Operator: Thank you for standing by and welcome to the FUBO third quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one in your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. I'd now like to turn the call over to Amit Pate, SVP, FP&A, Corporate Development and Investor Relations. You may begin.
Amit Pate: Thank you for joining us to discuss Fubo's third quarter 2025 results. 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 call. David will start with some brief remarks on the quarter and our business, and John will cover the financials. 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, expected synergies and other benefits from our business combination business strategy and plans including our products and subscription packages market industry and consumer trends and expectations regarding growth and profitability these forward-looking statements are subject to certain risks uncertainties and assumptions actual results could differ materially from our current expectations and we may not provide updates unless legally required. Potential factors that could cause actual results to differ materially from forward-looking statements are discussed in the earnings release we issued today, our letter to shareholders, and in our SEC filings, all of which are available on our website at ir.buvo.tv. Except, as otherwise noted, the results 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. Please note also these results reflect Fubo's standalone operations prior to the recent completion of our business combination with the Walt Disney Company's Hulu Plus Live TV. 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 available in our Q3 2025 Letter to Shareholders, which is available on our website at ir.fugo.tv. With that, I will turn the call over to David.
David Gandler: Thank you, Amit, and good morning, everyone. This quarterly earnings call is unlike any other in our history, coming just days after completing our transformative combination with the Hulu plus live TV business, setting a new stage for what's ahead. The combination of Fubo and Hulu plus live TV forms one of the largest live TV streaming services in America. Our combined nearly 6 million subscribers in North America make Fubo the sixth largest pay TV company according to recent UBS estimates. It's a defining moment for our team and our shareholders and the culmination of years of innovation and execution. Together with our strong standalone results, this combination underscores the enormous potential ahead, a consumer-first platform built on choice, value, and profitable scale. Now, looking at our third quarter standalone results, Fubo ended the quarter with 1,630,000 paid subscribers in North America, our strongest third quarter performance to date and $369 million in total revenue alongside solid contributions from our international operations. We're also proud to report that we achieved meaningful improvements in both net loss and adjusted EBITDA with the third quarter representing our second consecutive quarter of positive adjusted EBITDA. Beneath those strong headline numbers, the health of our underlying metrics continues to improve. Trial starts increased and conversions from trial to paid meaningfully improved year over year, while churn declined nearly 50% versus last year. At the same time, we reduced marketing spend during a highly competitive sports quarter, reinforcing our path toward profitability and stronger margin expansion. These trends reflect growing consumer demand, higher engagement, and the continued scalability of our model. Our mission remains clear. Deliver must-have programming through a flexible value-forward experience. Fubo continues to make watching live content easier and more valuable. The Fubo Channel Store, similar in concept to Amazon Prime Video Channels, offers third-party premium services like RSNs, DAZN1, Hallmark Movies Now, and Paramount Plus with Showtime into one sports-first interface, removing friction and simplifying viewing. Our Fubo Sports Skinny service added lower-priced, high-value access to top sports content, including the majority of ESPN Unlimited content, and is driving record trial conversions. Together with the expansion of pay-per-view, which delivered double-digit sales growth in October compared to the prior month, these initiatives demonstrate Fubo's ability to innovate, scale engagement, and strengthen our live platform. We have built market-defining features, multi-view, game highlights, game alert push notifications, and catch up to live that increase engagement and make watching sports easier and more entertaining. These are the types of personalized capabilities we will continue to scale across our growing membership base. Fubo's recent results gives us much to be confident about, and we envision unprecedented opportunities at the combined company. We're expanding choice, not forcing one bundle. The combined company offers consumers a broad set of sports and entertainment-focused programming offerings from Fubo and Hulu plus live TV, respectively. Together, we give families flexible ways to right-size their spend while broadening access to the best content. In the near term, we'll focus on programming efficiencies, ad tech uplift, and marketing at scale, including through ESPN's ecosystem, as well as deeper personalization. These are four major drivers to grow our subscriber base and achieve our profitability goals. In closing, we could not be more excited about Fubo's future. We believe our third quarter standalone performance coupled with the opportunities unlocked by our business combination with Disney's Hulu plus live TV solidly positioned Fubo for future success. We want to thank our retail and institutional shareholders for your unwavering support and to our customers for your loyalty. We remain committed to building a consumer first streaming service that delivers more live action, less friction, and superior value. I will now turn the call over to John Gineas, CFO, to discuss our financial results in greater detail. John.
