Jack_Chen_qy
2021-08-17
Nice
FuboTV: Continued Progress On The March To Profitability
免责声明：上述内容仅代表发帖人个人观点，不构成本平台的任何投资建议。
分享至
微信
复制链接
精彩评论
我们需要你的真知灼见来填补这片空白
打开APP，发表看法
APP内打开
发表看法
1
1
{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":839493494,"tweetId":"839493494","gmtCreate":1629171154618,"gmtModify":1633686837983,"author":{"id":3576899111877903,"idStr":"3576899111877903","authorId":3576899111877903,"authorIdStr":"3576899111877903","name":"Jack_Chen_qy","avatar":"https://static.tigerbbs.com/d7857d3bb380dd24f38771faa0cbd29c","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":1,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p>Nice</p></body></html>","htmlText":"<html><head></head><body><p>Nice</p></body></html>","text":"Nice","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/839493494","repostId":1155687461,"repostType":4,"repost":{"id":"1155687461","pubTimestamp":1629166865,"share":"https://www.laohu8.com/m/news/1155687461?lang=&edition=full","pubTime":"2021-08-17 10:21","market":"us","language":"en","title":"FuboTV: Continued Progress On The March To Profitability","url":"https://stock-news.laohu8.com/highlight/detail?id=1155687461","media":"seekingalpha","summary":"Summary\n\nfuboTV expects to achieve profitability through virtual MVPD subscriptions, CTV advertising","content":"<p><b>Summary</b></p>\n<ul>\n <li>fuboTV expects to achieve profitability through virtual MVPD subscriptions, CTV advertising, and the eventual launch of real-money wagering.</li>\n <li>The company had triple-digit year-over-year growth in both total paid subscribers and revenue growth.</li>\n <li>fuboTV had an Adjusted Contribution Margin of positive 8.3%, up 316 bps YoY from 5.1%, thereby showing improved operating leverage.</li>\n <li>The company is on schedule to launch Fubo Sportsbook app in the fourth quarter of this year and fubo added a market access agreement for their fourth state, Pennsylvania in Q2.</li>\n <li>fubo is a buy for aggressive growth investors.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/af7296f7a2085a34994d7c485a529563\" tg-width=\"768\" tg-height=\"432\" width=\"100%\" height=\"auto\"><span>RightFramePhotoVideo/iStock via Getty Images</span></p>\n<p>The last time I posted about fuboTV(NYSE:FUBO)in May, the stock was trading at $21.72 and was coming off a strong Q1 earnings report that sent the stock up +10% the day after earnings were released. Each quarter, fuboTV has only continued to prove critics wrong as the company maintains putting up numbers showing a strong march toward profitability.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/10c059c77020997d84e21eeff219cba5\" tg-width=\"635\" tg-height=\"417\" width=\"100%\" height=\"auto\"><span>Data by YCharts</span></p>\n<p>Fubo's investing thesis is based on the company producing both strong revenue growth and eventually reaching profitability through the contribution from at least three major revenue sources which currently are:virtual MVPD subscriptions, CTV advertising, and the eventual launch of real-money wagering.</p>\n<blockquote>\n As we've cited previously, our strategy is rooted in the intersection of 3 megatrends: the secular decline of traditional television, the shift of TV ad dollars to connected devices; and 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.\n</blockquote>\n<blockquote>\n Source: fuboTV CEO David Gandler -Q2 2021 Earnings Call\n</blockquote>\n<p>The key things investors should look for in fuboTV's quarterly results to determine whether the company is on the path of maintaining strong growth and eventually scaling to profitability are:</p>\n<ul>\n <li>Strong Paid subscriber growth</li>\n <li>Strong vMVPD market share growth</li>\n <li>Strong Advertising ARPU (Average Revenue Per User) growth</li>\n <li>Strong Total ARPU (Average Revenue Per User) growth</li>\n <li>Continued growth in the Contribution Margin</li>\n <li>The successful launch of Fubo Sportsbook with real-money wagering.</li>\n</ul>\n<p>This article will go through fuboTV's latest earnings and showing how the company is making tangible progress on all three revenue fronts.</p>\n<p><b>Figuring Out the Secret Sauce</b></p>\n<p>Ever since Dish (NASDAQ:DISH) started the concept of the \"skinny bundle\" with the first vMPVD called SlingTV, companies have been searching for ways to make the concept profitable.</p>\n<p>Part of the problem with vMVPDs is that they all have high variable costs, in the form of high content expenses, that cause very low gross margins. Most vMVPDs are structurally unprofitable because the variable (content) costs are sometimes even greater than the price of their subscription fees, consequently, even at scale most vMVPDs would have a profitability problem because scaling the business would only cover costs that are fixed.</p>\n<p>In order for most vMVPDs to become profitable, they would have to lower content costs or raise subscription prices. Lowering content costs, more often than not, involves getting rid of expensive content. The problem is the most expensive content is often what the viewers most want to see and when that content is eliminated, it often causes churn and costs the vMVPDs a loss of subscribers.</p>\n<p>If a vMVPD goes the other route and raises subscription prices, many are finding out that they don't have a lot of pricing power for the content that they are offering. Maybe only two companies, in the general entertainment space in Connected TV, have pricing power and that is Netflix(NASDAQ:NFLX)and Disney(NYSE:DIS). So many vMVPDs are stuck between a rock and a hard place.</p>\n<p>So, what's the solution?</p>\n<p>I don't know if fuboTV management logically thought it out or just simply accidently discovered it but the viewing public does have a thirst for live TV. When Netflix first arose as a streaming phenomenon, they pretty much began to dominate every category of TV viewing but the one area Netflix left alone was live TV, made up primarily of sports and news.