FuboTV Inc. Class A

I would now like to turn the conference over to Allison Sternberg, Senior Vice President of Investment Relations at Fubo. Please go ahead.

Thank you for joining us to discuss Fubo's first quarter 2024. With me today is David Gandler, 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 full year and Fubo strategy, and John 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, industry and consumer trends, anti-competitive practices among our competitors and our response plan, including our antitrust lawsuit, and expectations regarding 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 include those discussed in our filings with the SEC. 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 Q1 2024 Earnings Shareholder Letter, which is available on our website at ir.fubo.tv. With that, I will turn the call over to David.

Thank you, Allison. Good morning, and thank you all for joining us today to discuss FUBO's first quarter 2024 results. We are very pleased with our strong start to 2024. Fubo again exceeded guidance with double-digit growth across key financial and operating metrics in North America during the first quarter. We ended the quarter with $394 million in total revenue, up 24% year over year, and paid subscribers at 1,511,000, up 18% year over year. Our ad sales business continues to be an expanding revenue source for Fubo. In Q1, we delivered North American ad revenue of $27.2 million, an increase of 21% year-over-year, demonstrating an accelerating business. We are also pleased to report that the first quarter marked yet another period of steady progress towards achieving positive cash flow and adjusted EBITDA. In Q1, adjusted EBITDA margin reached minus 10%, representing a significant improvement of 796 basis points, or an increase of approximately $18 million in absolute dollars compared to the first quarter of 2023. Additionally, Q1 represents the fifth consecutive quarter of year-over-year improvements in free cash flow and adjusted EBITDA, underscoring our forward momentum in the right direction. Notably, we've grown our market share in the pay TV space since our October 2020 listing on the NYSE. In Q1, we achieved our lowest subscriber acquisition cost to average revenue per user ratio, or SAC to ARPA ratio, well below the low end of our target range of 1 to 1.5 times. This demonstrates our increased efficiency in customer acquisition. Additionally, March 2024 represented the lowest churn rate for any March on record for the company. These results are demonstrative of Fubo's continued ability to grow quickly, efficiently, and effectively since our 2015 founding, performing well against benchmark companies across the media and tech sectors. While these statistics are impressive, when comparing our growth timeline to industry leaders and applying Moneyball metrics, these results are even more profound. For instance, Fuvo achieved $1 billion in revenue in 2022, just seven years after its founding. This achievement is particularly striking when compared to larger, scaled companies like Netflix and Roku, which reached the $1 billion revenue mark 10 years and 17 years after their respective launches. In 2023, Fubo generated $2.6 million of revenue per employee globally, a figure we believe we can improve further based on our latest projections. We believe this sets Fubo apart as one of the most productive companies in direct-to-consumer streaming. For context, in the same period, Netflix also generated $2.6 million of revenue per employee, while both Roku and Spotify achieved less than $2 million during the same period. These examples highlight the strength of Fubo's tech stack and management team, which we believe underscore our position as a leading operator in the streaming market. Fubo operates efficiently each quarter, but we continue to be challenged by excessively above-market content licensing costs and other onerous contractual terms imposed by programmers. In the first quarter, we spent approximately 90% of our total revenue on content. The exorbitant fees imposed on us and consequently on our customers are well above the market. The same is true of other onerous contractual terms such as penetration rates. These issues are at the core of our current litigation against the Walt Disney Company, Fox Corp, and Warner Brothers Discovery. We allege that this JV has engaged in longstanding anti-competitive practices aimed at monopolizing the market, suppressing competition, and depriving consumers of choice, affordability, pricing, and innovation. The pending launch of those companies' joint venture is an existential challenge that we face, one that we are committed to meeting, in part, through our suit to enjoin the launch of the joint venture until and unless the playing field in the industry has been leveled. Nearly 90 days after filing our lawsuit, while it remains early, we are encouraged by the progress we have made so far. Notably, we were encouraged by the support received by our competitors, Direct TV and Dish, who have filed declarations backing our motion for a preliminary injunction against the JV. Additionally, the US District Court has granted our request for limited discovery and set a hearing date for our motion. We are eager to present our claims and preliminary injunction motion in court beginning August 7th. Equally noteworthy, we have received very strong support from Capitol Hill. Congressman Jerry Nadler of New York and Joaquin Castro of Texas are also concerned that the JV's control of 80% of broadcast sports content will negatively impact consumers and market competition. In April, the congressman sent the JV CEOs a letter requesting that they address 19 concerns. They also asked that these responses be shared with the Department of Justice. Just this week, eight co-signers representing companies like Fubo, DirecTV, Dish, Newsmax, as well as multiple consumer advocacy groups sent a letter to Congress requesting they hold a hearing on the JV. And last but not least, we are also encouraged by the DOJ's reported investigation into the JV. At a minimum, All distributors, including Fubo, should receive fair and equitable terms from programmers. We should be able to offer our subscribers competitive pricing, packaging flexibility, and the ability to launch innovative products that further enhance the sports streaming experience. This history of programmers forcing unfair deals is the reason why, only a few days ago, Fubo customers lost the discovery networks owned by Warner Brothers Discovery, While negotiating a renewal, we also requested to license the Turner Sports Networks and ask for flexible packaging, the same packaging we expect the JV will offer. WBD did not want to discuss terms. Instead, they offered an extension for the discovery content on the previous status quo terms in flexible and above market. Meanwhile, Fubo has never strayed from our mission to delight consumers with an aggregated sports entertainment offering that leverages a personalized and intuitive streaming experience. From the outset, Fubo has been committed to tech innovation alongside sports. At this week's Advertising Upfronts, we announced several new offerings that enable our brand partners to reach passionate sports fans. These include interactive ads, pause ads, banner ads with enhanced targeting, and what we are calling the marquee, a branded carousel takeover displayed prominently on our home screen. On the consumer tech front, we are introducing AI-driven playlists in beta within the DVR for basketball content. Imagine a playlist of just the three pointers from last night's game, or just the foul shots from a game you recorded last weekend. Our plan is to vastly improve for consumers our DVR experience, enabling user controls and maximizing the value of their DVR. With playlists, the consumer could personalize their sports recordings, watching and rewatching the moments that matter most to them. We believe this will also help drive tune in for our league and programming partners. In closing, Q1 represented another strong quarter of exceeding forecasts and making substantial progress. We are steadfast in our execution and proactive in addressing these hurdles head on, despite market challenges. Our vision promotes a competitive streaming landscape that offers consumers choice, fair pricing, and innovative products. This is the vision upon which Fubo was founded and is only achievable in a truly competitive market. I will now turn the call over to John Giannidis, CFO, to discuss our financial results in greater detail. John?