John Giannidis: Thank you, David, and good morning, everyone. Our third quarter results reflect continued progress in both execution and profitability, capped by a historic milestone, the completion of our business combination with Hulu plus live TV. We believe this transaction is a huge win for our company shareholders, and the market, and we could not be more excited about the opportunities ahead. Taking a look at the results for the quarter, in North America, we delivered total revenue of $368.6 million, down 2.3% year-over-year, and reached 1.63 million paid subscribers, a 1.1% increase year-over-year, and their highest ever third quarter subscriber count. In the rest of the world, revenue was $8.6 million, and we ended the quarter with 342,000 paid subscribers. In North America, advertising revenue totaled $25 million, down 7% year-over-year, primarily reflecting the absence of certain ad-insertable content and one-time benefits in the prior year period. That said, demand indicators remain constructive, including upfront commitments for the 2025-2026 cycle up over 36% versus last year, with nearly a third of advertisers new to Fubo. Non-video formats such as pause ads and branded activations grew over 150% year over year. These personalized and dynamic ad experiences are driving greater engagement and reinforce the stickiness of CTV formats beyond standard video ads. Net loss was $18.9 million, or 6 cents per share, compared to a loss of $54.7 million, or 17 cents per share, in the prior year period. Adjusted EPS improved to 2 cents compared to a loss of 8 cents in the prior year period. Adjusted EBITDA was positive $6.9 million, representing a year-over-year improvement of more than $34 million. This marks our second consecutive quarter of positive adjusted EBITDA, underscoring the strength of our cost discipline and the scalability of our model. I would also like to point out our continued improvement in expense efficiency, with total operating expenses now approaching parity with revenue, our best-ever third quarter performance. This reflects the benefits of disciplined content spending, optimization of marketing investments, an ongoing focus on scalable growth. From a cash flow perspective, net cash used in operating activities was $6.5 million, or a $9 million increase compared to Q3 2024, while free cash flow was negative $9.4 million, a decrease of $8.3 million compared to the prior year. Free cash flow improved sequentially versus Q2, but was lower year-over-year driven primarily by working capital timing. We ended the quarter with a solid liquidity position and balance sheet flexibility, including over $280 million in cash. In summary, Q3 was another quarter of steady financial progress and operational execution. We've demonstrated consistent improvement in profitability metrics, disciplined cost management, and continued engagement growth. With the Hulu plus live TV combination now complete, we enter the next phase of our journey as a stronger, scaled player in the pay TV ecosystem, positioned to deliver sustainable profitability and long-term shareholder value. With that, I'll turn the call back to the operator for Q&A.
Operator: Operator? Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. We ask that you please limit yourself to one question and one follow-up. Your first question today comes from the line of David Joyce from Seaport Research Partners. Your line is open.
David Joyce: Thank you. First of all, congratulations on completing the combination early. I was wondering about the advertising side of the business. If you could delve in a little bit more into what the content that was removed to make the comparisons a little challenging, but going forward, you will have the new advertising relationship with Disney where they're taking care of the ad sales, but you get the revenue net of the ad sales commission. So is that across all of the subscriber base that they have the ownership of on Hulu Live? Thanks.
John Giannidis: Hey, David, this is John. Maybe I'll take the first part of that and David will take the second. On the content portion of the question, Just as a reminder, we dropped Univision effectively at the end of last year, so that had an impact as number one. Number two, we also had some residual maximum effort channel revenue in there as well. And then third, unrelated, but there was also a political comp in there. And so if I would have normalized for the three of those, I would say ad revenue would have been up modestly year over year for the quarter.
David Gandler: Yeah. And David, just to add to that, I think When you look at the results for the quarter, I think ads has been the only minor blemish on an otherwise outstanding quarter. But that's a high class problem given our combination with Hulu Live. As we've stated, Disney will be taking over advertising sales. And we expect that as we collaborate and integrate our inventory into Disney's ecosystem and ad server, you know, we should see pretty strong results relative to where we are today. So we're very excited about that.
Operator: Your next question comes from a line of Patrick Shaw from Barrington Research. Your line is open.
Patrick Shaw: Hi, thank you and congrats on completing the transaction. I was wondering if you could, you know, Now that the transaction has been completed, could you maybe discuss some of the differentiating factors on basically the full services and why maintain both offerings in addition to the sports-focused package?
