FUBO update 091021

I’ve posted this on another subscription service, and see there are some holders who’ve posted on this board. Hope this is helpful and not OT. Also fingers crossed on formatting on this blog – hope the formatting comes thru (?)

Some recent background…

From the 2021 Q2 earnings call ……….
<#i> As we’ve cited previously, our strategy is rooted in the intersection of 3 megatrends:

  1. the secular decline of traditional television,
  2. the shift of TV ad dollars to connected devices; and
  3. online sports wagering, a market opportunity which we believe complements our sports-first live TV streaming platform.
    We are laser-focused on staying ahead of these trends

Q2 2021 Highlights
? Total revenue grew 196% YoY to $130.9 million
? Advertising revenue grew 281% YoY to $16.5 million
? Subscription revenue increased 189% YoY to $114.4 million
? Subscribers grew 138% YoY and 15% Q/Q to 681,721
? Average Revenue Per User (ARPU) per month increased 30% YoY to $71.43
? Advertising ARPU per month increased 62% YoY to $8.70
? Adjusted Contribution Margin was positive 8.3%, up 316 bps YoY from 5.1%1 <#/i>

Here’s my stats on revenue growth………
FUBO Rev $ Rev inr $ Rev Incr YoY
Guide 2021 565 347 159% Guide $560 - $570M
2020 218 214 5,350%
2019 4 4

FUBO Rev $ Rev inr $ Rev Incr QoQ Rev Incr YoY
Guide 2021 Q4 172 30 21.1% 63.8% Deduced from annual guidance
–Guide 2021 Q3 142 11 8.4% 121.9% Guide $140M - $144M
2021 Q2 131 11 9.2% 197.7%
2021 Q1 120 15 14.3% 1614.3%
2020 Q4 105 41 64.1% n/a
2020 Q3 64 20 45.5% n/a
2020 Q2 44 37 528.6% n/a
2020 Q1 7

My take:
• QoQ revenue growth is growing significantly, however is somewhat erratic with periods of growth as well as deceleration
• Advertising revenue is just starting out at only 13% of total revenue, growing by 281% YoY, and Advertising ARPU is up 30% YoY to $71.43. Thus, Ad Rev very difficult to project, however is showing signs of hypergrowth mode
• Sports betting revenue stream goes live 2021 Q4, not in guidance, so is a 3rd revenue stream (after subscription and ads), also difficult to project but will add to the revenue firehose
• Q 3 guidance is estimated at $140M - $144M, with full year 2021 guidance raised to $560 - $570M earnings and guidance. This would put Q3 QoQ at about 8% growth, and by process of elimination would leave Q4 to be $172M or about 21% QoQ

My take on Valuation…… At the current price, FUBO shows a P/S ratio of 10.2% (Charles Schwab), and I calculate forward P/S based on the guidance as 5.9 ($142k Q3 + 172 Q4, and add est 10% each of the following 2 quarters) – this forward P/S is low in comparison to P/S for ROKU (19.7 TTM Chas Schwab / 16.8 my forward calc) and MGNI (13.0 TTM Chas Schwab and 19.1 my forward calc)

Also from the earnings call……
<#i> Accordingly, we are increasing our full year 2021 revenue guidance to $560-570 million, representing a 116% increase at the mid-point compared to 2020, up from an increase of 101% in our prior guidance. Similarly, we are increasing our end-of-year subscribers guidance to 910,000-920,000, representing a 67% increase at the midpoint compared to 2020. This subscriber outlook implies full year 2021 net additions of at least 367,000, 58% higher than our full year 2020 net additions of 232,000. Third quarter revenue is estimated to be between $140 million and $144 million, up 132%
year-over-year at the midpoint. Third quarter end-of-period subscribers are estimated to be between
810,000 and 820,000, up 79% year-over-year at the midpoint.

We also made significant progress towards our profitability goals, driven by a 62% year-over-year
increase in advertising Monthly Average Revenue Per User (ARPU) and a 30% increase in total
Monthly ARPU. This positions us well to continue making deliberate, strategic investments in team,
technology and infrastructure to optimize our market position and grow share, while also driving
margin expansion.