</p>\n<p>FuboTV started as a soccer streaming service, and then changed to an all-sports service in 2017. So, fuboTV was born as a live streaming service and while fuboTV does offer general scripted entertainment today, they still brand themselves as a \"Sports First\" and a live TV service. In Q2, 94% of Fubo's content was viewed on a big-screen connected TV and 89% of that viewing was for live content.</p>\n<p>One reason why live content is important for fuboTV is that there is a ton of competition among vMVPDs that offer mostly scripted content. There is a lot less competition among vMVPDs that have a focus on providing more live content for sports and news.</p>\n<p>So, fuboTV fits right into an opening that Netflix left wide open. Also, unlike more general entertainment, there is some emerging evidence that sports viewing has some pricing power and the popularity of sports (especially the NFL and Soccer) is also helping fuboTV gain market share against other vMVPDs.</p>\n<p>Investors that have read FuboTV's S-1, might realize that the company had a plan from the beginning to pay a majority of their variable (content) costs through subscription revenue and then later become profitable through adding a combination of higher margin revenue sources that include advertising, real money wagering and other additional services/content. The company is still in the relative early stages of implementing that plan, which is why I still consider fuboTV a speculative stock.</p>\n<p><b>FuboTV Q2 2021 Earnings Report</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b001cc03e46cb7bef17b78ec5e028615\" tg-width=\"640\" tg-height=\"353\" width=\"100%\" height=\"auto\"><span>Source:FuboTV Q2 2021 Earnings Slides</span></p>\n<p>FuboTV delivered triple-digit year-over-year growth in total paid subscribers, which was up 138% to 681,721 compared to just 31% growth for the entire virtual MVPD market over the same period. Overall, subscriber growth was driven by cord cutters increasingly choosing fuboTV over more expensive legacy pay-TV services or other vMVPDs.</p>\n<p>Secondarily, Q2 2021 subscriber growth was driven by a heavy sports calendar and expanded smart TV distribution which helped increase the net subscriber additions by 91,291, compared to last year's Q2 sequential decline of approximately 1,000 subscribers, a number that last year was largely affected by the pandemic shutting down most sporting events. This year's heavy sports calendar includedfuboTV's exclusive streamsof the South American Qatar World Cup qualifying matches (CONMEBOL).</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b6ff85451655b7867e1030f5b2b36c26\" tg-width=\"640\" tg-height=\"412\" width=\"100%\" height=\"auto\"><span>Source:fuboTV Q2 2021 Shareholder Letter</span></p>\n<p>FuboTV also showed <b>strong increases in engagement</b> with users (both paid and trial) streaming over 245 million hours, up 148% year-over-year. Fubo MAUs (Monthly Active Users) watched a total of 134 hours per month per user on average in the quarter. According to management, the strong engagement numbers were driven by product enhancements, content personalization and improvements to fuboTV's technology and platform infrastructure.</p>\n<blockquote>\n Our \n <b>impressive engagement metrics</b>, particularly the number of hours viewed, indicate that consumers prefer a holistic content bundle with a wide assortment of premium content. In our view, we are still in the early days for virtual MVPDs, and our category will continue to gain popularity.\n</blockquote>\n<blockquote>\n Source: fuboTV CEO David Gandler -Q2 2021 Earnings Call\n</blockquote>\n<p>Among the reasons that David Gandler thinks it is early days for vMVPDs is because he believes that there will be a major shift in the TV industry back to content \"bundling\". Gandler believes that the proliferation of SVOD or Subscriber Video on Demand services (Ex. Netflix, Disney+) will become increasingly too costly for consumers. There is already some evidence of that particular sentiment becoming true. According to a global survey from Apester, 60.1% of people are sick of so many streaming services.</p>\n<p>In the earnings call, David Gandler mentions that consumers are experiencing fatigue from managing too many subscriptions, which is some cases cost more than the original legacy cable bundle that forced consumers to cut the cord in the first place. In my opinion, I believe the TV industry will increasingly consolidate content and/or the concept of \"bundling\" will return, only it will be this time on CTV, instead of cable.</p>\n<p>FuboTV's <b>total Q2 revenue growth was up 196% YoY</b> to $130.9 million and advertising revenue was up 281% to $16.5 million. FuboTV has increased their total revenue YoY growth number in every quarter since the company gave their first pro-forma Q3 2020 revenue growth numbers of 71%.</p>\n<p>Growth in advertising revenue is also an important aspect for Fubo because capturing the shift of <b>higher margin</b> TV advertising dollars from Linear TV to connected devices is part of the second leg of fuboTV's overall strategy to eventually become profitable.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/6c0253ae9912e4bfe8e06a6e80a4cb0f\" tg-width=\"640\" tg-height=\"360\" width=\"100%\" height=\"auto\"><span>Source:FuboTV Q2 2021 Earnings Slides</span></p>\n<p>Advertising accounted for 13% of total revenue in the Q2 2021, compared to 10% in the Q2 2020. Fubo's advertising ARPU was up 62% year-over-year to $8.70, and increased 22% sequentially. This is absolutely spectacular growth in ARPU. Rising advertising ARPU for a company like Fubo is an indication that the company's viewers are being seen as being more valuable by advertisers.</p>\n<p>FuboTV is currently growing their national ad sales team to address what the company calls \"significant demand in the marketplace\". FuboTV's advertiser base consists of Fortune 500 companies and blue-chip national brands that have observed that FUBO has attracted a very <b>highly engaged premium audience</b>. Advertisers like the fact that they can highly target a growing premium audience with Fubo'sfirst-partyaddressable data. Brands also find advertising on the Fubo platform very attractive because CTV allows the effectiveness of ads on the platform to be precisely measured, which is an advantage over cable TV.