David Gandler: Yeah, this is David. I'll take that. So one is I think this is one of the few cases of when companies combine that do not have any overlapping customers. Hulu Lab does not. overlapped with Hulu. They're similar, but quite different. We've been very focused on driving our sports identity, branding, and delivering capabilities for sports fans that I mentioned in my opening comments. Hulu has been more of a general entertainment bundle that has sports. And it's very important for us to continue to provide consumers with optionality and flexibility. And there's programming that we don't have on Fubo today, you know, obviously top quality networks that are available at Hulu. So this only adds to the spectrum of offers that we provide consumers at different price points along the demand curve. So this is really part of our super aggregation strategy that we talked about, you know, as far back as 18 or 20 months ago.
Patrick Shaw: Okay. On the cost side, you had a pretty significant reduction in sales and marketing costs year over year. Is that partly a function just of kind of maintaining your target subscriber acquisition cost of about one in that like one times ARPU range and just with the sports product being kind of lower cost and just being mathematical from that? Or is there any specific things to call out in terms of subscriber retention or additions that you're able to find efficiencies on?
David Gandler: Yeah, very good question. So, David, I'll take that. Look, I think that, you know, when you look at what we've been able to achieve this quarter, we had a 68% increase in net ads on a year-over-year basis while decreasing our marketing spend or sales and marketing line as a percentage of revenue by 21%. In part, that's due to the fact that we have many more offers in the market, everything from the Fubo Channel store to the skinny bundle, to our pro and elite offers. And we've also begun to leverage AI both on channel optimizations and creative testing. So all of these things have worked together and we've stated many times that our goal is to be measured and disciplined and we didn't see a reason to push any further given how expensive third quarter marketing is. And the last thing I'll say is that you're right, we have stated since 2020 that our goal is to maintain that SAC to ARPU of 1 to 1.5 times. I'm very happy to say that this year we've been well below the low end of that range. So we think we can become even more efficient, particularly as the structural shift in consumption, you know, continues to move in our direction.
Operator: Your next question comes from the line of Alicia Reese from Wedbush. Your line is open.
Alicia Reese: All right, thanks. Thanks for taking my questions. First, I was hoping we could dig a little deeper on the skinny bundle. The 20% sequential subscriber growth suggests that you've seen a nice uptake so far, and the subscription ARPU suggests that the impact was pretty limited. Can you speak to, at least qualitatively, to the dynamics of the skinny bundle? Are these new subscribers? And for those that converted from existing subscription tiers, did they primarily come from the base tier, mid tier, or premium tier?
John Giannidis: Yes, sir. Hey, this is John. I'll maybe start with that one. Look, I'd say it's early days clearly, but I'll share a couple of data points for you. Number one, look, we feel good about the $55.99 price point. At launch, the reach was about one-third of the country. Now it's north of 80% heading to full distribution by the end of the year. A couple of months in, we see virtually no cannibalization, and we think it's really expanding our addressable market And I would just add a couple of metrics in the short term on retention and churn. It's early, but I'd say performing as expected, meaning better retention and lower churn relative to pro and elite.
David Gandler: I was just going to add very quickly that we're seeing this type of success not only in Skinny Bundle, but this was a strong quarter across the board for all of our offers. you know, the skinny bundle has really delivered on trial starts, conversion to pay, net churn, at least in the early days of the package.
Alicia Reese: And can you just discuss briefly how the Q3 marketing budget was allocated between promoting the heavy sports calendar and the skinny bundle?
David Gandler: Yeah, look, I think we have a world-class marketing team and retention team, and I think we're very focused on ensuring that we scale profitably. And we obviously manage almost in real time the different packages to ensure that we're continuing to drive both top and bottom line.
Operator: Your next question comes from a line of Laura Martin from Needham & Company. Your line is open.
Laura Martin: Hello, David. Now that you guys have closed the Hulu Plus Live deal, I'm wondering, they have 4 million subs. You guys have a million and a half round numbers, million six. Aren't they sort of the dog and you guys the tail? I know you're running it, but I don't Isn't the strategy sort of get eclipsed by theirs because they have so many more subs? And can you talk about just over the next six months, nine months, how much is really you driving this company compared to Hulu, which is so much larger?