In the quarter, we delivered triple-digit year-over-year growth in total paid subscribers (up 138% to 681,721), total revenue (up 196% to $130.9 million) and advertising revenue (up 281% to $16.5
million). <#i/>

Recent News / selected news / strategy execution
• 8/20 – IPO
• 8/10/21 – earnings call 2021 Q2
• Aug. 19, 2021 9:18 AM ETfuboTV Inc. (FUBO)By: Niloofer Shaikh, SA News Editor9 Comments – fuboTV (NYSE:FUBO) has acquired the exclusive rights for Coppa Italia and the exclusive English language rights for Serie A in Canada, making it a premier soccer streaming platform in Canada.
• FuboTV launching free games, live stats for Conmebol matches Aug. 30, 2021 10:47 AM ETfuboTV Inc. (FUBO)By: Jason Aycock, SA News Editor7 Comments FuboTV (FUBO -1.3%) is using September’s Conmebol World Cup qualifying matches to launch integrated free-to-play games and FanView live stats. The features have been in beta program but starting Sept. 2, subscribers can stream the South American Qatar World Cup qualifiers using FanView to monitor stats/scores on screen, as well as play free games with their remote control without opening another app. The free-to-play games will be available on Android/iOS, Android TV, Fire TV, Roku and the Web. FanView will be available on Android TV, Fire TV, LG TV, Roku, Samsung Smart TV, the Xbox One family of devices, and the Web.
• 9/2/21 SA article, “ FuboTV: Growth Has Only Just Begun
• Sep. 02, 2021 4:33 PM ETfuboTV Inc. (FUBO) 44 Comments23 Likes – https://seekingalpha.com/article/4453307-fubotv-growth-has-o…
• Fubo Gaming Receives License to Offer Mobile Event Wagering From the Arizona Department of Gaming 4:05 PM ET 9/2/21 | BusinessWire “In addition to its licenses and market access agreements in Arizona and Iowa (market access via Casino Queen), Fubo Gaming has also entered into market access agreements in Pennsylvania via The Cordish Companies as well as Indiana and New Jersey via Caesars Entertainment Inc.
• Sep. 08, 2021 9:32 AM ETfuboTV Inc. (FUBO)By: Preeti Singh, SA News Editor14 Comments – Fubo Gaming, a subsidiary of fuboTV (FUBO +2.1%), has announced a multi-year partnership with professional American football team, New York Jets. Under the deal, Fubo Gaming’ mobile sportsbook, Fubo Sportsbook, will become an Official Sports Betting partner of the club. This agreement marks Fubo Sportsbook’s first sponsorship of a professional sports team. Expected to launch in Q421, Fubo Sportsbook is designed as a holistic, hyper-personalized betting experience, The New York Jets partnership centers around the creation of the Fubo Sportsbook Lounge at MetLife Stadium for Jets home games, set to debut during the 2021-22 NFL season, and will be the first authorized, mobile sports betting lounge in the stadium. Additionally, Fubo Sportsbook will become the presenting partner of the Jets Mobile App and is the team’s first legal sports betting (LSB) partner to leverage the Jets’ new advertising data partnership with Sportradar (SRAD

My take – Lots of great stuff going on – I wanted to point out the flywheel effect in the last bullet above – so these 3 revenue streams are not simply verticles, they actually drive each other. Note how the last news point from 9/8 highlights how advertisers will gain exposure not only to the eyeballs watching FUBO games / content, but also via subsribers’ wagering. So when a guy watching the game, who pays for the subscription, not only is there the additional ad revenue – when he goes to his mobile device to wager, he again generates ad revenue.

Out of the articles above, I recommend the 9/2/21 SA article, as well as Beth Kindig I/O fund (I am a subscriber to I/O fund, some of her write-ups are behind a paywall). These sources flesh out the thesis much better than this post.

Beth Kindig / I/O Fund, when questioned what is her favorite stock at the Motley Fool webinar 8/5/21 responded that FUBO was her favorite and in her opinion is overlooked by the market.

My Conclusion: A high preference is a company with a good track record of consistent QoQ and YoY revenue growth of at minimum 9% QoQ / 40% YoY, however with FUBO we’re looking at a company less than a year old and thus the time and track record is minimal and somewhat erratic, including periods of deceleration.

— however —

given that the catalysts are just occurring and will be reflected materially in revenue in future revenue IMHO, and given the sheer number of catalysts and the compelling story of hypersgrowth in both ad revenue and wagering, for me outweighs the lack of historical revenue “proof”. FUBO’s moat of the home viewing sports watching, warrants a place in my portfolio. I follow Beth Kindig’s I/O fund as well as this board, and I see like-minded investors have begun to take positions and provided facts and opinions that I find compelling. I currently hold 6% FUBO – new position for me just this past week (I added 2% today). (I also hold 7% ROKU and 2% MGNI); I considering adding more – just trying to decide if this will be a medium size position ~ 5% - 7% or large position ~ 10% - 12% – I may add in layers.

Watch List: PATH

PS – lot’s of gratitude to this board, the posters, and the moderators who keep us on topic