</p>\n<p><b>Expenses</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c1682b13fb5b019a05ec4ca1bfc25\" tg-width=\"640\" tg-height=\"263\" width=\"100%\" height=\"auto\"><span>Source:FuboTV Q2 2021 Shareholder Letter</span></p>\n<p>Fubo's <b>subscriber-related expenses</b>, which <b>primarily consist of content cost</b>, accounted for 92% of total revenue in the quarter, an improvement of 28 percentage points compared to the year prior. This shows that FUBO has gotten better about managing content costs over the past year.</p>\n<p>Subscriber-related expenses can also be considered cost of sales or cost of revenues. Using the formula,<b>Gross Profit = Revenue - Cost of Sales</b>, FUBO had a Gross Profit of $10.38 million, making Gross margins around 8%.</p>\n<p>These low gross margins are among the things critics don't like about fuboTV. The vMVPD subscriber revenue portion of the business carries very low gross margins and the situation won't markedly improve until the company increases its percentage of product revenue that have much higher gross margins, like the advertising, interactive products and the real-money wagering portions of the business.</p>\n<p>FuboTV's operating expenses in Q2 was $211.95 million. Operating expenses as a percentage of revenue in the second quarter improved 97 percentage points from 252% in Q2 2020 to 155% in 2Q 2021, showing that the company is improving its operating leverage.</p>\n<p>One important aspect of the operating expenses is Fubo's investment in S&M, which came in at $21.51 million in Q2 or 16% of revenue, down sequentially from 18% of revenue in the first quarter of 2021. So, the company is also becoming more efficient in how they deploy sales and marketing dollars, while still achieving strong subscriber growth and lowering churn by 203 basis points year-over-year.</p>\n<p>Currently, fuboTV shows an operating loss of $81.07 million in Q2 2021, compared to an operating loss of $67.29 million in Q2 2020. Investors should be aware that in the companiesS-1, the very first risk factor that fuboTV management included is this one:</p>\n<blockquote>\n We have incurred operating losses in the past, expect to incur operating losses in the future and may never achieve or maintain profitability.\n</blockquote>\n<blockquote>\n Source:FuboTV S-1\n</blockquote>\n<p>Profitability is the major risk with FUBO and the progress toward profitability should be closely monitored by anyone investing in this company. However, the overall operating revenue numbers is not the best way to measure fuboTV's path to profitability, instead FuboTV uses a metric called Adjusted Contribution Margin.</p>\n<p>I first learned of the concept of Contribution Margin whenNetflix first started using the metricto better manage their content expenses (variable costs).Contribution margin analysisis a measure ofoperating leverage; it measures how growth in sales translates to growth in profits.</p>\n<p>FuboTV is essentially following Netflix's playbook with their use of the contribution margin both to measure their operating leverage and to better manage content expenses. In Q2, FuboTV had an Adjusted Contribution Margin of positive 8.3%, up 316 bps YoY from 5.1%. So Fubo's Adjusted Contribution Margin has been showing constant improvement over the last two years, another confirmation of improving operating leverage.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/83025af4aa71f3ff8461f828279aa80e\" tg-width=\"640\" tg-height=\"350\" width=\"100%\" height=\"auto\"><span>Source:FuboTV Q2 2021 Earnings Slides</span></p>\n<p>In addition to an expanding Adjusted Contribution Margin, fuboTV has grown their overall Average Revenue Per User (ARPU) 30% YoY to an impressive <b>$71.43,</b>which is a strong monetization number. Many people consider Roku's ARPU number as impressive andRoku grew their ARPU 46%to only <b>$36.46</b> (on a trailing 12-month basis) in their second quarter.</p>\n<p>Adjusted EBITDA margin improved YoY from minus 95% to minus 36%. Net loss in Q2 was $94.9 million and EPS in the quarter was negative $0.68 compared to a loss of $2.08 in the second quarter of 2020. This missed analyst estimates by $0.18.</p>\n<p>Adjusted EPS in the second quarter 2021 was a loss of $0.38 beat analyst estimates by $0.11. Expenses incurred for the launch of the wagering business impacted EPS and adjusted EPS by $0.02 in the quarter.</p>\n<p><b>Balance Sheet</b></p>\n<p>FUBO ended the quarter with $412 million in cash, cash equivalent and restricted cash.</p>\n<p>FUBO has aquick ratioof 2.332. A company with a quick ratio of 1.0 and above can easily pay current liabilities.</p>\n<p>FUBO has aDebt-to-Equity ratioof 0.476, which is a measure of the ability to pay long term liabilities. Companies with a Debt-to-Equity ratio of less than 1.0, means a company tends to use more equity than debt to finance operations which is generally less risky than firms whose Debt-to-Equity ratio is greater than 1.0.</p>\n<p>Operating cash flow in the quarter was negative $33.6 million, improving $20 million compared to the first quarter of 2021 and the number includes a $4.3 million negative impact from a payment associated with the buildup of the wagering business.</p>\n<p><b>Guidance</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/86f71e24685f80b82bdf502aafb3e065\" tg-width=\"640\" tg-height=\"359\" width=\"100%\" height=\"auto\"><span>Source:FuboTV Q2 2021 Shareholder Letter</span></p>\n<p>One important take-away from this guidance is that it doesn't include any revenue from the Fubo Sportsbook that's still expected to launch in Q4 and even without that addition, fuboTV increased their revenue and subscriber guidance for the full year 2021.</p>\n<p><b>More On Advertising</b></p>\n<p>Two things mentioned in the Q2 2021 Shareholder Letter that occurred in the quarter, was the launch of theBranded Content studioand the start of a first-party datapartnership with LiveRamp(NYSE:RAMP). Both news items were first announced beforethis year upfronts.