David Gandler: Yeah, Laura, thank you. This is David. Good to hear your voice. Look, you and I have been going at this now for, I don't know, five years. I remember in the early, my first meeting with you over COVID, I told you one day we would be contribution margin positive. And then two years later, I told you we would be gross margin positive. And I can tell you that, I don't know about dogs and tails, but I can tell you that this is no longer a fairy tale. Fubo will continue to drive significant growth. I can walk you through kind of areas in which that we believe that could be the case. One is you're seeing very strong net ads in a quarter that is typically very competitive. We've been able to add more products to market. We've had record churn, net churn numbers, all positive. We removed Univision from the platform sometime in December. And just to kind of give you a little peek into Q4, you know, we're seeing record Latino numbers, SANS, Univision, which is very positive. So I think actually Fubo is going to be a very important growth engine for the company. There are a few areas in which where I think we'll really sort of hope to take advantage of this new collaboration. One I think is quite obvious, ESPN's ecosystem of ESPN Radio, ESPN.com, Flagship, and other spokes that they have within that ESPN flywheel probably averages somewhere in the sort of 100 million monthly active users. This is a funnel that we have never leveraged before, so we think that there's probably significant untapped value for us to grow our sub-base, again, profitably, which means it could have a very positive impact on our sales and marketing line. The second thing is an area where I think you've had a lot of questions on and maybe a little bit of frustration around advertising. I think that there's significant upside in our relationship with Disney. Once part of the Disney ecosystem, all of our football, basketball, baseball, soccer, all of that inventory will likely move over hopefully sooner rather than later, but we're targeting sometime in the first quarter given some of the technical hurdles that We need to go through. We're transitioning our ad sales team over to Disney. So, you know, there's probably some pretty significant upside from where we are today relative to where we could be if you think about Disney Sports CPMs and their ability to just use their scale, you know, to fill our veils. The third area, which I'm really very excited about, which is an area that we've significantly underperformed the market, and probably a reason why the stock is underperformed, is programming efficiencies. We have not been able to achieve what I would believe to be fair deals, and that's because everything is related to size-based MFNs. But, you know, as the sixth largest pay TV player, it doesn't really tell you much. I look at this as the second largest virtual MVPD Player in the market, which means that those structural shifts both from a consumption perspective you know as well as a monetization perspective are in our favor and We think that we'll be able to grow that and last but not least an area that we really don't discuss a lot Which is the international piece we've been really focused on our unified platform as I like to say timing is everything that platform is is almost ready to go. We'll be onboarding Molotov and migrating it onto the Fubo platform. And Disney has 100-plus international subscribers, and it's a D-plus service. And I think that similar to the way Hulu Live has been embedded into Hulu and potentially into Disney+, we think that there's probably an opportunity for us to drive significant growth. Our ambitions have not changed. We want to be the world's largest live TV provider. and we're using streaming to make a smarter, cheaper, and more profitable TV product.
Laura Martin: Super helpful. You guys have always had a world-class tech stack. Do you find you're able to use any of the new generative AI capabilities to personalize the recommendation line or personalize what you're showing to different consumers? Are you using any of those capabilities to drive better product updates?
David Gandler: Yeah, of course. That's a great question. Look, I think what's interesting that people have not noticed or investors have not noticed about Fubo is that we have removed a significant number of channels from the platform. Yet ad inventory or ad avails, I should say, has grown year over year by about 30%. So what we're really focused on is recommending the appropriate programming for the appropriate user at the appropriate time. And so we've been using our AI capabilities to develop highlights for all of our sports moments and really put those in front of the consumers that find that content most impactful. One thing I will say as it relates to all of this is that I think when we started our, I think during our testing the waters, roadshow, Laura, you may remember this, but we had a long-term target, and we are basically almost there. So I think our target was roughly around $100 of revenue, ARPU, back then. And then what we said was that our goal was to achieve 30% gross margins, which would then drive about 15% EBITDA margins. I'd like to say we're almost there. You know, we are now somewhere in that north of 20 or roughly around 20% gross margin. This is a story that is just unfolding right now. We've got, we need about, you know, 10 points to deliver on that 30% gross margin. And it's not much to believe. You're talking about 300 basis points of programming efficiencies, two to 300 basis points of you know, advertising, uplift, one or 200 basis points in GNA and technology. And then, as you see, our efficiencies on the sales and marketing side have also been pretty impressive. So, you know, my view is that we're almost there, and this transaction will allow us to amplify all of the innovation and success and execution that we've put into this company. So I'm very excited about this. Our investors should be very excited about this. And I'm hoping Disney is excited about this as we are.
Operator: Your next question comes from a line of Sebastiano Petty from JP Morgan. Your line is open.
