed a higher number of bets, higher retention rates. Just curious how you're anticipating crossover rates given, you know, the NFL season's over, the MLB might go into the lockout. Just curious how you're sort of forecasting this or anticipating this into the spring and summer.

Yeah, look, as I said in my comments, it's very early days. We're in two states right now, Iowa and Arizona. In terms of Fubo TV, the television product footprint, it's very small. What we've seen right now, and we call it crossover, what that really means is that it's a Sportsbook customer who also has a TV subscription. And what we've seen is that those customers seem to be, at least in the onset, they're more active. More active means that they produce more volume of vets. relative to just a regular non-TV using, you know, betting customer. And then we're also seeing that that customer has better retention. But, again, there's only been two months. So we've only seen these people place bets in the second month. So right now it's still early. The data is coming in really strong. We actually are starting to feel we will not have to spend – you know, large amounts of money to compete. We've got over 1 million customers. We're guiding towards 1.5 million customers. We think we're going to be able to pull from that customer base, assuming we can continue, you know, to expand our market access footprint. And then there's this one other cohort which, you know, our trial cohort, which is a relatively large cohort that we see over the course of the year. But, you know, if I was to kind of, you know, gauge where the growth is going to be, of course, it's going to look like our TV product where you have seasonality post Super Bowl, just like the sports book. I'm sure, you know, they're probably strongest growth is in the back half of the year. up until the Super Bowl. So we'll see probably some of that. But, you know, we're taking a very measured approach, as I said. We think that if we can nail down the product and focus on casual bettors, the goal here is not to focus on the same cohort of users that Caesars and DraftKings and FanDuel is all focused on. But this is event-driven. When you have 800,000 concurrents that are streaming that product and they're watching the Georgia game and you say, hey, we know you love Georgia, put five bucks down on this game. We think that that's going to create a lot of value, a lot of entertainment value, and that we think is going to prove to be game-changing when the time is right.

Thank you.

Great. Thanks, Zach, for your thoughtful questions. Our next question comes from Dan Salmon with BMO. Dan, please go ahead.

Okay, great, guys. Good afternoon. Welcome, John. So I'm going to try to slip in two questions. First, I may have missed it, but I see the 2022 outlook still does not include anything for sports gambling. Can you just elaborate on that, how you might integrate it into guidance eventually? And then second, David, your own sports rights portfolio continues to grow. It's obviously taken on a little bit more of an international flavor as well any updates on your thinking for that part of your strategy and, uh, how it might be impacting some of your key subscriber metrics like gross ads or churn.

Thanks. Yeah. So, uh, I'll start on the second one. Look, we have been very deliberate on everything we do. And, um, You know, if you go back since we've IPO-ed, we have delivered on every metric that we said we would deliver on. And so what we're doing now is testing the waters. You are correct. We've acquired condomable rights. We've acquired the UEFA rights starting this fall. We have the EPL rights in your home country of Canada and Syria. So we're really starting to look at what can we do to expand our footprint in the sports space where we're known. and also start to leverage some of the fixed costs associated with that, because we're now starting to think about that margin profile. In terms of sports betting, again, the content obviously plays into that in our ability to leverage some of our new product features, such as predictive games, which will help us isolate users that will eventually be able to turn into casual gaming customers. Again, just delivering on our mission, which is really... to drive ARPU, right, lower the cost of entry and create positive and attractive user economics. And so on the betting side, the reason we've taken a different approach, slightly different approach, is we're starting to feel comfortable, one, with the pace and growth of our subscriber base. Number two, we're starting to see, you know, the brand emerge as a sports platform. And you can see that because it's supported by, you know, I think we have the highest NPF score of all virtual MVPD services per Parks & Associates. So, you know, from that perspective, I think we're very comfortable. We don't plan on spending a lot of money competing directly with DraftKings. And so the idea now is continue to focus on sub-growth. We want to acquire more market access licenses so we can drive subscribers into the sports book. And so we think we can do that very efficiently in ways that others can simply just won't be able to do that. And at the same time, we're really focused on continuing to deliver a really immersive product. And hopefully from that little video that you saw, we're starting to get a bit closer to where we want to be.

Thank you, guys. Thank you. Thanks, Dan.

Thank you, Dan. This concludes the Q&A portion of our call. We want to thank everybody for your participation and your thoughtful and insightful questions and also encourage you to reach out to what extent you have any follow-up questions. And we look forward to speaking with everybody soon. Thank you again.

Thank you.