</p>\n<p>The Branded Content Studio allows advertisers to be able to collaborate with fuboTV's creative team to build short or long form custom branded content to air on the Fubo Sports Network.</p>\n<p>The new data partnership with LiveRamp is designed to improve Fubo's existing addressable targeting capabilities by enabling advertisers to combine Fubo's first party data with LiveRamp's Advanced TV products, which include subscriber file matching, viewership and measurement with Data Plus Math.Data Plus Mathprovides media measurement and analytics to streaming services like FuboTV along with its advertising brand customers to determine which people are watching the ads, and matching it with other consumer behavior data.</p>\n<blockquote>\n We capitalized on the high demand for CTV in this year's upfront, with buyers seeking to reach our valuable cord-cutting audience of premium paying subscribers that can't be accessed via linear TV. FuboTV's concentration of live sports content also drove outperformance on advertising in the quarter.\n</blockquote>\n<blockquote>\n Source:FuboTV Q2 2021 Shareholder Letter\n</blockquote>\n<p><b>Wagering & Interactivity</b></p>\n<p>Fubo indicated in their Shareholder Letter that are on schedule to launch Fubo Sportsbook app in the fourth quarter of this year and the CEO David Gandler also announced during the earnings call that Fubo added amarket access agreementfor their fourth state, Pennsylvania, through a partnership with theCordish Companies, a highly respected international developer of large-scale projects.</p>\n<p>CEO David Gandler also revealed a video on the company'sQ2 2021 Earnings Live Video Webinaron how the Sportsbook app is designed to synch with what the user is watching on fuboTV at every moment. The app is designed this way, in order to provide a highly personalized interactive betting experience for the user.</p>\n<p>FuboTV is all about enhancing interactivity and one of the ways that they have already done that is with their launch of predictive, free-to-play games.</p>\n<p>In the Q2 Shareholder Letter, FUBO highlighted the fact that these free-to-play games are a key component of the company's overall wagering strategy because it is considered a potential customer on-ramp to the Sportsbook app and fuboTV, in general.</p>\n<p>The company also plans to use the interactive, free-to-play games to measure the likelihood of customers to engage in even greater levels of interactivity on the Fubo platform. Additionally, free-to-play games have the potential to drive greater levels of adoption of the future wagering product.</p>\n<p>Fubo's first stab at a free-to-play predictive game is theCONMEBOL Predictive Challengewhich tested a user's sports knowledge by presenting questions to be answered about each match in the South American Football Confederation (CONMEBOL) that occurred on June 3rd, 4th and 8th. The Challenge provided a chance to win a free year of fuboTV service<b>.</b></p>\n<p>Fubo used their exclusive CONMEBOL coverage to beta test their interactive game, which Fubo had integrated into their core vMVPD platform. Like most beta tests, Fubo tested this gaming experience on a select group of users to gather data on usability and to optimize the experience ahead of launching the gaming experience to a wider audience.</p>\n<p>Another beta test that Fubo conducted was the new FanView feature, which is a user-initiated feature that shows supplemental, interactive information, like live game stats and scores. FanView screens are located next to and under a reduced-size video player.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b0620209ed3727c3f6307fd4eb9dd720\" tg-width=\"640\" tg-height=\"357\" width=\"100%\" height=\"auto\"><span>Source:FuboTV</span></p>\n<blockquote>\n As expected, gaming proved extremely popular across the subset of users with whom we conducted our test. We saw a nice lift in viewership, with subscribers who engaged in free gaming watching CONMEBOL content for \n <b>significantly more time per user</b> than those that did not play.\n</blockquote>\n<blockquote>\n Source:FuboTV Q2 2021 Shareholder Letter\n</blockquote>\n<p>Fubo also indicated that they plan on launching the above features of interactive, free-to-play gaming and FanView to all fuboTV subscribers on multiple sports this fall. I also don't think this will be the last innovative \"first mover\" type features that fuboTV will release in the future either.</p>\n<p>Fubo management has made commentary since theirS-1, that they were focused on building applications in traditional entertainment, sports entertainment, live events, social networking, mixed reality (AR/VR) and artificial intelligence. That focus has led the company to currently building a personalized and interactive streaming experience that the company credits for their current ability to capture market share.</p>\n<p><b>Valuation</b></p>\n<table>\n <tbody>\n <tr>\n <td>Company</td>\n <td>Mkt Cap (BIL)</td>\n <td><p>Price/Sales</p></td>\n <td>Free Cash Flow Margin %</td>\n <td>EV/Sales (FWD)</td>\n <td>Revenue Growth (Y/Y) %</td>\n <td>Gross Margins %</td>\n <td>Operating Margins %</td>\n </tr>\n <tr>\n <td>Roku (ROKU)</td>\n <td>$50.61B</td>\n <td>21.70</td>\n <td>6.01%</td>\n <td>16.73</td>\n <td>81.18%</td>\n <td>52.43%</td>\n <td>10.71%</td>\n </tr>\n <tr>\n <td>DISH Network (DISH)</td>\n <td>$22.78B</td>\n <td>1.46</td>\n <td>16.63%</td>\n <td>1.93</td>\n <td>40.79%</td>\n <td>35.68%</td>\n <td>20.21%</td>\n </tr>\n <tr>\n <td>DraftKings (DKNG)</td>\n <td>$20.97B</td>\n <td>19.86</td>\n <td>-40.04%</td>\n <td>15.27</td>\n <td>319.6%</td>\n <td>37.16%</td>\n <td>-108%</td>\n </tr>\n <tr>\n <td>fuboTV (FUBO)</td>\n <td>$4.05B</td>\n <td>6.90</td>\n <td>-32.76</td>\n <td>7.87</td>\n <td>196%</td>\n <td>8%</td>\n <td>-61.93%</td>\n </tr>\n </tbody>\n</table>\n<p>Fubo makes for a very interesting comparison with Roku. Fubo is currently growing faster than Roku and has a much better ARPU. The primary reason that Roku is valued so much more highly than Fubo is that there are very real worries about Fubo ever becoming profitable, while Roku is already profitable.