Sebastiano Petty: Hi, thank you for taking the question and congratulations on the deal. Just maybe if you could kind of help us think about now with the added scale that you have from the live TV combination with Hulu. I mean, how are you thinking about rest of world? Is that still core to you over time? If so, why? And as we're thinking about perhaps the rest of the world, I mean, are there synergies or maybe cross-bundling opportunities when you look at Disney's international streaming services? And then following up on that, I guess, maybe quick one. Any benefit from the YouTube TV blackout of Disney from over the weekend? Thanks.
David Gandler: Yeah, thank you. This is David. Look, I'm very bullish on rest of the world. I have been. It's all about a timing question. Right now, as I just said, we are very focused on migrating Molotov onto the Fubo platform. We'll look to partner with Disney internationally. I think this is going to create a tremendous amount of value for both companies. Disney Plus will benefit from all the local programming
David Joyce: that we're going to provide markets like France.
David Gandler: There are probably three or four markets we'd like to start with in the next 18 to 24 months, and then quickly move in to other markets because the platform has been built so efficiently. It is obviously core. I don't know why there's always a question around rest of world. I mean, you tell me. I think, you know, Reed Hastings used to talk about the fact that he wanted to be like YouTube because 80% of YouTube's revenue came from outside of the United States. We are no different. We think that we can be a global leader in the live TV streaming space. There are hundreds and hundreds of millions of people that still value live sports, live news, and we're going to focus on developing that strategy in the short term. And I think everyone on both sides is very excited about that. As it relates to YouTube TV and their I guess there are issues with Disney. That's not anything we can really talk about. What I can say is that just like last year, we see bumps all the time from people that are looking for programming, so there's not really much to say about that. The interesting thing is that while we have seen an influx of YouTube TV customers, we're seeing all around improvements, as I just mentioned, including in Latino, in terms of subscriber growth. You know, we haven't really marketed that. We're not attempting to take advantage of that. We'll let that play out as it will. And, you know, we're focused on our own business here.
Sebastiano Petty: Thank you.
Operator: Your next question comes from a line of Clark Lampin from BTIG. Your line is open.
Clark Lampin: Thanks very much. John, maybe in light of the comments around LATAM customer strength to start 4Q, could we dial it back a little bit and maybe talk about early October reads across the entire spectrum? And then if we were to sort of focus a little bit more medium to long term, fill race programming efficiencies. David, I think you said that you haven't had fair deals thus far. Maybe update us on... Clark Kauffman- Revenue and Expense synergies, I guess, on a go forward basis and how that might impact profit trajectory. At what point could we start to see sustainable sort of EBITDA and net earnings profitability? Thanks a lot.
John Giannidis: James Heitingmann, Clark on the first part of that question was that specific to advertising or is that more broad?
Clark Lampin: Correct me if I'm wrong, I guess, but the comment, it sounded like it was on a subscriber basis. So if we were thinking about the subscriber trajectory of the business for 4Q, are you seeing the same strength with sort of core demos relative to LATAM, or was there some bifurcation for one reason or another?
John Giannidis: No, actually, so thanks for the question. So I'd say the strength we saw through the third quarter, meaning August, September, has continued through October. And what I would say is that relative to plan, we're exceeding, I would say, across all packaging. And so not just Latino, but also on Canada, skinny bundle, standalone RSNs in English.
David Gandler: Yeah, I would just add that, look, the reason why we're continuing to formulate these different services and packages is because we want to reduce the cost of entry and at the same time create attractive user economics. You're starting to see that unfold this quarter.
David Joyce: And as I mentioned, Latino is really just a little seed. We're seeing this across the board.
David Gandler: So typically our strongest quarters, as you guys know, is the back half of the year, third and fourth quarter, given the strength of the sports calendar. So we're, again, very excited about this. We're excited about our new relationship with Disney. I have to say the first few days have been extremely exciting. Everybody seems to be on the same page. We all know what we want, and it's going to be Fubo's job to execute and drive shareholder value.
John Giannidis: And then maybe on synergies. Look, when we announced the business combination in January, we highlighted content and advertising as one of the key areas of synergies. David commented before about the ads team. They're already working with Disney in their offices as of this morning, so we are moving with urgency. So on the timing of that advertising synergy, I would say, We'll see that in the short to midterm on the content expense savings. Remain very confident there as well. Think the opportunity is meaningful. And you're right, but it's not just fill rate for advertising. It's other factors as well. We think there's also CPM upside to name a couple.
Operator: And that was our final question. This concludes today's conference call. We thank you for your participation and you may now disconnect.