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/39250f37532ed7be4c37a6da2e78aa9e\" tg-width=\"475\" tg-height=\"389\" width=\"100%\" height=\"auto\"><span>Source: Yahoo Finance</span></p>\n<p>The above is based on 8 Wall Street analysts offering 12-month price targets for fuboTV in the last 3 months. The average price target is $39.50 with a high forecast of $60.00 and a low forecast of $26.00. The average price target represents a 37% increase from the last price of $28.83.</p>\n<p><b>Conclusion</b></p>\n<p>The results from the latest quarter seems to have the Bears on the run, although as I write this the stock is down 10% in reaction to news that the company plans a$500 million stock offering.</p>\n<p>FuboTV is still a speculative stock but each quarter of results makes it look increasingly more likely that the company will both be able to sustain growth and eventually become profitable. If Fubo also successfully launches its wagering business in Q4, then the stock could wind up one of the better performers in 2021, as it could force many short sellers to concede defeat.</p>\n<p>I look at the pullback in stock price as a reason for aggressive growth investors to buy Fubo after such an excellent quarter that shows progress on all fronts and includes an increase of full year guidance.</p>\n<p>Fubo was once a company that I only had a little conviction about but I am becoming increasingly more confident in the company's long-term prospects, as Fubo does nothing but strongly execute on its business plan that was first laid out in itsS-1filing.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>FuboTV: Continued Progress On The March To Profitability</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nFuboTV: Continued Progress On The March To Profitability\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-08-17 10:21 GMT+8 <a href=https://seekingalpha.com/article/4449793-fubotv-continued-progress-to-profitability><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nfuboTV expects to achieve profitability through virtual MVPD subscriptions, CTV advertising, and the eventual launch of real-money wagering.\nThe company had triple-digit year-over-year growth...</p>\n\n<a href=\"https://seekingalpha.com/article/4449793-fubotv-continued-progress-to-profitability\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"FUBO":"fuboTV Inc."},"source_url":"https://seekingalpha.com/article/4449793-fubotv-continued-progress-to-profitability","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1155687461","content_text":"Summary\n\nfuboTV expects to achieve profitability through virtual MVPD subscriptions, CTV advertising, and the eventual launch of real-money wagering.\nThe company had triple-digit year-over-year growth in both total paid subscribers and revenue growth.\nfuboTV had an Adjusted Contribution Margin of positive 8.3%, up 316 bps YoY from 5.1%, thereby showing improved operating leverage.\nThe company is on schedule to launch Fubo Sportsbook app in the fourth quarter of this year and fubo added a market access agreement for their fourth state, Pennsylvania in Q2.\nfubo is a buy for aggressive growth investors.\n\nRightFramePhotoVideo/iStock via Getty Images\nThe last time I posted about fuboTV(NYSE:FUBO)in May, the stock was trading at $21.72 and was coming off a strong Q1 earnings report that sent the stock up +10% the day after earnings were released. Each quarter, fuboTV has only continued to prove critics wrong as the company maintains putting up numbers showing a strong march toward profitability.\nData by YCharts\nFubo's investing thesis is based on the company producing both strong revenue growth and eventually reaching profitability through the contribution from at least three major revenue sources which currently are:virtual MVPD subscriptions, CTV advertising, and the eventual launch of real-money wagering.\n\n As we've cited previously, our strategy is rooted in the intersection of 3 megatrends: the secular decline of traditional television, the shift of TV ad dollars to connected devices; and 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.\n\n\n Source: fuboTV CEO David Gandler -Q2 2021 Earnings Call\n\nThe key things investors should look for in fuboTV's quarterly results to determine whether the company is on the path of maintaining strong growth and eventually scaling to profitability are:\n\nStrong Paid subscriber growth\nStrong vMVPD market share growth\nStrong Advertising ARPU (Average Revenue Per User) growth\nStrong Total ARPU (Average Revenue Per User) growth\nContinued growth in the Contribution Margin\nThe successful launch of Fubo Sportsbook with real-money wagering.\n\nThis article will go through fuboTV's latest earnings and showing how the company is making tangible progress on all three revenue fronts.\nFiguring Out the Secret Sauce\nEver since Dish (NASDAQ:DISH) started the concept of the \"skinny bundle\" with the first vMPVD called SlingTV, companies have been searching for ways to make the concept profitable.\nPart of the problem with vMVPDs is that they all have high variable costs, in the form of high content expenses, that cause very low gross margins. Most vMVPDs are structurally unprofitable because the variable (content) costs are sometimes even greater than the price of their subscription fees, consequently, even at scale most vMVPDs would have a profitability problem because scaling the business would only cover costs that are fixed.\nIn order for most vMVPDs to become profitable, they would have to lower content costs or raise subscription prices. Lowering content costs, more often than not, involves getting rid of expensive content. The problem is the most expensive content is often what the viewers most want to see and when that content is eliminated, it often causes churn and costs the vMVPDs a loss of subscribers.\nIf a vMVPD goes the other route and raises subscription prices, many are finding out that they don't have a lot of pricing power for the content that they are offering. Maybe only two companies, in the general entertainment space in Connected TV, have pricing power and that is Netflix(NASDAQ:NFLX)and Disney(NYSE:DIS). So many vMVPDs are stuck between a rock and a hard place.\nSo, what's the solution?\nI don't know if fuboTV management logically thought it out or just simply accidently discovered it but the viewing public does have a thirst for live TV. When Netflix first arose as a streaming phenomenon, they pretty much began to dominate every category of TV viewing but the one area Netflix left alone was live TV, made up primarily of sports and news.\nFuboTV started as a soccer streaming service, and then changed to an all-sports service in 2017. So, fuboTV was born as a live streaming service and while fuboTV does offer general scripted entertainment today, they still brand themselves as a \"Sports First\" and a live TV service. In Q2, 94% of Fubo's content was viewed on a big-screen connected TV and 89% of that viewing was for live content.\nOne reason why live content is important for fuboTV is that there is a ton of competition among vMVPDs that offer mostly scripted content. There is a lot less competition among vMVPDs that have a focus on providing more live content for sports and news.\nSo, fuboTV fits right into an opening that Netflix left wide open. Also, unlike more general entertainment, there is some emerging evidence that sports viewing has some pricing power and the popularity of sports (especially the NFL and Soccer) is also helping fuboTV gain market share against other vMVPDs.\nInvestors that have read FuboTV's S-1, might realize that the company had a plan from the beginning to pay a majority of their variable (content) costs through subscription revenue and then later become profitable through adding a combination of higher margin revenue sources that include advertising, real money wagering and other additional services/content. The company is still in the relative early stages of implementing that plan, which is why I still consider fuboTV a speculative stock.\nFuboTV Q2 2021 Earnings Report\nSource:FuboTV Q2 2021 Earnings Slides\nFuboTV delivered triple-digit year-over-year growth in total paid subscribers, which was up 138% to 681,721 compared to just 31% growth for the entire virtual MVPD market over the same period. Overall, subscriber growth was driven by cord cutters increasingly choosing fuboTV over more expensive legacy pay-TV services or other vMVPDs.\nSecondarily, Q2 2021 subscriber growth was driven by a heavy sports calendar and expanded smart TV distribution which helped increase the net subscriber additions by 91,291, compared to last year's Q2 sequential decline of approximately 1,000 subscribers, a number that last year was largely affected by the pandemic shutting down most sporting events. This year's heavy sports calendar includedfuboTV's exclusive streamsof the South American Qatar World Cup qualifying matches (CONMEBOL).\nSource:fuboTV Q2 2021 Shareholder Letter\nFuboTV also showed strong increases in engagement with users (both paid and trial) streaming over 245 million hours, up 148% year-over-year. Fubo MAUs (Monthly Active Users) watched a total of 134 hours per month per user on average in the quarter. According to management, the strong engagement numbers were driven by product enhancements, content personalization and improvements to fuboTV's technology and platform infrastructure.\n\n Our \n impressive engagement metrics, particularly the number of hours viewed, indicate that consumers prefer a holistic content bundle with a wide assortment of premium content. In our view, we are still in the early days for virtual MVPDs, and our category will continue to gain popularity.\n\n\n Source: fuboTV CEO David Gandler -Q2 2021 Earnings Call\n\nAmong the reasons that David Gandler thinks it is early days for vMVPDs is because he believes that there will be a major shift in the TV industry back to content \"bundling\". Gandler believes that the proliferation of SVOD or Subscriber Video on Demand services (Ex. Netflix, Disney+) will become increasingly too costly for consumers. There is already some evidence of that particular sentiment becoming true. According to a global survey from Apester, 60.1% of people are sick of so many streaming services.\nIn the earnings call, David Gandler mentions that consumers are experiencing fatigue from managing too many subscriptions, which is some cases cost more than the original legacy cable bundle that forced consumers to cut the cord in the first place. In my opinion, I believe the TV industry will increasingly consolidate content and/or the concept of \"bundling\" will return, only it will be this time on CTV, instead of cable.\nFuboTV's total Q2 revenue growth was up 196% YoY to $130.9 million and advertising revenue was up 281% to $16.5 million. FuboTV has increased their total revenue YoY growth number in every quarter since the company gave their first pro-forma Q3 2020 revenue growth numbers of 71%.\nGrowth in advertising revenue is also an important aspect for Fubo because capturing the shift of higher margin TV advertising dollars from Linear TV to connected devices is part of the second leg of fuboTV's overall strategy to eventually become profitable.\nSource:FuboTV Q2 2021 Earnings Slides\nAdvertising accounted for 13% of total revenue in the Q2 2021, compared to 10% in the Q2 2020. Fubo's advertising ARPU was up 62% year-over-year to $8.70, and increased 22% sequentially. This is absolutely spectacular growth in ARPU. Rising advertising ARPU for a company like Fubo is an indication that the company's viewers are being seen as being more valuable by advertisers.\nFuboTV is currently growing their national ad sales team to address what the company calls \"significant demand in the marketplace\". FuboTV's advertiser base consists of Fortune 500 companies and blue-chip national brands that have observed that FUBO has attracted a very highly engaged premium audience. Advertisers like the fact that they can highly target a growing premium audience with Fubo'sfirst-partyaddressable data. Brands also find advertising on the Fubo platform very attractive because CTV allows the effectiveness of ads on the platform to be precisely measured, which is an advantage over cable TV.\nExpenses\nSource:FuboTV Q2 2021 Shareholder Letter\nFubo's subscriber-related expenses, which primarily consist of content cost, accounted for 92% of total revenue in the quarter, an improvement of 28 percentage points compared to the year prior. This shows that FUBO has gotten better about managing content costs over the past year.\nSubscriber-related expenses can also be considered cost of sales or cost of revenues. Using the formula,Gross Profit = Revenue - Cost of Sales, FUBO had a Gross Profit of $10.38 million, making Gross margins around 8%.\nThese low gross margins are among the things critics don't like about fuboTV. The vMVPD subscriber revenue portion of the business carries very low gross margins and the situation won't markedly improve until the company increases its percentage of product revenue that have much higher gross margins, like the advertising, interactive products and the real-money wagering portions of the business.\nFuboTV's operating expenses in Q2 was $211.95 million. Operating expenses as a percentage of revenue in the second quarter improved 97 percentage points from 252% in Q2 2020 to 155% in 2Q 2021, showing that the company is improving its operating leverage.\nOne important aspect of the operating expenses is Fubo's investment in S&M, which came in at $21.51 million in Q2 or 16% of revenue, down sequentially from 18% of revenue in the first quarter of 2021. So, the company is also becoming more efficient in how they deploy sales and marketing dollars, while still achieving strong subscriber growth and lowering churn by 203 basis points year-over-year.\nCurrently, fuboTV shows an operating loss of $81.07 million in Q2 2021, compared to an operating loss of $67.29 million in Q2 2020. Investors should be aware that in the companiesS-1, the very first risk factor that fuboTV management included is this one:\n\n We have incurred operating losses in the past, expect to incur operating losses in the future and may never achieve or maintain profitability.\n\n\n Source:FuboTV S-1\n\nProfitability is the major risk with FUBO and the progress toward profitability should be closely monitored by anyone investing in this company. However, the overall operating revenue numbers is not the best way to measure fuboTV's path to profitability, instead FuboTV uses a metric called Adjusted Contribution Margin.\nI first learned of the concept of Contribution Margin whenNetflix first started using the metricto better manage their content expenses (variable costs).Contribution margin analysisis a measure ofoperating leverage; it measures how growth in sales translates to growth in profits.\nFuboTV is essentially following Netflix's playbook with their use of the contribution margin both to measure their operating leverage and to better manage content expenses. In Q2, FuboTV had an Adjusted Contribution Margin of positive 8.3%, up 316 bps YoY from 5.1%. So Fubo's Adjusted Contribution Margin has been showing constant improvement over the last two years, another confirmation of improving operating leverage.\nSource:FuboTV Q2 2021 Earnings Slides\nIn addition to an expanding Adjusted Contribution Margin, fuboTV has grown their overall Average Revenue Per User (ARPU) 30% YoY to an impressive $71.43,which is a strong monetization number. Many people consider Roku's ARPU number as impressive andRoku grew their ARPU 46%to only $36.46 (on a trailing 12-month basis) in their second quarter.\nAdjusted EBITDA margin improved YoY from minus 95% to minus 36%. Net loss in Q2 was $94.9 million and EPS in the quarter was negative $0.68 compared to a loss of $2.08 in the second quarter of 2020. This missed analyst estimates by $0.18.\nAdjusted EPS in the second quarter 2021 was a loss of $0.38 beat analyst estimates by $0.11. Expenses incurred for the launch of the wagering business impacted EPS and adjusted EPS by $0.02 in the quarter.\nBalance Sheet\nFUBO ended the quarter with $412 million in cash, cash equivalent and restricted cash.\nFUBO has aquick ratioof 2.332. A company with a quick ratio of 1.0 and above can easily pay current liabilities.\nFUBO has aDebt-to-Equity ratioof 0.476, which is a measure of the ability to pay long term liabilities. Companies with a Debt-to-Equity ratio of less than 1.0, means a company tends to use more equity than debt to finance operations which is generally less risky than firms whose Debt-to-Equity ratio is greater than 1.0.\nOperating cash flow in the quarter was negative $33.6 million, improving $20 million compared to the first quarter of 2021 and the number includes a $4.3 million negative impact from a payment associated with the buildup of the wagering business.\nGuidance\nSource:FuboTV Q2 2021 Shareholder Letter\nOne important take-away from this guidance is that it doesn't include any revenue from the Fubo Sportsbook that's still expected to launch in Q4 and even without that addition, fuboTV increased their revenue and subscriber guidance for the full year 2021.\nMore On Advertising\nTwo things mentioned in the Q2 2021 Shareholder Letter that occurred in the quarter, was the launch of theBranded Content studioand the start of a first-party datapartnership with LiveRamp(NYSE:RAMP). Both news items were first announced beforethis year upfronts.\nThe Branded Content Studio allows advertisers to be able to collaborate with fuboTV's creative team to build short or long form custom branded content to air on the Fubo Sports Network.\nThe new data partnership with LiveRamp is designed to improve Fubo's existing addressable targeting capabilities by enabling advertisers to combine Fubo's first party data with LiveRamp's Advanced TV products, which include subscriber file matching, viewership and measurement with Data Plus Math.Data Plus Mathprovides media measurement and analytics to streaming services like FuboTV along with its advertising brand customers to determine which people are watching the ads, and matching it with other consumer behavior data.\n\n We capitalized on the high demand for CTV in this year's upfront, with buyers seeking to reach our valuable cord-cutting audience of premium paying subscribers that can't be accessed via linear TV. FuboTV's concentration of live sports content also drove outperformance on advertising in the quarter.\n\n\n Source:FuboTV Q2 2021 Shareholder Letter\n\nWagering & Interactivity\nFubo indicated in their Shareholder Letter that are on schedule to launch Fubo Sportsbook app in the fourth quarter of this year and the CEO David Gandler also announced during the earnings call that Fubo added amarket access agreementfor their fourth state, Pennsylvania, through a partnership with theCordish Companies, a highly respected international developer of large-scale projects.\nCEO David Gandler also revealed a video on the company'sQ2 2021 Earnings Live Video Webinaron how the Sportsbook app is designed to synch with what the user is watching on fuboTV at every moment. The app is designed this way, in order to provide a highly personalized interactive betting experience for the user.\nFuboTV is all about enhancing interactivity and one of the ways that they have already done that is with their launch of predictive, free-to-play games.\nIn the Q2 Shareholder Letter, FUBO highlighted the fact that these free-to-play games are a key component of the company's overall wagering strategy because it is considered a potential customer on-ramp to the Sportsbook app and fuboTV, in general.\nThe company also plans to use the interactive, free-to-play games to measure the likelihood of customers to engage in even greater levels of interactivity on the Fubo platform. Additionally, free-to-play games have the potential to drive greater levels of adoption of the future wagering product.\nFubo's first stab at a free-to-play predictive game is theCONMEBOL Predictive Challengewhich tested a user's sports knowledge by presenting questions to be answered about each match in the South American Football Confederation (CONMEBOL) that occurred on June 3rd, 4th and 8th. The Challenge provided a chance to win a free year of fuboTV service.\nFubo used their exclusive CONMEBOL coverage to beta test their interactive game, which Fubo had integrated into their core vMVPD platform. Like most beta tests, Fubo tested this gaming experience on a select group of users to gather data on usability and to optimize the experience ahead of launching the gaming experience to a wider audience.\nAnother beta test that Fubo conducted was the new FanView feature, which is a user-initiated feature that shows supplemental, interactive information, like live game stats and scores. FanView screens are located next to and under a reduced-size video player.\nSource:FuboTV\n\n As expected, gaming proved extremely popular across the subset of users with whom we conducted our test. We saw a nice lift in viewership, with subscribers who engaged in free gaming watching CONMEBOL content for \n significantly more time per user than those that did not play.\n\n\n Source:FuboTV Q2 2021 Shareholder Letter\n\nFubo also indicated that they plan on launching the above features of interactive, free-to-play gaming and FanView to all fuboTV subscribers on multiple sports this fall. I also don't think this will be the last innovative \"first mover\" type features that fuboTV will release in the future either.\nFubo management has made commentary since theirS-1, that they were focused on building applications in traditional entertainment, sports entertainment, live events, social networking, mixed reality (AR/VR) and artificial intelligence. That focus has led the company to currently building a personalized and interactive streaming experience that the company credits for their current ability to capture market share.\nValuation\n\n\n\nCompany\nMkt Cap (BIL)\nPrice/Sales\nFree Cash Flow Margin %\nEV/Sales (FWD)\nRevenue Growth (Y/Y) %\nGross Margins %\nOperating Margins %\n\n\nRoku (ROKU)\n$50.61B\n21.70\n6.01%\n16.73\n81.18%\n52.43%\n10.71%\n\n\nDISH Network (DISH)\n$22.78B\n1.46\n16.63%\n1.93\n40.79%\n35.68%\n20.21%\n\n\nDraftKings (DKNG)\n$20.97B\n19.86\n-40.04%\n15.27\n319.6%\n37.16%\n-108%\n\n\nfuboTV (FUBO)\n$4.05B\n6.90\n-32.76\n7.87\n196%\n8%\n-61.93%\n\n\n\nFubo makes for a very interesting comparison with Roku. Fubo is currently growing faster than Roku and has a much better ARPU. The primary reason that Roku is valued so much more highly than Fubo is that there are very real worries about Fubo ever becoming profitable, while Roku is already profitable.\nSource: Yahoo Finance\nThe above is based on 8 Wall Street analysts offering 12-month price targets for fuboTV in the last 3 months. The average price target is $39.50 with a high forecast of $60.00 and a low forecast of $26.00. The average price target represents a 37% increase from the last price of $28.83.\nConclusion\nThe results from the latest quarter seems to have the Bears on the run, although as I write this the stock is down 10% in reaction to news that the company plans a$500 million stock offering.\nFuboTV is still a speculative stock but each quarter of results makes it look increasingly more likely that the company will both be able to sustain growth and eventually become profitable. If Fubo also successfully launches its wagering business in Q4, then the stock could wind up one of the better performers in 2021, as it could force many short sellers to concede defeat.\nI look at the pullback in stock price as a reason for aggressive growth investors to buy Fubo after such an excellent quarter that shows progress on all fronts and includes an increase of full year guidance.\nFubo was once a company that I only had a little conviction about but I am becoming increasingly more confident in the company's long-term prospects, as Fubo does nothing but strongly execute on its business plan that was first laid out in itsS-1filing.","news_type":1},"isVote":1,"tweetType":1,"viewCount":246,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":4,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/839493494"}
精彩评论